DEF 14A: Xtant Medical Holdings Sets Date for Annual Stockholders Meeting, Outlines Key Proposals

Xtant Medical Holdings will hold its annual meeting of stockholders on July 23, 2024, to vote on director elections, auditor ratification, and executive compensation.

Summary

• Xtant Medical Holdings, Inc. will hold its Annual Meeting of Stockholders on July 23, 2024, at 8:00 a.m. Eastern Time, at the offices of Fox Rothschild LLP in New York.
• Stockholders of record as of May 28, 2024, are entitled to vote at the meeting.
• The meeting will address the election of six director nominees, ratification of Grant Thornton LLP as the independent registered public accounting firm for the year ending December 31, 2024, and an advisory vote on executive compensation.
• The Board recommends voting FOR all six director nominees, FOR the ratification of Grant Thornton LLP, and FOR the approval of executive compensation.
• The company had 130,268,590 shares of common stock issued and outstanding on the record date.
• The Board met 17 times during fiscal year 2023.
• The company's non-employee director compensation program provides for annual equity grants of stock options and RSUs (or DSUs), with a value equal to $125,000 per non-employee director, except in the case of the Chair of the Board, where the value is equal to $187,500.
• In 2023, over 99% of the votes cast were in favor of the company's say-on-pay proposal.
• OrbiMed Advisors LLC beneficially owns approximately 56.1% of the company's common stock.

Sentiment

Score: 7

Explanation: The document is primarily informational, outlining the agenda for the annual meeting and providing details on corporate governance and executive compensation. The Board's recommendations and the high approval rate of the say-on-pay proposal suggest a positive outlook, but the presence of related party transactions and the controlled company status temper the overall sentiment.

Positives

• The Board recommends voting FOR all six director nominees, indicating confidence in their ability to lead the company.
• The Board recommends voting FOR the ratification of Grant Thornton LLP, suggesting satisfaction with their services.
• The Board recommends voting FOR the approval of executive compensation, indicating alignment with company performance.
• Over 99% of the votes cast were in favor of the company's say-on-pay proposal in 2023, demonstrating strong stockholder support for executive compensation practices.
• The company has adopted a clawback policy to provide for a mandatory clawback of incentive compensation paid to current and former executives under certain circumstances in the event a financial metric used to determine the vesting or payment of incentive compensation to an executive was calculated incorrectly and resulted in a financial restatement.

Negatives

• The company is a controlled company because more than 50% of the combined voting power of all of its outstanding common stock is beneficially owned by OrbiMed Advisors LLC.
• The Investor Rights Agreement grants Royalty Opportunities and ROS the right to purchase from the company a pro rata amount of any new securities that the company may propose to issue and sell.

Risks

• The Investor Rights Agreement requires the company to obtain the approval of a majority of its common stock held by Royalty Opportunities and ROS to proceed with certain actions, which could limit the company's flexibility.
• The company faces a number of risks, including regulatory, compliance, legal, competitive, financial, operational, political, strategic, and reputational risks.

Future Outlook

The company plans to hold its next say-on-pay vote at the 2025 Annual Meeting of Stockholders.

Management Comments

• The Board believes that the six director nominees collectively have the experience, qualifications, attributes, and skills to effectively oversee the management of the Company.
• The Board believes that executive compensation for 2023 was reasonable, appropriate, and justified by the performance of the Company and the result of a carefully considered approach.

Industry Context

The document does not provide specific details on how this announcement relates to broader industry trends or competitors, but it does mention that the company strives to compensate its executive officers competitively relative to other companies that are similar to it primarily from an industry, revenue and revenue growth perspective.

Comparison to Industry Standards

• The company targets executive compensation at the 50th percentile of its peer group.
• The peer group includes Anika Therapeutics, Inc., AxoGen, Inc., IRadimed Corporation, NeuroPace, Inc., OrthoPediatrics Corp., Pulmonx Corporation, Rockwell Medical, Inc., Sanara MedTech Inc., SI-BONE, Inc., Sientra, Inc., Sight Sciences, Inc., Silk Road Medical, Inc., Surmodics, Inc., TELA Bio, Inc., Treace Medical Concepts, Inc., and Zynex, Inc.

Related Party Transactions

• The company is party to an Investor Rights Agreement with OrbiMed Royalty Opportunities II, LP and ROS Acquisition Offshore LP, which grants them certain rights, including the right to nominate a majority of the directors and designate the chairperson of the Board.
• On August 23, 2022, the company entered into a securities purchase agreement with several accredited investors, including Stavros G. Vizirgianakis and Jonn R. Beeson, pursuant to which the company agreed to issue an aggregate of 20,305,429 shares of its common stock and warrants to purchase up to an aggregate of 5,076,358 shares of its common stock in a private placement.

Stakeholder Impact

• Stockholders are encouraged to participate in the Annual Meeting and vote on the proposals.
• The outcome of the votes will impact the composition of the Board, the selection of the independent auditor, and the company's executive compensation practices.

Next Steps

• Stockholders are encouraged to vote their shares by completing and returning the proxy card or by voting online or by telephone.
• The company will announce preliminary voting results at the Annual Meeting and disclose final voting results in a Current Report on Form 8-K.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Director Election, Executive Compensation, Grant Thornton, Stockholders, Corporate Governance, Xtant Medical