Q4 2020 SINTX Technologies Inc Earnings Call
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Greetings and welcome to <unk> technologies March 'twenty, and 'twenty, one investor business call. At this time all participants are in a listen only mode. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure.
And it's introduce your host he knows our business operations and HR manager. Thank you you may begin.
Yeah. Thank you all for joining our business update today, we're excited for the opportunity to discuss our business progress over the last year and what we hope to achieve in the coming year.
Several emails and question and have broken those answers into this discussion.
This is not a big news announcement call, but and opportunity for centex to verbally address our investor and for questions.
Yeah.
During the course of this presentation predictions estimates.
And and forward looking statements may be made concerning the company's future results.
Actual results could differ materially from those projected.
Please refer to the company's SEC filings, including the company's annual report on form 10-K for the year ended 2020 copies of these filings maybe obtained by contacting the company on the S E T and with that I'll turn things over to Dr. Bob and David O'brien.
Hey, Yeah. Thanks, Gena. This is a sunny ball CEO of fin Tech and the rest of the presentation and will be with me.
And David O'brien, and just so you don't get tired of one voice.
We at Syntex, and our 25 year old company.
And that started as a surgeon scientists collaboration and Salt Lake City.
With the initial intent to make a hip implant and then ultimately CAD.
And on F D a spinal implant.
That's what we were a spinal implant company up until two years ago. When we made the tough decision.
To sell the spine business and focus on our core competencies and those came about from an intense focus on R&D.
And that showed us that the material was much more than just the spinal implant.
Oh for relevant and sits and industrial.
Material, that's used widely and we saw markets well beyond the biomedical market.
This was a tough decision that required a lot of faith for for our employees and investors and we became centex, we used to be a America.
The last year or change things, even more and pretty much validated our decision as you know the world changed with COVID-19.
And we had invested heavily in R&D and one of the things on our R&D shelf for the small study showing that our silicon nitride and activated several species of single stranded RNA viruses.
Very similar to Sars two the virus that causes COVID-19.
Hopeful, but cautious we then and.
Investigators thoroughly whether or not our silicon nitride, good and activates the virus responsible for COVID-19.
And what we did last year, and indeed and encouragingly.
And very consistently and trial after trial are material inactivated the Sars virus. This opened up a whole new line of business for us and.
And the what I call anti pathogenic market.
On the anti viral market.
And these products include masks cellphones tablet cases coding surgical gowns, and drapes and the possibilities on nearly endless.
But having said that theyre not easy or quick because no other company has ever embedded silicon nitride ceramic particles.
And two a fabric or even composites we.
We had already worked on the composites that we were ready this is brand new uncharted territory.
And our R&D team and I'm very proud of sprang into action and has come a long ways.
Yeah.
And good afternoon, everybody. This is Dave O'brien, Chief operating officer with syntax.
Continue on from there and Texas, making real progress for the concentrated effort on.
Specific objective.
Our business development leaders, Dan and Michael are building revenue generating opportunities and three business segments, and anti pathogenic industrial and biomedical.
We continue to connect with new customers partners and manufacturers to help realize our goal on leveraging our expertise and high tech ceramics and to create new innovative opportunities across these sectors.
And we continue to invest and research and development and area in which our initiatives are prioritized to focus on generating revenue through the development of safe and effective products and applications.
Very well and the 2021 bad this year, we expect that syntax will continue to expand.
And grow into new areas.
And if you follow US you already know names such as Oh, two today and.
And he what Connie.
In addition to those names where we are in various stages of discussion.
And with a number of companies and diverse market such as body armor for.
Or ballistics dental high and automotive paint on.
Arthroplasty wishes joint replacement.
And warned dressing for the year 2020 represented.
And Texas second full year as and advanced ceramic company.
Beyond just the spinal company and.
And obviously the ear presented many challenges due to COVID-19.
Thankfully, we were able to minimize the implications of the pandemic on our business operations, we kept going avoided.
Avoided layoffs, we invested on our employee safety. Thanks.
For the everyone was safe we implemented effective work from home policies.
And we suspended all travel well.
But we kept in touch with the companies that we work with and we continue to advance the company's interest.
We also had a rapid and a major change and our strategy as of 2020.
Given the discovery that our silicon nitride consistently it very quickly and activates the Sars two virus.
This discovery was directly a result on for a significant investment and R&D.
Over the past several years, we had previously shown and an unrelated study there are material.
And activated a number of viruses single standard virus is much like Sars too.
Including the influenza a or the common flu virus.
From these discoveries which have since been published.
We leveraged new partnerships and testing and developing anti pathogenic applications.
Face masks with O two today I T devices would be what Tony.
So one question comes with this dramatic discovery why a small company like Oh, too wide and I've talked to a bigger company, that's better known and there are a number of reasons.
One and the pandemic the big businesses are essentially shut down they didn't even communicate.
These are risk averse companies that look to smaller companies like us to develop and idea.
And de risked yet so to speak and then buy and that technology.
In contrast, Oh, two today is a small nimble company.
That was already a believer and masks before COVID-19.
That was already targeting and increasing population and pollution and the world, particularly in Asian markets. They were passionate about their technology, they had experienced and retail.
And we're able to take the concept of a mask and make it sexy and desirable no large company had done that and Moreover.
And they had deep roots and the Asian markets, including China for those reasons it seemed like the most exciting opportunity for us.
Now beyond Oh true today, we're exploring other applications like automotive.
H Bac filters wound dressing as clothing and much more.
Thankfully, we were able to maintain our listing on NASDAQ and good standing and would that oak, having to do a reverse split.
That's where sometimes necessary and previous years and we are proud to have avoided it.
Our revenues last year were understandably down as with any medical device.
And reliance company, we sell to see PLE America.
And elective spine surgeries.
And we're essentially stopped when the pandemic was in full swing.
And the good news is those surgeries are coming back there's pent up demand, we expect those revenues to increase this year.
And the more significant event in 2020 was the sale, albeit small of the first non medical products and send Texas history, and I am very proud of that David.
I wanted to address a couple of questions that have been submitted for this call.
The first concerns the ATM, we put in place earlier this year.
To put this ATM in place to give us for flexibility, we might need to quickly access additional capital and.
As we stated earlier, we are aggressively pursuing new sources of revenue.
These activities take resources people equipment and external collaborations.
In addition, we are looking for strategic partnerships in order to grow our business.
Having and ATM in place gives us the ability to quickly access capital if the need arises and market conditions are favorable.
We have not yet utilized the ATM.
The second question concerns the bonus plan.
Like most companies we have a bonus plan for all employees from technician for officers there.
For multiple components of this plan and it includes revenue objective operational objectives, such as yield and on time delivery and individual objectives.
Payout and combined cash and stock option on.
Our plan is modest compared to many other companies, we have a very dedicated and hard working team and.
And we reward them when they earn it.
Yeah.
But for ball.
Yeah, Thanks, David and I'll, just reiterate we have a very skilled and staffs and we invest in them. The knowledge. That's created in this company is one of a kind we lead the world and as.
We value our employees and our the incentive and bonuses are very very well and very modest compared to other companies.
Let me switch over to the anti pathogenic business update which is the anti microbial.
That market has existed for many years well, let me correct that that market has existed for many centuries, and starting with the Egyptians and their use of bronze and copper that was well recognized as the anti microbial touch surface.
Now with COVID-19, the modern world attention has refocused on infections.
And I anticipate this will only continue even after the virus has gone.
One interesting thing about our material is if you look at the competing materials, such as silver copper zinc heavy metals.
That are placed at the wound dressings or contact surfaces, and so on and so forth.
They are all toxic to mammalian cells and.
And I on it or particularly it for them.
Silicon nitride to our knowledge. So far is the only one and particularly it for them, which when tested against mammalian cells.
As no toxicity and we have done the testing over and over again with the same encouraging results, we see silicon nitride.
As a replacement for that.
The current applications that consist of that rely on heavy metals.
We will continue to prioritize this business and we did in 2020.
Including work force expansion acquisition, and a prototype manufacturing and supporting lab equipment, and some of which is being installed as we speak.
And development of relationships with reputable U S laboratories and development of test protocols.
To assess the anti pathogenic properties of new products that contain silicon nitride.
This is important and this is our credibility. This is a vital because when you make a claim as we did.
It needs to undergo repeat of testing in order to validate it so.
So far we've performed on multiple levels of independent and rigorous testing.
And repeated it.
With labs, including George Mason University.
Ginny a tech most recently University of Rochester independent companies, such as I Am Quest Biosciences and.
And as you know we continue to subject on our data to independent and rigorous peer review and when approved it appears in the peer literature David.
We have successfully developed a new fabric technology by bonding silicon nitride particles consistently and evenly into the fibers of non woven fabric layers. This composite fabric begins to reduce viral load immediately and by as much as 99.
9% after one minute of exposure.
This is a significant achievement for our company.
We have spent 23 years developing monolithic silicon nitride discrete components, but this is the first time, we've embedded silicon nitride into fabrics.
For our knowledge nobody else has done this either and it's exciting to be breaking new ground.
We've been learning about different ways to put powders and the fabrics and assess their performance against pathogens.
We expect this anti pathogenic fabric technology to be used and applications.
As you've heard earlier, such as the catch and kill face mask surgical gowns, and drapes automotive and HVAC filters wound dressings et cetera.
We have discussions and or active collaboration going on across all of the applications I just mentioned.
Across all of these opportunities the ones that I've mentioned as well as ones like the autonomy syntex's role is to develop the appropriate silicon nitride powder for that application.
In addition, we can supply technical resources to support the integration of our silicon nitride and through the desired product.
And to assist and the testing of the product.
And then the primary responsibility shifts to the product manufacturer to create the final product that will go into worldwide markets.
We are the silicon nitride experts, while our partners are the product experts.
Great.
And to expand on on what David just said, let's focus on our partnership with Oh two today.
And that relationship continues to progress we signed a commercialization agreement in February and that includes the technology license agreement for two years would be options for extension.
For the agreement has a license fee and a commercial agreement on Silicon nitride sales royalties based on product sales of masks and filters and a commercial supply agreement for the silicon nitride powder that we manufacture.
Right now efficacy and safety standards testing are underway and Oh two today. It continues to work out a process for development and manufacturing.
Specifically to scale up we have integrated and.
As David said and silicon nitride and into the fibers that parts done and verified under an electron microscopy.
We simply need to dial it up.
Oh, two today hopes to have a data for availability for their silicon nitride masks soon.
But it doesn't have and anticipated data release, yet this is a work in progress and the partnership is and the scale up phase we are working earnestly with them on.
On that process and finding the best ways for commercial high speed production.
You can certainly sign up for the newsletter for updates.
David mentioned, our cash and killed mass, Quebec term comes from copper research.
In terms of catching microbes on to the surface of copper and then creating a self sterilizing surface. So.
So we didn't come up with that term.
But the cash and kill face masks and activates viral diseases will be needed long after the COVID-19 pandemic.
And again, there's outside interest and there is if you look at Wall Street Journal on March the 27th and they have an article on Hy Tech for face masks.
And it's the first one I've seen that mentioned anti viral properties of masks.
And they had some technologies, which are the wall street that access to one of them being from Harvard.
And that's a half a pound mask you hang on your face for the nine volt battery that heats up some carbon fiber is apparently.
Another idea was a ultra violet light.
Source that you were around your Fanny pack and the masks are circulated through the Fanny pack.
In comparison to those desirable commendable potentially effective technologies that sound very cumbersome ours is just a math.
And the silicon nitride and the microscopic level is the cash and kill it doesn't need a battery and does that for you to Fanny pack and the.
The math and it doesn't away half a pound.
Even before COVID-19, the mask market was anticipated to reach 7 billion by 2027, and that's a Grand view research article her report.
Seeing concerns worldwide about new variance.
And we don't know what the future looks like we don't know what the flu season. This year it looks like we and.
Never relied on just COVID-19 for a mask technologies.
And we shared our concerned with O two today.
And a rising global population rising levels of pollution, particularly in high density cities will create.
A permanent and increasing.
Need.
For effective facial protection and lungs and oral hygiene.
Now in Asian countries, particularly there earlier pandemic such as the bird flu. They just never came across the U S until COVID-19.
To summarize we see the mass market as being important.
And as the article and I referenced states other than for recognizing this need well beyond the COVID-19 pandemic David.
Yeah.
We continue to collaborate with Ekati to develop I T cases, which would incorporate our silicon nitride into them.
And our product development stage, and what you would Connie is developed and developing methods to integrate our material and for their polymer products.
We're supporting them and this product development process and.
And the manufacturing process itself as well as developing protocols to assess the anti pathogenic properties of the composite.
To our knowledge again, what we're developing with the wood County is a material that has never been produced before and this is an exciting challenge, but it means that we are at the forefront and developing something completely new and that will take some time.
And as with masks this anti pathogenic technology isn't viewed as only related to COVID-19.
And will serve a purpose and the global marketplace post pandemic.
We have many other companies we are in discussions with and who are testing our material and we hope to announce specifics later this year.
For the current early phase of discussion or the non disclosure agreements on file all we can say is that these companies are in automotive paints and coatings and filter industries.
And we continue to uncover new opportunities.
Anti pathogenic opportunities extend beyond the antibacterial and anti viral and we believe that the recent anti fungal publication demonstrates that.
We are taking foundational steps to allow our participation and the agriculture markets, but these are longer term opportunity.
Workable.
Yeah, Thanks, David and that's a good point the agricultural markets, where our material is a biocompatible and safe for the environment.
The other things we mentioned some other synthetic fertilizers and pesticides and the heavy metals.
There's increasing concern about how to discard them and what they do to the soil.
And off of that let's go to the industrial business updates, we continue to identify opportunities and uses for it.
That's the other applications, where the strength toughness and where resistance from silicon nitride are important.
We hired Don Bray, our VP for business development, specifically on the industrial side and.
And we have had a lot of success on our relationships with customers and.
And the aerospace automotive body armor cutting tool energy and transportation.
Industries.
So in 2020 because of COVID-19, the high volume opportunities were put on pause necessarily but the good news is they have all come back and they have resumed and we are in active discussions.
With many companies across a variety of industries, we shipped our first non medical orders and the company's history, which was a huge milestone even though theres limited revenue associated with it.
These are low volume prototype orders and other companies kicking tires, but these unnecessary steps and.
And the process of getting new business.
We became a 9100 day certified which enables for centex to supply components.
Direct lead to industries, and the aerospace and defense markets.
That means is the certification means that we meet the highly stringent standard of these industries and we are lifted and the Oasis day.
<unk> base, that's used by aerospace.
Fliers and the United States military David.
And early 2020, we began and organized mergers and acquisitions effort focused on the industrial ceramic space, we had deposits last spring, but it is now underway again.
We are looking for opportunities to diversify the line and materials, we offer and industries, we participate in and to bolt on revenue.
Perfect, Let me move on to the bio medical.
Opportunities and.
At the outset. This is where our company leaves this is where we are strongest.
And we claim that we have the near perfect for the near ideal.
Material for biomedical applications.
A few days ago, there's an article by Robert Heinemann, and a German scientist Ted I refer you to it.
If you Google Robert and then Highland H G, I mean, and and and then silicon nitride those for words.
And you'll see the article it's on a preprint server pending peer review and the title.
Pretty much replicates, what we've been saying, which is silicon nitride as the ideal biomaterial keep in mind, we don't know who Robert time and is he has no association with our company.
In addition to that there have been a number of very high quality papers targeting biomedical applications from silicon nitride.
From reputable Chinese universities, so others are taking notice.
We are unique and that we lead and the R&D well beyond the articles that I've just mentioned.
And the biomedical space, we also have a foundational and successful track record for.
Over 35000, and spinal implant patients over a 13 year period, and we have published clinical data book.
And cervical and lumbar fusion, we have leadership and the manufacturing and science knowledge knowhow mechanisms of Silicon nitride.
And there are significant opportunities well beyond spine and this space.
For example, we submitted a master file to the FDA for Silicon Nitride peak apt.
Applications for this material include any place infusion devices needed.
Foot and ankle etc.
We have an order for this material and we will see revenue from it and the second half of 'twenty 'twenty. One we have active research projects underway for other composite from silicon nitride and polymers David.
And we continue to work on new materials, and new manufacturing technologies that could broaden the use of silicon nitride and biomedical application.
We have acquired capital equipment for our R&D team to speed up development, and new materials and new manufacturing technologies from a.
And that is being installed today.
We are making progress on developing silicon nitride coding via multiple techniques.
This is something we've worked on for a number of years.
And recently have received some very positive results on that and the applications include dental fine and arthroplasty.
We also have spoken in the past and published a paper on our three D. Printing efforts continue to work and that area and we've moved beyond.
Three D printing of monolithic ceramics and into other forms of silicon nitride.
Paul.
Yeah, I'm glad you mentioned that David the three D printing and coding where if you look at other authors and their space or considered to be impossibilities.
Seriously technically impossibilities.
And all I can say is we have to keep your eyes on us we have made significant progress and those difficult technical areas.
Given our knowledge.
Specific to spine, we're working on product development engineers at Sea TLA of America, we have been for several years and we expect the results to be several new spinal implants in 2020, one based on our successful collaborations and relationship with that company.
And we are hopeful to see an uptick in revenue from C. T L.
And in 2020, one and the company did very well all things considered.
Very challenging retail spinal market last year.
We received a new U S patent for anti bacterial applications of our silicon nitride, we added that to our portfolio.
So that covers a variety of biomedical implants and.
And our technology improves the anti bacterial characteristics from the implants.
And that's a big claim and that's a big technology bacterial infections are the number one problem and orthopedic and other implants worldwide.
And pulling antibiotics and.
Microbes is yesterdays strategy.
Given the increasing resistance of bacteria.
And many researchers are sounding the alarm on that to have a material that intrinsically repel bacteria has no known resistance from any bacteria is broadly applicable to a variety of bacteria.
As a truly wonderful and we are blessed.
To have this material to work with.
Our.
And to have bacterial applications should be commercialized in 2020 one.
Two the launch of our Silicon nitride Peek composite technology that has come to fruition.
We have talked about the dental markets before this one market.
Okay knocked two the P. So to speak and was the most significantly impacted by Covid, 19, and especially shut down but again. This has been resuscitate it and the first quarter of this year and we're working with a number of partners and have renewed contacts.
We have re engaged a number of partners looking at monolithic for dental implants, and coatings and very important there's a lot of interest and coatings for a lot of biomedical space.
Our dental partners have expressed significant interest.
And these technologies and we continue to work with them toward commercialization opportunities.
With respect to coatings again, specifically, we have met some key development milestones that will move existing partnerships forward. This was a very difficult technology that we have worked with for many years.
And we are very proud of the progress that.
She'll bring encouraging announcements and the future in terms of new markets.
We hired a VP of business development, and specifically for the biomedical space and we're looking at foot and ankle or the extremities fusion devices, that's a big and growing market as well as anti bacterial wound care products and other big markets.
And we are attending conferences with invited presentations.
This spring and both those industries.
And I'd like to close and I appreciate your patience and listening and your confidence and trust and our company.
Let me reiterate my excitement for this is the best the company has been we have a lot of balls up in the air a lot of opportunities.
We don't have a single point of failure over and over again and material has proven out we are.
Our own best Skeptics, we don't believe results unless we reproduce them.
Repeatedly at more than one institution and now encouragingly.
Other reproducing what we have already published.
This is a function not only on the wonderful material, we have but the incredible team of scientists.
And workers that we have and Salt Lake City, So 'twenty 'twenty.
While it was a difficulty or globally with many tragedies, we weathered the pandemic and came out ahead of it.
Thank you for your attention and I'll turn to Gina.
Great. Thank you Dr. Bob and thank you David O'brien and thanks for everybody who participated in today's call it'll be available on this and tech.
On site shortly and will be posted for the next 30 days.
We wish you good health to you and your families and have a good rest of your day. Thank you.
Yeah.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.