Greetings and welcome to Xtant Medical second quarter 2020 financial results conference call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. I would now like to turn the conference over to Matt Steinberg of Lazar FINN Partners. Please go ahead.

Thank you, operator, and welcome to Xtant Medical's second quarter 2020 financial results call. Joining me today is Sean Browne, President and Chief Executive Officer, and Greg Jensen, Vice President of 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, intends, and other words with similar meaning. Any such forward-looking statements are not guarantees of future performance and involve risks 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 5, 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 Monday, August third at approximately 4:30 P.M. Eastern Daylight Time. The company declines any obligation to update its forward-looking statements, except as required by applicable law. Now, I would like to turn the call over to Sean Browne.

Thank you, Matt, and good afternoon to everyone listening. The second quarter of 2020 was truly an unprecedented and unique time, not only in our company's history but also in the healthcare sector and global economy. At the start of the quarter, the pandemic outbreak surged across the country, creating restrictions on elective procedures that put the majority of spinal procedures on hold. Throughout the second quarter, we saw a dramatic uptick in the month-to-month spinal elective procedures. Supported by pent-up demand, we generated revenues of $10.5 million in the second quarter. The spine market tends to be the least elective of elective procedures since patients are often in debilitating pain, and as such, these procedures were among the first to resume. Beginning in March at the start of the pandemic, we implemented a series of strategic actions to adapt to the new environment and maintain business continuity while positioning the company to emerge from the pandemic in a position of strength. As we previously announced in the first quarter, we focused on four areas to achieve those objectives, and our results in the second quarter reflect early positive returns. First and foremost, we focused on and we continue to prioritize keeping our employees and their families safe and healthy through social distancing and work-from-home procedures where possible. Second, to conserve our cash, we initiated extensive cost reductions at the end of the first quarter. This included significant workforce reductions and across-the-board pay decreases for all employees as well as our Board of Directors. In addition, we enacted deep cuts in discretionary spending and capital expenditures. These swift actions to reduce expenses enabled us to conserve cash and rightsize our cost structure during this uncertain environment. Going forward, we will improve our expense management as we continue to adapt to a new economic reality in healthcare. Third, we used this time to catch up on production shortfalls. We rebuilt inventory levels and continue to focus on optimizing our inventory position. This will enable us to adequately meet current and future demand needs. Finally, due to the slowdown of procedures, we were able to focus on areas of the business that needed to be fixed. In particular, our bio production processing was not meeting our demand needs, and our materials management function had become outdated. Over the course of the last three months, we have dramatically improved the business for the future to enhance overall efficiency. Overall, I am extremely pleased with the performance of our team under such difficult circumstances, and we are now well-positioned to take on current and future challenges. We remain vigilant in monitoring the market for regions that are impacted by COVID and will continue to be flexible in managing our business. Going forward, we believe operating as a leaner organization and improving our overall efficiencies will allow us to live our mission of honoring the gift of donation so our patients can live as full a life as possible. Now, I would like to turn the call over to Greg Jensen for a discussion of our second quarter 2020 financial results.

Thanks, Sean, and good afternoon, everyone. Total revenue for the second quarter of 2020 was $10.5 million compared to $15.3 million for the same period in 2019. For the first half of 2020, total revenue was $25.3 million compared to $32 million for the first half of 2019. These decreases are attributed to the impact of COVID-19 and the sudden drop in elective procedures beginning in early March. As Sean mentioned earlier, sales gradually improved throughout the second quarter, driven by a resumption of elective procedures. Gross margin for the second quarter of 2020 was 62.2% compared to 64.9% for the same period in 2019. Gross margin for the first half of 2020 was 63.9% compared to 64.8% for the first half of 2019. The decrease in gross margin as a percentage of sales is attributed to the decrease in second quarter sales. Second quarter 2020 operating expenses were $6.9 million compared to $10.5 million in the same period a year ago. For the first six months of 2020, operating expenses were $17.9 million compared to $22 million in 2019. As a percentage of total revenue, operating expenses were 65.9% and 70.8% for the three and six months ended June 30, 2020, respectively, compared to 68.6% for both the three and six month periods ended June 30, 2019. General and administrative expenses decreased by $1.3 million to $2.9 million for the three months ended June 30, 2020, compared to the same period in 2019, and decreased by $1.4 million to $7.3 million for the first half of 2020 compared to the same period in 2019. These decreases were primarily due to a reduction in salary and wages, lower legal and consulting fees, and reduced legal settlement expenses, partially offset by additional stock-based compensation expense and severance-related expenses from the workforce reductions we enacted due to COVID-19. Sales and marketing expenses were $3.9 million and $10.3 million for the three and six month periods ended June 30, 2020, respectively, a decrease of 36% and 20% for the three and six month periods, respectively. These decreases were primarily attributable to lower sales commissions due to lower sales and reduced salaries and wages due to the workforce reductions at the end of the first quarter of 2020. Research and development expenses were approximately $110,000 for the second quarter of 2020, a decrease of 47% compared with the same period in 2019. For the six month period ending June 30, 2020, R&D expenses decreased by $120,000 or 25% due to reduced salaries compared to the prior year. These reductions attributed to our cash conservation strategies during the COVID-19 pandemic. The net loss of the business was $2.5 million or $0.19 per share for the second quarter in 2020 compared to a loss of $1.9 million or $0.15 per share in the comparable 2019 period. The year-to-date net loss for 2020 was $5 million or $0.38 per share, compared to $4.7 million or $0.36 per share in 2019. Adjusted EBITDA for the second quarter of 2020 was $712,000 compared to $1.1 million for the same period of 2019. Adjusted EBITDA for the first six months of 2020 was $1.2 million compared to $2.1 million for the same period of 2019. As of June 30, 2020, we had $3 million of cash and cash equivalents, $7.6 million of net accounts receivable, $19.9 million of inventory, and $12.2 million available under our credit facility. Now I will turn the call back to Sean for additional comments.

Thank you, Greg. In closing, against a difficult backdrop facing the healthcare industry entering the second quarter, the month-by-month uptick in spinal elective procedures combined with pent-up demand enabled us to deliver a solid revenue performance, which only months earlier was far bleaker. Unfortunately, the pandemic continues to create regional uncertainties, especially in areas of the country where we are strongest. We will remain vigilant on managing our expenses and improving operations so that we can adapt our business to the new environment. I look forward to providing updates on our progress on future calls. I wish all those listening on today's call good health. Thank you for your continued support.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.