WHERE
YOU CAN FIND MORE INFORMATION
We
have filed a registration statement on Form S-1 with the SEC under the Securities Act of 1933, as amended. This prospectus is
part of the registration statement, but the registration statement includes additional information and exhibits. We file annual,
quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a web site that contains
reports, proxy and information statements and other information regarding companies, such as ours, that file documents electronically
with the SEC. The website address is www.sec.gov. The information on the SEC’s website is not part of this prospectus, and
any references to this website or any other website are inactive textual references only.
QUESTIONS
AND ANSWERS RELATING TO THE RIGHTS OFFERING
The
following are examples of what we anticipate will be common questions about this Rights Offering. The answers are based on selected
information included elsewhere in this prospectus. The following questions and answers do not contain all of the information that
may be important to you and may not address all of the questions that you may have about the Rights Offering. This prospectus
and the documents incorporated by reference into this prospectus contain more detailed descriptions of the terms and conditions
of the Rights Offering and provides additional information about us and our business, including potential risks related to the
Rights Offering, the Units offered hereby, and our business. We urge you to read this entire prospectus and the documents incorporated
by reference into this prospectus.
Why
are we conducting the Rights Offering?
We
are conducting the Rights Offering to raise additional capital for general corporate purposes and to fund ongoing operations and
expansion of our business.
What
is a Unit?
Each
Unit consists of one share of Series C Convertible Preferred Stock and a warrant, at a subscription price of $1,000 per Unit.
No fractional Units will be issued. Each warrant entitles you to purchase
shares of common stock at an exercise price of $ per share,
from the date of issuance through its expiration five years after the date of issuance. Each share of Preferred Stock will have
a stated value of $1,000 and will be convertible into shares of our common stock at the conversion price $ .
The Preferred Stock do not generally have any voting rights and will not be certificated. The shares of Preferred Stock and warrants
that comprise each Unit are immediately separable and will be issued separately in this Rights Offering, however, they may only
be purchased as a Unit, and the Units will not trade as a separate security.
What
is the Rights Offering?
We
are distributing, at no charge, to holders of our common stock, Series B Preferred Stock, and holders of our May 2018 Warrants,
as of the Record Date, non-transferable Subscription Rights to purchase Units at a price of $1,000 per Unit. The Subscription
Rights will not be tradable. Each Unit consists of one share of our Preferred Stock and
Warrants. See “Are there risks in exercising my Subscription Rights?” below. Each Warrant will be exercisable for
one share of our common stock. Upon expiration of the Rights Offering, the Preferred Stock and Warrants will immediately separate.
There is no public trading market for the Preferred Stock or the Warrants and they will not be listed for trading on Nasdaq or
any other securities exchange or market. The common stock to be issued upon conversion of the Preferred Stock or exercise of the
Warrants, like our existing shares of common stock, will be traded on the NASDAQ Capital Market under the symbol “SINT.”
You will receive one Subscription Right for every share of common stock (including each share of common stock issuable upon conversion
of Series B Preferred Stock and exercise of May 2018 Warrants) that you owned as of 5:00 p.m., Eastern Time, on the Record Date.
Each Subscription Right entitles the record holder to a Basic Subscription Right and an Over-Subscription Privilege. The Subscription
Rights will expire if they are not exercised by 5:00 p.m., Eastern Time, on ,
2019, unless we extend or earlier terminate the Rights Offering.
What
are the Basic Subscription Rights?
For
every share you owned (including each share of common stock issuable upon conversion of Series B Preferred Stock and exercise
of May 2018 Warrants) as of the Record Date, you will receive one Basic Subscription Right, which gives you the opportunity to
purchase one Unit, consisting of one share of our Preferred Stock and
Warrants, for a price of $1,000 per Unit. For example, if you owned 100 shares of common stock as of the Record Date, you will
receive 100 Subscription Rights and will have the right to purchase 100 shares of our Preferred Stock and Warrants to purchase
shares of our common stock for $1,000 per Unit (or a total payment
of $100,000). You may exercise all or a portion of your Basic Subscription Rights or you may choose not to exercise any Basic
Subscription Rights at all.
If
you are a record holder of our common stock, Series B Preferred Stock, or May 2018 Warrants, the number of shares you may purchase
pursuant to your Basic Subscription Rights is indicated on the enclosed Rights Certificate. If you hold your common or Series
B Preferred shares or participating warrants in the name of a broker, dealer, bank or other nominee who uses the services of the
Depository Trust Company, or DTC, you will not receive a Rights Certificate. Instead, DTC will issue one Subscription Right to
your nominee record holder for each share of our common stock (including each share of common stock issuable upon conversion of
Series B Preferred Stock and exercise of May 2018 Warrants) that you beneficially own as of the Record Date. If you are not contacted
by your nominee, you should contact your nominee as soon as possible.
What
is the Over-Subscription Privilege?
If
you exercise your Basic Subscription Rights in full, you may also choose to exercise your Over-Subscription Privilege to purchase
a portion of any Units that are not purchased by other holders of common stock, Series B Preferred Stock, or participating warrant
holders and remain available under the Rights Offering. You should indicate on your Rights Certificate, or the form provided by
your nominee if your shares are held in the name of a nominee, how many additional Units you would like to purchase pursuant to
your Over-Subscription Privilege, which we refer to as your Over-Subscription Request.
Subject
to stock ownership limitations, if enough Units are available, we will seek to honor your Over-Subscription Request in full. If
Over- Subscription Requests exceed the number of Units available, however, we will allocate the available Units pro-rata among
the stockholders and warrant holders exercising the Over-Subscription Privilege in proportion to the number of shares of our common
stock (including each share of common stock issuable upon conversion of Series B Preferred Stock and exercise of May 2018 Warrants)
each of those stockholders and warrant holders owned on the Record Date, relative to the number of shares (including each share
of common stock issuable upon conversion of Series B Preferred Stock and exercise of May 2018 Warrants) owned on the Record Date
by all record holders exercising the Over-Subscription Privilege. If this pro-rata allocation results in any stockholders or warrant
holders receiving a greater number of Units than the stockholder or warrant holders subscribed for pursuant to the exercise of
the Over-Subscription Privilege, then such stockholder or warrant holder will be allocated only that number of Units for which
the stockholder or warrant holder oversubscribed, and the remaining Units will be allocated among all other stockholders and warrant
holders exercising the Over-Subscription Privilege on the same pro rata basis described above. The proration process will be repeated
until all Units have been allocated. See “The Rights Offering- Limitation on the Purchase of Units” for a description
of certain stock ownership limitations.
To
properly exercise your Over-Subscription Privilege, you must deliver to the Subscription Agent the subscription payment related
to your Over- Subscription Privilege before the Rights Offering expires. Because we will not know the total number of unsubscribed
Units before the expiration of the Rights Offering, if you wish to maximize the number of Units you purchase pursuant to your
over-subscription privilege, you will need to deliver payment in an amount equal to the aggregate Subscription Price for the maximum
number of Units available, assuming that no common or Series B stockholder or warrant holders other than you has purchased any
Units pursuant to such stockholder’s or warrant holder’s basic subscription right and over-subscription privilege.
See “The Rights Offering- The Subscription Rights-Over-Subscription Privilege.” To the extent you properly exercise
your Over-Subscription Privilege for an amount of Units that exceeds the number of unsubscribed Units available to you, any excess
subscription payments will be returned to you within 10 business days after the expiration of the Rights Offering, without interest
or deduction.
American
Stock Transfer & Trust Company, LLC, our Subscription Agent for the Rights Offering, will determine the allocation of Over-Subscription
Requests based on the formula described above.
May
the Subscription Rights that I exercise be reduced for any reason?
Yes.
While we are distributing to holders of our common stock, Series B Preferred Stock, and holders of our May 2018 Warrants, one
Subscription Right for every share of common stock (including each share of common stock issuable upon conversion of Series B
Preferred Stock and exercise of May 2018 Warrants) owned on the Record Date, we are only seeking to raise $8 million dollars in
gross proceeds in this Rights Offering. As a result, based on 2,434,008 shares of common stock outstanding as of October 25, 2019,
114,762 shares of common stock issuable upon conversion of 249 shares of Series B Preferred Stock, and 342,129 shares of common
stock issuable upon exercise of May 2018 Warrants, we would grant Subscription Rights to acquire 2,890,899 Units but will only
accept subscriptions for 8,000 Units. Accordingly, enough Units may not be available to honor your subscription in full. If exercises
of Basic Subscription Rights exceed the number of Units available in the Rights Offering, we will allocate the available Units
pro-rata among the record holders exercising the Basic Subscription Rights in proportion to the number of shares of our common
stock (including each share of common stock issuable upon conversion of Series B Preferred Stock and exercise of May 2018 Warrants)
each of those record holders owned on the Record Date, relative to the number of shares owned on the Record Date by all record
holders exercising the Basic Subscription Right. If this pro-rata allocation results in any record holders receiving a greater
number of Units than the record holder subscribed for pursuant to the exercise of the Basic Subscription Rights, then such record
holder will be allocated only that number of Units for which the record holder subscribed, and the remaining Units will be allocated
among all other record holders exercising their Basic Subscription Rights on the same pro rata basis described above. The proration
process will be repeated until all Units have been allocated. Please also see the discussion under “The Rights Offering-The
Subscription Rights-Over-Subscription Privilege” and “The Rights Offering-Limitation on the Purchase of Units”
for a description potential proration as to the Over-Subscription Privilege and certain stock ownership limitations.
If
for any reason the amount of Units allocated to you is less than you have subscribed for, then the excess funds held by the Subscription
Agent on your behalf will be returned to you, without interest, as soon as practicable after the Rights Offering has expired and
all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected, and we will have
no further obligations to you.
What
are the terms of the Series C Convertible Preferred Stock?
Each
share of Preferred Stock will be convertible, at our option at any time on or after the first anniversary of the expiration of
the rights offering or at the option of the holder at any time, into the number of shares of our common stock determined by dividing
the $1,000 stated value per share of the Preferred Stock by a conversion price of $
per share, subject to adjustment. The Preferred Stock has certain conversion rights and dividend rights as described in more detail
herein.
What
are the terms of the Warrants?
Each
Warrant entitles the holder to purchase one share of our common stock at an exercise price of $
per share from the date of issuance through its expiration five years from the date of issuance. The Warrants will be exercisable
for cash, or, solely during any period when a registration statement for the exercise of the Warrants is not in effect, on a cashless
basis. We may redeem the Warrants for $ per Warrant if our common
stock closes above $ per share for ten consecutive
trading days, provided that we may not do so prior to the first anniversary of expiration of the Rights Offering.
Are
the Preferred Stock or Warrants listed?
There
is no public trading market for the Preferred Stock or Warrants and they will not be listed for trading on Nasdaq or any other
securities exchange or market. The Warrants will be issued in registered form under a warrant agent agreement with American Stock
Transfer & Trust Company, LLC, as warrant agent.
Will
fractional shares be issued upon exercise of Subscription Rights, the conversion of Preferred Stock, or the exercise of Warrants?
No.
We will not issue fractional shares of common stock in the Rights Offering. We will only distribute Subscription Rights to acquire
whole Units, rounded down to the nearest whole number of underlying common shares giving rise to such Subscription Rights. Any
excess subscription payments received by the Subscription Agent will be returned within 10 business days after expiration of the
Rights Offering, without interest or deduction.
Additionally,
no fractional shares of common stock will be issued as a result of the conversion of shares of Preferred Stock or the exercise
of Warrants. Instead, for any such fractional share that would otherwise have been issuable upon conversion of shares of Preferred
Stock, the Company may, at its election, pay a cash payment equal to such fraction multiplied by the conversion price or round
up to the next whole share, and for any such fractional share that would have otherwise been issued upon exercise of Warrants,
the Company will round up such fraction to the next whole share.
What
effect will the Rights Offering have on our outstanding common stock?
Assuming
no other transactions by us involving our capital stock prior to the expiration of the Rights Offering, and if the Rights Offering
is fully subscribed, upon consummation of the Rights Offering we will have
shares of common stock issued and outstanding, 8,000 shares of Preferred Stock issued and outstanding convertible into an aggregate
of shares of our common stock, and Warrants to
purchase an additional shares of our common stock issued
and outstanding, based on 2,434,008 shares of our common stock outstanding as of October 25, 2019. The exact number of shares
of Preferred Stock and Warrants that we will issue in this offering will depend on the number of Units that are subscribed for
in the Rights Offering.
How
was the Subscription Price determined?
In
determining the Subscription Price, the directors considered, among other things, the following factors:
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the
current and historical trading prices of our common stock;
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the
price at which stockholders might be willing to participate in the Rights Offering;
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the
value of the common stock issuable upon conversion of the Preferred Stock being issued as a component of the Unit;
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the
value of the Warrant being issued as a component of the Unit;
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our
need for additional capital and liquidity;
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the
cost of capital from other sources; and
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comparable
precedent transactions, including the percentage of shares offered, the terms of the subscription rights being offered, the
subscription price and the discount that the subscription price represented to the immediately prevailing closing prices for
those offerings.
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In
conjunction with the review of these factors, the board of directors also reviewed our history and prospects, including our past
and present earnings and cash requirements, our prospects for the future, the outlook for our industry and our current financial
condition. The board of directors also believed that the Subscription Price should be designed to provide an incentive to our
current stockholders to participate in the Rights Offering and exercise their Basic Subscription Right and their Over-Subscription
Privilege.
The
Subscription Price does not necessarily bear any relationship to any established criteria for value. You should not consider the
Subscription Price as an indication of actual value of our company or our common stock. The market price of our common stock may
decline during or after the Rights Offering. You should obtain a current price quote for our common stock and perform an independent
assessment of our Preferred Stock and Warrants before exercising your Subscription Rights and make your own assessment of our
business and financial condition, our prospects for the future, the terms of the Rights Offering, the information in this prospectus
and the other considerations relevant to your circumstances. Once made, all exercises of Subscription Rights are irrevocable.
In addition, there is no established trading market for the Preferred Stock or the Warrants to be issued pursuant to this offering,
and the Preferred Stock and the Warrants may not be widely distributed.
Am
I required to exercise all the Basic Subscription Rights I receive in the Rights Offering?
No.
You may exercise any number of your Basic Subscription Rights, or you may choose not to exercise any Basic Subscription Rights.
If you do not exercise any Basic Subscription Rights, the number of shares of our common stock you own will not change. However,
if you choose to not exercise your Basic Subscription Rights in full and other holders of Subscription Rights do exercise, your
proportionate ownership interest in our company will decrease. If you do not exercise your Basic Subscription Rights in full,
you will not be entitled to exercise your Over-Subscription Privilege.
How
soon must I act to exercise my Subscription Rights?
If
you received a Rights Certificate and elect to exercise any or all of your Subscription Rights, the Subscription Agent must receive
your completed and signed Rights Certificate and payment for both your Basic Subscription Rights and any Over-Subscription Privilege
you elect to exercise before the Rights Offering expires on , 2019, at 5:00 p.m., Eastern Time, unless we extend or earlier
terminate the Rights Offering. If you hold your common or Series B Preferred shares or participating warrants in the name of a
broker, dealer, bank or other nominee, your nominee may establish a deadline before the expiration of the Rights Offering by which
you must provide it with your instructions to exercise your Subscription Rights, along with the required subscription payment.
May
I transfer my Subscription Rights?
No.
The Subscription Rights may be exercised only by the common and Series B Preferred stockholders and warrant holders to whom they
are distributed, and they may not be sold, transferred, assigned or given away to anyone else, other than by operation of law.
As a result, Rights Certificates may be completed only by the stockholder or warrant holder who receives the certificate. We do
not intend to apply for the listing of the Subscription Rights on any securities exchange or recognized trading market.
Will
our directors and executive officers participate in the Rights Offering?
To
the extent they hold common stock, Series B Preferred Stock, or May 2018 Warrants as of the Record Date, our directors and executive
officers will be entitled to participate in the Rights Offering on the same terms and conditions applicable to other Rights holders.
Are
we requiring a minimum subscription to complete the Rights Offering?
There
is no aggregate minimum we must receive to complete the Rights Offering.
Has
the board of directors made a recommendation to stockholders regarding the Rights Offering?
No.
Our board of directors is making no recommendation regarding your exercise of the Subscription Rights. Rights holders who exercise
Subscription Rights will incur investment risk on new money invested. We cannot predict the price at which our shares of common
stock will trade after the Rights Offering. On October 31, 2019, the last reported sale price of our common stock on Nasdaq
was $2.45 per share. You should make your decision based on your assessment of our business and financial condition, our
prospects for the future, the terms of the Rights Offering, the information contained in this prospectus and other considerations
relevant to your circumstances. See “Risk Factors” for discussion of some of the risks involved in investing in our
securities.
How
do I exercise my Subscription Rights?
If
you are a common or Series B Preferred stockholder or May 2018 Warrant holder of record (meaning you hold your shares of our common
stock, Series B Preferred Stock, or May 2018 Warrants in your name and not through a broker, dealer, bank or other nominee) and
you wish to participate in the Rights Offering, you must deliver a properly completed and signed Rights Certificate, together
with payment of the Subscription Price for both your Basic Subscription Rights and any Over-Subscription Privilege you elect to
exercise, to the Subscription Agent before 5:00 p.m., Eastern Time, on ,
2019. If you are exercising your Subscription Rights through your broker, dealer, bank or other nominee, you should promptly contact
your broker, dealer, bank or other nominee and submit your subscription documents and payment for the Units subscribed for in
accordance with the instructions and within the time period provided by your broker, dealer, bank or other nominee.
What
if my shares are held in “street name”?
If
you hold your shares of our common stock, Series B Preferred Stock or participating warrants in the name of a broker, dealer,
bank or other nominee, then your broker, dealer, bank or other nominee is the record holder of the shares you beneficially own.
The record holder must exercise the Subscription Rights on your behalf. Therefore, you will need to have your record holder act
for you.
If
you wish to participate in this Rights Offering and purchase Units, please promptly contact the record holder of your shares or
participating warrants. We will ask the record holder of your shares or participating warrants, who may be your broker, dealer,
bank or other nominee, to notify you of this Rights Offering.
What
form of payment is required?
You
must timely pay the full Subscription Price for the full number of Units you wish to acquire pursuant to the exercise of Subscription
Rights by delivering to the Subscription Agent a:
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personal
check drawn on a U.S. bank;
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certified
check drawn on a U.S. bank;
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U.S.
Postal money order; or
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wire
transfer.
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If
you send payment by personal uncertified check, payment will not be deemed to have been delivered to the Subscription Agent until
the check has cleared. As such, any payments made by personal check should be delivered to the Subscription Agent no fewer than
three business days prior to the expiration date.
If
you send a payment that is insufficient to purchase the number of Units you requested, or if the number of Units you requested
is not specified in the forms, the payment received will be applied to exercise your Subscription Rights to the fullest extent
possible based on the amount of the payment received.
Will
I receive interest on any funds I deposit with the Subscription Agent?
No.
You will not be entitled to any interest on any funds that are deposited with the Subscription Agent pending completion or cancellation
of the Rights Offering. If the Rights Offering is cancelled for any reason, the Subscription Agent will return this money to subscribers,
without interest or penalty, as soon as practicable.
When
will I receive my new shares of Preferred Stock and Warrants?
As
soon as practicable after the expiration of the Rights Offering, and within five business days thereof, we expect to close on
subscriptions and for the Subscription Agent to arrange for the issuance of the shares of Preferred Stock and Warrants purchased
in the Rights Offering. At closing, all prorating calculations and reductions contemplated by the terms of the Rights Offering
will have been effected and payment to us for the subscribed-for Units will have cleared. All shares and Warrants that you purchase
in the Rights Offering will be issued in book-entry, or uncertificated, form meaning that you will receive a direct registration,
or DRS, account statement from our transfer agent reflecting ownership of these securities if you are a holder of record. If you
hold your common or Series B Preferred shares or participating warrants in the name of a broker, dealer, bank or other nominee,
DTC will credit your account with your nominee with the securities you purchase in the Rights Offering. American Stock Transfer
& Trust Company, LLC, is acting as the warrant agent in this offering.
After
I send in my payment and Rights Certificate to the Subscription Agent, may I cancel my exercise of Subscription Rights?
No.
Exercises of Subscription Rights are irrevocable, even if you later learn information that you consider to be unfavorable to the
exercise of your Subscription Rights. You should not exercise your Subscription Rights unless you are certain that you wish to
purchase Units at the Subscription Price.
How
much will our company receive from the Rights Offering?
Assuming
that all Units are sold in the Rights Offering, we estimate that the net proceeds from the Rights Offering will be approximately
$7.4 million, based on the Subscription Price of $1,000 per Unit, after deducting fees and expenses payable to the dealer-manager,
and after deducting other estimated expenses payable by us and excluding any proceeds received upon exercise of any Warrants.
If all Warrants included in the Units are exercised for cash at the exercise price of $
per share, we will receive an additional $
million. We intend to use the net proceeds for general corporate purposes and to fund ongoing operations and expansion of our
business. See “Use of Proceeds.”
Are
there risks in exercising my Subscription Rights?
Yes.
The exercise of your Subscription Rights involves risks. Exercising your Subscription Rights involves the purchase of shares of
our Preferred Stock and Warrants to purchase common stock and you should consider this investment as carefully as you would consider
any other investment. In addition, our Preferred Stock and Warrants will not be listed on Nasdaq and a market for the Preferred
Stock and Warrants does not exist. See “Risk Factors” for discussion of additional risks involved in investing in
our securities.
Can
the board of directors terminate, extend or amend the Rights Offering?
Yes.
Our board of directors may decide to terminate the Rights Offering at any time and for any reason before the expiration of the
Rights Offering. We also have the right to extend the Rights Offering for additional periods in our sole discretion for up to
an additional 45 days. We do not presently intend to extend the Rights Offering. We will notify stockholders and the public if
the Rights Offering is terminated or extended by issuing a press release announcing the extension no later than 9:00 a.m., Eastern
Time, on the next business day after the most recently announced expiration date of the Rights Offering. In the event that we
decide to extend the Rights Offering and you have already exercised your Subscription Rights, your subscription payment will remain
with the Subscription Agent until such time as the Rights Offering closes or is terminated.
Our
board of directors also reserves the right to amend or modify the terms of the Rights Offering in its sole discretion. If we should
make any fundamental changes to the terms of the Rights Offering set forth in this prospectus, we will file a post-effective amendment
to the registration statement in which this prospectus is included, offer potential purchasers who have subscribed for rights
the opportunity to cancel such subscriptions and issue a refund of any money advanced by such stockholder and recirculate an updated
prospectus after the post-effective amendment is declared effective by the SEC. In addition, upon such event, we may extend the
Expiration Date of the Rights Offering to allow holders of rights ample time to make new investment decisions and for us to recirculate
updated documentation. Promptly following any such occurrence, we will issue a press release announcing any changes with respect
to the Rights Offering and the new expiration date. The terms of the Rights Offering cannot be modified or amended after the Expiration
Date of the Rights Offering. Although we do not presently intend to do so, we may choose to amend or modify the terms of the Rights
Offering for any reason, including, without limitation, in order to increase participation in the Rights Offering. Such amendments
or modifications may include a change in the subscription price, although no such change is presently contemplated.
If
the Rights Offering is not completed or is terminated, will my subscription payment be refunded to me?
Yes.
The Subscription Agent will hold all funds it receives in a segregated bank account until completion of the Rights Offering. If
we do not complete the Rights Offering, all subscription payments received by the Subscription Agent will be returned within 10
business days after the termination or expiration of the Rights Offering, without interest or deduction. If you own shares in
“street name,” it may take longer for you to receive your subscription payment because the Subscription Agent will
return payments through the record holder of your shares.
How
do I exercise my Rights if I live outside the United States?
The
Subscription Agent will hold Rights Certificates for stockholders having addresses outside the United States. To exercise Subscription
Rights, foreign stockholders must notify the Subscription Agent and timely follow other procedures described in the section entitled
“The Rights Offering - Foreign Stockholders.”
What
fees or charges apply if I purchase shares in the Rights Offering?
We
are not charging any fee or sales commission to issue Subscription Rights to you or to issue shares of Preferred Stock or Warrants
to you if you exercise your Subscription Rights. If you exercise your Subscription Rights through a broker, dealer, bank or other
nominee, you are responsible for paying any fees your broker, dealer, bank or other nominee may charge you.
What
are the U.S. federal income tax consequences of receiving and/or exercising my Subscription Rights?
For
U.S. federal income tax purposes, we do not believe you should recognize income or loss in connection with the receipt or exercise
of Subscription Rights in the Rights Offering, but the receipt and exercise of the Subscription Rights is unclear in certain respects.
You should consult your tax advisor as to your tax consequences resulting from the receipt and exercise of Subscription Rights,
including the receipt, ownership and disposition of our Preferred Stock, Warrants, and common stock received upon the conversion
of Preferred Stock or the exercise of Warrants. For further information, see “Material U.S. Federal Income Tax Consequences.”
To
whom should I send my forms and payment?
If
your shares or participating warrants are held in the name of a broker, dealer, bank or other nominee, then you should send your
subscription documents and subscription payment to that broker, dealer, bank or other nominee. If you are the record holder, then
you should send your subscription documents, Rights Certificate, and subscription payment to the Subscription Agent by hand delivery,
first class mail or courier service to:
By
mail:
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By
hand or overnight courier:
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You
or, if applicable, your nominee are solely responsible for completing delivery to the Subscription Agent of your subscription
documents, Rights Certificate and payment. You should allow sufficient time for delivery of your subscription materials to the
Subscription Agent and clearance of payment before the expiration of the Rights Offering at 5:00 p.m. Eastern Time on ,
2019.
Whom
should I contact if I have other questions?
If
you have other questions or need assistance, please contact the Information Agent: D.F. King & Co., Inc., toll free at (866)
620-2536, by mail at D.F. King & Co., Inc., 48 Wall Street, 22nd Floor, New York, NY 10005 or by email at sintx@dfking.com.
Who
is the dealer-manager?
Maxim
Group LLC is acting as the sole dealer-manager for the Rights Offering. Under the terms and subject to the conditions contained
in the dealer-manager agreement, the dealer-manager will use its best efforts to solicit the exercise of Subscription Rights.
We have agreed to pay the dealer-manager certain fees for acting as dealer-manager and to reimburse the dealer-manager for certain
out-of-pocket expenses incurred in connection with this offering. The dealer-manager is not underwriting or placing any of the
Subscription Rights or the shares of our Preferred Stock or Warrants being issued in the Rights Offering and is not making any
recommendation with respect to such Subscription Rights (including with respect to the exercise or expiration of such Subscription
Rights), shares of Preferred Stock or Warrants.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. Before making an investment decision with respect to our securities, we urge
you to carefully consider the risks described in the “Risk Factors” section of our Annual Report on Form 10-K for
the year ended December 31, 2018 and our subsequent Quarterly Reports on Form 10-Q, which are incorporated by reference into this
prospectus. These risk factors relate to our business, intellectual property, regulatory matters, and ownership of our common
stock. In addition, the following risk factors present material risks and uncertainties associated with the Rights Offering. The
risks and uncertainties incorporated by reference into this prospectus or described below are not the only ones we face. Additional
risks and uncertainties not presently known or which we consider immaterial as of the date hereof may also have an adverse effect
on our business. If any of the matters discussed in the following risk factors were to occur, our business, financial condition,
results of operations, cash flows or prospects could be materially adversely affected, the market price of our common stock could
decline and you could lose all or part of your investment in our securities.
Risks
Related to the Rights Offering
Our
management will have broad discretion over the use of the net proceeds from this offering, you may not agree with how we use the
proceeds and the proceeds may not be invested successfully.
Our
management will have broad discretion as to the use of the net proceeds from this offering and could use them for purposes other
than those contemplated at the time of commencement of this offering. Accordingly, you will be relying on the judgment of our
management regarding the use of these net proceeds, and you will not have the opportunity, as part of your investment decision,
to assess whether the proceeds are being used appropriately. It is possible that, pending their use, we may invest the net proceeds
in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively could
have a material adverse effect on our business, financial condition, operating results and cash flows.
Your
interest in our company may be diluted as a result of this Rights Offering.
Stockholders
and warrant holders who do not fully exercise their Subscription Rights should expect that they will, at the completion of this
offering, own a smaller proportional interest in our company on a fully-diluted basis than would otherwise be the case had they
fully exercised their Subscription Rights. Further, the shares issuable upon the exercise of the Warrants to be issued pursuant
to the Rights Offering will dilute the ownership interest of stockholders not participating in this offering or holders of Warrants
who have not exercised them.
Further,
if you purchase Units in this offering at the Subscription Price, you may suffer immediate and substantial dilution in the net
tangible book value of our common stock. See “Dilution” in this prospectus for a more detailed discussion of the dilution
which may incur in connection with this offering.
Completion
of the Rights Offering is not subject to us raising a minimum offering amount.
Completion
of the Rights Offering is not subject to us raising a minimum offering amount and, therefore, proceeds may be insufficient to
meet our objectives, thereby increasing the risk to investors in this offering, including investing in a company that continues
to require capital. See “Use of Proceeds.”
This
Rights Offering may cause the trading price of our common stock to decrease.
The
Subscription Price, together with the number of shares of common stock issuable upon conversion of the Preferred Stock and Warrants
we propose to issue and ultimately will issue if this Rights Offering is completed, may result in an immediate decrease in the
market price of our common stock. This decrease may continue after the completion of this Rights Offering. If that occurs, you
may have committed to buy shares of our common stock at a price greater than the prevailing market price. We cannot predict the
effect, if any, that the availability of shares for future sale represented by the Warrants issued in connection with the Rights
Offering will have on the market price of our common stock from time to time. Further, if a substantial number of Subscription
Rights are exercised and the holders of the shares received upon exercise of those Subscription Rights or the related Warrants
choose to sell some or all of the shares underlying the Subscription Rights or the related Warrants, the resulting sales could
depress the market price of our common stock.
Holders
of our Preferred Stock and Warrants will have no rights as a common stockholder until such holders convert or exercise their Preferred
Stock or Warrants, respectively, and acquire our common stock.
Until
holders of Preferred Stock or Warrants acquire shares of our common stock upon conversion or exercise of the Preferred Stock or
Warrants, respectively, holders of such securities will have no rights with respect to the shares of our common stock underlying
such Preferred Stock or Warrants. Upon conversion or exercise of the Preferred Stock or Warrants, respectively, the holders thereof
will be entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs after the
exercise date. Prior to conversion, holders of Preferred Stock will have limited voting rights.
If
we terminate this offering for any reason, we will have no obligation other than to return subscription monies within 10 business
days.
We
may decide, in our sole discretion and for any reason, to cancel or terminate the Rights Offering at any time prior to the expiration
date. If this offering is cancelled or terminated, we will have no obligation with respect to Subscription Rights that have been
exercised except to return within 10 business days, without interest or deduction, all subscription payments deposited with the
Subscription Agent. If we terminate this offering and you have not exercised any Subscription Rights, such Subscription Rights
will expire and be worthless.
The
Subscription Price determined for this offering is not an indication of the fair value of our common stock.
In
determining the Subscription Price, our board of directors considered a number of factors, including, but not limited to, our
need to raise capital in the near term to continue our operations, the current and historical trading prices of our common stock,
a price that would increase the likelihood of participation in the Rights Offering, the cost of capital from other sources, the
value of the Preferred Stock and Warrants being issued as components of the Unit, and comparable precedent transactions. The Subscription
Price does not necessarily bear any relationship to any established criteria for value. No valuation consultant or investment
banker has opined upon the fairness or adequacy of the Subscription Price. You should not consider the Subscription Price as an
indication of the value of our company or our common stock.
If
you do not act on a timely basis and follow subscription instructions, your exercise of Subscription Rights may be rejected.
Holders
of Subscription Rights who desire to purchase shares of our Preferred Stock and Warrants in this offering must act on a timely
basis to ensure that all required forms and payments are actually received by the Subscription Agent prior to 5:00 p.m., New York
City time, on the expiration date, unless extended. If you are a beneficial owner of shares of common stock, Series B Preferred
Stock, or participating warrants and you wish to exercise your Subscription Rights, you must act promptly to ensure that your
broker, dealer, bank, trustee or other nominee acts for you and that all required forms and payments are actually received by
your broker, dealer, bank, trustee or other nominee in sufficient time to deliver such forms and payments to the Subscription
Agent to exercise the Subscription Rights granted in this offering that you beneficially own prior to 5:00 p.m., New York City
time on the expiration date, as may be extended. We will not be responsible if your broker, dealer, bank, trustee or other nominee
fails to ensure that all required forms and payments are received by the Subscription Agent prior to 5:00 p.m., New York City
time, on the expiration date.
If
you fail to complete and sign the required subscription forms, send an incorrect payment amount, or otherwise fail to follow the
subscription procedures that apply to your exercise in this Rights Offering, the Subscription Agent may, depending on the circumstances,
reject your subscription or accept it only to the extent of the payment received. Neither we nor the Subscription Agent undertakes
to contact you concerning an incomplete or incorrect subscription form or payment, nor are we under any obligation to correct
such forms or payment. We have the sole discretion to determine whether a subscription exercise properly follows the subscription
procedures.
You
may not receive all of the Units for which you subscribe.
While
we are distributing to holders of our common stock, Series B Preferred Stock, and May 2018 Warrants, one Subscription Right for
every share of common stock (including each share of common stock issuable upon conversion of Series B Preferred Stock and exercise
of May 2018 Warrants) owned on the Record Date, we are only seeking to raise $8 million dollars in gross proceeds in this Rights
Offering. As a result, based on 2,434,008 shares of common stock outstanding as of October 25, 2019, and 114,762 shares of common
stock issuable upon conversion of 249 shares of our Series B Preferred Stock, and 342,159 shares of common stock issuable upon
exercise of May 2018 Warrants, we would grant Subscription Rights to acquire 2,890,899 Units but will only accept subscriptions
for 8,000 Units. Accordingly, enough Units may not be available to honor your subscription in full. If excess Units are available
after the exercise of Basic Subscription Rights, holders who fully exercise their Basic Subscription Rights will be entitled to
subscribe for an additional number of Units. Over-Subscription Privileges will be allocated pro rata among Rights holders who
over-subscribed, based on the number of over-subscription Units to which they have subscribed. We cannot guarantee that you will
receive any or the entire number of Units for which you subscribed. If for any reason the amount of Units allocated to you is
less than you have subscribed for, then the excess funds held by the Subscription Agent on your behalf will be returned to you,
without interest, as soon as practicable after the Rights Offering has expired and all prorating calculations and reductions contemplated
by the terms of the Rights Offering have been effected, and we will have no further obligations to you.
Unless
we otherwise agree in writing, a person or entity, together with related persons or entities, may not exercise Subscription Rights
(including Over-Subscription Privileges) to purchase Units that, when aggregated with their existing ownership, would result in
such person or entity, together with any related persons or entities, owning in excess of 19.99% of our issued and outstanding
shares of common stock following the closing of the transactions contemplated by this Rights Offering. If the amount of shares
allocated to you is less than your subscription request, then the excess funds held by the Subscription Agent on your behalf will
be returned to you, without interest, as soon as practicable after the Rights Offering has expired and all prorating calculations
and reductions contemplated by the terms of the Rights Offering have been effected, and we will have no further obligations to
you.
If
you make payment of the Subscription Price by personal check, your check may not clear in sufficient time to enable you to purchase
shares in this Rights Offering.
Any
personal check used to pay for shares and Warrants to be issued in this Rights Offering must clear prior to the expiration date
of this Rights Offering, and the clearing process may require five or more business days. If you choose to exercise your Subscription
Rights, in whole or in part, and to pay for shares and Warrants by personal check and your check has not cleared prior to the
expiration date of this Rights Offering, you will not have satisfied the conditions to exercise your Subscription Rights and will
not receive the shares and Warrants you wish to purchase.
The
receipt of Subscription Rights may be treated as a taxable distribution to you.
We
believe the distribution of the Subscription Rights in this Rights Offering should be a non-taxable distribution to holders of
shares of common stock and Series B Preferred Stock, and holders of participating warrants, under Section 305(a) of the Internal
Revenue Code of 1986, as amended, or the Code. Please see the discussion on the “Material U.S. Federal Income Tax Consequences”
below. This position is not binding on the IRS, or the courts, however. If this Rights Offering is deemed to be part of a “disproportionate
distribution” under Section 305 of the Code, your receipt of Subscription Rights in this offering may be treated as the
receipt of a taxable distribution to you equal to the fair market value of the Subscription Rights. Any such distribution would
be treated as dividend income to the extent of our current and accumulated earnings and profits, if any, with any excess being
treated as a return of capital to the extent thereof and then as capital gain. Each holder of shares of common stock and each
holder of participating warrants is urged to consult his, her or its tax advisor with respect to the particular tax consequences
of this Rights Offering.
Exercising
the Subscription Rights limits your ability to engage in certain hedging transactions that could provide you with financial benefits.
By
exercising the Subscription Rights, you are representing to us that you have not entered into any short sale or similar transaction
with respect to our common stock since the Record Date for the Rights Offering. In addition, the Subscription Rights provide that,
upon exercise of the Subscription Right, you agree not to enter into any short sale or similar transaction with respect to our
common stock for so long as you continue to hold Warrants issued in connection with the exercise of the Subscription Right. These
requirements prevent you from pursuing certain investment strategies that could provide you greater financial benefits than you
might have realized if the Subscription Rights did not contain these requirements.
The
Subscription Rights are not transferable, and there is no market for the Subscription Rights.
You
may not sell, transfer, assign or give away your Subscription Rights. Because the Subscription Rights are non-transferable, there
is no market or other means for you to directly realize any value associated with the Subscription Rights. You must exercise the
Subscription Rights to realize any potential value from your Subscription Rights.
There
is no public market for the Preferred Stock in this offering.
There
is no established public trading market for the Preferred Stock, and we do not expect a market to develop. In addition, we do
not currently intend to apply for listing of the Preferred Stock on any securities exchange or recognized trading system. Purchasers
of the Preferred Stock may be unable to resell their shares of Preferred Stock or sell them only at an unfavorable price for an
extended period of time, if at all.
Absence
of a public trading market for the Warrants may limit your ability to resell the Warrants.
There
is no established trading market for the Warrants to be issued pursuant to this offering, and they will not be listed for trading
on Nasdaq or any other securities exchange or market, and the Warrants may not be widely distributed. Purchasers of the Warrants
may be unable to resell the Warrants or sell them only at an unfavorable price for an extended period of time, if at all.
The
market price of our common stock may never exceed the exercise price of the Warrants issued in connection with this offering.
The
Warrants being issued in connection with this offering become exercisable upon issuance and will expire five years from the date
of issuance. The market price of our common stock may never exceed the exercise price of the Warrants prior to their date of expiration.
Any Warrants not exercised by their date of expiration will expire worthless and we will be under no further obligation to the
Warrant holder.
The
Warrants contain features that may reduce your economic benefit from owning them.
The
warrants contain features that allow us to redeem the warrants and that prohibit you from engaging in certain investment strategies.
We may redeem the warrants for $ per warrant once the closing price
of our common stock has equaled or exceeded $
per share, subject to adjustment, for ten consecutive trading days, provided that we may not do so prior to the first anniversary
of expiration of the Rights Offering, and only upon not less than 30 days’ prior written notice of redemption. If we give
notice of redemption, you will be forced to sell or exercise your warrants or accept the redemption price. The notice of redemption
could come at a time when it is not advisable or possible for you to exercise the warrants. As a result, you may be unable to
benefit from owning the warrants being redeemed. In addition, for so long as you continue to hold warrants, you will not be permitted
to enter into any short sale or similar transaction with respect to our common stock. This could prevent you from pursuing investment
strategies that could provide you greater financial benefits from owning the warrant.
The
dealer-manager is not underwriting, nor acting as placement agent of, the Subscription Rights or the securities underlying the
Subscription Rights.
Maxim
Group LLC is acting as sole dealer-manager for the Rights Offering. As provided in the dealer-manager agreement, the dealer-manager
will provide marketing assistance in connection with this offering. The dealer-manager is not underwriting or placing any of the
Subscription Rights or the shares of our Preferred Stock or Warrants being issued in this offering and is not making any recommendation
with respect to such Subscription Rights (including with respect to the exercise or expiration of such Subscription Rights), shares
or Warrants. The dealer-manager will not be subject to any liability to us in rendering the services contemplated by the dealer-manager
agreement except for any act of bad faith, gross negligence or willful misconduct by the dealer-manager. The Rights Offering may
not be successful despite the services of the dealer-manager to us in this offering.
Since
the Warrants are executory contracts, they may have no value in a bankruptcy or reorganization proceeding.
In
the event a bankruptcy or reorganization proceeding is commenced by or against us, a bankruptcy court may hold that any unexercised
Warrants are executory contracts that are subject to rejection by us with the approval of the bankruptcy court. As a result, holders
of the Warrants may, even if we have sufficient funds, not be entitled to receive any consideration for their Warrants or may
receive an amount less than they would be entitled to if they had exercised their Warrants prior to the commencement of any such
bankruptcy or reorganization proceeding.
We
may amend or modify the terms of the Rights Offering at any time prior to the expiration of the Rights Offering in our sole discretion.
Our
board of directors reserves the right to amend or modify the terms of the Rights Offering in its sole discretion. If we should
make any fundamental changes to the terms of the Rights Offering set forth in this prospectus, we will file a post-effective amendment
to the registration statement in which this prospectus is included, offer potential purchasers who have subscribed for rights
the opportunity to cancel such subscriptions and issue a refund of any money advanced by such stockholder and recirculate an updated
prospectus after the post-effective amendment is declared effective by the SEC. In addition, upon such event, we may extend the
Expiration Date of the Rights Offering to allow holders of rights ample time to make new investment decisions and for us to recirculate
updated documentation. Promptly following any such occurrence, we will issue a press release announcing any changes with respect
to the Rights Offering and the new expiration date. The terms of the Rights Offering cannot be modified or amended after the Expiration
Date of the Rights Offering. Although we do not presently intend to do so, we may choose to amend or modify the terms of the Rights
Offering for any reason, including, without limitation, in order to increase participation in the Rights Offering. Such amendments
or modifications may include a change in the subscription price, although no such change is presently contemplated.
Risks
Related to Our Business
Investors
should carefully consider the risks and uncertainties and all other information contained or incorporated by reference in this
prospectus, including the risks and uncertainties discussed under “Risk Factors” in our most recent Annual
Report on Form 10-K, as may be amended from time to time, and in subsequent filings that are incorporated herein by reference.
All these risk factors are incorporated by reference herein in their entirety. These risks and uncertainties are not the only
ones facing us. Our business, financial condition or results of operations could be materially adversely affected by any of these
risks. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
This prospectus and the incorporated documents also contain forward-looking statements that involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors,
including the risks mentioned in this prospectus.
FORWARD-LOOKING
STATEMENTS
This
prospectus and the documents incorporated herein by reference contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based on our management’s current beliefs, expectations and
assumptions about future events, conditions and results and on information currently available to us. Discussions containing these
forward-looking statements may be found, among other places, in the Sections entitled “Business,” “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated by
reference from our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, as well as any amendments thereto,
filed with the SEC.
All
statements, other than statements of historical fact, included or incorporated herein regarding our strategy, future operations,
financial position, future revenues, projected costs, plans, prospects and objectives are forward-looking statements. Words such
as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,”
“estimate,” “think,” “may,” “could,” “will,” “would,”
“should,” “continue,” “potential,” “likely,” “opportunity” and similar
expressions or variations of such words are intended to identify forward-looking statements but are not the exclusive means of
identifying forward-looking statements. Examples of our forward-looking statements include:
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our
ability to achieve sufficient market acceptance of any of our products or product candidates;
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our
ability to enter into and maintain successful OEM arrangements with third parties;
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our
perception of the growth in the size of the potential market for our products and product candidates;
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our
estimate of the advantages of our silicon nitride technology platform;
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our
ability to become a profitable biomaterial technology company;
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our
estimates regarding our needs for additional financing and our ability to obtain such additional financing on suitable terms;
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our
ability to succeed in obtaining FDA clearance or approvals for our product candidates;
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our
ability to receive CE Marks for our product candidates;
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the
timing, costs and other limitations involved in obtaining regulatory clearance or approval for any of our product candidates
and product candidates and, thereafter, continued compliance with governmental regulation of our existing products and activities;
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our
ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights
of others;
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our
ability to obtain sufficient quantities and satisfactory quality of raw materials to meet our manufacturing needs;
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the
availability of adequate coverage reimbursement from third-party payers in the United States;
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our
estimates regarding anticipated operating losses, future product revenue, expenses, capital requirements and liquidity;
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our
ability to maintain and continue to develop our sales and marketing infrastructure;
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our
ability to enter into and maintain suitable arrangements with an adequate number of distributors;
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our
manufacturing capacity to meet future demand;
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our
ability to develop effective and cost-efficient manufacturing processes for our products;
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our
reliance on third parties to supply us with raw materials and our non-silicon nitride products and instruments;
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the
safety and efficacy of products and product candidates;
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the
timing of and our ability to conduct clinical trials;
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potential
changes to the healthcare delivery systems and payment methods in the United States or internationally;
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any
potential requirement by regulatory agencies that we restructure our relationships with referring surgeons;
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our
ability to develop and maintain relationships with surgeons, hospitals and marketers of our products; and
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our
ability to attract and retain a qualified management team, engineering team, sales and marketing team, distribution team,
design surgeons, surgeon advisors and other qualified personnel and advisors.
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Because
forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified
and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events.
The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could
differ materially from those projected in the forward- looking statements. Moreover, we operate in an evolving environment. New
risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors
and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward- looking statements
contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
This
prospectus and the documents incorporated herein by reference also refer to estimates and other statistical data made by independent
parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions
and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions and estimates
of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree
of uncertainty and risk.
USE
OF PROCEEDS
Assuming
that all Units are subscribed for in the Rights Offering, we estimate that the net proceeds from the Rights Offering will be approximately
$7.4 million, after deducting expenses relating to this offering payable by us estimated at approximately $
million, including dealer-manager fees and expenses which include fees payable to Ascendiant Capital Markets, LLC, for certain
financial advisor services provided in connection with the Rights Offering, and excluding any proceeds received upon exercise
of any Warrants.
We
intend to use the net proceeds from the exercise of Subscription Rights for general corporate purposes, which may include research
and development expenses, capital expenditures, working capital and general and administrative expenses, and potential acquisitions
of or investments in businesses, products and technologies that complement our business, although we have no present commitments
or agreements to make any such acquisitions or investments as of the date of this prospectus. We expect to use any proceeds we
receive from the exercise of Warrants for substantially the same purposes and in substantially the same manner. Pending these
uses, we intend to invest the funds in short-term, investment grade, interest-bearing securities. It is possible that, pending
their use, we may invest the net proceeds in a way that does not yield a favorable, or any, return for us.
Our
management will have broad discretion as to the allocation of the net proceeds from this offering and could use them for purposes
other than those contemplated at the time of commencement of this offering.
DILUTION
Purchasers
of Units in the Rights Offering will experience an immediate dilution of the net tangible book value per share of our common stock.
Our net tangible book value as of June 30, 2019 was approximately $6,396,000, or $3.448 per share of our common stock (based upon
1,854,898 shares of our common stock outstanding). Net tangible book value per share is equal to our total tangible assets less
our total liabilities, divided by the number of shares of our outstanding common stock.
Dilution
per share of common stock equals the difference between the amount paid by purchasers of Units in the Rights Offering (ascribing
no value to the Warrants contained in the Units) and the net tangible book value per share of our common stock immediately after
the Rights Offering.
Based
on the sale by us in this Rights Offering of a maximum of Units at the Subscription Price of $1,000 per Unit (assuming no exercise
of the Warrants), and after deducting estimated offering expenses and dealer-manager fees and expenses payable by us, our pro
forma net tangible book value as of June 30, 2019 would have been approximately $ million,
or $ per share. This represents an immediate increase in pro forma
net tangible book value to existing stockholders of $ per share and
an immediate dilution to purchasers in the Rights Offering of $ per share.
The following table illustrates this per-share dilution:
Subscription Price
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$
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1,000.00
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Net tangible book value per share as of June 30, 2019
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$
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3.448
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Increase in net tangible book value per share attributable to Rights Offering
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$
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Pro forma net tangible book value per share as of June 30, 2019, after giving effect to
Rights Offering
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$
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Dilution in net tangible book value per share to purchasers in the Rights Offering
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$
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The
information above is as of June 30, 2019 and excludes:
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377
shares of our common stock issuable upon the exercise of stock options, with a weighted-average exercise price of $7,653 per
share;
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95,303
shares of our common stock issuable upon the conversion of outstanding shares of Series B Preferred Stock;
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426,989
shares of our common stock issuable upon the exercise of outstanding warrants, with a weighted-average exercise price of 31.91
per share;
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5,953
other shares of our common stock reserved for future issuance under our 2012 Amended and Restated Equity Incentive Plan.
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MARKET
PRICE AND DIVIDEND POLICY
Our
shares of Common Stock are currently quoted on The Nasdaq Capital Market under the symbol “SINT”. On October 31,
2019, the last reported sales price of our Common Stock on Nasdaq was $2.45.
Holders
of Record
As
of October 25, 2019, we had approximately 360 holders of record of our Common Stock. Because many of our shares of Common Stock
are held by brokers and other institutions on behalf of stockholders, this number is not indicative of the total number of stockholders
represented by these stockholders of record.
Dividends
We
have not declared or paid dividends to stockholders since inception and do not plan to pay cash dividends in the foreseeable future.
We currently intend to retain earnings, if any, to finance our growth.
Issuer
Purchases of Equity Securities
None
THE
RIGHTS OFFERING
The
Subscription Rights
We
are distributing to the record holders of our common stock, Series B Preferred Stock, and May 2018 Warrants, at no charge, non-transferable
Subscription Rights to purchase one Unit at a subscription price of $1,000 per Unit. Each Basic Subscription Right will entitle
you to purchase one share of our preferred stock and
Warrants. Each Warrant will be exercisable for one share of our common stock at an exercise price of $
per share from the date of issuance through the expiration five years from the date of issuance. Each record holder of our common
stock, Series B Preferred Stock, and holders of May 2018 Warrants, will receive one Subscription Right for every share of our
common stock (including each share of common stock issuable upon conversion of Series B Preferred Stock and exercise of May 2018
Warrants) owned by such record holder as of the Record Date. Each Subscription Right entitles the record holder to a Basic Subscription
Right and an Over-Subscription Privilege.
Basic
Subscription Rights
Your
Basic Subscription Rights will entitle you to purchase Units, each comprised of one share of our Preferred Stock and
Warrants. For example, if you owned 100 shares of common stock as of the Record Date, you will receive 100 Subscription Rights
and will have the right to purchase 100 shares of our Preferred Stock and Warrants to purchase
shares of our common stock for $1,000 per Unit, or a total payment of $100,000. You may exercise all or a portion of your Basic
Subscription Rights, or you may choose not to exercise any of your Basic Subscription Rights. If you do not exercise your Basic
Subscription Rights in full, you will not be entitled to exercise your Over-Subscription Privilege.
Additionally,
sufficient Units may not be available to honor your Basic Subscription Right in full. While we are distributing one subscription
right for every share of common stock owned or deemed owned on the record date, we are only seeking to raise $8 million dollars
in gross proceeds in this Rights Offering. As a result, based on (1) 2,434,008 shares of common stock outstanding and (2) 456,891
shares of common stock deemed to be owned by holders of our Series B Preferred Stock and May 2018 Warrants and deemed to be outstanding
as of October 25, 2019, we would grant subscription rights to acquire 2,890,899 Units but will only accept subscriptions for 8,000
Units.
If
exercises of Basic Subscription Rights exceed the number of Units available in the Rights Offering, we will allocate the available
Units pro-rata among the record holders exercising the Basic Subscription Rights in proportion to the number of shares of our
common stock each of those record holders owned or were deemed to own on the record date, relative to the number of shares owned
or deemed owned on the record date by all record holders exercising the basic subscription right. If this pro-rata allocation
results in any record holders receiving a greater number of Units than the record holder subscribed for pursuant to the exercise
of the basic subscription rights, then such record holder will be allocated only that number of Units for which the record holder
subscribed, and the remaining Units will be allocated among all other record holders exercising their Basic Subscription Rights
on the same pro rata basis described above. The proration process will be repeated until all shares have been allocated.
If
for any reason the amount of Units allocated to you is less than you have subscribed for, then the excess funds held by the Subscription
Agent on your behalf will be returned to you, without interest, as soon as practicable after the Rights Offering has expired and
all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected, and we will have
no further obligations to you.
Over-Subscription
Privilege
If
you exercise your Basic Subscription Rights in full, you may also choose to exercise your Over-Subscription Privilege. Subject
to proration and the limitations described in this prospectus, we will seek to honor the Over-Subscription Requests in full. If
Over-Subscription Requests exceed the number of Units available, however, we will allocate the available Units pro rata among
the common and Series B stockholders and eligible warrant holders as of the Record Date exercising the Over-Subscription Privilege
in proportion to the number of shares of our common stock (including each share of common stock issuable upon conversion of Series
B Preferred Stock and exercise of May 2018 Warrants) each of those stockholders and/or warrant holders owned on the Record Date,
relative to the number of shares owned on the Record Date by all stockholders and warrant holders as of the Record Date exercising
the Over-Subscription Privilege. If this pro rata allocation results in any stockholder or warrant holder receiving a greater
number of Units than the record holder subscribed for pursuant to the exercise of the Over-Subscription Privilege, then such record
holder will be allocated only that number of Units for which the record holder oversubscribed, and the remaining Units will be
allocated among all other stockholders or warrant holders exercising the Over-Subscription Privilege on the same pro rata basis
described above. The proration process will be repeated until all Units have been allocated. American Stock Transfer & Trust
Company, LLC, the Subscription Agent for the Rights Offering, will determine the over-subscription allocation based on the formula
described above.
To
the extent the aggregate subscription payment of the actual number of unsubscribed Units available to you pursuant to the Over-Subscription
Privilege is less than the amount you actually paid in connection with the exercise of the Over-Subscription Privilege, you will
be allocated only the number of unsubscribed Units available to you, and any excess subscription payments will be returned to
you, without interest or deduction, with 10 business days after expiration of the Rights Offering.
We
can provide no assurances that you will be entitled to purchase the number of Units issuable upon the exercise of your Over- Subscription
Privilege in full at the expiration of the Rights Offering. We will not be able to satisfy any requests for Units pursuant to
the Over-Subscription Privilege if all of our stockholders exercise their Basic Subscription Rights in full, and we will only
honor an Over-Subscription Privilege to the extent sufficient Units are available following the exercise of Basic Subscription
Rights.
Limitation
on the Purchase of Units
You
may only purchase the number of Units purchasable upon exercise of the number of Basic Subscription Rights distributed to you
in the Rights Offering, plus the Over-Subscription Privilege, if any. Accordingly, the number of Units that you may purchase in
the Rights Offering is limited by the number of shares of our common stock (including each share of common stock issuable upon
conversion of Series B Preferred Stock and exercise of May 2018 Warrants) you held on the Record Date and by the extent to which
other stockholders or warrant holders exercise their Basic Subscription Rights and Over-Subscription Privileges, all of which
we cannot determine prior to completion of the Rights Offering. However, due to stock exchange restrictions, we will not issue
Units in the Rights Offering to the extent that a holder would beneficially own, together with any other person with whom such
holder’s securities may be aggregated under applicable law, more than 19.99% of our outstanding shares of common stock.
Subscription
Price
The
Subscription Price is $1,000 per Unit. The Subscription Price does not necessarily bear any relationship to our past or expected
future results of operations, cash flows, current financial condition, or any other established criteria for value. No change
will be made to the Subscription Price by reason of changes in the trading price of our common stock or other factor prior to
the expiration of this Rights Offering.
Determination
of Subscription Price
In
the determining the Subscription Price, the board of directors considered a variety of factors including those listed below:
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our
need to raise capital in the near term to continue our operations;
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the
current and historical trading prices of our common stock;
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a
price that would increase the likelihood of participation in the Rights Offering;
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the
cost of capital from other sources;
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the
value of the common stock being issued as a component of the Unit;
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the
value of the Warrant being issued as a component of the Unit; and
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comparable
precedent transactions, including the percentage of shares offered, the terms of the subscription rights being offered, the
subscription price and the discount that the subscription price represents to the immediately prevailing closing prices for
these offerings.
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The
Subscription Price does not necessarily bear any relationship to any established criteria for value. No valuation consultant or
investment banker has opined upon the fairness or adequacy of the Subscription Price. You should not consider the Subscription
Price as an indication of actual value of our company or our common stock. The market price of our common stock may decline during
or after the Rights Offering. We cannot predict the price at which our shares of common stock will trade after the Rights Offering.
You should obtain a current price quote for our common stock and perform an independent assessment of our Warrants before exercising
your Subscription Rights and make your own assessment of our business and financial condition, our prospects for the future, and
the terms of this Rights Offering. Once made, all exercises of Subscription Rights are irrevocable.
No
Short-Sales
By
exercising the Subscription Rights, you are representing to us that you have not entered into any short sale or similar transaction
with respect to our common stock since the Record Date for the Rights Offering. In addition, the Subscription Rights provide that,
upon exercise of the Subscription Right, you represent that you have not since the Record Date and, for so long as you continue
to hold Preferred Stock or Warrants issued in connection with the exercise of the Subscription Right, agree to not to enter into
any short sale or similar transaction with respect to our common stock. These requirements prevent you from pursuing certain investment
strategies that could provide you greater financial benefits than you might have realized if the Subscription Rights did not contain
these requirements.
No
Recombination
The
Preferred Stock and Warrants comprising the Units will separate upon the exercise of the Subscription Rights, and the Units will
not trade as a separate security. Holders may not recombine shares of Preferred Stock and Warrants to receive a Unit.
Non-Transferability
of Subscription Rights
The
Subscription Rights are non-transferable (other than by operation of law) and, therefore, you may not sell, transfer, assign or
give away your Subscription Rights to anyone. The Subscription Rights will not be listed for trading on any stock exchange or
market.
Expiration
Date; Extension
The
subscription period, during which you may exercise your Subscription Rights, expires at 5:00 p.m., Eastern Time, on ,
2019, which is the expiration of the Rights Offering. If you do not
exercise your Subscription Rights before that time, your Subscription Rights will expire and will no longer be exercisable. We
will not be required to issue shares to you if the Subscription Agent receives your Rights Certificate or your subscription payment
after that time. We have the option to extend the Rights Offering in our sole discretion, although we do not presently intend
to do so. We may extend the Rights Offering by giving oral or written notice to the Subscription Agent before the Rights Offering
expires. If we elect to extend the Rights Offering, we will issue a press release announcing the extension no later than 9:00
a.m., Eastern Time, on the next business day after the most recently announced expiration date of the Rights Offering.
If
you hold your shares of common stock, Series B Preferred Stock, or participating warrants in the name of a broker, dealer, bank
or other nominee, the nominee will exercise the Subscription Rights on your behalf in accordance with your instructions. Please
note that the nominee may establish a deadline that may be before 5:00 p.m., Eastern Time, on ,
2019, which is the expiration date that we have established for the Rights Offering.
Termination
We
may terminate the Rights Offering at any time and for any reason prior to the expiration of the Rights Offering. If we terminate
the Rights Offering, we will issue a press release notifying stockholders and the public of the termination no later than 9:00
a.m., Eastern Time, on the next business day after the most recently announced expiration date of the Rights Offering.
Return
of Funds upon Completion or Termination
The
Subscription Agent will hold funds received in payment for shares in a segregated account pending completion of the Rights Offering.
The Subscription Agent will hold this money until the Rights Offering is completed or is terminated. To the extent you properly
exercise your Over-Subscription Privilege for an amount of Units that exceeds the number of unsubscribed Units available to you,
any excess subscription payments will be returned to you within 10 business days after the expiration of the Rights Offering,
without interest or deduction. If the Rights Offering is terminated for any reason, all subscription payments received by the
Subscription Agent will be returned within 10 business days, without interest or deduction.
Shares
of Our Capital Stock and Warrants Outstanding After the Rights Offering
Assuming
no other transactions by us involving our capital stock prior to the expiration of the Rights Offering, and if the Rights Offering
is fully subscribed, upon consummation of the Rights Offering we will have 2,434,008 shares of common stock issued and outstanding,
249 shares of Series B Preferred Stock issued and outstanding, 8,000 shares of Preferred Stock issued and outstanding, and
Warrants to purchase additional shares of our common stock issued and outstanding, based on 2,434,008 shares of our common stock
outstanding as of October 25, 2019. The exact number of shares of Preferred Stock and Warrants that we will issue in this offering
will depend on the number of Units that are subscribed for in the Rights Offering.
Methods
for Exercising Subscription Rights
The
exercise of Subscription Rights is irrevocable and may not be cancelled or modified. You may exercise your Subscription Rights
as follows:
Subscription
by Record Holders
If,
as of the Record Date, you are a holder of record of common stock, Series B Preferred Stock or May 2018 Warrants, the number of
Units you may purchase pursuant to your Subscription Rights is indicated on the enclosed Rights Certificate. You may exercise
your Subscription Rights by properly completing and executing the Rights Certificate and forwarding it, together with your full
payment, to the Subscription Agent at the address given below under “Subscription Agent,” to be received before 5:00
p.m., Eastern Time, on , 2019.
Subscription
by Beneficial Owners
If
as of the Record Date you are a beneficial owner of shares of our common stock, Series B Preferred Stock or participating warrants
that are registered in the name of a broker, dealer, bank or other nominee, you will not receive a Rights Certificate. Instead,
we will issue one Subscription Right to such nominee record holder for all shares of our common stock, Series B Preferred Stock
or participating warrants held by such nominee at the Record Date. If you are not contacted by your nominee, you should promptly
contact your nominee in order to subscribe for shares in the Rights Offering and follow the instructions provided by your nominee.
To
properly exercise your Over-Subscription Privilege, you must deliver the subscription payment related to your Over-Subscription
Privilege before the Rights Offering expires. Because we will not know the total number of unsubscribed Units before the Rights
Offering expires, if you wish to maximize the number of shares you purchase pursuant to your Over-Subscription Privilege, you
will need to deliver payment in an amount equal to the aggregate subscription payment for the maximum number of Units that you
wish to purchase.
Payment
Method
Payments
must be made in full in U.S. currency by personal check, certified check or bank draft, or by wire transfer, and payable to “American
Stock Transfer and Trust Company, LLC, as Subscription Agent for SINTX Technologies, Inc.” You must timely pay the full
subscription payment, including payment for the Over- Subscription Privilege, for the full number of shares of our common stock
you wish to acquire pursuant to the exercise of Subscription Rights by delivering a:
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certified
or personal check drawn against a U.S. bank payable to “American Stock Transfer and Trust Company, LLC, as Subscription
Agent for SINTX Technologies, Inc.”;
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U.S.
Postal money order payable to “American Stock Transfer and Trust Company, LLC, as Subscription Agent for SINTX Technologies,
Inc.”; or
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wire
transfer of immediately available funds directly to the account maintained by American Stock Transfer and Trust Company, LLC,
as Subscription Agent, for purposes of accepting subscriptions in this Rights Offering at:
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If
you elect to exercise your Subscription Rights, you should consider using a wire transfer or certified check drawn on a U.S. bank
to ensure that the Subscription Agent receives your funds before the Rights Offering expires. If you send a personal check, payment
will not be deemed to have been received by the Subscription Agent until the check has cleared. The clearinghouse may require
five or more business days to clear a personal check. Accordingly, holders who wish to pay the Subscription Price by means of
a personal check should make payment sufficiently in advance of the expiration of the Rights Offering to ensure that the payment
is received and clears by that date. If you send a certified check, payment will be deemed to have been received by the Subscription
Agent immediately upon receipt of such instrument.
You
should read the instruction letter accompanying the Rights Certificate carefully and strictly follow it. DO NOT SEND RIGHTS
CERTIFICATES OR PAYMENTS DIRECTLY TO US. We will not consider your subscription received until the Subscription Agent has
received delivery of a properly completed and duly executed Rights Certificate and payment of the full subscription payment.
The
method of delivery of Rights Certificates and payment of the subscription payment to the Subscription Agent will be at the risk
of the holders of Subscription Rights. If sent by mail, we recommend that you send those certificates and payments by registered
mail, properly insured, with return receipt requested, or by overnight courier, and that you allow a sufficient number of days
to ensure delivery to the Subscription Agent and clearance of payment before the Rights Offering expires.
Missing
or Incomplete Subscription Forms or Payment
If
you fail to complete and sign the Rights Certificate or otherwise fail to follow the subscription procedures that apply to the
exercise of your Subscription Rights before the Rights Offering expires, the Subscription Agent will reject your subscription
or accept it to the extent of the payment received. Neither we nor our Subscription Agent undertakes any responsibility or action
to contact you concerning an incomplete or incorrect subscription form, nor are we under any obligation to correct such forms.
We have the sole discretion to determine whether a subscription exercise properly complies with the subscription procedures.
If
you send a payment that is insufficient to purchase the number of shares you requested, or if the number of shares you requested
is not specified in the forms, the payment received will be applied to exercise your Subscription Rights to the fullest extent
possible based on the amount of the payment received. Any excess subscription payments received by the Subscription Agent will
be returned, without interest or deduction, within 10 business days following the expiration of the Rights Offering.
Issuance
of Preferred Stock and Warrants
The
shares of Preferred Stock and Warrants that are purchased in the Rights Offering as part of the Units will be issued in book-entry,
or uncertificated, form meaning that you will receive a DRS account statement from our transfer agent reflecting ownership of
these securities if you are a holder of record. If you hold your shares of common stock, Series B Preferred Stock or participating
warrants in the name of a bank, broker, dealer, or other nominee, DTC will credit your account with your nominee with the securities
you purchased in the Rights Offering.
Subscription
and Information Agent
The
Subscription Agent for the Rights Offering is American Stock Transfer & Trust Company, LLC and the Information Agent is D.F.
King & Co., Inc. The address to which Rights Certificates and payments should be mailed or delivered by overnight courier
is provided below. If sent by mail, we recommend that you send documents and payments by registered mail, properly insured, with
return receipt requested, and that you allow a sufficient number of days to ensure delivery to the Subscription Agent and clearance
or payment before the Rights Offering expires. Do not send or deliver these materials to us.
If
delivering by mail, hand or overnight courier:
American
Stock Transfer & Trust Company, LLC
Operations
Center
Attn:
Reorganization Department
6201
15th Avenue
Brooklyn,
New York 11219
If
you deliver the Rights Certificates in a manner different than that described in this prospectus, we may not honor the exercise
of your Subscription Rights.
You
should direct any questions or requests for assistance concerning the method of subscribing for the shares of our common stock
or for additional copies of this prospectus to the Information Agent, D.F. King & Co., Inc., toll free at (866) 620-2536,
or by mail at D.F. King & Co., Inc., 48 Wall Street, 22nd Floor, New York, NY 10005.
Warrant
Agent
The
warrant agent for the Warrants is American Stock Transfer & Trust Company, LLC.
No
Fractional Shares
We
will not issue fractional shares of common stock in the Rights Offering. We will only distribute Subscription Rights to acquire
whole Units, rounded down to the nearest whole number of underlying common shares giving rise to such Subscription Rights. Any
excess subscription payments received by the Subscription Agent will be returned within 10 business days after expiration of the
Rights Offering, without interest or deduction. Similarly, no fractional shares of common stock will be issued in connection with
the conversion of the Preferred Stock or the exercise of a Warrant. Instead, for any such fractional share that would otherwise
have been issuable upon conversion of shares of Preferred Stock, the Company may, at its election, pay a cash payment equal to
such fraction multiplied by the conversion price or round up to the next whole share, and for any such fractional share that would
have otherwise been issued upon exercise of Warrants, the Company will round up such fraction to the next whole share.
Notice
to Brokers and Nominees
If
you are a broker, dealer, bank or other nominee holder that holds shares of our common stock, Series B Preferred Stock or participating
warrants for the account of others on the Record Date, you should notify the beneficial owners for whom you are the nominee of
the Rights Offering as soon as possible to learn their intentions with respect to exercising their Subscription Rights. If a beneficial
owner of our common stock or participating warrant so instructs, you should complete the Rights Certificate and submit it to the
Subscription Agent with the proper subscription payment by the expiration date. You may exercise the number of Subscription Rights
to which all beneficial owners in the aggregate otherwise would have been entitled had they been direct holders of our common
stock on the Record Date, provided that you, as a nominee record holder, make a proper showing to the Subscription Agent by submitting
the form entitled “Nominee Holder Certification,” which is provided with your Rights Offering materials. If you did
not receive this form, you should contact our Subscription Agent to request a copy.
Validity
of Subscriptions
We
will resolve all questions regarding the validity and form of the exercise of your Subscription Rights, including time of receipt
and eligibility to participate in the Rights Offering. Our determination will be final and binding. Once made, subscriptions are
irrevocable; we will not accept any alternative, conditional, or contingent subscriptions. We reserve the absolute right to reject
any subscriptions not properly submitted or the acceptance of which would be unlawful. You must resolve any irregularities in
connection with your subscriptions before the expiration date of the Rights Offering, unless we waive them in our sole discretion.
Neither we nor the Subscription Agent is under any duty to notify you or your representative of defects in your subscriptions.
A subscription will be considered accepted, subject to our right to withdraw or terminate the Rights Offering, only when the Subscription
Agent receives a properly completed and duly executed Rights Certificate and any other required documents and the full subscription
payment including final clearance of any personal check. Our interpretations of the terms and conditions of the Rights Offering
will be final and binding.
Stockholder
Rights
You
will have no rights as a holder of the shares of our common stock issuable upon conversion of the Preferred Stock issued in the
Rights Offering until such Preferred Stock is converted into common stock and issued in book-entry form or your account at your
broker, dealer, bank or other nominee is credited with the shares of our common stock. Holders of Warrants issued in connection
with the Rights Offering will not have rights as holders of our common stock until such Warrants are exercised and the shares
of common stock underlying the Warrants are issued to the holder.
Foreign
Stockholders
We
will not mail this prospectus or Rights Certificates to stockholders with addresses that are outside the United States or that
have an army post office or foreign post office address. The Subscription Agent will hold these Rights Certificates for their
account. To exercise Subscription Rights, our foreign stockholders must notify the Subscription Agent prior to 5:00 p.m., Eastern
Time, on , 2019, the third business day prior to the expiration date, of your exercise of Subscription Rights and provide
evidence satisfactory to us, such as a legal opinion from local counsel, that the exercise of such Subscription Rights does not
violate the laws of the jurisdiction in which such stockholder resides and payment by a U.S. bank in U.S. dollars before the expiration
of the offer. If no notice is received by such time or the evidence presented is not satisfactory to us, the Subscription Rights
represented thereby will expire.
No
Revocation or Change
Once
you submit the Rights Certificate or have instructed your nominee of your subscription request, you are not allowed to revoke
or change the exercise or request a refund of monies paid. All exercises of Subscription Rights are irrevocable, even if you learn
information about us that you consider to be unfavorable. You should not exercise your Subscription Rights unless you are certain
that you wish to purchase shares at the Subscription Price.
U.S.
Federal Income Tax Treatment of Rights Distribution
For
U.S. federal income tax purposes, we do not believe holders of shares of our common stock, Series B Preferred Stock or participating
warrants should recognize income or loss upon receipt or exercise of a Subscription Right. See “Material U.S. Federal Income
Tax Consequences.”
No
Recommendation to Rights Holders
Our
board of directors is not making a recommendation regarding your exercise of the Subscription Rights. Stockholders who exercise
Subscription Rights risk investment loss on money invested. We cannot predict the price at which our shares of common stock will
trade after the Rights Offering. You should make your investment decision based on your assessment of our business and financial
condition, our prospects for the future and the terms of this Rights Offering. Please see “Risk Factors” for a discussion
of some of the risks involved in investing in our common stock.
Fees
and Expenses
We
will pay all fees charged by the Subscription Agent and the Information Agent, and by the dealer-manager. You are responsible
for paying any other commissions, fees, taxes or other expenses incurred in connection with the exercise of your Subscription
Rights.
Listing
The
Subscription Rights may not be sold, transferred, assigned or given away to anyone, and will not be listed for trading on any
stock exchange or market. There is no public trading market for the Preferred Stock or the Warrants and they will not be listed
for trading on Nasdaq or any other securities exchange or market. The shares of our common stock issuable upon the conversion
of the Preferred Stock and the exercise of the Warrants to be issued in the Rights Offering are traded on Nasdaq under the symbol
“SINT.”
Important
Do
not send Rights Certificates directly to us. You are responsible for choosing the payment and delivery method for your Rights
Certificate and you bear the risks associated with such delivery. If you choose to deliver your Rights Certificate and payment
by mail, we recommend that you use registered mail, properly insured, with return receipt requested. We also recommend that you
allow a sufficient number of days to ensure delivery to the Subscription Agent and clearance of payment prior to the expiration
time.
Distribution
Arrangements
Maxim
Group LLC will act as dealer-manager for the Rights Offering. The dealer-manager will provide marketing assistance and advice
to us in connection with the Rights Offering and will use its best efforts to solicit the exercise of Subscription Rights and
participation in the Over-Subscription Privilege. The dealer-manager is not underwriting or placing any of the Subscription Rights
or the shares of our Preferred Stock or Warrants to be issued in the Rights Offering and does not make any recommendation with
respect to such Subscription Rights (including with respect to the exercise or expiration of such Subscription Rights), shares
or Warrants. We have agreed to pay the dealer-manager certain fees and to reimburse the dealer-manager for certain out-of-pocket
expenses incurred in connection with this offering. See “Plan of Distribution.”
Other
Matters
We
are not making the rights offering in any state or other jurisdiction in which it is unlawful to do so, nor are we distributing
or accepting any offers to purchase any units from subscription rights holders who are residents of those states or other jurisdictions
or who are otherwise prohibited by federal or state laws or regulations from accepting or exercising the subscription rights.
We may delay the commencement of the rights offering in those states or other jurisdictions, or change the terms of the rights
offering, in whole or in part, in order to comply with the securities laws or other legal requirements of those states or other
jurisdictions. Subject to state securities laws and regulations, we also have the discretion to delay allocation and distribution
of any shares you may elect to purchase by exercise of your subscription privileges in order to comply with state securities laws.
We may decline to make modifications to the terms of the rights offering requested by those states or other jurisdictions, in
which case, if you are a resident in those states or jurisdictions or if you are otherwise prohibited by federal or state laws
or regulations from accepting or exercising the subscription rights, you will not be eligible to participate in the rights offering.
However, we are not currently aware of any states or jurisdictions that would preclude participation in the rights offering.
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES
The
following discussion describes the material U.S. federal income tax consequences of the receipt and exercise (or expiration) of
the Subscription Rights acquired through the Rights Offering, the ownership and disposition of shares of our Preferred Stock and
Warrants received upon exercise of the Subscription Rights and the ownership and disposition of the shares of common stock received
upon the conversion of our Preferred Stock or the exercise of the Warrants. This discussion does not purport to be a complete
analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable
state, local or non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended,
or the Code, U.S. Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements
of the U.S. Internal Revenue Service, or the IRS, in each case in effect as of the date hereof. These authorities may change or
be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner
that could adversely affect a holder of the Subscription Rights, shares of our Preferred Stock, Warrants or shares of our common
stock. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance
the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the receipt of
Subscription Rights through the Rights Offering by persons holding shares of our common stock and warrants entitled to receive
Subscription Rights pursuant to this Rights Offering (which we refer to as participating warrants), the exercise (or expiration)
of the Subscription Rights, the acquisition, ownership and disposition of shares of our Preferred Stock, and the acquisition,
ownership and disposition (or expiration) of Warrants, each acquired upon exercise of the Subscription Rights, and the acquisition,
ownership and disposition of shares of our common stock acquired upon conversion of our Preferred Stock or exercise of the Warrants.
This
discussion is limited to the Subscription Rights acquired through the Rights Offering, shares of our Preferred Stock and Warrants
acquired upon exercise of Subscription Rights and shares of our common stock acquired upon conversion of our Preferred Stock or
exercise of the Warrants, in each case, that are held as a “capital asset” within the meaning of Section 1221 of the
Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant
to a holder’s particular circumstances, including the impact of the alternative minimum tax or the unearned income Medicare
contribution tax. In addition, it does not address consequences relevant to holders subject to particular rules, including, without
limitation:
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U.S.
expatriates and
former citizens
or long-term residents of the
United States;
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persons
holding our common stock, the
Subscription Rights, shares of
our Preferred Stock, Warrants
or shares of our
common stock as part of a hedge,
straddle or other risk reduction
strategy or as part of a conversion
transaction or other integrated investment;
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banks,
insurance companies,
and other financial
institutions;
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brokers,
dealers or traders in securities or
currencies or traders that elect to
mark-to-market their securities;
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“controlled
foreign corporations,” “passive
foreign investment companies,” and
corporations that accumulate earnings
to avoid U.S. federal income tax;
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partnerships
or other entities
or arrangements treated as partnerships
or other pass-through entities
for U.S. federal income tax purposes
(and investors therein);
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real
estate investment trusts, regulated investment
companies, grantor trusts, tax-exempt organizations
or governmental organizations;
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persons
deemed to sell the Subscription Rights,
shares of Preferred Stock, or
Warrants or shares of our
common stock under the
constructive sale provisions of the
Code;
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persons
subject to special tax accounting rules as a result of any item of gross income being taken into account in an applicable
financial statement (as defined in the Code);
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persons
for whom our stock constitutes
“qualified small business stock”
within the meaning of
Section 1202 of
the Code;
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persons
who received, hold or
will receive shares of our common
stock, participating warrants, the
Subscription Rights, shares of
our Preferred Stock or Warrants
pursuant to the exercise of
any employee stock
option or otherwise as compensation
and persons who hold restricted common stock;
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tax-qualified
retirement plans;
and
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U.S.
holders (as
defined below) that have a functional
currency other than the U.S.
dollar.
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If
an entity treated as a partnership for U.S. federal income tax purposes holds shares of our common stock, the Subscription Rights,
shares of our Preferred Stock and Warrants acquired upon exercise of Subscription Rights or shares of our common stock acquired
upon conversion of our Preferred Stock or exercise of the Warrants, as the case may be, the tax treatment of a partner in the
partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the
partner level. Accordingly, partnerships and the partners in such partnerships should consult their tax advisors regarding the
U.S. federal income tax consequences to them.
THIS
DISCUSSION IS FOR INFORMATION PURPOSES ONLY AND
IS NOT TAX ADVICE. INVESTORS
SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME
TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS
ANY TAX CONSEQUENCES OF THE RECEIPT, OWNERSHIP AND
EXERCISE OF SUBSCRIPTION RIGHTS, THE ACQUISITION, OWNERSHIP, AND
DISPOSITION OF SHARES OF OUR PREFERRED STOCK AND
WARRANTS ACQUIRED UPON EXERCISE OF SUBSCRIPTION RIGHTS, AND
SHARES OF OUR COMMON STOCK ACQUIRED
UPON CONVERSION OF PREFERRED STOCK OR EXERCISE OF WARRANTS
ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER
THE LAWS OF ANY STATE, LOCAL OR NON-U.S.
TAXING JURISDICTION OR UNDER ANY
APPLICABLE INCOME TAX TREATY.
Tax
Considerations Applicable to U.S. Holders
Definition
of a U.S. Holder
For
purposes of this discussion, a “U.S. holder” is any beneficial owner of shares of our common stock, our Subscription
Rights, shares of our Preferred Stock and Warrants acquired upon exercise of Subscription Rights or shares of our common stock
acquired upon conversion of our Preferred Stock or exercise of Warrants, as the case may be, that, for U.S. federal income tax
purposes, is:
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an
individual who is a citizen or
resident of the United States;
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a
corporation (or other entity treated
as a corporation for U.S. federal
income tax purposes) created or organized
under the laws of
the United States, any state thereof, or
the District of Columbia;
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an
estate, the income of
which is subject to U.S. federal
income tax regardless of its
source; or
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a
trust that (1) is subject to the
primary supervision of a U.S.
court and the control
of one or
more United States persons (within the meaning
of Section 7701(a)(30) of
the Code), or (2) has
made a valid election under applicable
U.S. Treasury Regulations to
continue to be treated as a United
States person.
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Receipt
of Subscription Rights
Although
the authorities governing transactions such as this Rights Offering are complex and do not speak directly to the consequences
of certain aspects of this Rights Offering, including the inclusion of the right to purchase Warrants in the Subscription Rights
(rather than the right to purchase only shares of our Preferred Stock), the distribution of Subscription Rights to holders of
participating warrants and the effects of the Over-Subscription Privilege, we do not believe a U.S. holder’s receipt of
Subscription Rights pursuant to the Rights Offering should be treated as a taxable distribution with respect to its existing shares
of common stock, Series B Preferred Stock or participating warrants, as applicable, for U.S. federal income tax purposes. Section
305(a) of the Code generally provides that the receipt by a stockholder, or a holder of rights to acquire stock, of a right to
acquire stock or warrants is not included in the taxable income of the stockholder; however, the general non-recognition rule
in Section 305(a) of the Code is subject to exceptions described in Section 305(b) of the Code, which include “disproportionate
distributions.” A disproportionate distribution is generally a distribution or a series of distributions, including deemed
distributions, that has the effect of the receipt of cash or other property by some stockholders (including holders of rights
to acquire stock and holders of debt instruments convertible into stock) and an increase in the proportionate interest of other
stockholders (including holders of rights to acquire stock and holders of debt instruments convertible into stock) in a corporation’s
assets or earnings and profits. During the last 36 months, the Company has not made any distributions of cash or property (other
than stock or rights to acquire stock) with respect to: (i) its common stock or (ii) options or warrants to acquire its common
stock. Currently the Company does not intend to make any future distributions of cash or property (other than stock or rights
to acquire stock) with respect to: (i) its common stock or (ii) options or warrants to acquire its common stock; however, there
is no guarantee that the Company will not make such distributions in the future. In addition, the Company does not currently have
any convertible debt outstanding nor does the Company currently intend to issue any convertible debt.
The
position regarding the non-taxable treatment of the Subscription Right distribution is not binding on the IRS, or the courts.
If this position is finally determined by the IRS or a court to be incorrect, whether because, contrary to our expectations, distributions
of cash or property (other than stock or rights to acquire stock) are made with respect to our common stock, options or warrants,
because the issuance of the Subscription Rights is a “disproportionate distribution” or otherwise, the fair market
value of the Subscription Rights would be taxable to U.S. holders of our common stock as a dividend to the extent of the U.S.
holder’s pro rata share of our current and accumulated earnings and profits, if any, with any excess being treated as a
return of capital to the extent thereof and then as capital gain. Although no assurance can be given, the Company anticipates
that it will not have current and accumulated earnings and profits through the end of 2019. Further, if the position regarding
the non-taxable treatment of the Subscription Rights distribution is incorrect, the treatment of holders of participating warrants
is not clear, and it may differ from, and may be more adverse than, the treatment of the Subscription Rights distribution to the
holders of common stock.
The
following discussion is based upon the treatment of the Subscription Right issuance as a non-taxable distribution with respect
to a U.S. holder’s’ existing shares of common stock, Series B Preferred Stock or participating warrants for U.S. federal
income tax purposes.
Tax
Basis in the Subscription Rights
If
the fair market value of the Subscription Rights a U.S. holder receives is less than 15% of the fair market value of the U.S.
holder’s existing shares of common stock, Series B Preferred Stock or participating warrants (in each case, with respect
to which the Subscription Rights are distributed) on the date the U.S. holder receives the Subscription Rights, the Subscription
Rights will be allocated a zero tax basis for U.S. federal income tax purposes, unless the U.S. holder elects to allocate the
tax basis in the holder’s existing shares of common stock, Series B Preferred Stock or participating warrants between the
existing shares of common stock, Series B Preferred Stock or participating warrants and the Subscription Rights in proportion
to the relative fair market values of the existing shares of common stock, Series B Preferred Stock or participating warrants
and the Subscription Rights determined on the date of receipt of the Subscription Rights. If a U.S. holder chooses to allocate
tax basis between the holder’s existing common shares or participating warrants and the Subscription Rights, the U.S. holder
must make this election on a statement included with the holder’s timely filed U.S. federal income tax return (including
extensions) for the taxable year in which the U.S. holder receives the Subscription Rights. Such an election is irrevocable.
However,
if the fair market value of the Subscription Rights a U.S. holder receives is 15% or more of the fair market value of the holder’s
existing shares of common stock, Series B Preferred Stock or participating warrants on the date the U.S. holder receives the Subscription
Rights, then the U.S. holder must allocate tax basis in the existing shares of common stock, Series B Preferred Stock or participating
warrants between those shares or warrants and the Subscription Rights the U.S. holder receives in proportion to their fair market
values determined on the date the U.S. holder receives the Subscription Rights. Please refer to the discussion below regarding
the U.S. tax treatment of a U.S. holder that, at the time of the receipt of the Subscription Right, no longer holds the common
stock, Series B Preferred Stock or participating warrants with respect to which the Subscription Right was distributed.
The
fair market value of the Subscription Rights on the date that the Subscription Rights are distributed is uncertain and the fair
market value of the participating warrants is uncertain, and we have not obtained, and do not intend to obtain, an appraisal of
the fair market value of the Subscription Rights or the participating warrants on that date. In determining the fair market value
of the Subscription Rights, U.S. holders should consider all relevant facts and circumstances, including without limitation any
difference between the Subscription Price of the Subscription Rights and the trading price of our shares of common stock on the
date that the Subscription Rights are distributed, the fair market value and the conversion terms of the Preferred Stock, the
exercise price of the Warrants, the length of the period during which the Subscription Rights may be exercised and the fact that
the Subscription Rights are non-transferable. In determining the fair market value of the participating warrants, U.S. holders
should consider all relevant facts and circumstances, including without limitation the difference between the exercise price of
the participating warrants and the trading price of our common stock on the date that the Subscription Rights are distributed,
the length of the period during which the participating warrants may be exercised, the nature of the adjustment provisions in
the participating warrants that may affect the economics of the exercise of such participating warrants and any limitations of
the transferability of the participating warrants.
Exercise
of Subscription Rights
A
U.S. holder will not recognize gain or loss upon the exercise of a Subscription Right received in the Rights Offering. A U.S.
holder’s adjusted tax basis, if any, in the Subscription Right plus the Subscription Price should be allocated between the
share of Preferred Stock and the Warrant acquired upon exercise of the Subscription Right. The tax basis in the common stock or
participating warrants upon which the Subscription Rights were issued which is allocated to the Subscription Rights under the
prior section entitled “—Tax Basis in the Subscription Rights” should be further allocated between the shares
of Preferred Stock and the Warrant acquired upon exercise of the Subscription Right in proportion to their relative fair market
values on the date the Subscription Rights were distributed. The Subscription Price should be allocated between the shares of
Preferred Stock and the Warrant acquired upon exercise of the Subscription Right in proportion to their relative fair market values
on the exercise date. These allocations will establish the U.S. holder’s initial tax basis for U.S. federal income tax purposes
in the shares of Preferred Stock and Warrants received upon exercise of such U.S. holder’s Subscription Right. The holding
period of a share of Preferred Stock or a Warrant acquired upon exercise of a Subscription Right in the Rights Offering will begin
on the date of exercise.
If,
at the time of the receipt or exercise of the Subscription Right, the U.S. holder no longer holds the common stock or participating
warrant with respect to which the Subscription Right was distributed, then certain aspects of the tax treatment of the receipt
and exercise of the Subscription Right are unclear, including (1) the allocation of the tax basis between the shares of our common
stock, Series B Preferred Stock or participating warrants previously sold and the Subscription Right, (2) the impact of such allocation
on the amount and timing of gain or loss recognized with respect to the shares of our common stock, Series B Preferred Stock or
participating warrants previously sold, and (3) the impact of such allocation on the tax basis of the shares of our Preferred
Stock and Warrants acquired upon exercise of the Subscription Right. If a U.S. holder exercises a Subscription Right received
in the Rights Offering after disposing of shares of our common stock, Series B Preferred Stock or participating warrants with
respect to which the Subscription Right is received, the U.S. holder should consult its own tax advisor.
Expiration
of Subscription Rights
If
a U.S. holder allows Subscription Rights received in the Rights Offering to expire, the U.S. holder should not recognize any gain
or loss for U.S. federal income tax purposes, and the U.S. holder should re-allocate any portion of the tax basis in its existing
common shares previously allocated to the Subscription Rights that have expired to such U.S. holder’s existing common shares.
Sale
or Other Disposition, Exercise or Expiration of Warrants
Upon
the sale or other taxable disposition of a Warrant (other than by exercise) received upon exercise of a Subscription Right, a
U.S. holder will generally recognize capital gain or loss equal to the difference between the amount realized on the sale or other
taxable disposition and the U.S. holder’s adjusted tax basis in the Warrant. A U.S. Holder’s adjusted tax basis in
a Warrant will generally equal its initial tax basis (discussed above under “—Exercise of Subscription Rights”),
as adjusted for any constructive dividends on the Warrant described below. This capital gain or loss will be long-term capital
gain or loss if the U.S. holder’s holding period in such Warrant is more than one year at the time of the sale or other
taxable disposition. The deductibility of capital losses is subject to certain limitations.
A
U.S. holder will not be required to recognize income, gain or loss upon exercise of a Warrant received upon exercise of a Subscription
Right. A U.S. holder’s tax basis in a share of our common stock received upon exercise of the Warrants for cash will be
equal to the sum of (1) the U.S. holder’s tax basis in the Warrants exchanged therefor and (2) the exercise price of such
Warrants. A U.S. holder’s holding period in the shares of our common stock received upon exercise will commence on the day
after such U.S. holder exercises the Warrants.
In
certain circumstances, the Warrants will be exercisable on a cashless basis. The U.S. federal income tax treatment of an exercise
of a Warrant on a cashless basis is not clear, and could differ from the consequences described above. It is possible that a cashless
exercise could be a taxable event. U.S. holders are urged to consult their tax advisors as to the consequences of an exercise
of a Warrant on a cashless basis, including with respect to whether the exercise is a taxable event, and their holding period
and tax basis in the common stock received.
If
a Warrant expires without being exercised, a U.S. holder will recognize a capital loss in an amount equal to such holder’s
adjusted tax basis in the Warrant. Such loss will be long-term capital loss if, at the time of the expiration, the U.S. holder’s
holding period in such Warrant is more than one year. The deductibility of capital losses is subject to certain limitations.
Constructive
Dividends on Warrants
As
described in the section entitled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders
of our common stock or our Preferred Stock in the foreseeable future. However, if at any time during the period in which a U.S.
holder holds Warrants received upon exercise of a Subscription Right, we were to pay a taxable dividend to our stockholders and,
in accordance with the anti-dilution provisions of the Warrants, the exercise price of the Warrants were decreased, that decrease
would be deemed to be the payment of a taxable dividend to a U.S. holder of the Warrants to the extent of our earnings and profits,
notwithstanding the fact that such holder will not receive a cash payment. If the exercise price is adjusted in certain other
circumstances (or in certain circumstances, there is a failure to make appropriate adjustments), or there is an adjustment to
the number of common shares that will be issued on exercise of the Warrants, such adjustments may also result in the deemed payment
of a taxable dividend to a U.S. holder. U.S. holders should consult their tax advisors regarding the proper treatment of any adjustments
to the exercise price of the Warrants. We are currently required to report the amount of any deemed distributions to the IRS,
as well as either on our website or to holders not exempt from reporting.
Distributions
on Preferred Stock and Common Stock
As
described in the section entitled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders
of our Preferred Stock, Series B Preferred Stock, or common stock in the foreseeable future. However, if we do make distributions
of cash or property on our Preferred Stock, Series B Preferred Stock, or common stock, such distributions will constitute dividends
to the extent paid out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes.
Dividends received by a corporate U.S. holder may be eligible for a dividends received deduction, subject to applicable limitations.
Dividends received by certain non-corporate U.S. holders, including individuals, are generally taxed at the lower applicable capital
gains rate provided certain holding period and other requirements are satisfied. Distributions in excess of our current and accumulated
earnings and profits will constitute a return of capital and first be applied against and reduce a U.S. holder’s adjusted
tax basis in its Preferred Stock or common stock, as the case may be, but not below zero. Any excess will be treated as capital
gain and will be treated as described below in the section relating to the sale or disposition of our common stock.
Sale,
Exchange or Other Disposition of Preferred Stock and Common Stock
Upon
a sale, exchange, or other taxable disposition of our Preferred Stock (other than by conversion) or our common stock, a U.S. holder
generally will recognize capital gain or loss equal to the difference between the amount realized (not including any amount attributable
to declared and unpaid dividends, which will be taxable as described above to U.S. holders of record who have not previously included
such dividends in income) and the U.S. holder’s adjusted tax basis in our Preferred Stock or our common stock. The U.S.
holder’s adjusted tax basis in our Preferred Stock generally will equal its initial tax basis (discussed above under “—Exercise
of Subscription Rights”), as adjusted for applicable distributions (including constructive dividends described below). A
U.S. holder’s adjusted tax basis in our common stock generally will equal its initial tax basis in our common stock (discussed
below under “—Conversion of the Preferred Stock into Our Common Stock”), as adjusted for applicable distributions
(including constructive dividends described below). Such capital gain or loss generally will be long-term capital gain or loss
if the U.S. holder’s holding period for our Preferred Stock or our common stock exceeded one year at the time of disposition
(see the discussion below under “—Conversion of Our Preferred Stock into Our Common Stock” regarding a U.S.
holder’s holding period for our common stock). Long-term capital gains recognized by certain non-corporate U.S. holders,
including individuals, generally are subject to reduced rates of taxation. The deductibility of capital losses is subject to limitations.
Conversion
of Our Preferred Stock into Our Common Stock
A
U.S. holder will not recognize any gain or loss in respect of the receipt of our common stock upon the conversion of our Preferred
Stock (except to the extent the U.S. holder receives a cash payment for any fractional share that would otherwise have been issuable
upon conversion of the Preferred Stock). The adjusted tax basis of our common stock that a U.S. holder receives on conversion
will equal the adjusted tax basis of the Preferred Stock converted (decreased by the adjusted tax basis allocable to any fractional
share that would otherwise have been issuance upon conversion of the Preferred Stock), and the holding period of such common stock
received on conversion will include the period during which the U.S. holder held the Preferred Stock prior to conversion.
In
the event a U.S. holder’s Preferred Stock is converted pursuant to an election by such U.S. holder in the case of certain
acquisitions or fundamental changes or pursuant to certain other transactions (including our consolidation or merger into another
person), the tax treatment of such a conversion will depend upon the facts underlying the particular transaction triggering such
a conversion. In this regard, it is possible that any related adjustments of the conversion rate would be treated as a constructive
distribution to the U.S. holder as described below under “—Constructive Dividends on Preferred Stock.”
U.S. holders should consult their own tax advisors to determine the specific tax treatment of a conversion under such circumstances.
Constructive
Dividends on Preferred Stock
The
conversion rate of our Preferred Stock is subject to adjustment under certain circumstances, as described above under “Description
of Securities—Preferred Stock—Preferred Stock.” Section 305(c) of the Code and U.S. Treasury Regulations
thereunder may treat a U.S. holder of our Preferred Stock as having received a constructive distribution includable in such U.S.
holder’s income in the manner as described above under “—Distributions on Preferred Stock and Common
Stock,” if and to the extent that certain adjustments in the conversion rate (or failures to make such an adjustment) increase
the proportionate interest of such U.S. holder in our earnings and profits. In certain other circumstances, an adjustment to the
conversion rate of our Preferred Stock or a failure to make such an adjustment could potentially give rise to constructive distributions
to U.S. holders of our common stock. Thus, under certain circumstances, U.S. holders may recognize income in the event of a constructive
distribution even though they may not receive any cash or property. We are currently required to report the amount of any deemed
distributions to the IRS, as well as either on our website or to holders not exempt from reporting.
Information
Reporting and Backup Withholding
A
U.S. holder may be subject to information reporting and backup withholding when such holder receives dividend payments (including
constructive dividends) or receives proceeds from the sale or other taxable disposition of the Warrants, shares of our Preferred
Stock acquired through the exercise of Subscription Rights or shares of our common stock acquired through conversion of our Preferred
Stock or exercise of the Warrants. Certain U.S. holders are exempt from backup withholding, including certain corporations and
certain tax-exempt organizations. A U.S. holder will be subject to backup withholding if such holder is not otherwise exempt (or
fails to properly establish an exemption) and such holder:
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fails
to furnish the holder’s taxpayer identification
number, which for an individual is ordinarily
his or her social security number;
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furnishes
an incorrect taxpayer identification number;
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is
notified by the IRS that
the holder previously failed to
properly report payments of interest or dividends;
or
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fails
to certify under penalties of perjury
that the holder has
furnished a correct taxpayer identification number and
that the IRS has not
notified the holder
that the holder is subject
to backup withholding.
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Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a
credit against a U.S. holder’s U.S. federal income tax liability, provided the required information is timely furnished
to the IRS. U.S. holders should consult their tax advisors regarding their qualification for an exemption from backup withholding
and the procedures for obtaining such an exemption.
Tax
Considerations Applicable to Non-U.S. Holders
For
purposes of this discussion, a “non-U.S. holder” is a beneficial owner of shares of our common stock, Series B Preferred
Stock, participating warrants, our Subscription Rights, shares of our Preferred Stock and Warrants acquired upon exercise of Subscription
Rights or shares of our common stock acquired upon conversion of our Preferred Stock or exercise of Warrants, as the case may
be, that is neither a U.S. holder nor an entity treated as a partnership for U.S. federal income tax purposes.
Receipt,
Exercise and Expiration of the Subscription Rights
The
discussion assumes that the receipt of Subscription Rights will be treated as a nontaxable distribution. See “—Tax
Considerations Applicable to U.S. Holders—Receipt of Subscription Rights” above. In such case, non-U.S. holders will
not be subject to U.S. federal income tax (or any withholding thereof) on the receipt, exercise or expiration of the Subscription
Rights.
Exercise
of Warrants
A
non-U.S. holder will not be subject to U.S. federal income tax on the cash exercise of Warrants into shares of our common stock.
As discussed above in “—Tax Considerations Applicable to U.S. Holders—Sale or Other Disposition, Exercise or
Expiration of Warrants,” the U.S. federal income tax treatment of an exercise of a Warrant on a cashless basis is not clear.
Non-U.S. holders are urged to consult their tax advisors as to the consequences of an exercise of a Warrant on a cashless basis,
including with respect to whether the exercise is a taxable event, and their holding period and tax basis in the common stock
received.
Constructive
Dividends on Warrants
As
described in the section entitled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders
of our Preferred Stock or common stock in the foreseeable future. However, if at any time during the period in which a non-U.S.
holder holds Warrants we were to pay a taxable dividend to our stockholders and, in accordance with the anti-dilution provisions
of the Warrants, the exercise price of the Warrants were decreased, that decrease would be deemed to be the payment of a taxable
dividend to a non-U.S. holder to the extent of our earnings and profits, notwithstanding the fact that such holder will not receive
a cash payment. If the exercise price is adjusted in certain other circumstances (or in certain circumstances, there is a failure
to make appropriate adjustments), or there is an adjustment to the number of common shares that will be issued on exercise of
the Warrants, such adjustments may also result in the deemed payment of a taxable dividend to a non-U.S. holder. Any resulting
withholding tax attributable to deemed dividends may be collected from other amounts payable or distributable to the non-U.S.
holder. Non-U.S. holders should consult their tax advisors regarding the proper treatment of any adjustments to the Warrants.
Distributions
on Preferred Stock and Common Stock
As
described in the section entitled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders
of our Preferred Stock or common stock in the foreseeable future. However, if we do make distributions of cash or property on
our Preferred Stock or common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the
extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts
not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against
and reduce a non-U.S. holder’s adjusted tax basis in its Preferred Stock or common stock, as the case may be, but not below
zero. Any excess will be treated as capital gain and will be treated as described below in the section relating to the sale or
disposition of our Preferred Stock, Warrants, or common stock. Because we may not know the extent to which a distribution is a
dividend for U.S. federal income tax purposes at the time it is made, for purposes of the withholding rules discussed below we
or the applicable withholding agent may treat the entire distribution as a dividend.
Subject
to the discussion below on backup withholding and foreign accounts, dividends paid to a non-U.S. holder of our Preferred Stock
or common stock that are not effectively connected with the non-U.S. holder’s conduct of a trade or business within the
United States will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower
rate specified by an applicable income tax treaty).
Non-U.S.
holders will be entitled to a reduction in or an exemption from withholding on dividends as a result of either (1) an applicable
income tax treaty or (2) the non-U.S. holder holding our Preferred Stock or common stock in connection with the conduct of a trade
or business within the United States and dividends being effectively connected with that trade or business. To claim such a reduction
in or exemption from withholding, the non-U.S. holder must provide the applicable withholding agent with a properly executed (a)
IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) claiming an exemption from or reduction of the withholding tax
under the benefit of an income tax treaty between the United States and the country in which the non-U.S. holder resides or is
established, or (b) IRS Form W-8ECI stating that the dividends are not subject to withholding tax because they are effectively
connected with the conduct by the non-U.S. holder of a trade or business within the United States, as may be applicable. These
certifications must be provided to the applicable withholding agent prior to the payment of dividends and must be updated periodically.
Non-U.S. holders that do not timely provide the applicable withholding agent with the required certification, but that qualify
for a reduced rate under an applicable income tax treaty, may obtain a refund of any excess amounts withheld by timely filing
an appropriate claim for refund with the IRS.
If
dividends paid to a non-U.S. holder are effectively connected with the non-U.S. holder’s conduct of a trade or business
within the United States (and, if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment
in the United States to which such dividends are attributable), then, although exempt from U.S. federal withholding tax (provided
the non-U.S. holder provides appropriate certification, as described above, and subject to the discussion below on backup withholding
and foreign accounts), the non-U.S. holder will be subject to U.S. federal income tax on such dividends on a net income basis
at the regular graduated U.S. federal income tax rates. In addition, a non-U.S. holder that is a corporation may be subject to
a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on its effectively connected
earnings and profits for the taxable year that are attributable to such dividends, as adjusted for certain items. Non-U.S. holders
should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.
Sale
or Other Disposition of Preferred Stock, Warrants or Common Stock
Subject
to the discussions below on backup withholding and foreign accounts, a non-U.S. holder will not be subject to U.S. federal income
tax on any gain realized upon the sale or other taxable disposition of our Preferred Stock, Warrants or common stock unless:
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the
gain is effectively connected
with the non-U.S. holder’s conduct
of a trade or business
within the United States (and, if required by
an applicable income tax treaty,
the non-U.S. holder maintains
a permanent establishment in the United
States to which such gain is attributable);
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the
non-U.S. holder
is a nonresident alien individual
present in the United States for 183
days or more during the
taxable year of the disposition and
certain other requirements are met; or
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our
Preferred Stock,
Warrants or common stock constitutes
a U.S. real property interest, or
USRPI, by reason of our
status as a U.S. real property
holding corporation, or
USRPHC, for U.S. federal income tax
purposes.
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Gain
described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular
graduated rates. A Non-U.S. holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such
lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.
Gain
described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified
by an applicable income tax treaty) on any gain derived from the disposition, which may be offset by U.S. source capital losses
of the non-U.S. holder (even though the individual is not considered a resident of the United States), provided the non-U.S. holder
has timely filed U.S. federal income tax returns with respect to such losses.
With
respect to the third bullet point above, we believe we are not currently and do not anticipate becoming a USRPHC. Because the
determination of whether we are a USRPHC depends on the fair market value of our USRPIs relative to the fair market value of our
other business assets and our non-U.S. real property interests, however, there can be no assurance we are not a USRPHC or will
not become one in the future.
Non-U.S.
holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different
rules.
Conversion
of Our Preferred Stock into Our Common Stock
A
non-U.S. holder will not recognize any gain or loss in respect of the receipt of our common stock upon the conversion of our Preferred
Stock (except to the extent the non-U.S. holder receives a cash payment for any fractional share that would otherwise have been
issuable upon conversion of the Preferred Stock).
Constructive
Dividends on Preferred Stock
As
described above under “—Tax Considerations Applicable to U.S. Holders—Constructive Dividends on Preferred Stock,”
in certain circumstances, a non-U.S. holder will be deemed to receive a constructive distribution from us. Adjustments in the
conversion rate (or failures to adjust the conversion rate) that increase the proportionate interest of a non-U.S. holder in our
earnings and profits could result in deemed distributions to the non-U.S. holder that are treated as dividends for U.S. federal
income tax purposes. Any constructive dividend deemed paid to a non-U.S. holder will be subject to U.S. federal income tax or
withholding tax in the manner described above under “—Tax Considerations Applicable to Non-U.S. Holders—Distributions
on Preferred Stock and Common Stock.” It is possible that U.S. federal tax on the constructive dividend would be withheld,
if applicable, from subsequent payments on the Preferred Stock or our common stock.
Information
Reporting and Backup Withholding
Subject
to the discussion below on foreign accounts, a non-U.S. holder will not be subject to backup withholding with respect to distributions
on our Preferred Stock, Warrants or common stock we make to the non-U.S. holder, provided the applicable withholding agent does
not have actual knowledge or reason to know such holder is a United States person and the holder timely certifies its non-U.S.
status, such as by providing a valid IRS Form W-8BEN, W- 8BEN-E or W-8ECI, or other applicable certification. However, information
returns generally will be filed with the IRS in connection with any distributions (including deemed distributions) made on our
Preferred Stock, Warrants and common stock to the non-U.S. holder, regardless of whether any tax was actually withheld. Copies
of these information returns may also be made available under the provisions of a specific treaty or agreement to the tax authorities
of the country in which the non-U.S. holder resides or is established.
Information
reporting and backup withholding may apply to the proceeds of a sale or other taxable disposition of our Preferred Stock, Warrants
or common stock within the United States, and information reporting may (although backup withholding generally will not) apply
to the proceeds of a sale or other taxable disposition of our Preferred Stock, Warrants or common stock outside the United States
conducted through certain U.S.-related financial intermediaries, in each case, unless the beneficial owner timely certifies under
penalty of perjury that it is a non-U.S. holder on IRS Form W-8BEN or W-8BEN-E, or other applicable form (and the payor does not
have actual knowledge or reason to know that the beneficial owner is a U.S. person) or such owner otherwise timely establishes
an exemption. Proceeds of a disposition of our Preferred Stock, Warrants or common stock conducted through a non-U.S. office of
a non-U.S. broker generally will not be subject to backup withholding or information reporting.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a
credit against a non-U.S. holder’s U.S. federal income tax liability, provided the required information is timely furnished
to the IRS.
Additional
Withholding Tax on Payments Made to Foreign Accounts
Withholding
taxes may be imposed under the Foreign Account Tax Compliance Act, or FATCA, on certain types of payments made to non-U.S. financial
institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends (including deemed
dividends) paid on our Preferred Stock, Warrants or common stock, or gross proceeds from the sale or other disposition of our
Preferred Stock, Warrants or common stock paid to a “foreign financial institution” or a “non-financial foreign
entity” (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting
obligations, (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners”
(as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign
financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a
foreign financial institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement
with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain
“specified United States persons” or “United States-owned foreign entities” (each as defined in the Code),
annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial
institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental
agreement with the United States governing FATCA may be subject to different rules.
Under
the applicable U.S. Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of
dividends (including deemed dividends), and will apply to payments of gross proceeds (including a distribution to the extent it
is treated as a return of capital or capital gain) from the sale or other disposition of our Preferred Stock, Warrants or common
stock on or after January 1, 2019. Pursuant to Treasury Regulations proposed under Sections 1471 through 1474 of the Code, the
U.S. Treasury Department and the IRS have proposed to eliminate the application of the FATCA withholding rules to gross proceeds
from the sale or other disposition of any property of a type which can produce interest or dividends from U.S. sources. Under
Section 7805(b)(1)(C) of the Code, taxpayers may rely on such proposed Treasury Regulations until final Treasury Regulations are
issued. Because we may not know the extent to which a distribution is a dividend for U.S. federal income tax purposes at the time
it is made, for purposes of these withholding rules we or the applicable withholding agent may treat the entire distribution as
a dividend. Prospective investors should consult their tax advisors regarding the potential application of these withholding provisions.
DESCRIPTION
OF SECURITIES
As
of the date of this prospectus, our Restated Certificate of Incorporation authorizes us to issue 250,000,000 shares of common
stock, par value $0.01 per share, and 130,000,000 shares of preferred stock, par value $0.01 per share. The following is a summary
of the rights of our common and preferred stock and some of the provisions of our Restated Certificate of Incorporation and Restated
Bylaws, our outstanding warrants, our registration rights agreements and the Delaware General Corporation Law. Because it is only
a summary, it does not contain all the information that may be important to you and is subject to and qualified in its entirety
by our Restated Certificate of Incorporation and our Restated Bylaws, a copy of each of which has been incorporated as an exhibit
to the registration statement of which this prospectus forms a part.
Our
Restated Certificate of Incorporation and our Restated Bylaws contain certain provisions that are intended to enhance the likelihood
of continuity and stability in the composition of the board of directors, which may have the effect of delaying, deferring or
preventing a future takeover or change in control of the Company unless such takeover or change in control is approved by our
board of directors.
Common
Stock
As
of June 30, 2019, there were 1,854,898 shares of common stock outstanding. In addition, as of June 30, 2019 there were: (i) 377
shares of common stock subject to outstanding options; (ii) 5,953 shares of common stock reserved for future issuance under our
Amended and Restated 2012 Equity Incentive Plan; (iii) 426,702 shares of common stock reserved for future issuance under
outstanding common stock warrants; and (iv) 282,080 shares of common stock reserved for issuance on conversion of 737 shares
of the Series B Preferred Stock. Each outstanding share of common stock entitles the holder thereof to one vote per share on all
matters. Our Restated Bylaws provide that any vacancy occurring in the board of directors may be filled by the affirmative vote
of a majority of the remaining directors. Stockholders do not have preemptive rights to purchase shares in any future issuance
of our common stock. In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to receive,
ratably, the net assets available to stockholders after payment of all creditors.
Holders
of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders,
and do not have cumulative voting rights. Accordingly, the holders of a majority of the shares of our common stock entitled to
vote can elect all of the directors standing for election. Subject to preferences that may be applicable to any outstanding shares
of preferred stock, holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared from
time to time by our board of directors out of funds legally available for dividend payments. All outstanding shares of our common
stock are fully paid and nonassessable, and any shares of our common stock to be sold pursuant to this prospectus will be fully
paid and nonassessable. The holders of common stock have no preferences or rights of conversion, exchange, pre- emption or other
subscription rights. There are no redemption or sinking fund provisions applicable to our common stock. In the event of any liquidation,
dissolution or winding-up of our affairs, holders of our common stock will be entitled to share ratably in our assets that are
remaining after payment or provision for payment of all of our debts and obligations and after liquidation payments to holders
of outstanding shares of preferred stock, if any.
The
transfer agent and registrar for our common stock is American Stock Transfer and Trust Company. The transfer agent and the registrar’s
address is 59 Maiden Lane, New York, New York 10038. Their telephone number is 1-800-937-5449. Our common stock is listed on The
NASDAQ Capital Market under the symbol “SINT”.
Preferred
Stock
Our
Board of directors has the authority under our Restated Certificate of Incorporation, without further action by our stockholders,
to issue up to 130,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares
to be included in each such series, to fix the rights, preferences, privileges and restrictions of the shares of each wholly unissued
series, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference and sinking fund
terms, and to increase or decrease the number of shares of any such series (but not below the number of shares of such series
then outstanding). Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that
could have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the
liquidation rights of our common stock or otherwise adversely affecting the rights of holders of our common stock. The issuance
of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could,
among other things, have the effect of delaying, deferring or preventing a change of control and may adversely affect the market
price of our common stock.
Series
B Preferred Stock.
Our
board of directors designated 15,000 shares of our preferred stock as Series B Preferred Stock. As of June 30, 2019, there were
737 shares of Series B Preferred stock outstanding. The Series B Preferred Stock ranks senior to our common stock and other classes
of capital stock with respect to redemption, unless the holders of a majority of the outstanding shares of Series B Preferred
Stock consent to the creation of parity stock or senior preferred stock.
Conversion
Each
share of Series B Preferred Stock is convertible into shares of our common stock at any time at the holder’s option at the
Conversion Price described below. We may not effect any conversion of Series B Preferred Stock, with certain exceptions, to the
extent that, after giving effect to an attempted conversion, the holder of Series B Preferred Stock (together with such holder’s
affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially
own a number of shares of common stock in excess of 4.99% (or, at the election of the holder, 9.99%) of the shares of our common
stock then outstanding after giving effect to such conversion, referred to as the Preferred Stock Beneficial Ownership Limitation;
provided, however, that upon notice to the Company, the holder may increase or decrease the Preferred Stock Beneficial Ownership
Limitation, provided that in no event may the Preferred Stock Beneficial Ownership Limitation exceed 9.99% and any increase in
the Preferred Stock Beneficial Ownership Limitation will not be effective until 61 days following notice of such increase from
the holder to us.
Subject
to certain ownership limitations as described below and certain equity conditions being met, if during any 30 consecutive trading
days, the volume weighted average price of our common stock exceeds $130.61 and the daily dollar trading volume during such period
exceeds $500,000 per trading day, we have the right to force the conversion of the Series B Preferred Stock into common stock.
Conversion
Price.
The
Series B Preferred Stock is convertible into shares of common stock by dividing the stated value of the Series B Preferred Stock
($1,100) by $2.3867 (the “Conversion Price”). The Conversion Price is subject to adjustment for stock splits, stock
dividends, and distributions of common stock or securities convertible, exercisable or exchangeable for common stock, subdivisions,
combinations and reclassifications.
Subject
to certain exclusions contained in the Certificate of Designation, if the Company in any manner grants or sells any rights, warrants
or options and the lowest price per share for which one share of common stock is at any time issuable upon the exercise of any
such option or upon conversion, exercise or exchange of any Common Stock Equivalents (as defined in the Certificate of Designation)
issuable upon exercise of any such option, exercise or exchange of any Common Stock Equivalent issuable upon the exercise of such
option or otherwise pursuant to the terms thereof is less than the Conversion Price, then such share of common stock will be deemed
to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such option for such
price per share. For purposes of this paragraph only, the “lowest price per share for which one share of common stock is
issuable upon the exercise of any such options or upon conversion, exercise or exchange of any Common Stock Equivalent issuable
upon exercise of any such option or otherwise pursuant to the terms thereof” will be equal to (1) the lower of (x)
the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of
common stock upon the granting or sale of such option, upon exercise of such option and upon conversion, exercise or exchange
of any Common Stock Equivalents issuable upon exercise of such option or otherwise pursuant to the terms thereof and (y) the lowest
exercise price set forth in such option for which one share of common stock is issuable upon the exercise of any such options
or upon conversion, exercise or exchange of any Common Stock Equivalents issuable upon exercise of any such option or otherwise
pursuant to the terms thereof. Except as contemplated by the terms of the Certificate of Designation, no further adjustment of
the Conversion Price will be made upon the actual issuance of such shares of common stock or of such convertible securities upon
the exercise of such options or otherwise pursuant to the terms of or upon the actual issuance of such Common Stock Equivalents.
Subject
to certain exclusions contained in the Certificate of Designation, if the Company in any manner issues or sells any Common Stock
Equivalents and the lowest price per share for which one share of common stock is at any time issuable upon the conversion, exercise
or exchange thereof or otherwise pursuant to the terms thereof is less than the Conversion Price, then such share of common stock
will be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such convertible
securities for such price per share. For purposes of this paragraph only, the “lowest price per share for which one share
of common stock is issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof”
will be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by
the Company with respect to one share of common stock upon the issuance or sale of the Common Stock Equivalent and upon conversion,
exercise or exchange of such convertible security or otherwise pursuant to the terms thereof and (y) the lowest conversion price
set forth in such convertible security for which one share of common stock is issuable upon conversion, exercise or exchange thereof
or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Common Stock
Equivalent (or any other person) upon the issuance or sale of such Common Stock Equivalent plus the value of any other consideration
received or receivable by, or benefit conferred on, the holder of such Common Stock Equivalent (or any other person). Except as
contemplated by the terms of the Certificate of Designation, no further adjustment of the Conversion Price will be made upon the
actual issuance of such shares of common stock upon conversion, exercise or exchange of such Common Stock Equivalents or otherwise
pursuant to the terms thereof, and if any such issuance or sale of such Common Stock Equivalents is made upon exercise of any
options for which adjustment of the Conversion Price has been or is to be made, except as contemplated by the terms of the Certificate
of Designation, no further adjustment of the Conversion Price will be made by reason of such issuance or sale.
If
the purchase or exercise price provided for in any options, the additional consideration, if any, payable upon the issue, conversion,
exercise or exchange of any convertible securities, or the rate at which any convertible securities are convertible into or exercisable
or exchangeable for shares of common stock increases or decreases at any time (other than proportional changes in conversion or
exercise prices, as applicable, in connection with stock dividends, splits or combination of outstanding common stock) the Conversion
Price in effect at the time of such increase or decrease will be adjusted to the Conversion Price which would have been in effect
at such time had such options or convertible securities provided for such increased or decreased purchase price, additional consideration
or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. If the terms of
any option or convertible security that was outstanding as of the date of issuance of the Preferred Stock and related Warrants
are increased or decreased in the manner described in the immediately preceding sentence, then such option or convertible security
and the shares of common stock deemed issuable upon exercise, conversion or exchange thereof will be deemed to have been issued
as of the date of such increase or decrease. No adjustment will be made if such adjustment would result in an increase of the
Conversion Price then in effect.
If
any option and/or convertible security and/or Adjustment Right is issued in connection with the issuance or sale or deemed issuance
or sale of any other securities of the Company (as determined by the holder of Preferred Stock, the “Primary Security”,
and such option and/or convertible security and/or Adjustment Right (as defined below), the “Secondary Securities”
and together with the Primary Security, each a “unit”), together comprising one integrated transaction, the aggregate
consideration per share of common stock with respect to such Primary Security will be deemed to be the lower of (x) the
purchase price of such unit, (y) if such Primary Security is an option and/or convertible security, the lowest price per share
for which one share of common stock is at any time issuable upon the exercise or conversion of the Primary Security in accordance
with the paragraphs above and (z) the lowest volume-weighted average price of the common stock on any trading day during the four
trading day period immediately following the public announcement of such dilutive issuance. If any shares of common stock, options
or convertible securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor
will be deemed to be the net amount of consideration received by the Company therefor. If any shares of common stock, options
or convertible securities are issued or sold for a consideration other than cash, the amount of such consideration received by
the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities,
in which case the amount of consideration received by the Company for such securities will be the arithmetic average of the volume-weighted
average prices of such security for each of the five (5) trading days immediately preceding the date of receipt. If any shares
of common stock, options or convertible securities are issued to the owners of the non-surviving entity in connection with any
merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value
of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of common stock,
options or convertible securities (as the case may be). The fair value of any consideration other than cash or publicly traded
securities will be determined jointly by the Company and the holder. If such parties are unable to reach agreement within ten
(10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration
will be determined within five trading days after the tenth day following such Valuation Event by an independent, reputable appraiser
jointly selected by the Company and the holder. “Adjustment Right” means any right granted with respect to any securities
issued in connection with, or with respect to, any issuance or sale (or deemed issuance or sale in accordance with the paragraph
above) of shares of common stock that could result in a decrease in the net consideration received by the Company in connection
with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other
similar rights).
In
addition, holders of Preferred Stock may be eligible to elect an alternative price in the event we issue certain variable price
securities.
Liquidation;
Dividends; Repurchases.
In
the event of a liquidation, the holders of Series B Preferred Stock are entitled to participate on an as-converted-to-common stock
basis with holders of the common stock in any distribution of assets of the Company to the holders of common stock. Additionally,
we will not pay any dividends on shares of common stock (other than dividends in the form of common stock) unless and until such
time as we pay dividends on each Series B Preferred Share on an as-converted basis. Other than as set forth in the previous sentence,
no other dividends will be paid on Series B Preferred Stock and we will pay no dividends (other than dividends in the form of
common stock) on shares of common stock unless we simultaneously comply with the previous sentence.
Redemption
Right.
The
Company holds an option to redeem some or all of the Series B Preferred Stock at any time after the six-month anniversary of its
issuance date at a 25% premium to the stated value of the Series B Preferred Stock subject to redemption, upon 30 days prior written
notice to the holder of the Series B Preferred Stock. The Series B Preferred Stock would be redeemed by the Company for cash.
Fundamental
Transactions.
In
the event of any fundamental transaction, generally including any merger with or into another entity, sale of all or substantially
all of our assets, tender offer or exchange offer, or reclassification of our common stock, then upon any subsequent conversion
of the Series B Preferred Stock, the holder will have the right to receive as alternative consideration, for each share of our
common stock that would have been issuable upon such conversion immediately prior to the occurrence of such fundamental transaction,
the number of shares of common stock of the successor or acquiring corporation or of our company, if it is the surviving corporation,
and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares of our
common stock for which the Series B Preferred Stock is convertible immediately prior to such event.
Voting
Rights.
With
certain exceptions, the holders of shares of Series B Preferred Stock have no voting rights. However, as long as any shares of
Series B Preferred Stock remain outstanding, we may not, without the affirmative vote of holders of a majority of the then-outstanding
Series B Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock
or alter or amend the Certificate of Designation, (b) increase the number of authorized shares of Series B Preferred Stock, (c)
amend our Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of holders of
Series B Preferred Stock disproportionately to the rights of holders of our other capital stock, or (d) enter into any agreement
with respect to any of the foregoing.
Jurisdiction
and Waiver of Trial by Jury
Other
than with respect to suits, actions or proceedings arising under the federal securities laws, the Certificate of Designation provides
for investors to consent to exclusive jurisdiction to courts located in New York, New York and provides for a waiver of the right
to a trial by jury. It also provides that disputes are governed by Delaware law.
Future
Preferred Stock.
Our
board of directors will fix the rights, preferences, privileges, qualifications and restrictions of the preferred stock of each
series that we sell under this prospectus and applicable prospectus supplements in the certificate of designation relating to
that series. We will file as an exhibit to the registration statement of which this prospectus is a part, or incorporate by reference
into the registration statement of which this prospectus is a part the form of any certificate of designation that describes the
terms of the series of preferred stock we are offering before the issuance of the related series of preferred stock. This description
will include:
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the
title and stated value;
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the
number of shares we are offering;
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the
liquidation preference per share;
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the
purchase price per share;
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the
dividend rate per share, dividend period and payment dates and method of calculation for dividends;
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whether
dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
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our
right, if any, to defer payment of dividends and the maximum length of any such deferral period;
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the
procedures for any auction and remarketing, if any;
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the
provisions for a sinking fund, if any;
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the
provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and
repurchase rights;
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any
listing of the preferred stock on any securities exchange or market;
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whether
the preferred stock will be convertible into our common stock or other securities of ours, including warrants, and, if applicable,
the conversion period, the conversion price, or how it will be calculated, and under what circumstances it may be adjusted;
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voting
rights, if any, of the preferred stock;
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preemption
rights, if any;
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restrictions
on transfer, sale or other assignment, if any;
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a
discussion of any material or special United States federal income tax considerations applicable to the preferred stock;
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the
relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind
up our affairs;
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any
limitations on issuances of any class or series of preferred stock ranking senior to or on a parity with the series of preferred
stock being issued as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; and
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any
other specific terms, rights, preferences, privileges, qualifications or restrictions of the preferred stock.
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When
we issue shares of preferred stock under this prospectus, the shares will be fully paid and nonassessable and will not have, or
be subject to, any preemptive or similar rights.
The
General Corporation Law of the State of Delaware, the state of our incorporation, provides that the holders of preferred stock
will have the right to vote separately as a class on any proposal involving fundamental changes in the rights of holders of that
preferred stock. This right is in addition to any voting rights that may be provided for in the applicable certificate of designation.
Description
of Other Outstanding Securities of the Company
Warrants
As
of June 30, 2019, there were 426,702 common stock purchase warrants outstanding, which expire between July 1, 2019 and
May 2023. Each of these warrants entitles the holder to purchase one share of common stock at prices ranging between $7,992 and
$2.874, as converted, per share, with a weighted average exercise price of $31.76 per share. Certain of these warrants has a net
exercise provision under which its holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive
a net amount of shares based on the fair market value of our common stock at the time of exercise of the warrant after deduction
of the aggregate exercise price. Each of these warrants also contains provisions for the adjustment of the exercise price and
the aggregate number of shares issuable upon the exercise of the warrant in the event of dividends, share splits, reorganizations
and reclassifications and consolidations. Certain of these warrants contain a provision requiring a reduction to the exercise
price in the event we issue common stock, or securities convertible into or exercisable for common stock, at a price per share
lower than the warrant exercise price.
The
holders of certain of these warrants have registration rights that are outlined below under the heading “Registration Rights.”
May
2018 Public Offering Warrants
On
May 14, 2018, we issued 379,000 common stock warrants (the “May 2018 Warrants”) in a public offering. The material
terms and provisions of the May 2018 Warrants are summarized below. This summary of the May 2018 Warrants is not complete. For
the complete terms of the May 2018 Warrants, you should refer to the form of May 2018 Warrant filed as an exhibit to the registration
statement of which this prospectus forms a part.
Pursuant
to a warrant agency agreement between us and American Stock Transfer & Trust Company, LLC, as warrant agent, the May 2018
Warrants were issued in book-entry form and are represented only by one or more global warrants deposited with the warrant agent,
as custodian on behalf of The Depository Trust Company, or DTC, and registered in the name of Cede & Co., a nominee of DTC,
or as otherwise directed by DTC.
Exercisability,
Exercise Price and Term. The May 2018 Warrants entitle the holder to purchase shares of our common stock at an exercise price
equal to $2.3867 per share. The May 2018 Warrants were exercisable immediately and expire on the five-year anniversary of the
issuance date. The holder of a May 2018 Warrant will not be deemed a holder of our underlying common stock until the May 2018
Warrant is exercised, except as set forth in the May 2018 Warrants.
The
exercise price and the number of shares issuable upon exercise of the May 2018 Warrants is subject to appropriate adjustment,
similar to that described with respect to the Series B Preferred Stock above, in the event of recapitalization events, stock dividends,
stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our common stock. Subject to
certain exclusions contained in the May 2018 Warrant, the exercise price is also subject to adjustment in the event that we sell
or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer,
sale, grant or any option to purchase or other disposition) any common stock or common stock equivalents (as defined in the May
2018 Warrants), at an effective price per share less than the exercise price then in effect (including in the event we issued
Series B Preferred Stock at a conversion price lower than the initial conversion price of the Series B Preferred Stock). In addition,
May 2018 Warrant holders may be eligible to elect an alternative price in the event we issue certain variable price securities.
The May 2018 Warrant holders must pay the exercise price in cash upon exercise of the May 2018 Warrants, unless such May 2018
Warrant holders are utilizing the cashless exercise provision of the May 2018 Warrants, which is only available in certain circumstances
such as if the underlying shares are not registered with the SEC pursuant to an effective registration statement.
Fundamental
Transactions. In addition, in the event we consummate a merger or consolidation with or into another person or other reorganization
event in which our common shares are converted or exchanged for securities, cash or other property, or we sell, lease, license,
assign, transfer, convey or otherwise dispose of all or substantially all of our assets or we or another person acquires 50% or
more of our outstanding shares of common stock, referred to as a fundamental transaction, then following such event, the holders
of the May 2018 Warrants will be entitled to receive upon exercise of the May 2018 Warrants the same kind and amount of securities,
cash or property which the holders would have received had they exercised the May 2018 Warrants immediately prior to such fundamental
transaction. Any successor to us or surviving entity is required to assume the obligations under the warrants. Notwithstanding
the foregoing, in the event of a fundamental transaction, the holders will have the option, which may be exercised within 30 days
after the consummation of the fundamental transaction, to require the Company or the successor entity purchase the Warrant
from the holder by paying to the holder an amount of cash equal to the Black Scholes value of the remaining unexercised portion
of the warrant on the date of the consummation of the fundamental transaction. However, if the fundamental transaction is not
within the Company’s control, including not approved by the Company’s Board of Directors, the holder
will only be entitled to receive from the Company or any successor entity, as of the date of consummation of such fundamental
transaction, the same type or form of consideration (and in the same proportion), at the Black Scholes value of the unexercised
portion of the May 2018 Warrant, that is being offered and paid to the holders of common stock of the Company in connection
with the fundamental transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether
the holders of common stock are given the choice to receive from among alternative forms of consideration in connection with the
fundamental transaction.
Upon
the holder’s exercise of a May 2018 Warrant, we will issue the shares of common stock issuable upon exercise of the May
2018 Warrant within two trading days following our receipt of a notice of exercise, provided that payment of the exercise price
has been made (unless exercised via the “cashless” exercise provision).
Prior
to the exercise of any May 2018 Warrants to purchase common stock, holders of the May 2018 Warrants will not have any of the rights
of holders of the common stock purchasable upon exercise, including the right to vote, except as set forth therein.
May
2018 Warrant holders may exercise the May 2018 Warrants only if the issuance of the shares of common stock upon exercise of the
May 2018 Warrants is covered by an effective registration statement, or an exemption from registration is available under the
Securities Act and the securities laws of the state in which the holder resides. The May 2018 Warrant holders must pay the exercise
price in cash upon exercise of the May 2018 Warrants unless there is not an effective registration statement or, if required,
there is not an effective state law registration or exemption covering the issuance of the shares underlying the May 2018 Warrants
(in which case, the May 2018 Warrants may only be exercised via a “cashless” exercise provision).
Beneficial
Ownership Limitation. The May 2018 Warrant provides that we may not effect any exercise of the May 2018 Warrants, with certain
exceptions, to the extent that, after giving effect to an attempted exercise, the holder (together with such holder’s affiliates,
and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a
number of shares of common stock in excess of 4.99% (or, at the election of the holder, 9.99%) of the shares of our common stock
then outstanding after giving effect to such exercise, referred to as the May 2018 Warrant Beneficial Ownership Limitation; provided,
however, that upon notice to the Company, the holder may increase or decrease the May 2018 Warrant Beneficial Ownership Limitation,
provided that in no event may the May 2018 Warrant Beneficial Ownership Limitation exceed 9.99% and any increase in the May 2018
Warrant Beneficial Ownership Limitation will not be effective until 61 days following notice of such increase from the holder
to us.
Cashless
Exercise. If a May 2018 Warrant is exercised via the “cashless” exercise provision, the holder will receive the
number of shares equal to the quotient obtained by dividing (i) the difference between the VWAP (as determined pursuant to the
terms of the May 2018 Warrants) and the exercise price of the May 2018 Warrant multiplied by the number of shares issuable under
the May 2018 Warrant if such exercise were by means of a cash exercise by (ii) the VWAP (as determined pursuant to the terms of
the May 2018 Warrants).
Jurisdiction
and Waiver of Trial by Jury. Other than with respect to suits, actions or proceedings arising under the federal securities
laws, the May 2018 Warrant provides for investors to consent to exclusive jurisdiction to courts located in New York, New York
and provides for a waiver of the right to a trial by jury. It also provides that disputes are governed by New York law.
Repricing
of Series E Warrants and Issuance of New Warrants
On
March 6, 2018, the Company entered into a Warrant Amendment Agreement (the “Amendment Agreement”) with the holders
of previously issued Series E Common Stock Purchase Warrants (collectively, the “Series E Investors”).
In
connection with that certain Series E Common Stock Purchase Warrant between the Company and Series E Investors dated July 8, 2016,
(the “Series E Warrant Agreement”) the Company issued to the Series E Investors warrants to purchase up to 22,278
shares of common stock (the “Warrant Shares”) at an exercise price of $60.00 per share, (the “Series E Investor
Warrants”). Under the terms of the Amendment Agreement, in consideration of the Series E Investors exercising 22,278 of
the Series E Investor Warrants (the “Series E Warrant Exercise”), the exercise price per share of the Series E Investor
Warrants was reduced to $63.75 per share. In addition, and as further consideration, the Company issued to the Series E Investors
warrants to purchase up to the number of shares of common stock equal to 100% of the number of Series E Warrant Shares issued
pursuant to the Series E Warrant Exercise at an exercise price per share equal to $60.00 per share, the closing bid price for
our common stock on March 5, 2018 (the “New Warrants”). The Series E Investors may exercise the remaining 33,899 Series
E Investor Warrants at their discretion. The Amendment Agreement incorporated portions of the Series E Warrant Agreement, which
contained customary representations, warranties and covenants by each of the Company and the Series E Investors.
The
New Warrants are exercisable for up to five years from the Effective Date. The exercise price and number of shares issuable upon
exercise of the New Warrants are subject to adjustment for stock splits, combinations, recapitalization events and certain dilutive
issuances. The New Warrants are required to be exercised for cash, provided that if during the term of the New Warrants there
is not an effective registration statement under the Securities Act covering the resale of the shares issuable upon exercise of
the New Warrants, then the New Warrants may be exercised on a cashless (net exercise) basis. The New Warrant is attached as an
exhibit to the registration statement of which this prospectus forms a part and is incorporated herein by reference.
Securities
Issued to North Stadium Investments, LLC
On
July 28, 2017, the Company closed on a $2.5 million term loan (the “North Stadium Loan”) with North Stadium Investments,
LLC (“North Stadium”), a company owned and controlled by the Company’s Chief Executive Officer and Chairman
of the Board, Dr. Sonny Bal. In connection with the North Stadium Loan, the Company issued to North Stadium a Secured Promissory
Note in the amount of $2.5 million (the “North Stadium Note”). The North Stadium Note bears interest at the rate of
10% per annum, requires the Company to make monthly interest only payments for a period of 12 months, and principal and any unpaid
accrued interest are due and payable 12 months from the effective date of the North Stadium Note, July 28, 2017. The North Stadium
Note is secured by substantially all of the assets of the Company pursuant to a security agreement between the Company and North
Stadium dated July 28, 2017, and is junior to other previously existing security interests in such assets. The North Stadium Note
is attached as an exhibit to the registration statement of which this prospectus forms a part and is incorporated herein by reference.
In
connection with the North Stadium Loan and as additional consideration for the North Stadium Loan, the Company issued to North
Stadium a warrant to acquire shares of common stock with a five-year term (the “North Stadium Warrant”). As a result
of the Company’s reverse stock splits since the North Stadium Warrant was issued, the North Stadium Warrant is exercisable
for 1,833 shares of common stock as of the date of this prospectus, at an exercise price of $151.20 per share. The North Stadium
Warrant also has a net exercise provision under which the holder may, in lieu of payment of the exercise price in cash, surrender
the North Stadium Warrant and receive a net number of shares of common stock based on the fair market value of our common stock
at the time of exercise of the North Stadium Warrant after deduction of the aggregate exercise price. The North Stadium Warrant
also contains provisions for the adjustment of the exercise price and the aggregate number of shares of common stock issuable
upon the exercise of the North Stadium Warrant in the event of dividends, share splits, reorganizations, reclassifications and
consolidations. The North Stadium Warrant is attached as an exhibit to the registration statement of which this prospectus forms
a part and is incorporated herein by reference.
January
2017 Public Offering Warrants
On
January 19, 2017, the Company issued common stock and warrants in a public offering, with each warrant exercisable for one share
of common stock. The warrants expire on the five-year anniversary of the closing date. The exercise price is subject to appropriate
adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations
or similar events affecting the Company’s common stock. As a result of the Company’s reverse stock splits since the
warrants were issued, the warrants are exercisable for 12,125 shares of common stock as of the date of this prospectus, at an
exercise price of $198 per share. The warrants are callable by the Company in certain circumstances.
Subject
to limited exceptions, a holder of these warrants will not have the right to exercise any portion of its warrants if the holder
(together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s
affiliates) would beneficially own a number of shares of our common stock in excess of 4.99% (or, at the election of the holder,
9.99%) of the shares of our common stock then outstanding after giving effect to such exercise (the “2017 Warrant Beneficial
Ownership Limitation”); provided, however, that upon notice to the Company, the holder may increase or decrease the 2017
Warrant Beneficial Ownership Limitation, provided that in no event shall the 2017 Warrant Beneficial Ownership Limitation exceed
9.99% and any increase in the Beneficial Ownership Limitation will not be effective until 61 days following notice of such increase
from the holder to us.
The
holders of these warrants must pay the exercise price in cash upon exercise of the warrants, unless such holders are utilizing
the cashless exercise provision of the warrants, which is only available in certain circumstances such as if the underlying shares
are not registered with the SEC pursuant to an effective registration statement. We intend to use commercially reasonable efforts
to have the registration statement of which this prospectus forms a part, effective when the warrants are exercised.
In
addition, in the event the Company consummates a merger or consolidation with or into another person or other reorganization event
in which our common stock is converted or exchanged for securities, cash or other property, or the Company sells, leases, licenses,
assigns, transfers, conveys or otherwise disposes of all or substantially all of our assets or the Company or another person acquires
50% or more of the outstanding shares of our common stock, then following such event, the holders of the warrants will be entitled
to receive upon exercise of the warrants the same kind and amount of securities, cash or property which the holders would have
received had they exercised the warrants immediately prior to such fundamental transaction. Any successor to us or surviving entity
shall assume the obligations under the warrants.
In
the event of a fundamental transaction other than one in which a successor entity that is a publicly traded corporation whose
stock is quoted or listed on a trading market assumes the warrant such that the warrant shall be exercisable for the publicly
traded common stock of such successor entity, then the Company or any successor entity will pay at the holder’s option,
exercisable at any time concurrently with or within 30 days after the consummation of the fundamental transaction, an amount of
cash equal to the value of the remaining unexercised portion of the warrants on the date of consummation of the fundamental transaction
as determined in accordance with the Black Scholes option pricing model.
Upon
the holder’s exercise of a warrant, the Company will issue the shares of common stock issuable upon exercise of the warrant
within three trading days following the Company’s receipt of a notice of exercise, provided that payment of the exercise
price has been made (unless exercised via the “cashless” exercise provision).
Prior
to the exercise of a warrant, holders of the warrants will not have any of the rights of holders of our common stock purchasable
upon exercise, including the right to vote, except as set forth therein.
The
form of this warrant is attached as an exhibit to the registration statement of which this prospectus forms a part and is incorporated
herein by reference.
July
2016 Public Offering and Underwriter Warrants
In
July 2016, the Company sold Class A and Class B Units that consisted of common stock and Series E Warrants. The Series E Warrants
are exercisable for up to five years after the date of issuance. As of the date of this prospectus, there were 4,861 Series E
Warrants outstanding, exercisable for 4,861 shares of our common stock, at an exercise price of $360 per share. The Series E warrants
are callable by us in certain circumstances.
Subject
to limited exceptions, a holder of Series E Warrants does not have the right to exercise any portion of its Series E Warrants
if the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any
of such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99% (or, at the election
of the holder, 9.99%) of the shares of our common stock then outstanding after giving effect to such exercise (the “Series
E Beneficial Ownership Limitation”); provided, however, that upon notice to the Company, the holder may increase or decrease
the Series E Beneficial Ownership Limitation, provided that in no event shall the Series E Beneficial Ownership Limitation exceed
9.99% and any increase in the Series E Beneficial Ownership Limitation will not be effective until 61 days following notice of
such increase from the holder to us.
The
exercise price and the number of shares issuable upon exercise of the Series E Warrants is subject to appropriate adjustment in
the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or
similar events affecting our common stock. The Series E Warrant holders must pay the exercise price in cash upon exercise of the
Series E Warrants, unless such Series E Warrant holders are utilizing the cashless exercise provision of the Series E Warrants,
which is only available in certain circumstances such as if the underlying shares are not registered with the SEC pursuant to
an effective registration statement. We intend to use commercially reasonable efforts to have the registration statement of which
this prospectus forms a part, effective when the Series E Warrants are exercised.
In
addition, in the event we consummate a merger or consolidation with or into another person or other reorganization event in which
our common shares are converted or exchanged for securities, cash or other property, or we sell, lease, license, assign, transfer,
convey or otherwise dispose of all or substantially all of our assets or we or another person acquire 50% or more of our outstanding
shares of common stock, then following such event, the holders of the Series E Warrants will be entitled to receive upon exercise
of the warrants the same kind and amount of securities, cash or property which the holders would have received had they exercised
the warrants immediately prior to such fundamental transaction. Any successor to us or surviving entity shall assume the obligations
under the Series E Warrants.
In
the event of a fundamental transaction approved by our board of directors and other than one in which a successor entity that
is a publicly traded corporation whose stock is quoted or listed on a trading market assumes the Series E Warrant such that the
Series E Warrant shall be exercisable for the publicly traded common stock of such successor entity, then the Company or any successor
entity will pay at the holder’s option, exercisable at any time concurrently with or within 30 days after the consummation
of the fundamental transaction, an amount of cash equal to the value of the remaining unexercised portion of the Series E Warrants
on the date of consummation of the fundamental transaction as determined in accordance with the Black Scholes option pricing model.
Upon
the holder’s exercise of a Series E Warrant, we will issue the shares of common stock issuable upon exercise of the Series
E Warrant within three trading days following our receipt of a notice of exercise, provided that payment of the exercise price
has been made (unless exercised via the “cashless” exercise provision).
Prior
to the exercise of any Series E Warrants to purchase common stock, holders of the Series E Warrants will not have any of the rights
of holders of the common stock purchasable upon exercise, including the right to vote, except as set forth therein.
The
form of Series E Warrant and form of underwriters warrant are attached as exhibits to the registration statement of which this
prospectus forms a part and is incorporated herein by reference.
2016
Debt Exchange Warrants
On
April 4, 2016, the Company entered into an exchange agreement (the “Riverside Exchange Agreement”) with Riverside
Merchant Partners, LLC (“Riverside”), pursuant to which the Company agreed to exchange $1,000,000 of the principal
amount outstanding under the term loan held by Riverside for a subordinated convertible promissory note in the principal amount
of $1,000,000 and a warrant (the “First Riverside Warrant”) (the “Riverside Exchange”). In addition, pursuant
to the terms and conditions of the Riverside Exchange Agreement, the Company and Riverside exchanged an additional $2,000,000
of the principal amount of the term loan for an additional subordinated convertible promissory note in the principal amount of
up to $2,000,000 and an additional warrant (the “Second Riverside Warrant” and, together with the First Exchange Warrant,
the “Riverside Warrants”). As a result of the Company’s reverse stock splits since the Riverside Warrants were
issued, the First Riverside Warrant is exercisable for 278 shares of common stock as of the date of this prospectus, at an exercise
price of $583.20 per share, and the Second Riverside Warrant is exercisable for 278 shares of common stock as of the date of this
prospectus, at an exercise price of $597.60 per share.
The
Riverside Warrants are exercisable until the five-year anniversary of six months after the date of issuance of the Riverside Warrants.
The Riverside Warrants have a net exercise provision under which the holder may, in lieu of payment of the exercise price in cash,
surrender the warrant and receive a net number of shares of common stock based on the fair market value of our common stock at
the time of exercise of the Riverside Warrants after deduction of the aggregate exercise price. The Riverside Warrants also contain
provisions for the adjustment of the exercise price and the aggregate number of shares of common stock issuable upon the exercise
of the Riverside Warrants in the event of dividends, share splits, reorganizations, reclassifications and consolidations.
In
the event of a fundamental transaction approved by our board of directors, including but not limited to a transaction in which
the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with
another person or group of persons whereby such other person or group acquires more than 50% of the outstanding shares of our
common stock (not including any shares of common stock held by the other person or other persons making or party to, or associated
or affiliated with the other persons making or party to, such stock or share purchase agreement or other business combination),
other than one in which a successor entity that is a publicly traded corporation whose stock is quoted or listed on a trading
market assumes the warrant such that the warrant shall be exercisable for the publicly traded common stock of such successor entity,
then the Company or any successor entity will pay at the holder’s option, exercisable at any time concurrently with or within
30 days after the consummation of the fundamental transaction, an amount of cash equal to the value of the remaining unexercised
portion of the warrants on the date of consummation of the fundamental transaction as determined in accordance with the Black
Scholes option pricing model.
The
form of Riverside Warrant is attached as an exhibit to the registration statement of which this prospectus forms a part and is
incorporated herein by reference.
Westlake
Securities Warrants – 2016
As
compensation paid in connection with the consummation of a private placement in 2016, the Company issued a warrant to Westlake
Securities LLC on January 28, 2016 (the “2016 Westlake Warrant”). The 2016 Westlake Warrant is exercisable for five
years after the date of issuance. As a result of the Company’s reverse stock splits the 2016 Westlake Warrant is exercisable
for 208 shares of common stock as of the date of this prospectus at an exercise price of $702.00 per share. The 2016 Westlake
Warrant has a net exercise provision under which the holder may, in lieu of payment of the exercise price in cash, surrender the
warrant and receive a net number of shares of common stock based on the fair market value of our common stock at the time of exercise
of the warrant after deduction of the aggregate exercise price. The 2016 Westlake Warrant contains provisions for the adjustment
of the exercise price and the aggregate number of shares of common stock issuable upon the exercise of the warrant in the event
of dividends, share splits, reorganizations, reclassifications and consolidations. The 2016 Westlake Warrant is attached as an
exhibit to the registration statement of which this prospectus is a part and are incorporated herein by reference.
2015
Series A Warrants
On
September 11, 2015, the Company closed a concurrent public and private offering (the “2015 Offerings”) of common stock
and Series A, Series B and Series C Warrants. The Series B and Series C Warrants have since been either fully exercised or expired
in accordance with their terms, and only 278 Series A Warrants remain outstanding as of the date of this prospectus. On December
11, 2015, the Company entered into an Amended and Restated Series A Warrant (the “Series A Warrant Amendment”) with
each of the holders of the Series A Warrants (each an “Investor”). The Series A Warrants are exercisable on a cashless
basis, subject to certain conditions. As a result of the Company’s reverse stock splits since this warrant was issued, the
outstanding Series A Warrants are exercisable for 278 shares of common stock as of the date of this prospectus, at an exercise
price of $540.00 per share. The Series A Warrant also contains provisions for the adjustment of the exercise price and the aggregate
number of shares of common stock issuable upon the exercise of the warrant in the event of dividends, share splits, reorganizations,
reclassifications and consolidations. The Series A Warrant prohibits the Company from entering into variable rate transactions
without the holder’s consent.
In
the event of a fundamental transaction approved by our board of directors, including but not limited to a transaction in which
the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with
another person or group of persons whereby such other person or group acquires more than 50% of the outstanding shares of our
common stock (not including any shares of common stock held by the other person or other persons making or party to, or associated
or affiliated with the other persons making or party to, such stock or share purchase agreement or other business combination),
other than one in which a successor entity that is a publicly traded corporation whose stock is quoted or listed on a trading
market assumes the warrant such that the warrant shall be exercisable for the publicly traded common stock of such successor entity,
then the Company or any successor entity will pay at the holder’s option, exercisable at any time concurrently with or within
30 days after the consummation of the fundamental transaction, an amount of cash equal to the value of the remaining unexercised
portion of the warrants on the date of consummation of the fundamental transaction as determined in accordance with the Black
Scholes option pricing model.
As
compensation paid in connection with the consummation of the 2015 Offerings, the Company issued a warrant to Ladenburg Thalmann
& Co. Inc. on September 11, 2015 (the “Ladenburg Warrant”), who acted as placement agent for the 2015 Offerings.
As a result of the Company’s reverse stock splits since the Ladenburg Warrant was issued, the Ladenburg Warrant is exercisable
for 122 shares of common stock as of the date of this prospectus, at an exercise price of $2,538.00 per share. The Ladenburg Warrant
is exercisable from March 12, 2016 until September 8, 2020. The Ladenburg Warrant has a net exercise provision under which the
holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net number of shares of common
stock based on the fair market value of our common stock at the time of exercise of the Ladenburg Warrant after deduction of the
aggregate exercise price. The Ladenburg Warrant also contains provisions for the adjustment of the exercise price and the aggregate
number of shares of common stock issuable upon exercise of the Ladenburg Warrant in the event of dividends, share splits, reorganizations,
reclassifications and consolidations.
In
the event of a fundamental transaction approved by our board of directors, including but not limited to a transaction in which
the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with
another person or group of persons whereby such other person or group acquires more than 50% of the outstanding shares of our
common stock (not including any shares of common stock held by the other person or other persons making or party to, or associated
or affiliated with the other persons making or party to, such stock or share purchase agreement or other business combination),
other than one in which a successor entity that is a publicly traded corporation whose stock is quoted or listed on a trading
market assumes the warrant such that the warrant shall be exercisable for the publicly traded common stock of such successor entity,
then the Company or any successor entity will pay at the holder’s option, exercisable at any time concurrently with or within
30 days after the consummation of the fundamental transaction, an amount of cash equal to the value of the remaining unexercised
portion of the warrants on the date of consummation of the fundamental transaction as determined in accordance with the Black
Scholes option pricing model.
The
Series A Warrant and the Ladenburg Warrant are attached as exhibits to the registration statement of which this prospectus forms
a part and is incorporated herein by reference.
2014
Unit Purchase Option and Related Warrants
In
connection with a public offering of units, with each unit consisting of one share of common stock and one warrant to purchase
multiple shares of common stock in December 2014 we issued to Dawson James Securities, Inc. a Unit Purchase Option (the “Unit
Purchase Option”) to purchase units. The Unit Purchase Option is exercisable until five years from the date of issuance.
As a result of the Company’s reverse stock splits since these units were issued, this Unit Purchase Option is exercisable
for 106 units as of the date of this prospectus, at an exercise price of $7,696.80 per unit. The Unit Purchase Option also has
a net exercise provision under which the holder may, in lieu of payment of the exercise price in cash, surrender the Unit Purchase
Option and receive a net number of units based on the fair market value of the units at the time of exercise of the Unit Purchase
Option after deduction of the aggregate exercise price. The Unit Purchase Option also contains provisions for the adjustment of
the exercise price and the aggregate number of units issuable upon the exercise of the Unit Purchase Option in the event of dividends,
share splits, reorganizations, reclassifications and consolidations. The form of the Unit Purchase Option is attached as an exhibit
to the registration statement of which this prospectus forms a part and is incorporated herein by reference.
The
warrants issuable upon exercise of the Unit Purchase Option terminate on the fifth anniversary of the date of issuance. As a result
of the Company’s reverse stock splits, these warrants now have an exercise price of $7,696.80per share. The number of shares
of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations
or similar events affecting our common stock and the exercise price. This warrant contains a provision requiring a reduction to
the exercise price in the event we issue common stock, or securities convertible into or exercisable for common stock, at a price
per share lower than the warrant exercise price.
Cashless
Exercise Provision. Holders may exercise warrants by paying the exercise price in cash or, in lieu of payment of the exercise
price in cash, at any time 120 days after issuance, by electing to receive a cash payment from us equal to the Black Scholes Value
(as defined below) of the number of shares the holder elects to exercise (the “Black Scholes Payment”); provided that
we have discretion as to whether to deliver the Black Scholes Payment or, subject to meeting certain conditions, to deliver a
number of shares of our common stock determined according to the following formula:
Total
Shares = (A x B) / C
Where:
|
●
|
Total
Shares is the number of shares of common stock to be issued upon a cashless exercise
|
|
●
|
A
is the total number of shares with respect to which the warrant is then being exercised.
|
|
●
|
B
is the Black Scholes Value (as defined below).
|
|
●
|
C
is the closing bid price of our common stock as of two trading days prior to the time of such exercise.
|
As
defined in the warrants, “Black Scholes Value” means the Black Scholes value of an option for one share of our common
stock at the date of the applicable Black Scholes Payment or cashless exercise, as such Black Scholes value is determined, calculated
using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying
price per share equal to the closing bid price of the common stock as of trading day immediately preceding the date of issuance
of the warrant, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term
of the warrant as of the applicable Black Scholes Payment or cashless exercise, (iii) a strike price equal to the exercise price
in effect at the time of the applicable Black Scholes Payment or cashless exercise, (iv) an expected volatility equal to 135%
and (v) a remaining term of such option equal to five (5) years (regardless of the actual remaining term of the warrant).
If,
at any time a warrant is outstanding, the Company consummates any fundamental transaction, as described in the warrants and generally
including any consolidation or merger into another corporation, or the sale of all or substantially all of our assets, or other
transaction in which our common stock is converted into or exchanged for other securities or other consideration, the holder of
any warrants will thereafter receive, the securities or other consideration to which a holder of the number of shares of common
stock then deliverable upon the exercise or exchange of such warrants would have been entitled upon such consolidation or merger
or other transaction. Notwithstanding the foregoing, in connection with a fundamental transaction, at the request of a holder
of warrants we will be required to purchase the warrant from the holder by paying to the holder cash in an amount equal to the
Black Scholes value of the warrant, as described in such warrant. The form of this warrant is attached as an exhibit to the registration
statement of which this prospectus is a part and is incorporated herein by reference.
Kipke
Warrant
As
compensation paid in connection with the consummation of a bridge financing in 2014, the Company issued a warrant to purchase
shares of common stock to Karl Kipke, who acted as a financial advisor in the bridge financing. As a result of the Company’s
reverse stock splits this warrant is exercisable for 5 shares of common stock as of the date of this prospectus, at an exercise
price of $6,156.00 per share. The warrant has a net exercise provision under which the holder may, in lieu of payment of the exercise
price in cash, surrender the warrant and receive a net number of shares of common stock based on the fair market value of our
common stock at the time of exercise of the warrant after deduction of the aggregate exercise price. The form of this warrant
is attached as an exhibit to the registration statement of which this prospectus is a part and is incorporated herein by reference.
Westlake
Securities Warrants - 2014
As
compensation paid in connection with the consummation of two private placements in 2014, the Company issued two warrants to Westlake
Securities LLC (the “2014 Westlake Warrants”). The first 2014 Westlake Warrant was issued September 17, 2014 and has
now expired. The second 2014 Westlake Warrant was issued November 12, 2014. The remaining 2014 Westlake Warrants is each exercisable
for five years after the date of issuance. As a result of the Company’s reverse stock splits the second 2014 Westlake Warrant
is exercisable for 28 shares of common stock as of the date of this prospectus at an exercise price of $6,750.00 per share. The
2014 Westlake Warrants have a net exercise provision under which the holder may, in lieu of payment of the exercise price in cash,
surrender the warrant and receive a net number of shares of common stock based on the fair market value of our common stock at
the time of exercise of the warrant after deduction of the aggregate exercise price. The 2014 Westlake Warrant contains provisions
for the adjustment of the exercise price and the aggregate number of shares of common stock issuable upon the exercise of the
warrant in the event of dividends, share splits, reorganizations, reclassifications and consolidations. These 2014 Westlake Warrant
is attached as an exhibit to the registration statement of which this prospectus is a part and are incorporated herein by reference.
Outstanding
December 2012 Warrants
On
December 17, 2012, in connection with entering into a commercial lending transaction, we issued warrants to purchase a total of
270,000 shares of our Series F convertible preferred stock to two of our institutional lenders. These warrants are exercisable
for ten years after the date of issuance. As a result of the Company’s reverse stock splits since these warrants were issued
and other corporate changes, these warrants are exercisable for 13 shares of common stock as of the date of this prospectus, at
an exercise price of $9,279.00 per share. These warrants have a net exercise provision under which the holder may, in lieu of
payment of the exercise price in cash, surrender the warrant and receive a net number of shares of common stock based on the fair
market value of our common stock at the time of exercise of the warrant after deduction of the aggregate exercise price. Each
of these warrants also contains provisions for the adjustment of the exercise price and the aggregate number of shares of common
stock issuable upon the exercise of the warrant in the event of dividends, share splits, reorganizations, reclassifications and
consolidations. These warrants are attached as exhibits to the registration statement of which this prospectus is a part and are
incorporated herein by reference.
Registration
Rights
We
have entered into various agreements with holders of shares of our common stock and warrants to acquire shares of our common stock
that under certain circumstances require us to register with the SEC such shares of common stock and the shares of common stock
issuable upon exercise of the warrants. These registration rights are generally subject to certain conditions and limitations,
including our right to limit the number of shares included in any such registration under certain circumstances. We are generally
required to pay all expenses incurred in connection with registrations effected in connection with the registration rights, excluding
selling expenses such as broker commissions and underwriting discounts. The registration rights may be transferred to any transferee
or assignee of the holder of such registrations rights who agrees to be bound by the terms of the registration rights agreement.
Furthermore,
the terms of the agreements generally provide that we will not be required to maintain the effectiveness of any registration statement,
or file another registration statement, with respect to any registrable securities that are not subject to the current public
information requirement under Rule 144 and that are eligible for resale without volume or manner-of-sale restrictions.
Piggyback
Rights. Pursuant to the terms of the Unit Purchase Option, if at any time while the Unit Purchase Option is outstanding, we
file a registration statement under the Securities Act to register the sale of any of our securities, we will be required to include
in such registration statement the shares of common stock underlying the Unit Purchase Option. We intend to seek a waiver of these
registration rights in connection with this registration statement.
Generally,
the foregoing piggyback registration rights do not apply to registrations of our securities that we initiate that are (i) issuable
in connection with our acquisition of another entity or business or (ii) incidental to any of our equity compensation, employee
stock purchase or other employee benefit plans or any sales agent/distributor equity incentive program that we may implement.
Series
C Preferred Stock Included in Units Issuable in the Rights Offering
We
will authorize the Series C Preferred Stock by filing a certificate of designation with the Secretary of State of Delaware. The
certificate of designation may be authorized by our Board without approval by our stockholders.
Conversion.
Each share of Preferred Stock will be convertible at our option at any time on or after the first anniversary of the expiration
of the Rights Offering or at the option of the holder at any time, into the number of shares of our common stock determined by
dividing the $1,000 stated value per share of the Preferred Stock by a conversion price of $ per share. In addition, the conversion
price per share is subject to adjustment for stock dividends, distributions, subdivisions, combinations or reclassifications.
Subject to limited exceptions, a holder of the Preferred Stock will not have the right to convert any portion of the Preferred
Stock to the extent that, after giving effect to the conversion, the holder, together with its affiliates, would beneficially
own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to its conversion.
A holder of the Preferred Stock, upon notice to the Company, may increase or decrease the beneficial ownership limitation provisions
of such holder’s Preferred Stock, provided that in no event shall the limitation exceed 9.99% of the number of shares of
our common stock outstanding immediately after giving effect to its conversion. In the event that a conversion is effected at
our option, we will exercise such option to convert shares of Preferred Stock on a pro rata basis among all of the holders based
on such holders’ shares of Preferred Stock.
Fundamental
Transactions. In the event we effect certain mergers, consolidations, sales of substantially all of our assets, tender or
exchange offers, reclassifications or share exchanges in which our common stock is effectively converted into or exchanged for
other securities, cash or property, we consummate a business combination in which another person acquires 50% of the outstanding
shares of our common stock, or any person or group becomes the beneficial owner of 50% of the aggregate ordinary voting power
represented by our issued and outstanding common stock, then, upon any subsequent conversion of the Preferred Stock, the holders
of the Preferred Stock will have the right to receive any shares of the acquiring corporation or other consideration it would
have been entitled to receive if it had been a holder of the number of shares of common stock then issuable upon conversion in
full of the Preferred Stock.
Dividends.
Holders of Preferred Stock shall be entitled to receive dividends (on an as-if-converted-to-common-stock basis) in the same
form as dividends actually paid on shares of the common stock when, as and if such dividends are paid on shares of common stock.
Voting
Rights. Except as otherwise provided in the certificate of designation or as otherwise required by law, the Preferred Stock
has no voting rights.
Liquidation Preference. Upon
our liquidation, dissolution or winding-up, whether voluntary or involuntary, holders of Preferred Stock will be entitled to receive
out of our assets, whether capital or surplus, the same amount that a holder of common stock would receive if the Preferred Stock
were fully converted (disregarding for such purpose any conversion limitations under the certificate of designation) to common
stock, which amounts shall be paid pari passu with all holders of common stock.
Redemption
Rights. We are not obligated to redeem or repurchase any shares of Preferred Stock. Shares of Preferred Stock are not otherwise
entitled to any redemption rights, or mandatory sinking fund or analogous provisions.
Warrants
Included in Units Issuable in the Rights Offering
The
Warrants to be issued as a part of this Rights Offering will be designated as our “Series 1” warrants. These Warrants
will be separately transferable following their issuance and through their expiration five years from the date of issuance. Each
Warrant will entitle the holder to purchase one share of our common stock at an exercise price of $ per share from the date
of issuance through its expiration. There is no public trading market for the Warrants and they will not be listed for trading
on Nasdaq or any other securities exchange or market. The common stock underlying the Warrants, upon issuance, will also be traded
on Nasdaq under the symbol “SINT.”
All
Warrants that are purchased in the Rights Offering as part of the Units will be issued in book-entry, or uncertificated, form
meaning that you will receive a DRS account statement from our transfer agent reflecting ownership of Warrants if you are a holder
of record. The Subscription Agent will arrange for the issuance of the Warrants as soon as practicable after the closing, which
will occur as soon as practicable after the Rights Offering has expired but which may occur up to five business days thereafter.
At closing, all prorating calculations and reductions contemplated by the terms of the Rights Offering will have been effected
and payment to us for the subscribed-for Units will have cleared. If you hold your shares of common stock in the name of a bank,
broker, dealer, or other nominee, DTC will credit your account with your nominee with the Warrants you purchased in the Rights
Offering.
Exercisability
Each
Warrant will be exercisable at any time and will expire five years from the date of issuance. The Warrants will be exercisable,
at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and payment in full for
the number of shares of our common stock purchased upon such exercise, except in the case of a cashless exercise as discussed
below. The number of shares of common stock issuable upon exercise of the Warrants is subject to adjustment in certain circumstances,
including a stock split of, stock dividend on, or a subdivision, combination or recapitalization of the common stock. If we effect
a merger, consolidation, sale of substantially all of our assets, or other similar transaction, then, upon any subsequent exercise
of a Warrants, the Warrant holder will have the right to receive any shares of the acquiring corporation or other consideration
it would have been entitled to receive if it had been a holder of the number of shares of common stock then issuable upon exercise
in full of the Warrant.
Cashless
Exercise
If
at any time there is no effective registration statement registering, or the prospectus contained therein is not available for
issuance of, the shares issuable upon exercise of the warrant, the holder may exercise the warrant on a cashless basis. When exercised
on a cashless basis, a portion of the warrant is cancelled in payment of the purchase price payable in respect of the number of
shares of our common stock purchasable upon such exercise.
Exercise
Price
Each
warrant represents the right to purchase one share of common stock at an exercise price of $ per share. In addition, the exercise
price per share is subject to adjustment for stock dividends, distributions, subdivisions, combinations, or reclassifications,
and for certain dilutive issuances. Subject to limited exceptions, a holder of warrants will not have the right to exercise any
portion of the warrant to the extent that, after giving effect to the exercise, the holder, together with its affiliates, and
any other person acting as a group together with the holder or any of its affiliates, would beneficially own in excess of 4.99%
of the number of shares of our common stock outstanding immediately after giving effect to its exercise. The holder, upon notice
to the Company, may increase or decrease the beneficial ownership limitation provisions of the warrant, provided that in no event
shall the limitation exceed 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the
exercise of the warrant.
Transferability
Subject
to applicable laws and restrictions, a holder may transfer a warrant upon surrender of the warrant to us with a completed and
signed assignment in the form attached to the warrant. The transferring holder will be responsible for any tax that liability
that may arise as a result of the transfer.
No
Market
There
is no public trading market for the Warrants and they will not be listed for trading on Nasdaq or any other securities exchange
or market.
Rights
as Stockholder
Except
as set forth in the Warrant, the holder of a Warrant, solely in such holder’s capacity as a holder of a Warrant, will not
be entitled to vote, to receive dividends, or to any of the other rights of our stockholders.
Redemption
Rights
We
may redeem the warrants for $ per warrant if our common stock
closes above $ per share for ten consecutive trading days, provided that we may
not do so prior to the first anniversary of expiration of the Rights Offering.
Amendments
and Waivers
The
provisions of each Warrant may be modified or amended or the provisions thereof waived with the written consent of us and the
holder.
The
Warrants will be issued pursuant to a warrant agent agreement by and between us and America Stock Transfer & Trust Company,
the warrant agent.
Effects
of Anti-Takeover Provisions of Our Restated Certificate of Incorporation, Our Restated Bylaws and Delaware Law
The
provisions of (1) Delaware law, (2) our Restated Certificate of Incorporation and (3) our Restated Bylaws discussed below could
discourage or make it more difficult to prevail in a proxy contest or effect other change in our management or the acquisition
of control by a holder of a substantial amount of our voting stock. It is possible that these provisions could make it more difficult
to accomplish, or could deter, transactions that stockholders may otherwise consider to be in their best interests or our best
interests. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board
of directors and in the policies formulated by the board of directors and to discourage certain types of transactions that may
involve an actual or threatened change in control of our company. These provisions are designed to reduce our vulnerability to
an unsolicited acquisition proposal. These provisions also are intended to discourage certain tactics that may be used in proxy
fights. These provisions also may have the effect of preventing changes in our management.
Delaware
Statutory Business Combinations Provision. We are subject to the anti-takeover provisions of Section 203 of the Delaware General
Corporation Law. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging in a “business combination”
with an “interested stockholder” for a period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is, or the transaction in which the person became an interested
stockholder was, approved in a prescribed manner or another prescribed exception applies. For purposes of Section 203, a “business
combination” is defined broadly to include a merger, asset sale or other transaction resulting in a financial benefit to
the interested stockholder, and, subject to certain exceptions, an “interested stockholder” is a person who, together
with his or her affiliates and associates, owns (or within three years prior, did own) 15% or more of the corporation’s
voting stock.
Classified
Board of Directors; Appointment of Directors to Fill Vacancies; Removal of Directors for Cause. Our Restated Certificate of
Incorporation provides that our board of directors will be divided into three classes as nearly equal in number as possible. Each
year the stockholders will elect the members of one of the three classes to a three-year term of office. All directors elected
to our classified board of directors will serve until the election and qualification of their respective successors or their earlier
resignation or removal. The board of directors is authorized to create new directorships and to fill any positions so created
and is permitted to specify the class to which any new position is assigned. The person filling any of these positions would serve
for the term applicable to that class. The board of directors (or its remaining members, even if less than a quorum) is also empowered
to fill vacancies on the board of directors occurring for any reason for the remainder of the term of the class of directors in
which the vacancy occurred. Members of the board of directors may only be removed for cause and only by the affirmative vote of
holders of at least 80% of our outstanding voting stock. These provisions are likely to increase the time required for stockholders
to change the composition of the board of directors. For example, in general, at least two annual meetings will be necessary for
stockholders to effect a change in a majority of the members of the board of directors.
Authorization
of Blank Check Preferred Stock. Our Restated Certificate of Incorporation provides that our board of directors is authorized
to issue, without stockholder approval, blank check preferred stock. Blank check preferred stock can operate as a defensive measure
known as a “poison pill” by diluting the stock ownership of a potential hostile acquirer to prevent an acquisition
that is not approved by our board of directors.
Advance
Notice Provisions for Stockholder Proposals and Stockholder Nominations of Directors. Our Restated Bylaws provide that, for
nominations to the board of directors or for other business to be properly brought by a stockholder before a meeting of stockholders,
the stockholder must first have given timely notice of the proposal in writing to our Secretary. For an annual meeting, a stockholder’s
notice generally must be delivered not less than 90 days nor more than 120 days prior to the anniversary of the mailing date of
the proxy statement for the previous year’s annual meeting. For a special meeting, the notice must generally be delivered
no less than 60 days nor more than 90 days prior to the special meeting or ten days following the day on which public announcement
of the meeting is first made. Detailed requirements as to the form of the notice and information required in the notice are specified
in our Restated Bylaws. If it is determined that business was not properly brought before a meeting in accordance with our bylaw
provisions, this business will not be conducted at the meeting.
Special
Meetings of Stockholders. Special meetings of the stockholders may be called only by our board of directors pursuant to a
resolution adopted by a majority of the total number of directors.
No
Stockholder Action by Written Consent. Our Restated Certificate of Incorporation does not permit our stockholders to act by
written consent. As a result, any action to be effected by our stockholders must be effected at a duly called annual or special
meeting of the stockholders.
Super-Majority
Stockholder Vote required for Certain Actions. The Delaware General Corporation Law provides generally that the affirmative
vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation
or bylaws, unless the corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage.
Our Restated Certificate of Incorporation requires the affirmative vote of the holders of at least 80% of our outstanding voting
stock to amend or repeal any of the provisions discussed in this section of this prospectus entitled “Effect of Anti-Takeover
Provisions of Our Restated Certificate of Incorporation, Our Restated Bylaws and Delaware Law” or to reduce the number of
authorized shares of common stock or preferred stock. This 80% stockholder vote would be in addition to any separate class vote
that might in the future be required pursuant to the terms of any preferred stock that might then be outstanding. A 80% vote is
also required for any amendment to, or repeal of, our Restated Bylaws by the stockholders. Our Restated Bylaws may be amended
or repealed by a simple majority vote of the board of directors.
Potential
Effects of Authorized but Unissued Stock
We
have shares of common stock and preferred stock available for future issuance without stockholder approval. We may utilize these
additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate
corporate acquisitions or payment as a dividend on the capital stock.
The
existence of unissued and unreserved common stock and preferred stock may enable our board of directors to issue shares to persons
friendly to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party
attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity
of our management. In addition, the board of directors has the discretion to determine designations, rights, preferences, privileges
and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences
of each series of preferred stock, all to the fullest extent permissible under the Delaware General Corporation Law and subject
to any limitations set forth in our certificate of incorporation. The purpose of authorizing the board of directors to issue preferred
stock and to determine the rights and preferences applicable to such preferred stock is to eliminate delays associated with a
stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with
possible financings, acquisitions and other corporate purposes, could have the effect of making it more difficult for a third-party
to acquire, or could discourage a third-party from acquiring, a majority of our outstanding voting stock.
Transfer
Agent and Warrant Agent
The
transfer agent and registrar for our common stock and the warrant agent for the Warrants is American Stock Transfer & Trust
Company, LLC. The transfer agent and the registrar’s address is 59 Maiden Lane, New York, New York 10038.
PLAN
OF DISTRIBUTION
Promptly
following the effective date of the registration statement of which this prospectus form is a part, we will distribute the Subscription
Rights, Rights Certificates and copies of this prospectus to the holders of our common stock, Series B Preferred Stock, and participating
warrants on the Record Date. Subscription Rights holders who wish to exercise their Subscription Rights and purchase Units must
complete the Subscription Rights Certificate and return it with payment for the shares to the Subscription Agent at the following
address:
By
mail:
|
|
By
hand or overnight courier:
|
If
you have any questions, you should contact our Information Agent for the Rights Offering: D.F. King & Co, Inc., toll free
at ______________ or by mail at ______________________________________.
Other
than as described in this prospectus, we do not know of any existing agreements between any stockholder, broker, dealer, underwriter
or agent relating to the sale or distribution of the underlying securities.
Maxim
Group LLC will act as dealer-manager for the Rights Offering. In such capacity, the dealer-manager will provide marketing assistance
and financial advice (including determining the Subscription Price and the structure of the Rights Offering) to us in connection
with this offering and will solicit the exercise of Subscription Rights and participation in the Over-Subscription Privilege.
The dealer-manager will provide us with updated investor feedback and recommendations on pricing and structure through to the
end of the subscription period. The dealer- manager is not underwriting or placing any of the Subscription Rights or the shares
of our Preferred Stock or Warrants being issued in this offering and do not make any recommendation with respect to such Subscription
Rights (including with respect to the exercise or expiration of such Subscription Rights), shares or Warrants.
In connection with this Rights Offering, we
have agreed to pay fees to Maxim Group LLC as dealer-manager an aggregate cash fee equal to 7.0% of the gross proceeds received
by us directly from exercises of the Subscription Rights. We advanced $20,000 to Maxim Group LLC as an advance against such non-accountable
expense allowance upon their engagement as dealer-manager, or the Advance, and agreed to reimburse the reasonable fees and expenses
of the dealer-manager up to $75,000 (including the Advance). Any portion of the Advance not used for Maxim’s actual
out-of-pocket expenses shall be promptly reimbursed to the Company. Additionally, we agreed to grant to Maxim (or its designated
affiliates) share purchase warrants (the “Dealer Warrants”) covering a number of shares of the Company’s common
stock equal to 4.0% of the common stock issuable upon exercise of the Preferred Stock sold in the Rights Offering. In the event
that the Company engages Ascendiant Capital Markets, LLC as a financial advisor in connection with the Offering, Maxim agrees
that Ascendiant shall be entitled to 20% of the total fee earned by Maxim under the dealer-management agreement and 20% of the
Dealer Warrants issuable upon Closing (i.e., Maxim will be issued 80% of the Dealer Warrants, and Ascendiant shall be issued 20%
of the Dealer Warrants). The Dealer Warrants will be non-exercisable for six (6) months after the date of the Closing and will
expire five years after the effective date of the registration statement that this prospectus forms a part. The
Dealer Warrants will be exercisable at a price equal to 110.0% of the conversion price of the Convertible Preferred. The Warrants
shall not be redeemable. The Dealer Warrants may not be sold, transferred, assigned, pledged or hypothecated or
be the subject of any hedging, short sale, derivative, put, or call transaction for a period of 180 days following
the effective date of the registration statement that this prospectus forms a part, except that they may be assigned, in
whole or in part, to any officer or partner of Maxim (or to Ascendiant). The Dealer Warrants may be exercised as
to all or a lesser number of shares of the Company’s common stock, will contain unlimited “piggyback” registration
rights for a period of five years after the Closing (but not longer than 7 years from the effective date of the registration
statement of which this prospectus forms a part) at the Company’s expense.
Upon the successful completion of the Rights
Offering for gross proceeds of at least six million dollars ($6,000,000), for a period of nine (9) months from the final Closing
(but not longer than three years from the commencement of sales for this Rights Offering), the
Company will grant Maxim Group LLC the right of first refusal to act as (a) lead managing underwriter and book runner for any
and all future public and private equity and public debt offerings.
We
have also agreed to indemnify the dealer-manager and their respective affiliates against certain liabilities arising under the
Securities Act. The dealer-manager participation in this offering are subject to customary conditions contained in the dealer-manager
agreement, including the receipt by the dealer-manager of an opinion of our counsel. The dealer-manager and their affiliates may
provide to us from time to time in the future in the ordinary course of their business certain financial advisory, investment
banking and other services for which they will be entitled to receive fees.
Subject
to certain exceptions, we have agreed not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of
or otherwise dispose of any common shares or other securities convertible into or exercisable or exchangeable for common shares
for a period of ninety (90) days after the expiration of this Rights Offering.
EXPERTS
The
consolidated financial statements of SINTX Technologies, Inc., as of December 31, 2018 and 2017, and for each of the years in
the two-year period ended December 31, 2018, have been incorporated by reference herein in reliance on the report of Tanner LLC,
an independent registered public accounting firm (the report on the consolidated financial statements contains an explanatory
paragraph regarding the Company’s ability to continue as a going concern), given on the authority of said firm as experts
in auditing and accounting.
LEGAL
MATTERS
The
validity of the securities offered hereby will be passed upon for us by Dorsey & Whitney LLP, Salt Lake City, Utah. The dealer-manager
is being represented by Ellenoff Grossman & Schole LLP, New York, New York.
Subscription
Rights to Purchase Up to 8,000 Units
Consisting
of an Aggregate of Up to 8,000
Shares of Series C Convertible Preferred
Stock
and Warrants to Purchase Up to Shares of
Common Stock
at
a Subscription Price of $1,000 Per Unit
PROSPECTUS
Dealer-Manager
Maxim
Group LLC
,
2019
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution
The
following is a statement of estimated expenses in connection with the issuance and distribution of the securities being registered,
excluding dealer-manager fees. All expenses incurred with respect to the registration of the common stock will be borne by us.
All amounts are estimates except the SEC registration fee and the FINRA filing fee.
Item
|
|
Amount
to be
Paid
|
|
SEC registration fee
|
|
$
|
1,142.24
|
|
FINRA filing fee
|
|
$
|
1,820.00
|
|
Printing expenses
|
|
|
*
|
|
Legal fees and expenses
|
|
|
*
|
|
Accounting fees and expenses
|
|
|
*
|
|
Subscription Agent, Information Agent and Warrant Agent Fees and Expenses
|
|
|
*
|
|
Miscellaneous expenses
|
|
|
*
|
|
Total
|
|
$
|
*
|
|
*
To be provided by amendment.
Item
14. Indemnification of Directors and Officers
Section
145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant,
indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for
liabilities, including reimbursement for expenses incurred, arising under the Securities Act.
The
Registrant’s amended certificate of incorporation provides for indemnification of its directors and executive officers to
the maximum extent permitted by the Delaware General Corporation Law, and the Registrant’s amended and restated bylaws provide
for indemnification of its directors and executive officers to the maximum extent permitted by the Delaware General Corporation
Law.
In
addition, the Registrant has entered into indemnification agreements with each of its current directors and executive officers.
These agreements will require the Registrant to indemnify these individuals to the fullest extent permitted under Delaware law
against liabilities that may arise by reason of their service to the Registrant and to advance expenses incurred as a result of
any proceeding against them as to which they could be indemnified. The Registrant also intends to enter into indemnification agreements
with its future directors and executive officers.
Item
15. Recent Sales of Unregistered Securities.
On
July 28, 2017, we closed on a $2.5 million term loan (the Loan”) with North Stadium Investments, LLC (“North Stadium”),
a company owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board, Dr. Sonny Bal. In connection
with the Loan, the Company issued to North Stadium, a Secured Promissory Note in the amount of $2.5 million (the “Note”).
The Note bears interest at the rate of 10% per annum, requires the Company to make monthly interest only payments for a period
of 12 months, and principal and any unpaid accrued interest are due and payable 12 months from the effective date of the Note,
July 28, 2017. The Note is secured by substantially all of the assets of the Company pursuant to a security agreement between
the Company and North Stadium dated July 28, 2017 (the “Security Agreement”), and is junior to the already existing
security interest in such assets of the Company held by Hercules Capital, Inc. In connection with the Loan and as additional consideration
for the Loan, the Company issued to North Stadium a warrant to acquire up to 1,833 common shares with a purchase price set at
$151.20 per share and a five-year term (the “Warrant”).
On January 3, 2018, the Company entered
into an Assignment Agreement (the “Assignment Agreement”) with certain accredited investors (collectively the “Assignees”
and each an “Assignee”), Hercules Technology III, L.P. (“HT III”) and Hercules Capital, Inc. (“HC”
and, together with HT III, “Hercules”), pursuant to which Hercules assigned to the Assignees all amounts remaining
due under the Loan and Security Agreement, dated June 30, 2014, as amended, between the Company and Hercules (the “Loan
and Security Agreement”) and (2) the note (the “Hercules Note”) between the Company and Hercules evidencing
the amounts due under the Loan and Security Agreement. The total amount assigned by Hercules to the Assignees equals in the aggregate
$2,264,623, which is secured by the same collateral underlying the Loan and Security Agreement. The Company entered into an exchange
agreement (the “Exchange Agreement”) with the Assignees, pursuant to which the Company agreed to exchange (the “Exchange”)
the Hercules Note held by the Assignees for senior secured convertible promissory notes each in the principal amount of $1,132,311
for an aggregate principal amount of $2,264,623 (the “Exchange Notes”). The Exchange Notes will mature on February
3, 2019.
On
January 31, 2018, we entered into a securities purchase agreement (the “Purchase Agreement”) with L2 Capital LLC.
Pursuant to the Purchase Agreement, we agreed to sell an original issue discount promissory note in the aggregate principal amount
of up to $840,000 (the “Note”) for an aggregate purchase price of up to $750,000 and warrants to purchase up to an
aggregate of 2,275 shares of Common Stock.
On
March 6, 2018, in connection with the Amendment Agreement described above in Description of Securities – Description of
Other Outstanding Securities of the Company – March 2018 Warrant Amendment, the Company issued to the Series E Investors
warrants to purchase up to 22,278 shares of Common Stock at an exercise price per share equal to $60.00 per share, the closing
bid price for our Common Stock on March 5, 2018 (the “New Warrants”).
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
The
following exhibits are being filed with this Registration Statement:
4.24
|
|
Form of Indenture
|
|
|
|
Form
S-3
(Exhibit
4.2)
|
|
3/25/19
|
|
333-230492
|
|
|
|
|
|
|
|
|
|
|
|
4.25#
|
|
Form
of Common Stock Warrant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.26#
|
|
Form
of Warrant Agency Agreement between Amedica Corporation and American Stock Transfer and Trust Company, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.27#
|
|
Form
of Non-Transferrable Subscription Rights Certificate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.1#
|
|
Opinion
of Dorsey & Whitney LLP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Loan and Security Agreement by and among the Registrant, its subsidiary, Hercules Technology Growth Capital, Inc., and Hercules Technology III, L.P., dated as of June 30, 2014
|
|
|
|
Form
8-K (Exhibit 10.3)
|
|
7/1/2014
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
Centrepointe Business Park Lease Agreement Net by and between the Registrant and Centrepointe Properties, LLC, dated as of April 21, 2009
|
|
|
|
Form
S-1 (Exhibit 10.10)
|
|
11/8/13
|
|
333-192232
|
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
First Addendum to Centrepointe Business Park Lease Agreement Net by and between the Registrant and Centrepointe Properties, LLC, dated as of January 31, 2012
|
|
|
|
Form
S-1 (Exhibit 10.11)
|
|
11/8/13
|
|
333-192232
|
|
|
|
|
|
|
|
|
|
|
|
10.4
|
|
Form of Change of Control Agreement*
|
|
|
|
Form
8-K (Exhibit 10.1)
|
|
7/22/15
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.5
|
|
Form of Indemnification Agreement by and between the Registrant and its officers and directors
|
|
|
|
Amendment
No. 2
to
Form S-1 (Exhibit 10.14)
|
|
12/20/13
|
|
333-192232
|
|
|
|
|
|
|
|
|
|
|
|
10.6
|
|
SINTX Technologies Amended and Restated 2012 Equity Incentive Plan*
|
|
|
|
Amendment
No. 4
to
Form S-1 (Exhibit 10.15)
|
|
2/12/14
|
|
333-192232
|
|
|
|
|
|
|
|
|
|
|
|
10.7
|
|
Form of 2012 Stock Option Grant Notice and Stock Option Agreement*
|
|
|
|
Amendment
No. 4
to
Form S-1 (Exhibit 10.16)
|
|
2/12/14
|
|
333-192232
|
|
|
|
|
|
|
|
|
|
|
|
10.8
|
|
Form of 2012 Restricted Stock Award and Restricted Stock Unit Agreement*
|
|
|
|
Amendment
No. 4
to
Form S-1 (Exhibit 10.17)
|
|
2/12/14
|
|
333-192232
|
|
|
|
|
|
|
|
|
|
|
|
10.9
|
|
SINTX Technologies 2003 Stock Option Plan*
|
|
|
|
Form
S-1 (Exhibit 10.18)
|
|
11/8/13
|
|
333-192232
|
|
|
|
|
|
|
|
|
|
|
|
10.10
|
|
Form of 2003 Non-Qualified Stock Option Agreement and Notice of Exercise of Non-Qualified Stock Option thereunder*
|
|
|
|
Form
S-1 (Exhibit 10.19)
|
|
11/8/13
|
|
333-192232
|
10.11
|
|
Form of 2003 Incentive Stock Option Agreement and Notice of Exercise of Incentive Stock Option thereunder*
|
|
|
|
Form
S-1 (Exhibit 10.20)
|
|
11/8/13
|
|
333-192232
|
|
|
|
|
|
|
|
|
|
|
|
10.12
|
|
Consent and First Amendment to Loan and Security Agreement dated September 8, 2015 by and among Hercules Technology Growth Capital Inc., the financial institutions signatory thereto, SINTX Corporation, and the guarantors signatory thereto.
|
|
|
|
Form
8-K (Exhibit 10.1)
|
|
9/8/15
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
First Amendment to Warrant to Purchase Shares of Common Stock of SINTX Corporation dated September 8, 2015, by and between SINTX Corporation and Hercules Technology III, L.P.
|
|
|
|
Form
8-K (Exhibit 10.2)
|
|
9/8/15
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.14
|
|
Form of Securities Purchase Agreement between SINTX Technologies and the Purchasers Dated September 8, 2015
|
|
|
|
Form
8-K (Exhibit 10.5)
|
|
9/8/15
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
Exchange Agreement dated April 4, 2016, by and among SINTX Corporation and Riverside Merchant Partners, LLC
|
|
|
|
Form
8-K (Exhibit 10.2)
|
|
5/05/16
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.16
|
|
Warrant Agency Agreement, dated July 8, 2016, by and between SINTX Corporation and American Stock Transfer & Trust Company, LLC
|
|
|
|
Form
8-K (Exhibit 10.1)
|
|
7/8/16
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.17
|
|
Warrant Agency Agreement dated January 24, 2017, by and between SINTX Corporation and American Stock Transfer & Trust Company, LLC
|
|
|
|
Form
8-K (Exhibit 8-K)
|
|
1/24/17
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.18
|
|
Security Agreement, dated July 28, 2017
|
|
|
|
Form
8-K (Exhibit 10.1)
|
|
8/3/17
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.19
|
|
Assignment Agreement, dated January 3, 2018, by and among the Company, US Spine, Inc., MEF I, L.P., Anson Investments Master Fund LP, Hercules Technology III, L.P. and Hercules Capital, Inc.
|
|
|
|
Form
8-K (Exhibit 10.1)
|
|
01/4/18
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.20
|
|
Exchange Agreement, dated January 3, 2018, by and among SINTX Corporation and MEF I, L.P.
|
|
|
|
Form
8-K (Exhibit 10.2)
|
|
01/4/18
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.21
|
|
Exchange Agreement, dated January 3, 2018, by and among Amedica Corporation and Anson Investments Master Fund LP
|
|
|
|
Form
8-K (Exhibit 10.3)
|
|
01/4/18
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.22
|
|
Senior Secured Convertible Promissory Note, dated January 3, 2018, by and among Amedica Corporation and MEF I, L.P.
|
|
|
|
Form
8-K (Exhibit 10.4)
|
|
01/4/18
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.23
|
|
Senior Secured Convertible Promissory Note, dated January 3, 2018, by and among Amedica Corporation and Anson Investments
|
|
|
|
Form
8-K (Exhibit 10.5)
|
|
01/4//18
|
|
001-33624
|
10.24
|
|
Securities Purchase Agreement, dated January 30, 2018, by and among the Company and L2 Capital, LLC.
|
|
|
|
Form
8-K (Exhibit 10.1)
|
|
2/1/18
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.25
|
|
Amended and Restated Promissory Note payable to L2 Capital
|
|
|
|
Form
S-1
(Exhibit
10.25)
|
|
4/26/18
|
|
333-223032
|
10.26
|
|
Form of Warrant Amendment Agreement
|
|
|
|
Form
S-1
(Exhibit
10.26)
|
|
4/26/18
|
|
333-223032
|
|
|
|
|
|
|
|
|
|
|
|
10.27
|
|
Amendment to Centrepointe Business Park Lease Agreement, dated June 7, 2019, between SINTX Technologies, Inc. and Centrepointe Properties, LLC.
|
|
|
|
Form
8-K
(Exhibit
10.1)
|
|
6/10/19
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.28
|
|
Equity Distribution Agreement, dated as of June 4, 2019, by and between SINTX Technologies, Inc and Maxim Group LLC
|
|
|
|
Form
8-K
(Exhibit
10.1)
|
|
6/04/19
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.29
|
|
Amendment to Equity Distribution Agreement, dated as of September 12, 2019, by and between SINTX Technologies, Inc. and Maxim Group LLC
|
|
|
|
Form
8-K
(Exhibit
10.1)
|
|
9/12/19
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.30
|
|
Promissory Note issued by CTL Corporation in favor of Amedica Corporation dated as of October 1, 2018.
|
|
|
|
Form
8-K
(Exhibit
10.1)
|
|
10/5/18
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.31
|
|
Security Agreement between Amedica Corporation and CTL Corporation dated as of October 1, 2018.
|
|
|
|
Form
8-K
(Exhibit
10.2)
|
|
10/5/18
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.32
|
|
Guaranty between Amedica Corporation and Daniel Chon dated as of October 1, 2018.
|
|
|
|
Form
8-K
(Exhibit
10.3)
|
|
10/5/18
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
10.32
|
|
ROFN Security Agreement between Amedica Corporation and CTL Corporation dated as of October 1, 2018.
|
|
|
|
From
8-K
(Exhibit
10.4)
|
|
10/5/18
|
|
001-33624
|
|
|
|
|
|
|
|
|
|
|
|
21.1
|
|
List of Subsidiaries of the Registrant
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm, Tanner LLC
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.1#
|
|
Form
of Instructions as to Use of Subscription Rights Certificates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.2#
|
|
Form
of Letter to Shareholders who are Record Holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.3#
|
|
Form
of Letter to Brokers, Dealers, Banks and Other Nominees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.4#
|
|
Form
of Broker Letter to Clients Who are Beneficial Holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.5#
|
|
Form
of Beneficial Owner Election Form
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.6#
|
|
Form
of Nominee Holder Certification
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.7#
|
|
Form
of Notice of Important Tax Information
|
|
|
|
|
|
|
|
|
*
Indicates management contract or compensatory plan or arrangement.
#
To be filed by amendment or as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended, and incorporated herein by reference.
(b) Financial Statement Schedules
All
schedules have been omitted because either they are not required, are not applicable or the information is otherwise set forth
in the financial statements and related notes thereto.
Item
17. Undertakings
(a)
|
The
undersigned registrant hereby undertakes:
|
|
|
(1)
|
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
|
(i)
|
To
include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
|
|
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
and
|
|
|
|
|
(iii)
|
To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
|
|
Provided,
however, that paragraphs (a)(1)(i), (ii) and (iii) above do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
|
(2)
|
That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
|
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
|
|
|
(4)
|
That,
for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned
registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
|
|
|
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
|
|
|
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
|
|
|
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
|
(b)
|
The
undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
|
|
|
(c)
|
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final adjudication of such issue.
|
|
|
(d)
|
The
undersigned registrant hereby undertakes that:
|
|
|
(1)
|
For
purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective; and
|
|
|
(2)
|
For
the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
SIGNATURES
We,
the undersigned directors and officers of Sintx Technologies, Inc. (the “Company”), hereby severally constitute and
appoint B. Sonny Bal, MD as our true and lawful attorney, with full power to him to sign for us and in our names in the capacities
indicated below, the registration statement on Form S-1 filed herewith, and any and all pre-effective and post-effective amendments
to said registration statement, and any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, in connection with the registration under the Securities Act of 1933, as amended, of equity securities of the Company,
and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorney full power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and purposes as each of us might or could do in person,
and hereby ratifying and confirming all that said attorney or his substitute or substitutes, shall do or cause to be done by virtue
of this Power of Attorney.
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Salt Lake City, Utah on November 1, 2019.
|
SINTX
TECHNOLOGIES, INC.
|
|
|
|
|
By:
|
/s/
B. Sonny Bal
|
|
|
B.
Sonny Bal, M.D.
|
|
|
Chief
Executive Officer and President
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/
B. Sonny Bal
|
|
|
|
November
1, 2019
|
B.
Sonny Bal, M.D.
|
|
Chief
Executive Officer and Director
|
|
|
|
|
(Principal
Executive Officer and Principal Financial Officer)
|
|
|
/s/
David W. Truetzel
|
|
|
|
November
1, 2019
|
David
W. Truetzel
|
|
Director
|
|
|
|
|
|
|
|
/s/
Jeffrey S. White
|
|
|
|
November
1, 2019
|
Jeffrey
S. White
|
|
Director
|
|
|
|
|
|
|
|
/s/
Eric. A Stookey
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November
1, 2019
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Eric
A. Stookey
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Director
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SiNtx Technologies (NASDAQ:SINT)
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SiNtx Technologies (NASDAQ:SINT)
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