Xtant Medical Announces the Operations Expansion of Montana's Tissue Processing Rooms Belgrade, MT

Xtant Medical Announces the

Operations Expansion of Montana's Tissue Processing Rooms

Belgrade, MT, July 26, 2016 -

Xtant Medical Holdings, Inc. (NYSE MKT: XTNT), a leader in the development of regenerative medicine products and medical devices,

today announced the expansion of its tissue processing facility in Belgrade, MT, which now includes an additional seven new processing

rooms. This more than doubles the capacity of processing rooms available for production.

The new processing suite will improve

both production efficiency and utilization of resources, while allowing for the Company to increase its future product offerings.

The rooms are equipped with the latest, state-of-the-art equipment for processing biologics, and will help Xtant Medical execute

on its commitment to the State of Montana for creating new jobs.

"These facilities allow for increased

processing volume of our high-demand products and reduces the time required to get processing suites available for reuse,"

said Darrel Holmes, Chief Operating Officer of Bacterin International, Inc., a subsidiary of Xtant Medical. "We remain committed

to the ideals of the Donate Life community, with deep respect for the gift of tissue donation and the benefits it can bring to

donor recipients. We couldn't be more proud of this expansion and the role we play in the Circle of Life".

The U.S. allograft market is anticipated

to grow to $682MM in 2016, according to market data provided by BioMed GPS, LLC.

About Xtant Medical Holdings

Xtant Medical develops, manufactures

and markets regenerative medicine products and medical devices for domestic and international markets. Xtant Medical 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 Medical 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

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.