*See footnote about the use of pro forma financial information
Third Quarter 2016 Highlights:
- Company revenue increased 10.5% to $23.1 million, as compared to pro forma revenue of $20.9 million in third quarter 2015
- Gross profit increased to $16.0 million, as compared to pro forma third quarter 2015 gross profit of $13.7 million
- Gross margins expanded to 69.2%, compared to 65.5% for the pro forma third quarter of 2015
- The Company reported net loss of $4.9 million for the third quarter 2016, compared to a loss of $6.9 million in third quarter 2015
- The Company reported an EBITDA gain of $768,000 for the third quarter 2016, compared to a loss of ($915,000) in third quarter 2015
- Company raised full year 2016 revenue guidance to $89-91 million, as compared to previous guidance of $87-90 million
- The Company also provided full year 2017 revenue guidance of $98.0 - 102.0 million with positive EBITDA of $7.7-9.2 million
BELGRADE, Mont., Nov. 07, 2016 (GLOBE NEWSWIRE) -- Xtant™ Medical Holdings, Inc. (NYSE MKT:XTNT), a leader in the development of regenerative medical devices, today reported its financial results for the three months ended September 30th, 2016. The Company reported third quarter revenues of approximately $23.1 million and an EBITDA gain of $768,000.
"I am very pleased to have reported our strongest quarter in the history of the company," said Dan Goldberger, Chief Executive Officer of Xtant Medical, "we have rectified our inventory supply chain constraints from the first half of 2016, and have positioned the company to take full advantage of the increasing demand for our proprietary differentiated product offerings. As a result, we have raised our 2016 revenue guidance to $89 to $91 million from our previous revenue guidance of $87 to $90 million provided earlier this year."
Revenue
Third quarter 2016 revenue was approximately $23.1 million, compared to pro forma revenue of approximately $20.9 million for the same period during 2015. This represents an increase of 10.5%, compared to pro forma third quarter 2015 revenue and a 7.6% sequential increase over second quarter 2016 revenue of $21.5 million.
Gross Profit
Gross profit for the third quarter of 2016 was $16.0 million or 69.2% of revenue, compared to pro forma gross profit of $13.7 million or 65.5% of revenues for the third quarter of 2015. On a sequential basis, third quarter 2016 gross margin increased 0.7% over second quarter 2016 gross margin of 68.5%.
Sales and Marketing Expenses
Third quarter 2016 sales and marketing expenses increased to $11.2 million, as compared to pro forma sales and marketing expenses of $9.8 million during the same period in 2015. For the quarter, sales and marketing as a percentage of revenues increased to 48.7%, compared to 47.0% for the pro forma third quarter of 2015. The increase was mainly due to the higher OEM revenue in the third quarter of 2015 which had no associated sales commissions. In addition, as part of its growth strategy, the Company increased its sales infrastructure to support the portfolio selling opportunity of the combined business.
General and Administrative Expenses
In the third quarter, general and administrative expenses decreased to $3.8 million, compared to pro forma general and administrative expenses of $4.5 million for the same period last year. As a percentage of revenue, general and administrative expenses were 16.3% during the period, as compared to pro forma 21.7% for the same period during 2015.
Loss from Operations and Net Income / Loss
Third quarter loss from operations improved to a loss of $1.9 million, compared to a pro forma loss from operations of $5.0 million in the third quarter of 2015. Third quarter 2016 consolidated net loss narrowed to $4.9 million, compared to pro forma net loss of $6.9 million during the year-ago period.
Adjusted EBITDA
The Company defines earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") as net income/loss from operations before depreciation, amortization, impairment charges, non-recurring expenses and non-cash stock-based compensation. Consolidated adjusted EBITDA for the third quarter of 2016 was a gain of $768,000, compared to a pro forma adjusted EBITDA loss of $915,000 for the third quarter of 2015.
Reconciliation of Adjusted EBITDA
| Stated in 000's | Three Months Ended September 30, 2016 | Three Months Ended September 30, 2015* | ||||
| Net Loss from Operations | ($ | 1,904 | ) | ($ | 5,018 | ) |
| Impairment of Assets | $ | 0 | $ | 233 | ||
| Acquisition and Integration Related Expenses | $ | 517 | $ | 3,857 | ||
| Gain from the Extinguishment of Debt | $ | 0 | ($ | 2,345 | ) | |
| Non-cash compensation | $ | 252 | $ | 187 | ||
| Depreciation & Amortization | $ | 1,903 | $ | 2,170 | ||
| Adjusted EBITDA Gain (Loss) | $ | 768 | ($ | 915 | ) | |
| *Pro Forma Results | ||||||
Financial Liquidity
Cash on hand as of September 30, 2016, was $1.4 million, as compared to $6.4 million as of December 31, 2015. This figure excludes cash resources available to be drawn down by the Company through its accounts receivable revolver facility with Silicon Valley Bank and its equity facility with Aspire Capital. The Company is in the process of completing a common stock rights offering to raise up to $13.5 million in additional equity capital.
Outlook for Full Year 2016 & 2017
The Company increased its full year 2016 revenue guidance and issued 2017 revenue guidance based on the following:
| Full-Year 2016 | Full-Year 2017 | |||||||||||||||
| Stated in 000's | Low | High | Low | High | ||||||||||||
| Revenue | $ | 89,000 | - | $ | 91,000 | $ | 98,000 | - | $ | 102,000 | ||||||
| Adjusted EBITDA | $ | 2,000 | - | $ | 2,800 | $ | 7,700 | - | $ | 9,200 | ||||||
| Cash Based Debt Service | $ | 4,835 | - | $ | 4,835 | $ | 8,430 | - | $ | 8,430 | ||||||
| Non-GAAP Profitability** | $ | (2,835 | ) | - | $ | (2,035 | ) | $ | (700 | ) | - | $ | 800 | |||
**Non-GAAP profitability is defined as EBITDA less total cash based interest expense.
Conference Call to be Held November 8, 2016
An accompanying conference call will be hosted by Dan Goldberger, Chief Executive Officer, and John Gandolfo, Chief Financial Officer, to discuss the results. The call will be held at 10:00 AM ET, on November 8, 2016. Please refer to the information below for conference call dial-in information and webcast registration.
Conference date: Tuesday, November 8, 2016, 10:00 AM ET Conference dial-in: 877-269-7756 International dial-in: 201-689-7817 Conference Call Name: Xtant Medical's Third Quarter 2016 Results Call Webcast Registration: Click Here
Shortly after the live call, a replay will be available on the Company's website, www.xtantmedical.com , under "Investor Info."
*Use of Pro Forma Financial Information
On July 31, 2015, Bacterin International Holdings, Inc. acquired all of the issued and outstanding stock of X-spine Systems, Inc. and the combined company was renamed Xtant™ Medical Holdings, Inc. Except for the financial results for the three months and nine months ended September 30, 2016, the results presented are on a pro forma basis as if the two companies were combined for the periods shown. Certain pro forma adjustments have been made to reflect the impact of the purchase transaction, primarily consisting of amortization of intangible assets with determinable lives and interest expense on long-term debt. In addition, certain historical expenses, such as warrant expense and interest expense associated with debt that was immediately repaid, were eliminated from these pro forma results. The pro forma information does not necessarily reflect the actual results of operations had the acquisition been consummated at the beginning of the fiscal reporting period indicated nor is it indicative of future operating results. The pro forma information does not include any adjustment for potential revenue enhancements, cost synergies or other operating efficiencies that could result from the acquisition.
Additional information regarding the business combination and its impact on the Company’s financial position will be set forth in the Company’s Form 10-Q for the quarter ended September 30, 2016, which will be filed with the Securities and Exchange Commission on or about November 11, 2016 and will include the Company’s unaudited consolidated financial statements as of and for the quarters ended September 30, 2016 and September 30, 2015.
About Xtant™ Medical Holdings, Inc.
Xtant Medical Holdings, Inc. (NYSE MKT:XTNT) develops, manufactures and markets class-leading regenerative medicine products and medical devices for domestic and international markets. Xtant products serve the specialized needs of orthopedic and neurological surgeons, including orthobiologics for the promotion of bone healing, implants and instrumentation for the treatment of spinal disease, tissue grafts for the treatment of orthopedic disorders, and biologics to promote healing following cranial, and foot and ankle surgeries. With core competencies in both biologic and non-biologic surgical technologies, Xtant can leverage its resources to successfully compete in global neurological and orthopedic surgery markets. For further information, please visit www.xtantmedical.com .
Important Cautions Regarding Forward-looking Statements
This press release contains certain disclosures that may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to significant risks and uncertainties. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "continue," "efforts," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "strategy," "will," "goal," "target," "prospects," "potential," "optimistic," "confident," "likely," "probable" or similar expressions or the negative thereof.
Statements of historical fact also may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others: our ability to integrate the acquisition of X-spine Systems, Inc. and any other business combinations or acquisitions successfully; our ability to remain listed on the NYSE MKT; our ability to obtain financing on reasonable terms; our ability to increase revenue; our ability to comply with the covenants in our credit facility; our ability to maintain sufficient liquidity to fund our operations; the ability of our sales force to achieve expected results; our ability to remain competitive; government regulations; our ability to innovate and develop new products; our ability to obtain donor cadavers for our products; our ability to engage and retain qualified technical personnel and members of our management team; the availability of our facilities; government and third-party coverage and reimbursement for our products; our ability to obtain regulatory approvals; our ability to successfully integrate recent and future business combinations or acquisitions; our ability to use our net operating loss carry-forwards to offset future taxable income; our ability to deduct all or a portion of the interest payments on the notes for U.S. federal income tax purposes; our ability to service our debt; product liability claims and other litigation to which we may be subjected; product recalls and defects; timing and results of clinical studies; our ability to obtain and protect our intellectual property and proprietary rights; infringement and ownership of intellectual property; our ability to remain accredited with the American Association of Tissue Banks; influence by our management; our ability to pay dividends; our ability to issue preferred stock; and other factors.
Additional risk factors are listed in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading "Risk Factors." You should carefully consider the trends, risks and uncertainties described in this document, the Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.
| XTANT MEDICAL HOLDINGS, INC. | ||||||||||||||||||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||||||||||||||
| Unaudited Actual and Proforma Results | ||||||||||||||||||||||||||||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2016 Actual Unaudited | 2015 Pro Forma | 2016 Actual Unaudited | 2015 Pro Forma | |||||||||||||||||||||||||||||||||
| % of | % of | % of | % of | |||||||||||||||||||||||||||||||||
| Amount | Revenue | Amount | Revenue | Amount | Revenue | Amount | Revenue | |||||||||||||||||||||||||||||
| Orthopedic Product Sales | $ | 22,907,717 | 99.2 | % | $ | 20,577,473 | 98.5 | % | $ | 65,025,908 | 99.2 | % | $ | 63,463,420 | 98.8 | % | ||||||||||||||||||||
| Other | 186,423 | 0.8 | % | 323,819 | 1.5 | % | 505,971 | 0.8 | % | 788,357 | 1.2 | % | ||||||||||||||||||||||||
| Total Revenue | 23,094,139 | 100.0 | % | 20,901,292 | 100.0 | % | 65,531,878 | 100.0 | % | 64,251,777 | 100.0 | % | ||||||||||||||||||||||||
| Cost of sales | 7,114,041 | 30.8 | % | 7,208,696 | 34.5 | % | 20,749,379 | 31.7 | % | 22,560,240 | 35.1 | % | ||||||||||||||||||||||||
| Gross Profit | 15,980,098 | 69.2 | % | 13,692,596 | 65.5 | % | 44,782,499 | 68.3 | % | 41,691,537 | 64.9 | % | ||||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||||||
| General and administrative | 3,773,236 | 16.3 | % | 4,532,981 | 21.7 | % | 11,216,112 | 17.1 | % | 12,411,489 | 19.3 | % | ||||||||||||||||||||||||
| Sales and marketing | 11,242,820 | 48.7 | % | 9,832,446 | 47.0 | % | 32,115,763 | 49.0 | % | 28,726,775 | 44.7 | % | ||||||||||||||||||||||||
| Research and development | 928,930 | 4.0 | % | 987,433 | 4.7 | % | 2,612,402 | 4.0 | % | 2,813,792 | 4.4 | % | ||||||||||||||||||||||||
| Depreciation and amortization | 1,265,490 | 5.5 | % | 1,562,220 | 7.5 | % | 3,690,519 | 5.6 | % | 4,201,058 | 6.5 | % | ||||||||||||||||||||||||
| Acquisition and Integration related expenses | 517,083 | 2.2 | % | 3,856,519 | 18.5 | % | 1,269,613 | 1.9 | % | 3,856,519 | 6.0 | % | ||||||||||||||||||||||||
| Gain from the Extinguishment of Debt | 0 | 0.0 | % | (2,345,019 | ) | 0.0 | % | - | 0.0 | % | (2,345,019 | ) | 0.0 | % | ||||||||||||||||||||||
| Impairment of Assets | 0 | 1.1 | % | 233,748 | 0.0 | % | 0 | 0.4 | % | 233,748 | 0.0 | % | ||||||||||||||||||||||||
| Non-cash consulting | 156,129 | 0.2 | % | 50,000 | 0.2 | % | 266,721 | 0.3 | % | 190,869 | 0.1 | % | ||||||||||||||||||||||||
| Total Operating Expenses | 17,883,688 | 77.4 | % | 18,710,329 | 89.5 | % | 51,171,130 | 78.1 | % | 50,089,232 | 78.0 | % | ||||||||||||||||||||||||
| Net Gain (Loss) from Operations | (1,903,590 | ) | -8.2 | % | (5,017,733 | ) | -24.0 | % | (6,388,631 | ) | -9.7 | % | (8,397,695 | ) | -13.1 | % | ||||||||||||||||||||
| Other Income (Expense) | ||||||||||||||||||||||||||||||||||||
| Interest expense | (3,163,534 | ) | -13.7 | % | (2,153,985 | ) | -10.3 | % | (8,974,895 | ) | -13.7 | % | (8,146,038 | ) | -12.7 | % | ||||||||||||||||||||
| Change in warrant derivative liability | 220,409 | 1.0 | % | 397,366 | 1.9 | % | 716,738 | 1.1 | % | (78,923 | ) | -0.1 | % | |||||||||||||||||||||||
| Non-cash consideration associated with stock purchase agreement | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | (558,185 | ) | -0.9 | % | |||||||||||||||||||||||
| Other income (expense) | (51,350 | ) | -0.2 | % | (83,097 | ) | -0.4 | % | (309,924 | ) | -0.5 | % | (187,118 | ) | -0.3 | % | ||||||||||||||||||||
| Total Other Income (Expense) | (2,994,475 | ) | -13.0 | % | (1,839,716 | ) | -8.8 | % | (8,568,081 | ) | -13.1 | % | (8,970,263 | ) | -14.0 | % | ||||||||||||||||||||
| Net Gain (Loss) from Operations Before Benefit (Provision) for Income Taxes | (4,898,065 | ) | -21.2 | % | (6,857,449 | ) | -32.8 | % | (14,956,712 | ) | -22.8 | % | (17,367,958 | ) | -27.0 | % | ||||||||||||||||||||
| Benefit (Provision) for Income Taxes | ||||||||||||||||||||||||||||||||||||
| Current | 0 | 0.0 | % | 11,143 | 0.1 | % | 0 | 0.0 | % | 65,387 | 0.1 | % | ||||||||||||||||||||||||
| Deferred | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | ||||||||||||||||||||||||
| Net Income (Loss) | $ | (4,898,065 | ) | -21.2 | % | $ | (6,868,591 | ) | -32.9 | % | $ | (14,956,712 | ) | -22.8 | % | $ | (17,433,345 | ) | -27.1 | % | ||||||||||||||||
| Net Income (loss) per share: | ||||||||||||||||||||||||||||||||||||
| Basic | ($ | 0.40 | ) | ($ | 0.66 | ) | ($ | 1.23 | ) | ($ | 2.15 | ) | ||||||||||||||||||||||||
| Dilutive | ($ | 0.40 | ) | ($ | 0.66 | ) | ($ | 1.23 | ) | ($ | 2.15 | ) | ||||||||||||||||||||||||
| Shares used in the computation: | ||||||||||||||||||||||||||||||||||||
| Basic | 12,193,970 | 10,432,622 | 12,147,916 | 8,100,226 | ||||||||||||||||||||||||||||||||
| Dilutive | 12,193,970 | 10,432,622 | 12,147,916 | 8,100,226 | ||||||||||||||||||||||||||||||||
| XTANT MEDICAL HOLDINGS, INC. | ||||||||||||||||||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||||||||||||||
| Unaudited Actual Results | ||||||||||||||||||||||||||||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2016 Actual Unaudited | 2015 Actual Unaudited | 2016 Actual Unaudited | 2015 Actual Unaudited | |||||||||||||||||||||||||||||||||
| % of | % of | % of | % of | |||||||||||||||||||||||||||||||||
| Amount | Revenue | Amount | Revenue | Amount | Revenue | Amount | Revenue | |||||||||||||||||||||||||||||
| Orthopedic Product Sales | $ | 22,907,717 | 99.2 | % | $ | 17,421,397 | 98.5 | % | $ | 65,025,908 | 99.2 | % | $ | 36,431,354 | 98.2 | % | ||||||||||||||||||||
| Other | 186,423 | 0.8 | % | 271,623 | 1.5 | % | 505,971 | 0.8 | % | 657,396 | 1.8 | % | ||||||||||||||||||||||||
| Total Revenue | 23,094,139 | 100.0 | % | 17,693,020 | 100.0 | % | 65,531,878 | 100.0 | % | 37,088,749 | 100.0 | % | ||||||||||||||||||||||||
| Cost of sales | 7,114,041 | 30.8 | % | 6,035,673 | 34.1 | % | 20,749,379 | 31.7 | % | 12,883,439 | 34.7 | % | ||||||||||||||||||||||||
| Gross Profit | 15,980,098 | 69.2 | % | 11,657,347 | 65.9 | % | 44,782,499 | 68.3 | % | 24,205,310 | 65.3 | % | ||||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||||||
| General and administrative | 3,773,236 | 16.3 | % | 3,980,804 | 22.5 | % | 11,216,112 | 17.1 | % | 8,805,104 | 23.7 | % | ||||||||||||||||||||||||
| Sales and marketing | 11,242,820 | 48.7 | % | 8,430,303 | 47.6 | % | 32,115,763 | 49.0 | % | 18,179,552 | 49.0 | % | ||||||||||||||||||||||||
| Research and development | 928,930 | 4.0 | % | 794,464 | 4.5 | % | 2,612,402 | 4.0 | % | 1,519,196 | 4.1 | % | ||||||||||||||||||||||||
| Depreciation and amortization | 1,265,490 | 5.5 | % | 1,541,220 | 8.7 | % | 3,690,519 | 5.6 | % | 1,765,994 | 4.8 | % | ||||||||||||||||||||||||
| Acquisition and Integration related expenses | 517,083 | 21.8 | % | 3,856,519 | 0.0 | % | 3,856,519 | 10.4 | % | 3,856,519 | 0.0 | % | ||||||||||||||||||||||||
| Gain from the Extinguishment of Debt | 0 | -13.3 | % | (2,345,019 | ) | 0.0 | % | (2,345,019 | ) | -6.3 | % | (2,345,019 | ) | 0.0 | % | |||||||||||||||||||||
| Impairment of Assets | 0 | 1.3 | % | 233,748 | 0.0 | % | 233,748 | 0.6 | % | 233,748 | 0.0 | % | ||||||||||||||||||||||||
| Non-cash consulting | 156,129 | 0.7 | % | 50,000 | 0.3 | % | 266,721 | 0.4 | % | 190,869 | 0.5 | % | ||||||||||||||||||||||||
| Total Operating Expenses | 17,883,688 | 77.4 | % | 16,542,040 | 93.5 | % | 51,646,766 | 78.8 | % | 32,205,964 | 86.8 | % | ||||||||||||||||||||||||
| Net Gain (Loss) from Operations | (1,903,590 | ) | -8.2 | % | (4,884,693 | ) | -27.6 | % | (6,864,267 | ) | -10.5 | % | (8,000,654 | ) | -21.6 | % | ||||||||||||||||||||
| Other Income (Expense) | ||||||||||||||||||||||||||||||||||||
| Interest expense | (3,163,534 | ) | -13.7 | % | (2,111,721 | ) | -11.9 | % | (8,974,895 | ) | -13.7 | % | (4,930,941 | ) | -13.3 | % | ||||||||||||||||||||
| Change in warrant derivative liability | 220,409 | 1.0 | % | 397,366 | 2.2 | % | 716,738 | 1.1 | % | (78,923 | ) | -0.2 | % | |||||||||||||||||||||||
| Non-cash consideration associated with stock purchase agreement | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | (558,185 | ) | -1.5 | % | |||||||||||||||||||||||
| Other income (expense) | (51,350 | ) | -0.2 | % | (89,926 | ) | -0.5 | % | (309,924 | ) | -0.5 | % | (193,052 | ) | -0.5 | % | ||||||||||||||||||||
| Total Other Income (Expense) | (2,994,475 | ) | -13.0 | % | (1,804,281 | ) | -10.2 | % | (8,568,081 | ) | -13.1 | % | (5,761,101 | ) | -15.5 | % | ||||||||||||||||||||
| Net Gain (Loss) from Operations Before Benefit (Provision) for Income Taxes | (4,898,065 | ) | -21.2 | % | (6,688,974 | ) | -37.8 | % | (15,432,348 | ) | -23.5 | % | (13,761,754 | ) | -37.1 | % | ||||||||||||||||||||
| Benefit (Provision) for Income Taxes | ||||||||||||||||||||||||||||||||||||
| Current | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | ||||||||||||||||||||||||
| Deferred | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | ||||||||||||||||||||||||
| Net Income (Loss) | $ | (4,898,065 | ) | -21.2 | % | $ | (6,688,974 | ) | -37.8 | % | $ | (15,432,348 | ) | -23.5 | % | $ | (13,761,754 | ) | -37.1 | % | ||||||||||||||||
| Net Income (loss) per share: | ||||||||||||||||||||||||||||||||||||
| Basic | ($ | 0.40 | ) | ($ | 0.64 | ) | ($ | 1.27 | ) | ($ | 1.70 | ) | ||||||||||||||||||||||||
| Dilutive | ($ | 0.40 | ) | ($ | 0.64 | ) | ($ | 1.27 | ) | ($ | 1.70 | ) | ||||||||||||||||||||||||
| Shares used in the computation: | ||||||||||||||||||||||||||||||||||||
| Basic | 12,193,970 | 10,432,622 | 12,147,916 | 8,100,226 | ||||||||||||||||||||||||||||||||
| Dilutive | 12,193,970 | 10,432,622 | 12,147,916 | 8,100,226 | ||||||||||||||||||||||||||||||||
| XTANT MEDICAL HOLDINGS, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Unaudited | ||||||||
| For the Nine months ended September 30, | ||||||||
| 2016 | 2015 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | (14,956,712 | ) | $ | (13,761,754 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 5,551,851 | 2,403,934 | ||||||
| Non-Cash Interest | 4,477,148 | 1,665,172 | ||||||
| Extinguishment of Debt | 0 | (2,345,019 | ) | |||||
| Non-cash consideration associated with stock purchase agreement | 0 | 558,185 | ||||||
| Impairment of Assets | 0 | 233,748 | ||||||
| Amortization of debt discount | 0 | 707,281 | ||||||
| Loss on sale of fixed assets | (14,149 | ) | 11,377 | |||||
| Non-cash consulting expense/stock option expense | 522,987 | 881,681 | ||||||
| Provision for losses on accounts receivable and inventory | 898,285 | 805,684 | ||||||
| Change in derivative warrant liability | (716,738 | ) | 78,923 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (859,026 | ) | (2,801,124 | ) | ||||
| Inventories | (3,958,050 | ) | 477,818 | |||||
| Prepaid and other assets | (1,482,561 | ) | (325,976 | ) | ||||
| Accounts payable | 3,155,962 | 694,326 | ||||||
| Accrued liabilities | (3,813,998 | ) | 1,688,664 | |||||
| Net cash used in operating activities | (11,195,001 | ) | (9,027,080 | ) | ||||
| Investing activities: | ||||||||
| Acquisition of X-spine Systems, Inc. | 0 | (73,033,049 | ) | |||||
| Purchases of property and equipment and intangible assets | (5,566,572 | ) | (444,312 | ) | ||||
| Proceeds from sale of fixed assets | 16,400 | 102,587 | ||||||
| Net cash used in investing activities | (5,550,172 | ) | (73,374,774 | ) | ||||
| Financing activities: | ||||||||
| Payments on Long-term debt | 0 | (38,668 | ) | |||||
| Net proceeds from equity private placement | 0 | 515,395 | ||||||
| Payment on royalty obligation | 0 | (542,905 | ) | |||||
| Proceeds from the issuance of capital leases | 0 | 70,921 | ||||||
| Payments on capital leases | (80,070 | ) | (78,490 | ) | ||||
| Net proceeds from the issuance of long-term debt | 1,000,000 | 17,479,159 | ||||||
| Net proceeds from the issuance of convertible debt | 2,212,718 | 66,322,366 | ||||||
| Proceeds from the revolving line of credit | 8,353,117 | 0 | ||||||
| Net proceeds from the issuance of stock | 300,000 | 2,118,483 | ||||||
| Net cash provided by financing activities | 11,785,765 | 85,846,261 | ||||||
| Net change in cash and cash equivalents | (4,959,408 | ) | 3,444,407 | |||||
| Cash and cash equivalents at beginning of period | 6,368,016 | 4,468,208 | ||||||
| Cash and cash equivalents at end of period | $ | 1,408,608 | $ | 7,912,615 | ||||
| XTANT MEDICAL HOLDINGS, INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| As of September 30, 2016 (Unaudited) and As of December 31, 2015 (Audited) | |||||||
| As of September 30, | As of Dec. 31, | ||||||
| 2016 | 2015 | ||||||
| ASSETS | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $ | 1,408,608 | $ | 6,368,016 | |||
| Trade accounts receivable, net of allowance for doubtful accounts of $2,997,747 and $2,579,634, respectively | 15,826,130 | 15,385,218 | |||||
| Inventories, net | 26,499,085 | 22,684,716 | |||||
| Prepaid and other current assets | 2,034,127 | 601,697 | |||||
| Total current assets | 45,767,950 | 45,039,647 | |||||
| Non-current inventories | 1,271,425 | 1,607,915 | |||||
| Property and equipment, net | 16,012,138 | 11,816,629 | |||||
| Goodwill | 41,534,626 | 41,534,626 | |||||
| Intangible assets, net | 37,021,472 | 40,237,289 | |||||
| Other assets | 841,354 | 791,221 | |||||
| Total Assets | $ | 142,448,965 | $ | 141,027,327 | |||
| LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY | |||||||
| Current Liabilities: | |||||||
| Accounts payable | $ | 12,889,056 | $ | 9,386,531 | |||
| Accounts payable - related party | 1,060,200 | 1,406,763 | |||||
| Accrued liabilities | 5,623,574 | 9,595,851 | |||||
| Revolving Line of Credit | 8,353,117 | 0 | |||||
| Warrant derivative liability | 333,613 | 1,050,351 | |||||
| Current portion of capital lease obligations | 209,826 | 35,139 | |||||
| Total current liabilities | 28,469,386 | 21,474,635 | |||||
| Long-term Liabilities: | |||||||
| Capital lease obligation, less current portion | 720,265 | 7,800 | |||||
| Long term convertible debt, less current portion | 68,864,974 | 66,436,647 | |||||
| Long-term debt, less current portion | 49,493,259 | 44,231,718 | |||||
| Total Liabilities | 147,547,884 | 132,150,800 | |||||
| Commitments and Contingencies | |||||||
| Stockholders' Equity | |||||||
| Preferred stock | - | - | |||||
| Common stock | 11 | 11 | |||||
| Additional paid-in capital | 82,898,754 | 81,917,488 | |||||
| Accumulated deficit | (87,997,684 | ) | (73,040,973 | ) | |||
| Total Stockholders’ Equity (Deficit) | (5,098,919 | ) | 8,876,527 | ||||
| Total Liabilities & Stockholders’ Equity | $ | 142,448,965 | $ | 141,027,327 | |||
| XTANT MEDICAL HOLDINGS, INC. | |||||||||||||
| Calculation of Consolidated EBITDA for the Three and Nine Months Ended September 30, 2016 | |||||||||||||
| and for the Pro Forma Three and Nine Months Ended September 30, 2015 | |||||||||||||
| Unaudited | |||||||||||||
| For the three months ended September 30, | For the Nine months ended September 30, | ||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| Loss from Operations | (1,903,590 | ) | (5,017,733 | ) | (6,388,631 | ) | (8,397,695 | ) | |||||
| Acquisition and Integration related expenses | 517,083 | 3,856,519 | 1,269,613 | 3,856,519 | |||||||||
| Extinguishment of Debt | 0 | (2,345,019 | ) | 0 | (2,345,019 | ) | |||||||
| Impairment of Assets | 0 | 233,748 | 0 | 233,748 | |||||||||
| Non-Cash Compensation | 251,611 | 186,882 | 522,987 | 631,234 | |||||||||
| Depreciation & Amortization | 1,902,490 | 2,170,824 | 5,551,851 | 6,337,673 | |||||||||
| EBITDA Gain | 767,594 | (914,779 | ) | 955,819 | 316,460 | ||||||||
Investor Contact CG CAPITAL Rich Cockrell 877.889.1972 xtant@cg.capital Company Contact Xtant Medical Molly Mason mmason@xtantmedical.com
