ADDED
In addition, Xtant s biologics are utilized in trauma, foot and ankle, sports medicine, total joint, along with several surgical repair and wound care applications.
While our focus is the United States market, we promote and sell our products internationally through stocking distribution partners in Europe, Canada, Mexico, South America, and certain Pacific region countries.
We have recently made and intend to continue to make measured and targeted investments in the expansion of our commercial team to support our new products and maximize the reach of our broad portfolio of orthobiologics solutions.
Since one of our key growth initiatives is to leverage our growth platform with technology and strategic acquisitions and explore other strategic transactions with respect to our products and our company, including licenses, business collaborations and other business combinations or transactions with other companies, we, as a matter of course, often engage in discussions with third parties regarding such matters.
As discussed in more detail elsewhere in this report, we recognized $18.7 million in license revenue in 2025 that likely will not repeat in 2026 due primarily to changes in the reimbursement environment for our SimpliMax product effective January 1, 2026 and which changes also will adversely affect a portion of our product revenue in 2026.
The loss of this license and product revenue will have an adverse impact on our 2026 revenues and other operating results, including in particular, our gross margins.
Sale of Coflex/CoFix Assets and International Hardware Business On December 1, 2025, we completed the sale of certain assets relating to our Coflex and CoFix products (the Coflex/CoFix Divestiture ) to Companion Spine, LLC and one of its affiliates, Companion Spine SAS (collectively, Companion Spine ), pursuant to an Asset Purchase Agreement dated July 7, 2025 (the Coflex/CoFix Agreement ).
The total purchase price of the Coflex/CoFix Divestiture was $17.5 million (subject to a closing inventory valuation adjustment set forth in the Coflex/CoFix Agreement).
Of the total purchase price, an aggregate of $7.5 million was paid to us in cash as non-refundable deposits during third and fourth quarters of 2025, $1.8 million was paid to us in cash at the closing, and $8.2 million was paid to us as an unsecured promissory note issued by Companion Spine to us at the closing (the Companion Spine Note ).
Pursuant to subsequent amendments to the Coflex/CoFix Agreement, the maturity date of the Companion Spine Note was extended to January 31, 2026.
REMOVED
While our focus is primarily the United States market, we promote and sell our products internationally through direct sales representatives and stocking distribution partners in Europe, Canada, Mexico, South America, Australia, and certain Pacific region countries.
Our strategic focus is currently on digesting and growing the products and businesses we have acquired, producing our own stem cells, growth factor, amnio and synthetics biologics products, and continuing to focus on the following four key growth initiatives: (1) introduce new biologics products, including our Cortera Spinal Fixation System, viable bone matrix, OsteoVive Plus, and amniotic membrane allografts, SimpliGraft and SimpliMax ; (2) leverage our distribution network; (3) penetrate adjacent markets; and (4) leverage our growth platform with technology and strategic acquisitions.
Recent Developments During the fourth quarter of 2024, we entered into a license agreement with a distributor granting an exclusive, nontransferable, non-sublicensable, royalty-bearing right and license to manufacture and commercialize in the United States our SimpliMax product and the trademarks associated therewith during the term of the agreement and subject to certain limitations as set forth therein.
Under the terms of the agreement, we received a one-time, up front, non-refundable, non-creditable cash payment of $1.5 million.
Beginning in 2025, we are entitled to quarterly royalty payments based on the volume of product sold by the distributor.
These royalty payments include guaranteed minimums, which aggregate to $3.75 million during 2025.
The agreement has an initial term of one year and is automatically renewable in one-year terms unless either party thereto provides written notice of non-renewal six months prior to the then-current term or earlier termination as provided under the agreement.
During the first quarter of 2025, we entered into a manufacture and license agreement with a distributor pursuant to which we agreed to manufacture and supply to the distributor our SimpliGraft product under the distributor s name and brand.
We appointed the distributor as the exclusive seller of our SimpliGraft product to end-users located in the United States during the term of the agreement and in accordance with the terms and conditions thereof and granted the distributor the right to use our related trademark in connection therewith.
Under the terms of the agreement, we received a one-time, up-front, non-refundable, non-creditable cash payment of $1.5 million.