Greetings, and welcome to the Xtant Medical Q3 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to Matt Steinberg of Finn Partners. Please go ahead.
Thank you, operator, and welcome to Xtant Medical's third quarter 2022 financial results call. Joining me today is Sean Browne, President and Chief Executive Officer, and Scott Neils, 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 XTNT current perspective on existing trends and information and can be identified by such words as expect, plan, will, may, anticipate, believe, and other words with similar meaning.
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 eighth, 2022, and in subsequent SEC reports and press releases.
Actual results may differ materially. The company's financial results press release in 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 is held and recorded on Thursday, November third, at approximately 9:00 A.M. Eastern Daylight Time. The company disclaims 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, Matt, and good morning, everyone. I am pleased to provide an update on our company's progress during the third quarter. There were several positive items that I'd like to touch on today. First, we achieved solid year-over-year revenue growth driven by our biologics business, continuing our momentum from the H1 of the year. Second, we enhanced our cash position and strengthened our board. Third, we continued to execute on our key growth pillars, thereby positioning the company to create value for our leading spine brand.
Lastly, I want to provide an update on our newly implemented ERP on both the challenges of implementation and the benefits it will provide moving forward. Starting with our third quarter performance, total revenue increased by 5% year-over-year, led by growth in our biologics products of 12% year-over-year.
Throughout the quarter, the pace of sales increased following a slow start, and we closed September on a positive note. We are pleased with our revenue growth against the backdrop of a challenging labor environment. Market demand, particularly for our biologics products, remains strong. However, due to limited availability of production labor, we were operating below 70% capacity for most of Q3.
This is not just a challenge at Xtant, but one that is impacting the entire tissue banking industry. We work with a number of tissue banks for some outsourced lower volume products, and they, too, were having significant labor issues. To minimize this effect, we proactively increased recruiting and training efforts for our processing team. We believe our actions are starting to alleviate the supply chain issues so that we can keep up with demand and produce more product.
While it typically takes about six months to get a new employee fully trained, we are confident that we will be operating at 100% capacity by the end of first quarter of 2023. Now, turning to our recently announced private investment. During the quarter, we bolstered our financial position by entering into a securities purchase agreement with select group of accredited investors led by Stavros Vizirgianakis, a successful biotech executive and investor.
The total gross proceeds of $9.75 million from the transaction will support working capital and other general corporate purposes. After the completion of this closing in August, Stavros became Non-Executive Chairman of the XTNT board. He brings us a distinguished career of more than 30 years of serving the broader spine and orthopedic surgical markets, having recently served as Chief Executive Officer at MiMedx.
We welcome his deep experience and leadership that will be invaluable as we grow our business and fulfill our mission. Moving forward, our focus remains primarily on four key growth initiatives. one, new product introductions. two, distribution network expansion. three, adjacent market penetration. four, strategic acquisitions. Demand and order flow for our new biologic products were robust during the third quarter. Both OsteoFactor, our marrow-derived growth factor product, and OsteoVive Plus, a cellular allograft product, performed exceptionally well in driving our revenue growth.
OsteoFactor, in particular, is a terrific product for bringing on new distributors and for providing a safe and very effective growth factor product to our surgeons. We are excited about the traction generated to date and look forward to continued growth of these new product lines. Our distribution expansion strategy is bearing very nice fruit. Over the course of the last two years, we have been targeting at least 10 new distributors per quarter. I'm happy to say the quality of those distributors and their overall impact on our business has been very positive.
At the beginning of the year, we planned for that group of new distributors to contribute $6.1 million in sales for all of 2022, and through September, they've already produced more than $5.7 million. Our third key pillar, targeted adjacent market penetration, remains an important part of our strategy that represents a total market opportunity of $625 million.
Concurrent with the production labor constraints that I discussed earlier, our penetration into certain adjacent markets has slowed. Our focus remains on our existing private label and OEM businesses near term, but we will continue to view the adjacent markets as a key growth pillar moving forward. Our last pillar is leveraging our growth platform through strategic acquisitions.
As we have previously communicated, we feel the strategy can provide both a path to accelerate scale, but it is a strategy that takes time to execute. With the recent reductions in public market companies valuations, many private companies are only now beginning to realize that the valuations of 2021 are not the same as they are in 2022. We will remain diligent in our approach to acquisition, but this will be an important element of our goal to get to greater scale. Finally, amidst the many production challenges XTNT has faced, we also implemented a new enterprise resource planning system, or ERP system.
This is the fourth time in my career where I've been involved in such an endeavor, and the previous three were very disruptive to the everyday workload of everyone in those respective companies. For XTNT, we endured a tough transition in July and August, but by September, we were beginning to reap the benefits of this wonderful new system. I'm thrilled by how our team stepped up and successfully implemented this system.
I look at the implementation of this new ERP system as the last step in turning this business around and fortifying our growth platform. Looking back on the third quarter, we have made significant progress on our growth pillars, operations and financial position. I am appreciative of the work that our dedicated team has achieved by delivering 5% revenue growth and 12% biologics growth under a very tight labor market. Given the strong demand environment, we have taken the necessary actions of ramping up our recruiting and training efforts to ensure we can meet this demand. Looking forward, we are more confident than ever regarding our future prospects.
With the recent closed private investment and supported by the deep experience of Stavros Vizirgianakis, along with all our newly implemented ERP, we believe all the pieces are in place to execute on our vision and strategy. Now, I'd like to turn the call over to Scott Neils, who will discuss our third quarter 2022 financial results.
Thank you, Sean, and good morning, everyone. Total revenue for the third quarter of 2022 was $14.5 million compared to $13.8 million in the same quarter in the prior year. This 5% increase in revenue was attributed primarily to introductions of new products. Gross margin for the third quarter of 2022 was 54.6%, compared to 52.2% the same period in 2021.
The increase was primarily attributable to improved capacity utilization. Operating expenses for the third quarter of 2022 totaled $9.8 million, compared to $8.6 million in the third quarter of 2021. As a percentage of total revenue, operating expenses were 68% compared to 63% in the same period a year ago.
General and administrative expenses were $3.7 million for the three months ended September thirtieth, 2022, compared to $3.1 million for the same period in 2021. This increase was primarily attributable to additional expenses related to product registrations and various employee compensation plans.
Sales and marketing expenses were $5.9 million for the three months ended September thirtieth, 2022, compared to $5.3 million for the same period in 2021. This increase was primarily attributable to additional independent agent sales commissions and incentives due to higher revenues versus comparable period 2021. Net loss for the third quarter of 2022 was $2.4 million, or $0.03 per share, compared to a loss of $1.8 million or $0.02 per share in the comparable 2021 period.
non-GAAP adjusted EBITDA for the third quarter of 2022 totaled a loss of $0.9 million, compared to a non-GAAP adjusted EBITDA loss of $0.6 million for the prior year period. As of September thirtieth, 2022, we had $17.4 million of cash and cash equivalents, $9.8 million of net accounts receivable, $17 million of inventory, and $7.3 million available under our credit facility. Now I'll turn the call back to Sean for closing remarks.
Thank you, Scott. We are pleased with the progress made in the third quarter by delivering 5% revenue growth, driven by a 12% increase from our biologics products against a challenging market environment. We continue to make promising strides in our key growth pillars, highlighted by strong performance from our latest biologic product introductions and the significant contributions our new distributors have made to our business.
The private financing solidified our balance sheet by strengthening our cash position, enabling us to advance our long-term strategy. Additionally, we are excited to welcome Stavros Vizirgianakis to our board. With his expansive experience, he will be a significant contributor to our future success. In closing, XTNT values are centered around the three Rs, respect for the individual, responsiveness to our customers, and responsibility to our shareholders.
These values drive our mission, which is our duty to honor the gift of donation, while our job is to build world-class products so that our patients can live as full and complete a life as possible. Thank you for joining us today and for your continued support. I will now turn it back over to the operator.
Thank you. That concludes our call. All parties may now disconnect.