Form 4: Xtant COO granted DSUs and PSUs tied to stock

COO Mark A. Schallenberger received 292,253 DSUs and up to 584,506 PSUs on November 15, 2025, bringing reported beneficial ownership to 670,866 shares.

Summary

• On 2025-11-15, Chief Operating Officer Mark A. Schallenberger reported an equity grant consisting of 292,253 deferred stock units (DSUs) at $0 and performance stock units (PSUs) with a maximum of 584,506 shares.
• The 292,253 DSUs vest in four tranches: 73,063 on 2026-11-15, 73,063 on 2027-11-15, 73,063 on 2028-11-15, and 73,064 on 2029-11-05; settlement is deferred per the award agreement.
• The PSUs vest in one-third increments based on achieving specified stock price performance goals during a three-year performance period and are also subject to continued service; the maximum payout is 200% of the 292,253 target shares (i.e., 584,506).
• Following the transactions, reported beneficial ownership is 670,866 shares (direct), which includes 523,794 shares issuable upon vesting/settlement of RSU/DSU awards under the 2023 plan and 44,500 shares issuable upon vesting/settlement of RSUs under the 2018 plan.
• No open-market purchases or sales were reported; all awards were granted at $0 under company equity incentive plans.

Sentiment

Score: 5

Explanation: Neutral: routine executive equity grant with performance alignment offset by potential dilution; no operating results or guidance disclosed.

Positives

• Awards are predominantly performance-based (PSUs) with stock price hurdles, aligning executive incentives with shareholder returns.
• Multi-year vesting schedule (through 2029) supports executive retention and long-term focus.
• No cash consideration ($0 grant price) preserves company cash while providing compensation via equity.

Negatives

• Potential shareholder dilution from new equity awards: up to 584,506 PSUs at maximum plus 292,253 DSUs granted.
• Vesting and settlement complexities (deferred DSU settlement and performance conditions) add opacity for investors tracking realized ownership.
• Extended vesting horizon delays clarity on ultimate share issuance and realized compensation.

Risks

• PSUs will not vest unless specified stock price performance goals are achieved during the three-year performance period.
• All awards require continued employment; unvested DSUs/PSUs may be forfeited if service conditions are not met.
• Unvested PSUs expire on 2028-11-15; unearned shares will be forfeited.

Future Outlook

No financial guidance was provided. Equity vesting and ultimate share issuance depend on meeting stock price performance goals over the three-year period ending 2028-11-15 and continued employment through stated vesting dates.

Management Comments

• Each DSU represents a contingent right to receive one share of common stock; settlement of vested DSUs is deferred per the award agreement.
• PSUs vest in one-third increments based on specified stock price performance goals during a three-year performance period and require continued service; the reported PSU amount reflects the 200% maximum of the 292,253 target.

Industry Context

Use of multi-year PSUs tied to share price performance and time-based DSUs/RSUs is standard across U.S. medtech and small/mid-cap companies to align pay with performance and retain key executives.

Comparison to Industry Standards

• Three-year performance periods with stock-price or TSR-based metrics and a 200% maximum payout are common among U.S. medtech peers (e.g., Stryker, Zimmer Biomet, Globus Medical, Orthofix).
• Time-based DSU/RSU vesting over three to four years is a typical retention mechanism across the sector.
• Grant structure aligns with prevalent executive compensation designs; without share price or grant-date fair values here, relative grant magnitude versus peers cannot be precisely benchmarked.

Stakeholder Impact

• Shareholders: potential dilution if PSUs and DSUs vest and settle into common shares.
• Executives/employees: enhanced retention incentives through multi-year vesting and performance-based awards.
• Creditors: no immediate cash impact; non-cash compensation structure may preserve liquidity.

Next Steps

• Monitor PSUs against stock price performance goals through 2028-11-15 to assess potential vesting outcomes.
• Track DSU vesting tranches on 2026-11-15, 2027-11-15, 2028-11-15, and 2029-11-05 and any subsequent settlement timing.
• Confirm continued employment status given service-based vesting conditions for all awards.

Key Dates

Keywords

Xtant Medical Holdings, XTNT, Form 4, insider transaction, COO, performance stock units, PSU, deferred stock units, DSU, restricted stock units, RSU, equity grant, 2023 Equity Incentive Plan, 2018 Equity Incentive Plan, stock-based compensation