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inno00."333

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 March 31, 2026

☐ 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: 001-40355

Treace Medical Concepts, Inc.

(Exact name of registrant as specified in its charter)


Delaware	47-1052611
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 Palmetto Park Place

Ponte Vedra, Florida 32081

(Address of principal executive offices, including zip code)

(904) 373-5940

(Registrant’s telephone number, including area code)

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value	TMCI	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 April 30, 2026, 64,872,976 shares of the registrant’s common stock, $0.001 par value per share, were outstanding.

TREACE MEDICAL CONCEPTS, INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

Table of Contents


Special Note Regarding Forward-Looking Statements	1

Part I: Financial Information


Item 1.	Condensed Financial Statements	4
	Condensed Balance Sheets	4
	Condensed Statements of Operations and Comprehensive Loss	5
	Condensed Statements of Stockholders' Equity	6
	Condensed Statements of Cash Flows	7
	Notes to Condensed Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26


	Part II: Other Information
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
	Signatures	30

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

As used in this Quarterly Report on Form 10-Q ("Quarterly Report"), unless expressly indicated or the context otherwise requires, references to "Treace Medical Concepts," "we," "us," "our," or the "Company," refer to Treace Medical Concepts, Inc. This Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "assume," "believe," "contemplate," "continue," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "predict," "potential," "positioned," "seek," "should," "slated," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology.

These forward-looking statements include, but are not limited to, statements about:

•

the expected use of our products by physicians, including our ability to expand the number of active surgeons and maintain or increase the use of our products by existing and new surgeon customers;

•

the expected growth of our business and our organization and expected improvements in profitability, cash usage and other financial results;

•

our ability to increase case volumes and market share and effectively respond to and mitigate the impact of challenges in the current market environment, including evolving surgeon and patient preferences for bunion surgery treatments, the extensive competition in our industry and new product introductions from other industry participants, including in both the Lapidus market and the minimally invasive osteotomy market, and shifts in the setting of care for elective bunion surgeries from hospitals to ambulatory surgery centers;

•

our ability to control and reduce expenses to help offset changes in revenue growth rates, product mix, and other events;

•

our plans and expected timeline related to our products, or developing, commercially releasing or acquiring new or improved products, to address additional indications or otherwise, and the timing and extent that customers adopt and continue to use our products, including our flagship Lapiplasty® system which has higher average selling prices than our new osteotomy and great toe fusion systems;

•

our ability to maintain sufficient balance sheet strength to continue executing on our strategic investments and growth initiatives for the foreseeable future;

•

expected seasonality;

•

the impact of softening consumer sentiment, higher insurance deductibles and costs, higher fuel prices, inflationary pressures, interest rate changes, business downturns, evolving or increased tariffs, armed conflicts, changes in trade policy or global trade disruptions, protracted government shutdowns, and general economic conditions on the overall state of the economy, on patient behavior and demand for elective surgeries, on customers' and suppliers' operations, and on our business and results of operations;

•

our expectations regarding our ability to leverage investments and manage expenses in our commercial organization to support demand for our products and improve profitability;

•

our expectations regarding government and third-party payor coverage and reimbursement;

•

the economic success and viability of the hospitals, ambulatory surgery centers, surgeons, and stocking distributors that buy our products;

•

the impact of sales to stocking distributors and other customers on product revenues in future periods, particularly if softening demand means that products already purchased by customers are used more slowly for future cases;

•

our estimates of our expenses, ongoing losses, future revenue, and capital requirements, our ability to comply with covenants under our new 5-year credit facilities, and our need for, or ability to obtain, additional financing or refinancing of outstanding debt at or before maturity;

•

our expected uses of our existing cash, cash equivalents and marketable securities and the sufficiency of such resources to fund our planned operations;

•

our ability to retain and recruit key personnel and optimize our existing sales and marketing infrastructure;

•

our ability to obtain an adequate supply of materials and components for our products, some of which are single-source suppliers;

•

our ability to obtain and maintain intellectual property protection for our products;

•

our ability to protect and enforce our intellectual property, and the time and expense involved in monitoring unauthorized uses of our intellectual property, including in connection with the lawsuits we initiated in October 2024 and May 2025;

•

our ability to successfully defend against infringement of our intellectual property by third parties, including our competitors;

•

the impact on our operations, business, supply chain, patient demand for elective surgeries, case cancellations, and hospital and surgeon availability as a result of natural or other disasters, including hurricanes, floods, tornadoes and other climate-related events, power loss, strikes or other events beyond our control;

•

the anticipated pace of growth in the foot and ankle market;

•

our ability to obtain, maintain and expand regulatory clearances for our products and any new products we develop or acquire;

•

our ability to expand our business in current and new geographic markets;

•

our compliance with Nasdaq requirements and government laws, rules and regulations;

•

the impact of geopolitical tensions and international conflicts on the economy and our business;

•

the impact of a bankruptcy filing by any of our customers;

•

our plans to expand clinical data supporting our products and conduct further clinical studies;

•

the outcome and expense of pending and threatened litigation, or legal proceedings, including a pending purported federal securities class action; and

•

the effect of any infectious disease outbreak and its impact or potential impact on our business or on the healthcare industry, particularly elective surgeries where our products are used.

We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management's beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control. As a result, any or all of our forward-looking statements in this Quarterly Report and in other written materials or oral statements made by senior management to analysts, investors, representatives of the media or others may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 and any subsequent Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission ("SEC"), and this Quarterly Report under "Risk Factors" and elsewhere in this Quarterly Report. Readers and investors are urged to consider these factors carefully in evaluating the forward-looking statements.

These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to actual results or to changes in our expectations. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed with the SEC as exhibits to this Quarterly Report with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

PART I–FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

Treace Medical Concepts, Inc.

Condensed Balance Sheets

(in thousands, except share and per share amounts)

(unaudited)


	March 31,			December 31,
	2026			2025
Assets
Current assets
Cash and cash equivalents	$	9,544		$	10,708
Marketable securities, short-term		42,310			37,659
Accounts receivable, net of allowance for credit losses of $1,563 and $1,824 as of March 31, 2026 and December 31, 2025, respectively		30,358			42,155
Inventories		36,366			36,031
Prepaid expenses and other current assets		4,893			5,501
Total current assets		123,471			132,054
Property and equipment, net		32,063			29,752
Intangible assets, net of accumulated amortization of $2,613 and $2,375 as of March 31, 2026 and December 31, 2025, respectively		6,887			7,125
Goodwill		12,815			12,815
Operating lease right-of-use assets		7,371			7,614
Other non-current assets, net of allowance for credit losses of $52 and $69 as of March 31, 2026 and December 31, 2025, respectively		1,495			1,221
Total assets	$	184,102		$	190,581
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	13,537		$	6,726
Accrued liabilities		5,978			5,784
Accrued commissions		6,755			9,365
Accrued compensation		5,621			6,331
Other liabilities		2,600			2,429
Total current liabilities		34,491			30,635
Long-term debt, net		55,820			55,583
Operating lease liabilities, net of current portion		13,551			13,982
Other long-term liabilities		3,049			3,049
Total liabilities		106,911			103,249
Commitments and contingencies (Note 7)
Stockholders’ equity
Preferred stock, $0.001 par value, 5,000,000 shares authorized as of March 31, 2026 and December 31, 2025; 0 shares issued as of March 31, 2026 and December 31, 2025		—			—
Common stock, $0.001 par value, 300,000,000 shares authorized; 65,033,812 and 64,029,378 shares issued as of March 31, 2026 and December 31, 2025, respectively		65		64
Additional paid-in capital		345,495			337,371
Accumulated deficit		(266,953	)		(248,992	)
Accumulated other comprehensive income (loss)		(26	)		72
Treasury stock, at cost; 248,126 and 165,513 shares as of March 31, 2026 and December 31, 2025, respectively		(1,390	)		(1,183	)
Total stockholders’ equity		77,191			87,332
Total liabilities and stockholders’ equity	$	184,102		$	190,581

The accompanying notes are an integral part of these condensed financial statements.

Treace Medical Concepts, Inc.

Condensed Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended March 31,
	2026			2025
Revenue	$	47,198		$	52,570
Cost of goods sold		9,791			10,677
Gross profit		37,407			41,893
Operating expenses
Sales and marketing		33,775			36,122
Research and development		4,622			5,562
General and administrative		16,177			15,791
Total operating expenses		54,574			57,475
Loss from operations		(17,167	)		(15,582	)
Interest income		501			841
Interest expense		(1,570	)		(1,311	)
Other income, net		275			130
Other non-operating income (expense), net		(794	)		(340	)
Net loss	$	(17,961	)	$	(15,922	)

Other comprehensive income (loss)
Unrealized gain (loss) on marketable securities		(98	)		(40	)
Comprehensive loss	$	(18,059	)	$	(15,962	)

Net loss per share, basic and diluted	$	(0.28	)	$	(0.25	)
Weighted-average shares used in computing net loss per share, basic and diluted		64,592,681			62,661,447

The accompanying notes are an integral part of these condensed financial statements.

Treace Medical Concepts, Inc.

Condensed Statements of Stockholders’ Equity

(in thousands, except share amounts)

(unaudited)


												Accumulated
						Additional						Other						Total
	Common Stock					Paid-In			Accumulated			Comprehensive			Treasury			Stockholders’
	Outstanding Shares			Amount		Capital			Deficit			Income (Loss)			Stock			Equity
Balances at December 31, 2025		63,863,865		$	64	$	337,371		$	(248,992	)	$	72		$	(1,183	)	$	87,332
Issuance of common stock upon exercise of stock options		106,420			—		91			—			—			—			91
Issuance of common stock for vesting of restricted stock units		898,014			1		(1	)		—			—			—			—
Share-based compensation expense		—			—		8,034			—			—			—			8,034
Net loss		—			—		—			(17,961	)		—			—			(17,961	)
Unrealized gain (loss) on available-for-sale marketable securities		—			—		—			—			(98	)		—			(98	)
Shares directly withheld from employees for tax payment		(82,613	)		—		—			—			—			(207	)		(207	)
Balances at March 31, 2026		64,785,686		$	65	$	345,495		$	(266,953	)	$	(26	)	$	(1,390	)	$	77,191

Balances at December 31, 2024		62,361,710		$	62	$	303,004		$	(189,990	)	$	97		$	(281	)	$	112,892
Issuance of common stock upon exercise of stock options		82,829			1		118			—			—			—			119
Issuance of common stock for vesting of restricted stock units		499,572			—		—			—			—			—			—
Share-based compensation expense		—			—		8,693			—			—			—			8,693
Net loss		—			—		—			(15,922	)		—			—			(15,922	)
Unrealized gain (loss) on available-for-sale marketable securities		—			—		—			—			(40	)		—			(40	)
Shares directly withheld from employees for tax payment		(52,605	)		—		—			—			—			(401	)		(401	)
Balances at March 31, 2025		62,891,506		$	63	$	311,815		$	(205,912	)	$	57		$	(682	)	$	105,341

The accompanying notes are an integral part of these condensed financial statements.

Treace Medical Concepts, Inc.

Condensed Statements of Cash Flows

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2026			2025
Cash flows from operating activities
Net loss	$	(17,961	)	$	(15,922	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization expense		899			2,461
Provision for allowance for credit losses		112			500
Share-based compensation expense		8,034			8,693
Non-cash lease expense		571			578
Amortization of debt issuance costs		262			74
Amortization (accretion) of premium (discount) on marketable securities, net		5			(77	)
Other, net		587			187
Net changes in operating assets and liabilities, net of acquisitions
Accounts receivable		11,685			9,289
Inventory		(335	)		1,315
Prepaid expenses and other assets		608			1,369
Other non-current assets		(293	)		(76	)
Operating lease liabilities		(854	)		(785	)
Accounts payable		6,811			2,701
Accrued liabilities		(3,126	)		(6,166	)
Other, net		235			57
Net cash provided by (used in) operating activities		7,240			4,198

Cash flows from investing activities
Purchases of available-for-sale marketable securities		(16,071	)		(15,090	)
Sales and maturities of available-for-sale marketable securities		11,317			16,739
Purchases of property and equipment		(3,062	)		(3,543	)
Net cash provided by (used in) investing activities		(7,816	)		(1,894	)

Cash flows from financing activities
Debt issuance costs		(6	)		—
Payments on insurance premium financing		(466	)		—
Proceeds from exercise of employee stock options		91			119
Taxes from withheld shares		(207	)		(401	)
Net cash provided by (used in) financing activities		(588	)		(282	)
Net increase (decrease) in cash and cash equivalents		(1,164	)		2,022
Cash and cash equivalents at beginning of period		10,708			11,350
Cash and cash equivalents at end of period	$	9,544		$	13,372

Supplemental disclosure of cash flow information
Cash paid for interest	$	858		$	1,229
Noncash investing activities
Unrealized (gains) losses, net on marketable securities	$	98		$	40
Noncash financing activities
Legal cost financing	$	497		$	45

The accompanying notes are an integral part of these condensed financial statements.

TREACE MEDICAL CONCEPTS, INC.

Notes to Condensed Financial Statements

(unaudited)

1. Formation and Business of the Company

Treace Medical Concepts, Inc. (the "Company") is a medical technology company with the goal of advancing the standard of care for the surgical management of bunion and related midfoot deformities. The Company has pioneered and patented the Lapiplasty® 3D Bunion Correction System–a combination of instruments, implants, and surgical methods designed to surgically correct all three planes of the bunion deformity and secure the unstable joint, addressing the root cause of the bunion and helping patients get back to their active lifestyles. To further support the needs of surgeons and bunion patients, the Company has expanded its product offerings to continue to execute its strategy of becoming a comprehensive bunion solutions company and further penetrating the bunion market opportunity. The Company operates from its corporate headquarters located in Ponte Vedra, Florida.

2. Summary of Significant Accounting Policies

The Company prepared the unaudited interim condensed financial statements included in this report in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC") related to quarterly reports on Form 10-Q.

Basis of Presentation

The condensed financial statements have been prepared on the same basis as the Company’s annual financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026. The condensed financial statements included herein reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending December 31, 2026.

Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Updates ("ASU") of the Financial Accounting Standards Board ("FASB").

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Significant estimates and assumptions include valuation of intangible assets and goodwill, reserves and write-downs related to accounts receivable, inventories, the recoverability of long-term assets, deferred tax assets and related valuation allowances, contingencies, and stock-based compensation.

Property and Equipment, Net

Property and equipment is recorded at cost. Depreciation and amortization of property, equipment and internal-use software and website costs are recorded using the straight-line method over the estimated useful lives of the related assets.

Amortization expense on internal-use software and website development costs was $0.1 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively. Accumulated amortization for software and website development costs was $0.7 million and $0.6 million as of March 31, 2026 and December 31, 2025, respectively.

Beginning January 1, 2026, the Company adjusted the useful life of its capitalized surgical instruments from three years to five years. The change in useful life was made as a prospective adjustment and resulted in a decrease of depreciation expense of $1.2 million and decrease of $0.02 on a loss per share basis for the three months ended March 31, 2026. The change in

useful life is expected to reduce depreciation expense by $4.6 million for the year ended 2026 based on capitalized surgical instruments balances during the year.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash, cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash with established financial institutions and has exposure for balances in excess of the Federal Deposit Insurance Corporation insured limits. The Company's available-for-sale securities portfolio primarily consists of U.S. treasury and agency securities, money market funds, commercial paper, Yankee CDs, high credit quality asset-backed securities and corporate debt securities. The Company's investment policy requires its available-for-sale securities to meet certain criteria including investment type, credit ratings, and a maximum portfolio duration of one year.

The Company earns revenue from the sale of its products to customers such as hospitals, ambulatory surgery centers, and stocking distributors. The Company’s accounts receivable are derived from revenue earned from customers. At March 31, 2026 and December 31, 2025, no customer accounted for more than 10% of accounts receivable. For the three months ended March 31, 2026 and 2025, there were no customers that represented 10% or more of revenue.

Rental Income

The Company recorded rental income for its subleases of $0.3 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively. All subleases are classified as operating leases.

3. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-06, Intangibles–Goodwill and Other–Internal-Use Software Topic 350-40: Targeted Improvements to the Accounting for Internal-Use Software ("ASC 350-40"). The update clarifies and modernizes the accounting for costs related to internal-use software. The guidance removes all references to project stages in ASC 350-40 and clarifies the threshold entities should apply to begin capitalizing costs. The new guidance is effective for annual periods beginning after December 15, 2027, and interim periods within those years. The Company adopted the standard January 1, 2026 on a prospective basis. The adoption of this update did not have a material impact on the Company's financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures Topic 220-40 ("ASC 220-40"). The update requires all public business entities at interim and annual reporting periods to disclose in (1) a tabular format the amounts of certain specified natural expenses included in each relevant expense caption: the purchases of inventory, employee compensation, depreciation, and intangible asset amortization, (2) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated, and (3) the total amount of selling expenses and an entity's definition of selling expenses annually. The new guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments are to be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact of the new standard on its financial statements and related disclosures.

4. Fair Value Measurements

Assets and liabilities recorded at fair value in the condensed financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.

Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not

active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3—Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis–The following assets and liabilities are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 (in thousands):


	March 31, 2026
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents
Money market funds	$	5,098	$	—	$	—	$	5,098
Corporate debt		—		400		—		400
Short-term marketable securities at fair value
U.S. treasury and government agencies		8,226		498		—		8,724
Corporate debt		—		21,107		—		21,107
Asset-backed securities		—		11,579		—		11,579
Yankee CD		—		900		—		900
Total assets	$	13,324	$	34,484	$	—	$	47,808


	December 31, 2025
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents
Money market funds	$	7,836	$	—	$	—	$	7,836
Short-term marketable securities at fair value
U.S. treasury and government agencies		6,218		500		—		6,718
Corporate debt		—		19,302		—		19,302
Asset-backed securities		—		10,438		—		10,438
Yankee CD		—		1,201		—		1,201
Total assets	$	14,054	$	31,441	$	—	$	45,495

The carrying amounts of the Company's money market funds classified as cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate their fair value due to the short-term nature of these assets and liabilities. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the term loan approximates fair value.

The Company's available-for-sale securities portfolio may consist of investments in U.S. treasury and government agency securities, commercial paper, corporate debt securities, asset-backed securities, and Yankee CDs. Yankee CDs are certificates of deposit issued in the United States by a branch of a foreign bank and are denominated in U.S. dollars. The fair value of Level 1 securities is determined on trade prices in active markets for identical assets. The fair value of Level 2 securities is determined using valuation models using inputs that are observable either directly or indirectly, such as quoted prices for similar assets, interest rates, yield curves, credit spreads, default rates, loss severity, broker and dealer quotes, as well as other relevant economic measures.

There were no assets or liabilities measured at fair value on a nonrecurring basis as of March 31, 2026 and December 31, 2025.

5. Balance Sheet Components

Cash and Cash Equivalents

The Company’s cash and cash equivalents consisted of the following (in thousands):


	March 31,		December 31,
	2026		2025
Cash	$	4,046	$	2,872
Cash equivalents
Money market funds		5,098		7,836
Corporate debt		400		—
Total cash and cash equivalents	$	9,544	$	10,708

Marketable Securities

The Company's available-for-sale marketable securities consisted of the following (in thousands):


	March 31, 2026
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Marketable securities—short-term
U.S. treasury and government agencies	$	8,735	$	1	$	(12	)	$	8,724
Corporate debt		21,113		13		(19	)		21,107
Asset-backed securities		11,588		5		(14	)		11,579
Yankee CD		900		—		—			900
Total marketable securities—short-term	$	42,336	$	19	$	(45	)	$	42,310


	December 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Marketable securities—short-term
U.S. treasury and government agencies	$	6,709	$	9	$	—		$	6,718
Corporate debt		19,254		48		—			19,302
Asset-backed securities		10,423		16		(1	)		10,438
Yankee CD		1,201		—		—			1,201
Total marketable securities—short-term	$	37,587	$	73	$	(1	)	$	37,659

As of March 31, 2026, there were no available-for-sale securities with unrealized losses greater than 12 months. An allowance for credit losses was not required for available-for-sale securities as of March 31, 2026 and December 31, 2025.

As of March 31, 2026, the Company had no plans to sell securities with unrealized losses, and believes it is more likely than not that it would not be required to sell such securities before recovery of their amortized cost. For the three months ended March 31, 2026 and 2025, there were no material gains or losses from sales of available-for-sale securities.

As of March 31, 2026 and December 31, 2025, accrued interest of $0.4 million and $0.3 million, respectively, is excluded from the amortized cost basis of available-for-sale securities in the tables above and is recorded in prepaid expenses and other current assets on the Condensed Balance Sheets.

As of March 31, 2026, all marketable securities mature within two years, except for asset-backed securities. Asset-backed securities are not due at a single maturity date. As such, these securities were not included.

Property and equipment, net

The Company’s property and equipment, net consisted of the following (in thousands):


	March 31,			December 31,
	2026			2025
Furniture and fixtures	$	2,569		$	2,569
Construction in progress		1,198			1,069
Machinery and equipment		3,927			3,663
Capitalized surgical equipment1		34,958			33,147
Computer equipment		1,232			1,225
Leasehold improvements		10,592			10,591
Software and website development		1,524			1,357
Total property and equipment		56,000			53,621
Less: accumulated depreciation and amortization		(23,937	)		(23,869	)
Property and equipment, net	$	32,063		$	29,752

1 Capitalized surgical equipment includes $29.0 million and $28.0 million that is ready for its intended use and have started depreciating and $6.0 million and $5.1 million that is not ready for its intended use and have not started depreciating as of March 31, 2026 and December 31, 2025, respectively.

Depreciation and amortization expense on property and equipment was $0.7 million and $2.2 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in depreciation and amortization expense is from a change in useful life of capitalized surgical instruments. Refer to Note 2, "Summary of Significant Accounting Policies," for more information regarding the change in accounting estimate.

The Company did not record impairment charges for its property and equipment, net for the three months ended March 31, 2026 and 2025.

Accrued liabilities

Accrued liabilities consist of the following (in thousands):


	March 31,		December 31,
	2026		2025
Accrued royalties expense	$	1,309	$	1,830
Accrued interest		494		239
Accrued professional services		1,906		1,532
Other accrued expense		2,269		2,183
Total accrued liabilities	$	5,978	$	5,784

Other liabilities

Other liabilities consist of the following (in thousands):


	March 31,		December 31,
	2026		2025
Current portion of operating lease liabilities	$	457	$	552
Short-term debt1		1,776		1,745
Other		367		132
Total other liabilities	$	2,600	$	2,429

l See Note 6, "Long-Term Debt," for information regarding the legal cost financing related to the lawsuit against Stryker Corporation and its subsidiary Wright Medical Technology, Inc. Short-term debt includes $1.6 million and $1.1 million in financed legal costs as of March 31, 2026 and December 31, 2025, respectively, and reflects the amount that may be called within the next twelve months. In addition, short-term debt includes $0.2 million and $0.6 million of insurance premiums payable over the next three months and six months, respectively.

6. Long-Term Debt

The Company’s long-term debt consisted of the following (in thousands):


	March 31,			December 31,
	2026			2025
Term loan
SLR term loan facility	$	60,000		$	60,000
Less: debt discount and issuance costs		(4,180	)		(4,417	)
Total long-term debt, net	$	55,820		$	55,583

As of March 31, 2026, future payments of long-term debt were as follows (in thousands):


Fiscal Year
2026	$	—
2027		—
2028		—
2029		—
2030		60,000
Total principal payments		60,000
Less: Unamortized debt discount and debt issuance costs		(4,180	)
Total long-term debt, net	$	55,820

SLR Term Loan and Revolving Loan Facility

On December 17, 2025, the Company entered into a term loan agreement with SLR Investment Corp. ("SLRIC") and several affiliates and a revolving loan agreement with Gemino Healthcare Finance, LLC d/b/a SLR Healthcare ABL ("SLR ABL" and collectively with SLRIC, referred to as "SLR").

The term loan agreement provides a 60 month term loan facility for up to $125.0 million in borrowing capacity to the Company over four tranches. At closing, the Company borrowed $60.0 million under tranche one. The remaining three tranches provide up to an additional $65.0 million, of which $10.0 million (tranche two) is available immediately and $55.0 million is subject to achievement of certain revenue objectives.

The revolving loan agreement provides a 60 month revolving loan facility for up to $30.0 million in additional borrowing capacity. The amount available is based on a borrowing base calculation determined by the Company's accounts receivable and inventory assets. The borrowing base at March 31, 2026 was $20.6 million. The Company may request SLR ABL to approve two additional $10.0 million increases for a total commitment of $50.0 million. As of March 31, 2026, the Company had not drawn on the revolving loan facility.

The term loan bears interest at a rate per annum equal to the 1-Month SOFR plus 5.05%. The 1-Month SOFR is the greater of (1) the forward looking term rate based on the one month tenor and (2) 3.0% per annum, with the rate reset monthly. The revolving loan bears interest at a rate per annum equal to the 3-Month SOFR plus 4.0%. The 3-Month SOFR is the greater of (1) the forward looking term rate based on the three month tenor and (2) 3.0% per annum, with the rate reset daily. The interest is payable monthly in arrears on the first day of each month and on the maturity of the loans. The Company is obligated to pay interest only for the first 48 months and straight-line amortization for the remaining 12 months, subject to the Company's election to extend the initial interest-only period by 12 months to 60 months total, subject to the Company's achievement of a trailing 12-month EBITDA objective measured as of September 30, 2029.

The Company pays a servicing collateral monitoring fee of 1.2% per annum on the average borrowing base and an unused line fee equal to 0.5% per annum on the average unused portion of the commitment. The revolving loan facility agreement provides for SLR ABL to control the Company's lockbox account in the event that the Company begins to draw on the revolving loan. If the Company draws on the revolving loan, the lockbox receipts sweep to the lender and reduce the revolving loan's outstanding balance.

The Company is obligated to pay a $0.4 million fee payable on the earlier of funding tranche two, June 30, 2027, or the prepayment of the term loan and a $0.2 million fee payable on the earlier of funding tranche three, March 31, 2028, or the prepayment of the term loan. In addition, the term loan has a final payment fee of 3.95% of the amount borrowed under the

term loan. These fees are recorded as debt issuance costs related to the term loan and within Other long-term liabilities on the Condensed Balance Sheets.

If the term loan is repaid before final maturity or the revolving loan facility is terminated before the end of its term, the Company pays a prepayment fee of 3.0% of the term loan balance or the commitment amount in the first year, 2.0% in the second year and 1.0% in the third year and thereafter. The prepayment fees are waived if the Company refinances the outstanding balances with SLR or its affiliates.

The loans are secured by substantially all of the Company's assets, including intellectual property. The loan agreements contain customary representations and warranties and affirmative and negative covenants. The Company is required to meet a minimum liquidity requirement that the Company's cash and cash equivalents and marketable securities held subject to control agreements in favor of the lenders exceed 60% of the term loan outstanding. If the minimum liquidity requirement is not met, the Company must meet certain minimum revenue covenants. The Company meets the minimum liquidity requirement at March 31, 2026.

Legal Cost Financing

On March 25, 2025, the Company entered into an agreement with its primary legal counsel related to the pending patent and unfair competition dispute with Stryker Corporation and its subsidiary Wright Medical Technology, Inc. (collectively, "Stryker") to defer payment of certain legal costs incurred in 2025 and 2026 related to the dispute. The agreement anticipates that the amount financed by the Company would not exceed $5.0 million over this two-year period. The deferred portion of the legal costs bear interest at 10% per annum. The total principal and interest financed is scheduled to be repaid in twelve equal monthly installments beginning January 2027. However, if certain thresholds for the currently paid portion of legal costs are not reached in 2025 and 2026, primary counsel has the option to require a portion of the deferred balances up to the current threshold amount to be reallocated to currently due. The amount of legal costs that are not deferred are due according to normal billing terms and are subject to certain contractual thresholds. All current and deferred legal costs are expensed as incurred. All amounts financed as of March 31, 2026 are classified as current debt and are included in Other liabilities on the Condensed Balance Sheets as the primary legal counsel has the option to reallocate the deferred legal costs to currently due up to the threshold. See Note 5, "Balance Sheet Components," for additional information on the amounts of the deferred legal costs.

7. Commitments and Contingencies

License and Royalty Commitments

The Company has entered into product development and fee for service agreements with members of its Surgeon Advisory Board and other surgeon consultants that specify the terms under which the consultant is compensated for his or her consulting services and grants the Company rights to the intellectual property created by the consultant in the course of such services. As products are commercialized with the assistance of members of the Surgeon Advisory Board and other surgeon consultants, the Company may agree to enter into a royalty agreement if such consultant's contributions to the product are novel, significant and innovative.

As of March 31, 2026 and 2025, the Company has royalty agreements with certain surgeon consultants. The Company recognized royalty expense for the three months ended March 31, 2026 and 2025 of $1.2 million and $1.6 million, respectively, resulting in an aggregate royalty rate of 2.5% and 3.1%, respectively.

Contingencies

In accordance with applicable accounting standards, the Company establishes an accrued liability for litigation contingencies when those matters present loss contingencies that are both probable and can be reasonably estimated. The Company discloses the nature of the contingency when management believes there is at least a reasonable possibility that the outcome may be material to the Company’s financial statements and, where feasible, an estimate of the possible loss. In such cases, there still may be an exposure to loss in excess of any amounts reasonably estimated and accrued. When a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability, but continues to monitor, in conjunction with any outside counsel handling a matter, further developments that would make such loss contingency both probable and reasonably estimable. Once the Company establishes an accrued liability with respect to a loss contingency, the Company continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established, and any appropriate adjustments are made each quarter.

On April 11, 2025, a shareholder filed a class action complaint in the United States District Court for the Middle District of Florida (captioned McCluney v. Treace Medical Concepts, Inc. et al. Case No. 3:25-cv-00390-WWB-PDB) against the Company and certain of its officers on behalf of all persons who purchased or otherwise acquired the Company’s stock between May 8, 2023 and May 7, 2024 alleging that the Company and certain of its officers violated federal securities laws by making false or misleading statements and failing to disclose material adverse facts about the Company's business, operations and prospects. The plaintiffs seek unspecified monetary damages, costs, and attorneys’ fees. On July 1, 2025, the court appointed the lead plaintiff and lead counsel. The plaintiff filed an amended complaint on July 31, 2025, and the Company filed a motion to dismiss on September 5, 2025. The action is in the preliminary stage. The Company disputes the allegations in the complaint and intends to defend against this complaint vigorously. Based on the preliminary nature of the proceedings in this action, the outcome remains uncertain, and the Company cannot reasonably estimate the potential impact, if any, on its business or financial statements at this time. The Company is insured for Directors and Officers liability for amounts in excess of the retention and up to the policy limits.

There were no accrued contingent liabilities as of March 31, 2026 and December 31, 2025.

8. Stockholders’ Equity

Stock Options

During the three months ended March 31, 2026 and 2025 the Company did not grant stock options to employees.

Restricted Stock Units

During the three months ended March 31, 2026 and 2025, the Company granted 3,092,850 and 1,938,595 restricted stock units ("RSUs"), respectively. The weighted average grant-date fair value of RSUs granted during the three months ended March 31, 2026 and 2025 was $2.62 and $9.33 per share, respectively.

The Company grants primarily market condition PSU awards subject to market and service vesting conditions to certain executives under the Company's 2021 Incentive Award Plan. The actual number of PSUs that will vest at the end of the measurement period is determined based on the Company's total stockholder return ("TSR") ranking relative to the TSR of a published index of the Company's peers. The measurement period for its outstanding awards is three years. The grant date fair value of each target PSU award was determined using a Monte Carlo valuation model. Over the performance period, if the service vesting conditions are met, the actual number of PSUs earned may vary from zero, if performance thresholds are not met, to as much as 200%. In 2025, the Company issued a small number of PSU awards that vest on other performance conditions. The fair value of these PSUs is based on the stock price on the grant date and expense is recognized if the performance condition is probable of occurring. The service requirement for these awards is up to approximately 3 years; however, the employee must remain employed at the time the performance condition is met to receive the award.

During the three months ended March 31, 2026 and 2025, the Company granted PSUs for 876,250 and 560,625 shares, respectively, at target performance levels. The weighted average grant-date fair value of the PSUs granted during the three months ended March 31, 2026 and 2025 was $3.29 and $11.17 per share, respectively.

Share-based compensation expense is reflected in the Condensed Statements of Operations and Comprehensive Loss as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Cost of goods sold	$	115	$	99
Sales and marketing expense		1,853		1,414
Research and development expense		961		1,125
General and administrative expense		5,105		6,055
Total	$	8,034	$	8,693

9. Net Loss Per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders which is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. As the Company reported a net loss for the three months ended March 31, 2026 and 2025, basic net loss per share attributable to common stockholders was the same as diluted net loss per share attributable to common stockholders as the inclusion of potentially dilutive shares would have been antidilutive if included in the calculation (in thousands, except share and per share amounts):


	Three Months Ended March 31,
	2026			2025
Numerator
Net loss	$	(17,961	)	$	(15,922	)
Denominator
Weighted-average common stock outstanding, basic and diluted		64,592,681			62,661,447
Net loss per share attributable to common stockholders, basic and diluted	$	(0.28	)	$	(0.25	)

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding because such securities have an antidilutive impact due to the Company’s net loss, in common stock equivalent shares:


	As of March 31,
	2026		2025
Common stock options issued and outstanding		6,953,271		7,594,683
Unvested full value awards		7,855,976		5,687,076
Contingently issuable PSU shares		300,000		1,459,024
Total		15,109,247		14,740,783

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

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed financial statements and related notes thereto included in this Quarterly Report on Form 10-Q (this "Quarterly Report") and our audited financial statements and related notes thereto for the year ended December 31, 2025, included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on February 27, 2026 (our "Annual Report"). This discussion and other parts of this Quarterly Report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report under "Part I, Item 1A–Risk Factors," and in the section titled "Risk Factors" and elsewhere in this Quarterly Report. Please also see the section of this Quarterly Report titled "Special Note Regarding Forward-Looking Statements."

Overview

We are a medical technology company with the goal of advancing the standard of care for the surgical management of bunion and related midfoot deformities. Bunions are complex 3-dimensional deformities that originate from an unstable joint in the middle of the foot and affect approximately 67 million Americans, of which we estimate 1.1 million are annual surgical candidates. We have pioneered and patented the Lapiplasty 3D Bunion Correction System–a combination of instruments, implants and surgical methods designed to surgically correct all three planes of the bunion deformity and secure the unstable joint, addressing the root cause of the bunion and helping patients get back to their active lifestyles. To further support the needs of surgeons and bunion patients, we offer the Adductoplasty® Midfoot Correction System, designed for reproducible surgical correction of the midfoot, two systems for minimally invasive osteotomy procedures, namely the Nanoplasty® 3D Minimally Invasive Bunion Correction System and the Percuplasty™ percutaneous 3D Bunion Correction System, and the SpeedMTP® System for fusions of the great toe (the metatarsophalangeal ("MTP")) joint. We continue to expand our footprint in the marketplace by extending our SpeedPlate® rapid compression implant platform to new applications, as well as providing surgeons with advanced digital solutions with our IntelliGuide® patient specific, pre-op planning and cut guide technology. With our Lapiplasty System, new osteotomy systems, and other complementary products, we are continuing to execute our strategy of becoming a comprehensive bunion solutions company and supporting further penetration in the bunion market opportunity. See the "Innovation and Growth" section below for more information on our new products.

We were formed in 2013, and since receiving 510(k) clearance for the Lapiplasty System in March 2015, we have expanded our bunion related products in the United States. We market and sell our products to surgeons, ambulatory surgery centers, hospitals, and stocking distributors. Our procedures can be performed in either hospital outpatient or ambulatory surgery center settings, and utilize existing, well-established reimbursement codes. We primarily market and sell our products through a combination of a direct employee sales force and independent sales agencies and stocking distributors in the United States.

As of March 31, 2026, we had cash and cash equivalents of $9.5 million and marketable securities of $42.3 million available for sale to fund operations, an accumulated deficit of $267.0 million and $60.0 million of principal outstanding under our term loan and revolving loan agreements.

Economic Environment

There is continuing uncertainty in the macroeconomic environment. Inflation, recession fears, reduced consumer confidence, higher insurance deductibles, fuel prices and other costs, and other adverse economic conditions have negatively impacted, and may continue to negatively impact, consumer demand for elective foot and ankle surgeries. While we continuously work with suppliers to mitigate higher costs and continue to invest in our direct sales channel, focused surgeon education training, and product innovations to build demand for our products, we expect these macroeconomic challenges to continue for the foreseeable future, which have impacted and likely will continue to impact the demand for our products and our results of operations.

Increased Competition, Procedure Preferences and Setting of Care Changes

Before we launched our flagship Lapiplasty System, there were no other products in the market that provided a 3D solution and specialized procedural instrumentation for traditionally freehand, difficult Lapidus surgeries. This allowed us to capitalize on our pioneering technology and grow our market share quickly. Since we launched the Lapiplasty System, we have faced increasing competition from large, mid-sized and small companies that have launched their own Lapidus

products. We are also experiencing a shift in patient and surgeon preferences for treating less severe bunions through minimally invasive osteotomy solutions as well as MTP fusions, with competitive products already addressing these types of surgery. Another trend is a shift in where bunion surgeries are performed from hospitals to ambulatory surgery centers, which receive lower procedure reimbursement rates and may be part of integrated delivery networks ("IDNs") that have established relationships with large orthopaedic companies. These trends have negatively impacted, and may continue to negatively impact, our growth rates, market share, and results of operations. To address the shifting preferences for treating mild to moderate bunions, we have introduced new bunion systems, including two minimally invasive osteotomy systems and a MTP fusion system. While adoption of these new systems is increasing, they are generally sold at lower average selling prices than our Lapiplasty System. Our revenues and results of operations have been and may continue to be adversely affected by declines in sales of our Lapiplasty System that have not been fully offset by the increased sales of our new bunion systems. In addition, our customer mix initiatives, the use of stocking distributors, and advance purchases by hospitals and surgery centers have affected and may continue to affect both revenue growth and gross margins. Furthermore, we face extensive competition, and new product introductions in the Lapidus, MTP fusion and minimally invasive osteotomy markets that have adversely impacted, and may continue to adversely impact our growth rates, market share and results of operations.

Innovation and Growth

We expect to continue to focus on long-term revenue growth through investments in our business and new products. In sales and marketing, we have dedicated meaningful resources to building a sales force and management team to support our future growth and to providing bunion-focused surgeon training and patient-focused outreach and education.

In research and development, our employee team and surgeon consultants are continually working on next-generation innovations for the surgical correction of bunions and other conditions that often present with bunions. Their work has resulted in the launch of a suite of new products in the past two years, including the following: (1) the Nanoplasty and Percuplasty Systems, which are minimally-invasive 3D osteotomy systems; (2) IntelliGuide PSI Cut Guides for Lapiplasty and Adductoplasty Procedures, which are cut guides created specifically for an individual patient’s foot anatomy; (3) the Mini-Adductoplasty System, which is designed to allow the Adductoplasty midfoot correction procedure to be performed through an approximately 50% smaller incision; (4) the SpeedMTP Rapid Compression Implant, a specialized implant for addressing bunions through MTP fusions; (5) new SpeedPlate configurations, including the SpeedAkin™ implant and the SpeedPlate Micro-Quad implant; and (6) single use osteotomes. We have recently begun limited market release of the SpeedTMT™ Rapid Compression Implant, which combines our SpeedPlate and FastPitch® technologies in a fixation option for tarsometatarsal ("TMT") fusions, and Percuplasty SuperBite™ Screws, which are self-drilling beveled compression screws of different sizes designed for use in other foot fusions. We expect to release other new solutions in 2026, including the Lapiplasty Lightning Next Generation Instrumentation designed to further increase the precision and speed of the Lapiplasty Procedure.

Intellectual Property Strategy

We actively seek to protect the technology, inventions, and improvements that we consider important to our business using patents, trade secrets, trademarks and copyrights in the United States and foreign markets. As of March 31, 2026, our patent portfolio included 97 granted U.S. patents, with an additional 37 granted patents worldwide and over 200 pending patent applications. In keeping with our strategy of protecting our intellectual property rights, on October 14, 2024, we filed a lawsuit against Stryker Corporation and its subsidiary Wright Medical Technology, Inc. (collectively, "Stryker") alleging infringement of 9 patents related to our innovative Lapiplasty 3D Bunion Correction technologies and unfair competition. The suit was filed in the United States District Court for the District of New Jersey, and seeks injunctive relief and damages. In addition, on May 12, 2025, we filed a lawsuit against Zimmer Biomet Holdings, Inc. and Paragon 28, Inc. (collectively, "ZB") alleging infringement of 4 patents related to our innovative Lapiplasty 3D Bunion Correction technologies. The suit was filed in the United States District Court for the District of Delaware and seeks injunctive relief and damages. On August 5, 2025, we filed an amended complaint alleging infringement of an additional patent.

The growth of our business depends on our ability to gain broader acceptance of our proprietary procedures and systems by successfully marketing and distributing these products. While surgeon adoption of our products and procedures remains critical to supporting revenue growth, hospital and ambulatory surgery center facility approvals are necessary for existing and future surgeon customers to access our products. To facilitate greater access to our products and support future sales growth, we intend to continue educating hospitals and facility administrators on the differentiated benefits associated with our procedures and systems, supported by our robust portfolio of clinical data on our existing procedures and additional clinical

data we expect to develop on our new products. While we have experienced overall increases in bunion procedure cases and in our market share, our flagship Lapiplasty System has contributed and may continue to contribute less to our market share growth in future quarters, which has reduced, and may continue to reduce, revenues and impact our liquidity if product sales from our new bunion systems do not increase sufficiently to offset the decline in sales of the Lapiplasty System. If we are unable to continue to successfully commercialize our procedures and systems, we may not be able to generate sufficient revenue to achieve or sustain profitability.

Seasonality

We have experienced and expect to continue to experience seasonality in our business, with higher sales volumes in the fourth calendar quarter, historically accounting for approximately 30 to 35% of full year revenues, and lower sales volumes in subsequent calendar quarters. Our sales volumes in the fourth quarter tend to be higher as many patients elect to have surgery after meeting their annual deductible and having time to recover over the winter holidays. Our sales volumes in subsequent first calendar quarters also tend to be lower versus the prior year fourth quarters as a result of adverse weather and by resetting annual patient healthcare insurance plan deductibles, both of which may cause patients to delay elective procedures; however, in some years the first quarter may benefit from additional sales volumes when high patient demand for surgeries in the fourth quarter cannot be fully accommodated and those surgical procedures are rolled over into the first quarter. In addition to the seasonality noted above, we generally expect lower sales volumes in the second and third quarters than throughout the rest of the year as elective procedures generally decline during the spring and summer months.

Coverage and Reimbursement

Hospitals, ambulatory surgery centers and surgeons that purchase or use our products generally rely on third-party payors to reimburse for all or part of the costs and fees associated with procedures using our products. As a result, sales of our products depend, in part, on the extent to which the procedures using our products are covered by third-party payors, including government programs such as Medicare and Medicaid, private insurance plans and managed care programs. Based on historical claims data, more than 60% of all bunion surgical cases are paid by private payors.

Medicare payment rates to hospital outpatient departments are set under the Medicare hospital outpatient prospective payment system, which groups clinically similar hospital outpatient procedures and services with similar costs to ambulatory payment classifications ("APCs"). Each APC is assigned a single lump sum payment rate, which includes payment for the primary procedure as well as any integral, ancillary, and adjunctive services. The primary current procedure terminology ("CPT") codes for the Lapiplasty Procedure, CPT 28297 and CPT 28740, are grouped under APC 5115 and APC 5114, respectively. For Lapiplasty Procedures in which fusion is performed on multiple TMT joints, CPT 28730 applies and is classified under APC 5115. For Adductoplasty Procedures in which fusion is performed on multiple TMT joints, either CPT 28730 or CPT 27835 applies and are classified under APC 5115. For the Nanoplasty and Percuplasty Procedures, CPT 28306 applies and are classified under APC 5114. For MTP fusions using the SpeedMTP implant or our other plates, CPT 28750 applies and are classified under APC 5114.

Components of Our Results of Operations

Revenue

We currently generate revenue from the sale of our bunion implant kit systems, single-use sterile instruments, and other complementary products. Our systems bring together single-use implant kits, reusable instrument trays, and surgical techniques. We sell the kits and single-use instruments and other products to hospitals, ambulatory surgery centers, and stocking distributors in the United States primarily through a network of employee sales representatives and independent sales agencies.

Cost of Goods Sold

Cost of goods sold consists primarily of direct costs for the purchase of our products from third-party manufacturers. Cost of goods sold also includes royalties, overhead, shipping costs, tariffs, sterilization, product testing, and packaging. We expense all inventory provisions for excess, obsolete, and field losses as cost of goods sold. We evaluate the carrying value of our inventories in relation to historical sales, current inventory levels, and consideration of the life cycle of the product. A significant decrease in demand or development of products could result in an increase in the amount of excess or obsolete inventory on hand, which could lead to additional provisions.

Gross Profit and Gross Margin

We calculate gross profit as revenue less cost of goods sold, and gross margin as gross profit divided by revenue. Our gross margin has been and will continue to be affected by a variety of factors, primarily average selling prices, production, and ordering volumes, change in mix of customers, third-party manufacturing costs and cost-reduction strategies.

Operating Expenses

Sales and Marketing

Sales and marketing expenses consist primarily of compensation for personnel, including salaries, bonuses, benefits, sales commissions and share-based compensation, related to selling and marketing functions, surgical instrument expense, physician education programs, training, shipping costs related to sending products to our sales representatives, travel expenses, marketing initiatives including our direct-to-consumer outreach program and advertising, market research and analysis and conferences and trade shows.

Research and Development

Research and development ("R&D") expenses consist primarily of engineering, product development, clinical studies to develop and support our products, regulatory expenses, and other costs associated with products and technologies that are in development. These expenses include compensation for personnel, including salaries, bonuses, benefits and share-based compensation, supplies, consulting, prototyping, testing, materials, travel expenses, depreciation, and allocated facilities-related expenses.

General and Administrative

General and administrative expenses consist primarily of compensation for personnel, including salaries, bonuses, benefits, and share-based compensation, related to finance, information technology, legal and human resource functions, as well as professional services fees (including legal, audit and tax fees), insurance costs, general corporate expenses, and allocated facilities-related expenses.

Interest Income

Interest income consists of interest received on our money market funds and marketable securities.

Interest Expense

Interest expense consists of interest incurred and amortization of debt discount and issuance costs related to our term loan and revolving debt facility.

Results of Operations

Comparison of the three months ended March 31, 2026 and 2025

The following table summarizes our results of operations for the periods presented below ($ in thousands):


	Three Months Ended March 31,						Change
	2026			2025			Amount			%
Revenue	$	47,198		$	52,570		$	(5,372	)		(10.2	)	%
Cost of goods sold		9,791			10,677			(886	)		(8.3	)	%
Gross profit		37,407			41,893			(4,486	)		(10.7	)	%
Operating expenses
Sales and marketing		33,775			36,122			(2,347	)		(6.5	)	%
Research and development		4,622			5,562			(940	)		(16.9	)	%
General and administrative		16,177			15,791			386			2.4		%
Total operating expenses		54,574			57,475			(2,901	)		(5.0	)	%
Loss from operations		(17,167	)		(15,582	)		(1,585	)		10.2		%
Interest income		501			841			(340	)		(40.4	)	%
Interest expense		(1,570	)		(1,311	)		(259	)		19.8		%
Other income, net		275			130			145			111.5		%
Other non-operating income (expense), net		(794	)		(340	)		(454	)		133.5		%
Net loss	$	(17,961	)	$	(15,922	)	$	(2,039	)		12.8		%

Comparison of the three months ended March 31, 2026 and 2025

Revenue. Revenue decreased by $5.4 million, or 10.2%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease was primarily driven by a mix shift from higher priced flagship Lapiplasty bunion procedure kits to lower priced minimally invasive bunion procedure kits and lower volume of bunion procedure kits sold during the quarter. Revenue for the three months ended March 31, 2026 included a $0.8 million increase in sales to stocking distributors as compared to the same period in 2025.

Cost of Goods Sold, Gross Profit and Gross Margin. Cost of goods sold decreased by $0.9 million, or 8.3%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in cost of goods sold was primarily due to a $0.5 million decrease in royalties, a $0.4 million decrease in inventory provisions, and a $0.4 million decrease in direct cost of goods sold resulting from decreased sales, partially offset by a $0.4 million increase in other costs of goods sold. During the three months ended March 31, 2026, gross profit decreased by $4.5 million, or 10.7%, as compared to the same period in 2025, due to decreased sales. Gross profit margin for the three months ended March 31, 2026 decreased from 79.7% to 79.3%, as compared to the same period in 2025, primarily due to lower margin sales to stocking distributors, and higher other costs of goods sold, partially offset by a decrease in inventory provisions and royalties.

Sales and Marketing Expenses. Sales and marketing expenses decreased by $2.3 million, or 6.5%, for the three months ended March 31, 2026 as compared to the same period in 2025. Sales and marketing expenses decreased due to a $1.4 million decrease for surgeon training and clinical-related expenses, a $1.2 million decrease in surgical instrument expense from an increase in useful life from three to five years, and a $0.8 million decrease in direct to consumer advertising costs, partially offset by a $1.0 million increase in commissions, a $0.3 million increase in payroll and related costs, and $0.3 million in higher costs for conferences and events.

Research and Development Expenses. R&D expenses decreased by $0.9 million, or 16.9%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in R&D expenses was primarily due to a $0.4 million decrease in payroll and related costs, including stock compensation expense, and a $0.3 million decrease in the Company's products and instrumentation used for the R&D process.

General and Administrative Expenses. General and administrative expenses increased by $0.4 million, or 2.4%, for the three months ended March 31, 2026 as compared to the same period in 2025. The increase in general and administrative expenses was due to a $2.1 million increase in legal fees primarily driven by ongoing litigation matters, partially offset by a $1.3 million decrease in payroll and related costs, including stock compensation expense, and a $0.4 million decrease in the provision for allowance for credit losses.

Interest Income. Interest income decreased $0.3 million, or 40.4%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in interest income was primarily due to lower balances invested in marketable securities during the current year period.

Interest Expense. Interest expense increased $0.3 million, or 19.8%, for the three months ended March 31, 2026 as compared to the same period in 2025. The increase in interest expense was primarily due to increased amortization of debt issuance costs and a higher debt balance as a result of the debt refinancing in December 2025, partially offset by slightly lower interest rates.

Liquidity and Capital Resources

Overview

Before our initial public offering ("IPO"), our primary sources of capital were private placements of common stock and convertible preferred stock, debt financing agreements and revenue from the sale of our products. In April 2021, we received net proceeds of $107.6 million from our IPO. On February 10, 2023, we received net proceeds of $107.5 million from a follow-on public offering of our common stock.

In December 2025, we entered into a five year $175.0 million senior secured loan arrangement for a term loan and a revolving credit facility. At the loan closing, we borrowed $60.0 million under tranche one of the term loan. The remaining tranches provide up to an additional $65.0 million in borrowing capacity, of which $55.0 million is subject to the achievement of certain revenue objectives.

The revolving loan agreement currently provides $30.0 million in borrowing capacity with the ability to request two additional $10.0 million increases for a total of $50.0 million. The amount available is based on a borrowing base calculation determined by our accounts receivable and inventory assets.

As of March 31, 2026, we had cash and cash equivalents of $9.5 million and marketable securities of $42.3 million available for sale, an accumulated deficit of $267.0 million, and principal outstanding under our new term loan of $60.0 million. We believe that our existing cash and cash equivalents, marketable securities, available debt borrowings and expected revenues will be sufficient to meet our capital requirements and fund our operations for at least twelve months from the date of issuance of these condensed financial statements. We may be required or decide to raise additional debt or equity financing to support further growth of our operations.

Funding Requirements

We use our cash, marketable securities, and revenues to fund our operations, which primarily include the costs of manufacturing our products, capital expenditures, as well as our operating expenses. The timing and amount of our operating and capital expenditures and use of available funding will depend on many factors, including:

•

the degree and rate of market acceptance of our products;

•

the scope and timing of our investment in our commercial infrastructure and sales force;

•

the costs of our ongoing commercialization activities including product sales, marketing, manufacturing, and distribution;

•

the success of competitors and their products, emergence of new competing technologies or other adverse market developments;

•

the scope of our marketing efforts, including the degree to which we utilize direct to consumer campaigns;

•

the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights, including enforcing our intellectual property rights against infringing products or technologies or enforcing contractual rights against parties breaching agreements with us, including the litigation proceedings we initiated against Stryker and ZB;

•

the research and development activities we intend to undertake to improve the Lapiplasty System and other products, to commercialize PSI technologies, to gain share in the minimally invasive osteotomy market, and to develop or acquire additional products;

•

our need to implement additional infrastructure and internal systems;

•

shifts in the surgical setting where bunion surgeries are performed and the pricing and reimbursement sensitivity, contract restrictions, IDNs, GPO and other established relationships, and decision-making processes of the surgical facility;

•

the effect of softening consumer sentiment, higher health insurance, fuel and other costs, inflation, interest rate changes, evolving or increased tariffs, geopolitical tensions, changes in trade policy or global trade disruptions and other general economic conditions on our operations and business;

•

the ability of customers to pay us for our products, including stocking distributors which generally have longer payment terms than hospital and ambulatory surgery center customers;

•

the ability to obtain adequate supplies of materials and components for our products, including from single-source suppliers;

•

any product liability or other lawsuits related to our products;

•

the expenses needed to attract and retain skilled personnel; and

•

the impact of any infectious disease outbreak or natural or other disaster or event beyond our control on our business or on the healthcare industry, particularly elective surgeries where our products are used.

Based upon our current operating plan, we believe that our existing cash, cash equivalents, marketable securities, and available debt borrowings will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months. We have based this estimate on assumptions that may prove to be wrong or that may change in the future, and we could utilize our available capital resources sooner than we expect. We may seek to raise any necessary additional capital through public or private equity offerings or debt financings, credit or loan facilities or a combination of one or more of these or other funding sources. Additional funds may not be available to us on acceptable terms or at all. If we fail to obtain necessary capital when needed on acceptable terms, or at all, we could be forced to delay, limit, reduce or terminate our product development programs, commercialization efforts, sales and marketing initiatives, or other operations. If we raise additional funds by issuing equity securities, our stockholders will suffer dilution, and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and in the event of insolvency, debt holders would be repaid before holders of our equity securities received any distribution of our corporate assets.

Cash Flows

The following table sets forth the primary sources and uses of cash and cash equivalents for the periods presented below (in thousands):


	Three Months Ended March 31,
	2026			2025
Net cash (used in) provided by:
Operating activities	$	7,240		$	4,198
Investing activities		(7,816	)		(1,894	)
Financing activities		(588	)		(282	)
Net increase (decrease) in cash and cash equivalents	$	(1,164	)	$	2,022

Cash Flows from Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2026 was $7.2 million, consisting primarily of a net loss of $18.0 million, adjusted for non-cash charges of $10.5 million and a decrease in net operating assets. The non-cash charges consist primarily of $8.0 million in share-based compensation expense, $0.9 million in depreciation and amortization, $0.6 million in non-cash lease expense, and $0.3 million in amortization of debt issuance costs. The decrease in net operating assets was primarily due to a $11.7 million decrease in accounts receivable from collection on higher sales in the fourth quarter of 2025, a $6.8 million increase in accounts payable due to timing of payments, and a $0.6 million decrease in prepaid and other current assets, partially offset by a $3.1 million decrease in accrued liabilities, a $0.9 million decrease in operating lease liabilities, and a $0.3 million increase in inventory. The decrease in accrued liabilities was primarily from a decrease in accrued commissions from lower sales in the first quarter of 2026 compared to the fourth quarter of 2025.

Net cash provided by operating activities for the three months ended March 31, 2025 was $4.2 million, consisting primarily of a net loss of $15.9 million, adjusted for non-cash charges of $12.4 million and a decrease in net operating assets. The non-cash charges consist primarily of $8.7 million in share-based compensation expense, $2.5 million in depreciation and amortization, $0.6 million of non-cash lease expense, and $0.4 million in the provision for allowance for credit losses. The decrease in net operating assets was primarily due to a $9.3 million decrease in accounts receivable from higher sales in the fourth quarter of 2024, a $1.4 million decrease in prepaid expenses and other current assets, a $1.3 million decrease in inventory, and an $2.7 million increase in accounts payable due to timing of payments, partially offset by a $6.2 million decrease in accrued liabilities due to timing of payments and a $0.8 million decrease in operating lease liabilities.

Cash Flows from Investing Activities

Net cash used in investing activities was $7.8 million for the three months ended March 31, 2026, consisting primarily of $16.1 million in purchases of available-for-sale marketable securities and $3.1 million in purchases of property and equipment, partially offset by $11.3 million in sales and maturities of available-for-sale marketable securities. The purchases of property and equipment included $2.5 million in capitalized surgical instruments for the reusable instrument trays primarily related to our new products, and $0.6 million primarily for equipment and internal use software to support the business.

Net cash used in investing activities was $1.9 million for the three months ended March 31, 2025, consisting primarily of $15.1 million in purchases of available for sale marketable securities and $3.5 million in purchases of property and equipment, partially offset by $16.7 million in sales and maturities of available for sale marketable securities. The net of marketable securities sales and maturities and purchases of $1.6 million were primarily used to fund our current operations. The purchases of property and equipment included $2.8 million in capitalized surgical instruments for the reusable instrument trays related to new products, and $0.7 million for equipment and leasehold improvements to support the growth of our business.

Cash Flows from Financing Activities

Net cash used in financing activities was $0.6 million for the three months ended March 31, 2026, consisting primarily of $0.5 million in payments on insurance premium financing and $0.2 million of shares repurchased for tax withholding on vested restricted stock units.

Net cash used in financing activities was $0.3 million for the three months ended March 31, 2025, consisting primarily of $0.4 million of shares repurchased for tax withholding on vested restricted stock units, partially offset by $0.1 million in proceeds from stock option exercises.

Royalty Agreements

We recognized royalty expense of $1.2 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026 and 2025, the aggregate royalty rate was 2.5% and 3.1%, respectively. Each of the royalty agreements with our surgeon consultants prohibits the payment of royalties on products sold to entities and/or individuals with whom any of the surgeon consultants is affiliated.

Operating Lease

We have commitments for future payments related to our corporate headquarters office located in Ponte Vedra, Florida. We entered into a 10-year lease in February 2022 for our headquarters which expires in July 2032. Lease payments comprise the base rent plus operating costs which include taxes, insurance, and common area maintenance. We also have commitments for future payments related to our former headquarters which expire in April 2026 and have subleased this space for the remainder of our lease term. The remaining lease obligations are $19.1 million under these leases as of March 31, 2026.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of the condensed financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making

judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

Goodwill

Our annual impairment testing date was July 1, 2025. We determined after performing the qualitative analysis that there was no evidence that it is more likely than not that the fair value of goodwill was less than the carrying amount. Therefore, it was not necessary to perform a quantitative impairment test. As of March 31, 2026 and December 31, 2025, goodwill was $12.8 million.

Our critical accounting policies and estimates are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates" in our Annual Report. There were no material changes to these accounting policies during the three months ended March 31, 2026.

Recently Issued Accounting Pronouncements

Refer to Note 3, "Recent Accounting Pronouncements," of the Notes to Condensed Financial Statements for new accounting pronouncements not yet adopted as of this Quarterly Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

There have been no material changes from the market risk information previously disclosed in our Annual Report under "Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk."

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures

Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent limitation on the effectiveness of internal control

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II–OTHER INFORMATION

Item 1. Legal Proceedings.

Except as described below, we are not a party to any legal proceedings which we believe would have a material adverse effect on our business or results of operations. From time to time, we may become involved in various legal proceedings that arise in the ordinary course of our business.

On April 11, 2025, a shareholder filed a class action complaint in the United States District Court for the Middle District of Florida (captioned McCluney v. Treace Medical Concepts, Inc. et al. Case No. 3:25-cv-00390-WWB-PDB) against us and certain of our officers on behalf of all persons who purchased or otherwise acquired our stock between May 8, 2023 and May 7, 2024 alleging that we and certain of our current executives violated the federal securities laws by making false or misleading statements and failing to disclose material adverse facts about our business, operations and prospects. Specifically, the complaint alleges that we failed to disclose the impact of competition on demand for and utilization of our products and the need to accelerate our plans to offer a new osteotomy product and that our positive statements about our business, operations, and prospects were materially misleading and/or lacked a reasonable basis. The plaintiffs seek unspecified monetary damages, costs, and attorneys’ fees. On July 1, 2025, the court appointed the lead plaintiff and lead counsel. The plaintiffs filed an amended complaint on July 31, 2025, and we filed a motion to dismiss on September 5, 2025. The action is in the preliminary stage. We dispute the allegations in the complaint and intend to defend against this complaint vigorously. Based on the preliminary nature of the proceedings in this action, the outcome remains uncertain, and we cannot reasonably estimate the potential impact, if any, on our business or financial statements at this time. We are insured for Directors and Officers liability for amounts in excess of the retention and up to the policy limits.

On October 14, 2024, we filed a lawsuit against Stryker Corporation and its subsidiary Wright Medical Technology, Inc. (collectively, "Stryker") alleging infringement of 9 patents related to our innovative Lapiplasty 3D Bunion Correction technologies and unfair competition. The suit was filed in the United States District Court for the District of New Jersey and seeks injunctive relief and damages. On January 24, 2025, Stryker filed a motion to dismiss the unfair competition claims which the Court granted on October 2, 2025 without prejudice. We filed a first amended complaint on October 24, 2025, and Stryker subsequently filed another motion to dismiss the unfair competition claims on December 5, 2025. The Court denied Stryker’s motions and applications to stay discovery pending a ruling on its new motion to dismiss. The case has continued with the parties exchanging claim construction briefs. Discovery is ongoing, and a Markman hearing has been scheduled for May 21, 2026.

On May 22, 2025, Stryker European Operations Holdings LLC and Howmedica Osteonics Corp. filed a suit in the United States District Court for the District of Delaware (captioned Stryker European Operations Holdings LLC et al v. Treace Medical Concepts, Inc. Case No. 1:25-cv-00637-GBW) against us for patent infringement by our PEEK hammertoe product. The plaintiffs seek findings of patent infringement, equitable relief, unspecified monetary damages, enhanced damages for willful patent infringement, interest, costs, and attorneys’ fees. We dispute the allegations in the complaint, and on August 4, 2025, we moved to dismiss all of the claims in the suit. The court denied our motion to dismiss, noting that additional claim construction proceedings would be helpful for the court to resolve the issues presented in the motion to dismiss. We filed an answer on February 19, 2026, amended on March 12, 2026, including defenses and declaratory judgement of invalidity and non-infringement counterclaims. The plaintiffs filed an answer to our counterclaims on March 26, 2026. Based on the preliminary nature of the proceedings in this action, the outcome remains uncertain, and we cannot estimate the potential impact, if any, on our business or financial statements at this time.

On May 12, 2025, we filed a lawsuit in the United States District Court for the District of Delaware (captioned Treace Medical Concepts, Inc. v. Zimmer Biomet Holdings, Inc. et al. Case No. 1:25-cv-00592-CBW) against Zimmer Biomet Holdings, Inc. and Paragon 28, Inc. alleging infringement of 4 patents related to our innovative Lapiplasty 3D Bunion Correction technologies and seeking injunctive relief and damages. On August 5, 2025, we filed an amended complaint alleging infringement of an additional patent. On December 19, 2025, the defendants moved to dismiss certain patent claims, claims of willful infringement, and all claims against Zimmer Biomet Holdings, Inc. In December 2025 and January 2026, Paragon 28 filed petitions for inter partes review and post-grant review before the Patent Trial and Appeal Board ("PTAB") seeking further administrative review of the validity of four of the five patents-in-suit. On February 17, 2026, we filed an opposition to the defendants’ motion to dismiss. On March 4, 2026, the defendants filed a motion to stay the case pending review of the 5 asserted patents by the Patent and Trademark Appeals Board, in connection to 4 post-grant and 1 inter partes review petitions filed by Paragon 28, Inc. We filed a motion to sever and consolidate the patent claims of Case No. 25-1092-GBW into this case. All motions have been briefed, and we are awaiting a decision.

On August 29, 2025, Paragon 28, Inc. and Disior Oy filed a lawsuit in the United States District Court for the District of Delaware (captioned Paragon 28, Inc. et al v. Treace Medical Concepts, Inc. et al. Case No. 1:25-cv-01092-GBW) against us and RPM-3D alleging RPM-3D improperly acquired, used, and disclosed confidential and trade secret technology from Disior's software to develop software acquired by us and seeking injunctive relief and damages. On December 18, 2025, Paragon 28, Inc. and Disior Oy filed an amended complaint adding patent and copyright infringement to their claims. We filed an answer to the amended complaint, including defenses and declaratory judgment of invalidity and non-infringement counterclaims, on February 17, 2026. On March 10, 2026, the plaintiffs filed an answer to our counterclaims, and we filed motions to sever and consolidate the patent claims into C.A. No. 25-592-GBW, our patent infringement case against Zimmer Biomet Holdings, Inc. and Paragon 28, Inc. We filed an amended answer on March 27, 2026, and the plaintiffs filed an amended answer on April 9, 2026. Based on the preliminary nature of the proceedings in this action, the outcome remains uncertain, and we cannot estimate the potential impact, if any, on our business or financial statements at this time.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K under "Part I, Item 1A. Risk Factors" for the year ended December 31, 2025, filed with the SEC on February 27, 2026.

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

Issuer Purchases of Equity Securities

The following table presents information with respect to the Company's repurchases of stock during the three months ended March 31, 2026.


Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 to January 31, 2026(1)(2)		67,224	$	2.73		—		—
February 1 to February 28, 2026		—		—		—		—
March 1 to March 31, 2026(1)(2)		15,389		1.52		—		—
Totals		82,613	$	2.51		—		—

(1)

Includes restricted shares withheld pursuant to the terms of awards under the Company’s share-based compensation plans to offset tax withholding obligations that occur upon vesting and release of restricted shares.

(2)

The value of the restricted shares withheld is the closing price of the Company's common stock on the date the relevant transaction occurs.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.


Exhibit Number		Description
10.1+		Non-Employee Director Compensation Program (incorporated by reference to Exhibit 10.16 to the Company’s Form 10-K, as filed by the Company with the SEC on February 27, 2026).
10.2+		Consulting Services Agreement, dated as of April 9, 2026, between Treace Medical Concepts, Inc. and Gaetano M. Guglielmino.*
31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


+	Indicates management contract or compensatory plan.
*	Portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K.
†	The certifications attached as Exhibit 32.1 and 32.2 to this Quarterly Report are deemed furnished and not filed with the U.S. Securities and Exchange Commission and are not to be incorporated by reference into any filing of Treace Medical Concepts, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Treace Medical Concepts, Inc.

Date: May 8, 2026	By:	/s/ John T. Treace
		Name:	John T. Treace
		Title:	Chief Executive Officer (Principal Executive Officer)


Date: May 8, 2026	By:	/s/ Mark L. Hair
		Name:	Mark L. Hair
		Title:	Chief Financial Officer (Principal Financial Officer)

Basis of Presentation

Use of Estimates

Cash and Cash Equivalents

Marketable Securities

Property and equipment, net

Accrued liabilities

Other liabilities

License and Royalty Commitments

Stock Options

Performance Share Units

Share-Based Compensation Expense

Overview

Market Share Growth

Seasonality

Revenue

Cost of Goods Sold

Gross Profit and Gross Margin

Operating Expenses

Sales and Marketing

Research and Development

General and Administrative

Interest Income

Interest Expense

Results of Operations

Comparison of the three months ended March 31, 2026 and 2025

TREACE MEDICAL CONCEPTS, INC. 10-Q