Xtant Medical (XTNT) - 2024 Q1 - Quarterly Report

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Forward-Looking Statements and Risks This section outlines forward-looking statements in the 10-Q, highlighting inherent risks and uncertainties that could materially alter actual results - Forward-looking statements are subject to risks and uncertainties, including stem cell shortages for OsteoVive, integration challenges for acquired products, international operation risks, biologics manufacturing challenges, inflation, supply chain disruptions, and labor shortages[11][12][14] PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This item presents unaudited condensed consolidated financial statements, including balance sheets, operations, comprehensive loss, equity, and cash flows, with detailed notes Condensed Consolidated Balance Sheets The condensed consolidated balance sheets present the company's financial position as of March 31, 2024, and December 31, 2023 | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $93,931 | $92,612 | | Total Liabilities | $46,251 | $41,263 | | Total Stockholders' Equity | $47,680 | $51,349 | | Cash and cash equivalents | $4,547 | $5,715 | | Line of credit | $10,270 | $4,622 | Condensed Consolidated Statements of Operations The condensed consolidated statements of operations report the company's financial performance for the three months ended March 31, 2024, and 2023 | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Revenue | $27,873 | $17,943 | | Cost of sales | $10,571 | $7,407 | | Gross Profit | $17,302 | $10,536 | | Loss from Operations | $(3,470) | $(1,576) | | Net Loss | $(4,400) | $(2,078) | | Basic Net Loss Per Share | $(0.03) | $(0.02) | Condensed Consolidated Statements of Comprehensive Loss This statement details the net loss and other comprehensive loss components, specifically foreign currency translation adjustments, for the three months ended March 31, 2024, and 2023 | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net Loss | $(4,400) | $(2,078) | | Foreign currency translation adjustments | $(162) | $0 | | Comprehensive Loss | $(4,562) | $(2,078) | Condensed Consolidated Statements of Equity The condensed consolidated statements of equity show changes in stockholders' equity for the three months ended March 31, 2024, and 2023 | Metric | Balance at March 31, 2024 (in thousands) | Balance at December 31, 2023 (in thousands) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Total Stockholders' Equity | $47,680 | $51,349 | | Additional Paid-In Capital | $295,223 | $294,330 | | Accumulated Deficit | $(247,410) | $(243,010) | Condensed Consolidated Statements of Cash Flows This statement provides a breakdown of cash flows from operating, investing, and financing activities for the three months ended March 31, 2024, and 2023 | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net cash used in operating activities | $(5,755) | $(2,245) | | Net cash used in investing activities | $(674) | $(17,421) | | Net cash provided by financing activities | $5,179 | $4,569 | | Net change in cash and cash equivalents and restricted cash | $(1,299) | $(15,097) | | Cash and cash equivalents and restricted cash at end of period | $4,624 | $5,410 | Notes to Unaudited Condensed Consolidated Financial Statements These notes provide essential details and explanations for the unaudited condensed consolidated financial statements (1) Business Description, Basis of Presentation and Summary of Significant Accounting Policies This note describes Xtant Medical Holdings, Inc. as a global medical technology company focused on orthobiologics and spinal implant systems - Xtant is a global medical technology company specializing in orthobiologics and spinal implant systems to facilitate spinal fusion[30] - For the three months ended March 31, 2024, the company incurred a net loss of $4.4 million and negative cash flows from operating activities of $5.8 million[34] - Management believes current cash and credit facilities, including additional term loan borrowings of $5.0 million on May 14, 2024, will provide sufficient liquidity through at least May 2025[34] (2) Acquisition of Coflex and CoFix Product Lines On February 28, 2023, Xtant acquired Surgalign SPV, Inc., including the Coflex and CoFix product lines, for $17.0 million in cash - Xtant acquired Surgalign SPV, Inc. and its Coflex and CoFix product lines on February 28, 2023, for an aggregate purchase price of $17.0 million in cash[43][46] - The acquisition strengthened the Company's spine portfolio with differentiated, FDA-approved, minimally invasive motion-preserving stabilization implants, resulting in the recognition of $3.5 million in goodwill[44][48] Acquired Asset Fair Value | Acquired Asset | Fair Value (in thousands) | | :------------- | :------------------------ | | Inventories | $1,589 | | Equipment | $947 | | Intangible assets | $10,940 | | Net assets acquired | $13,476 | | Goodwill | $3,524 | | Total purchase consideration | $17,000 | (3) Acquisition of Surgalign Holdings, Inc.'s Hardware and Biologics Business On August 10, 2023, Xtant acquired Surgalign Holdings, Inc.'s hardware and biologics business assets for $5.0 million in cash, plus assumed liabilities - Xtant acquired the hardware and biologics business assets of Surgalign Holdings, Inc. on August 10, 2023, for $5.0 million in cash plus assumed liabilities, through a bankruptcy proceeding[50][51] - The transaction resulted in an $11.7 million gain from bargain purchase, as the estimated fair value of the identifiable net assets acquired exceeded the purchase consideration, strengthening the company's orthobiologics and spinal fusion device portfolio[53][54] Preliminary Allocation of Acquired Assets/Liabilities | Acquired Asset/Liability | Preliminary Allocation (in thousands) | | :----------------------- | :------------------------------------ | | Cash | $1,087 | | Accounts receivable | $1,627 | | Inventories | $15,300 | | Prepaids and other current assets | $825 | | Equipment | $2,067 | | Right-of-use asset | $576 | | Accounts payable | $(530) | | Accrued liabilities | $(1,170) | | Current portion of lease liability | $(238) | | Lease liability, less current portion | $(338) | | Net assets acquired | $19,206 | | Bargain purchase gain | $(11,694) | | Deferred tax liability | $(1,922) | | Total purchase consideration | $5,590 | [(4) Acquisition of NanOss Production Operations](index=16&type=section&id=(4)%20Acquisition%20of%20NanOss%20Production