SiNtx Technologies, Inc. Aktie

[Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the call over to SINTX Technologies Chief Legal Officer, Kevin Ontiveros.

Thank you, operator, and good afternoon, everyone. Earlier today, SINTX Technologies released its financial results for the quarter ended September 30, 2026, and filed its quarterly report on Form 10-Q with the Securities and Exchange Commission. These materials, together with a replay of this call, will be available through the Investor Relations section of the SINTX Technologies website.

Before we begin, I want to remind listeners that statements on today's call, other than historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements about customer orders, production, and shipment schedules, future revenue and guidance, gross margins, medical device commercialization, surgeon and distributor adoption, research and development, intellectual property, strategic relationships, potential financing and warrant exercises, liquidity and business outlook. They reflect current expectations, involve risks and uncertainties, and actual results may differ materially. Please review the risk factors and other disclosures in our latest Form 10-K and 10-Q and subsequent SEC filings.

SINTX undertakes no duty to update these statements except as required by law. Unless otherwise noted, financial measures discussed today are presented on a U.S. GAAP basis. Joining me are Eric Olson, our Chairman and Chief Executive Officer, and Kevin Trask, our Chief Financial Officer. Eric will provide the business and strategic update. Kevin will review financial results and liquidity. And Eric will close with our near-term priorities. At this time, I would like to turn the call over to Eric Olson. Eric?

Thank you, Kevin. And thank you to everyone for joining today's call. Our third quarter performance marks an important step in SINTX's transition into a commercially driven advanced biomaterials company. For many years, the strength of SINTX has been its silicon nitride technology, manufacturing expertise, and research and development capabilities. Today we can announce that we have translated these strengths into sustainable commercial revenue and gross profits.

I would like to highlight several third quarter takeaways. First, SINTX has manufactured and delivered more silicon nitride parts than in any other quarter in the company's history. Third quarter revenue grew 953%, reaching approximately $2.2 million compared with $208,000 a year earlier. This represents a meaningful step up in demonstrating commercial scale, driven primarily by our industrial and aerospace ceramics manufacturing operations. Second, gross profits reached approximately $1.4 million, while our net loss narrowed by 55% year-over-year. Third, achieving the Q3 revenue milestone allowed us to execute a warrant call which resulted in gross capital proceeds of approximately $2 million, as well as the expiration of unexercised warrants that would have covered the issuance of an additional 941,000 shares, reducing the dilution to existing shareholders. We anticipate the revenue from the industrial sales vertical will support us as we continue our transition to addressing unmet needs in medical devices and medical textiles, while also working to bring our cost structure more in line with our revenue.

The update we will discuss today reinforces both our short- and long-term business strategies focused on: first, industrial and aerospace revenue growth; second, commercialization of our FDA 510(k)-cleared SiNAPTIC silicon nitride system for foot and ankle procedures; third, moving our silicon nitride PEEK 3D-printed orthopedic implants closer to commercialization; and fourth, the licensing of silicon nitride-treated medical textiles for wound closure and wound care applications. These strategies are possible thanks to our one-of-a-kind vertically integrated manufacturing facility, the only facility registered with the FDA to manufacture medical-grade silicon nitride biomaterials. This manufacturing capability, combined with our recent patents for integrating silicon nitride into composites and textiles, has allowed our platform to begin moving forward beyond traditional orthopedic devices into other exciting biotech applications.

As the only global manufacturer of medical-grade silicon nitride, we believe our priorities reflect a business that is not just about a single quarter's growth. It is about our ability to leverage a biomaterial platform to convert customer demand into delivered products and overall revenue growth. With that context in mind, I'd like to begin discussing our revenue growth in Q3 and what that means for the future of our silicon nitride business. Industrial manufacturing remained the primary contributor to third quarter revenue. Our experience in material formulation, precision manufacturing, and repeatable processing gives us an opportunity to deepen relationships with established industrial customers who need reliable components that perform in demanding environments. Purchase orders received this year from Fortune 500 aerospace companies informed the guidance we offered in our second quarter earnings call, where we indicated an expected revenue range of $900,000 to $1.1 million for the third quarter. Our ability to double the high end of these expectations is not only a testament of customer satisfaction, it is also a reflection of improvements in our manufacturing and operational efficiencies.

Importantly, this execution demonstrated our capacity to manufacture at scale, which will become even more critical when applied to our medical device manufacturing throughput. As we discussed in our previous calls, receipt of these purchase orders represented the beginning of the work, not the completion of it. We indicated then that the important milestones included repeatable production, manufacturing yield, on-time delivery, and recognized revenue. We are pleased to report that we have demonstrated objective success in achieving these milestones and on an accelerated basis. Our ambition is to turn the success into a durable commercial foundation—that is, increasing capacity, obtaining repeat orders, and generating revenue that can support further development of our proprietary biomaterial platform. We are also expanding our dialogue with prospective manufacturing partners where our ceramic expertise can help solve specific technical challenges. The revenue from industrial sales provides an important source of growth and operational leverage as we expand our medical device biomaterial platforms.

To provide some quick background for listeners new to the SINTX story, the unique molecular properties of silicon nitride make it the ideal biomaterial for medical devices. Silicon nitride has several material characteristics that we believe make it attractive for medical device applications. These properties include being naturally antipathogenic and antimicrobial, which may decrease the likelihood of revision surgery during or due to infection; and osteoconduction, or the ability to stimulate bone growth, which could accelerate natural healing and help to prevent implant failures in the future. Implant-associated infections cost the U.S. healthcare system approximately $3 billion to $5 billion every year. Once bacteria adhere to implants made of other materials such as metal or plastic, the bacteria becomes more resistant to antibiotics. Silicon nitride, on the other hand, has been shown to not only inhibit the bacterial attachment in the first place, but to actually kill the bacteria as well. Published studies regarding silicon nitride have shown that these features may help to accelerate patient healing while also being less likely to cause allergic reactions and also provide more clear radiographic visibility than any other material, allowing for precise placement of implants in critical anatomic locations.

Our lead proprietary silicon nitride product in this vertical remains the FDA 510(k)-cleared SiNAPTIC foot and ankle wedge system. This implant system entered clinical use in the United States earlier this year, and we have begun the process of building a commercial channel around it. As you may recall, the SiNAPTIC system consists of silicon nitride wedges, which are being used in reconstructive procedures, including those to correct mid- and hindfoot pathologies, and potentially for sports medicine applications as well. Following the completion of our limited market release that we have discussed in our previous call, full commercialization has now begun with distributors targeting the lead foot and ankle surgeons in the United States, while we also explore other strategic opportunities with partners that have existing relationships with facilities and foot and ankle surgeons. Commercial success of the system will be measured through surgeon adoption, product availability, repeat procedures or stickiness, and meaningful revenue. We are also evaluating capital-efficient routes to market, and we intend to build effective distribution and clinical support models, maintaining manufacturing and quality discipline.

Beyond monolithic silicon nitride implants, our technology initiatives are intended to extend silicon nitride into new material formats and applications, including polymer composites and 3D manufacturing. We are pursuing commercialization strategies for patient-specific and custom implants, and we are entering into collaboration with partners who have the design, regulatory, and distribution capabilities needed to bring advanced products to market. We also continue to assess applications involving medical textiles, wound care, wound management, and other potential antipathogenic applications. 3D printing of orthopedic implants allows us to distribute a vast array of AI-assisted custom and patient-specific implants with complex geometries and patient-specific designs that may be difficult to achieve using traditional manufacturing methods.

We believe these capabilities create new opportunities for our silicon nitride PEEK biocomposite platform. Last year, we announced the manufacturing agreement with Evonik, a leading global manufacturer of PEEK and PEEK-based filaments for 3D printing applications. Operating under our patent and using silicon nitride material provided by SINTX, Evonik produces a commercial-scale composite filament of PEEK and silicon nitride for these 3D-printed devices. Our patented silicon nitride PEEK biocomposite, which will be marketed as part of our SiNERGY biocomposite platform, combines the characteristics of these two materials and may offer advantages for certain orthopedic applications. We anticipate that 3D printing using the filament provided by Evonik may result in greater manufacturing yields, lower cost of goods, and less waste material than other manufacturing processes. Already, SINTX manufacturing and innovation teams have created a new 3D printing manufacturing facility and have also begun developing the custom workflows for these 3D-printed implant applications.

SINTX is also currently conducting large-animal in vivo studies to evaluate the effectiveness of medical textiles treated with silicon nitride and to advance preclinical work evaluating the antimicrobial and anti-adhesion scar reduction properties of silicon nitride-treated sutures and wound dressings for various wound healing and wound management applications. We anticipate that these studies will be completed in the next calendar quarter. These large-animal studies are intended to help generate data regarding the healing performance of these materials in relevant wound environments and to inform future development and potential commercial partnering activities. We believe this represents a promising opportunity to extend our silicon nitride technology platform beyond traditional orthopedic implants. Ongoing testing and applicable regulatory clearances or approvals will be required before the commercialization or licensing of any resulting medical devices. The long-term vision is to create a licensing platform that would allow partners to integrate patented silicon nitride technologies into their own medical textiles. We expect the outcome of these studies to inform the commercial strategy for these particular wound care and wound management applications and look forward to providing updates on this study's progress.

To conclude, the milestones we have discussed today reflect a record quarter of meaningful execution across all of our core strategic priorities. While each of these initiatives are important on their own, together they demonstrate the progress we are making towards commercialization and the long-term strategy we have previously outlined. With that, I will turn the call over to our Chief Financial Officer, Kevin Trask, for more details on the quarter's financial results.

Thank you, Eric, and good afternoon, everyone. Total revenue for the three months ended September 30, 2026 was $2.2 million, an increase of 953% compared with $208,000 in the prior year period. Product revenue was $2.1 million compared with $150,000 in the third quarter last year. The increase in revenue was primarily driven by higher sales of our aerospace technical manufacturing products. These results reflect the progress we have made in strengthening customer relationships, improving our manufacturing capabilities, and executing on customer orders. While the timing and size of customer orders may result in fluctuations in quarterly revenue, we expect continued demand for our products at levels above those experienced in prior periods. Grant and contract revenue was $100,000 compared with $58,000 in the prior year period.

Gross profit for the quarter increased to approximately $1.4 million compared with $93,000 in the prior year period. Gross margins were 62% compared with 45% in Q3 2025. The improvement in gross margin was primarily driven by pricing adjustments implemented earlier this year, favorable product mix, and increased production volumes, which contributed to improved manufacturing efficiencies and better absorption of fixed manufacturing costs.

Total operating expenses for the quarter were $3 million compared with $3.4 million in the prior year period, a decrease of 13%. Net loss decreased 55% to $1.6 million compared with $3.5 million in the prior year period. Research and development expenses were $548,000 compared with $1.3 million in the same period in 2025. The decrease in reported R&D expenses primarily reflects the reallocation of certain overhead costs from research and development to general and administrative expenses as our operations have evolved towards increased commercial manufacturing activity. While these changes have reduced reported R&D expenses, they do not represent a corresponding reduction in our underlying research and development efforts. General and administrative expenses for the third quarter were $2.5 million to $3 million compared with $2.1 million in the prior year period, a 7% increase. Sales and marketing expenses for the quarter were $140,000 compared with $59,000 in the prior year quarter. The increase reflects greater commercialization activities with the launch of new products.

Turning to year-to-date results, total revenue for the nine months ended September 30, 2026 was $3 million, an increase of 315% compared with $728,000 in the same period last year. Product revenue for the first nine months of 2026 was $2.8 million compared with $541,000 in the prior year period, an increase of 424%. The increase in year-to-date revenue was primarily driven by higher OEM technical manufacturing sales, particularly in the third quarter of the year. During the quarter, we also began recognizing commercial revenue from our SiNAPTIC foot and ankle wedge system during 2026, marking an important milestone in our medical device commercialization efforts.

Gross profit for the first nine months of 2026 was $1.8 million compared with $273,000 in the prior year period, an increase of 553%. Net loss for the first nine months of 2026 decreased to $7.1 million compared with $8.1 million in the prior year period. The reduction in our year-to-date net loss reflects improved gross profitability and our continued focus on operating efficiencies and disciplined expense management.

Turning to our balance sheet, cash and cash equivalents were $2 million at September 30, 2026, compared with $4.1 million at December 31, 2025. The decrease in cash primarily reflects cash used in operating activities and investments in working capital to support increased manufacturing and commercialization activities, partially offset by proceeds from financing activities. At September 30, 2026, we had current assets of $5.5 million, current liabilities of $3 million, and total stockholders' equity of $3.4 million. Inventory at quarter-end was $2.6 million compared with $1 million at year-end 2025. The increase in inventory primarily reflects additional raw materials, work-in-process, and finished goods to support increased manufacturing activity and anticipated customer demand. These investments are intended to support our expanding commercialization operations, including our industrial manufacturing activities and medical device commercialization efforts.

Net cash used in operating activities was $6.6 million for the first nine months of 2026, compared with $6.2 million in the prior year period. Net cash provided by financing activities for the first nine months of 2026 was $4.7 million, compared with $7.9 million in the same period last year. At quarter-end, we had approximately $5 million of remaining capacity under our at-the-market offering, subject to market conditions and applicable offering limitations.

Subsequent to quarter-end, we exercised our right to call the Class B warrants issued in connection with our June 2026 financing after achieving the required quarterly revenue milestone. As announced on October 9, 2026, we received approximately $2 million in aggregate gross proceeds from funded warrant exercises and related exchanges covering approximately 941,000 Class B warrant shares. The remaining unexercised Class B warrants covering approximately 941,000 additional shares expired without consideration, eliminating the potential dilution associated with those unexercised Class B warrants.

Although our improved third quarter financial performance and the proceeds from the Class B warrant exercises have strengthened our liquidity position, we continue to incur operating losses and use cash in our operations. We remain focused on improving operating cash flow, managing working capital and expenses, and evaluating additional sources of capital to support our business objectives. We continue to evaluate opportunities to raise additional capital through equity and debt financing to support our ongoing operations and commercialization initiatives.

Although we anticipate continued operating losses in the near term, we are encouraged by the progress made in increasing revenue, improving gross margins, and managing operating expenses. We believe these improvements provide a stronger operational foundation as we continue to execute our growth strategy. We are particularly pleased with our third quarter revenue performance, which exceeded by 2x the high end of the revenue guidance range provided during our previous earnings call. And we continue to expect technical manufacturing demand to remain above historical levels.

Quarterly revenue may fluctuate based on the timing and size of customer orders, production schedules, and shipment timing, but we remain focused on sustainable gross profit generation and converting demand into cash rather than treating a single strong quarter as a guaranteed future run rate. Looking ahead, our previously communicated revenue guidance for the fourth quarter of 2026 was based on expected timing of delivery against the $3.2 million in purchase orders received in June. As mentioned earlier, the timing and delivery of those orders may result in revenue fluctuations, and at this time we are unable to offer an expectation related to order delivery for the remainder of those purchase orders relative to the fourth quarter of 2026. We look forward to greater visibility on the matter as information becomes available. With that, I will turn the call back to Eric for closing remarks.

Thank you, Kevin. This quarter, SINTX has clearly demonstrated our ability to translate commercial activity into financial progress. While there is still important work ahead, our third quarter results show what our team can accomplish when customer demand, technical manufacturing, and commercial execution come together.

In closing, I'd like to reemphasize our four priorities as we move through the remainder of 2026 and into 2027: first, reliable manufacturing and commercial execution of our industrial and aerospace products; second, commercialization of the SINTX foot and ankle implant system; third, advancement of silicon nitride composites for 3D manufacturing; fourth, identifying licensing opportunities of our silicon nitride textiles alongside strategic partners; and finally, disciplined management of our costs and working capital.

We believe the company is well positioned to execute on the opportunities in front of us and to continue advancing toward commercialization across multiple verticals. As we prepare for further growth in 2027, our commitment is to report measurable milestones and to keep converting the technology we have built into products that customers value. We look forward to updating you on our continued progress in the quarters ahead. Thank you to our employees, customers, clinical collaborators, and shareholders for the success of this quarter.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

Thank you. Good day, and welcome to the SINTX Technologies second quarter 2026 earnings call. [Operator Instructions] As a reminder, today's call is being recorded. I would like to turn the call over to SINTX Technologies Chief Legal Officer, [ Kevin Ontiveros ].

Thank you, operator, and good afternoon, everyone. Earlier today, SINTX Technologies issued its financial results for the quarter ended June 30, 2026, and filed its quarterly report on Form 10-Q with the Securities and Exchange Commission. Earnings release and Form 10-Q are available in the Investor Relations section of the company's website, and a replay of this call will be available following the conclusion of today's event.

Before we begin, I would like to remind everyone that statements made during this call that are not statements of historical fact are forward-looking statements. These statements include, among other things, expectations regarding revenue growth, customer orders, production and shipping timing, commercialization, market adoption, strategic relationships, operating performance, cost management, liquidity, financing, future business opportunities, and revenue guidance and expectations regarding the timing and amount of revenue recognition.

Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Please refer to the company's most recent Form 10-K, today's Form 10-Q, and other filings with the SEC for a discussion of these risks. SINTX undertakes no obligation to update forward-looking statements except as required by law.

Unless otherwise stated, the financial results discussed today are presented in accordance with U.S. generally accepted accounting principles. Joining today's call are Eric Olson, Chairman and Chief Executive Officer, and [ Kevin Trask ], Chief Financial Officer. Eric will begin with a review of the quarter and the company's commercial priorities. Kevin will then discuss the financial results and liquidity. Eric will conclude with the priorities for the remainder of 2026. Eric, please go ahead.

Thank you, Kevin, and thank you to everyone joining us today. The second quarter represented meaningful progress in SINTX's transition from a development company to a commercially focused biomaterials and medical technology platform company. Our financial results show that commercial activity is beginning to become more visible. They also make clear that our work is not complete. We must convert demand into revenue, establish repeatable medical device commercialization efforts, align our cost structure with the scale of the business, and maintain adequate liquidity.

So let me begin with 3 key takeaways from the quarter. First, commercial activity is beginning to show up in our reported results. Second quarter revenue increased 199% year over year to $452,000. And product revenue increased 347% to $447,000. Gross profit increased 388% to $278,000. And gross margins improved to approximately 62% compared with 38% a year ago. These are calculated obviously from a small revenue base, and we do not want to overstate them. The important point is that higher product sales, improved pricing on certain OEM products, a favorable sales mix, and the early stage of commercial sales of the SINTX osteotomy foot and ankle wedge system are beginning to move the financial statements in the right direction.

Second, our business model is taking shape around 2 complementary sources of value. 1, our contract manufacturing and OEM activities can provide near-term revenue, customer validation, manufacturing utilization, and operating leverage. 2, our proprietary silicon nitride medical platform can create differentiated products and potential OEM licensing, distribution, and strategic partnership opportunities with greater long-term value. Both rely on the same foundation, material science, precision ceramic processing, and clinical data.

Our responsibility is to increase revenue, manage operating and working capital requirements, pursue cost and efficiency actions, and access capital prudently while focusing resources on the opportunities most likely to create value. Turning first to contract manufacturing, product revenue growth during the quarter was driven primarily by increased sales in our OEM industrial manufacturing business, reflecting improved customer demand and pricing. We view this business as an important commercial foundation. Customers rely on SINTX for technically demanding components used in applications where mechanical strength, thermal stability, wear and corrosion resistance, manufacturing consistency, and quality control are critical.

In June, we announced that SINTX had received purchase orders from multiple existing contract manufacturing customers with an aggregate value exceeding $3.2 million. Subject to customer requirements, manufacturing schedules, and commercial terms, production and shipment activities associated with these purchase orders have begun and will continue into 2027. The value of those purchase orders is meaningful relative to our current revenue base, but the announcement is the beginning of the work rather than the completion of it.

The milestones that matter are qualified production, material availability, manufacturing yield, quality release, on-time shipment, customer acceptance, recognized revenue, cash collection, and repeat orders. Because these are technically demanding components, timing may vary. We will distinguish clearly between order value and recognized revenue and will update investors as execution progresses. Our manufacturing priorities are straightforward. We are aligning production schedules to customer requirements, managing the working capital needed to support raw materials and work in progress, while protecting quality and delivery performances and evaluating where capacity, process efficiency, or external support may be required. We intend to remain disciplined. Growth that creates excessive working capital pressure or compromises quality would not be sustainable.

Turning to our proprietary medical portfolio, the SINTX foot and ankle osteotomy wedge system remains our lead commercial product. This system received FDA 510(k) clearance in late 2025. In March 2026, our first SINTX wedges were used in a reconstructive foot and ankle procedure in the U.S., and we recognized initial commercial revenue during our limited use review. Those are important commercialization milestones. They demonstrate that SINTX has moved beyond research and regulatory development into clinical use and commercial activity. We are focused on building adoption and increasing commercial activity, although the timing and amount of future revenue will depend on surgeon adoption, channel development, product availability, and other potential market factors.

FDA clearance and first clinical use, however, do not by themselves create a durable medical device business. Commercialization requires surgeon education, case support, channel development, product availability, inventory management, reliable manufacturing, reimbursement awareness, and ongoing clinical and market feedback. Our near-term objective is to establish a disciplined commercial foundation for the foot and ankle wedge system rather than to pursue growth at any cost. We are evaluating the most capital-efficient routes to market, including direct-to-surgeon engagement, distributor relationships, and broader strategic relationships. The right model must provide credible access to foot and ankle surgeons, appropriate clinical support, and an economic structure that will allow SINTX to build adoption without creating a sales infrastructure that is disproportionate to current revenue.

Silicon nitride has a combination of properties that we believe can be valuable in musculoskeletal applications, including biocompatibility, bone affinity, strength, imaging compatibility, hydrophilicity, and surface characteristics studied for resistance to bacterial adhesion and clear pathogenic characteristics. Beyond the wedge system, SINTX's broader opportunities to apply silicon nitride across multiple formats including monolithic implants, powders, coatings, coarse porous structures, and polymer composites. Potential applications span orthopedics, spine, dental, wound care, and other specialized medical markets.

The breadth of the platform is valuable, but it also creates a need for us to focus. We are prioritizing programs based on time to revenue, required capital, regulatory pathways, partner interest, manufacturing fit, and strategic value. In the near term, that means concentrating on 3 categories of activity. The first is converting contract manufacturing demand into revenue and repeat business. The second is building a credible commercial path for the SINTX foot and ankle wedge system. The third is advancing OEM licensing and strategic discussions where a partner can provide market access, development funding, manufacturing volume, or another meaningful source of value.

We do not believe SINTX must build every commercial capability internally. As discussed in today's business update, we have engaged one of our board members, [ Chris Lyons ], and his company, [ Southern Metrics ], to help coordinate and evaluate inbound strategic opportunities involving potential commercial partnerships, licensing relationships, and other business development initiatives. That engagement should not be interpreted to mean that any particular transaction is pending or will occur. The quarter also reflects our shift towards commercialization in the way expenses are classified. Sales and marketing expenses increased as we supported product launch activity.

Research and development expenses declined, but the majority of that change resulted from the reallocation of certain overhead costs to general and administrative expenses as our operating focus changed. This is important. The reduction in reported R&D expense should not be interpreted as an equivalent reduction in underlying technical activity. At the same time, the current cost structure is high relative to our revenue base. We recognize that. Management is evaluating staffing, outside services, facilities, project priorities, working capital, and other spending commercially.

Thank you, Eric, and good afternoon, everyone. For the second quarter of 2026, total revenue was $452,000 compared with $151,000 in the second quarter of 2025, an increase of 199%. Product revenue was $447,000 compared with $100,000 in the prior year period, an increase of 347%. Grant and contract revenue was $5,000 compared with $51,000 a year ago. Gross profit was $278,000 compared with $57,000. Gross margin was 61.5% compared with 37.7% a year ago.

The improvement reflects cost of revenue increasing at a lower rate than revenue, supported by higher margin sales, favorable sales mix, and improved pricing on certain OEM products. Investors should not assume that the second quarter margin will repeat each quarter. Gross margin can vary based on product mix, pricing, manufacturing efficiency, customer demand, and the mix of product and grant and contract revenue. [ Total of 16%. ] [ Research and development expense generally paid off general and administrative expenses. ] Other research and development expenses were generally consistent with the prior year period.

General and administrative expense was $2.3 million compared with $1.4 million in the prior year period, an increase of 64%. The increase primarily reflected higher headcount costs, including non-cash stock-based compensation, and the approximately $700,000 of overhead reallocation from research and development. These increases were partially offset by lower board fees, non-employee compensation, accounting fees, and other general expenses. Sales and marketing expense was $273,000 compared with the prior year associated with the SINTX product portfolio. Net loss was $2.3 million compared with a net loss of $2.3 million a year ago.

For the first 6 months of 2026, total revenue was an increase of 6% from the prior year period. Product revenue increased 91% to $747,000. On a comparable basis, excluding revenue associated with the divested [ PAMT ] business, revenue increased approximately 102% compared with the first half of 2025. Gross profit for the first 6 months of 2026 was $422,000 compared with $180,000 a year ago. Net loss was $5.5 million compared with $4.6 million in the prior year period.

Turning to the balance sheet, cash and cash equivalents were $3.6 million at June 30, 2026, compared with $4.1 million at December 31, 2025. Current assets were $7 million, current liabilities were $3 million, and stockholders' equity was $4.8 million at quarter end. Inventory was $2.3 million at June 30, 2026, compared with $1 million at year end. The increase primarily reflects inventory purchases and production activity to support anticipated customer demand and commercialization activities. The timing of conversion to revenue will depend on production schedules and customer requirements.

Accounts payable and accrued liabilities increased during the first half of 2026, partially offsetting the cash impact of increased inventory and other operating activities. Management is focused on balancing supplier support and customer delivery requirements with responsible cash management. Working capital will remain an important variable as we continue production activity associated with announced orders. Net cash used in operating activities was $5.3 million for the first 6 months of 2026, compared with $3.7 million in the prior year period.

The increase reflected the higher net loss and working capital investment, including inventory and receivables, partially offset by increases in accounts payable and accrued liabilities and by non-cash adjustments. Net cash used in investing activities was approximately $91,000 due to investments in property and equipment. Net cash provided by financing activities was $4.8 million during the first 6 months of 2026. Financing activity included net proceeds from the June private placement and at-the-market sales, partially offset by debt payments.

As of June 2026, the company had sold approximately $1.3 million under its 2025 at-the-market program and had approximately $5.1 million of remaining capacity. The June 2026 financing, remaining ATM capacity, Armor facility sublease, pricing improvements, divestiture of non-core operations, and growth initiatives provide important tools, but they do not eliminate the underlying liquidity risk. We will continue to seek opportunities to raise additional funding through equity and/or debt financing.

Based on our current production schedules, customer requirements, and expectations regarding the timing of shipments, we currently expect total revenue to be approximately $900,000 to $1.1 million in the third quarter and approximately $1 million to $1.3 million in the fourth quarter of 2026. These expectations are subject to significant uncertainty, particularly with respect to production timing, customer scheduling, manufacturing execution, and the timing of revenue recognition, and actual results could differ materially. The publicly announced purchase orders provide commercial visibility, but revenue recognition will depend on production, shipment, and other customary conditions. We will provide updates through our public disclosures as execution progresses. With that, I will turn the call back to Eric for closing remarks.

Thank you, Kevin. As we look to the remainder of 2026, our priorities are straightforward. First, execute the contract manufacturing orders already in hand with the quality, timing, working capital discipline, and customer service required to convert demand into recognized revenue and repeat business. Second, build a disciplined commercial foundation for the SINTX foot and ankle osteotomy wedge system through surgeon engagement, channel development, training, reliable product availability, and capital-efficient market access.

Third, concentrate capital and management attention on programs and strategic relationships with a credible path to revenue, funded development, market access, licensing economics, or meaningful enhancements of the silicon nitride biomaterial platform. Fourth, continue aligning spending, staffing, inventory, and financing decisions with the milestones most likely to create value for our shareholders.

SINTX has spent many years building the science, intellectual property, quality systems, manufacturing capabilities, and regulatory foundation of silicon nitride. The standard now is purely execution. We intend to be judged by customer shipments, revenue growth, gross profit, surgeon adoption, partner conversion, cash discipline, and the quality of our public communication. We appreciate the continuous support of our shareholders, employees, customers, clinical collaborators, and strategic partners.

This concludes today's conference call. Thank you for your participation. You may now disconnect.