Greetings and welcome to Xtant Medical First Quarter 2020 Financial Results Conference Call. At this time, all participants are in listen-only mode. As a reminder, this conference is being recorded. I would now like to turn the conference over to David Carey of Lazar FINN Partners. Please go ahead.

Thank you operator and welcome to Xtant Medical first quarter 2020 financial results call. Joining me today is Sean Browne, President and Chief Executive Officer; and Greg Jensen, Vice President, Finance and Chief Financial Officer. Today's call is being webcast and will be posted on the company's website for playback. During the course of this call, management may make certain forward-looking statements regarding future events and the company's expected future performance. These forward-looking statements reflect Xtant's current perspective on existing trends and information and can be identified by such words as expect, plan, will, may, anticipate, believe, should intend, and other words with similar meaning. Any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties including those noted in the Risk Factors section of the company's annual report on Form 10-K filed with the SEC on March 5th, 2020, and as supplemented by the company's subsequent SEC filings. Actual results may differ materially. The company's financial results, press release, and today's discussion include certain non-GAAP financial measures. Please refer to the non-GAAP to GAAP reconciliations which appear in the tables of our press release and are otherwise available on our website. Note that our Form 8-K filed with our financial results press release provides a detailed narrative that describes our use of such measures. For the benefit of those of you who may be listening to the replay, this call was held and recorded on Thursday, May 7th at approximately 9:00 A.M. Eastern Daylight time. The company declines any obligation to update its forward-looking statements except as required by applicable law. Now, I'd like to turn the call over to Sean Browne.

Thank you, David and good morning to everyone listening. Before I begin, on behalf of Xtant Medical, I'd like to extend our deepest gratitude to the healthcare professionals, including many of our customers, our friends, and family members, who are tirelessly caring for patients on the frontlines of the COVID-19 pandemic. They are an inspiration to us all as they do the impossible work of taking care of those most in need, while putting their own lives and safety at risk. In reviewing Xtant Medical's first quarter results, we began the year motivated and optimistic that the strategic and operational initiatives implemented in late 2019 were gaining traction. Sales were tracking in line with our expectations and our actions to streamline the business overall were showing signs of progress. However, as the scope of the COVID-19 pandemic became apparent in early March and restrictions were placed on elective procedures, our sales began to trail off as the majority of spinal procedures were put on hold. In response to this crisis, we had to go back to our mission of honoring the gift of donation by allowing our patients the ability to live as full a life as possible. Through this reset and realigning with our mission, we identified four areas to improve upon and emerge from this crisis stronger than ever. First, we prioritized keeping our employees safe and healthy. To that extent, we implemented social distancing and employee work from home procedures. We continue to monitor local and state government guidelines and intend to hold those measures in place until it is safe for our employees to return to work. Second, we enacted several cost reduction initiatives to conserve as much cash as possible; this included workforce reductions and furloughs, and a pay decrease for all employees, including our Board of Directors. Additionally, we enacted deep cuts in discretionary spending and capital expenditures. Although it was a difficult decision to reduce our workforce, our series of cost-saving actions are intended to preserve capital to support our operations. These measures will be assessed on an ongoing basis, and as more spinal procedures become available, we will review where to invest moving forward. Third, we need to get caught up on production shortfalls, particularly related to our biologics inventory. With the temporary pause in elective procedures, we were able to build our inventory levels to ensure that we can adequately meet demand once business conditions return to normal. And finally, we initiated a strategy to optimize how we manage our surgeons and distributor customers. Before the pandemic, we implemented a set of actions to better position us to serve the needs of our customers, while also lowering our costs and reducing the complexity of our commercial organization. These combined initiatives are designed to increase the predictability of our future revenues and profitability. While the full extent of the pandemic's impact on our business will depend on future developments, we are encouraged to see elective procedures beginning to resume across the country. We made significant progress in transforming our organization before COVID-19 and we're making sure that we can continue this momentum. Through our actions to position the company to operate as a leaner organization and improve the efficiency of our biologics production, I believe we'll be in a better position to fulfill our mission as conditions normalize. Now, I'd like to turn the call over to Greg Jensen for a discussion of our first quarter 2020 financial results.

Thanks Sean and good morning again, everyone. Total revenue for the first quarter of 2020 was $14.8 million compared to $16.7 million for the same period in 2019. This decrease was primarily attributed to the impact of COVID-19 and the sudden drop in elective procedures beginning early March. As Sean mentioned earlier, prior to the pandemic, our sales were tracking in line with our internal forecast and similar to prior year sales levels. Gross margin for the first quarter of 2020 was 65.0% compared to 64.6% in the same period a year ago. First quarter 2020 operating expenses were $11 million compared to $11.5 million in first quarter 2019. General and administrative expenses decreased to $4.3 million in first quarter 2020 compared to $4.5 million for the same period in 2019. The decrease was primarily due to lower legal expenses and consulting fees, partially offset by severance-related expenses from the workforce reductions we enacted due to COVID-19. Sales and marketing expenses were $6.4 million for the first quarter of 2020, a decrease of 5% compared to $6.7 million in the same period in 2019. The decrease was primarily attributable to lower sales commissions due to the lower sales number. Research and development expenses were approximately $250,000 for the first quarter of 2020 compared to $262,000 for the same period in 2019. The net loss was $2.5 million or $0.19 per share for the first quarter in 2020 compared to a net loss of $2.8 million or $0.21 per share in the comparable 2019 period. Non-GAAP adjusted EBITDA for the first quarter of 2020 was $500,000 compared to $1.0 million for the same period of 2019. As of March 31st, 2020, we had $3.2 million of cash and cash equivalents, $9.7 million of net accounts receivable, $18 million of inventory, and approximately $12 million available under our credit facility. Now, I'll turn the call back to Sean for additional comments.

Thank you, Greg. In closing, this is an unprecedented and challenging time for our business and the customers that we serve. While we expect near-term challenges to persist due to the restrictions on elective procedures, we believe our cost-saving actions in response to the pandemic will enable us to navigate through this period of uncertainty. Through our newly implemented operational and marketing initiatives, we believe that our business will emerge in a position of strength as conditions begin to normalize and as elective procedures are allowed to resume. I look forward to providing updates on our progress on future calls. We wish all of those listening on today's call good health. Thank you for your continued support.

And that concludes today's call. Thank you for joining. All parties may disconnect.