Xtant Medical (XTNT) Q1 2025 Earnings Call May 12, 2025 04:30 PM ET Speaker0 Good afternoon, everyone, and welcome to the Xtant Medical First Quarter twenty twenty five Financial Results. Please note this conference is being recorded. I will now turn the conference over to your host, Brett Maas of Hayden Investor Relations. Brett, the floor is yours. Speaker1 Thank you, operator. Joining me today is Sean Brown, President and Chief Executive Officer and Scott Neals, Chief Financial Officer. Today's call is b ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or ...

Revenue Increases 18% Year-over-YearDelivers Positive Net Income and $1.3 Million in Operating Cash FlowIncreases 2025 Revenue Guidance to $127 Million to $131 Million BELGRADE, Mont., May 12, 2025 /PRNewswire/ -- Xtant Medical Holdings, Inc. (NYSE American: XTNT), a global medical technology company focused on surgical solutions for the treatment of spinal, orthopedic, and wound care disorders, today reported financial and operating results for the first quarter ended March 31, 2025.First Quarter 2025 Fina ...

Stock Transaction and Ownership Changes - The Company completed a stock transaction on April 15, 2025, selling approximately 73.1 million shares at a price of $0.42 per share, totaling approximately $30.7 million[6][12]. - Following the transaction, Nantahala Capital Management, LLC acquired 57.0 million shares, resulting in Nantahala holding 49.1% of the Company's issued and outstanding common stock[7][12]. - The transaction resulted in a change of control, with Nantahala becoming the largest stockholder and effectively controlling the Company[12]. - The Company amended its credit agreements to increase the ownership threshold for a Change in Control from 40% to 49.9%[7]. - Nantahala's significant ownership may prevent other stockholders from influencing corporate decisions, potentially affecting the market price of the common stock[20]. - The Company is no longer classified as a "controlled company" under NYSE American standards due to the change in stock ownership[16]. - The transaction led to the termination of the Investor Rights Agreement with ROS Acquisition and ORO II, effective immediately[9]. - Nantahala's ownership concentration may discourage unsolicited acquisition proposals, impacting the Company's strategic options[20]. - The Company has entered into a Registration Rights Agreement with several purchasers, which may influence future stockholder dynamics[23]. Financial Performance and Projections - The Company disclosed preliminary, unaudited revenue for the quarter ended March 31, 2025, in connection with the transaction announcement[10]. - The Company anticipates a preliminary revenue growth of 18% to 19% for the first quarter of 2025[23]. - The Company warns that future sales of shares may lead to a material adverse impact on the trading price of the Common Stock, especially given its low trading volume[22]. - The Company is obligated to file a Resale Registration Statement, which will allow these shares to be available for resale, potentially impacting future capital raising efforts[21]. - The Company has filed several amendments to its credit agreements, indicating ongoing financial restructuring efforts[23]. Risks and Regulatory Compliance - The Company cautions that forward-looking statements involve risks and uncertainties that could lead to actual results differing materially from expectations[22]. - The Company is at risk of delisting from NYSE American if the trading price of its Common Stock falls to abnormally low levels[21]. - The Company emphasizes the importance of reviewing its SEC filings for a comprehensive understanding of risks and uncertainties[22]. - The Chief Financial Officer, Scott Neils, signed the report, indicating official acknowledgment of the financial disclosures[26].

Core Viewpoint - Xtant Medical Holdings, Inc. is focusing on a strategic shift towards higher-margin orthobiologics, supported by new product launches and a recent secondary private sale of shares, which enhances its operational flexibility and aligns with long-term healthcare-focused investors [1][2][3]. Group 1: Strategic Developments - The completion of a secondary private sale of 73.1 million shares by OrbiMed Advisors LLC to existing and new stockholders, led by Nantahala Capital Management LLC, marks a significant change in ownership structure [1]. - The termination of the investor rights agreement with OrbiMed allows Xtant greater strategic and operational flexibility moving forward [2]. - The company aims to prioritize profitability and self-sustainability as part of its long-term growth strategy, with a focus on expanding its orthobiologics offerings [3]. Group 2: Financial Performance - Xtant Medical expects to report Q1 2025 revenue between $32.8 million and $33.1 million, reflecting an 18% to 19% increase compared to Q1 2024 [4]. - The growth in revenue is primarily driven by orthobiologics and licensing revenue, indicating a successful transition towards higher-margin products [4]. Group 3: Future Outlook - The company plans several new product launches that will expand its offerings beyond spinal solutions, which is anticipated to accelerate growth in 2025 and beyond [3]. - Nantahala Capital Management expresses confidence in Xtant's innovative biologics and implant solutions, which address a growing need in the healthcare sector for regenerative and cost-effective surgical solutions [3].

Xtant Medical (XTNT) Q4 2024 Earnings Call March 07, 2025 01:28 AM ET Company Participants Brett Maas - Managing PartnerSean Browne - President and Chief Executive OfficerScott Neils - Chief Financial Officer Conference Call Participants Chase Knickerbocker - Senior Equity Research Analyst - HealthcareNone - Analyst Operator Good day, everyone, and welcome to the Xtant Medical Fourth Quarter and Year End twenty twenty four Earnings. At this time, all participants have been placed on a listen only mode. If y ...

Xtant Medical Holdings, Inc. (NYSE:XTNT) Q4 2024 Results Conference Call March 6, 2025 4:30 PM ET Company Participants Brett Maas - Hayden IR Sean Browne - President & Chief Executive Officer Scott Neils - Chief Financial Officer Conference Call Participants Chase Knickerbocker - Craig-Hallum Sean Browne Good afternoon, everyone. I am pleased to announce record fourth-quarter revenue of $31.5% million and for the full year, $117.3% million. This is our first full quarter. A consistent year-over-year compari ...

Financial Agreements and Acquisitions - In Q4 2024, Xtant Medical entered a license agreement for the SimpliMax™ product, receiving a one-time cash payment of $1.5 million and expected minimum royalty payments of $3.75 million in 2025[21]. - A manufacture and license agreement for the SimpliGraft product was established, with an upfront payment of $1.5 million and minimum purchase obligations totaling $3.9 million in 2025[22]. - Xtant Medical acquired Surgalign SPV for $17 million, gaining rights to the Coflex and CoFix product lines approved by the FDA for lumbar spinal stenosis treatment[24]. - The acquisition of Surgalign Holdings' assets included a broad portfolio of spinal hardware implants and biologics, funded with $5 million in cash[25]. - The company acquired RTI Surgical's nanOss production operations for $2 million, along with a low single-digit royalty on future sales[26]. - Recent license agreements generated a one-time cash payment of $1.5 million, with potential quarterly royalty payments starting in 2025[143]. - The company acquired Surgalign SPV and other assets in 2023, aiming to enhance product offerings through strategic acquisitions[147]. Product Development and Market Strategy - Xtant Medical's strategic focus includes introducing new biologics products and leveraging its distribution network to penetrate adjacent markets[19]. - The company plans to launch new products in 2025, including FibreX and OsteoFactor Pro, aimed at enhancing bone regeneration[32]. - New product offerings include SimpliGraft, SimpliMax, OsteoVive Plus, and the Cortera Spinal Fixation System, aimed at increasing future revenues[128]. - The company expects its private label and OEM business to grow, but this segment typically has lower gross margins compared to independent agent sales[142]. Regulatory Compliance and Challenges - The company is ISO 13485 and MDSAP certified, ensuring compliance with quality management systems for medical devices[52]. - The company’s products are regulated as human cellular and tissue products (HCT/Ps) and have received 510(k) clearances from the FDA[53]. - The FDA's 510(k) review process typically takes three to nine months, with no assurance of clearance[63]. - The FDA may require the company to conduct post-market surveillance studies for products marketed under PMA, which could delay commercialization[176]. - The company is subject to extensive regulatory requirements, including obtaining FDA clearances or approvals for new products, which can be costly and time-consuming[170]. - Compliance with the Federal Physician Payments Sunshine Act requires the company to report annual payments to physicians and teaching hospitals[184]. - The company must comply with the EU Medical Devices Regulation 2017/745 to market products in the European Economic Area (EEA)[191]. - The company is required to perform post-market clinical follow-up studies to evaluate the safety and performance of previously approved products[196]. Financial Performance and Risks - As of December 31, 2024, the company has an accumulated deficit of $259.5 million and incurred a net loss of $16.4 million during the year[113]. - The company may seek additional financing through equity or debt, which could dilute current stockholders' interests[115]. - The company faces significant risks related to its high level of indebtedness, which could adversely affect its financial condition and operating results[119]. - The company has focused on four key growth initiatives: introducing new products, expanding distribution networks, penetrating adjacent markets, and leveraging technology and strategic acquisitions[128]. - The company may need to curtail operations significantly if it fails to raise additional funds or generate sufficient cash flow[117]. - The company has a minimum liquidity covenant of $5.0 million, which it has struggled to comply with in recent years[116]. Workforce and Employee Relations - As of December 31, 2024, Xtant had 232 employees, with 217 being full-time, including 90 in operations and 42 in sales and marketing[86]. - The company’s total workforce consists of 49% female and 39% racially or ethnically diverse employees[87]. - The average tenure of employees is approximately 4 years, while management team members have an average tenure of about 7 years[88]. - The company has no employee unions and maintains good relations with its employees[89]. - The company emphasizes employee safety and wellness, implementing multiple safety programs and health initiatives[92][93]. - The company has a robust learning management system for employee development and training[99]. Market Conditions and Competitive Landscape - The orthopedic biomaterials market is expected to grow, with increasing demand for products that aid in healing and bone tissue augmentation[27]. - Recent changes in CMS reimbursement policies may impact revenue from the SimpliMax™ and SimpliGraft products, with potential revenue reductions anticipated[23]. - The overall escalating cost of medical products is leading to increased pressures on the healthcare industry to reduce costs, which may affect Xtant's product demand[81]. - International reimbursement systems vary significantly, impacting Xtant's ability to achieve market acceptance in foreign markets[82]. - The company anticipates a shift towards more outpatient procedures in ambulatory surgical centers, which may reduce product prices and margins due to lower facility fee reimbursements compared to hospitals[166]. Operational Challenges and Supply Chain Issues - The company has faced delays in product launches, including OsteoVivePlus and Cortera Spinal Fixation System, due to validation and supplier issues[133]. - In 2023, the company experienced a shortage of stem cells, which adversely affected revenues in the first half of fiscal 2024[135]. - Manufacturing biologics products is complex and time-consuming, leading to operational challenges and missed revenue opportunities in 2023[136]. - The company relies heavily on human donors and placentas for its biologics business, with limited availability impacting revenue and operations[137]. - Persistent inflation and supply chain disruptions have resulted in increased costs and delayed product launches, affecting profit margins[139]. Legal and Liability Risks - The company may incur material liabilities from product liability claims, which may exceed insurance coverage[160]. - The potential for product recalls due to design or manufacturing failures could adversely affect demand and revenue[161]. - The company is subject to product liability litigation, which could harm its financial condition if it results in substantial damage awards[210]. - The FDA has the authority to inspect facilities and enforce compliance, which could lead to recalls or other enforcement actions if violations are found[214]. International Operations and Compliance - The company operates in 33 countries, exposing it to political, economic, and social instability risks[151]. - Compliance with international trade regulations is costly and may result in significant penalties for non-compliance[151]. - Regulatory approvals for marketing products outside the U.S. are costly and time-consuming, and failure to obtain them could adversely affect the business[189]. - The company faces risks from reliance on a limited number of third-party suppliers, which could disrupt operations if not managed properly[157]. Miscellaneous Risks - The company faces risks related to fluctuations in foreign currency exchange rates, particularly with the Euro, Swiss franc, and British pound against the U.S. dollar[164]. - The company’s ability to deduct interest on indebtedness is limited to business interest income and 30% of adjusted taxable income, which has become more restrictive since 2022[165]. - The company is exposed to increasing criminal prosecutions for noncompliance with HIPAA and state data privacy laws[185]. - Negative publicity regarding tissue recovery methods could reduce demand for biologics products[154].

FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 6, 2025 XTANT MEDICAL HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 001-34951 20-5313323 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 664 Cruiser Lane Belgrade, Montana 59714 (Address of principa ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $27.9 million, a 12% increase from $25 million in Q3 2023, primarily driven by product sales from the Surgalign acquisition [31] - Adjusted EBITDA for Q3 2024 was a loss of $193,000, compared to a positive adjusted EBITDA of $458,000 in Q3 2023 [36] - Net loss for Q3 2024 was $5 million, or $0.04 per share, compared to net income of $9.2 million, or $0.07 per share, in the same period last year [35] Business Line Data and Key Metrics Changes - The company experienced delays in launching two new products, OsteoVive Plus and Cortera, which impacted sales [9] - Operating expenses for Q3 2024 were $20.1 million, up from $18.7 million in Q3 2023, but as a percentage of total revenue, they decreased to 71.9% from 74.8% [32] Market Data and Key Metrics Changes - The company noted a reduction in surgical procedures, which partially offset year-over-year growth [31] - The summer months of July and August saw a slowdown in procedures due to doctors' vacations, but a recovery was noted in September [38][39] Company Strategy and Development Direction - The company aims to become operationally self-sustaining by controlling its supply chain and reducing reliance on external manufacturers [29] - A licensing agreement in October with a significant player in the advanced wound care market is expected to generate a minimum of $3.75 million in 2025, with high margins due to low incremental costs [12] - The company is focused on increasing in-house manufacturing to improve profitability, with gross margins for in-house products expected to rise from mid-80% to low 90% [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue guidance of $116 to $120 million, representing a growth of approximately 27% to 31% compared to 2023 [8] - The company anticipates a breakout fourth quarter, driven by the resolution of supply chain challenges and the successful launch of new products [23] - Management highlighted the importance of operational leverage and cost reduction as key to improving profitability [21] Other Important Information - The company has doubled its revenue from $58 million at the end of fiscal year 2022 to an expected $116 to $120 million by the end of 2024 [13] - The Surgalign acquisition has revitalized the company's hardware line, enhancing its product offerings in the spine market [14] Q&A Session Summary Question: Can you provide more color on the third quarter results and trends in the fourth quarter? - Management noted that the summer months were soft due to doctors' vacations, but a recovery was seen in September, with expectations for normalcy in Q4 [38][39] Question: What is the revenue mix between orthobiologics and spinal implants? - The expected split for 2024 is roughly 55% orthobiologics and 45% spinal implants, with orthobiologics anticipated to increase its share in future years [42] Question: What are the early considerations for 2025 guidance? - Management indicated expectations for revenue growth approaching double digits and improvements in gross margin and operating leverage [43] Question: What contribution do you expect from VBN in Q4 and 2025? - Minimal impact is expected from the distributor side in Q4, with a more significant contribution anticipated from the white label side [46] Question: How should profitability be modeled for next year? - Management expects improvements in both gross margins and operating leverage to contribute to profitability [48][49] Question: Can you elaborate on the licensing agreement mentioned? - The agreement includes a $1.5 million upfront payment and a minimum of $3.75 million in 2025, with potential for higher revenues depending on performance [52] Question: What is the confidence level in achieving revenue guidance? - Management expressed confidence in reaching the guidance range, supported by new product launches and recovery in sales [53]