Xtant Medical (XTNT) - 2019 Q2 - Quarterly Report

FORM 10-Q Filing Information Filing Details This section provides the basic filing information for the Quarterly Report on Form 10-Q for the period ended June 30, 2019, identifying Xtant Medical Holdings, Inc. as the registrant and its classification as a non-accelerated filer and smaller reporting company Filing Details | Detail | Value | | :--- | :--- | | Form Type | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) | | Period Ended | June 30, 2019 | | Registrant Name | XTANT MEDICAL HOLDINGS, INC. | | Commission File Number | 001-34951 | | Filer Status | Non-accelerated filer, Smaller reporting company | Common Stock Outstanding As of August 7, 2019, the total number of common shares outstanding for Xtant Medical Holdings, Inc. was 13,161,762 Common Stock Outstanding | Metric | Value | | :--- | :--- | | Common Stock Outstanding (as of Aug 7, 2019) | 13,161,762 shares | Cautionary Statement Regarding Forward-Looking Statements Forward-Looking Statements This section highlights that the report contains forward-looking statements based on current expectations and beliefs, which involve risks and uncertainties that could cause actual results to differ materially. The Company does not undertake to update these statements unless required by law - Forward-looking statements are based on current expectations and beliefs, but actual results may differ due to various risks and uncertainties[11] - The Company does not commit to updating or revising forward-looking statements unless required by applicable securities laws[12] - Key risks include ability to comply with credit agreement covenants, maintain liquidity, obtain financing, increase revenue, remain competitive, and manage government regulations, product recalls, and litigation[13] PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, equity, and cash flows, along with detailed notes explaining the Company's business, accounting policies, and specific financial line items Condensed Consolidated Balance Sheets The balance sheet shows a slight decrease in total assets and liabilities from December 31, 2018, to June 30, 2019, with a notable reduction in current liabilities and an improvement in stockholders' deficit Condensed Consolidated Balance Sheets | Metric (in thousands) | June 30, 2019 (Unaudited) | December 31, 2018 | | :--- | :--- | :--- | | Total Assets | $44,497 | $46,422 | | Total Liabilities | $85,573 | $90,194 | | Total Stockholders' Equity (Deficit) | $(41,076) | $(43,772) | | Current Assets | $32,303 | $34,677 | | Current Liabilities | $9,930 | $12,051 | - Cash and cash equivalents increased to $7,318 thousand as of June 30, 2019, from $6,797 thousand at December 31, 2018[15] - Accounts payable significantly decreased from $6,465 thousand to $3,194 thousand[15] Condensed Consolidated Statements of Operations The Company reported a reduced net loss for both the three and six months ended June 30, 2019, compared to the prior year, primarily driven by lower operating expenses and interest expense, despite a decrease in total revenue Condensed Consolidated Statements of Operations | Metric (in thousands) | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | 6 Months Ended June 30, 2019 | 6 Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $15,271 | $18,741 | $31,997 | $36,674 | | Gross Profit | $9,906 | $12,475 | $20,719 | $24,706 | | Loss from Operations | $(563) | $(2,261) | $(1,231) | $(3,918) | | Net Loss | $(1,939) | $(5,002) | $(4,738) | $(10,255) | | Basic Net Loss Per Share | $(0.15) | $(0.38) | $(0.36) | $(1.00) | - Total revenue decreased by 18.5% for the three months and 12.8% for the six months ended June 30, 2019, compared to the same periods in 2018[17] - Operating expenses decreased significantly, contributing to a lower loss from operations[17] Condensed Consolidated Statements of Equity The Company's total stockholders' deficit improved from $(43,772) thousand at December 31, 2018, to $(41,076) thousand at June 30, 2019, primarily due to an increase in additional paid-in capital, partially offset by accumulated net losses Condensed Consolidated Statements of Equity | Metric (in thousands) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Stockholders' Equity (Deficit) | $(41,076) | $(43,772) | | Additional Paid-In Capital | $178,707 | $171,273 | | Accumulated Deficit | $(219,783) | $(215,045) | - Additional paid-in capital increased by $7,264 thousand due to debt extinguishment and $161 thousand from stock-based compensation during the six months ended June 30, 2019[21] Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities increased to $954 thousand for the six months ended June 30, 2019, from $344 thousand in the prior year, while financing activities shifted from providing cash to using cash Condensed Consolidated Statements of Cash Flows | Metric (in thousands) | 6 Months Ended June 30, 2019 | 6 Months Ended June 30, 2018 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $954 | $344 | | Net Cash Used in Investing Activities | $(48) | $(288) | | Net Cash (Used in) Provided by Financing Activities | $(385) | $3,137 | | Net Change in Cash and Cash Equivalents | $521 | $3,193 | | Cash and Cash Equivalents at End of Period | $7,318 | $6,049 | - The increase in operating cash flow was primarily due to reduced net loss and non-cash adjustments[23] - Financing activities in 2018 included significant proceeds from equity private placement and debt conversion, which were not present in 2019[23] Notes to Unaudited Condensed Consolidated Financial Statements These notes provide detailed explanations of the Company's business, significant accounting policies, recent corporate restructuring events, and specific financial statement line items, including inventories, property, goodwill, debt, equity, warrants, commitments, and related party transactions (1) Business Description, Basis of Presentation and Summary of Significant Accounting Policies This note outlines Xtant Medical Holdings, Inc.'s business as a global medical technology company focused on orthobiologics and spinal implant systems. It details the basis of financial statement presentation, significant accounting policies, and the impact of a major corporate restructuring in 2018, including debt-to-equity conversions, a reverse stock split, and new investor agreements - Xtant is a global medical technology company specializing in orthobiologics and spinal implant systems for spinal fusion[25] - In 2018, the Company underwent a significant restructuring, converting $71.9 million of debt into equity, issuing 10,590,954 shares, and completing a 1-for-12 reverse stock split[33][36] - The Investors (OrbiMed affiliates) acquired approximately 70% controlling interest in the Company's common stock post-restructuring[33] Revenue Disaggregation (in thousands) | Product Line | 3 Months Ended June 30, 2019 | % of Total Revenue (2019) | 3 Months Ended June 30, 2018 | % of Total Revenue (2018) | | :--- | :--- | :--- | :--- | :--- | | Orthobiologics | $11,020 | 72% | $12,713 | 68% | | Spinal implant | $4,177 | 27% | $5,940 | 32% | | Other revenue | $74 | 1% | $88 | 0% | | Total Revenue | $15,271 | 100% | $18,741 | 100% | | Product Line | 6 Months Ended June 30, 2019 | % of Total Revenue (2019) | 6 Months Ended June 30, 2018 | % of Total Revenue (2018) | | :--- | :--- | :--- | :--- | :--- | | Orthobiologics | $23,020 | 72% | $24,818 | 68% | | Spinal implant | $8,863 | 27% | $11,665 | 31% | | Other revenue | $114 | 1% | $191 | 1% | | Total Revenue | $31,997 | 100% | $36,674 | 100% | (2) Inventories, Net Net inventories decreased from $17.3 million at December 31, 2018, to $15.8 million at June 30, 2019, primarily due to a reduction in finished goods and an increase in the reserve for obsolescence Inventory Category (in thousands) | Inventory Category (in thousands) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Raw materials | $3,465 | $3,519 | | Work in process | $1,480 | $949 | | Finished goods | $23,534 | $25,235 | | Gross inventories | $28,479 | $29,703 | | Reserve for obsolescence | $(12,651) | $(12,402) | | Total inventories, net | $15,828 | $17,301 | - Consigned inventory held by the Company through its sales channels increased from $8.8 million to $9.2 million[65] (3) Property and Equipment, Net Net property and equipment decreased to $5.6 million at June 30, 2019, from $7.2 million at December 31, 2018, mainly due to accumulated depreciation Property and Equipment, Net (in thousands) | Category (in thousands) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total cost | $19,965 | $20,083 | | Less: accumulated depreciation | $(14,365) | $(12,909) | | Property and equipment, net | $5,600 | $7,174 | - Consigned surgical instruments, classified as non-current assets, had a net book value of approximately $4.9 million at June 30, 2019, up from $4.4 million at December 31, 2018[66] (4) Goodwill and Intangible Assets Goodwill remained at $3.2 million as of June 30, 2019, following a $38.3 million impairment charge in Q4 2018 due to revised revenue growth expectations and sales channel strategy. Intangible assets, primarily patents, were $544 thousand net of amortization - A non-cash goodwill impairment charge of $38.3 million was recorded in Q4 2018, leaving a remaining goodwill of $3.2 million, unchanged as of June 30, 2019[71] - An impairment charge of $9.8 million was also recorded for intangible assets in Q4 2018[72] Intangible Assets (in thousands) | Intangible Assets (in thousands) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Patents | $847 | $847 | | Accumulated amortization | $(303) | $(274) | | Intangible assets, net | $544 | $573 | (5) Accrued Liabilities Accrued liabilities increased to $5.9 million at June 30, 2019, from $5.2 million at December 31, 2018, driven by increases in wages/commissions payable and other accrued liabilities Accrued Liabilities (in thousands) | Accrued Liabilities (in thousands) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Wages/commissions payable | $3,808 | $3,332 | | Other accrued liabilities | $2,059 | $1,818 | | Accrued liabilities | $5,867 | $5,150 | (6) Debt The Company's long-term debt structure was significantly amended and restated on March 29, 2019, resulting in a debt extinguishment under GAAP, a new effective interest rate of 13.19%, and an extended maturity date to March 31, 2021. Interest accrual was suspended until March 31, 2020 - On March 29, 2019, the Company entered into a Second Amended and Restated Credit Agreement, which was accounted for as a debt extinguishment, resulting in a $7.3 million increase to additional paid-in capital[83] - The new agreement suspends interest accrual on loans from January 1, 2019, until March 31, 2020, with cash interest resuming at LIBOR plus 10% (with a 2.3125% floor) from April 1, 2020, until the March 31, 2021 maturity date[84] Long-term Debt (in thousands) | Long-term Debt (in thousands) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Long-term debt, less issuance costs | $73,831 | $77,939 | | Gross long-term debt | $73,939 | $83,219 | | Principal balance owed | $55,800 | N/A | | Accrued PIK interest owed | $29,000 | N/A | (7) Equity In Q1 2018, the Company converted $71.9 million of convertible notes into 10,590,954 shares of common stock and raised $6.8 million through a private placement of 945,819 shares. A rights offering in Q2 2018 issued an additional 129 shares - Convertible notes totaling $71.9 million were converted into 10,590,954 shares of common stock in Q1 2018[89] - A private placement in February 2018 generated $6.8 million from the sale of 945,819 common shares[91] - A rights offering in June 2018 resulted in the issuance of 129 common shares and $0.9 thousand in gross proceeds[93] (8) Stock-Based Compensation The Company's 2018 Equity Incentive Plan, approved in August 2018, replaced the Prior Plan for future grants. As of June 30, 2019, 148,905 stock options were outstanding, with total stock-based compensation expense recognized at $0.2 million for the six months ended June 30, 2019 - The 2018 Equity Incentive Plan, effective August 1, 2018, authorized 1,307,747 shares for issuance[94] Stock Option Activity | Stock Option Activity | Shares (2019) | Avg. Exercise Price (2019) | Shares (2018) | Avg. Exercise Price (2018) | | :--- | :--- | :--- | :--- | :--- | | Outstanding at January 1 | 496,958 | $9.90 | 67,465 | $71.03 | | Granted | 100,000 | $2.24 | — | — | | Cancelled or expired | (448,053) | $4.64 | (22,971) | $96.44 | | Outstanding at June 30 | 148,905 | $9.12 | 44,494 | $53.14 | | Exercisable at June 30 | 18,135 | $52.04 | 44,494 | $53.14 | - Total stock-based compensation expense was $0.2 million for the six months ended June 30, 2019, a decrease from $0.4 million in the prior year[102] (9) Warrants On April 1, 2019, the Company issued 1.2 million warrants to investors with an exercise price of $0.01 per share, bringing the total outstanding common stock warrants to 2,910,609. The fair value of these 2019 Warrants was determined to be $9 thousand - 1.2 million warrants were issued on April 1, 2019, with an exercise price of $0.01 per share and an expiration date of April 1, 2029[103] - The fair value of the 2019 Warrants upon issuance was $9 thousand, significantly lower than prior warrants due to updated forecasts and goodwill impairment[103] Warrant Activity | Warrant Activity | Common Stock Warrants (2019) | Weighted Average Exercise Price (2019) | | :--- | :--- | :--- | | Outstanding at January 1, 2019 | 1,710,609 | $7.33 | | Issued | 1,200,000 | $0.01 | | Outstanding at June 30, 2019 | 2,910,609 | $4.31 | (10) Commitments and Contingencies The Company adopted ASU No. 2016-02 (Topic 842) for leases, recognizing right-of-use assets and lease liabilities. It also disclosed ongoing litigation, including a patent infringement suit and resolved distributor disputes, while maintaining accruals for probable liabilities - The Company adopted ASU No. 2016-02 (Leases), recognizing $2.3 million in right-of-use assets and total lease liabilities as of June 30, 2019[106][110] Lease Obligations (in thousands) | Lease Obligations (in thousands) | June 30, 2019 | | :--- | :--- | | Right-of-use assets, net | $2,296 | | Total lease liability | $2,307 | | Weighted-average remaining lease term | 5.25 years | | Weighted-average discount rate | 5.2% | - A patent infringement lawsuit filed in December 2018 by RSB Spine, LLC, against Xtant Medical Holdings, Inc. is ongoing, with trial scheduled for no sooner than June 21, 2021[113] - Two distributor disputes (Axis Spine NV, LLC and Phoenix Surgical, Inc.) were settled in June and April 2019, respectively, with payments deemed not material to the Company's financial position or results of operations[115][116] (11) Income Taxes The Company has established a full valuation allowance against its deferred income tax assets due to uncertainty regarding future profitability, and no interest or penalties related to income taxes were recognized - A valuation allowance has been provided against the entire deferred income tax asset balance due to uncertainty of future profitability[121] - No interest or penalties related to income taxes were recognized for the six months ended June 30, 2019 and 2018[123] (12) Supplemental Disclosure of Cash Flow Information This section provides supplemental cash flow information, detailing non-cash activities such as the extinguishment and recognition of credit agreements, and the recognition of 2019 Warrants Non-Cash Activities (in thousands) | Non-Cash Activities (in thousands) | 6 Months Ended June 30, 2019 | 6 Months Ended June 30, 2018 | | :--- | :--- | :--- | | Extinguishment of Prior Credit Agreement | $79,624 | — | | Recognition of Second Amended and Restated Credit Agreement | $72,657 | — | | Recognition of 2019 Warrants | $9 | — | | Conversion of convertible debt to equity | — | $71,865 | | Conversion of interest related to Credit Facility to long-term debt | — | $7,977 | - Cash paid for interest was $47 thousand for the six months ended June 30, 2019, significantly lower than $170 thousand in the prior year[124] (13) Related Party Transactions The Investors, who own approximately 70% of the Company's common stock, are the sole holders of its long-term debt and are party to key agreements. A sublease agreement with Cardialen, Inc., where a Board member is CEO, also constitutes a related party transaction - Investors, owning ~70% of common stock, are sole holders of long-term debt and parties to the Investor Rights Agreement and Registration Rights Agreement[125] - A sublease agreement with Cardialen, Inc. (where a Board member is CEO) for office space is a related party transaction, reviewed and approved by the Audit Committee or disinterested Board members[126][127] (14) Segment and Geographic Information The Company operates as a single segment focused on orthopedic medical products. The majority of its revenue, approximately 96% for the six months ended June 30, 2019, is generated in the United States - The Company operates in a single operating segment: development, manufacture, and marketing of orthopedic medical products and devices[128] Geographic Area (in thousands) | Geographic Area (in thousands) | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | 6 Months Ended June 30, 2019 | 6 Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | United States | $14,585 | $17,319 | $30,702 | $34,792 | | Rest of world | $686 | $1,422 | $1,295 | $1,882 | | Total revenue | $15,271 | $18,741 | $31,997 | $36,674 | - Approximately 96% of sales for the six months ended June 30, 2019, were in the United States, consistent with 95% in the prior year[130] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the Company's financial condition, results of operations, and liquidity, highlighting key trends, challenges, and strategic actions taken during the period, including a significant restructuring and efforts to regain compliance with NYSE American listing standards Executive Summary The Company, a medical technology firm, experienced reduced revenues in 2018 and Q2 2019 due to decreased demand for hardware products. It completed a significant restructuring in 2018, converting debt to equity, and secured a new credit agreement in March 2019 to enhance liquidity. The Company is also addressing non-compliance with NYSE American listing standards - Revenues decreased in 2018 and Q2 2019, primarily due to reduced demand for hardware products, partly influenced by a December 2018 product recall and changes in sales channels[134][136] - A significant restructuring in Q1 2018 converted $71.9 million of debt into equity, resulting in OrbiMed affiliates owning approximately 70% of outstanding common stock[133] - A Second Amended and Restated Credit Agreement in March 2019 increased credit availability by $10.0 million, bringing total availability to $12.2 million as of June 30, 2019[134] - The Company is non-compliant with NYSE American listing standards regarding stockholders' equity and has a plan accepted to regain compliance by October 4, 2020[135] Results of Operations The Company experienced a decline in total revenue for both the three and six months ended June 30, 2019, compared to the prior year, primarily due to reduced demand for hardware products. However, operating expenses and interest expense decreased significantly, leading to a reduced net loss Results of Operations | Metric (in thousands) | 3 Months Ended June 30, 2019 | 3 Months Ended June 30, 2018 | Change (%) | 6 Months Ended June 30, 2019 | 6 Months Ended June 30, 2018 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $15,271 | $18,741 | -18.5% | $31,997 | $36,674 | -12.8% | | Cost of Sales | $5,365 | $6,266 | -14.4% | $11,278 | $11,968 | -5.8% | | Gross Profit | $9,906 | $12,475 | -20.6% | $20,719 | $24,706 | -16.2% | | Operating Expenses | $10,469 | $14,736 | -29.0% | $21,950 | $28,624 | -23.4% | | Loss from Operations | $(563) | $(2,261) | -75.1% | $(1,231) | $(3,918) | -68.6% | | Interest Expense | $(1,301) | $(2,820) | -53.9% | $(3,319) | $(6,366) | -47.9% | | Net Loss | $(1,939) | $(5,002) | -61.2% | $(4,738) | $(10,255) | -53.8% | - Operating expenses decreased due to reductions in sales and marketing expenses ($2.5 million for 3 months, $4.1 million for 6 months), absence of restructuring expenses from prior year, and lower amortization expense[138] - General and administrative expenses increased due to legal settlement expenses and executive recruiting fees[139] Liquidity and Capital Resources The Company's working capital remained stable, and operating cash flow improved. A new credit agreement provides $12.2 million in unused availability, which, combined with existing cash, is expected to meet cash requirements for at least 12 months. However, future funding may be required, potentially leading to equity dilution or restrictive debt covenants Liquidity and Capital Resources (in thousands) | Metric (in thousands) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $7,318 | $6,797 | | Total current assets | $32,303 | $34,677 | | Total current liabilities | $9,930 | $12,051 | | Total working capital | $22,373 | $22,626 | | Long-term debt, less issuance costs | $73,831 | $77,939 | - Net cash provided by operating activities was $1.0 million for the first six months of 2019, up from $0.3 million in 2018[149] - The Second Amended and Restated Credit Agreement provides $12.2 million in unused availability as of June 30, 2019, and is expected to provide sufficient liquidity for at least 12 months[154][155] Off Balance Sheet Arrangements The Company does not have any material off-balance sheet arrangements that would significantly impact its financial condition or results of operations - The Company has no material off-balance sheet arrangements[158] Recent Accounting Pronouncements The Company is evaluating new FASB ASUs on credit losses (ASU No. 2016-13, effective after Dec 15, 2019) and goodwill impairment (ASU No. 2018-15, effective after Dec 15, 2019) but does not expect a material impact on its financial statements - ASU No. 2016-13 (Credit Losses) and ASU No. 2019-05 (Targeted Transition Relief) are effective for annual periods beginning after December 15, 2019; no material effect is expected[159] - ASU No. 2018-15 (Goodwill Impairment) is effective for annual periods beginning after December 15, 2019; no material impact is expected[160] Critical Accounting Estimates The Company's financial statements rely on estimates and assumptions, but there have been no changes to its critical accounting estimates for the six months ended June 30, 2019, compared to those disclosed in its 2018 Annual Report on Form 10-K - No changes in critical accounting estimates for the six months ended June 30, 2019, compared to the 2018 Annual Report on Form 10-K[162] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, Xtant Medical Holdings, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The Company is not required to provide market risk disclosures as a smaller reporting company[163] ITEM 4. CONTROLS AND PROCEDURES Management concluded that the Company's disclosure controls and procedures were effective as of June 30, 2019, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2019[166] - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2019[167] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is involved in a patent infringement lawsuit filed by RSB Spine, LLC, with a trial scheduled for June 2021. Two other civil suits with former distributors (Axis Spine NV, LLC and Phoenix Surgical, Inc.) were settled in 2019, with payments not materially affecting the Company's financial position - A patent infringement complaint was filed by RSB Spine, LLC, against Xtant Medical Holdings, Inc. in December 2018, with trial set for June 21, 2021[169] - A civil suit by Axis Spine NV, LLC, alleging breach of contract, was settled in June 2019, with the payment not material to the Company's financial position[170] - A lawsuit by former distributor Phoenix Surgical, Inc. was resolved via a confidential settlement agreement in April 2019, with the payment not material[171] ITEM 1A. RISK FACTORS As a smaller reporting company, Xtant Medical Holdings, Inc. is not required to provide specific risk factor disclosures in this quarterly report - The Company is not required to provide risk factor information as a smaller reporting company[173] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS On April 1, 2019, the Company issued 1.2 million warrants to investors as a condition of the Second Amended and Restated Credit Agreement, exempt from registration under Section 4(a)(2) of the Securities Act. The Company did not repurchase any equity securities during the quarter - 1.2 million warrants were issued to investors on April 1, 2019, with an exercise price of $0.01 per share and an expiration date of April 1, 2029[174] - The issuance of these warrants was exempt from registration requirements under Section 4(a)(2) and/or Regulation D of the Securities Act[174] - The Company did not purchase any shares of its common stock or other equity securities during the quarter ended June 30, 2019[176] ITEM 3. DEFAULTS UPON SENIOR SECURITIES This item is not applicable to the Company for the reporting period - This item is not applicable[177] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the Company for the reporting period - This item is not applicable[178] ITEM 5. OTHER INFORMATION This section details the appointment of Greg Jensen as non-interim Chief Financial Officer with an amended employment agreement, including severance benefits. It also outlines the 2019 Bonus Plan for executive officers, tied to financial performance metrics like total sales, hardware sales, adjusted EBITDA, and free cash flow - Greg Jensen was appointed as non-interim Chief Financial Officer, with an amended employment agreement detailing severance and change in control benefits[179] - The 2019 Bonus Plan for executive officers is based on total sales (25%), hardware sales (15%), adjusted EBITDA (40%), free cash flow (10%), and Board discretion (10%)[181] Executive Compensation | Executive and Position | Target Annual Bonus Opportunity | 2019 Base Salary | | :--- | :--- | :--- | | Greg Jensen, VP, Finance and CFO | 50% of Base Salary | $400,000 | | Ronald G. Berlin, VP, COO and GM | 50% of Base Salary | $400,000 | | Kevin D. Brandt, Chief Commercial Officer | 50% of Base Salary | $415,000 | ITEM 6. EXHIBITS This section lists all exhibits filed or furnished with the Quarterly Report on Form 10-Q, including corporate governance documents, warrant agreements, employment agreements, and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Second Amended and Restated Bylaws, Warrant agreements, Amended and Restated Employment Agreement for Greg Jensen, and CEO/CFO certifications[184] SIGNATURES Signature Block The report is duly signed on behalf of Xtant Medical Holdings, Inc. by Greg Jensen, Vice President, Finance and Chief Financial Officer, on August 8, 2019 - The report was signed by Greg Jensen, Vice President, Finance and Chief Financial Officer, on August 8, 2019[187]