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Xtant Medical Holdings (XTNT) Risk Analysis
Risk Overview Q2, 2026
Risk Change Over Time
- Employment / Personnel - Risk 1In April 2026, we entered into a Distribution Agreement with Dilon Technologies, Inc. and hired sales personnel in connection therewith, which will result in increased sales and marketing costs and involves other risks, which could adversely affect our business, operating results, and financial condition.
In April 2026, we entered into a Distribution Agreement with Dilon Technologies, Inc. pursuant to which we obtained the exclusive rights to import, market, distribute and sell the HEMOBLAST Bellows product in the United States, and Dilon agreed to transition its existing U.S. customer base for the product to us. In connection with the agreement, we hired approximately 20 Dilon sales personnel to assist in selling the HEMOBLAST Bellows product in the United States. While the agreement expands our portfolio and bolsters our commercial capabilities through the integration of Dilon's former U.S. sales team, we cannot assure that we will successfully sell the HEMOBLAST Bellows product or integrate it with our portfolio. In addition, while we believe we can leverage new cross-selling opportunities between the HEMOBLAST Bellows product and our existing products, we cannot assure that we will be effective in doing so or otherwise realize the anticipated benefits of this distribution arrangement. We expect our sales and marketing expenses to increase substantially compared to prior periods as a result of the additional sales personnel. While we anticipate that additional revenue from HEMOBLAST Bellows sales, cross-selling opportunities, and utilizing Dilon's former U.S. sales team to sell our other products will eventually offset these additional expenses, we cannot assure that they will or that the transition to us of Dilon's existing U.S. customer base will be successful. Under the Distribution Agreement, Dilon will continue to manufacture the HEMOBLAST Bellows product at its facility in France and supply it to us at a specified transfer price, which price is subject to adjustment in certain circumstances. We rely on Dilon as the sole manufacturer to produce the product in sufficient quantities and at an appropriate transfer price; there are no alternative suppliers. This arrangement involves risk because we do not control the manufacturing process and Dilon is responsible for all manufacturing decisions and related regulatory compliance. We believe we will have sufficient supply of the HEMOBLAST Bellows product to support our anticipated sales through the end of third quarter 2026, we are uncertain that supply will be available thereafter. If Dilon is unable to manufacture and supply the product in sufficient quantities or at all, we will be unable to sell it or recognize related revenue. In addition, because the product is manufactured in France, we are subject to risks associated with international operations, including supply chain disruptions, foreign currency exchange fluctuations, and additional regulatory requirements. We paid Dilon a $5.0 million exclusivity fee upon execution of the Distribution Agreement. This fee is subject to repayment by Dilon under certain circumstances, including upon termination of the Distribution Agreement for any reason. Because either party may terminate the Distribution Agreement upon certain specified events, we cannot assure that the agreement will remain in effect, and any such termination would result in the loss of our distribution rights for the product. In addition, given the refundable nature of the$5.0 million exclusivity payment, we initially recognized the payment as a deposit asset on our consolidated balance sheet. However, based on an assessment of facts and circumstances, including the uncertainty surrounding recovery of the payment and management's expectation that repayment was not probable despite contractual repayment provisions, we recognized a $5.0 million charge to operating expenses during the second quarter of 2026, which adversely affected our operating results for that period. Although Dilon currently has the right to terminate the Distribution Agreement upon 30 days' notice, it has not done so through the date of this report. If the Distribution Agreement terminates, we would need to reassign or terminate the sales personnel we hired to sell the HEMOBLAST Bellows product.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 55
- Share Price & Shareholder Rights - Risk 1Nantahala owns a significant percentage of our common stock and is able to exert significant control over matters subject to stockholder approval, preventing other stockholders and new investors from influencing significant corporate decisions.
Funds affiliated with Nantahala Capital Management, LLC collectively ownapproximately 48.8% of our outstanding common stock. Because of its significant stock ownership, Nantahala has the ability to exert substantial influence over our management and affairs and over substantially all matters requiring action by our stockholders, including amendments to our certificate of incorporation, bylaws, election and removal of directors, and approval of any significant corporate actions, including any merger, consolidation, or sale of all or substantially all of our assets. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock. The interests of Nantahala may not be aligned with the interests of our other stockholders. For example, Nantahala may have an interest in pursuing a sale of our Company, acquisitions, divestitures and other transactions or not pursuing such transactions that, in its judgment, could provide Nantahala with liquidity or enhance or reduce its investment, even though such transactions might involve risks to us and our other stockholders. This concentration of voting control could deprive our other stockholders of an opportunity to receive a premium for their shares of our common stock as part of a sale of our Company and ultimately might affect the market price of our common stock. In addition, this significant concentration of stock ownership may adversely affect the trading price of our common stock due to investors' perception that conflicts of interest may exist or arise.
- Share Price & Shareholder Rights - Risk 2Shares of our common stock are equity securities and are subordinate to our outstanding indebtedness.
Shares of our common stock are common equity interests. This means that our common stock will rank junior to any outstanding shares of our preferred stock that we may issue in the future or to the indebtedness under our Credit Agreements and any future indebtedness we may incur and to all creditor claims and other non-equity claims against us and our assets available to satisfy claims on us, including claims in a bankruptcy or similar proceeding.
- Share Price & Shareholder Rights - Risk 3The market price of our common stock is extremely volatile, which may affect our ability to raise capital in the future and may subject the value of the investment of our stockholders to sudden decreases.
The market price for securities of medical device and biotechnology companies, including ours, historically has been highly volatile, and the market from time to time has experienced significant price and volume fluctuations that are unrelated to the operating performance of such companies. The trading volume and prices of our common stock have been and may continue to be volatile and could fluctuate widely due to factors both within and beyond our control. During 2025, the sale price of our common stock ranged from $0.34 to $0.95 per share, and our daily trading volume ranged from four thousand to 6.9 million shares. Such volatility may be the result of broad market and industry factors. Future fluctuations in the trading price or liquidity of our common stock may harm the value of the investment of our stockholders in our common stock. Factors that may have a significant impact on the market price and marketability of our common stock include, among others: - our observance of covenants under our Credit Agreements; - our ability to make principal, interest and other payments under our Credit Agreements; - the terms of any potential future transaction(s) related to debt financing, debt restructuring or capital raising; - announcements of technological innovations or new commercial products by us or our present or potential competitors; - developments or disputes concerning patent or other proprietary rights; - developments in our relationships with employees, suppliers, distributors, sales representatives and customers; - acquisitions or divestitures;- litigation and government proceedings; - adverse legislation, including changes in governmental regulation; - third-party reimbursement policies; - additions or departures of key personnel; - sales of our equity securities by our significant stockholders or management or sales of additional equity securities by our Company; - changes in securities analysts' recommendations; - short selling; - changes in health care policies and practices or reimbursement affecting our products or technologies; - the delisting of our common stock or halting or suspension of trading in our common stock by the NYSE American; - economic, social and other external factors, such as epidemics or pandemics, supply chain disruptions, labor shortages and persistent inflation; and - general market conditions. In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been instituted. These lawsuits often seek unspecified damages, and as with any litigation proceeding, one cannot predict with certainty the eventual outcome of pending litigation. Furthermore, we may have to incur substantial expenses in connection with any such lawsuits and our management's attention and resources could be diverted from operating our business as we respond to any such litigation. We maintain insurance to cover these risks for us and our directors and officers, but our insurance is subject to high deductibles to reduce premium expense, and there is no guarantee that the insurance will cover any specific claim that we currently face or may face in the future, or that it will be adequate to cover all potential liabilities and damages.
- Share Price & Shareholder Rights - Risk 4We may issue additional common stock resulting in stock ownership dilution.
From time to time, we issue equity securities to raise additional financing and in connection with debt restructurings. Dilution may occur due to additional future equity issuances and/or equity financing events by us, including any potential future restructuring of our outstanding indebtedness. In addition, we may raise additional capital through the sale of equity or convertible debt securities, which would further dilute the ownership interests of our stockholders. As of December 31, 2025, we had outstanding warrants to purchase 12,237,470 shares of our common stock. In addition, we had stock options to purchase 3,760,472 shares of our common stock, performance stock units covering 3,340,111 shares of our common stock, assuming target performance, and restricted stock unit or deferred stock unit awards covering 7,669,141 shares of our common stock under our equity-based compensation plans, and 12,966,721 shares available for issuance under the Xtant Medical Holdings, Inc. 2023 Equity Incentive Plan. If these or any future warrants, options or restricted stock units are exercised or otherwise converted into shares of our common stock, our stockholders will experience additional dilution.
- Share Price & Shareholder Rights - Risk 5The sale or availability for sale of substantial amounts of our common stock, or the perception that such sales could occur at any time, could adversely affect the market price of our common stock.
Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could adversely affect the market price of our common stock and could materially impair our ability to raise capital through equity offerings in the future. We cannot predict what effect, if any, market sales of shares of our common stock held by our stockholders or the availability of the shares for future resale will have on the market price of our common stock, although it is likely that such sales would have a material adverse impact on the trading price of our common stock, especially given the low trading volume and low public float of our common stock.
- Share Price & Shareholder Rights - Risk 6If securities analysts stop publishing research or reports about us or our business, or if they downgrade our common stock, the trading volume and market price of our common stock could decline.
The market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. If any analyst who covers us downgrades our stock or lowers its future stock price targets or estimates of our operating results, our stock price could decline rapidly. This is particularly true if we fail to meet the expectations of analysts with respect to our revenue and other operating results. Furthermore, if analysts cease to cover our Company, we could lose visibility in the market. Each of these events could, in turn, cause our trading volume and the market price of our common stock to decline.
- Share Price & Shareholder Rights - Risk 7Anti-takeover provisions in our organizational documents and agreements may discourage or prevent a change in control, even if a sale of the Company could be beneficial to our stockholders, which could cause our stock price to decline and prevent attempts by our stockholders to replace or remove our current management.
Several provisions of our Restated Certificate of Incorporation ("Charter") and Bylaws could make it difficult for our stockholders to change the composition of our Board of Directors or discourage, delay or prevent a merger or acquisition that our stockholders may consider favorable. These provisions include: - We have shares of common stock and preferred stock available for issuance without stockholder approval. The existence of unissued and unreserved common stock and preferred stock may enable the Board of Directors to issue shares to persons friendly to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our management. - Shares of our common stock do not have cumulative voting rights in the election of directors, so our stockholders holding a majority of the shares of common stock outstanding will be able to elect all of our directors. - Special meetings of the stockholders may be called only by the Board of Directors, the chair of the Board of Directors or the chief executive officer. - The Board of Directors may adopt, alter, amend or repeal our Bylaws without stockholder approval. - Unless otherwise provided by law, any newly created directorship or any vacancy occurring on the Board of Directors for any cause may be filled by the affirmative vote of a majority of the remaining members of the Board of Directors even if such majority is less than a quorum, and any director so elected shall hold office until the expiration of the term of office of the director whom he or she has replaced or until his or her successor is elected and qualified. - Prior to July 26, 2030, fixing the number of directors at more than seven directors requires the approval of at least 75% of our directors then holding office. - The affirmative vote of the holders of at least two-thirds of the voting power of the then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class, is required to amend or repeal the provisions of our Charter related to the amendment of our Bylaws, the Board of Directors and our stockholders as well as the general provisions of our Charter. - Stockholders must follow advance notice procedures to submit nominations of candidates for election to the Board of Directors at an annual or special meeting of our stockholders, including director election contests subject to the SEC's universal proxy rules, and must follow advance notice procedures to submit other proposals for business to be brought before an annual meeting of our stockholders. - Unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware, (or, if the Court of Chancery of the State of Delaware does not have subject matter jurisdiction, a state court located within the State of Delaware or, if no state court located within the State of Delaware has subject matter jurisdiction, the federal district court for the District of Delaware), will be the exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim arising under any provision of the General Corporation Law of the State of Delaware ("DGCL"), our Charter or our Bylaws, or (iv) any action asserting a claim governed by the internal-affairs doctrine; provided, however, that unless we consent in writing to an alternative forum, the federal district courts of the United States of America shall be, to the fullest extent permitted by applicable law, the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. These anti-takeover provisions could substantially impede the ability of our stockholders to benefit from a change in control and, as a result, could materially adversely affect the market price of our common stock and the ability of our stockholders to realize any potential change-in-control premium. In addition, the forum selection provision in our Charter could limit the ability of our stockholders to obtain a favorable judicial forum for disputes with us.
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