0001493152-24-044764 | 10-Q | XBRL Viewer | Xtant Medical Holdings INC

Revenue

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

(5) Revenue

In the United States, the Company generates most of its revenue from independent commissioned sales agents. The Company consigns its orthobiologics products to hospitals and consigns or loans its spinal implant sets to independent sales agents. The spinal implant sets typically contain the instruments, disposables, and spinal implants required to complete a surgery. Consigned sets are managed by the sales agent to service hospitals that are high volume users for multiple procedures.

The Company ships replacement inventory to independent sales agents to replace the consigned inventory used in surgeries. Loaned sets are returned to the Company’s distribution center, replenished, and made available to sales agents for the next surgical procedure.

For each surgical procedure, the sales agent reports use of the product by the hospital and, as soon as practicable thereafter, ensures that the hospital provides a purchase order to the Company. Revenue is recognized upon utilization of product.

Additionally, the Company sells product directly to domestic and international stocking resellers, original equipment manufacturer resellers and private label resellers. Upon receipt and acceptance of a purchase order from a stocking reseller, the Company ships product and invoices the reseller. The Company recognizes revenue when the control is transferred upon shipment or upon delivery, based on the customer contract terms and legal requirements, and the transfer of title and risk of loss occurs. There is generally no customer acceptance or other condition that prevents the Company from recognizing revenue in accordance with the delivery terms for these sales transactions. In the normal course of business, the Company accepts returns of product that have not been implanted. Product returns are not material to the Company’s consolidated statements of operations. The Company accounts for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. The Company’s policy is to record revenue net of any applicable sales, use, or excise taxes. Payment terms are generally net 30 days from invoice date and some customers are offered discounts for early pay. The consideration for goods or services reflects any fixed amount stated per the contract and estimates for any variable consideration, such as returns, discounts or rebates, to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. For certain sales transactions, we incur GPO fees that are based on a contractual percentage of applicable sales and are treated as consideration payable to a customer and recorded as a reduction of revenue.

The Company recognizes revenue in certain circumstances before product delivery occurs (commonly referred to as bill-and-hold transactions). When the Company enters into bill-and-hold arrangements, the Company determines if the customer obtains control of the product by determining (a) the reason for the bill-and-hold arrangement; (b) whether the product was identified separately as belonging to the customer; (c) whether the product was ready for physical transfer to the customer; and (d) whether the Company was unable to utilize the product or direct it to another customer. For bill-and-hold arrangements, the associated product inventory is identified separately by the Company as belonging to the customer and is ready for physical transfer. At September 30, 2024, $0.6 million was included in revenue for products that had not shipped.

The Company operates in one reportable segment with its net revenue derived primarily from the sale of orthobiologics and spinal implant products across North America, Europe, Asia Pacific, and Latin America. Sales are reported net of returns, discounts and rebates. The following table presents revenues from these product lines for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Schedule of Revenues from Product Lines

	Three Months Ended					Three Months Ended
	September 30, 2024		Percentage of Total Revenue			September 30, 2023		Percentage of Total Revenue
Orthobiologics	$	16,579		59	%	$	15,665		63	%
Spinal implant		11,358		41	%		9,354		37	%
Total revenue	$	27,937		100	%	$	25,019		100	%

	Nine Months Ended					Nine Months Ended
	September 30, 2024		Percentage of Total Revenue			September 30, 2023		Percentage of Total Revenue
Orthobiologics	$	48,123		56	%	$	43,531		69	%
Spinal implant		37,631		44	%		19,664		31	%
Total revenue	$	85,754		100	%	$	63,195		100	%

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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+ Details

Commitments and Contingencies	9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	(14) Commitments and Contingencies Litigation We are subject to potential liabilities under government regulations and various claims and legal actions that are pending or may be asserted from time to time. These matters arise in the ordinary course and conduct of our business and may include, for example, commercial, product liability, intellectual property, and employment matters. We intend to continue to defend the Company vigorously in such matters and, when warranted, take legal action against others. Furthermore, we regularly assess contingencies to determine the degree of probability and range of possible loss for potential accrual in our financial statements. An estimated loss contingency is accrued in our financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on our assessment, we have adequately accrued an amount for contingent liabilities currently in existence. We do not accrue amounts for liabilities that we do not believe are probable or that we consider immaterial to our overall financial position. Litigation is inherently unpredictable, and unfavorable resolutions could occur. As a result, assessing contingencies is highly subjective and requires judgment about future events. While we do not believe that the ultimate resolution of any claims and lawsuits will have a material adverse effect upon our consolidated financial position, results of operations or cash flows, it is possible that the amount of ultimate loss may exceed our current accruals and that our cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies. Indemnification Arrangements Our indemnification arrangements generally include limited warranties and certain provisions for indemnifying customers against liabilities if our products or services infringe a third-party’s intellectual property rights. To date, we have not incurred any material costs as a result of such warranties or indemnification provisions and have not accrued any liabilities related to such obligations in the accompanying condensed consolidated financial statements. We have also agreed to indemnify our directors and executive officers for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as our director or officer or that person’s services provided to any other company or enterprise at our request.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

(14) Commitments and Contingencies

Litigation

We are subject to potential liabilities under government regulations and various claims and legal actions that are pending or may be asserted from time to time. These matters arise in the ordinary course and conduct of our business and may include, for example, commercial, product liability, intellectual property, and employment matters. We intend to continue to defend the Company vigorously in such matters and, when warranted, take legal action against others. Furthermore, we regularly assess contingencies to determine the degree of probability and range of possible loss for potential accrual in our financial statements. An estimated loss contingency is accrued in our financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on our assessment, we have adequately accrued an amount for contingent liabilities currently in existence. We do not accrue amounts for liabilities that we do not believe are probable or that we consider immaterial to our overall financial position. Litigation is inherently unpredictable, and unfavorable resolutions could occur. As a result, assessing contingencies is highly subjective and requires judgment about future events. While we do not believe that the ultimate resolution of any claims and lawsuits will have a material adverse effect upon our consolidated financial position, results of operations or cash flows, it is possible that the amount of ultimate loss may exceed our current accruals and that our cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies.

Indemnification Arrangements

Our indemnification arrangements generally include limited warranties and certain provisions for indemnifying customers against liabilities if our products or services infringe a third-party’s intellectual property rights. To date, we have not incurred any material costs as a result of such warranties or indemnification provisions and have not accrued any liabilities related to such obligations in the accompanying condensed consolidated financial statements.

We have also agreed to indemnify our directors and executive officers for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as our director or officer or that person’s services provided to any other company or enterprise at our request.

Schedule of Revenues from Product Lines (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 27,937	$ 25,019	$ 85,754	$ 63,195
Percentage of total revenue	100.00%	100.00%	100.00%	100.00%
Orthobiologics [Member]
Disaggregation of Revenue [Line Items]
Total revenue	$ 16,579	$ 15,665	$ 48,123	$ 43,531
Percentage of total revenue	59.00%	63.00%	56.00%	69.00%
Spinal Implant [Member]
Disaggregation of Revenue [Line Items]
Total revenue	$ 11,358	$ 9,354	$ 37,631	$ 19,664
Percentage of total revenue	41.00%	37.00%	44.00%	31.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

Intangible Assets (Details Narrative) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 0.4	$ 0.4	$ 1.3	$ 1.0

Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]
Balance at Dec. 31, 2022	$ 34,171		$ 277,841		$ (243,670)
Balance, shares at Dec. 31, 2022		108,874,803
Common stock issued on vesting of restricted stock units
Common stock issued on vesting of restricted stock units, shares		22,245
Stock-based compensation	617		617
Net income (loss)	(2,078)				(2,078)
Balance at Mar. 31, 2023	32,710		278,458		(245,748)
Balance, shares at Mar. 31, 2023		108,897,048
Balance at Dec. 31, 2022	34,171		277,841		(243,670)
Balance, shares at Dec. 31, 2022		108,874,803
Foreign currency translation adjustment	(146)
Net income (loss)	4,963
Balance at Sep. 30, 2023	54,681		293,534	(146)	(238,707)
Balance, shares at Sep. 30, 2023		129,788,947
Balance at Mar. 31, 2023	32,710		278,458		(245,748)
Balance, shares at Mar. 31, 2023		108,897,048
Stock-based compensation	439		439
Net income (loss)	(2,190)				(2,190)
Balance at Jun. 30, 2023	30,959		278,897		(247,938)
Balance, shares at Jun. 30, 2023		108,897,048
Private placement of common stock, net of issuance costs	14,011		14,011
Private placement of common stock, net of issuance costs, shares		20,000,000
Common stock issued on vesting of restricted stock units
Common stock issued on vesting of restricted stock units, shares		992,287
Withholding of common stock upon vesting of restricted stock units	(119)		(119)
Withholding of common stock upon vesting of restricted stock units, shares		(100,388)
Stock-based compensation	745		745
Foreign currency translation adjustment	(146)			(146)
Net income (loss)	9,231				9,231
Balance at Sep. 30, 2023	54,681		293,534	(146)	(238,707)
Balance, shares at Sep. 30, 2023		129,788,947
Balance at Dec. 31, 2023	51,349		294,330	29	(243,010)
Balance, shares at Dec. 31, 2023		130,180,031
Common stock issued on vesting of restricted stock units
Common stock issued on vesting of restricted stock units, shares		44,496
Withholding of common stock upon vesting of restricted stock units	(17)		(17)
Withholding of common stock upon vesting of restricted stock units, shares		(7,986)
Stock-based compensation	910		910
Foreign currency translation adjustment	(162)			(162)
Net income (loss)	(4,400)				(4,400)
Balance at Mar. 31, 2024	47,680		295,223	(133)	(247,410)
Balance, shares at Mar. 31, 2024		130,216,541
Balance at Dec. 31, 2023	51,349		294,330	29	(243,010)
Balance, shares at Dec. 31, 2023		130,180,031
Foreign currency translation adjustment	25
Net income (loss)	(13,284)
Balance at Sep. 30, 2024	45,725		301,966	54	(256,295)
Balance, shares at Sep. 30, 2024		138,680,874
Balance at Mar. 31, 2024	47,680		295,223	(133)	(247,410)
Balance, shares at Mar. 31, 2024		130,216,541
Common stock issued on vesting of restricted stock units
Common stock issued on vesting of restricted stock units, shares		97,831
Stock-based compensation	1,228		1,228
Foreign currency translation adjustment	(42)			(42)
Net income (loss)	(3,861)				(3,861)
Balance at Jun. 30, 2024	45,005		296,451	(175)	(251,271)
Balance, shares at Jun. 30, 2024		130,314,372
Private placement of common stock, net of issuance costs	4,456		4,456
Private placement of common stock, net of issuance costs, shares		7,812,500
Exercise of stock options	13		13
Exercise of stock options, shares		19,858
Common stock issued on vesting of restricted stock units
Common stock issued on vesting of restricted stock units, shares		689,977
Withholding of common stock upon vesting of restricted stock units	(93)		(93)
Withholding of common stock upon vesting of restricted stock units, shares		(155,833)
Stock-based compensation	1,139		1,139
Foreign currency translation adjustment	229			229
Net income (loss)	(5,024)				(5,024)
Balance at Sep. 30, 2024	$ 45,725		$ 301,966	$ 54	$ (256,295)
Balance, shares at Sep. 30, 2024		138,680,874

Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

(11) Debt

Long-term debt consists of the following (in thousands):

Schedule of Long-term Debt

	September 30, 2024			December 31, 2023
Amounts due under the term loan	$	22,000		$	17,000
Accrued end-of-term payments		359			456
Less: unamortized debt issuance costs		(471	)		(289	)
Less: current maturities		(2,750	)		—
Long-term debt, less issuance costs	$	19,138		$	17,167

On March 7, 2024, the Company’s term credit agreement was amended and restated to, among other things, extend the maturity date to March 1, 2029. An additional $10.0 million tranche, available solely at the discretion of MidCap Financial Trust and the lenders, was added to the term credit agreement and the applicable margin used to determine the per annum interest rate was reduced from 7.00% to 6.50%. The date of certain fees payable in connection with optional prepayments were also reset by the amendment to be determined based on the date the amendment. The Company’s revolving credit agreement was also amended and restated on March 7, 2024, to among other things, increase the commitment amount from $8.0 million to $17.0 million. The maturity of the revolving credit agreement was also extended to March 1, 2029. Minimum net product revenue requirements specified in the credit agreements were reset and minimum adjusted EBITDA requirements were removed.

On May 14, 2024, the term credit agreement was amended to increase the amount of term loans that may be borrowed by $5.0 million to a maximum of $22.0 million, which were fully drawn as of May 14, 2024. In addition, the amendments to the term credit agreement and revolving credit agreement re-set the date certain fees payable in connection with optional prepayments are determined to May 14, 2024 and consequently extend such fees’ original expiration. The exit fees were increased by 2.50% to 6.50% of the principal amount borrowed pursuant to the term credit agreement. The terms of borrowing under the term credit agreement and revolving credit agreement otherwise remain materially unchanged.

The effective rate of the term loan, inclusive of amortization of debt issuance costs and accretion of the final payment, was 14.58% as of September 30, 2024. The effective rate of the revolving credit agreement was 9.82% as of September 30, 2024. As of September 30, 2024, the Company had $3.8 million available under the revolving credit agreement and was in compliance with all covenants under the credit agreements.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Revenue (Details Narrative) $ in Thousands	3 Months Ended		9 Months Ended
Revenue (Details Narrative) $ in Thousands	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) Segment	Sep. 30, 2023 USD ($)
Disaggregation of Revenue [Line Items]
Revenue	$ 27,937	$ 25,019	$ 85,754	$ 63,195
Number of reportable segment \| Segment			1
Bill and Hold Transactions [Member]
Disaggregation of Revenue [Line Items]
Revenue			$ 600

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

+ References

+ Details

Acquisition of NanOss Production Operations (Tables)

9 Months Ended

Sep. 30, 2024

Restructuring Cost and Reserve [Line Items]

Schedule of Acquisition Pro Forma Information

	Nine Months Ended
	September 30, 2023
Revenues	$	97,842
Net loss		(11,570	)

Nan Oss Production Operations [Member]

Restructuring Cost and Reserve [Line Items]

Schedule of Business Acquisitions


Inventories	$	1,150
Fixed assets		267
Intangible assets		220
Net assets acquired		1,637

Goodwill		573

Total purchase consideration	$	2,210

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Schedule of Warrant Activity (Details) - Warrant [Member]	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares Outstanding, Beginning balance \| shares	12,187,470
Weighted Average Fair Value at Grant Date Per Share, Outstanding, Beginning balance \| $ / shares	$ 1.53
Common Stock Warrants, Issued \| shares	50,000
Weighted Average Exercise Price, Issued \| $ / shares	$ 0.82
Shares Outstanding, Ending balance \| shares	12,237,470
Weighted Average Fair Value at Grant Date Per Share, Outstanding, Ending balance \| $ / shares	$ 1.53

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Section 35
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Schedule of Share-based Compensation, Stock Options Activity (Details) - Equity Option [Member] - 2023 and 2018 Equity Incentive Plan [Member] - $ / shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares, Outstanding, Beginning balance	4,875,828	3,360,664
Weighted Average Exercise Price, Outstanding, Beginning balance	$ 1.31	$ 1.51
Shares, Granted		1,602,013
Weighted Average Exercise Price, Granted		$ 1.16
Shares, Exercised	(19,858)
Weighted Average Exercise Price, Exercised	$ 0.64
Shares, Cancelled or expired	(397,032)	(86,849)
Weighted Average Exercise Price, Cancelled or expired	$ 1.16	$ 6.58
Shares, Outstanding, Ending balance	4,458,938	4,875,828
Weighted Average Exercise Price, Outstanding, Ending balance	$ 1.32	$ 1.31
Weighted Average Remaining Contract Term (years), Outstanding	6 years 7 months 6 days	8 years 2 months 12 days
Shares, Exercisable, Ending balance	2,779,049	1,519,973
Weighted Average Exercise Price, Exercisable, Ending balance	$ 1.41	$ 1.59
Weighted Average Remaining Contract Term (years), Exercisable	5 years 10 months 24 days	7 years 1 month 6 days

Property and Equipment, Net

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

(8) Property and Equipment, Net

Property and equipment, net are as follows (in thousands):

Schedule of Property and Equipment, Net

	September 30, 2024			December 31, 2023
Equipment	$	7,120		$	6,858
Computer equipment		1,234			1,330
Computer software		361			230
Leasehold improvements		4,382			4,347
Surgical instruments		17,275			14,648
Assets not yet in service		905			959
Total cost		31,277			28,372
Less: accumulated depreciation		(20,993	)		(19,680	)
Property and equipment, net	$	10,284		$	8,692

Depreciation expense related to property and equipment, including property under finance leases, for the three months ended September 30, 2024 and 2023 was $0.7 million and $0.5 million, respectively, and $1.8 million and $1.2 million for the nine months ended September 30, 2024 and 2023, respectively.

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Share-based Compensation, Stock Options Activity

Stock option activity, including options granted under the 2023 Plan and the 2018 Plan was as follows for the nine months ended September 30, 2024 and 2023:

	2024							2023
	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)		Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)
Outstanding at January 1		4,875,828		$	1.31				3,360,664		$	1.51
Granted		—			—				1,602,013			1.16
Exercised		(19,858	)		0.64				—			—
Cancelled or expired		(397,032	)	$	1.16				(86,849	)	$	6.58
Outstanding at September 30		4,458,938		$	1.32		6.6		4,875,828		$	1.31		8.2
Exercisable at September 30		2,779,049		$	1.41		5.9		1,519,973		$	1.59		7.1

Schedule of Restricted Stock Activity

Deferred stock unit and restricted stock unit activity for awards granted under the 2023 Plan and the 2018 Plan was as follows for the nine months ended September 30, 2024 and 2023:

Schedule of Restricted Stock Activity

	2024					2023
	Shares			Weighted Average Fair Value at Grant Date Per Share		Shares			Weighted Average Fair Value at Grant Date Per Share
Outstanding at January 1		3,524,675		$	1.07		3,612,433		$	0.88
Granted		4,195,363		$	0.84		1,942,614		$	1.15
Vested		(1,482,056	)	$	1.08		(1,014,532	)	$	0.68
Cancelled		(675,820	)	$	0.90		(494,121	)	$	0.54
Outstanding at September 30		5,562,162		$	0.91		4,046,394		$	1.10

Schedule of Performance Stock Activity

Activity for PSU awards granted under the 2023 Plan was as follows for the nine months ended September 30, 2024:

Schedule of Performance Stock Activity

	2024
	Shares			Weighted Average Fair Value
Outstanding at January 1		—		$	—
Granted		1,894,985			1.49
Forfeited		(184,209	)		1.49
Vested		—			—
Outstanding at September 30		1,710,776		$	1.49

Schedule of Restricted Stock Activity (Details) - Deferred Stock Units and Restricted Stock Units [Member] - 2023 and 2018 Equity Incentive Plan [Member] - $ / shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares Outstanding, Beginning balance	3,524,675	3,612,433
Weighted Average Fair Value at Grant Date Per Share, Outstanding, Beginning balance	$ 1.07	$ 0.88
Shares, Granted	4,195,363	1,942,614
Weighted Average Fair Value at Grant Date Per Share, Granted	$ 0.84	$ 1.15
Shares, Vested	(1,482,056)	(1,014,532)
Weighted Average Fair Value at Grant Date Per Share, Vested	$ 1.08	$ 0.68
Shares, Cancelled	(675,820)	(494,121)
Weighted Average Fair Value at Grant Date Per Share, Cancelled	$ 0.90	$ 0.54
Shares Outstanding, Ending balance	5,562,162	4,046,394
Weighted Average Fair Value at Grant Date Per Share, Outstanding, Ending balance	$ 0.91	$ 1.10

Acquisition of NanOss Production Operations

9 Months Ended

Sep. 30, 2024

Acquisition Of Nanoss Production Operations

Acquisition of NanOss Production Operations

(4) Acquisition of NanOss Production Operations

On October 23, 2023, the Company acquired the nanOss production operations from RTI Surgical, Inc. (“RTI”) pursuant to an Asset Purchase Agreement dated October 23, 2023 between the Company and RTI (the “Asset Purchase Agreement”). Under the terms of the Asset Purchase Agreement, the Company acquired certain assets, including equipment and inventory, used in RTI’s synthetic bone graft business and assumed from RTI the lease for the nanOss production facility located in Greenville, North Carolina. The purchase price for the assets was $2.0 million in cash on hand plus $0.2 million of contingent payments based on future sales of next generation nanOss products. The Company previously acquired nanOss distribution rights and certain nanOss intellectual property with the acquisition of assets related to the biologics and spinal fixation business of Surgalign Holdings, Inc. in August 2023. The potential benefit associated with the improved economics of internal production of nanOss products resulted in the Company paying a premium for the acquisition resulting in the recognition of $0.6 million of goodwill. For tax purposes, goodwill is deductible.

The Company recorded the purchase of this acquisition using the acquisition method of accounting and, accordingly, recognized the assets acquired at their fair values as of the date of acquisition. The table below represents the allocation of the total consideration for certain RTI assets based on management’s estimates of their respective fair values as of October 23, 2023 (in thousands):

Schedule of Business Acquisitions


Inventories	$	1,150
Fixed assets		267
Intangible assets		220
Net assets acquired		1,637

Goodwill		573

Total purchase consideration	$	2,210

The following unaudited pro forma combined financial information summarizes the results of operations for the periods indicated as if the Transaction, the acquisition of Surgalign SPV, Inc. and the acquisition of nanOss production operations from RTI Surgical, Inc. had been completed as of January 1, 2023 (in thousands):

	Nine Months Ended
	September 30, 2023
Revenues	$	97,842
Net loss		(11,570	)

Pro forma information reflects adjustments that are expected to have a continuing impact on the Company’s results of operations and are directly attributable to the Transaction, the acquisition of Surgalign SPV, Inc. and the acquisition of nanOss production operations from RTI Surgical, Inc. The unaudited pro forma results include adjustments to reflect the amortization of the inventory step-up and the incremental intangible asset amortization to be incurred based on the values of each identifiable intangible asset. The pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the transactions had occurred as of January 1, 2023 or that may be obtained in the future, and do not reflect future synergies, integration costs, or other such costs or savings.

Revenue was approximately $10.5 million and net losses were approximately $0.3 million for Surgalign SPV and the hardware and biologics business of Surgalign Holdings, collectively, from the dates of acquisition to September 30, 2023.

Acquisition of NanOss Production Operations (Details Narrative) - USD ($) $ in Thousands		9 Months Ended
	Oct. 23, 2023	Sep. 30, 2023	Sep. 30, 2024	Dec. 31, 2023
Restructuring Cost and Reserve [Line Items]
Goodwill			$ 7,302	$ 7,302
Revenue		$ 97,842
Net losses		(11,570)
Hardware And Biologics Business [Member]
Restructuring Cost and Reserve [Line Items]
Revenue		10,500
Net losses		$ 300
Nan Oss Production Operations [Member]
Restructuring Cost and Reserve [Line Items]
Purchase price for the assets	$ 2,210
Contingent payments	200
Goodwill	$ 573

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References

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-Topic 942
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(10)(1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478546/942-210-S99-1

+ Details

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Subsequent Event

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

Subsequent Event

(20) Subsequent Event

On October 22, 2024, the Company entered into a licensing agreement with a distributor granting an exclusive, nontransferable, non-sublicensable, royalty-bearing right and license to manufacture and commercialize in the United States the Company’s SimpliMax™ product and the trademarks associated therewith during the term of the agreement and subject to certain limitations as set forth therein. Under the terms of the agreement, the Company received a one-time, up front, non-refundable, non-creditable cash payment of $1.5 million. Beginning in 2025, the Company is entitled to quarterly royalty payments based on the volume of product sold by the distributor. These royalty payments include guaranteed minimums, which aggregate to $3.75 million during 2025. The agreement has an initial term of one year and is automatically renewable in one-year terms unless either party thereto provides written notice of non-renewal six months prior to the then-current term or earlier termination as provided under the agreement, including in the event of a CMS Policy Change, as defined in the agreement.

Supplemental Disclosure of Cash Flow Information

9 Months Ended

Sep. 30, 2024

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosure of Cash Flow Information

(17) Supplemental Disclosure of Cash Flow Information

Supplemental cash flow information is as follows (in thousands):

	2024		2023
	Nine Months Ended
	September 30,
	2024		2023
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	2,657	$	1,854

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure [Table]
Net (Loss) Income	$ (5,024)	$ (3,861)	$ (4,400)	$ 9,231	$ (2,190)	$ (2,078)	$ (13,284)	$ 4,963

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Net (Loss) Income Per Share (Tables)

9 Months Ended

Sep. 30, 2024

Net (Loss) Income Per Share:

Schedule of Basic and Diluted Earnings Per Share

The table below sets forth the computation of basic and diluted (loss) earnings per share (in thousands, except per share data):

	2024			2023		2024			2023
	Three Months Ended September 30,					Nine Months Ended September 30,
	2024			2023		2024			2023
Numerator:
Net (loss) income	$	(5,024	)	$	9,231	$	(13,284	)	$	4,963
Denominator:
Basic – weighted average shares outstanding		135,100,233			128,140,238		131,881,302			115,380,792
Effect of dilutive securities:
Employee restricted stock units		-			2,270,924		-			3,199,497
Warrants		-			5,252,112		-			5,252,112
Diluted – weighted average shares outstanding		135,100,233			135,663,274		131,881,302			123,832,401
Basic (loss) earnings per share		(0.04	)		0.07		(0.10	)		0.04
Diluted (loss) earnings per share		(0.04	)		0.07		(0.10	)		0.04

Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Cash compensation/commissions payable	$ 6,826	$ 8,890
Other accrued liabilities	2,045	1,529
Accrued liabilities	$ 8,871	$ 10,419

Revenue (Tables)

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Revenues from Product Lines

	Three Months Ended					Three Months Ended
	September 30, 2024		Percentage of Total Revenue			September 30, 2023		Percentage of Total Revenue
Orthobiologics	$	16,579		59	%	$	15,665		63	%
Spinal implant		11,358		41	%		9,354		37	%
Total revenue	$	27,937		100	%	$	25,019		100	%

	Nine Months Ended					Nine Months Ended
	September 30, 2024		Percentage of Total Revenue			September 30, 2023		Percentage of Total Revenue
Orthobiologics	$	48,123		56	%	$	43,531		69	%
Spinal implant		37,631		44	%		19,664		31	%
Total revenue	$	85,754		100	%	$	63,195		100	%

Warrants (Tables)

9 Months Ended

Sep. 30, 2024

Warrants

Schedule of Warrant Activity

Warrant activity was as follows for the nine months ended September 30, 2024:

Schedule of Warrant Activity

	2024
	Common Stock Warrants		Weighted Average Exercise Price
Outstanding as of January 1, 2024		12,187,470	$	1.53
Issued		50,000		0.82
Outstanding as of September 30, 2024		12,237,470	$	1.53

Related Party Transactions

9 Months Ended

Sep. 30, 2024

Related Party Transactions

(18) Related Party Transactions

As described in more detail under Note 1, “Business Description and Summary of Significant Accounting Policies,” and Note 19, “Related Party Transactions,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, we are party to an Investor Rights Agreement, as amended, Registration Rights Agreements and certain other agreements with OrbiMed Royalty Opportunities II, LP and ROS Acquisition Offshore LP, which are funds affiliated with OrbiMed Advisors LLC (“OrbiMed”). OrbiMed beneficially owns 52.5% of the Company’s common stock.

All related party transactions are reviewed and approved by the Audit Committee or the disinterested members of the full Board of Directors.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
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+ Details

Acquisition of Coflex and CoFix Product Lines

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Acquisition of Coflex and CoFix Product Lines

(2) Acquisition of Coflex and CoFix Product Lines

On February 28, 2023, we entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”) with Surgalign SPV, Inc. (“Surgalign SPV”), a wholly owned subsidiary of Surgalign Spine Technologies, Inc., (“Seller”), Seller and Surgalign Holdings, Inc. , pursuant to which we purchased all of the issued and outstanding shares of common stock of Surgalign SPV, which shares constituted all of the outstanding equity of Surgalign SPV, for an aggregate purchase price of $17.0 million in cash (the “Purchase Price”). The closing contemplated by the Equity Purchase Agreement occurred on February 28, 2023 (the “Closing”).

Immediately prior to the Closing, Seller and its affiliates transferred and assigned to Surgalign SPV, a newly formed entity wholly owned by Seller, certain intellectual property, contractual rights and other assets related to the design, manufacture, sale and distribution of Seller’s Coflex and CoFix products in the United States (the “Coflex Business”). The Coflex and CoFix products have been approved by the U.S. Food and Drug Administration for the treatment of moderate to severe lumbar spinal stenosis in conjunction with decompression and provide minimally invasive, motion preserving stabilization.

In conjunction with the Equity Purchase Agreement, on February 28, 2023, we entered into a Transition Services Agreement with Surgalign SVP and Seller, whereby Seller agreed to provide, or cause to be provided, to us on and after the effective date of the Equity Purchase Agreement, after giving effect to the Closing, certain transitional services related to the transition of the Coflex Business.

We funded the Purchase Price with cash on hand and approximately $5.0 million of indebtedness incurred under our term loan, refer to Note 11 – Debt for additional information.

We recorded the purchase of this acquisition using the acquisition method of accounting and, accordingly, recognized the assets acquired at their fair values as of the date of acquisition. The table below represents the allocation of the total consideration for Surgalign SPV’s assets and liabilities based on management’s estimates of their respective fair values as of February 28, 2023 (in thousands):


Inventories	$	1,589
Equipment		947
Intangible assets		11,155
Net assets acquired		13,691

Goodwill		3,309

Total purchase consideration	$	17,000

The acquisition was recorded by allocating the costs of the net assets acquired based on their estimated fair values at the acquisition date. The fair values were based on management’s analysis, including work performed by third-party valuation specialists.

The acquisition strengthened the Company’s spine portfolio with the addition of the Coflex Business. Coflex is a differentiated and minimally invasive motion preserving stabilization implant that had a premarket application approved by the U.S. Food and Drug Administration for the treatment of moderate to severe lumbar spinal stenosis in conjunction with decompression. This potential benefit resulted in the Company paying a premium for the acquisition resulting in the recognition of $3.3 million in goodwill. For tax purposes, goodwill is deductible.

Business Description, Basis of Presentation and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business Description and Basis of Presentation	Business Description and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Xtant Medical Holdings, Inc. (“Xtant”), a Delaware corporation, and its wholly owned subsidiaries, which are jointly referred to herein as “Xtant” or the “Company”. The terms “we,” “us” and “our” also refer to Xtant. All intercompany balances and transactions have been eliminated in consolidation. Xtant is a global medical technology company focused on the design, development, and commercialization of a comprehensive portfolio of orthobiologics and spinal implant systems to facilitate spinal fusion in complex spine, deformity, and degenerative procedures. The accompanying condensed consolidated balance sheet as of December 31, 2023, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. They do not include all disclosures required by generally accepted accounting principles for annual consolidated financial statements, but in the opinion of management include all adjustments, consisting only of normal recurring items, necessary for a fair presentation. Interim results are not necessarily indicative of results that may be achieved in the future for the full year ending December 31, 2024. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, which are included in Xtant’s Annual Report on Form 10-K for the year ended December 31, 2023. The accounting policies set forth in those annual consolidated financial statements are the same as the accounting policies utilized in the preparation of these condensed consolidated financial statements, except as modified for appropriate interim consolidated financial statement presentation.
Liquidity	Liquidity Since our inception, we have financed our operations through primarily operating cash flows, private placements of equity securities and convertible debt, debt facilities, common stock rights offerings, and other debt transactions. For the nine months ended September 30, 2024, we incurred a net loss of $13.3 million and negative cash flows from operating activities of $12.6 million. We believe that our $6.6 million of cash and cash equivalents as of September 30, 2024, together with our anticipated operating cash flows and amounts available under our credit facilities, as discussed further in Note 11, “Debt,” will be sufficient to meet our anticipated cash requirements through at least November 2025. However, we may require or seek additional capital to fund our future operations and business strategy prior to November 2025. Accordingly, there is no assurance that we will not need or seek additional financing prior to such time. Additionally, we can give no assurances that we will be able to secure additional sources of funds to support our operations, or if such funds are available to us, that such additional financing will be sufficient to meet our needs or on terms acceptable to us. This is particularly true if economic and market conditions deteriorate or our business, financial performance or prospects deteriorate. In addition, prior to raising additional equity or debt financing, we may be required to obtain the consent of MidCap Financial Trust and MidCap Funding IV Trust under our Credit Agreements and/or OrbiMed Royalty Opportunities II, LP (“Royalty Opportunities”) and ROS Acquisition Offshore LP (“ROS”) under our Investor Rights Agreement with them, and no assurance can be provided that they would provide such consent, which could limit our ability to raise additional financing and the terms thereof.
Private Placement	Private Placement On August 7, 2024, we entered into a securities purchase agreement pursuant to which we issued an aggregate of 7,812,500 shares of common stock to accredited investors in a private placement at a per share purchase price of $0.64 at a closing held on August 9, 2024. The gross proceeds to us from the private placement were $5.0 million, before deducting estimated offering fees and expenses payable by us. We expect to use the net proceeds of $4.5 million from the private placement for working capital and other general corporate purposes.
Use of Estimates	Use of Estimates The preparation of the condensed consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. Significant estimates include the carrying amount of property and equipment; goodwill, intangible assets and liabilities; valuation allowances for trade receivables, inventory, deferred income tax assets and liabilities; current and long-term lease obligations and corresponding right-of-use asset; estimates for the fair value of assets acquired as part of business combinations; and estimates for the fair value of long-term debt, stock options and other equity awards upon which the Company determines stock-based compensation expense. Actual results could differ from those estimates.
Restricted Cash	Restricted Cash Cash and cash equivalents classified as restricted cash on our condensed consolidated balance sheets are restricted as to withdrawal or use under the terms of certain contractual agreements. The September 30, 2024 and December 31, 2023 balances included lockbox deposits that are temporarily restricted due to timing at the period end. The lockbox deposits are applied against our line of credit the next business day.
Concentration of Credit Risk	Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash, cash equivalents and restricted cash. The Company maintains its cash balances primarily with two financial institutions. These balances generally exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in cash and cash equivalents.
Long-Lived Assets	Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. No impairments of long-lived assets were recorded for the three and nine months ended September 30, 2024 and 2023.
Goodwill	Goodwill Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have indefinite useful lives are not amortized. Instead, they are tested for impairment at least annually, and whenever events or circumstances indicate, the carrying amount of the asset may not be recoverable. No impairments of goodwill were recorded for the three and nine months ended September 30, 2024 and 2023.
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock-based compensation in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification (“ASC”) 718, Compensation-Stock Compensation. ASC 718 requires the recognition of compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options, restricted stock units, performance stock units, and shares issued under its employee stock purchase plan. ASC 718 requires companies to estimate the fair value of all share-based payment option awards on the date of grant using an option pricing model. The fair value of stock options is recognized over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period (usually the vesting period), on a straight-line basis. The Company accounts for option forfeitures as they occur. The Company accounts for stock-based compensation for restricted stock units at their fair value, based on the closing market price of the Company’s common stock on the date of grant. These costs are recognized on a straight-line basis over the requisite service period, which is usually the vesting period. The Company accounts for stock-based compensation for performance stock units with market-based conditions at their fair value on the date of the award using the Monte Carlo simulation model. These costs are recognized over the requisite service period, which is usually the vesting period, regardless of the likelihood of achievement of the market-based performance criteria.
Foreign Currency	Foreign Currency The Company generates revenues outside the United States in multiple foreign currencies including euros, Swiss francs, British pounds and in U.S. dollar-denominated transactions conducted with customers who generate revenue in currencies other than the U.S. dollar. The Company also incurs operating expenses in euros, Swiss francs and British pounds. All assets and liabilities of foreign subsidiaries which have a functional currency other than the U.S. dollar are translated at the rate of exchange at period-end, while elements of the income statement are translated at the average exchange rates in effect during the period. The net effect of these translation adjustments is shown as a component of accumulated other comprehensive income. Foreign currency transaction gains and losses are reported in other income, net.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying values of financial instruments, including trade accounts receivable, accounts payable, accrued liabilities, and long-term debt, approximate their fair values based on terms and related interest rates as of September 30, 2024 and December 31, 2023.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Aug. 10, 2023	Feb. 28, 2023
Business Acquisition [Line Items]
Net assets acquired			$ 12,000
Goodwill	$ 7,302	$ 7,302
Surgalign SPV, Inc. [Member]
Business Acquisition [Line Items]
Inventories				$ 1,589
Equipment				947
Intangible assets				11,155
Net assets acquired				13,691
Goodwill				3,309
Total purchase consideration				$ 17,000

- Definition

+ References

+ Details

Schedule of Intangible of Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 11,967	$ 11,967
Accumulated amortization	(3,179)	(1,882)
Intangible assets, net	$ 8,788	$ 10,085
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted avereage life	11 years	11 years
Intangible assets, gross	$ 2,777	$ 2,777
Accumulated amortization	(879)	(672)
Intangible assets, net	$ 1,898	$ 2,105
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted avereage life	6 years	6 years
Intangible assets, gross	$ 8,000	$ 8,000
Accumulated amortization	(2,112)	(1,111)
Intangible assets, net	$ 5,888	$ 6,889
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted avereage life	10 years	10 years
Intangible assets, gross	$ 1,190	$ 1,190
Accumulated amortization	(188)	(99)
Intangible assets, net	$ 1,002	$ 1,091

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

(12) Stock-Based Compensation

On July 26, 2023, our stockholders approved and adopted the Xtant Medical Holdings, Inc. 2023 Equity Incentive Plan (the “2023 Plan”), which replaced the Xtant Medical Holdings, Inc. 2018 Equity Incentive Plan (as amended and restated, the “2018 Plan”) with respect to future grants of equity awards, although the 2018 Plan continues to govern equity awards granted under the 2018 Plan. The 2023 Plan permits the Board of Directors, or a committee thereof, to grant to eligible employees, non-employee directors, and consultants of the Company non-statutory and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, deferred stock units, performance awards, non-employee director awards, and other stock-based awards. The Board of Directors may select 2023 Plan participants and determine the nature and amount of awards to be granted. The maximum number of shares of our common stock available for issuance under the 2023 Plan, subject to adjustment pursuant to the terms of the 2023 Plan, is (i) 5,500,000 shares of common stock; (ii) 7,695,812 shares of common stock remaining available for issuance under the 2018 Plan but not subject to outstanding awards under the 2018 Plan as of July 26, 2023; and (iii) up to 6,686,090 shares of common stock subject to awards outstanding under the 2018 Plan as of July 26, 2023 but only to the extent such awards are subsequently forfeited, cancelled, expire, or otherwise terminate without the issuance of such shares of common stock after such date.

Stock Options

Stock option activity, including options granted under the 2023 Plan and the 2018 Plan was as follows for the nine months ended September 30, 2024 and 2023:

	2024							2023
	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)		Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)
Outstanding at January 1		4,875,828		$	1.31				3,360,664		$	1.51
Granted		—			—				1,602,013			1.16
Exercised		(19,858	)		0.64				—			—
Cancelled or expired		(397,032	)	$	1.16				(86,849	)	$	6.58
Outstanding at September 30		4,458,938		$	1.32		6.6		4,875,828		$	1.31		8.2
Exercisable at September 30		2,779,049		$	1.41		5.9		1,519,973		$	1.59		7.1

As of September 30, 2024, there was approximately $1.1 million of total unrecognized compensation expense related to unvested stock options. These costs are expected to be recognized over a weighted-average period of 2.5 years. There were no options granted during the nine months ended September 30, 2024.

Deferred Stock Units and Restricted Stock Units

Deferred stock unit and restricted stock unit activity for awards granted under the 2023 Plan and the 2018 Plan was as follows for the nine months ended September 30, 2024 and 2023:

Schedule of Restricted Stock Activity

	2024					2023
	Shares			Weighted Average Fair Value at Grant Date Per Share		Shares			Weighted Average Fair Value at Grant Date Per Share
Outstanding at January 1		3,524,675		$	1.07		3,612,433		$	0.88
Granted		4,195,363		$	0.84		1,942,614		$	1.15
Vested		(1,482,056	)	$	1.08		(1,014,532	)	$	0.68
Cancelled		(675,820	)	$	0.90		(494,121	)	$	0.54
Outstanding at September 30		5,562,162		$	0.91		4,046,394		$	1.10

Total compensation expense related to unvested deferred stock units and restricted stock units not yet recognized was $4.0 million as of September 30, 2024, which is expected to be allocated to expenses over a weighted-average period of 2.7 years.

Performance Stock Units

During 2024, the Company began awarding performance stock units, or PSUs, under the 2023 Plan to certain executive officers and key employees. The Company has awarded an aggregate of 1,894,985 PSUs, assuming target performance, and each PSU award can be earned and vested at the end of a three-year performance period based on the total stockholder return, or TSR, of the Company’s common stock price relative to a group of peer companies and subject to continued service to the Company. The number of shares of the Company’s common stock to be issued upon vesting and settlement of the PSUs range from 0% to 200% of the target number of shares underlying the award, depending on the Company’s performance against the group of peer companies. The fair value of the PSUs was estimated using the Monte Carlo simulation model and the following assumptions: the volatility of the peer companies was unique to each company used in simulation, Company volatility of 93.34%, risk-free interest rate of 4.53%, correlation with index of 0.06, and dividend yield of 0%.

Activity for PSU awards granted under the 2023 Plan was as follows for the nine months ended September 30, 2024:

Schedule of Performance Stock Activity

	2024
	Shares			Weighted Average Fair Value
Outstanding at January 1		—		$	—
Granted		1,894,985			1.49
Forfeited		(184,209	)		1.49
Vested		—			—
Outstanding at September 30		1,710,776		$	1.49

The total compensation cost related to unvested PSUs was $2.1 million as of September 30, 2024, which is expected to be allocated to expenses over a weighted-average period of 2.4 years.

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Allowance of accounts receivable, net	$ 1,038	$ 920
Preferred stock, par value	$ 0.000001	$ 0.000001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.000001	$ 0.000001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	138,680,874	130,180,031
Common stock, shares outstanding	138,680,874	130,180,031

Acquisition of Surgalign Holdings, Inc.’s Hardware and Biologics Business (Details Narrative) - USD ($) $ in Thousands	Aug. 10, 2023	Aug. 09, 2023
Restructuring Cost and Reserve [Line Items]
Purchase consideration	$ 12,000
Surgalign Holdings Inc [Member]
Restructuring Cost and Reserve [Line Items]
Purchase price consideration	$ 5,590	$ 5,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Total Revenue	$ 27,937	$ 25,019	$ 85,754	$ 63,195
Cost of Sales	11,630	9,685	33,562	24,865
Gross Profit	16,307	15,334	52,192	38,330
Operating Expenses
General and administrative	7,493	7,144	22,991	16,983
Sales and marketing	11,890	11,085	37,530	26,855
Research and development	701	490	1,863	844
Total Operating Expenses	20,084	18,719	62,384	44,682
Loss from Operations	(3,777)	(3,385)	(10,192)	(6,352)
Other (Expense) Income
Interest expense	(1,199)	(760)	(3,026)	(2,120)
Interest income		48		133
Foreign currency exchange gain	27		106
Other expense	(13)		(6)
Bargain purchase gain		11,028		11,028
Total Other (Expense) Income	(1,185)	10,316	(2,926)	9,041
Net (Loss) Income from Operations Before Provision for Income Taxes	(4,962)	6,931	(13,118)	2,689
Provision for Income Taxes Current and Deferred	(62)	2,300	(166)	2,274
Net (Loss) Income	$ (5,024)	$ 9,231	$ (13,284)	$ 4,963
Net (Loss) Income Per Share:
Basic	$ (0.04)	$ 0.07	$ (0.10)	$ 0.04
Dilutive	$ (0.04)	$ 0.07	$ (0.10)	$ 0.04
Shares used in the computation:
Basic	135,100,233	128,140,238	131,881,302	115,380,792
Dilutive	135,100,233	135,663,274	131,881,302	123,832,401

Business Description, Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($)		3 Months Ended						9 Months Ended
	Aug. 07, 2024	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Net (Loss) Income		$ (5,024,000)	$ (3,861,000)	$ (4,400,000)	$ 9,231,000	$ (2,190,000)	$ (2,078,000)	$ (13,284,000)	$ 4,963,000
Cash flows from operating activities								(12,561,000)	(8,600,000)
Cash and cash equivalents		6,596,000			8,664,000			6,596,000	8,664,000	$ 5,715,000
Net proceeds								4,456,000	14,011,000
Impairments of long-lived assets		0			0			0	0
Impairments of goodwill		$ 0			$ 0			$ 0	$ 0
Private Placement [Member] \| Securities Purchase Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares issued	7,812,500
Purchase price per share	$ 0.64
Gross proceeds	$ 5,000,000.0
Net proceeds	$ 4,500,000

Acquisition of Coflex and CoFix Product Lines (Tables)

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed


Inventories	$	1,589
Equipment		947
Intangible assets		11,155
Net assets acquired		13,691

Goodwill		3,309

Total purchase consideration	$	17,000

Debt (Details Narrative) - USD ($) $ in Millions	Sep. 30, 2024	May 14, 2024	Mar. 07, 2024	Mar. 06, 2024
Line of Credit Facility [Line Items]
Line of credit facility, maturity date			Mar. 01, 2029
Exit increase fees		2.50%
Exit fees		6.50%
Line of credit facility remaining borrowing	$ 3.8
Maximum [Member]
Line of Credit Facility [Line Items]
Line of credit		$ 22.0
Minimum [Member]
Line of Credit Facility [Line Items]
Line of credit		$ 5.0
Term Credit Agreements [Member] \| Maximum [Member]
Line of Credit Facility [Line Items]
Line of credit issuance costs			7.00%
Term Credit Agreements [Member] \| Minimum [Member]
Line of Credit Facility [Line Items]
Line of credit issuance costs			6.50%
Term Loan [Member]
Line of Credit Facility [Line Items]
Line of credit issuance costs	14.58%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit issuance costs	9.82%
Term Loan Commitment [Member] \| Agent and Lenders [Member]
Line of Credit Facility [Line Items]
Line of credit facility, additional borrowing capacity			$ 10.0
Revolving Loan Commitment [Member] \| Maximum [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			$ 17.0
Revolving Loan Commitment [Member] \| Minimum [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity				$ 8.0

Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net are as follows (in thousands):

Schedule of Property and Equipment, Net

	September 30, 2024			December 31, 2023
Equipment	$	7,120		$	6,858
Computer equipment		1,234			1,330
Computer software		361			230
Leasehold improvements		4,382			4,347
Surgical instruments		17,275			14,648
Assets not yet in service		905			959
Total cost		31,277			28,372
Less: accumulated depreciation		(20,993	)		(19,680	)
Property and equipment, net	$	10,284		$	8,692

Schedule of Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Schedule of Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income tax expense (benefit) from continuing operations	$ 62	$ (2,300)	$ 166	$ (2,274)
Net (Loss) Income from Operations Before Provision for Income Taxes	$ (4,962)	$ 6,931	$ (13,118)	$ 2,689
Effective income tax rate	1.20%	33.20%	1.30%	84.60%

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

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Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

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-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 6.I.7)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-8

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-10

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(9))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477250/944-220-S99-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Subparagraph (a)
-SubTopic 20
-Topic 740
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482659/740-20-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h))
-SubTopic 10
-Topic 235
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

+ Details

Related Party Transactions (Details Narrative)	Sep. 30, 2024
OrbiMed Advisors LLC [Member]
Ownership percentage	52.50%

Schedule of Business Acquisitions (Details) - USD ($) $ in Thousands	Oct. 23, 2023	Aug. 10, 2023	Aug. 09, 2023	Sep. 30, 2024	Dec. 31, 2023
Restructuring Cost and Reserve [Line Items]
Goodwill				$ 7,302	$ 7,302
Surgalign Holdings Inc [Member]
Restructuring Cost and Reserve [Line Items]
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	$ 5,000
Nan Oss Production Operations [Member]
Restructuring Cost and Reserve [Line Items]
Inventories	$ 1,150
Fixed assets	267
Intangible assets	220
Net assets acquired	1,637
Goodwill	573
Total purchase consideration	$ 2,210

Cover - $ / shares	9 Months Ended
Cover - $ / shares	Sep. 30, 2024	Nov. 07, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-34951
Entity Registrant Name	XTANT MEDICAL HOLDINGS, INC.
Entity Central Index Key	0001453593
Entity Tax Identification Number	20-5313323
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	664 Cruiser Lane
Entity Address, City or Town	Belgrade
Entity Address, State or Province	MT
Entity Address, Postal Zip Code	59714
City Area Code	(406)
Local Phone Number	388-0480
Title of 12(b) Security	Common stock, par value $0.000001 per share
Trading Symbol	XTNT
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		139,008,456
Entity Listing, Par Value Per Share	$ 0.000001

Accrued Liabilities

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Accrued Liabilities

(10) Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

Schedule of Accrued Liabilities

	September 30, 2024		December 31, 2023
Cash compensation/commissions payable	$	6,826	$	8,890
Other accrued liabilities		2,045		1,529
Accrued liabilities	$	8,871	$	10,419

Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Net (Loss) Income Per Share:
Net (loss) income	$ (5,024)	$ (3,861)	$ (4,400)	$ 9,231	$ (2,190)	$ (2,078)	$ (13,284)	$ 4,963
Basic – weighted average shares outstanding	135,100,233			128,140,238			131,881,302	115,380,792
Employee restricted stock units				2,270,924,000				3,199,497,000
Warrants				5,252,112,000				5,252,112,000
Diluted – weighted average shares outstanding	135,100,233			135,663,274			131,881,302	123,832,401
Basic (loss) earnings per share	$ (0.04)			$ 0.07			$ (0.10)	$ 0.04
Diluted (loss) earnings per share	$ (0.04)			$ 0.07			$ (0.10)	$ 0.04

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Receivables

9 Months Ended

Sep. 30, 2024

Credit Loss [Abstract]

Receivables

(6) Receivables

The Company’s provision for current expected credit loss is determined based on historical collection experience adjusted for current economic conditions affecting collectability. Actual customer collections could differ from estimates. Account balances are charged to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Provisions to the allowance for credit losses are charged to expense.

Warrants

9 Months Ended

Sep. 30, 2024

Warrants

Warrants

(13) Warrants

Warrant activity was as follows for the nine months ended September 30, 2024:

Schedule of Warrant Activity

	2024
	Common Stock Warrants		Weighted Average Exercise Price
Outstanding as of January 1, 2024		12,187,470	$	1.53
Issued		50,000		0.82
Outstanding as of September 30, 2024		12,237,470	$	1.53

As of September 30, 2024 and December 31, 2023, the weighted average remaining contractual term of outstanding warrants was 2.0 years and 2.8 years, respectively.

Schedule of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 7,172	$ 7,269
Work in process	2,820	1,562
Finished goods	31,894	28,054
Total	$ 41,886	$ 36,885

Schedule of Performance Stock Activity (Details) - Performance Shares [Member] - 2023 Equity Incentive Plan [Member]	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares Outstanding, Beginning balance \| shares
Weighted Average Fair Value at Grant Date Per Share, Outstanding, Beginning balance \| $ / shares
Shares, Granted \| shares	1,894,985
Weighted Average Fair Value, Granted \| $ / shares	$ 1.49
Shares, Forfeited \| shares	(184,209)
Weighted Average Fair Value, Forfeited \| $ / shares	$ 1.49
Shares, Vested \| shares
Weighted Average Fair Value, Vested \| $ / shares
Shares Outstanding, Ending balance \| shares	1,710,776
Weighted Average Fair Value at Grant Date Per Share, Outstanding, Ending balance \| $ / shares	$ 1.49

Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Statement of Cash Flows [Abstract]
Net issuance costs	$ 191	$ 175

Subsequent Event (Details Narrative) - Licensing Agreement [Member] - USD ($) $ in Thousands		12 Months Ended
	Oct. 22, 2024	Dec. 31, 2025
Forecast [Member]
Subsequent Event [Line Items]
Royalty payments received		$ 3,750
Subsequent Event [Member]
Subsequent Event [Line Items]
Cash payment received	$ 1,500
Licensing agreement description	The agreement has an initial term of one year and is automatically renewable in one-year terms unless either party thereto provides written notice of non-renewal six months prior to the then-current term or earlier termination

Acquisition of Coflex and CoFix Product Lines (Details Narrative) - USD ($) $ in Thousands	Feb. 28, 2023	Sep. 30, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Goodwill		$ 7,302	$ 7,302
Surgalign SPV, Inc. [Member]
Business Acquisition [Line Items]
Goodwill	$ 3,309
Equity Purchase Agreement [Member] \| Surgalign SPV, Inc. [Member]
Business Acquisition [Line Items]
Aggregate purchase price in cash	17,000
Indebtedness incurred under term loan	$ 5,000

- Definition

+ References

+ Details

Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total cost	$ 31,277	$ 28,372
Less: accumulated depreciation	(20,993)	(19,680)
Property and equipment, net	10,284	8,692
Equipment [Member]
Property, Plant and Equipment [Line Items]
Total cost	7,120	6,858
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Total cost	1,234	1,330
Computer Softwares [Member]
Property, Plant and Equipment [Line Items]
Total cost	361	230
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total cost	4,382	4,347
Surgical Instruments [Member]
Property, Plant and Equipment [Line Items]
Total cost	17,275	14,648
Assets Not Yet in Service [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 905	$ 959

Supplemental Disclosure of Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2024

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information

Supplemental cash flow information is as follows (in thousands):

	2024		2023
	Nine Months Ended
	September 30,
	2024		2023
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	2,657	$	1,854

Inventories (Tables)

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consist of the following (in thousands):

Schedule of Inventories

	September 30, 2024		December 31, 2023
Raw materials	$	7,172	$	7,269
Work in process		2,820		1,562
Finished goods		31,894		28,054
Total	$	41,886	$	36,885

Acquisition of Surgalign Holdings, Inc.’s Hardware and Biologics Business (Tables)

9 Months Ended

Sep. 30, 2024

Surgalign Holdings Inc [Member]

Restructuring Cost and Reserve [Line Items]

Schedule of Business Acquisitions


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	)
Fixed assets
Intangible assets
Lease liability, less current portion		(338	)
Net assets acquired		19,206
Bargain purchase gain		(11,694	)
Deferred tax liability		(1,922	)

Goodwill
Total purchase consideration	$	5,590

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 6,596	$ 5,715
Restricted cash	490	208
Trade accounts receivable, net of allowance for credit losses and doubtful accounts of $1,038 and $920, respectively	20,545	20,731
Inventories	41,886	36,885
Prepaid and other current assets	1,893	1,330
Total current assets	71,410	64,869
Property and equipment, net	10,284	8,692
Right-of-use asset, net	995	1,523
Goodwill	7,302	7,302
Intangible assets, net	8,788	10,085
Other assets	103	141
Total Assets	98,882	92,612
Current Liabilities:
Accounts payable	8,298	7,054
Accrued liabilities	8,871	10,419
Current portion of lease liability	795	830
Current portion of finance lease obligations	68	65
Line of credit	12,887	4,622
Current portion of long-term debt	2,750
Total current liabilities	33,669	22,990
Long-term Liabilities:
Lease liability, less current portion	247	759
Finance lease obligation, less current portion	65	116
Long-term debt, plus premium and less issuance costs	19,138	17,167
Other liabilities	38	231
Total Liabilities	53,157	41,263
Commitments and Contingencies (note 14)
Stockholders’ Equity:
Preferred stock, $0.000001 par value; 10,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.000001 par value; 300,000,000 shares authorized; 138,680,874 shares issued and outstanding as of September 30, 2024 and 130,180,031 shares issued and outstanding as of December 31, 2023
Additional paid-in capital	301,966	294,330
Accumulated other comprehensive loss (income)	54	29
Accumulated deficit	(256,295)	(243,010)
Total Stockholders’ Equity	45,725	51,349
Total Liabilities & Stockholders’ Equity	$ 98,882	$ 92,612

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Schedule of Income Taxes

Information on the Company’s income taxes for the periods reported is as follows:

Schedule of Income Taxes

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Income tax expense (benefit) from continuing operations	$	62		$	(2,300	)	$	166		$	(2,274	)
Income (loss) from continuing operations before income taxes	$	(4,962	)	$	6,931		$	(13,118	)	$	2,689
Effective income tax rate		-1.2	%		-33.2	%		-1.3	%		-84.6	%

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible of Assets

The following table sets forth information regarding intangible assets (in thousands):

Schedule of Intangible of Assets

September 30, 2024:	Weighted Average Life	Cost		Accumulated Amortization			Net
Patents	11 years	$	2,777	$	(879	)	$	1,898
Customer List	6 years		8,000		(2,112	)		5,888
Tradenames	10 years		1,190		(188	)		1,002
		$	11,967	$	(3,179	)	$	8,788

December 31, 2023:	Weighted Average Life	Cost		Accumulated Amortization			Net
Patents	11 years	$	2,777	$	(672	)	$	2,105
Customer List	6 years		8,000		(1,111	)		6,889
Tradenames	10 years		1,190		(99	)		1,091
		$	11,967	$	(1,882	)	$	10,085

Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Millions		9 Months Ended
	Jul. 26, 2023	Sep. 30, 2024
Deferred Stock Units and Restricted Stock Units [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unvested employee stock options not yet recognized		$ 4.0
Weighted average period		2 years 8 months 12 days
Performance Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Weighted average period		2 years 4 months 24 days
Compensation cost related to unvested stock units		$ 2.1
Equity Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unvested employee stock options not yet recognized		$ 1.1
Weighted average period		2 years 6 months
2023 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share based compensation, description	The maximum number of shares of our common stock available for issuance under the 2023 Plan, subject to adjustment pursuant to the terms of the 2023 Plan, is (i) 5,500,000 shares of common stock; (ii) 7,695,812 shares of common stock remaining available for issuance under the 2018 Plan but not subject to outstanding awards under the 2018 Plan as of July 26, 2023; and (iii) up to 6,686,090 shares of common stock subject to awards outstanding under the 2018 Plan as of July 26, 2023 but only to the extent such awards are subsequently forfeited, cancelled, expire, or otherwise terminate without the issuance of such shares of common stock after such date.
Number of shares available for grant	5,500,000
2023 Equity Incentive Plan [Member] \| Performance Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares awarded		1,894,985
Volatility rate		93.34%
Risk-free interest rate		4.53%
Share price per share		$ 0.06
Dividend yield		0.00%
2023 Equity Incentive Plan [Member] \| Performance Shares [Member] \| Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting rights, percentage		0.00%
2023 Equity Incentive Plan [Member] \| Performance Shares [Member] \| Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting rights, percentage		200.00%
2018 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares available for grant	7,695,812
Share based compensation, award outstanding	6,686,090

Segment and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Schedule of Revenues by Geographical Region

	2024		2023
	Three Months Ended September 30,
	2024		2023
United States	$	25,342	$	23,433
Rest of world		2,595		1,586
Total revenue	$	27,937	$	25,019

	2024		2023
	Nine Months Ended September 30,
	2024		2023
United States	$	76,752	$	60,932
Rest of world		9,002		2,263
Total revenue	$	85,754	$	63,195

Acquisition of Surgalign Holdings, Inc.’s Hardware and Biologics Business

9 Months Ended

Sep. 30, 2024

Acquisition Of Surgalign Holdings Inc.s Hardware And Biologics Business

Acquisition of Surgalign Holdings, Inc.’s Hardware and Biologics Business

(3) Acquisition of Surgalign Holdings, Inc.’s Hardware and Biologics Business

On August 10, 2023, we completed the acquisition (the “Transaction”) of the assets of Surgalign Holdings, Inc. (“Surgalign Holdings”), and its subsidiaries used in Surgalign Holdings’ hardware and biologics business. The acquired assets included specified inventory, intellectual property and intellectual property rights, contracts, equipment and other personal property, records, the outstanding equity securities of Surgalign Holdings’ international subsidiaries, and intangibles that were related to Surgalign Holdings’ hardware and biologics business (collectively, the “Assets”). As part of the Transaction, we assumed and certain specified liabilities of Surgalign Holdings (collectively, the “Liabilities”), all pursuant to the Asset Purchase Agreement, dated June 18, 2023, between Surgalign Holdings and us (as amended, the “Asset Purchase Agreement”).

The Transaction was conducted through a process supervised by the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”) in connection with Surgalign Holdings’ bankruptcy proceedings; and therefore, we acquired the Assets with limited representations and warranties. The Bankruptcy Court issued a Sale Order on August 9, 2023 approving and authorizing the Transaction. We funded the purchase price of $5.0 million, plus Liabilities, with cash on hand.

We recorded the purchase of the Transaction using the acquisition method of accounting and, accordingly, recognized the assets acquired at their fair values as of the date of acquisition. The table below represents the allocation of the total consideration for Surgalign Holdings’ assets and liabilities based on management’s estimates of their respective fair values as of August 10, 2023 (in thousands):

Schedule of Business Acquisitions


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	)
Fixed assets
Intangible assets
Lease liability, less current portion		(338	)
Net assets acquired		19,206
Bargain purchase gain		(11,694	)
Deferred tax liability		(1,922	)

Goodwill
Total purchase consideration	$	5,590

The Transaction was recorded by allocating the costs of the net assets acquired based on their estimated fair values at the acquisition date. The fair values were based on management’s analysis, including work performed by third-party valuation specialists.

ASC 805, Business Combinations, requires that any excess of purchase price over the fair value of assets acquired, including identifiable intangibles and liabilities assumed, be recognized as goodwill and any excess of fair value of acquired net assets, including identifiable intangible assets over the acquisition consideration, results in a gain from bargain purchase. Prior to recording a gain, the acquiring entity must reassess whether all assets acquired and assumed liabilities have been identified and recognized and perform re-measurements to verify that the consideration paid, assets acquired and liabilities assumed have been properly valued. The Transaction resulted in a gain on bargain purchase due to the estimated fair value of the identifiable net assets acquired exceeding the purchase consideration transferred by $12.0 million and is shown as a gain on bargain purchase on our condensed consolidated statement of operations. Upon completion of our assessment, we concluded that recording a gain on bargain purchase was appropriate and required under ASC 805. The bargain purchase was primarily attributable to the Transaction occurring as part of bankruptcy proceedings.

The Company believes that the Transaction will strengthen our growing orthobiologics and spinal fusion device portfolio, while expanding our commercial footprint with new contracts and distributors.

Schedule of Acquisition Pro Forma Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Acquisition Of Nanoss Production Operations
Revenues	$ 97,842
Net loss	$ (11,570)

Property and Equipment, Net (Details Narrative) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation expenses	$ 0.7	$ 0.5	$ 1.8	$ 1.2

Net (Loss) Income Per Share

9 Months Ended

Sep. 30, 2024

Net (Loss) Income Per Share:

Net (Loss) Income Per Share

(16) Net (Loss) Income Per Share

Basic net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period that they were outstanding. Diluted net (loss) income per share is computed in a manner consistent with that of basic earnings per share while giving effect to all potentially dilutive shares of common stock outstanding during the period, which include the assumed exercise of stock options and warrants using the treasury stock method. Diluted net (loss) income per share was the same as basic net (loss) income per share for the three and nine months ended September 30, 2024, as shares issuable upon the exercise of stock options and warrants were anti-dilutive as a result of the net losses incurred for those periods.

The table below sets forth the computation of basic and diluted (loss) earnings per share (in thousands, except per share data):

	2024			2023		2024			2023
	Three Months Ended September 30,					Nine Months Ended September 30,
	2024			2023		2024			2023
Numerator:
Net (loss) income	$	(5,024	)	$	9,231	$	(13,284	)	$	4,963
Denominator:
Basic – weighted average shares outstanding		135,100,233			128,140,238		131,881,302			115,380,792
Effect of dilutive securities:
Employee restricted stock units		-			2,270,924		-			3,199,497
Warrants		-			5,252,112		-			5,252,112
Diluted – weighted average shares outstanding		135,100,233			135,663,274		131,881,302			123,832,401
Basic (loss) earnings per share		(0.04	)		0.07		(0.10	)		0.04
Diluted (loss) earnings per share		(0.04	)		0.07		(0.10	)		0.04

For the three months ended September 30, 2024 and 2023, 22,289,457 and 13,856,656 stock options, restricted stock units and warrants were excluded for the diluted (loss) earnings per share calculation as they were anti-dilutive. For the nine months ended September 30, 2024 and 2023, 22,289,457 and 12,658,083 stock options, restricted stock units and warrants were excluded for the diluted (loss) earnings per share calculation as they were anti-dilutive.

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

Schedule of Accrued Liabilities

	September 30, 2024		December 31, 2023
Cash compensation/commissions payable	$	6,826	$	8,890
Other accrued liabilities		2,045		1,529
Accrued liabilities	$	8,871	$	10,419

Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Long-term debt consists of the following (in thousands):

Schedule of Long-term Debt

	September 30, 2024			December 31, 2023
Amounts due under the term loan	$	22,000		$	17,000
Accrued end-of-term payments		359			456
Less: unamortized debt issuance costs		(471	)		(289	)
Less: current maturities		(2,750	)		—
Long-term debt, less issuance costs	$	19,138		$	17,167

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating activities:
Net (loss) income	$ (13,284)	$ 4,963
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	3,076	2,157
Gain on disposal of fixed assets	(182)	(104)
Non-cash interest	369	266
Non-cash rent	(18)	5
Stock-based compensation	3,277	1,801
Provision for expected credit losses	330	316
Provision for excess and obsolete inventory	695	398
Release of valuation allowance		(2,394)
Gain on bargain purchase		(11,028)
Other	17
Changes in operating assets and liabilities, net of the effects of the acquisition:
Accounts receivable	(128)	(7,047)
Inventories	(5,657)	(1,669)
Prepaid and other assets	(503)	69
Accounts payable	1,290	1,298
Accrued liabilities	(1,843)	2,369
Net cash used in operating activities	(12,561)	(8,600)
Investing activities:
Purchases of property and equipment	(3,441)	(1,093)
Proceeds from sale of fixed assets	278	70
Acquisition of Surgalign SPV, Inc.		(17,000)
Acquisition of Surgalign Holdings, Inc.’s hardware and biologics business, net of cash acquired		(4,448)
Net cash used in investing activities	(3,163)	(22,471)
Financing activities:
Payments on financing leases	(49)	(46)
Borrowings on line of credit	86,315	55,345
Repayments on line of credit	(78,050)	(54,724)
Proceeds from private placement, net of cash issuance costs	4,456	14,011
Net proceeds from issuance of long-term debt, net of issuance costs	5,000	4,899
Payments on long term debt	(648)
Proceeds from the exercise of stock based compensation	13
Payments of taxes from withholding of common stock on vesting of restricted stock units	(110)	(119)
Net cash provided by financing activities	16,927	19,366
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(40)	(53)
Net change in cash and cash equivalents and restricted cash	1,163	(11,758)
Cash and cash equivalents and restricted cash at beginning of period	5,923	20,507
Cash and cash equivalents and restricted cash at end of period	7,086	8,749
Reconciliation of cash and cash equivalents and restricted cash reported in the condensed consolidated balance sheets
Cash and cash equivalents	6,596	8,664
Restricted cash	490	85
Total cash and restricted cash reported in condensed consolidated balance sheets	$ 7,086	$ 8,749

Net (Loss) Income Per Share (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Net (Loss) Income Per Share:
Number of stock options, RSU and warrants excluded for diluted earnings per share	22,289,457	13,856,656	22,289,457	12,658,083

Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
Amounts due under the term loan	$ 22,000	$ 17,000
Accrued end-of-term payments	359	456
Less: unamortized debt issuance costs	(471)	(289)
Less: current maturities	(2,750)
Long-term debt, less issuance costs	$ 19,138	$ 17,167

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

- Definition

The carrying value as of the balance sheet date of the noncurrent portion of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Schedule of Revenues by Geographical Region (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 27,937	$ 25,019	$ 85,754	$ 63,195
UNITED STATES
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	25,342	23,433	76,752	60,932
Rest of World [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 2,595	$ 1,586	$ 9,002	$ 2,263

- Definition

+ References

+ Details

Warrants (Details Narrative)	9 Months Ended	12 Months Ended
Warrants (Details Narrative)	Sep. 30, 2024	Dec. 31, 2023
Warrant [Member]
Weighted average remaining contractual term	2 years	2 years 9 months 18 days

Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

(15) Income Taxes

Information on the Company’s income taxes for the periods reported is as follows:

Schedule of Income Taxes

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Income tax expense (benefit) from continuing operations	$	62		$	(2,300	)	$	166		$	(2,274	)
Income (loss) from continuing operations before income taxes	$	(4,962	)	$	6,931		$	(13,118	)	$	2,689
Effective income tax rate		-1.2	%		-33.2	%		-1.3	%		-84.6	%

Our effective tax rate for the three and nine months ended September 30, 2024 differs from the statutory rate due to a valuation allowance against deferred tax assets, offset by the impact of cash state and foreign taxes.

Our effective tax rate for the three and nine months ended September 30, 2023 differs from the statutory rate due to a valuation allowance against deferred tax assets, offset by the impact of cash state taxes.

As of September 30, 2024, the Company is not currently under examination by tax authorities.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Supplemental Cash Flow Elements [Abstract]
Interest	$ 2,657	$ 1,854

Intangible Assets

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

(9) Intangible Assets

The following table sets forth information regarding intangible assets (in thousands):

Schedule of Intangible of Assets

September 30, 2024:	Weighted Average Life	Cost		Accumulated Amortization			Net
Patents	11 years	$	2,777	$	(879	)	$	1,898
Customer List	6 years		8,000		(2,112	)		5,888
Tradenames	10 years		1,190		(188	)		1,002
		$	11,967	$	(3,179	)	$	8,788

December 31, 2023:	Weighted Average Life	Cost		Accumulated Amortization			Net
Patents	11 years	$	2,777	$	(672	)	$	2,105
Customer List	6 years		8,000		(1,111	)		6,889
Tradenames	10 years		1,190		(99	)		1,091
		$	11,967	$	(1,882	)	$	10,085

Amortization expense for both the three months ended September 30, 2024 and 2023 was $0.4 million, and $1.3 million and $1.0 million for the nine months ended September 30, 2024 and 2023, respectively.

Segment and Geographic Information

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Segment and Geographic Information

(19) Segment and Geographic Information

The Company operates in one segment based upon the Company’s organizational structure, the way in which the operations and investments are managed and evaluated by the chief operating decision maker (“CODM”). The Company shares common, centralized support functions which report directly to the CODM and decision-making regarding the Company’s overall operating performance and allocation of Company resources is assessed on a consolidated basis. Net revenue by geographic region are as follows:

	2024		2023
	Three Months Ended September 30,
	2024		2023
United States	$	25,342	$	23,433
Rest of world		2,595		1,586
Total revenue	$	27,937	$	25,019

	2024		2023
	Nine Months Ended September 30,
	2024		2023
United States	$	76,752	$	60,932
Rest of world		9,002		2,263
Total revenue	$	85,754	$	63,195

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Net (Loss) Income	$ (5,024)	$ 9,231	$ (13,284)	$ 4,963
Other Comprehensive (Loss) Income
Foreign currency translation adjustments	229	(146)	25	(146)
Comprehensive (Loss) Income	$ (4,795)	$ 9,085	$ (13,259)	$ 4,817

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Inventories

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Inventories

(7) Inventories

Inventories consist of the following (in thousands):

Schedule of Inventories

	September 30, 2024		December 31, 2023
Raw materials	$	7,172	$	7,269
Work in process		2,820		1,562
Finished goods		31,894		28,054
Total	$	41,886	$	36,885

Business Description, Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Description, Basis of Presentation and Summary of Significant Accounting Policies

(1) Business Description, Basis of Presentation and Summary of Significant Accounting Policies

Business Description and Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of Xtant Medical Holdings, Inc. (“Xtant”), a Delaware corporation, and its wholly owned subsidiaries, which are jointly referred to herein as “Xtant” or the “Company”. The terms “we,” “us” and “our” also refer to Xtant. All intercompany balances and transactions have been eliminated in consolidation.

Xtant is a global medical technology company focused on the design, development, and commercialization of a comprehensive portfolio of orthobiologics and spinal implant systems to facilitate spinal fusion in complex spine, deformity, and degenerative procedures.

The accompanying condensed consolidated balance sheet as of December 31, 2023, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. They do not include all disclosures required by generally accepted accounting principles for annual consolidated financial statements, but in the opinion of management include all adjustments, consisting only of normal recurring items, necessary for a fair presentation.

Interim results are not necessarily indicative of results that may be achieved in the future for the full year ending December 31, 2024.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, which are included in Xtant’s Annual Report on Form 10-K for the year ended December 31, 2023. The accounting policies set forth in those annual consolidated financial statements are the same as the accounting policies utilized in the preparation of these condensed consolidated financial statements, except as modified for appropriate interim consolidated financial statement presentation.

Liquidity

Since our inception, we have financed our operations through primarily operating cash flows, private placements of equity securities and convertible debt, debt facilities, common stock rights offerings, and other debt transactions. For the nine months ended September 30, 2024, we incurred a net loss of $13.3 million and negative cash flows from operating activities of $12.6 million. We believe that our $6.6 million of cash and cash equivalents as of September 30, 2024, together with our anticipated operating cash flows and amounts available under our credit facilities, as discussed further in Note 11, “Debt,” will be sufficient to meet our anticipated cash requirements through at least November 2025. However, we may require or seek additional capital to fund our future operations and business strategy prior to November 2025. Accordingly, there is no assurance that we will not need or seek additional financing prior to such time. Additionally, we can give no assurances that we will be able to secure additional sources of funds to support our operations, or if such funds are available to us, that such additional financing will be sufficient to meet our needs or on terms acceptable to us. This is particularly true if economic and market conditions deteriorate or our business, financial performance or prospects deteriorate. In addition, prior to raising additional equity or debt financing, we may be required to obtain the consent of MidCap Financial Trust and MidCap Funding IV Trust under our Credit Agreements and/or OrbiMed Royalty Opportunities II, LP (“Royalty Opportunities”) and ROS Acquisition Offshore LP (“ROS”) under our Investor Rights Agreement with them, and no assurance can be provided that they would provide such consent, which could limit our ability to raise additional financing and the terms thereof.

Private Placement

On August 7, 2024, we entered into a securities purchase agreement pursuant to which we issued an aggregate of 7,812,500 shares of common stock to accredited investors in a private placement at a per share purchase price of $0.64 at a closing held on August 9, 2024. The gross proceeds to us from the private placement were $5.0 million, before deducting estimated offering fees and expenses payable by us. We expect to use the net proceeds of $4.5 million from the private placement for working capital and other general corporate purposes.

Use of Estimates

The preparation of the condensed consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. Significant estimates include the carrying amount of property and equipment; goodwill, intangible assets and liabilities; valuation allowances for trade receivables, inventory, deferred income tax assets and liabilities; current and long-term lease obligations and corresponding right-of-use asset; estimates for the fair value of assets acquired as part of business combinations; and estimates for the fair value of long-term debt, stock options and other equity awards upon which the Company determines stock-based compensation expense. Actual results could differ from those estimates.

Restricted Cash

Cash and cash equivalents classified as restricted cash on our condensed consolidated balance sheets are restricted as to withdrawal or use under the terms of certain contractual agreements. The September 30, 2024 and December 31, 2023 balances included lockbox deposits that are temporarily restricted due to timing at the period end. The lockbox deposits are applied against our line of credit the next business day.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash, cash equivalents and restricted cash. The Company maintains its cash balances primarily with two financial institutions. These balances generally exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in cash and cash equivalents.

Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. No impairments of long-lived assets were recorded for the three and nine months ended September 30, 2024 and 2023.

Goodwill

Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have indefinite useful lives are not amortized. Instead, they are tested for impairment at least annually, and whenever events or circumstances indicate, the carrying amount of the asset may not be recoverable. No impairments of goodwill were recorded for the three and nine months ended September 30, 2024 and 2023.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification (“ASC”) 718, Compensation-Stock Compensation. ASC 718 requires the recognition of compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options, restricted stock units, performance stock units, and shares issued under its employee stock purchase plan. ASC 718 requires companies to estimate the fair value of all share-based payment option awards on the date of grant using an option pricing model. The fair value of stock options is recognized over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period (usually the vesting period), on a straight-line basis. The Company accounts for option forfeitures as they occur.

The Company accounts for stock-based compensation for restricted stock units at their fair value, based on the closing market price of the Company’s common stock on the date of grant. These costs are recognized on a straight-line basis over the requisite service period, which is usually the vesting period.

The Company accounts for stock-based compensation for performance stock units with market-based conditions at their fair value on the date of the award using the Monte Carlo simulation model. These costs are recognized over the requisite service period, which is usually the vesting period, regardless of the likelihood of achievement of the market-based performance criteria.

Foreign Currency

The Company generates revenues outside the United States in multiple foreign currencies including euros, Swiss francs, British pounds and in U.S. dollar-denominated transactions conducted with customers who generate revenue in currencies other than the U.S. dollar. The Company also incurs operating expenses in euros, Swiss francs and British pounds. All assets and liabilities of foreign subsidiaries which have a functional currency other than the U.S. dollar are translated at the rate of exchange at period-end, while elements of the income statement are translated at the average exchange rates in effect during the period. The net effect of these translation adjustments is shown as a component of accumulated other comprehensive income. Foreign currency transaction gains and losses are reported in other income, net.

Fair Value of Financial Instruments

The carrying values of financial instruments, including trade accounts receivable, accounts payable, accrued liabilities, and long-term debt, approximate their fair values based on terms and related interest rates as of September 30, 2024 and December 31, 2023.