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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): August 10, 2023
XTANT
MEDICAL HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
001-34951 |
|
20-5313323 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
664
Cruiser Lane
Belgrade,
Montana |
|
59714 |
| (Address
of principal executive offices) |
|
(Zip
Code) |
(406)
388-0480
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
| ☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common
stock, par value $0.000001 per share |
|
XTNT |
|
NYSE
American LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
On
August 10, 2023, Xtant Medical Holdings, Inc., a Delaware corporation (the “Company”), entered into a Limited Consent and
Amendment No. 4 to Credit, Security and Guarantee Agreement (Term Loan) (“Term Amendment No. 4”), which amends the Credit,
Security and Guarantee Agreement (Term Loan) by and among the Company, as guarantor, and its U.S. subsidiaries, as borrowers, MidCap
Financial Trust, as agent, and the financial institutions party thereto (as amended, the “Term Credit Agreement”), and a
Limited Consent and Amendment No. 4 to Credit, Security and Guarantee Agreement (Revolving Loan) (“Revolving Amendment No. 4”
and, together with Term Amendment No. 4, the “Amendments No. 4”), which amends the Credit, Security and Guarantee Agreement
(Revolving Loan) by and among the Company, as guarantor, and its U.S. subsidiaries, as borrowers, MidCap Funding IV Trust, as agent,
and the financial institutions party thereto (as amended, the “Revolving Credit Agreement” and, together with the Term Credit
Agreement, the “Credit Agreements”).
The
Amendments No. 4 permit the Transaction, as described below, and provide the Company with additional flexibility with respect to holding
foreign subsidiaries. The Amendments No. 4 contain standard covenants regarding holding foreign subsidiaries. The terms of borrowing
under the Credit Agreements otherwise remain unchanged.
The
foregoing summary of the Amendments No. 4 is not complete and is qualified in its entirety by reference to the full text of the Amendments
No. 4, which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2023.
Item
2.01 Completion of Acquisition or Disposition of Assets.
On
August 10, 2023, the Company completed its previously announced acquisition (the “Transaction”) of certain assets of Surgalign
Holdings, Inc., a Delaware corporation (the “Seller”), and its subsidiaries on an as-is, where-is basis, including specified
inventory, intellectual property and intellectual property rights, contracts, equipment and other personal property, records, all outstanding
equity securities of the Seller’s international subsidiaries, and intangibles related to the business of designing, developing
and manufacturing hardware medical technology and distributing biologics medical technology, as conducted by the Seller and its subsidiaries
(collectively, the “Assets”), and certain specified liabilities of the Seller and its subsidiaries (collectively, the “Liabilities”)
pursuant to the Asset Purchase Agreement, dated June 18, 2023, between the Seller and the Company (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 the Seller’s bankruptcy proceedings. The Bankruptcy Court issued
a Sale Order on August 9, 2023 approving and authorizing the Transaction. The Company funded the purchase price of $5 million, plus Liabilities,
with cash on hand.
The
foregoing summary of the Asset Purchase Agreement is not complete and is qualified in its entirety by reference to the full text of the
Asset Purchase Agreement and the first amendment thereto, copies of which are attached hereto as Exhibit 2.1 and Exhibit 2.2, respectively,
and are incorporated herein by reference.
The
representations, warranties and covenants set forth in the Asset Purchase Agreement have been made only for purposes of the Asset Purchase
Agreement and solely for the benefit of the parties thereto, and may be subject to limitations agreed upon by the contracting parties,
including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the
Asset Purchase Agreement instead of establishing these matters as facts. In addition, information regarding the subject matter of the
representations and warranties made in the Asset Purchase Agreement may change after the date of the Asset Purchase Agreement. Accordingly,
the Asset Purchase Agreement and the first amendment thereto are included with this Current Report on Form 8-K only to provide investors
with information regarding its terms and not to provide investors with any other factual information regarding the Company, its subsidiaries,
the Assets or Liabilities, or the Company’s or its subsidiaries’ respective businesses as of the date of the Asset Purchase
Agreement or as of any other date.
Item
7.01 Regulation FD Disclosure.
On
August 10, 2023, the Company issued a press release announcing the closing of the Transaction. A copy of the press release is furnished
as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The
information contained in this Item 7.01 and Exhibit 99.1 to this Current Report on Form 8-K shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended,
or the Exchange Act, except as expressly provided by specific reference in such a filing.
Item
9.01 Financial Statements and Exhibits.
(a)
Financial statements of businesses or funds acquired.
The
Company intends to file the historical financial statements required by this Item 9.01(a) as an amendment to this Current Report on Form
8-K within 71 calendar days after the date upon which this Current Report on Form 8-K must be filed.
(b)
Pro forma financial information.
The
Company intends to file the pro forma financial information required by this Item 9.01(b) as an amendment to this Current Report on Form
8-K within 71 calendar days after the date upon which this Current Report on Form 8-K must be filed.
(d)
Exhibits.
| Exhibit
No. |
|
Description |
| 2.1 |
|
Asset Purchase Agreement, dated June 18, 2023, by and between Surgalign Holdings, Inc. and Xtant Medical Holdings, Inc. (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 20, 2023 (Securities and Exchange Commission File No. 001-34951) and incorporated by reference herein)
|
| |
|
|
| 2.2 |
|
First Amendment to Asset Purchase Agreement, dated as of July 10, 2023, by and between Xtant Medical Holdings, Inc. and Surgalign Holdings, Inc. (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 11, 2023 (Securities and Exchange Commission File No. 001-34591) and incorporated by reference herein)
|
| |
|
|
| 99.1 |
|
Press Release of Xtant Medical Holdings, Inc. dated August 10, 2023 entitled “Xtant Medical Completes Acquisition of Surgalign’s Hardware and Biologics Business” (furnished herewith)
|
| |
|
|
| 104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
| |
XTANT
MEDICAL HOLDINGS, INC. |
| |
|
|
| |
By: |
/s/
Sean E. Browne |
| |
|
Sean
E. Browne |
| |
|
President
and Chief Executive Officer |
Date:
August 10, 2023
Exhibit
99.1
Xtant
Medical Completes Acquisition of Surgalign’s Hardware and Biologics Business
BELGRADE,
MT, August 10, 2023 – Xtant Medical Holdings, Inc. (NYSE American: XTNT), a global medical technology company focused on surgical
solutions for the treatment of spinal disorders, today announced that it completed the acquisition of certain assets and liabilities
related to the domestic and international biologics and spinal fixation offerings of Surgalign Holdings, Inc. under a Bankruptcy Court
supervised process for $5 million, plus assumed liabilities, in an all-cash transaction.
“We
are thrilled to add to our growing orthobiologics and spinal fusion device portfolio, while expanding our commercial footprint with new
contracts and distributors with the completion of this acquisition,” said Sean Browne, President and Chief Executive Officer of
Xtant Medical. “Looking ahead, our focus will be integrating this business with our current offerings with the goal of maximizing
the full potential of these assets.”
2023
Financial Guidance
As
previously announced on August 1, 2023, Xtant Medical raised its expectation for full year 2023 revenue range to $75 million to $77 million,
up from the Company’s prior guidance of $73 million to $75 million. The Company expects to provide updated full year guidance incorporating
the acquisition upon the announcement of third quarter 2023 financial results.
About
Xtant Medical Holdings, Inc.
Xtant
Medical Holdings, Inc. (www.xtantmedical.com) 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. Xtant people are dedicated and talented, operating with the highest integrity to serve our customers.
The
symbols ™ and ® denote trademarks and registered trademarks of Xtant Medical Holdings, Inc. or its affiliates, registered as
indicated in the United States, and in other countries. All other trademarks and trade names referred to in this release are the property
of their respective owners.
Cautionary
Statement Regarding Forward-Looking Statements
This
press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 “intends,” “expects,” “anticipates,” “plans,” “believes,” “estimates,”
“continue,” “future,” “will,” “potential,” “going forward,” similar expressions
or the negative thereof, and the use of future dates. Forward-looking statements in this release include the growth of the Company’s
orthobiologics and spinal fusion device portfolio, expansion of the Company’s commercial footprint, integration of the acquired
business with the Company’s current offerings, and the Company’s financial guidance for 2023. The Company cautions that its
forward-looking statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety
of important factors, including, among others: the failure by the Company to achieve anticipated revenue and any cost or revenue synergies
expected from the Surgalign transaction or delays in the realization thereof; delays and challenges in integrating the businesses after
the transaction is completed; business disruption during the pendency of and following the transaction; loss of key personnel; unanticipated
liabilities or exposures for which the Company will not been indemnified or may not recover; the Company’s future operating results
and financial performance; its ability to increase or maintain revenue; risks associated with its recent acquisition of the Coflex®
product line; possible future impairment charges to long-lived assets and goodwill and write-downs of excess inventory if revenues continue
to decrease; the ability to remain competitive; the ability to innovate, develop and introduce new products; the ability to engage and
retain new and existing independent distributors and agents and qualified personnel and the Company’s dependence on key independent
agents for a significant portion of its revenue; the effect of COVID-19, labor and hospital staffing shortages on the Company’s
business, operating results and financial condition, especially when they affect key markets; the Company’s ability to implement
successfully its future growth initiatives and risks associated therewith; the effect of inflation, increased interest rates and other
recessionary factors and supply chain disruptions; the effect of product sales mix changes on the Company’s financial results;
government and third-party coverage and reimbursement for Company products; the ability to obtain and maintain regulatory approvals and
comply with government regulations; the effect of product liability claims and other litigation to which the Company may be subject;
the effect of product recalls and defects; the ability to obtain and protect Company intellectual property and proprietary rights and
operate without infringing the rights of others; the ability to service Company debt, comply with its debt covenants and access additional
indebtedness; the ability to obtain additional financing on favorable terms or at all; and other factors. Additional risk factors are
contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 7, 2023
and subsequent SEC filings by the Company, including its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 filed
with the SEC on August 1, 2023. Investors are encouraged to read the Company’s filings with the SEC, available at www.sec.gov,
for a discussion of these and other risks and uncertainties. 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 the Company or persons acting on its behalf are expressly
qualified in their entirety by this cautionary statement.
Investor
Relations Contact
David
Carey
Lazar
FINN
Ph:
212-867-1762
Email:
david.carey@finnpartners.com
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