Xtant Medical (XTNT) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenue for Q3 2024 was $27.9 million, a 12% increase from$ 25.0 million in Q3 2023, and for the nine months ended September 30, 2024, revenue was $85.8 million, up 36% from$ 63.2 million in the same period last year[98] - Gross profit margin for Q3 2024 decreased to 58.4% from 61.3% in Q3 2023, while for the nine months it increased slightly to 60.9% from 60.7%[100] Cost and Expenses - Cost of sales increased by 20% to $11.6 million for Q3 2024, and by 35% to$ 33.6 million for the nine months ended September 30, 2024, primarily due to higher revenue[99] - General and administrative expenses rose 5% to $7.5 million for Q3 2024 and 35% to$ 23.0 million for the nine months ended September 30, 2024, driven by severance and stock-based compensation[101] - Sales and marketing expenses increased 7% to $11.9 million for Q3 2024 and 40% to$ 37.5 million for the nine months ended September 30, 2024, mainly due to higher commission expenses[102] - Research and development expenses were $0.7 million for Q3 2024, up from$ 0.5 million in Q3 2023, and $1.9 million for the nine months ended September 30, 2024, compared to$ 0.8 million in the prior year[103] - Interest expense for Q3 2024 was $1.2 million, up from$ 0.8 million in Q3 2023, and for the nine months it increased to $3.0 million from$ 2.1 million[104] Cash Flow and Working Capital - Net cash used in operating activities for the first nine months of 2024 was $12.6 million, compared to$ 8.6 million for the same period in 2023[107] - As of September 30, 2024, net working capital was $37.7 million, down from$ 41.9 million at the end of 2023[106] - The company has $7.1 million in cash and cash equivalents as of September 30, 2024, which, along with anticipated operating cash flows, is expected to meet cash requirements through at least November 2025[117] Financing and Debt - As of September 30, 2024, the company had$ 12.9 million outstanding and $3.8 million of availability under the Revolving Facility[114] - The effective interest rate for the Prior Term Credit Agreement was 14.42%, while the effective rate for the Prior Revolving Credit Agreement was 9.94% as of December 31, 2023[115] - The company maintained compliance with all covenants under the Credit Agreements as of September 30, 2024[116] - The company may seek additional financing through equity and debt financings, but there is no assurance that such financing will be available or sufficient[118] - If additional capital is raised through equity or convertible debt, current stockholders may face dilution and adverse terms[119] Acquisitions - The company made three acquisitions in 2023, including Surgalign SPV for$ 17.0 million, additional assets from Surgalign Holdings for $5 million, and nanOss production operations for$ 2 million[93][94][95] Accounting Estimates - There have been no changes in critical accounting estimates for the three months ended September 30, 2024, compared to the previous fiscal year[121]