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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported): September 28, 2023
Sharps
Technology, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Nevada
(State
or Other Jurisdiction of Incorporation)
001-41355 |
|
82-3751728 |
(Commission
File
Number) |
|
(IRS
Employer
Identification No.) |
105
Maxess Road, Melville, New York 11747
(Address
of Principal Executive Offices)
(631)
574 -4436
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, $0.0001 par value |
|
STSS |
|
NASDAQ
Capital Market |
Common
Stock Purchase Warrants |
|
STSSW |
|
NASDAQ
Capital Market |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item
7.01 Regulation FD Disclosure
On
September 28, 2023, Sharps Technology, Inc. (the “Company”) issued a press release. A copy of the press release is furnished
hereto as Exhibit 99.1 and incorporated herein by reference.
Exhibits
9.01 Financial Statements and Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date:
September 28, 2023
SHARPS
TECHNOLOGY, INC. |
|
|
|
/s/
Robert Hayes |
|
Robert
Hayes |
|
Chief
Executive Officer |
|
Exhibit 99.1
Sharps
Technology Issues Letter to Shareholders Covering the Announced Asset Purchase Agreement to Acquire InjectEZ Prefillable Syringe Manufacturing
Facility and the Associated $400 Million 10-Year Purchase Agreement with Nephron Pharmaceuticals
Transformative
acquisition and purchase order enables Sharps to commercialize its innovative copolymer prefillable syringe systems to the healthcare
market
Company
has a capitalization strategy through debt that has resulted in a signed term sheet with a leading middle-market lender for up to $75
Million
NEW
YORK, September 28, 2023 (GLOBE NEWSWIRE) — Sharps Technology, Inc. (the “Company”) (NASDAQ: “STSS”
and “STSSW”), an innovative medical device and drug delivery Company offering patented, best-in-class syringe products, issues
a shareholder update from Robert Hayes, the Company’s Chief Executive Officer.
Dear
Fellow Shareholders:
I
am pleased to update you on Sharps’ recently signed Asset Purchase Agreement to acquire the InjectEZ facility , a specialty prefillable
syringe manufacturing facility, and the associated $400 Million 10-year purchase agreement with Nephron Pharmaceuticals. This is a transformative,
strategic set of events for Sharps and our shareholders, and I hope you share the enthusiasm I have for our future. I remain committed
to the vision I had upon signing the partnership with Nephron and will stay the course through the Company’s transition to commercialization
in early 2024. The signed agreements with Nephron advance the manufacturing and research partnership that we announced in November 2022,
and reinforce our commitment to product innovation, advanced manufacturing, and commercialization. In this letter, I will provide key
highlights about the Company’s vision, the proposed transaction, and the Company’s ongoing operations.
Strategic
Partnership with Nephron Continues:
Our
relationship with Nephron has strengthened since the signing of the initial agreement last year. Through the successful completion of
the Asset Purchase Agreement and the 10-year purchase agreement, we will have a full partnership that will provide a strong baseline
of revenue for Sharps for many years, supported by the $400 Million commitment from Nephron for the period. With full control of the
InjectEZ facility through this transaction and the capacity from our wholly owned manufacturing facility in Hungary, Sharps will have
the ability to supply Nephron with their prefilled syringe needs and also commercialize our smart safety syringe products to the broader
healthcare syringe market. The agreement will leverage synergies from both companies and enable Sharps to commercially enter the prefilled
syringe landscape with strength and ahead of plan.
Long-Term
Revenue Stability and Growth:
A
key component of the InjectEZ acquisition is the 10-year purchase agreement with Nephron and their commitment for minimum orders of more
than $400 Million over the period. Nephron has committed to purchasing 10mL and 50mL prefillable copolymer syringes, with initial product
delivery scheduled for the first quarter of 2024 and revenue for the first twelve months totaling approximately $30 Million. Subsequent
shipments will continue until at least December of 2033 with minimum annual revenue of approximately $45 Million per year. In addition
to the purchase agreement, Sharps will benefit from supplying Nephron because of their valued brand in the healthcare industry and leadership
in areas such as 503B outsourcing, respiratory medicine, diagnostic kits, and specialty drug delivery solutions. As a company that is
transitioning from research and development to commercialization, this is a significant development that will have a meaningful impact
on Sharps’ revenue and profitability. We anticipate Nephron’s start-up volume to be approximately 60% of our initial planned
manufacturing capacity, which will provide Sharps with the ability to fully service Nephron’s needs and to also sign purchase orders
for our products from other companies in the healthcare market. Looking ahead, our team has begun working on expansion at the InjectEZ
operation to provide for the additional planned capacity needed to service strategic customers in the branded and specialty Pharma space.
Through this transformation and growth, we are committed to producing innovative drug delivery solutions for the healthcare sector, including
smaller specialty configurations for biotech, ophthalmology, and cosmetic medicine.
Strength
Through Acquiring InjectEZ:
Owning
and operating the InjectEZ manufacturing facility will be a gamechanger for Sharps. Located on Nephron’s campus in West Columbia,
South Carolina, the InjectEZ facility is a state-of-the-art manufacturing facility and one of the only fully dedicated specialized copolymer
pre-filled syringe manufacturing plants in North America. The operation has fully automated pre-fillable syringe system manufacturing
capabilities that include ISO cleanrooms for all key areas including injection molding, high speed automated assembly, and specialty
packaging that include the use of Husky molding machines and Hahn automation. Looking ahead, our team has begun planning for expansion
at InjectEZ to provide for additional capacity and expand our ability to service customers outside of Nephron. We have plans for expansion
that will double our capacity from the current 45 Million to 90 Million units per year and expand the range of products to include specialty
0.5mL and 1.0mL formats and custom configurations.
Financing
Strategy:
Our
capitalization strategy for the InjectEZ transaction will use debt and preferred stock financing, while seeking to limit dilutive financings
to fund working capital needs. As stated in the press release on September 28, 2023, we have worked through a multi-month financing
process that has resulted in a signed term sheet with a leading middle-market lender for up to $75 Million in debt financing. Proceeds
from the financing will be used for the acquisition of InjectEZ, non-dilutive working capital, and facility enhancements. Through the
recent $5.6 Million raise, we are in a comfortable position with the working capital needed on hand as we work to close the debt financing.
We are working through this process with diligence and will provide updates as developments advance. We have also reached an agreement
with Nephron’s Bill and Lou Kennedy to let Sharps begin critical work on the facility and start up product development activities
prior to closing the deal. This will allow for timely activities to be completed as soon as possible, per the agreed upon schedule. We
will use part of the $5.6 Million raise to complete several of these milestones.
Increasing
Capacity for a Growing Prefillable Syringe Market:
Current
capacity levels at InjectEZ will fully support orders from Nephron, as well as our current projections for additional business from the
open healthcare market for 2024 through 2026. We have design plans in place to double our capacity from 45 Million to 90 Million units
per year, which we are forecasting to be in place in late 2026. The additional capacity will be used to serve our core business focus
within the 503B and pharmaceutical segments of the healthcare industry, including specialty small volume pieces, infusion pumps, and
novel drug delivery systems. Market research is forecasting for significant growth within the prefillable syringe segment, with product
demand outstripping supply for the foreseeable future. The prefilled syringe market is a niche sub-industry within the healthcare sector
that is growing faster than GDP, specifically within the copolymer segment of the market that Sharps will serve. We are excited for the
opportunities for Sharps within this segment, as prefillable syringe capacity is at a premium due to the global lack of capacity, increasing
demand, and technical challenges in production that our team has a wealth of experience in.
Accelerating
Operations in Europe:
Operations
at our wholly owned facility in Hungary are moving forward and hitting milestones as planned. We continue to manufacture and export our
patented line of ultra-low waste, smart safety disposable syringe products for commercial use. In the first half of 2024, Sharps will
introduce the Sologard Locking Plus syringe, a specialty FDA and WHO approved syringe system that will be offered in 3mL to 10mL barrel
volumes. The team is also working to advance the facility to manufacture new product configurations and have identified opportunities
for specialized size and technology options for our segment of the market. The facility has sufficient capacity for our growing needs
and will be vital in supporting our efforts at the InjectEZ facility as we begin to execute on commercialization. While we remain committed
to developing and commercializing disposable smart safety syringe technologies for the healthcare market, the opportunity to accelerate
our prefillable syringe strategy, with support from the Hungary facility, will take priority in the near term to support our partnership
with Nephron.
Conclusion:
We
are at a pivotal time in our Company’s history and the recent transactions position Sharps for exciting commercial growth. I would
like to thank Bill and Lou Kennedy at Nephron for their continued support and shared commitment to bringing our specialized products
to the market. We look forward to providing updates as we move ahead with our plans. I want to give my sincere thanks to our shareholders
for their continued support of Sharps Technology.
About
Sharps Technology:
Sharps
Technology is an innovative medical device and pharmaceutical packaging company offering patented, best-in-class smart-safety syringe
products to the healthcare industry. The Company’s product lines focus on providing ultra-low waste capabilities, that incorporate
syringe technologies that use both passive and active safety features. Sharps also offers products that are designed with specialized
copolymer technology to support the prefillable syringe market segment. The Company has a manufacturing facility in Hungary and has partnered
with Nephron Pharmaceuticals to expand its manufacturing capacity in the U.S. For additional information, please visit www.sharpstechnology.com.
Forward-Looking
Statements:
This press release contains “forward-looking statements”. Forward-looking statements reflect our current view about future
events. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect,”
“future,” “intend,” “plan,”“poised” or the negative of these terms and similar expressions,
as they relate to us or our management, identify forward-looking statements. Such statements, include, but are not limited to, statements
contained in this press release relating to our business strategy, our future operating results and liquidity, and capital resources
outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other
future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks,
and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking
statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore
against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from
those in the forward-looking statements include, without limitation, our ability to raise capital to fund continuing operations; our
ability to protect our intellectual property rights; the impact of any infringement actions or other litigation brought against us; competition
from other providers and products; our ability to develop and commercialize products and services; changes in government regulation;
our ability to complete capital raising transactions; and other factors relating to our industry, our operations and results of operations.
Actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Factors or events
that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We
cannot guarantee future results, levels of activity, performance, or achievements. The Company assumes no obligation to update any forward-looking
statements in order to reflect any event or circumstance that may arise after the date of this release.
Investor
Relations:
US
Investor Relations: |
|
|
|
|
|
Adam
Holdsworth, Managing Director |
|
Craig
Brelsford, Specialist |
TraDigital
IR |
|
RedChip
Companies Inc. |
adam@tradigitalir.com |
|
craig@redchip.com |
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