Xtant Medical Holdings Inc 2024年度报告

664 Cruiser LaneBelgrade, Montana 59714(406) 388-0480 Dear Shareholders, I would like to begin this letter by expressing my sincere gratitude for your ongoing support. XtantMedical sits in a much stronger position today than in the past, and with the steps we have taken andexpect to take, we intend to continue our progress towards delivering long-term, sustained value forour shareholders. Our mission,honoring the gift of donation so that our patients can live as full and complete a lifeas possible,continues to guide our strategic direction, serving as the touchstone for all majordecisions we make. Self-Sustainability and New Products: Last year, we indicated that we would be focused on self-sustainability and that our goal was to beself-sustaining in our supply chain and less reliant on production outside our control. The rationalebehind this self-reliance initiative was to become a larger and more diverse producer of biologics,improve our margin profile, and bring additional transformative treatment options to a large andgrowing patient population. This strategic decision that all sourced biologics products would be made in-house by Xtant Medicalwould require building out four product categories, three of which would require extensive researchand development. To this end, we produced four significant new products in just 18 months: xIn April 2024, we rolled out our new Amnio line, which is now our fastest-growing product lineand extends well beyond orthobiologics. We believe our Amnio products will become acornerstone technology in our biologics portfolio, helping us become a comprehensiveregenerative biologics company.xIn September 2024, we released our Viable Bone Matrix product called OsteoVive Plus. Thisproduct is a significantly improved product compared to the one we were previously sourcing,with improved gross margins and almost no supply constraints.xIn April 2025, we released our own growth factor product called OsteoFactor Pro, replacingOsteoFactor, which was being discontinued by our supplier. Our new OsteoFactor Pro hassubstantially better handling and significantly improved gross margins.xLastly, in May 2025, we rolled out a new premium Demineralized Bone Matrix (DBM) productcalled Trivium. Our DBM products account for approximately 60% of our biologics sales, andTrivium provides a premium-priced product for this segment. Our focus on self-sustainability, beginning last year, and becoming less reliant on production outsideour control, has paid oƯ. During thefirst quarter of 2025, we achieved a significant milestone bybecoming thefirst fully vertically integrated biologics company to manufacture all of our biologicsproducts in-house. This gives us control over our supply chain, ensuring the highest product qualitywhile also driving improved gross margins and delivering an enhanced customer experience. Self-Sustainability and Profitability and Cash Generation: Part of being self-sustainable is being profitable and generating cash. With the launch of newproducts, targeted growth opportunities in front of us, and cost-cutting measures we implemented atthe beginning of this year, we are on a path to restoring our business to a sustainably cash-flowingposition. As part of this, we continue to focus on and invest in our biologics business whilerationalizing our hardware product lines to streamline our oƯerings and optimize cash management. To this end, in July 2025, we announced definitive agreements to divest our non-core Coflex/CoFixspinal implant and international hardware businesses, also known as Paradigm. While thesedivestitures are still subject to closing, they are important as we believe they will accomplish twothings for our company: 1)They will help us focus on our core domestic business since although our Coflex/CoFix andParadigm businesses accounted for only 16% of our 2024 revenue, they consume significantlymore resources and time from our core business, including our biologics business.2)The cash proceeds from these divestitures will reduce our long-term debt and strengthen ourcash position, reducing future interest expense and our need to raise capital to fund ouroperations. Once completed, these divestitures will represent another step toward realizing our strategic vision forthe company. Moving Forward: We believe Xtant occupies a strong strategic position, with all of our biologics products verticallyintegrated and a robust pipeline of innovative new products that serve our core orthobiologics andadjacent markets. While we continue to face challenges in our business and the industry as a whole, we remainconfident in the value and future success of our core biologics products, the team we haveassembled, and the numerous opportunities that lie ahead. We remain committed to continuing onour path to restore our business to a sustainably profitable and cash-generating position, and wethank our shareholders for their ongoing support. Respectfully, Sean E. BrownePreside