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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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: 001-42756

CARLSMED, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	83-1081863
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1800 Aston Ave, Suite 100 Carlsbad, California	92008
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (760) 766-1923

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, $0.00001 par value per share

     CARL

     The Nasdaq Stock Market LLC

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, 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 November 3, 2025, the registrant had 26,592,908 shares of common stock, $0.00001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Balance Sheets as of September 30, 2025 and December 31, 2024	1
	Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months ended September 30, 2025 and 2024	2
	Condensed Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) for the Three and Nine Months Ended September 30, 2025 and 2024	3
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024	5
	Notes to Condensed Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

PART II.	OTHER INFORMATION	34

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
	Signatures	36

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains express or implied forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

our ability to advance the aprevo Technology Platform and any potential future products through applicable regulatory approval processes;

•

existing regulations and regulatory developments in the United States and other jurisdictions;

•

our ability to maintain or improve our third-party payor reimbursement strategy;

•

our ability to attract and retain hospitals and surgeons;

•

our expectations concerning orders for our products and utilization by existing hospitals and surgeons;

•

our expectations regarding the potential market size for the aprevo Technology Platform;

•

our ability to maintain our competitive technological advantages;

•

our intentions to pursue adjacent and international markets;

•

our ability to continue improving our products and technology;

•

our commercialization and marketing capabilities and strategies;

•

our ability to maintain or reduce the manufacturing times of our CMOs;

•

our reliance on a limited number of CMOs;

•

the implementation of our business model and strategic plans for our business and products and technology;

•

our relationships with, and the capabilities of, our suppliers;

•

the scope of protection we are able to establish and maintain for intellectual property rights covering our products;

•

our ability to effectively manage our growth;

•

the increased expenses associated with being a public company;

•

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended;

•

estimates of our expenses, future revenue, capital requirements, our needs for additional financing, and our ability to obtain additional capital;

•

our future financial performance; and

•

those other factors described in the section titled “Risk Factors” in our prospectus dated July 22, 2025 (File No. 333-288339) (the “IPO Prospectus”), as filed with the Securities and Exchange Commission (the “SEC”) on July 24, 2025 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”) and in periodic reports that we file with the SEC, and our reports to stockholders. These filings are available at www.sec.gov and on our website at https://www.carlsmed.com.

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date on which the statements are made. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

We own certain trademarks and trademark applications used in this Quarterly Report on Form 10-Q that are important to our business, including, among others, Carlsmed®, aprevo®, and myaprevo®. We also intend to apply for various trademarks that we use in connection with the operation of our business. This Quarterly Report on Form 10-Q may also contain trademarks, service marks, and trade names of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names, or products in this prospectus is not intended to, and does not, imply a relationship with, or endorsement or sponsorship by, us. Solely for convenience, the trademarks, service marks, and trade names referred to in this prospectus may appear without the “™,” “®,” or “SM” symbol, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable owner of these trademarks, service marks, and trade names.

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

CARLSMED, INC.

CONDENSED BALANCE SHEETS

(in thousands, except for share and par value amounts)

(unaudited)


	September 30, 2025			December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	115,373		$	40,125
Restricted cash		100			100
Accounts receivable, net of allowances of $1,601 and $1,239, as of September 30, 2025 and December 31, 2024, respectively		11,296			6,766
Inventory		1,340			995
Prepaid expenses and other current assets		3,356			1,365
Total current assets		131,465			49,351
Property and equipment, net		1,187			260
Operating lease right-of-use assets		1,986			1,644
Other assets		225			569
Total assets	$	134,863		$	51,824

Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	2,672		$	2,412
Accrued liabilities		3,186			2,687
Accrued compensation		4,409			3,270
Short-term operating lease liabilities		661			449
Total current liabilities		10,928			8,818
Long-term portion of term loan, net		15,440			15,414
Long-term operating lease liabilities		1,513			1,317
Warrant liabilities		32			457
Other long-term liabilities		290			222
Total liabilities		28,203			26,228
Commitments and contingencies (Note 9)
Series A convertible preferred stock, $0.00001 par value; zero and 4,902,814 shares authorized, issued, and outstanding, and zero and $13,767 liquidation preference as of September 30, 2025 and December 31, 2024, respectively		—			13,578
Series B convertible preferred stock, $0.00001 par value; zero and 4,393,481 shares authorized, zero and 4,335,051 shares issued and outstanding, and zero and $30,000 liquidation preference as of September 30, 2025 and December 31, 2024, respectively		—			29,801
Series C convertible preferred stock, $0.00001 par value; zero and 4,910,500 shares authorized, zero and 4,890,123 shares issued and outstanding, and zero and $52,500 liquidation preference as of September 30, 2025 and December 31, 2024, respectively		—			52,847

Stockholders’ equity (deficit):
Preferred stock, $0.00001 par value; 10,000,000 and zero shares authorized, zero shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		—			—
Common stock, $0.00001 par value; 600,000,000 and 21,835,801 shares authorized, 26,652,775 and 4,234,798 shares issued, and 26,584,077 and 4,139,219 shares outstanding as of September 30, 2025 and December 31, 2024, respectively		—			—
Additional paid-in capital		198,852			541
Accumulated deficit		(92,192	)		(71,171	)
Total stockholders’ equity (deficit)		106,660			(70,630	)
Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)	$	134,863		$	51,824

The accompanying notes are an integral part of these Condensed Financial Statements.

CARLSMED, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenue	$	13,074		$	6,590		$	35,346		$	17,757
Cost of sales		3,147			1,792			8,914			4,733
Gross profit		9,927			4,798			26,432			13,024
Operating expenses:
Research and development		4,445			4,035			11,755			11,289
Sales and marketing		9,610			6,622			24,218			15,092
General and administrative		4,907			1,918			11,715			6,068
Total operating expenses		18,962			12,575			47,688			32,449
Loss from operations		(9,035	)		(7,777	)		(21,256	)		(19,425	)
Other income (expense):
Interest expense		(380	)		(402	)		(1,100	)		(943	)
Interest income		954			394			1,670			920
Change in fair value of warrant liabilities		(65	)		(28	)		(335	)		(89	)
Total other income (expense), net		509			(36	)		235			(112	)
Net loss and comprehensive loss		(8,526	)		(7,813	)		(21,021	)		(19,537	)
Deemed dividend to preferred stockholders		—			(592	)		(584	)		(592	)
Net loss attributable to common stockholders	$	(8,526	)	$	(8,405	)	$	(21,605	)	$	(20,129	)

Net loss per share attributable to common stockholders, basic and diluted	$	(0.40	)	$	(2.06	)	$	(2.15	)	$	(4.97	)
Weighted-average number of common shares used to compute basic and diluted net loss per share		21,081,330			4,088,553			10,051,623			4,046,210

The accompanying notes are an integral part of these Condensed Financial Statements.

CARLSMED, INC.

CONDENSED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)


	Nine Months Ended September 30, 2025
	Series A Convertible Preferred Stock						Series B Convertible Preferred Stock						Series C Convertible Preferred Stock						Common Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares			Amount			Shares			Amount			Shares			Amount			Shares		Amount		Capital			Deficit			Equity (Deficit)
Balance as of December 31, 2024		4,902,814		$	13,578			4,335,051		$	29,801			4,890,123		$	52,847			4,139,219	$	—	$	541		$	(71,171	)	$	(70,630	)
Issuance of Series C convertible preferred stock, net of issuance costs of $80		—			—			—			—			1,117,743			12,503			—		—		—			—			—
Deemed dividend related to issuance of Series C convertible preferred stock		—			—			—			—			—			—			—		—		(584	)		—			(584	)
Vesting of early exercised stock options		—			—			—			—			—			—			8,960		—		10			—			10
Exercise of vested stock options		—			—			—			—			—			—			422,364		—		149			—			149
Stock-based compensation expense		—			—			—			—			—			—			—		—		175			—			175
Net loss		—			—			—			—			—			—			—		—		—			(5,729	)		(5,729	)
Balance as of March 31, 2025		4,902,814		$	13,578			4,335,051		$	29,801			6,007,866		$	65,350			4,570,543	$	—	$	291		$	(76,900	)	$	(76,609	)
Vesting of early exercised stock options		—			—			—			—			—			—			8,960		—		10			—			10
Exercise of vested stock options		—			—			—			—			—			—			24,253		—		34			—			34
Stock-based compensation expense		—			—			—			—			—			—			—		—		258			—			258
Net loss		—			—			—			—			—			—			—		—		—			(6,766	)		(6,766	)
Balance as of June 30, 2025		4,902,814		$	13,578			4,335,051		$	29,801			6,007,866		$	65,350			4,603,756	$	—	$	593		$	(83,666	)	$	(83,073	)
Conversion of convertible preferred stock into common stock on initial public offering		(4,902,814	)		(13,578	)		(4,335,051	)		(29,801	)		(6,007,866	)		(65,350	)		15,245,731		—		108,729			—			108,729
Issuance of common stock in initial public offering, net of underwriting discounts and commissions and offering costs of $12,446		—			—			—			—			—			—			6,700,000		—		88,054			—			88,054
Reclassification of warrants from liability classified to equity classified		—			—			—			—			—			—			—		—		760			—			760
Cashless exercise of warrants		—			—			—			—			—			—			25,184		—		—			—			—
Vesting of early exercised stock options		—			—			—			—			—			—			8,960		—		11			—			11
Exercise of vested stock options		—			—			—			—			—			—			446		—		1			—			1
Stock-based compensation expense		—			—			—			—			—			—			—		—		704			—			704
Net loss		—			—			—			—			—			—			—		—		—			(8,526	)		(8,526	)
Balance as of September 30, 2025		—		$	—			—		$	—			—		$	—			26,584,077	$	—	$	198,852		$	(92,192	)	$	106,660

CARLSMED, INC.

CONDENSED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)


	Nine Months Ended September 30, 2024
	Series A Convertible Preferred Stock				Series B Convertible Preferred Stock				Series C Convertible Preferred Stock				Common Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Equity (Deficit)
Balance as of December 31, 2023		4,902,814	$	13,578		4,335,051	$	29,801		—	$	—		3,970,811	$	—	$	784		$	(46,914	)	$	(46,130	)
Issuance of Series C convertible preferred stock, net of issuance costs of $172		—		—		—		—		3,586,091		38,328		—		—		—			—			—
Issuance of common stock		—		—		—		—		—		—		29,121		—		6			—			6
Exercise of vested stock options		—		—		—		—		—		—		43,506		—		12			—			12
Stock-based compensation expense		—		—		—		—		—		—		—		—		35			—			35
Net loss		—		—		—		—		—		—		—		—		—			(5,447	)		(5,447	)
Balance as of March 31, 2024		4,902,814	$	13,578		4,335,051	$	29,801		3,586,091	$	38,328		4,043,438	$	—	$	837		$	(52,361	)	$	(51,524	)
Exercise of vested stock options		—		—		—		—		—		—		19,957		—		11			—			11
Stock-based compensation expense		—		—		—		—		—		—		—		—		52			—			52
Net loss		—		—		—		—		—		—		—		—		—			(6,277	)		(6,277	)
Balance as of June 30, 2024		4,902,814	$	13,578		4,335,051	$	29,801		3,586,091	$	38,328		4,063,395	$	—	$	900		$	(58,638	)	$	(57,738	)
Issuance of Series C convertible preferred stock, net of issuance costs of $73		—		—		—		—		1,304,032		14,519		—		—		—			—			—
Deemed dividend related to issuance of Series C convertible preferred stock		—		—		—		—		—		—		—		—		(592	)		—			(592	)
Vesting of early exercised stock options		—		—		—		—		—		—		38,829		—		45			—			45
Exercise of vested stock options		—		—		—		—		—		—		8,637		—		4			—			4
Stock-based compensation expense		—		—		—		—		—		—		—		—		66			—			66
Net loss		—		—		—		—		—		—		—		—		—			(7,813	)		(7,813	)
Balance as of September 30, 2024		4,902,814	$	13,578		4,335,051	$	29,801		4,890,123	$	52,847		4,110,861	$	—	$	423		$	(66,451	)	$	(66,028	)

The accompanying notes are an integral part of these Condensed Financial Statements.

CARLSMED, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities
Net loss	$	(21,021	)	$	(19,537	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		183			108
Stock-based compensation		1,137			153
Non-cash interest		163			151
Loss on remeasurement of warrant liabilities		335			89
Non-cash lease expense		376			278
Provision for credit losses		362			310
Provision for excess and obsolete inventory		1,337			882
Other non-cash items		17			—
Changes in operating assets and liabilities:
Accounts receivable, net		(4,893	)		(2,379	)
Inventory		(1,681	)		(1,703	)
Prepaid expenses and other assets		(2,138	)		(631	)
Accounts payable		683			832
Accrued liabilities		530			564
Accrued compensation		1,139			(173	)
Lease liabilities		(185	)		(207	)
Net cash used in operating activities		(23,656	)		(21,263	)

Cash flows from investing activities:
Purchase of property and equipment		(569	)		(119	)
Capitalized internal use software costs		(558	)		—
Payment of initial direct costs related to operating leases		(126	)		—
Net cash used in investing activities		(1,253	)		(119	)

Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting discounts and commissions		93,465			—
Payments for deferred initial public offering costs		(5,411	)		—
Proceeds from issuance of Series C convertible preferred stock, net of issuance costs		11,919			52,288
Proceeds from term loan, net of issuance costs		—			6,235
Proceeds from exercises of stock options		184			27
Net cash provided by financing activities		100,157			58,550

Increase in cash, cash equivalents, and restricted cash		75,248			37,168
Cash, cash equivalents, and restricted cash at beginning of the period		40,225			7,372
Cash, cash equivalents, and restricted cash at end of the period	$	115,473		$	44,540

CARLSMED, INC.

CONDENSED STATEMENTS OF CASH FLOWS - CONTINUED

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2025		2024
Supplemental Disclosure of Noncash Investing and Financing Activities:
Conversion of convertible preferred stock upon initial public offering	$	108,729	$	—
Reclassification of warrants from liability classified to equity classified	$	760	$	—
Vesting of early exercised common stock options	$	31	$	45
Right-of-use asset obtained in exchange for lease liability	$	593	$	—
Preferred stock warrants issued in connection with term loan modifications	$	—	$	203
Cash, Cash Equivalents, and Restricted Cash Information:
Cash and cash equivalents, beginning of period	$	40,125	$	7,222
Restricted cash, beginning of period		100		150
Cash, cash equivalents, and restricted cash, beginning of period		40,225		7,372
Cash and cash equivalents, end of period		115,373		44,440
Restricted cash, end of period		100		100
Cash, cash equivalents, and restricted cash, end of period	$	115,473	$	44,540

The accompanying notes are an integral part of these Condensed Financial Statements.

CARLSMED, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

1. Organization

Description of Business

Carlsmed, Inc. (the “Company”) is a commercial-stage company within the surgical device with enabling technology sector. The Company was incorporated in Delaware in June 2018 and is headquartered in Carlsbad, California. The Company designs, manufactures, and markets aprevo®, a comprehensive technology platform for spine fusion surgery procedures.

The aprevo platform includes proprietary surgical planning software, using outcomes-based algorithms that are aided with artificial intelligence, and resulting custom-built, anatomically designed vertebral interbody implants. These implants provide each patient with a personalized vertebral fit to address their pathology and anatomy.

The U.S. Food and Drug Administration (“FDA”) cleared the aprevo interbody implants through its 510(k) regulatory pathway for the correction of adult lumbar spinal deformity in December 2020 and several degenerative conditions of the lumbar spine in August 2022. The Company commenced its limited clinical release with its first U.S. patient implant in February 2021, and in October 2021, the Company commenced its U.S. commercial launch of aprevo.

Reverse Stock Split

On July 10, 2025, the Company effectuated a 1-for-5.58 reverse stock split of the Company’s issued and outstanding shares of common stock, Series A, Series B, and Series C convertible preferred stock, as well as stock option awards to purchase shares of common stock, restricted stock units (“RSUs”), and warrants to purchase shares of common stock, Series B convertible preferred stock, and Series C convertible preferred stock. Consequently, all issued and outstanding shares of stock, stock option awards, RSUs, warrants, and per share data have been retroactively adjusted in these financial statements to reflect the reverse stock split for all periods presented. The par value of the common stock and convertible preferred stock remain unchanged. As the number and issuance price of all outstanding convertible preferred stock were adjusted, the conversion ratios for each series of the Company’s convertible preferred stock were unchanged. Stockholders entitled to fractional shares as a result of the reverse stock split received cash payment in lieu of receiving fractional shares.

Initial Public Offering

On July 24, 2025, the Company completed its initial public offering of 6,700,000 shares of its common stock, at a price to the public of $15.00 per share (the “IPO”). The net proceeds received by the Company from the IPO were $93.5 million, after deducting underwriting discounts and commissions and before additional offering expenses of $5.4 million paid by the Company. The underwriters had the option for a period of 30 days from the IPO date to purchase an additional 1,005,000 shares of common stock at the IPO price, less underwriting discounts and commissions, which was not exercised. Immediately prior to the closing of the IPO on July 24, 2025, all shares of the Company’s convertible preferred stock converted into shares of the Company’s common stock. In connection with this conversion, all warrants to purchase convertible preferred stock are now exercisable into common stock.

Liquidity and Capital Resources

As of September 30, 2025, the Company had $115.4 million of cash and cash equivalents, $15.6 million debt outstanding under its loan and security agreement with Customers Bank (the “Customers Loan Agreement”), and an accumulated deficit of $92.2 million.

On July 24, 2025, the Company completed the IPO and received net proceeds of $93.5 million, after deducting underwriting discounts and commissions and before additional offering expenses paid by the Company of $5.4 million.

The Company expects to continue to generate operating losses for the foreseeable future as it continues to expand commercial operations and develop its product portfolio. The Company believes that its existing cash on hand will be sufficient to meet anticipated capital requirements for its operations for at least 12 months from the date of the issuance of the accompanying Condensed Financial Statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Condensed Financial Statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by S-X, Rule 10-1. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for a complete set of financial statements. In the opinion of the Company’s management, the accompanying unaudited Condensed Financial Statements and notes have been prepared on the same basis as the audited financial statements for the year ended December 31, 2024, and include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the interim periods presented.

The accompanying unaudited Condensed Financial Statements should be read in conjunction with the Company’s audited annual financial statements and notes thereto included in the Company’s final prospectus, dated July 22, 2025, filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”) on July 24, 2025. The Company’s results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other interim period.

Use of Estimates

The preparation of the unaudited Condensed Financial Statements in conformity with GAAP requires management to make informed estimates that require assumptions that affect the reported amounts in the accompanying unaudited Condensed Financial Statements. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially under different assumptions and conditions.

Cash and Cash Equivalents

“Cash and cash equivalents” in the accompanying condensed Balance Sheets consist of bank deposits and highly liquid investments, including money market fund accounts, that are readily convertible into cash without penalty, with original maturities of three months or less from the purchase date. The carrying amounts reported in the accompanying condensed Balance Sheets for cash and cash equivalents are valued at cost, which approximate their fair value.

Restricted Cash

“Restricted cash” in the accompanying condensed Balance Sheets as of September 30, 2025 and December 31, 2024 represents cash held as collateral for the Company’s facility leases.

Accounts Receivable and Allowance for Credit Losses

“Accounts receivable, net of allowances” in the accompanying condensed Balance Sheets are presented net of allowances for credit losses. The Company maintains an allowance for expected credit losses for accounts receivable, which is recorded as an offset to accounts receivable. Changes in this allowance are recorded as “general and administrative” expense in the condensed Statements of Operations and Comprehensive Loss. Expected credit losses include losses expected based on known credit issues with certain customers as well as a general expected credit loss allowance based on relevant information, including historical loss rates, current conditions, and reasonable economic forecasts that affect collectability. The Company maintained an allowance for credit losses accounts of $1.6 million and $1.2 million as of September 30, 2025 and December 31, 2024, respectively. The Company recorded a provision for credit losses of less than $0.1 million and $0.1 million for the three months ended September 30, 2025 and 2024, respectively, and $0.4 million and $0.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Concentrations of Financial Instrument Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents in deposits at financial institutions that may exceed federally insured limits and certain accounts receivable balances. Risks associated with cash and cash equivalents are mitigated by banking with creditworthy institutions with platforms that administer deposits across multiple banks within federally insured limits. The Company mitigates potential losses from uncollectible accounts receivable through its credit approval and ongoing collection and customer monitoring activities. To date, the Company has not experienced any losses on its financial instruments and believes that it has adequately recorded allowances for uncollectible accounts receivable in each reported period.

As of September 30, 2025, the Company had one customer that accounted for 11% of the Company’s total accounts receivable balance. As of December 31, 2024, the Company did not have accounts receivable balances from any one customer exceeding 10% of total accounts receivable. The Company did not have revenue from any one customer exceeding 10% of total revenue for the three and nine months ended September 30, 2025. There were no customers exceeding 10% of total revenue for the three months ended September 30, 2024. There was one customer that accounted for 10% of the Company’s revenue for the nine months ended September 30, 2024.

Fair Value of Financial Instruments

Assets and liabilities are recorded at fair value on a recurring basis in the accompanying condensed Balance Sheets. These accounts are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative accounting guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

•

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are publicly accessible at the measurement date.

•

Level 2: Observable prices that are based on inputs not quoted on active markets, but that are corroborated by market data. These inputs may include quoted prices for similar assets or liabilities or quoted market prices in markets that are not active to the general public.

•

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.

The carrying amounts of the Company’s condensed financial instruments consisting of cash, cash equivalents, accounts receivables, prepaid expenses, accounts payable, and accrued liabilities approximate fair value due to the short maturities for each.

Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did not have any transfers of assets and liabilities between the levels of the fair value hierarchy during the periods presented.


(in thousands)	Total Fair Value		Quoted Market Prices for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of September 30, 2025
Money market funds (1)	$	112,661	$	112,661	$	—	$	—
Total financial assets	$	112,661	$	112,661	$	—	$	—

Warrant liabilities	$	32	$	—	$	—	$	32
Total financial liabilities	$	32	$	—	$	—	$	32

As of December 31, 2024
Money market funds (1)	$	37,744	$	37,744	$	—	$	—
Total financial assets	$	37,744	$	37,744	$	—	$	—

Warrant liabilities	$	457	$	—	$	—	$	457
Total financial liabilities	$	457	$	—	$	—	$	457

(1) Included as a component of “cash and cash equivalents” on the accompanying condensed Balance Sheets.

Inventory

The Company maintains minimal inventories because aprevo is made specific to each patient’s anatomy to address their pathology and is not otherwise made-to-stock. Work-in-process inventory consists of titanium alloy implants for spine fusion surgical procedures, pending sterilization and packaging. Finished goods inventory is ready for shipment to the customer for use in a spine fusion surgical procedure.

Inventories are valued at the lower of cost or net realizable value, determined by the specific identification method. At each balance sheet date, the Company evaluates its inventories for obsolescence, based on notification of permanently canceled surgeries and ongoing estimates of permanent cancellations. The Company records the corresponding charge for obsolete inventory through “cost of sales.”

The components of reported “inventory” are as follows:


(in thousands)	As of September 30, 2025		As of December 31, 2024
Finished goods	$	1,304	$	595
Work in process		36		400
Total	$	1,340	$	995

Warrant Liabilities

Prior to the closing of the IPO on July 24, 2025, the Company had issued warrants to purchase convertible preferred stock in conjunction with the Customers Loan Agreement (see Note 4). The Company accounted for its issued convertible preferred stock warrants as liabilities in accordance with ASC 480. The liability-classified warrants were initially measured at fair value, resulting in an implied discount on the related financing arrangement that was deferred as an asset as it relates to tranches of the Customers Loan Agreement. The deferred asset is recorded within “other assets” on the accompanying condensed Balance Sheets and is amortized into interest expense using the straight-line method over the period in which the Company can draw on the remaining tranches of the credit facility. Changes in fair value of the warrant liabilities are recognized in the condensed Statements of Operations and Comprehensive Loss.

In conjunction with the IPO, all of the outstanding shares of convertible preferred stock were converted into common stock. As a result, the Series B Warrant and Series C Warrant that had previously been exercisable for convertible preferred stock became exercisable for common stock. Upon the closing of the IPO on July 24, 2025, the Series B Warrant that was exercisable into 52,776 shares of common stock and the Series C Warrant that was exercisable into 5,093 shares of common stock met the criteria for equity classification and accordingly were reclassified from liabilities to equity, with the difference between their fair value immediately prior to reclassification and their prior recorded fair value being recognized in the accompanying condensed Statements of Operations and Comprehensive Loss. The fair value of these warrants immediately before reclassification was $0.7 million and are included in additional paid-in capital as of September 30, 2025. On the closing of the IPO on July 24, 2025, the Series B Warrant contained 5,644 shares of common stock and the Series C Warrant contained 15,282 shares of common stock that were exercisable contingent on specified revenue and loan draw milestones (see Note 4) and therefore continued to be classified as liabilities because they did not meet the criteria for equity classification.

Subsequently, as of September 30, 2025, the Company achieved a revenue milestone, causing 5,095 additional shares of common stock underlying the Series C Warrant to become exercisable and accordingly were reclassified from liabilities to equity as they met the criteria for equity classification. The difference between the fair value of the warrants immediately prior to reclassification and their prior recorded fair value was recognized in the accompanying condensed Statements of Operations and Comprehensive Loss. The fair value of these warrants at the time of reclassification was $0.1 million, and are included in "additional paid-in capital" as of September 30, 2025.

As of September 30, 2025, the Series B Warrant contains 5,644 shares of common stock and the Series C Warrant contains 10,187 shares of common stock that are exercisable contingent on loan draw milestones and continue to be classified as liabilities because they do not meet the equity classification criteria. On October 29, 2025, as a part of the Fifth Amendment to the Customers Loan Agreement, the Series B Warrant and Series C Warrant were amended and restated and the remaining aggregate 15,831 shares of common stock that were exercisable contingent on loan draw milestones were canceled (see Note 4).

The fair value of the warrant liabilities was determined based on significant inputs not observable in the market, which represents a “Level 3” measurement within the fair value hierarchy. Prior to the IPO, the fair values of the warrant liabilities were measured using the “hybrid method.” The hybrid method is often used when a company is expecting a liquidity event in the near future and is a combination of the option-pricing and probability-weighted expected return methods. Estimates and assumptions impacting the fair value measurement included the fair value per share of the underlying shares of convertible preferred stock, the remaining contractual term of the warrants, and probability of number of shares the warrants will become exercisable into. The most significant assumption in the model impacting the fair value of the warrants was the fair value of the Company’s convertible preferred stock as of each remeasurement date. Subsequent to the IPO, the fair value of the warrant liabilities is measured using the Black-Scholes option pricing model.

A summary of the changes in the total fair value of the warrant liabilities for the nine months ended September 30, 2025 and 2024, is as follows:


(in thousands)	Warrant Liabilities
Fair value as of December 31, 2024	$	457
Change in fair value of warrant liabilities		335
Reclassification of warrants from liability classified to equity classified		(760	)
Fair value as of September 30, 2025	$	32

Fair value as of December 31, 2023	$	—
Issuance of Series B preferred stock warrants		203
Change in fair value of warrant liabilities		89
Fair value as of September 30, 2024	$	292

Deferred Offering Costs

The Company capitalizes certain legal, professional, accounting, and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in “stockholders’ equity (deficit)” or the applicable series of convertible preferred stock as a reduction of proceeds generated as a result of the offering. Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the condensed Statements of Operations and Comprehensive Loss. As of September 30, 2025 and December 31, 2024, there were zero and $0.4 million deferred offering costs, respectively, which are included in “other assets” in the accompanying condensed Balance Sheets.

The Company completed its IPO on July 24, 2025. As a result, the deferred offering costs were offset against the proceeds of the IPO (see Note 1).

Comprehensive Loss

Comprehensive loss encompasses all changes in equity other than those arising from transactions with stockholders. For the three and nine months ended September 30, 2025 and 2024, the Company had no other comprehensive loss items and accordingly, "net loss" equaled "comprehensive loss."

Recent Accounting Pronouncements

Recently Issued Accounting Standards Not Yet Effective

Expense Disaggregation Disclosures - In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). This ASU requires new financial statement disclosures disaggregating prescribed expense categories within relevant income statement expense captions. ASU 2024-03 will be effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting the standard.

Income Taxes - In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Tax Disclosures (“ASU 2023-09”). This ASU expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of adopting the standard.

Financial Instruments - Credit Losses - In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). This ASU provides entities with the option to elect a practical expedient that assumes that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. ASU 2025-05 will be effective for fiscal years beginning after December 15, 2025 and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting the standard.

Internal-Use Software - In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). This ASU is intended to simplify the capitalization guidance by removing all references to prescriptive and sequential software development stages. This ASU also requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. ASU 2025-06 will be effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting the standard.

3. Balance Sheet Account Detail

The composition of selected captions within the accompanying condensed Balance Sheets are summarized below:

Property and Equipment, Net

The components of “property and equipment, net” as of September 30, 2025 and December 31, 2024 are as follows:


(in thousands)	As of September 30, 2025			As of December 31, 2024
Office equipment	$	573		$	488
Furniture and fixtures		144			91
Leasehold improvements		340			80
Construction in progress		380			—
Software		178			—
Total		1,615			659
Less: accumulated depreciation		(428	)		(399	)
Property and equipment, net	$	1,187		$	260

"Depreciation expense" for the three months ended September 30, 2025 and 2024 was $0.1 million and less than $0.1 million, respectively. Depreciation expense for the nine months ended September 30, 2025 and 2024 was $0.2 million and $0.1 million, respectively. The Company has not recognized any impairment loss for any long-lived assets for the three and nine months ended September 30, 2025 and 2024.

Accrued Liabilities

The components of “accrued liabilities” as of September 30, 2025 and December 31, 2024 are as follows:


(in thousands)	As of September 30, 2025		As of December 31, 2024
Accrued sales agent commissions	$	1,617	$	1,420
Accrued clinical studies		352		529
Liability associated with stock option exercises prior to vesting		81		112
Accrued professional fees		811		90
Other accrued expenses		325		536
Total accrued liabilities	$	3,186	$	2,687

4. Debt

Customers Bank Credit Facility

As of September 30, 2025, $15.6 million of principal was outstanding under the $27.5 million Customers Loan Agreement that was set to mature on October 31, 2029. As of September 30, 2025, an aggregate $11.9 million was available to draw and the Company was in compliance with all applicable Customers Loan Agreement covenants. The Customers Loan Agreement was subsequently amended on October 29, 2025, which among other changes, amended the maturity date and amount available to draw as discussed in more detail below.

In December 2022, the Company and Signature Bank, subsequently succeeded by Customers Bank, entered into a loan and security agreement (the “Customers Loan Agreement”) with an initial maturity to December 2026 that provided $12.5 million of available principal. The Customers Loan Agreement required the Company to pay a tiered cash-based “Success Fee” upon a defined Liquidity Event that was eliminated in March 2024 in connection with the Third Amendment, as discussed below.

The Customers Loan Agreement bore interest at the greater of (a) 1.0% below Prime Rate or (b) 5.25%. The Customers Loan Agreement also included an end of term charge of 4.21% of the aggregate principal amount funded, and such end of term charge remains in effect through the Third Amendment and Fourth Amendment. The end of term charge is recorded within “other long-term liabilities” within the condensed Balance Sheets and is accrued over the term of the loan through interest expense within the condensed Statements of Operations and Comprehensive Loss using the “effective interest method.” Debt issuance costs are accounted for as a debt discount and amortized as “interest expense” within the condensed Statements of Operations and Comprehensive Loss over the term of the loan using the “effective interest method.”

On March 7, 2024, the Company amended the Customers Loan Agreement (the “Third Amendment”) to increase the total principal available under the credit facility from $12.5 million to $18.8 million, subject to the achievement of certain revenue and other milestones, with extended maturity up to December 20, 2027, if certain conditions are met. The applicable per annum interest rate was adjusted to the greater of (a) WSJ Prime Rate + 0.25% or (b) 5.25%, and was 7.50% as of September 30, 2025.

As part of the Third Amendment, the Success Fee was contractually eliminated and replaced with the issuance of a warrant exercisable for up to 58,420 shares of Series B convertible preferred stock at an exercise price of $6.93 per share (the “Series B Warrant”). Upon issuance, the Series B Warrant was immediately exercisable for 26,881 shares with the remaining 31,539 additional shares becoming exercisable upon the required achievement of certain revenue milestones and/or draws of this expanded credit facility. The Series B Warrant was scheduled to expire 10 years from the issuance date of March 6, 2024, but was amended and restated in connection with the subsequent Fourth Amendment (see below). The fair value of the Series B Warrant at issuance in conjunction with the Third Amendment was $0.2 million.

In May 2024, the Company drew $6.3 million under the Customers Loan Agreement upon the achievement of requisite revenue milestones.

On December 30, 2024, the Company further amended the Customers Loan Agreement (the “Fourth Amendment”) to expand the credit facility from $18.8 million to $27.5 million, with the addition of two new debt draw tranches. Upon the Fourth Amendment, the Company had the ability to draw $7.5 million immediately and the remaining $4.4 million was contingent upon the achievement of a requisite revenue milestone. As of September 30, 2025, a requisite revenue milestone was met which resulted in the interest-only period being extended through January 31, 2027, followed by principal repayment over 33 months thereafter. Additionally, as a result of the requisite revenue milestone being met, the remaining $4.4 million became available to draw. Upon achievement of an additional revenue milestone, the interest-only period and repayment terms may be further extended to an interest-only period through July 31, 2027, followed by principal repayment over 27 months thereafter. However, such additional revenue milestone was not met as of September 30, 2025.

As part of the Fourth Amendment, the Company partially modified the aggregate 58,420 Series B Warrant issued with the Third Amendment, reducing the number of shares exercisable subject to remaining future draws of the credit facility as of the date of the Fourth Amendment from 11,289 shares to 5,644, with the remaining 5,644 shares becoming exercisable ratably with debt draws that had not occurred as of September 30, 2025. Additionally, the expiration date for the Series B Warrant was extended to December 30, 2034. The modification of the Series B Warrant upon the Fourth Amendment resulted in an immaterial increase in the warrant liability.

Additionally, as part of the Fourth Amendment, the Company issued a new warrant that was exercisable into the Company’s Series C convertible preferred stock (“Series C Warrant”), subject to certain revenue and debt draw milestones. The Series C Warrant is exercisable for up to 20,375 shares at an exercise price of $10.74 per share and expires on December 30, 2034. Upon issuance, the Series C Warrant was immediately exercisable into 5,093 shares with the remaining 15,282 additional shares becoming exercisable upon the required achievement of certain revenue milestones and/or draws of this expanded credit facility. As of September 30, 2025, the Company achieved the revenue milestone, causing the Series C Warrant to be exercisable into an additional 5,095 shares. As of September 30, 2025, the Series C Warrant is exercisable into 10,188 shares, with the remaining 10,187 shares becoming exercisable upon draws of this expanded credit facility which have not yet occurred.

In connection with the close of the Company's IPO on July 24, 2025, all of the outstanding shares of convertible preferred stock were converted into common stock. As a result, the warrants to purchase convertible preferred stock are now exercisable into common stock. As of September 30, 2025, the Series B and Series C Warrants are exercisable for 52,776 and 10,188 shares of the common stock, respectively. Refer to Note 2 for additional information regarding the reclassification of certain warrants from liability classified to equity classified during the three months ended September 30, 2025.

Each of the Third Amendment and Fourth Amendment were accounted for as debt modifications with no gain or loss recognized. The carrying value of amounts outstanding under the Customers Loan Agreement approximates its fair value as of September 30, 2025. The fair value of the term loan is classified as a Level 2 measurement because interest rates charged are similar to other financial instruments with similar terms and maturities.

Interest expense on the Customers Loan Agreement was $0.4 million for the three months ended September 30, 2025 and 2024. Of these amounts, $0.1 million was related to amortization of the debt discount and issuance costs for the three months ended September 30, 2025 and 2024. Interest expense on the Customers Loan Agreement was $1.1 million and $0.9 million for the nine months ended September 30, 2025 and 2024, respectively. Of these amounts, $0.2 million was related to amortization of the debt discount and issuance costs for the nine months ended September 30, 2025 and 2024. The effective interest rate was 7.81% as of September 30, 2025.

On October, 29, 2025, the Company amended the Customers Loan Agreement (the “Fifth Amendment”) to provide for a credit facility consisting of (i) a term loan in the principal amount of up to $50.0 million (the “Term Loan”), $17.5 million of which is contingent upon the achievement of requisite revenue milestones, and (ii) a $10.0 million non-formula revolving line of credit (the “Non-Formula Revolving Line”), provided that at no time shall the aggregate amount advanced under the Term Loan and the Non-Formula Revolving Line exceed $50.0 million. With the execution of the Fifth Amendment, the current maximum availability of the Term Loan and Non-Formula Revolving Line aggregates to $42.5 million.

The maturity date of the Term Loan was extended to October 15, 2030, with an interest-only period through October 15, 2027, followed by principal repayment over 36 months thereafter. Upon achievement of certain revenue milestones, the interest-only period and repayment terms of the Term Loan may be extended through April 15,2025 followed by principal repayment over 30 months, and upon achievement of an additional milestone, may be further extended through October 15, 2028, followed by principal repayment over 24 months thereafter. The Non-Formula Revolving Line will mature on October 15, 2028. The applicable per annum interest rate did not change as a result of the Fifth Amendment and remains as the greater of (a) WSJ Prime Rate + 0.25% or (b) 5.25%.

In connection with the Fifth Amendment, the Company partially amended the Series B Warrant, reducing the number of shares of common stock exercisable subject to future draws under the Customers Loan Agreement as of the date of the Fifth Amendment from 58,420 to 52,776 (the “Amended Series B Warrant”). In addition, the Company partially amended the Series C Warrant, reducing the number of shares of common stock exercisable subject to future draws under the Customers Loan Agreement as of the date of the Fifth Amendment from 20,375 to 10,188 (the “Amended Series C Warrant” and, together with the Amended Series B Warrant, the “Amended Warrants”). As a result of the Amended Warrants, Customers Bank's contingent rights to exercise the Warrants for an aggregate of 15,831 shares of common stock were canceled.

The following table summarizes contractual principal payments as of September 30, 2025:


Year ending December 31,	(in thousands)
Remainder of 2025	$	—
2026		—
2027		5,208
2028		5,682

CARLSMED, INC.

CONDENSED BALANCE SHEETS

CARLSMED, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

(unaudited)

CARLSMED, INC.

CONDENSED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except for share amounts)

(unaudited)

CARLSMED, INC.

CONDENSED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except for share amounts)

(unaudited)

CARLSMED, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

CARLSMED, INC.

CONDENSED STATEMENTS OF CASH FLOWS - CONTINUED

(in thousands)

(unaudited)

CARLSMED, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

1. Organization

2. Summary of Significant Accounting Policies

3. Balance Sheet Account Detail

The composition of selected captions within the accompanying condensed Balance Sheets are summarized below:

4. Debt

CARLSMED, INC. 10-Q