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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-52024

ALPHATEC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware	20-2463898
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1950 Camino Vida Roble, Carlsbad, CA	92008
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (760) 431-9286

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	ATEC	The NASDAQ Global Select Market

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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 23, 2025, there were 148,550,185 shares of the registrant’s common stock outstanding.

Table of Contents

ALPHATEC HOLDINGS, INC.

QUARTERLY REPORT ON FORM 10-Q

September 30, 2025

Table of Contents


		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations	4

	Condensed Consolidated Statements of Comprehensive Loss	5

	Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	6

	Condensed Consolidated Statements of Cash Flows	8

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

SIGNATURES		34

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)


	September 30, 2025			December 31, 2024
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	155,741		$	138,840
Accounts receivable, net of allowances of $10,127 and $4,763, respectively		96,838			82,987
Inventories		166,890			175,264
Prepaid expenses and other current assets		20,310			20,308
Total current assets		439,779			417,399
Property and equipment, net		138,226			156,394
Right-of-use assets		32,610			34,701
Goodwill		75,199			70,976
Intangible assets, net		96,043			93,518
Other assets		5,391			2,722
Total assets	$	787,248		$	775,710
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	36,875		$	52,984
Accrued expenses and other current liabilities		102,776			81,466
Contract liabilities		10,069			10,467
Short-term debt		64,663			1,656
Current portion of operating lease liabilities		6,442			6,453
Total current liabilities		220,825			153,026
Long-term debt		495,017			574,522
Operating lease liabilities, less current portion		25,031			27,305
Other long-term liabilities		11,266			11,423
Commitments and contingencies (Note 8)
Redeemable preferred stock, $0.0001 par value; 20,000 shares authorized at September 30, 2025 and December 31, 2024; 3,319 shares issued and outstanding at September 30, 2025 and December 31, 2024		23,603			23,603
Stockholders' equity (deficit):
Common stock, $0.0001 par value; 400,000 authorized; 149,347 shares issued and outstanding at September 30, 2025; and 144,129 shares issued and outstanding at December 31, 2024		15			14
Treasury stock, 1,808 shares, at cost		(25,097	)		(25,097	)
Additional paid-in capital		1,443,648			1,305,677
Accumulated other comprehensive loss		(4,346	)		(13,678	)
Accumulated deficit		(1,402,714	)		(1,281,085	)
Total stockholders’ equity (deficit)		11,506			(14,169	)
Total liabilities and stockholders’ equity (deficit)	$	787,248		$	775,710

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except per share amounts)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenue from products and services	$	196,503		$	150,719		$	551,227		$	434,769
Cost of sales		59,203			47,990			168,830			132,095
Gross profit		137,300			102,729			382,397			302,674
Operating expenses:
Research and development		18,679			20,357			53,987			57,474
Sales, general and administrative		124,303			109,200			369,827			335,541
Litigation-related expenses		6,520			2,093			20,327			8,611
Amortization of acquired intangible assets		3,731			3,848			11,187			11,538
Restructuring expenses		—			934			378			1,861
Total operating expenses		153,233			136,432			455,706			415,025
Operating loss		(15,933	)		(33,703	)		(73,309	)		(112,351	)
Other expense, net:
Interest expense, net		(12,878	)		(6,572	)		(33,028	)		(17,728	)
Loss on debt extinguishment		—			—			(17,576	)		—
Gain on derivative liability		—			—			620			—
Other income, net		307			623			1,637			897
Total other expense, net		(12,571	)		(5,949	)		(48,347	)		(16,831	)
Net loss before taxes		(28,504	)		(39,652	)		(121,656	)		(129,182	)
Income tax provision (benefit)		74			(36	)		(27	)		(391	)
Net loss	$	(28,578	)	$	(39,616	)	$	(121,629	)	$	(128,791	)
Net loss per share, basic and diluted	$	(0.19	)	$	(0.28	)	$	(0.81	)	$	(0.90	)
Weighted average shares outstanding, basic and diluted		151,401			143,492			149,373			142,400

See accompanying notes to unaudited condensed consolidated financial statements.

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ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(In thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Net loss	$	(28,578	)	$	(39,616	)	$	(121,629	)	$	(128,791	)
Foreign currency translation adjustments		(91	)		3,117			9,332			(89	)
Comprehensive loss	$	(28,669	)	$	(36,499	)	$	(112,297	)	$	(128,880	)

See accompanying notes to unaudited condensed consolidated financial statements.

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ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

(In thousands)


	Common stock				Additional paid-in			Treasury			Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Par Value		capital			stock			loss			deficit			equity (deficit)
Balance at December 31, 2024		144,129	$	14	$	1,305,677		$	(25,097	)	$	(13,678	)	$	(1,281,085	)	$	(14,169	)
Stock-based compensation		—		—		22,318			—			—			—			22,318
Common stock issued for stock option exercises		150		—		505			—			—			—			505
Common stock issued for vesting of performance and restricted stock awards, net of shares retained for tax liability		2,627		1		(3,417	)		—			—			—			(3,416	)
Purchase of capped calls		—		—		(42,485	)		—			—			—			(42,485	)
Foreign currency translation adjustments		—		—		—			—			3,215			—			3,215
Net loss		—		—		—			—			—			(51,907	)		(51,907	)
Balance at March 31, 2025		146,906	$	15	$	1,282,598		$	(25,097	)	$	(10,463	)	$	(1,332,992	)	$	(85,939	)
Stock-based compensation		—		—		15,624			—			—			—			15,624
Common stock issued for warrant exercises		1,139		—		52			—			—			—			52
Common stock issued for employee stock purchase plan and stock option exercises		323		—		2,326			—			—			—			2,326
Common stock issued for vesting of performance and restricted stock awards, net of shares retained for tax liability		379		—		(98	)		—			—			—			(98	)
Common stock issued for asset acquisition		95		—		1,000			—			—			—			1,000
Warrant modification		—		—		2,301			—			—			—			2,301
Reclassification of equity-based liability		—		—		123,441			—			—			—			123,441
Foreign currency translation adjustments		—		—		—			—			6,208			—			6,208
Net loss		—		—		—			—			—			(41,144	)		(41,144	)
Balance at June 30, 2025		148,842	$	15	$	1,427,244		$	(25,097	)	$	(4,255	)	$	(1,374,136	)	$	23,771
Stock-based compensation		—		—		16,379			—			—			—			16,379
Common stock issued for stock option exercises		64		—		143			—			—			—			143
Common stock issued for vesting of performance and restricted stock awards, net of shares retained for tax liability		441		—		(118	)		—			—			—			(118	)
Foreign currency translation adjustments		—		—		—			—			(91	)		—			(91	)
Net loss		—		—		—			—			—			(28,578	)		(28,578	)
Balance at September 30, 2025		149,347	$	15	$	1,443,648		$	(25,097	)	$	(4,346	)	$	(1,402,714	)	$	11,506

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ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED)

(In thousands)


	Common stock				Additional paid-in			Treasury			Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Par Value		capital			stock			loss			deficit			equity

Balance at December 31, 2023		139,245	$	14	$	1,230,484		$	(25,097	)	$	(8,323	)	$	(1,118,962	)	$	78,116
Stock-based compensation		—		—		17,322			—			—			—			17,322
Common stock issued for warrant exercises		30		—		150			—			—			—			150
Common stock issued for stock option exercises		56		—		156			—			—			—			156
Common stock issued for vesting of restricted stock units, net of shares withheld for tax liability		3,079		—		(7,560	)		—			—			—			(7,560	)
Reclassification of equity-based liability		—		—		327			—			—			—			327
Foreign currency translation adjustments		—		—		—			—			(2,464	)		—			(2,464	)
Net loss		—		—		—			—			—			(48,495	)		(48,495	)
Balance at March 31, 2024		142,410	$	14	$	1,240,879		$	(25,097	)	$	(10,787	)	$	(1,167,457	)	$	37,552
Stock-based compensation		—		—		16,960			—			—			—			16,960
Common stock issued for employee stock purchase plan and stock option exercises		283		—		2,524			—			—			—			2,524
Common stock issued for vesting of restricted stock units, net of shares withheld for tax liability		303		—		(265	)		—			—			—			(265	)
Common stock issued for asset acquisition		18		—		250			—			—			—			250
Reclassification of equity-based liability		—		—		1,512			—			—			—			1,512
Foreign currency translation adjustments		—		—		—			—			(742	)		—			(742	)
Net loss		—		—		—			—			—			(40,680	)		(40,680	)
Balance at June 30, 2024		143,014	$	14	$	1,261,860		$	(25,097	)	$	(11,529	)	$	(1,208,137	)	$	17,111
Stock-based compensation		—		—		17,462			—			—			—			17,462
Common stock issued for warrant exercises		13		—		65			—			—			—			65
Common stock issued for stock option exercises		78		—		226			—			—			—			226
Common stock issued for vesting of restricted stock units, net of shares retained for tax liability		802		—		(95	)		—			—			—			(95	)
Reclassification of equity-based liability		—		—		368			—			—			—			368
Foreign currency translation adjustments		—		—		—			—			3,117			—			3,117
Net loss		—		—		—			—			—			(39,616	)		(39,616	)
Balance at September 30, 2024		143,907	$	14	$	1,279,886		$	(25,097	)	$	(8,412	)	$	(1,247,753	)	$	(1,362	)

See accompanying notes to unaudited condensed consolidated financial statements.

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ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


	Nine Months Ended September 30,
	2025			2024
Operating activities:
Net loss	$	(121,629	)	$	(128,791	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		58,391			58,410
Stock-based compensation		54,321			51,744
Amortization of debt discount and debt issuance costs		15,626			3,279
Amortization of right-of-use assets		3,687			3,499
Write-down for excess and obsolete inventories		11,323			10,970
Loss on disposal of assets		2,295			3,262
Loss on debt extinguishment		17,576			—
Gain on derivative liability		(620	)		—
Other		5,603			4,993
Changes in operating assets and liabilities:
Accounts receivable		(18,505	)		(9,479	)
Inventories		(1,509	)		(57,044	)
Prepaid expenses and other current assets		710			683
Other assets		192			(673	)
Accounts payable		(16,338	)		16,016
Accrued expenses		19,314			(8,202	)
Lease liabilities		(3,571	)		(3,628	)
Contract liabilities		(620	)		(2,308	)
Other long-term liabilities		(1,697	)		2,095
Net cash provided by (used in) operating activities		24,549			(55,174	)
Investing activities:
Purchase of property and equipment		(29,491	)		(81,248	)
Purchase of intangible assets		(5,185	)		(8,142	)
Cash paid for equity investment		(3,000	)		—
Net cash used in investing activities		(37,676	)		(89,390	)
Financing activities:
Proceeds from issuance of convertible notes, net		392,850			—
Repurchase of convertible notes		(268,231	)		—
Repayment of revolving credit facility		(60,592	)		(110,400	)
Purchase of capped calls		(42,485	)		—
Proceeds from revolving credit facility		11,160			122,175
Payment of debt issuance costs		(706	)		—
Net cash paid for common stock exercises		(699	)		(4,732	)
Other		(1,485	)		(1,477	)
Net cash provided by financing activities		29,812			5,566
Effect of exchange rate changes on cash		216			(996	)
Net change in cash and cash equivalents		16,901			(139,994	)
Cash and cash equivalents at beginning of period		138,840			220,970
Cash and cash equivalents at end of period	$	155,741		$	80,976
Supplemental disclosure of cash flow information:
Cash paid for interest	$	18,766		$	15,342
Cash paid for income taxes	$	348		$	275
Supplemental disclosure of noncash activities:
Financed insurance	$	1,347		$	1,156
Purchases of property and equipment in accounts payable and accrued expenses	$	1,036		$	—
Purchase of intangible assets in accrued expenses and other long-term liabilities	$	4,780		$	—
Recognition of derivative liability	$	124,062		$	—
Recognition of lease liabilities	$	66		$	11,923

See accompanying notes to unaudited condensed consolidated financial statements.

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ALPHATEC HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Significant Accounting Policies

The Company

Alphatec Holdings, Inc. (the “Company”), through its wholly owned subsidiaries, Alphatec Spine, Inc. (“Alphatec Spine”), SafeOp Surgical, Inc. (“SafeOp”), and EOS imaging S.A.S. (“EOS”), is a medical technology company focused on the design, development, and advancement of technology for the better surgical treatment of spinal disorders. The Company, headquartered in Carlsbad, California, markets its products in the United States and internationally via a network of independent sales agents and direct sales representatives.

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, 2024, 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, 2025 are not necessarily indicative of the results that may be expected for the full year or any other future periods.

Reclassification

Certain financial statement line items in the condensed consolidated financial statements for the period ended September 30, 2024, have been aggregated to conform to the current year’s presentation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Fair Value Measurements

The carrying amount of financial instruments consisting of cash and cash equivalents, accounts receivable, prepaid expenses and other current 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.

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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, and biologics are valued by utilizing a standard cost method that includes capitalized variances which together approximates the weighted average cost. Imaging equipment and related parts 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. In order to market its products effectively and meet the demands of interoperative 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 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 10% of the Company’s total revenue. In certain cases, the Company does offer the ability for customers to lease its imaging equipment, but such arrangements are immaterial to total revenue in the periods presented. The Company generally does not allow returns of products that have been delivered. Costs incurred by the Company associated directly with sales contracts with customers are deferred over the performance obligation period and recognized in the same period as the related revenue, except for contracts that complete within one year or less, in which case the associated costs are expensed as incurred. Payment terms for sales to customers may vary but are commensurate with the general business practices in the country of sale.

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.

The Company records a contract asset when one or more performance obligations have been completed by the Company and revenue has been recognized, but the customer's payment is contingent on the satisfaction of additional performance obligations. Contract assets are generally short-term in nature. 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. These amounts primarily relate to undelivered equipment and related services, or maintenance agreements. When the Company sells a product or service

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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 December 2023, the FASB issued Accounting Standard Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency of income tax disclosures. The guidance in ASU No. 2023-09 allows for a prospective method of transition, with the option to apply the standard retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, 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 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 September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40). ASU 2025-06 removes references to prescriptive and sequential development stages, requiring companies to capitalize internal-use software costs when management commits to funding the software project and it is probable the project will be completed. This ASU 2025-06 is effective for all entities for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company is in the process of assessing the impact of this standard on its 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, 2025, and December 31, 2024 (in thousands):


	September 30, 2025
Assets:	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	19,118		—		—	$	19,118


	December 31, 2024
Assets:	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	57,006		—		—	$	57,006

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 Long-term Debt

The fair value, based on a quoted market price (Level 1), of the Company’s outstanding Senior Convertible Notes due 2026 (the "2026 Notes") was approximately $66.5 million at September 30, 2025, and approximately $299.6 million at December 31, 2024.

The fair value, based on a quoted market price (Level 1), of the Company’s outstanding Senior Convertible Notes due 2030 (the "2030 Notes") was approximately $488.8 million at September 30, 2025.

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3. Inventories

Inventories reported at the lower of cost or net realizable value consist of the following (in thousands):


	September 30, 2025		December 31, 2024
Raw materials	$	12,236	$	19,378
Finished goods		154,654		155,886
Inventories	$	166,890	$	175,264

4. Property and Equipment, net

Property and equipment, net consist of the following (in thousands, except as indicated):


	Useful lives (in years)	September 30, 2025			December 31, 2024
Surgical instruments	4	$	302,195		$	283,597
Machinery and equipment	7		13,076			12,710
Computer equipment	8		32,180			32,082
Office furniture and equipment	5		6,518			6,759
Leasehold improvements	various		4,383			4,321
Construction in progress	n/a		502			541
			358,854			340,010
Less: accumulated depreciation and amortization			(220,628	)		(183,616	)
Property and equipment, net		$	138,226		$	156,394

Total depreciation and amortization expense was $14.9 million and $45.7 million for the three and nine months ended September 30, 2025, respectively. Total depreciation and amortization expense was $16.5 million and $46.0 million for the three and nine months ended September 30, 2024, respectively. Construction in progress is not depreciated until placed in service. Property and equipment, net includes assets under financing leases and the related amortization of assets under financing leases is included in depreciation expense.

5. Goodwill and Intangible Assets

Goodwill

The change in the carrying amount of goodwill during the period ended September 30, 2025, includes the following (in thousands):


December 31, 2024	$	70,976
Foreign currency fluctuation		4,223
September 30, 2025	$	75,199

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Intangible assets, net

Intangible assets, net consist of the following (in thousands, except as indicated):


	Remaining Avg. Useful lives	Gross		Accumulated			Intangible
September 30, 2025:	(in years)	Amount		Amortization			Assets, net
Developed product technology	5	$	109,322	$	(50,776	)	$	58,546
Internally developed software	6		15,041		(3,962	)		11,079
Trademarks and trade names	6		5,936		(2,611	)		3,325
Customer relationships	2		15,055		(11,642	)		3,413
Distribution network	–		2,413		(2,413	)		—
Total amortized intangible assets			147,767		(71,404	)		76,363

Software in development	n/a		8,110		—			8,110
In-process research and development	n/a		11,570		—			11,570
Total intangible assets		$	167,447	$	(71,404	)	$	96,043
		.
	Remaining Avg. Useful lives	Gross		Accumulated			Intangible
December 31, 2024:	(in years)	Amount		Amortization			Assets, net
Developed product technology	5	$	102,412	$	(38,055	)	$	64,357
Internally developed software	3		4,283		(1,515	)		2,768
Trademarks and trade names	7		5,267		(1,991	)		3,276
Customer relationships	2		13,996		(10,094	)		3,902
Distribution network	–		2,413		(2,410	)		3
Total amortized intangible assets			128,371		(54,065	)		74,306

Software in development	n/a		12,927		—			12,927
In-process research and development	n/a		6,285		—			6,285
Total intangible assets		$	147,583	$	(54,065	)	$	93,518

Total amortization expense attributed to intangible assets was $4.3 million and $12.7 million for the three and nine months ended September 30, 2025, respectively. Total amortization expense attributed to intangible assets was $4.2 million and $12.5 million for the three and nine months ended September 30, 2024, respectively. Software in development is amortized when the projects are completed and the assets are ready for their intended use. In-process research and development assets begin amortizing when the relevant products reach full commercial launch.

Future amortization expense related to intangible assets is as follows (in thousands):


Remainder of 2025	$	4,400
2026		17,600
2027		17,135
2028		12,166
2029		11,781
Thereafter		13,281
	$	76,363

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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, 2025		December 31, 2024
Contract assets	$	3,748	$	5,678

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, 2025		December 31, 2024
Contract liabilities	$	12,150	$	13,598
Less: Non-current portion of contract liabilities		2,081		3,131
Current portion of contract liabilities	$	10,069	$	10,467

The Company recognized $0.9 million and $6.4 million of revenue from the opening contract liabilities balance for the three and nine months ended September 30, 2025, respectively.

7. Debt

0.75% Convertible Senior Notes due 2030

In March 2025, the Company issued $405.0 million aggregate principal amount of senior unsecured 2030 Notes with a stated interest rate of 0.75% and a maturity date of March 15, 2030. The 2030 Notes began accruing interest immediately and are payable semi-annually in arrears on March 15 and September 15 of each year. The net proceeds from the sale of the 2030 Notes were approximately $392.9 million after deducting the initial purchasers’ offering expenses and before cash use for the 2030 Capped Call Transactions, as described below, and the repayment of 80% of the 2026 Notes, as described below. The 2030 Notes do not contain any financial covenants.

The 2030 Notes are convertible into shares of the Company’s common stock based upon an initial conversion rate of 64.3407 shares of the Company’s common stock per $1,000 principal amount of 2030 Notes (equivalent to an initial conversion price of approximately $15.54 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of the Company’s common stock. Based on the terms of the 2030 Notes, when a conversion notice is received, the Company has the option to pay or deliver cash, shares of the Company’s common stock, or a combination thereof.

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 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the 5 consecutive business days immediately after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2030 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. From and after September 17, 2029, holders of the 2030 Notes may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. As of September 30, 2025, none of the conditions permitting the holders of the 2030 Notes to convert have been met. The 2030 Notes are classified as long-term debt on the condensed consolidated balance sheets as of September 30, 2025.

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 130% of the conversion price for a specified period of time. In addition, calling any of the 2030 Notes for redemption will constitute a “make-whole fundamental change” with respect to the redeemable note, in which case the conversion rate applicable to the conversion of the redeemed note will be increased in certain circumstances if such note is converted after it is called for redemption.

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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 100% of the principal amount of the 2030 Notes plus accrued and unpaid interest. No principal payments are otherwise due on the 2030 Notes prior to maturity.

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 no longer 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’ equity (deficit). The annual effective interest rate for the 2030 Notes is 9.1%. The Company recognized interest expense on the 2030 Notes of $6.5 million and $14.4 million during the three and nine months ended September 30, 2025, respectively, which includes $5.7 million and $12.7 million for the amortization of debt discount costs, respectively. The Company uses the if-converted method for assumed conversion of the 2030 Notes to compute the weighted-average shares of common stock outstanding for diluted earnings per share, if applicable.

The outstanding principal amount and carrying value of the 2030 Notes consists of the following (in thousands):


	September 30, 2025
Principal	$	405,000
Unamortized debt discount and debt issuance costs		(124,251	)
Net carrying value	$	280,749

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 $23.46 per share of the Company’s common stock, which represents a premium of 100% over the last reported sale price of the Company’s common stock on March 4, 2025, and is subject to certain adjustments under the terms of the 2030 Capped Call Transactions. Collectively, the 2030 Capped Call Transactions cover, initially, the number of shares of the Company’s common stock underlying the 2030 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2030 Notes. The cost of the 2030 Capped Call Transactions was approximately $42.5 million.

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 $42.5 million cost was recorded as a reduction to additional paid-in capital on the Company’s condensed consolidated statements of shareholders’ equity (deficit).

Term Loan

On January 6, 2023, the Company entered into a $150.0 million term loan credit facility with Braidwell Transaction Holdings, LLC (the “Braidwell Term Loan”). The Braidwell Term Loan provides for an initial term loan of $100.0 million which was funded on the closing date. On September 28, 2023, the Company drew an additional $50.0 million (the “delayed draw term loan(s)” or the “DDTL”). On October 29, 2024, the Company entered into an amendment of the Braidwell Term Loan, which provides for an additional term loan of $50.0 million, subject to the terms of the original term loan credit facility. The Braidwell Term Loan matures on January 6, 2028. As of September 30, 2025, the outstanding balance under the Braidwell Term Loan was $200.0 million.

In conjunction with the issuance of the Braidwell Term Loan, the Company incurred $3.6 million in debt issuance costs and $3.5 million in commitment fees. Commitment fees paid to the lender were accounted for as a debt discount. The debt issuance costs and debt discount were recorded as a direct reduction of the carrying amount of the loan on the condensed consolidated balance sheets and are being amortized over the life of the loan. As of September 30, 2025, debt issuance costs and debt discount, net of accumulated amortization, associated with the Braidwell Term Loan were both $2.2 million.

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Borrowings under the Braidwell Term Loan bear interest at a rate per annum equal to the Term Secured Overnight Financing Rate for such SOFR business day ("SOFR") subject to a 3% floor, plus 5.75%. The applicable interest rate as of September 30, 2025 was 10.00%. The loan agreement includes an undrawn commitment fee, which is calculated as 1% per annum of the average daily undrawn portion of the DDTL. Interest and undrawn commitment fees incurred are due quarterly. The Company is also required to pay fees on any prepayment of the Braidwell Term Loan, ranging from 3.0% to 1.0% depending on the date of prepayment, and a final payment fee equal to 3.25% of the principal amount of the loans drawn. The effective interest rate as of September 30, 2025 was 11.7%. During the three months ended September 30, 2025, the Company recognized interest expense on the Braidwell Term Loan of $5.7 million, which includes $0.2 million for both the amortization of debt issuance costs and debt discount. During the nine months ended September 30, 2025, the Company recognized interest expense on the Braidwell Term Loan of $16.2 million, which includes $0.3 million for the amortization of debt issuance costs and $0.4 million for the debt discount. During the three months ended September 30, 2024, the Company recognized interest expense on the Braidwell Term Loan of $4.4 million, which includes $0.2 million for the amortization of debt issuance costs and $0.1 million for the debt discount. During the nine months ended September 30, 2024, the Company recognized interest expense on the Braidwell Term Loan of $12.9 million, which includes $0.5 million for the amortization of debt issuance costs and $0.2 million for the debt discount. Upon the Braidwell Term Loan’s maturity, any outstanding principal balance, unpaid accrued interest, and all other obligations under the Braidwell Term Loan will be due and payable.

The Braidwell Term Loan is secured by substantially all of the Company’s assets with the priority interest of the lenders in the Braidwell Term Loan and the Revolving Credit Facility, as defined below, subject to terms of a customary intercreditor agreement, which provides that the lenders under the Revolving Credit Facility have a priority with respect to the Company's accounts receivable, inventory, medical instruments, and items related to the foregoing, and the lenders under the Braidwell Term Loan have priority with respect to the remainder of the Company's assets. The loan agreement contains customary representations and warranties and affirmative and negative covenants. Under the loan agreement, the Company is required to maintain a minimum level of liquidity. The loan agreement also includes certain events of default, and upon the occurrence of such events of default, all outstanding loans under the Braidwell Term Loan may be accelerated and/or the lenders’ commitments terminated. The Company is in compliance with all required financial covenants as of September 30, 2025.

Revolving Credit Facility

In September 2022, the Company entered into a revolving credit facility (the “Revolving Credit Facility”) with entities affiliated with MidCap Financial Trust (“MidCap”). The Revolving Credit Facility originally provided up to $

Alphatec Holdings, Inc. 10-Q