Alphatec Q3 2026 net loss narrows to $5.5M
Operating activities provided $40.7 million in cash over nine months, while investing activities used $64.4 million.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Alphatec Holdings, Inc. (ATEC) reported third-quarter revenue of $221.2 million, up 13% from $196.5 million a year earlier, and nine-month revenue of $626.8 million, up 14%. For the quarter, it recorded $3.2 million in operating income, compared with a $15.9 million operating loss a year earlier, and a $5.5 million net loss versus $28.6 million. Nine-month net loss was $65.2 million, versus $121.6 million.
Cash and cash equivalents were $79.9 million at September 30, 2026, compared with $160.8 million at December 31, 2025; operating activities provided $40.7 million over nine months. In May, the company repaid the $200 million Braidwell term loan and $12.5 million MidCap revolving credit facility. At quarter-end, the JPM term loan balance was $173.9 million and the JPM revolving credit facility balance was $70 million. It repaid the remaining $63.3 million principal on its 2026 convertible notes in July. A July asset acquisition had fixed consideration of approximately $8.8 million, plus up to $14.5 million payable upon specified future milestones.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointRevenue increased 13% to $221.2 million in the third quarter.
- Moderate pointQuarterly operating income was $3.2 million, versus a $15.9 million loss.
- Moderate pointNine-month net loss narrowed to $65.2 million from $121.6 million.
Negative
- Moderate pointQuarter-end cash: $79.9 million; December 31, 2025 balance: $160.8 million.
Filing Explained
The reported share count is higher; warrant and convertible-note shares remain potential dilution, not part of the issued-share count.
This unaudited quarterly report shows ATEC had 155,220 thousand common shares issued and outstanding on
The report also lists 8,177 thousand warrants and 34,527 thousand shares underlying its 2030 convertible notes among securities excluded from diluted loss per share; no note conversion conditions had been met and no warrants had been exercised by
Key Figures
Key Terms
contract liability financial
lower of cost or net realizable value financial
capped call transactions financial
if-converted method financial
Senior Secured Net Leverage Ratio financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did ATEC report in Q3 2026?
What was ATEC's net loss in Q3 2026?
What are the terms of ATEC's 2030 convertible notes?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No
As of October 22, 2026, there were
Table of Contents
ALPHATEC HOLDINGS, INC.
QUARTERLY REPORT ON FORM 10-Q
September 30, 2026
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Controls and Procedures |
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Risk Factors |
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Unregistered Sales of Equity Securities and Use of Proceeds |
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Exhibits |
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2
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for par value data)
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Assets |
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Current assets: |
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Accounts receivable, net of allowances of $ |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Right-of-use assets |
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Goodwill |
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Intangible assets, net |
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Other assets |
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Total assets |
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Liabilities and Stockholders’ (Deficit) Equity |
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Current liabilities: |
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Accounts payable |
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Accrued expenses and other current liabilities |
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Contract liabilities |
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Short-term debt |
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Current portion of operating lease liabilities |
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Total current liabilities |
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Long-term debt |
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Operating lease liabilities, less current portion |
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Other long-term liabilities |
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Commitments and contingencies (Note 8) |
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Redeemable preferred stock, $ |
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Common stock, $ |
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Treasury stock, |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Accumulated deficit |
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Total stockholders’ (deficit) equity |
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Total liabilities and stockholders’ (deficit) equity |
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See accompanying notes to unaudited condensed consolidated financial statements.
3
Table of Contents
ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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2026 |
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2025 |
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2025 |
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Revenue from products and services |
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Cost of sales |
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Gross profit |
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Operating expenses: |
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Research and development |
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Sales, general and administrative |
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Litigation-related expenses |
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Amortization of acquired intangible assets |
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Restructuring expenses |
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Total operating expenses |
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Operating income (loss) |
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Other expense, net: |
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Interest expense, net |
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Loss on debt extinguishment |
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Gain on derivative liability |
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Other (expense) income, net |
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Total other expense, net |
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Net loss before taxes |
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Income tax (benefit) provision |
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( |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss per share, basic and diluted |
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$ |
( |
) |
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$ |
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$ |
( |
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$ |
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Weighted average shares outstanding, basic and diluted |
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See accompanying notes to unaudited condensed consolidated financial statements.
4
Table of Contents
ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(In thousands)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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||||
Net loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Foreign currency translation adjustments |
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( |
) |
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( |
) |
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( |
) |
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Comprehensive loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
See accompanying notes to unaudited condensed consolidated financial statements.
5
Table of Contents
ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY
(UNAUDITED)
(In thousands)
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Common stock |
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Additional |
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Treasury |
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Accumulated other |
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Accumulated |
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Total |
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Shares |
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Par Value |
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capital |
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stock |
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loss |
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deficit |
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(deficit) equity |
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Balance at December 31, 2025 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
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||||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Common stock issued for stock option exercises |
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— |
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— |
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— |
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— |
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Common stock issued for vesting of |
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( |
) |
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— |
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— |
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— |
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( |
) |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance at March 31, 2026 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
|
$ |
( |
) |
|||
Stock-based compensation |
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— |
|
|
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— |
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|
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|
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— |
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— |
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— |
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Common stock issued for employee stock |
|
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|
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— |
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— |
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— |
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— |
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|||
Common stock issued for vesting of |
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— |
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( |
) |
|
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— |
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— |
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|
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— |
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( |
) |
|
Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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( |
) |
|
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— |
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( |
) |
Net loss |
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— |
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|
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— |
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|
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— |
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|
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— |
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|
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— |
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|
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( |
) |
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|
( |
) |
Balance at June 30, 2026 |
|
|
|
|
$ |
|
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$ |
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|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
Stock-based compensation |
|
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— |
|
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— |
|
|
|
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|
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— |
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— |
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— |
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||
Common stock issued for stock option exercises |
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— |
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— |
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— |
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— |
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|||
Common stock issued for vesting of |
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( |
) |
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— |
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— |
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— |
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( |
) |
||
Common stock issued for asset acquisition |
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— |
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— |
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— |
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— |
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|||
Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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( |
) |
|
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— |
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( |
) |
Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance at September 30, 2026 |
|
|
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$ |
|
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$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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6
Table of Contents
ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY
(UNAUDITED)
(In thousands)
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Common stock |
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Additional |
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Treasury |
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Accumulated other |
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Accumulated |
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Total |
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Shares |
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Par Value |
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capital |
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stock |
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loss |
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deficit |
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(deficit) equity |
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Balance at December 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
|||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Common stock issued for stock option exercises |
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— |
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— |
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— |
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— |
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Common stock issued for vesting of |
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( |
) |
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— |
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— |
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— |
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( |
) |
||
Purchase of capped calls |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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( |
) |
Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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— |
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Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
Stock-based compensation |
|
|
- |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Common stock issued for warrant exercises |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for employee stock |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for vesting of |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Common stock issued for asset acquisition |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Warrant modification |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Reclassification of equity-based liability |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Foreign currency translation adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Common stock issued for stock option exercises |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for vesting of |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Foreign currency translation adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
See accompanying notes to unaudited condensed consolidated financial statements.
7
Table of Contents
ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Amortization of debt discount and debt issuance costs |
|
|
|
|
|
|
||
Amortization of right-of-use assets |
|
|
|
|
|
|
||
Write-down for excess and obsolete inventories |
|
|
|
|
|
|
||
Loss on disposal of assets |
|
|
|
|
|
|
||
Loss on debt extinguishment |
|
|
|
|
|
|
||
Gain on derivative liability |
|
|
|
|
|
( |
) |
|
Other |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
|
Other assets |
|
|
( |
) |
|
|
|
|
Accounts payable |
|
|
|
|
|
( |
) |
|
Accrued expenses |
|
|
( |
) |
|
|
|
|
Lease liabilities |
|
|
( |
) |
|
|
( |
) |
Contract liabilities |
|
|
|
|
|
( |
) |
|
Other long-term liabilities |
|
|
|
|
|
( |
) |
|
Net cash provided by operating activities |
|
|
|
|
|
|
||
Investing activities: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
|
( |
) |
|
|
( |
) |
Note receivable |
|
|
( |
) |
|
|
|
|
Purchase of intangible assets |
|
|
( |
) |
|
|
( |
) |
Cash paid for equity investment |
|
|
|
|
|
( |
) |
|
Other |
|
|
( |
) |
|
|
|
|
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Financing activities: |
|
|
|
|
|
|
||
Repayment of term loan |
|
|
( |
) |
|
|
|
|
Proceeds from issuance of term loan |
|
|
|
|
|
|
||
Proceeds from revolving credit facility |
|
|
|
|
|
|
||
Repayment of convertible notes |
|
|
( |
) |
|
|
|
|
Repayment of revolving credit facility |
|
|
( |
) |
|
|
( |
) |
Payment of debt extinguishment costs |
|
|
( |
) |
|
|
|
|
Payments related to tax withholdings for share-based compensation |
|
|
( |
) |
|
|
( |
) |
Payment of debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of convertible notes, net |
|
|
|
|
|
|
||
Repurchase of convertible notes |
|
|
|
|
|
( |
) |
|
Purchase of capped calls |
|
|
|
|
|
( |
) |
|
Other |
|
|
( |
) |
|
|
|
|
Net cash (used in) provided by financing activities |
|
|
( |
) |
|
|
|
|
Effect of exchange rate changes on cash |
|
|
( |
) |
|
|
|
|
Net change in cash and cash equivalents |
|
|
( |
) |
|
|
|
|
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Cash paid for income taxes |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of noncash activities: |
|
|
|
|
|
|
||
Purchases of property and equipment in accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
Purchase of intangible assets in accrued expenses and other long-term liabilities |
|
$ |
|
|
$ |
|
||
Financed insurance |
|
$ |
|
|
$ |
|
||
Recognition of lease liabilities |
|
$ |
|
|
$ |
|
||
Recognition of derivative liability |
|
$ |
|
|
$ |
|
||
Common stock issued for asset acquisition |
|
$ |
|
|
$ |
|
||
See accompanying notes to unaudited condensed consolidated financial statements.
8
Table of Contents
ALPHATEC HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies
The Company
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. All intercompany balances and transactions have been eliminated in consolidation.
The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnotes it normally includes in its annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The unaudited interim condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2025, which are included in the Company’s Annual Report on Form 10-K that was filed with the SEC. Operating results for the nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the full year or any other future periods.
Use of Estimates
Fair Value Measurements
The carrying amount of financial instruments consisting of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, other assets, accounts payable, accrued expenses, and short-term debt included in the Company’s condensed consolidated financial statements are reasonable estimates of fair value due to their short maturities.
Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active; or other inputs that can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
9
Table of Contents
Excess and Obsolete Inventory
Most of the Company’s inventory is comprised of finished goods, which is primarily produced by third-party suppliers. Specialized implants, fixation products, biologics, and imaging equipment are determined by utilizing a standard cost method that includes capitalized variances, which approximates the weighted average cost. Component parts related to the imaging equipment are valued at weighted average cost. Inventories are stated at the lower of cost or net realizable value. The Company reviews the components of its inventory on a periodic basis for excess and obsolescence and adjusts inventory to its net realizable value as necessary.
The Company records a lower of cost or net realizable value (“LCNRV”) inventory reserve for estimated excess and obsolete inventory based upon its expected use of inventory on hand. The Company’s inventory, which consists primarily of specialized implants, fixation products, and biologics, is at risk of obsolescence due to the need to maintain substantial levels of inventory. In order to market its products effectively and meet the demands of intraoperative product placement, the Company maintains and provides surgeons and hospitals with a variety of inventory products and sizes. For each surgery, fewer than all components will be consumed. The need to maintain and provide a wide variety of inventory causes inventory to be held that is not likely to be used.
The Company’s estimates and assumptions for excess and obsolete inventory are reviewed and updated on a quarterly basis. The estimates and assumptions are determined primarily based on current usage of inventory and the age of inventory quantities on hand. Additionally, the Company considers recent sales experience to develop assumptions about future demand for its products, while considering product life cycles and new product launches. Increases in the LCNRV reserve for excess and obsolete inventory result in a corresponding charge to cost of sales.
Revenue Recognition
The Company recognizes revenue from product sales in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") Revenue from Contracts with Customers (“Topic 606”). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.
Sales are derived primarily from the sale of spinal implant products, imaging equipment, and related services to hospitals and medical centers. Revenue is recognized when obligations under the terms of a contract with customers are satisfied, which occurs with the transfer of control of products to customers, either upon shipment of the product or delivery of the product to the customer depending on the shipping terms, or when the products are used in a surgical procedure (implanted in a patient). Revenue from the sale of imaging equipment is recognized as each distinct performance obligation is fulfilled and control transfers to the customer, beginning with shipment or delivery, depending on the contract terms. Revenue from other distinct performance obligations, such as maintenance on imaging equipment and other imaging-related services, is recognized in the period the service is performed, and makes up less than
To the extent that the transaction price includes variable consideration, such as discounts, rebates, and customer payment penalties, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available, including historical, current, and forecasted information.
10
Table of Contents
The Company records a contract asset when one or more performance obligations have been completed and revenue has been recognized, but the customer's payment is contingent on the satisfaction of additional performance obligations. The Company records a contract liability, or deferred revenue, when it has an obligation to provide a product or service to the customer and payment is received in advance of its performance. When the Company sells a product or service with a future performance obligation, revenue is deferred on the unfulfilled performance obligation and recognized over the related performance period. Generally, the Company estimates the selling price of promised services included in the equipment sales price using an expected cost plus a margin approach and/or the separately observable price of such service, if available. The transaction price for a contract’s various performance obligations is allocated using the relative standalone selling price method. The use of alternative estimates could result in a different amount of revenue deferral.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Topic 220-40). Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company is in the process of assessing the impact of this standard on its consolidated financial statements and related disclosures.
In December 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2025-11 Interim Reporting (Topic 270). ASU No. 2025-11 clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. This ASU clarifies the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. GAAP. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, and early adoption is permitted. Entities may apply the guidance prospectively or retrospectively. The Company is currently evaluating the impact the standard will have on its interim consolidated financial statements and related disclosures.
2. Fair Value Measurements
Assets and liabilities measured at fair value on a recurring basis include the following as of September 30, 2026, and December 31, 2025 (in thousands):
|
September 30, 2026 |
|
|||||||||||||
Assets: |
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
$ |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
||
Total cash equivalents |
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
December 31, 2025 |
|
|||||||||||||
Assets: |
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
$ |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
||
Total cash equivalents |
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
The Company did not have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the periods presented.
Fair Value of Convertible Debt
The fair value, based on a quoted market price (Level 1), of the Company’s outstanding
11
Table of Contents
3. Inventories
Inventories reported at the lower of cost or net realizable value consist of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Finished goods |
|
|
|
|
|
|
||
Inventories |
|
$ |
|
|
$ |
|
||
4. Property and Equipment, net
Property and equipment, net consist of the following (in thousands, except as indicated):
|
|
Useful lives |
|
September 30, |
|
|
December 31, |
|
||
Surgical instruments |
|
|
$ |
|
|
$ |
|
|||
Machinery and equipment |
|
|
|
|
|
|
|
|||
Computer equipment |
|
|
|
|
|
|
|
|||
Office furniture and equipment |
|
|
|
|
|
|
|
|||
Leasehold improvements |
|
|
|
|
|
|
|
|||
Construction in progress |
|
n/a |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
Less: accumulated depreciation |
|
|
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
|
|
$ |
|
|
$ |
|
||
Total depreciation and amortization expense was $
5. Goodwill and Intangible Assets
Goodwill
The change in the carrying amount of goodwill during the period ended September 30, 2026, includes the following (in thousands):
December 31, 2025 |
|
$ |
|
|
Foreign currency fluctuation |
|
|
( |
) |
September 30, 2026 |
|
$ |
|
12
Table of Contents
Intangible assets, net
Intangible assets, net consist of the following (in thousands, except as indicated):
|
|
Remaining Avg. |
|
Gross |
|
|
Accumulated |
|
|
Intangible |
|
|||
September 30, 2026: |
|
(in years) |
|
Amount |
|
|
Amortization |
|
|
Assets, net |
|
|||
Developed product technology |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Internally developed software |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Trademarks and trade names |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Customer relationships |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Distribution network |
|
– |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Total amortized intangible assets |
|
|
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Software in development |
|
n/a |
|
|
|
|
|
— |
|
|
|
|
||
In-process research and development |
|
n/a |
|
|
|
|
|
— |
|
|
|
|
||
Total intangible assets |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Remaining Avg. |
|
Gross |
|
|
Accumulated |
|
|
Intangible |
|
|||
December 31, 2025: |
|
(in years) |
|
Amount |
|
|
Amortization |
|
|
Assets, net |
|
|||
Developed product technology |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Internally developed software |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Trademarks and trade names |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Customer relationships |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Distribution network |
|
– |
|
|
|
|
|
( |
) |
|
|
— |
|
|
Total amortized intangible assets |
|
|
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Software in development |
|
n/a |
|
|
|
|
|
— |
|
|
|
|
||
In-process research and development |
|
n/a |
|
|
|
|
|
— |
|
|
|
|
||
Total intangible assets |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Total amortization expense attributed to intangible assets was $
In July 2026, the Company completed an asset acquisition of in-process research and development assets with alternative future use for fixed consideration of approximately $
Future amortization expense related to intangible assets is as follows (in thousands):
Remainder of 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
|
|
$ |
|
13
Table of Contents
6. Contract Assets and Contract Liabilities
Contract assets included within prepaid expenses and other current assets in the condensed consolidated balance sheets are as follows (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Contract assets |
|
$ |
|
|
$ |
|
||
The non-current contract liabilities balance is included in other long-term liabilities on the condensed consolidated balance sheets. The Company’s contract liabilities are as follows (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Contract liabilities |
|
$ |
|
|
$ |
|
||
Less: Non-current portion of contract liabilities |
|
|
|
|
|
|
||
Current portion of contract liabilities |
|
$ |
|
|
$ |
|
||
The Company recognized $
7. Debt
JP Morgan Credit Agreement
In May 2026, the Company entered into a senior secured credit agreement (the “Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent, and the lenders and issuing banks party thereto. The Credit Agreement provides for (i) a $
The applicable and effective interest rates for the JPM Revolving Credit Facility and JPM Term Loan as of September 30, 2026 were
The JPM Term Loan requires quarterly amortization payments equal to
14
Table of Contents
In conjunction with obtaining the JPM Credit Facilities, the Company incurred $
In conjunction with the issuance of the JPM Credit Facilities, the Company incurred $
The JPM Credit Facilities are secured by substantially all of the assets of the Company, subject to customary exclusions. The Credit Agreement contains representations, warranties, and affirmative and negative covenants customary for financings of this type. The Credit Agreement requires the Company to maintain (i) a Senior Secured Net Leverage Ratio not exceeding
0.75% Convertible Senior Notes due 2030
In March 2025, the Company issued $
The 2030 Notes are convertible into shares of the Company’s common stock based upon an initial conversion rate of
Holders of the 2030 Notes have the right to convert their notes in certain circumstances and during specified periods. Prior to the close of business on the business day immediately preceding September 17, 2029, holders may convert all or a portion of their 2030 Notes only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter) if the last reported sale price of the Company’s common stock for at least
The 2030 Notes are redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after March 20, 2028 and on or before the 60th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of the Company’s common stock exceeds
If a fundamental change occurs prior to the maturity date, holders may require the Company to repurchase all or a portion of their 2030 Notes for cash at a price equal to
15
Table of Contents
At the time of issuance, the Company determined that the 2030 Notes had an embedded conversion option that met the criteria to be bifurcated and accounted for separately from the 2030 Notes. The Company initially recorded the fair value of the embedded conversion option as a derivative liability and the principal amount of the 2030 Notes as a long-term liability, net of debt discount and deferred issuance costs. In June 2025, conditions necessary for separate accounting of the conversion option as a derivative liability were not met. Accordingly, the conversion option derivative liability was remeasured as of the date of the change and subsequently reclassified to additional paid-in capital on the Company’s condensed consolidated statements of shareholders’ (deficit) equity. The annual effective interest rate for the 2030 Notes is
The outstanding principal amount and carrying value of the 2030 Notes consists of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Principal |
|
$ |
|
|
$ |
|
||
Unamortized debt discount and debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Net carrying value |
|
$ |
|
|
$ |
|
||
2030 Capped Call Transactions
In connection with the offering of the 2030 Notes, the Company entered into privately negotiated capped call transactions (the “2030 Capped Call Transactions”) with certain financial institutions. The 2030 Capped Call Transactions are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount of the 2030 Notes upon conversion of the 2030 Notes in the event that the market price per share of the Company’s common stock is greater than the strike price of the 2030 Capped Call Transactions with such reduction and/or offset subject to a cap. The 2030 Capped Call Transactions have an initial cap price of $
The 2030 Capped Call Transactions are separate transactions and are not part of the terms of the 2030 Notes and will not affect any holder’s rights under the 2030 Notes. Holders of the 2030 Notes will not have any rights with respect to the 2030 Capped Call Transactions.
The 2030 Capped Call Transactions meet all of the applicable criteria for equity classification, and as a result, the related $
Term Loan
On January 6, 2023, the Company entered into a $
On May 1, 2026, the Company repaid all obligations under its existing Braidwell Term Loan facility, including $
16
Table of Contents
Revolving Credit Facility
In September 2022, the Company entered into a revolving credit facility with entities affiliated with MidCap Financial Trust. The MidCap Revolving Credit Facility originally provided up to $
On May 1, 2026, the Company repaid all obligations under its existing MidCap Revolving Credit Facility, including $
0.75% Convertible Senior Notes due 2026
In August 2021, the Company issued $
The 2026 Notes were convertible into shares of the Company’s common stock based upon an initial conversion rate of
Holders of the 2026 Notes had the right to convert their notes in certain circumstances and during specified periods. Prior to the close of business on the business day immediately preceding February 2, 2026, holders could convert all or a portion of their 2026 Notes only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter) if the last reported sale price of the Company’s common stock for at least
The 2026 Notes were redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after
On July 30, 2026, the Company repaid the $
17
Table of Contents
2026 Capped Call Transactions
In connection with the offering of the 2026 Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions. The Capped Call Transactions were expected generally to reduce the potential dilution and/or offset the cash payments the Company was required to make in excess of the principal amount of the 2026 Notes upon conversion of the 2026 Notes in the event that the market price per share of the Company’s common stock was greater than the strike price of the Capped Call Transactions with such reduction and/or offset subject to a cap. The Capped Call Transactions had an initial cap price of $
Total Indebtedness
Principal payments remaining on the Company's debt are as follows as of September 30, 2026 (in thousands):
Remainder of 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
|
|
|
Less: unamortized debt discount and debt issuance costs |
|
|
( |
) |
Total |
|
|
|
|
Less: Short-term debt |
|
|
( |
) |
Long-term debt |
|
$ |
|
8. Commitments and Contingencies
Leases
The Company determines if an arrangement is a lease at inception by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset (“ROU asset”) upon commencement of the lease using a discount rate based on the incremental borrowing rate of interest that the Company would borrow on a collateralized basis for an amount equal to the lease payments in a similar economic environment.
On September 18, 2026, the Company entered into an amendment to the lease for its corporate headquarters in Carlsbad, California. The amendment extends the lease term from January 31, 2031 to July 31, 2039. The Company accounted for the amendment as a lease modification and remeasured the lease liability and related right-of-use asset as of the modification date.
Also on September 18, 2026, the Company entered into a lease for approximately
The Company leases office and storage facilities and equipment under various operating and financing lease agreements. The initial terms of these leases range from
18
Table of Contents
Future minimum annual lease payments for all operating leases of the Company are as follows as of September 30, 2026 (in thousands):
Remainder of 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted lease payments |
|
|
|
|
Less: imputed interest |
|
|
( |
) |
Operating lease liabilities |
|
|
|
|
Less: current portion of operating lease liabilities |
|
|
( |
) |
Operating lease liabilities, less current portion |
|
$ |
|
The Company’s weighted average remaining lease term and weighted average discount rate as of September 30, 2026 and December 31, 2025 are as follows:
|
|
September 30, |
|
|
December 31, |
|
||
Weighted-average remaining lease term (years) |
|
|
|
|
|
|
||
Weighted-average discount rate |
|
|
% |
|
|
% |
||
Information related to the Company’s operating leases is as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Rent expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cash paid for amounts included in measurement of lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Litigation
The Company is and may become involved in various legal proceedings arising from its business activities. While management is not aware of any litigation matter that in and of itself would have a material adverse impact on the Company’s condensed consolidated results of operations, cash flows or financial position, litigation is inherently unpredictable, and depending on the nature and timing of a proceeding, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows or financial position in a particular period. The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual or disclosure in the Company’s condensed consolidated financial statements. An estimated loss contingency is accrued in the Company’s condensed consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against the Company may be unsupported, exaggerated or unrelated to reasonably possible outcomes, and as such are not meaningful indicators of the Company’s potential liability.
Indemnifications
In the normal course of business, the Company enters into agreements under which it occasionally indemnifies third-parties for intellectual property infringement claims or claims arising from breaches of representations or warranties. In addition, from time to time, the Company provides indemnity protection to third-parties for claims relating to past performance arising from undisclosed liabilities, product liabilities, environmental obligations, representations and warranties, and other claims. In these agreements, the scope and amount of remedy, or the period in which claims can be made, may be limited. It is not possible to determine the maximum potential amount of future payments, if any, due under these indemnities due to the conditional nature of the obligations and the unique facts and circumstances involved in each agreement.
19
Table of Contents
Royalties
The Company has entered into various intellectual property agreements requiring the payment of royalties based on the sale of products that utilize such intellectual property. These royalties primarily relate to products sold by Alphatec Spine and are based on fixed fees or calculated either as a percentage of net sales or on a per-unit sold basis. Royalties are included on the accompanying condensed consolidated statements of operations as a component of cost of sales.
9. Stock-Benefit Plans and Equity Transactions
Stock-Based Compensation
The Company has stock-based compensation plans under which it grants stock options, restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs") to officers, directors and third parties. Total stock-based compensation for the periods presented is as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Cost of sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As of September 30, 2026, there was $
Restricted Stock Units and Performance Based Restricted Stock Units Awards
The Company issued
Employee Stock Purchase Plan
Employees are eligible to participate in the Employee Stock Purchase Plan ("ESPP") approved by its shareholders. During the three months ended September 30, 2026 and 2025,
The Company estimates the fair value of shares issued to employees under the ESPP using the Black-Scholes option-pricing model. The assumptions used to estimate the fair value of stock options granted and stock purchase rights under the ESPP are as follows:
|
|
Three and Nine Months Ended |
|
|||||
|
|
September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Risk-free interest rate |
|
|
|
|
||||
Expected dividend yield |
|
|
— |
|
|
|
— |
|
Expected term (years) |
|
|
|
|
|
|
||
Volatility |
|
|
|
|
||||
Warrants Outstanding
Squadron Medical Warrants
In connection with debt financing entered into with Squadron Medical Finance Solutions, LLC ("Squadron Medical") in 2018, and amended in 2019 and 2020, the Company issued common stock warrants to Squadron Medical and a participant lender (the “Squadron Medical Warrants”). The Squadron Medical Warrants expire in
20
Table of Contents
Executive Warrants
The Company issued warrants to its Chairman and Chief Executive Officer (the “Executive Warrants”). The Executive Warrants had a
A summary of all outstanding warrants for common stock as of September 30, 2026, is as follows (in thousands, except for strike price data):
|
|
Number of |
|
|
Strike Price |
|
Expiration |
||
2018 Squadron Medical Warrants |
|
|
|
|
$ |
|
|||
2019 Squadron Medical Warrants |
|
|
|
|
$ |
|
|||
2020 Squadron Medical Warrants |
|
|
|
|
$ |
|
|||
Executive Warrants |
|
|
|
|
$ |
|
|||
Other(1) |
|
|
|
|
$ |
|
|||
Total |
|
|
|
|
|
|
|
||
All outstanding warrants were deemed to qualify for equity classification under authoritative accounting guidance.
10. Business Segment and Geographic Information
The Company operates in
Net revenue and property and equipment, net, by geographic region are as follows (in thousands):
|
|
Revenue |
|
|
Property and equipment, net |
|
||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
December 31, |
|
||||||||||||
(in thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
21
Table of Contents
11. Net Loss Per Share
Basic net loss per share is calculated by dividing the net loss available to common stockholders by the weighted-average number of common shares outstanding for the period. If applicable, diluted net loss per share attributable to common stockholders is calculated by dividing net loss available to common stockholders by the diluted weighted-average number of common shares outstanding for the period, determined using the treasury-stock method and the if-converted method for convertible debt. For purposes of this calculation, common stock subject to repurchase by the Company, common stock issuable upon conversion or exercise of convertible notes, preferred shares, options, and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive. Due to the Company’s net loss position, the effect of including common stock equivalents in the earnings per share calculation is anti-dilutive, and therefore not included.
The following table presents the computation of basic and diluted net loss per share (in thousands, except per share amounts):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share, basic and diluted: |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The following potentially dilutive shares of common stock were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (in thousands):
|
|
As of |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Options to purchase common stock and employee stock purchase plan |
|
|
|
|
|
|
||
Unvested restricted stock unit awards |
|
|
|
|
|
|
||
Warrants to purchase common stock |
|
|
|
|
|
|
||
2026 Notes |
|
|
|
|
|
|
||
2030 Notes |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
12. Income Taxes
To calculate its interim tax provision, at the end of each interim period the Company estimates the annual effective tax rate, adjusted for discrete items arising in that quarter. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the estimated annual taxable income or loss for the year and projections of the proportion of income earned and taxed in foreign jurisdictions. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or the tax environment changes.
The Company’s effective tax rate from operations was 26
22
Table of Contents
13. Related Party Transactions
The Company purchases inventory from an affiliate of Squadron Capital, LLC (the “Squadron Supplier Affiliate”). David Pelizzon, President and Director of Squadron Capital, LLC, currently serves on the Company’s Board of Directors. For the three and nine months ended September 30, 2026, the Company purchased inventory in the amounts of $
23
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following management's discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto that appear elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). In addition to historical information, the following management’s discussion and analysis of our financial condition and results of operations includes forward-looking information that involves risks, uncertainties, and assumptions. Our actual results and the timing of events could differ materially from those anticipated by these forward-looking statements as a result of many factors, such as those set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, and any updates to those risk factors filed from time to time in our subsequent periodic and current reports filed with the SEC.
Overview
We are a medical technology company, headquartered in Carlsbad, California, focused on the design, development, and advancement of technology for better surgical treatment of spine disorders. By applying our unique, 100% spine focus and deep, collective industry know-how, we aim to revolutionize the approach to spine surgery through clinical distinction. The sophisticated approaches that we create from the ground up are designed to integrate with our expanding InformatiX™ product platform to objectively inform surgery and achieve the goals of spine surgery more predictably and more reproducibly. We have a comprehensive product portfolio designed to address the spine’s various pathologies, and are perpetually innovating to accomplish our ultimate vision, which is to be the standard bearer in spine.
The application of our team’s deep spine know-how, coupled with a willingness to invest holistically in the technologies integrated into our procedural approaches continues to increasingly compel surgeons and sales talent to partner with us. That adoption-driven validation has been the source of industry-leading market share expansion, which has delivered an approximately 35% revenue compound annual growth rate since our transformation commenced in 2018.
We market and sell our products through a network of independent sales agents and direct sales representatives. To deliver consistent, predictable growth, we have added, and intend to continue to add, clinically astute and exclusive sales team members to reach untapped surgeons, hospitals, and national accounts and better penetrate existing accounts and territories.
Revenue and Expense Components
The following is a description of the primary components of our revenue and expenses:
Revenue. We derive our revenue primarily from the sale of spinal surgery implants used in the treatment of spine disorders as well as the sale of medical imaging equipment which is used for surgical planning and post-operative assessment. Spinal implant products include pedicle screws and complementary implants, interbody devices, plates, and tissue-based materials. Medical imaging equipment includes our EOS full-body and weight-bearing x-ray imaging devices, and related services. Our revenue is generated by our direct sales force and independent sales agents. Our products are shipped and invoiced to hospitals and surgical centers. Currently, most of our business is conducted with customers within markets in which we have experience and with payment terms that are customary to our business. We may defer revenue until the time of collection if circumstances related to payment terms, regional market risk or customer history indicate that collectability is not certain.
Cost of sales. Cost of sales consists primarily of direct product costs, royalties, service labor hours, and parts. Our product costs consist primarily of raw materials, component parts, direct labor, and overhead. The product costs of certain of our biologics products include the cost of procuring and processing human tissue. We incur royalties related to the technologies that we license from others and the products that are developed in part by surgeons with whom we collaborate in the product development process.
Research and development expenses. Research and development expenses consist of costs associated with the design, development, testing, and enhancement of our products. Research and development expenses also include salaries and related employee benefits, research-related overhead expenses, and fees paid to external service providers and development consultants in the form of both cash and equity.
Sales, general and administrative expenses. Sales, general and administrative expenses consist primarily of salaries and related employee benefits, sales commissions and other variable costs, depreciation of our surgical instruments, regulatory affairs, quality assurance costs, professional service fees, travel, medical education, trade show and marketing costs, and insurance expenses.
24
Table of Contents
Litigation-related expenses. Litigation-related expenses consist of costs incurred for our ongoing and settled litigation.
Amortization of acquired intangible assets. Amortization of acquired intangible assets consists of intangible assets acquired in business combinations and asset acquisitions.
Restructuring expenses. Restructuring expenses are primarily associated with the realignment of our operations and geographical footprint to achieve synergies, in which we incur one-time costs related to exiting and/or relocating our facilities, and personnel related expenses including severance and other costs.
Total interest expense and other expense, net. Total interest expense and other expense, net includes interest income, interest expense, gains and losses from foreign currency exchanges, loss on debt extinguishment, gain on derivative liability, and other non-operating gains and losses.
Income tax provision (benefit). Income tax provision (benefit) primarily consists of an estimate of federal, state, and foreign income taxes based on enacted state and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowances for accounts receivable, inventories, intangible assets, stock-based compensation, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumption conditions.
Critical accounting policies are those that, in management’s view, are most important in the portrayal of our financial condition and results of operations. Management believes there have been no material changes during the three months ended September 30, 2026, to the critical accounting policies discussed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC.
Results of Operations
Total revenue
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
(in thousands, except %) |
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||||||
Revenue from products and services |
|
$ |
221,172 |
|
|
$ |
196,503 |
|
|
$ |
24,669 |
|
|
|
13 |
% |
|
$ |
626,793 |
|
|
$ |
551,227 |
|
|
$ |
75,566 |
|
|
|
14 |
% |
Revenue from products and services increased $24.7 million, or 13%, and $75.6 million, or 14%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to an increase in product volume that was due to the increase in our surgeon user base, continued expansion of our new product portfolio, and increasing adoption of our technology.
Cost of sales
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
(in thousands, except %) |
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||||||
Cost of sales |
|
$ |
62,926 |
|
|
$ |
59,203 |
|
|
$ |
3,723 |
|
|
|
6 |
% |
|
$ |
177,973 |
|
|
$ |
168,830 |
|
|
$ |
9,143 |
|
|
|
5 |
% |
25
Table of Contents
Cost of sales increased $3.7 million, or 6%, and $9.1 million, or 5% for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to an increase in product volume.
Operating expenses
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
(in thousands, except %) |
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Research and development |
|
$ |
18,004 |
|
|
$ |
18,679 |
|
|
$ |
(675 |
) |
|
|
(4 |
)% |
|
$ |
53,738 |
|
|
$ |
53,987 |
|
|
$ |
(249 |
) |
|
— |
|
|
Sales, general and administrative |
|
|
132,505 |
|
|
|
124,303 |
|
|
|
8,202 |
|
|
|
7 |
% |
|
|
403,563 |
|
|
|
369,827 |
|
|
|
33,736 |
|
|
|
9 |
% |
Litigation-related expenses |
|
|
593 |
|
|
|
6,520 |
|
|
|
(5,927 |
) |
|
|
(91 |
)% |
|
|
1,032 |
|
|
|
20,327 |
|
|
|
(19,295 |
) |
|
|
(95 |
)% |
Amortization of acquired intangible assets |
|
|
3,899 |
|
|
|
3,731 |
|
|
|
168 |
|
|
|
5 |
% |
|
|
11,731 |
|
|
|
11,187 |
|
|
|
544 |
|
|
|
5 |
% |
Restructuring expenses |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
378 |
|
|
|
(378 |
) |
|
|
(100 |
)% |
|||||
Total operating expenses |
|
$ |
155,001 |
|
|
$ |
153,233 |
|
|
$ |
1,768 |
|
|
|
1 |
% |
|
$ |
470,064 |
|
|
$ |
455,706 |
|
|
$ |
14,358 |
|
|
|
3 |
% |
Research and development expenses. Research and development expenses decreased $0.7 million, or 4%, for the three months ended September 30, 2026, compared to the same period in 2025. The decrease during the three months ended September 30, 2026 was primarily due to a decrease in stock-based compensation.
Sales, general and administrative expenses. Sales, general and administrative expenses increased $8.2 million, or 7%, and $33.7 million, or 9%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to higher compensation-related costs and variable selling expenses associated with the increase in revenue, and our continued investment in building our strategic distribution channel.
Litigation-related expenses. Litigation-related expenses decreased $5.9 million, or 91%, and $19.3 million, or 95%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The decrease was primarily related to a litigation settlement during the nine months ended September 30, 2025.
Amortization of acquired intangible assets. Amortization of acquired intangible assets remained consistent for the three and nine months ended September 30, 2026, compared to the same periods in 2025.
Restructuring expenses. Restructuring expenses decreased $0.4 million, or 100%, for the nine months ended September 30, 2026, compared to the same period in 2025. The decrease in restructuring expenses is primarily due to personnel related expenses in the prior period that did not recur.
Total interest expense and other expense, net
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
(in thousands, except %) |
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||||||
Other expense, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
$ |
(10,615 |
) |
|
$ |
(12,878 |
) |
|
$ |
2,263 |
|
|
|
(18 |
)% |
|
$ |
(33,300 |
) |
|
$ |
(33,028 |
) |
|
$ |
(272 |
) |
|
|
1 |
% |
Loss on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11,883 |
) |
|
|
(17,576 |
) |
|
$ |
5,693 |
|
|
|
(32 |
)% |
Gain on derivative liability |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
620 |
|
|
$ |
(620 |
) |
|
|
(100 |
)% |
Other (expense) income, net |
|
|
(95 |
) |
|
|
307 |
|
|
|
(402 |
) |
|
|
(131 |
)% |
|
|
(519 |
) |
|
|
1,637 |
|
|
|
(2,156 |
) |
|
|
(132 |
)% |
Total other expense, net |
|
$ |
(10,710 |
) |
|
$ |
(12,571 |
) |
|
$ |
1,861 |
|
|
|
(15 |
)% |
|
$ |
(45,702 |
) |
|
$ |
(48,347 |
) |
|
$ |
2,645 |
|
|
|
(5 |
)% |
26
Table of Contents
Interest expense, net, decreased $2.3 million, or 18%, and increased $0.3 million, or 1%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The decrease in interest expense, net, for the three months ended September 30, 2026, was primarily due to a decrease in cash interest expense. The increase in interest expense, net, for the nine months ended September 30, 2026 was primarily due to the amortization of debt discount associated with the 2030 Notes. Net cash interest was $4.1 million and $13.5 million for the three and nine months ended September 30, 2026, respectively. Net non-cash interest was $6.5 million and $19.8 million for the three and nine months ended September 30, 2026, respectively.
Loss on debt extinguishment decreased $5.7 million, or 32%, for the nine months ended September 30, 2026, compared to the same period in 2025. The decrease in loss on debt extinguishment relates to the redemption of 80% of the 2026 Notes in March 2025 compared to the extinguishment of the Braidwell Term Loan and MidCap Revolving Credit Facility during the nine months ended September 30, 2026.
Gain on derivative liability decreased $0.6 million, or 100%, for the nine months ended September 30, 2026, compared to the same period in 2025. The decrease in gain on derivative liability relates to the change in the valuation of the derivative liability associated with 2030 Notes from inception to June 30, 2025. As of June 12, 2025, the conditions necessary for separate accounting of the conversion option as a derivative liability were no longer met.
Other (expense) income, net, increased $0.4 million, or 131%, and $2.2 million, or 132%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase in other (expense) income, net, during the nine months ended September 30, 2026, was primarily due to fluctuations in foreign currency rates.
Income tax provision
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
(in thousands, except %) |
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||||||
Income tax (benefit) provision |
|
$ |
(1,994 |
) |
|
$ |
74 |
|
|
$ |
(2,068 |
) |
|
|
(2,795 |
)% |
|
$ |
(1,788 |
) |
|
$ |
(27 |
) |
|
$ |
(1,761 |
) |
|
|
6,522 |
% |
The change in the income tax (benefit) provision for the three and nine months ended September 30, 2026, compared to the same periods in 2025, was primarily related to a partial valuation allowance release as a result of the aforementioned asset acquisition and the recognition of income taxes in several jurisdictions.
Liquidity and Capital Resources
Our principal sources of liquidity are our existing cash and cash equivalents, our JPM Revolving Credit Facility and cash from operations. Our liquidity and capital structure are evaluated regularly within the context of our annual operating and strategic planning process. We consider the liquidity necessary to fund our operations, which includes working capital needs, investments in research and development, investments in inventory and instrument sets to support our customers, as well as other operating costs. Our future capital requirements will depend on many factors including our rate of revenue growth, the timing and extent of spending to support development efforts, the expansion of sales, marketing and administrative activities, the timing of introductions of new products and enhancements to existing products, and the international expansion of our business.
As current borrowing sources become due, we may be required to access the capital markets for additional funding. If we are required to access the debt markets, we expect to be able to secure reasonable borrowing rates. As part of our liquidity strategy, we will continue to monitor our current level of spending and cash use as well as our ability to secure additional credit facilities, term loans, or other similar arrangements in light of our spending levels and general financial market conditions.
A substantial portion of our operations are in the United States ("U.S."), and most of our net sales have been made in the U.S. Accordingly, we do not have material exposures to foreign currency rate fluctuations from operations. However, as our business in markets outside of the U.S. continues to increase, we will be exposed to foreign currency exchange risk related to our foreign operations.
27
Table of Contents
We do not have any material financial exposure to one customer or one country, outside of the United States, that would significantly hinder our liquidity. We are and may become involved in various legal proceedings arising from our business activities. While we have no material, undisclosed accruals for pending litigation or claims, litigation is inherently unpredictable, and depending on the nature and timing of a proceeding, an unfavorable resolution could materially affect our future consolidated results of operations, cash flows or financial position in a particular period. We assess contingencies to determine the degree of probability and range of possible loss for potential accrual or disclosure in our condensed consolidated financial statements. An estimated loss contingency is accrued in our condensed consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Assessing contingencies is highly subjective and requires judgments about future events because litigation is inherently unpredictable, and unfavorable resolutions could occur. When evaluating contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to reasonably possible outcomes, and as such are not meaningful indicators of our potential liability. We have disclosed all material accruals for pending litigation or investigations in Note 8, Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Cash and cash equivalents were $79.9 million and $160.8 million at September 30, 2026, and December 31, 2025, respectively. We believe that our existing funds, cash generated from our operations and our existing sources of and access to financing are adequate to satisfy our working capital, capital expenditure, debt service, and other strategic business requirements.
Summary of Cash Flows
|
|
Nine Months Ended September 30, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Cash (used in) provided by: |
|
|
|
|
|
|
||
Operating activities |
|
$ |
40,659 |
|
|
$ |
24,549 |
|
Investing activities |
|
|
(64,420 |
) |
|
|
(37,676 |
) |
Financing activities |
|
|
(56,987 |
) |
|
|
29,812 |
|
Effect of exchange rate changes on cash |
|
|
(122 |
) |
|
|
216 |
|
Net change in cash and cash equivalents |
|
$ |
(80,870 |
) |
|
$ |
16,901 |
|
Operating Activities
Operating activities provided net cash of $40.7 million for the nine months ended September 30, 2026, which is primarily related to cash collections offset by costs associated with the continued expansion of our business and inventory purchases.
Investing Activities
We used cash of $64.4 million in investing activities for the nine months ended September 30, 2026, which is primarily related to the purchase of surgical instruments to support the growth of our business and commercial launch of new products, the acquisition of intangible assets and a $5.0 million note receivable.
Financing Activities
We used cash of $57.0 million in financing activities for the nine months ended September 30, 2026, primarily due to the repayment of our 2026 Notes and previously existing credit facilities, partially offset by proceeds from the new term loan and revolving credit facilities.
28
Table of Contents
Debt and Commitments
As of September 30, 2026, we had $173.9 million outstanding under the JPM Term Loan. The outstanding loans under the JPM Term Loan bear interest at the sum of Term SOFR plus an applicable margin determined by reference to the Company’s Senior Secured Net Leverage Ratio. The JPM Term Loan matures on May 1, 2031.
As of September 30, 2026, we had $70.0 million outstanding under the JPM Revolving Credit Facility. The outstanding loans under the JPM Revolving Credit Facility bear interest at the sum of Term SOFR plus an applicable margin determined by reference to the Company’s Senior Secured Net Leverage Ratio. The JPM Revolving Credit Facility matures on May 1, 2031.
As of September 30, 2026, we had $405.0 million outstanding under the 2030 Notes. The 2030 Notes accrue interest at a rate of 0.75%, payable semi-annually in arrears on March 15 and September 15 of each year. Prior to maturity in March 2030, the holders of the 2030 Notes may, under certain circumstances, choose to convert their notes into shares of our common stock. Based on the terms we have the option to pay or deliver cash, shares of our common stock, or a combination thereof, when a conversion notice is received.
Contractual obligations and commercial commitments
Except as described in Notes 7 and 8 of our Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, as of September 30, 2026, there have been no material changes, outside the normal course of business, in our outstanding contractual obligations from those disclosed within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Recent Accounting Pronouncements
Aside from the changes disclosed in Note 1 to the Notes to Condensed Consolidated Financial Statements (Unaudited) under the heading “Recently Issued Accounting Pronouncements,” if any, there have been no new accounting pronouncements or changes to accounting pronouncements during the nine months ended September 30, 2026, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2025, that was filed with the SEC.
Forward Looking Statements
This Quarterly Report on Form 10-Q incorporates a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements regarding:
29
Table of Contents
Any or all of our forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be wrong. They can be affected by inaccurate assumptions and/or by known or unknown risks and uncertainties. Many factors mentioned in our discussion in this Quarterly Report on Form 10-Q will be important in determining future results. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially from expected results.
We also provide a cautionary discussion of risks and uncertainties under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, and any updates to those risk factors filed from time to time in our subsequent periodic and current reports filed with the SEC. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed there could also adversely affect us.
Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “estimate,” “may,” “will,” “should,” “could,” “would,” “seek,” “intend,” “continue,” “project,” and similar expressions are intended to identify forward-looking statements. There are a number of factors and uncertainties that could cause actual events or results to differ materially from those indicated by such forward-looking statements, many of which are beyond our control, including the factors set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and any updates to those risk factors filed from time to time in our subsequent periodic and current reports filed with the SEC. In addition, the forward-looking statements contained herein represent our estimate only as of the date of this filing and should not be relied upon as representing our estimate as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.
30
Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We have evaluated the information required under this item that was disclosed under Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2025, and there have been no significant changes to this information.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in SEC Rules 13a - 15(e) and 15d - 15(e)) as of September 30, 2026. Based on such evaluation, our management has concluded that as of September 30, 2026, our disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
During the three months ended September 30, 2026, there have been no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures.
31
Table of Contents
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
For a description of our material legal proceedings, refer to Note 8 of our Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
Item 1A. Risk Factors
There have been no material changes to the risk factors described under Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 24, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended September 30, 2026, we issued unregistered shares of common stock as described in the following table:
Date Issued |
Number of Shares |
Grant Date Fair Value |
|
|
July 1, 2026 |
2,745(1) |
$ |
8.86 |
|
July 1, 2026 |
5,489(2) |
$ |
8.86 |
|
July 31, 2026 |
224,322(3) |
$ |
9.52 |
|
August 6, 2026 |
3,334(2) |
$ |
9.21 |
|
September 21, 2026 |
58,334(2) |
$ |
10.17 |
|
September 30, 2026 |
1,000(1) |
$ |
10.32 |
|
(1) Pursuant to consulting services rendered to the Company.
(2) Pursuant to Development Services Agreements for the development of products and intellectual property.
(3) Pursuant to purchase of assets from a third party.
(4) Based on the market price of common stock on the issuance date.
The issuances of the foregoing securities were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as there was no general solicitation and the transactions did not involve a public offering.
32
Table of Contents
Item 5. Other Information
Adoption, Modification or Termination of Trading Arrangements
A portion of the compensation of our directors and officers is in the form of equity awards, and, from time to time, directors and officers engage in open-market transactions with respect to the securities they acquire pursuant to such equity awards we have issued.
Transactions in our securities by directors and officers are required to be made in accordance with our insider trading policy, which requires that the transactions comply with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables directors and officers to prearrange transactions in our securities in a manner that avoids concerns about initiating transactions while in possession of material nonpublic information.
The following table describes the contracts, instructions or written plans for the purchase or sale of securities adopted by our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) during the three months ended September 30, 2026, that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). No other Rule 10b5-1 trading arrangements or "non-Rule 10b5-1 trading arrangements" (as defined by S-K item 408(c)) were
Name |
Title of Director or Officer |
Action |
Date |
Total Shares to be Sold |
|
Expiration Date |
|
|
|
||||||
|
|
|
|
|
|
|
|
33
Table of Contents
Item 6. Exhibits
Exhibit |
|
Number Exhibit Description |
|
|
|
31.1 |
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2 |
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32 |
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
101 |
|
The following materials from the Alphatec Holdings, Inc. Quarterly Report on Form 10-Q for the Three and Nine Months Ended September 30, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2026 and December 31, 2025, (ii) Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025, (iii) Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025, (iv) Condensed Consolidated Statements of Stockholders’ (Deficit) Equity (Unaudited) for the Three and Nine months ended September 30, 2026 and 2025, (v) Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2026 and 2025, and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited). |
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS) |
34
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
ALPHATEC HOLDINGS, INC. |
|
|
|
|
|
By: |
/s/ Patrick S. Miles |
|
|
Patrick S. Miles |
|
|
Chairman and Chief Executive Officer |
|
|
(principal executive officer) |
|
|
|
|
By: |
/s/ J. Todd Koning |
|
|
J. Todd Koning |
|
|
Executive Vice President and Chief Financial Officer |
|
|
(principal financial officer and principal accounting officer) |
Date: October 29, 2026
35