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MEDICAL HOLDINGS, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
following unaudited pro forma condensed consolidated financial information was derived from the historical consolidated financial statements
of Xtant Medical Holdings, Inc. (the "Company") as described in more detail below and is being presented to give effect to:
| the sale of all of the Company's shares of equity securities of Paradigm Spine GmbH, a wholly owned subsidiary of the Company engaged in the operation of the Company's hardware business outside of the United States ("Paradigm"), which constituted 100% of the issued and outstanding shares of equity securities of Paradigm (the "Paradigm Divestiture" and together with the Coflex/CoFix Divestiture, the "Divestitures"), to Companion Spine SAS pursuant to the previously disclosed Equity Purchase Agreement dated July 7, 2025 between the Company, Paradigm and Companion Spine; and | ||
| the related reduction of the Company's term loan for the application of proceeds from the Divestitures in accordance with the terms of that certain Limited Consent and Amendment No. 3 to Amended and Restated Credit, Security and Guaranty Agreement (Term Loan) with MidCap Financial Trust ("MidCap Consent") and the estimated reduction in debt issuance costs from such reduction, which MidCap Consent required certain repayments of the term loan debt by the Company as a condition to the Company effecting the Divestitures (collectively, the "Term Loan Reduction"). |
below are the following unaudited pro forma condensed consolidated financial statements:
following unaudited pro forma condensed consolidated financial information is
presented based on assumptions, adjustments, and currently available information described in the accompanying notes. They are intended
for informational purposes only and are not intended to represent the Company's financial position or results of operations had
the Divestitures occurred on the dates indicated, or to project the Company's financial performance for any future period. Accordingly,
such information should not be relied upon as an indicator of future performance, financial condition or liquidity. Pro forma adjustments
have been made for events that are directly attributable to the Divestitures and factually supportable.
unaudited pro forma condensed consolidated financial information was prepared in accordance with Rule 8-05 and Article 11 of Regulation
S-X and should be read in conjunction with the following: (i) the accompanying notes to the unaudited pro forma condensed consolidated
financial information; (ii) the Company's audited consolidated financial statements for the year ended December 31, 2024 and related
notes thereto and the "Management's Discussion and Analysis of Financial Condition and Results of Operations"
section included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and
Exchange Commission (the "SEC") on March 6, 2025; and (iii) the Company's unaudited condensed consolidated financial
statements as of and for the nine month period ended September 30, 2025 and related notes thereto and the "Management's
Discussion and Analysis of Financial Condition and Results of Operations" section included in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2025 filed with the SEC on November 10, 2025.
MEDICAL HOLDINGS, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
of September 30, 2025
thousands, except number of shares and par value)
| As Reported | Transaction Accounting Adjustments | Notes | Pro Forma | |||||||||||
| ASSETS | ||||||||||||||
| Current Assets: | ||||||||||||||
| Cash and cash equivalents | $ | 10,400 | $ | 2,964 | (a) | $ | 13,364 | |||||||
| Restricted cash | 241 | - | 241 | |||||||||||
| Trade accounts receivable, net of allowance for credit losses and doubtful accounts | 25,517 | (2,314 | ) | (b) | 23,203 | |||||||||
| Inventories | 40,714 | (7,088 | ) | (b) | 33,626 | |||||||||
| Notes Receivable - Companion | - | 8,200 | (c) | 8,200 | ||||||||||
| Prepaid and other current assets | 1,458 | (693 | ) | (b) | 765 | |||||||||
| Total current assets | 78,330 | 1,069 | 79,399 | |||||||||||
| Property and equipment, net | 10,009 | (2,346 | ) | (b) | 7,663 | |||||||||
| Right-of-use asset, net | 3,619 | (284 | ) | (b) | 3,335 | |||||||||
| Goodwill | 7,302 | (1,215 | ) | (b) | 6,087 | |||||||||
| Intangible assets, net | 7,060 | (6,736 | ) | (b) | 324 | |||||||||
| Other assets | 1 | - | 1 | |||||||||||
| Total Assets | $ | 106,321 | $ | (9,512 | ) | $ | 96,809 | |||||||
| LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||||||||
| Current Liabilities: | ||||||||||||||
| Accounts payable | $ | 6,856 | $ | (1,303 | ) | (d) | $ | 5,553 | ||||||
| Accrued liabilities | 11,535 | (230 | ) | (d)(m) | 11,305 | |||||||||
| Advances from sale of Coflex/CoFix assets and international hardware business | 5,000 | (5,000 | ) | (e) | - | |||||||||
| Current portion of lease liability | 760 | (155 | ) | (d) | 605 | |||||||||
| Current portion of finance lease obligations | 44 | - | 44 | |||||||||||
| Line of credit | 11,308 | - | 11,308 | |||||||||||
| Total current liabilities | 35,503 | (6,688 | ) | 28,815 | ||||||||||
| Long-term Liabilities: | ||||||||||||||
| Lease liability, less current portion | 2,949 | (129 | ) | (d) | 2,820 | |||||||||
| Finance lease obligation, less current portion | 22 | - | 22 | |||||||||||
| Long-term debt, plus premium and less issuance costs | 17,404 | (4,724 | ) | (f) | 12,680 | |||||||||
| Other liabilities | 60 | - | 60 | |||||||||||
| Total Liabilities | 55,938 | (11,541 | ) | 44,397 | ||||||||||
| Commitments and Contingencies | ||||||||||||||
| 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; 140,004,240 shares issued and outstanding as of September 30, 2025 | - | - | - | |||||||||||
| Additional paid-in capital | 304,787 | - | 304,787 | |||||||||||
| Accumulated other comprehensive income (loss) | 139 | (139 | ) | (g) | - | |||||||||
| Accumulated deficit | (254,543 | ) | 2,168 | (h) | (252,375 | ) | ||||||||
| Total Stockholders' Equity | 50,383 | 2,029 | 52,412 | |||||||||||
| Total Liabilities & Stockholders' Equity | $ | 106,321 | $ | (9,512 | ) | $ | 96,809 |
notes to unaudited pro forma condensed consolidated financial statements.
MEDICAL HOLDINGS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
the Nine Months Ended September 30, 2025
thousands, except per share data)
| As Reported | Transaction Accounting Adjustments | Notes | Pro Forma | |||||||||||
| Revenue | ||||||||||||||
| Product revenue | $ | 87,492 | $ | (16,417 | ) | (i) | $ | 71,075 | ||||||
| License revenue | 14,078 | - | 14,078 | |||||||||||
| Total Revenue | 101,570 | (16,417 | ) | 85,153 | ||||||||||
| Cost of sales | 35,051 | (5,429 | ) | (i) | 29,622 | |||||||||
| Gross Profit | 66,519 | (10,988 | ) | 55,531 | ||||||||||
| Operating Expenses | ||||||||||||||
| General and administrative | 22,082 | (4,501 | ) | (j) | 17,581 | |||||||||
| Sales and marketing | 34,566 | (7,257 | ) | (j) | 27,309 | |||||||||
| Research and development | 1,643 | (387 | ) | (j) | 1,256 | |||||||||
| Total Operating Expenses | 58,291 | (12,145 | ) | 46,146 | ||||||||||
| Income (Loss) from Operations | 8,228 | 1,157 | 9,385 | |||||||||||
| Other Expense | ||||||||||||||
| Interest expense | (2,953 | ) | 854 | (k) | (2,099 | ) | ||||||||
| Unrealized foreign currency translation gain (loss) | 146 | (175 | ) | (l) | (29 | ) | ||||||||
| Other (expense) income | (18 | ) | 18 | (l) | - | |||||||||
| Total Other Expense | (2,825 | ) | 697 | (2,128 | ) | |||||||||
| Net Income (Loss) from Operations Before Provision for Income Taxes | 5,403 | 1,854 | 7,257 | |||||||||||
| Provision for Income Taxes Current and Deferred | (487 | ) | 1 | (m) | (486 | ) | ||||||||
| Net Income | $ | 4,916 | $ | 1,855 | $ | 6,771 | ||||||||
| Net Income Per Share: | ||||||||||||||
| Basic | $ | 0.04 | $ | $ | 0.05 | |||||||||
| Dilutive | $ | 0.03 | $ | $ | 0.03 | |||||||||
| Shares used in the computation: | ||||||||||||||
| Basic | 139,366,489 | 139,366,489 | ||||||||||||
| Dilutive | 149,912,292 | 149,912,292 |
notes to unaudited pro forma condensed consolidated financial statements.
MEDICAL HOLDINGS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
the Twelve Months Ended December 31, 2024
thousands, except per share data)
| As Reported | Transaction Accounting Adjustments | Notes | Pro Forma | |||||||||||
| Revenue | ||||||||||||||
| Product revenue | $ | 115,765 | $ | (21,487 | ) | (i) | $ | 94,278 | ||||||
| License revenue | 1,502 | - | 1,502 | |||||||||||
| Total Revenue | 117,267 | (21,487 | ) | 95,780 | ||||||||||
| Cost of sales | 49,051 | (5,951 | ) | (i) | 43,100 | |||||||||
| Gross Profit | 68,216 | (15,536 | ) | 52,680 | ||||||||||
| Operating Expenses | ||||||||||||||
| General and administrative | 28,691 | (5,988 | ) | (j) | 22,703 | |||||||||
| Sales and marketing | 49,214 | (11,104 | ) | (j) | 38,110 | |||||||||
| Research and development | 2,385 | (544 | ) | (j) | 1,841 | |||||||||
| Total Operating Expenses | 80,290 | (17,636 | ) | 62,654 | ||||||||||
| (Loss) Income from Operations | (12,074 | ) | 2,100 | (9,974 | ) | |||||||||
| Other Expense | ||||||||||||||
| Interest expense | (4,160 | ) | 1,236 | (k) | (2,924 | ) | ||||||||
| Unrealized foreign currency translation gain | 5 | - | 5 | |||||||||||
| Other (expense) income | (33 | ) | 2,138 | (l)(h) | 2,105 | |||||||||
| Total Other Expense | (4,188 | ) | 3,374 | (814 | ) | |||||||||
| Net (Loss) Income from Operations Before Provision for Income Taxes | (16,262 | ) | 5,474 | (10,788 | ) | |||||||||
| Provision for Income Taxes Current and Deferred | (187 | ) | (1,311 | ) | (m) | (1,498 | ) | |||||||
| Net (Loss) Income | $ | (16,449 | ) | $ | 4,163 | $ | (12,286 | ) | ||||||
| Net (Loss) Income Per Share: | ||||||||||||||
| Basic | $ | (0.12 | ) | $ | $ | (0.09 | ) | |||||||
| Dilutive | $ | (0.12 | ) | $ | $ | (0.09 | ) | |||||||
| Shares used in the computation: | ||||||||||||||
| Basic | 133,665,075 | 133,665,075 | ||||||||||||
| Dilutive | 133,665,075 | 133,665,075 |
notes to unaudited pro forma condensed consolidated financial statements.
MEDICAL HOLDINGS, INC.
TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 1, 2025, Xtant Medical Holdings, Inc. (the "Company") and Surgalign SPV, Inc., a wholly owned subsidiary of the
Company (together with the Company, the "Seller"), completed the sale of certain assets relating to the Company's Coflex
and CoFix products (the "Coflex/CoFix Divestiture") to Companion Spine, LLC and one of its affiliates, Companion Spine SAS
("Companion Spine"), pursuant to the previously disclosed Asset Purchase Agreement dated July 7, 2025 between the Company,
Surgalign SPV, Inc., and Companion Spine, and the sale of all of the Company's shares of equity securities of Paradigm Spine GmbH,
a wholly owned subsidiary of the Company engaged in the operation of the Company's hardware business outside of the United States
("Paradigm"), which constituted 100% of the issued and outstanding shares of equity securities of Paradigm (the "Paradigm
Divestiture" and together with the Coflex/CoFix Divestiture, the "Divestitures"), to Companion Spine SAS pursuant to
the previously disclosed Equity Purchase Agreement dated July 7, 2025 between the Company, Paradigm and Companion Spine.
total purchase price of the Coflex/CoFix Divestiture was $17.5 million (subject to a closing inventory valuation adjustment) (the "Coflex/CoFix
Purchase Price"). Of the total purchase price, an aggregate of $7.5 million was previously paid to the Seller in cash as non-refundable
deposits, $1.8 million was paid to the Seller in cash at the closing, and $8.2 million was paid to the Seller as an unsecured promissory
note issued by Companion Spine to the Seller at the closing, which note will mature on January 15, 2026. Any future reduction to the
Coflex/CoFix Purchase Price as a result of the closing inventory valuation adjustment will reduce the principal amount of the Companion
Spine promissory note. The total purchase price of the Paradigm Divestiture was $1.7 million (subject to certain cash, indebtedness and
net working capital adjustments) (the "Paradigm Purchase Price"), which was paid to the Company in cash at the closing of
the Paradigm Divestiture. Any future reduction to the Paradigm Purchase Price as a result of the cash, indebtedness and net working capital
adjustments will reduce the principal amount of the Companion Spine promissory note, and if applicable, be paid in cash by the Company.
accordance with the terms of the MidCap Consent, which required certain repayments of the term loan debt by the Company
as a condition to the Company effecting the Divestitures, approximately $8.0 million of the net cash proceeds received by the Company from the
Divestitures (including previous deposits received) was used to prepay a portion of the Company's term loan with MidCap, resulting
in $14.4 million remaining outstanding under the term loan as of December 1, 2025, of which up to an additional $1.6 million will be
required to be prepaid if and when the promissory note issued by Companion Spine is repaid.
2 - Pro Forma Adjustments
following adjustments have been reflected in the unaudited pro forma condensed consolidated financial statements: