Alphatec Holdings, Inc.

Previous wording

Income tax provision. Income tax provision primarily consists of an estimate of federal, state, and foreign income taxes based on enacted state and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.

Current wording

Income tax provision (benefit). Income tax provision (benefit) primarily consists of an estimate of federal, state, and foreign income taxes based on enacted state and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.

Previous wording

Revenue from products and services increased $40.0 million, or 27%, and $70.7 million, or 25%, during the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The increase was primarily due to an increase in product volume that was due to the increase in our surgeon user base, continued expansion of our new product portfolio, and increasing adoption of our technology.

Current wording

Revenue from products and services increased $45.8 million, or 30%, and $116.5 million, or 27%, during the three and nine months ended September 30, 2025, respectively, compared to the same period in 2024. The increase was primarily due to an increase in product volume that was due to the increase in our surgeon user base, continued expansion of our new product portfolio, and increasing adoption of our technology.

Previous wording

Cost of sales increased $13.5 million, or 31%, and $25.5 million, or 30%, for the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The increase was primarily due to an increase in product volume.

Current wording

Cost of sales increased $11.2 million, or 23%, and $36.7 million, or 28%, for the three and nine months ended September 30, 2025, respectively, compared to the same period in 2024. The increase was primarily due to an increase in product volume.

Previous wording

Research and development expenses. Research and development expenses decreased $0.8 million, or 4%, and $1.8 million, or 5%, for the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The decrease during the three months and six months ended June 30, 2025 was primarily due to a decrease in stock-based compensation.

Current wording

Research and development expenses. Research and development expenses decreased $1.7 million, or 8%, and $3.5 million, or 6%, for the three and nine months ended September 30, 2025, respectively, compared to the same period in 2024. The decrease during the three months and nine months ended September 30, 2025 was primarily due to a decrease in stock-based compensation.

Previous wording

Sales, general and administrative expenses. Sales, general and administrative expenses increased $5.8 million, or 5%, and $19.2 million, or 8%, during the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The increase was primarily due to higher compensation-related costs and variable selling expenses associated with the increase in revenue, and our continued investment in building our strategic distribution channel.

Current wording

Sales, general and administrative expenses. Sales, general and administrative expenses increased $15.1 million, or 14%, and $34.3 million, or 10%, during the three and nine months ended September 30, 2025, respectively, compared to the same period in 2024. The increase was primarily due to higher compensation-related costs and variable selling expenses associated with the increase in revenue, and our continued investment in building our strategic distribution channel.

Previous wording

Litigation-related expenses. Litigation-related expenses decreased $0.5 million, or 24%, and increased $7.3 million, or 112%, for the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The increase for the six month period ended June 30, 2025 was primarily related to a litigation settlement during the three months ended March 31, 2025.

Current wording

Litigation-related expenses. Litigation-related expenses increased $4.4 million, or 212%, and $11.7 million, or 136%, for the three and nine months ended September 30, 2025, respectively, compared to the same period in 2024. The increase for the three month period ended September 30, 2025 was primarily related to ongoing litigation. The increase for the nine month period ended September 30, 2025 was primarily related to a litigation settlement during the three months ended March 31, 2025, and ongoing litigation matters.

Previous wording

Amortization of acquired intangible assets. Amortization of acquired intangible assets remained consistent for the three and six months ended June 30, 2025, respectively, compared to the same period in 2024.

Current wording

Amortization of acquired intangible assets. Amortization of acquired intangible assets remained consistent for the three and nine months ended September 30, 2025, respectively, compared to the same period in 2024.

Previous wording

Restructuring expenses. Restructuring expenses decreased $0.1 million, or 95%, and $0.5 million, or 59%, during the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The decrease in restructuring expenses is primarily due to costs associated with the relocation of office facilities in Paris, France and personnel related expenses in the prior period that did not recur.

Current wording

Restructuring expenses. Restructuring expenses decreased $0.9 million, or 100%, and $1.5 million, or 80%, during the three and nine months ended September 30, 2025, respectively, compared to the same period in 2024. The decrease in restructuring expenses is primarily due to costs associated with the relocation of office facilities in Paris, France and personnel related expenses in the prior period that did not recur.

Previous wording

Interest expense, net, increased $6.5 million, or 112%, and $9.0 million, or 81%, during the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The increase in interest expense, net, was primarily due to drawing an additional $50.0 million on the Braidwell Term Loan in October 2024, and the amortization of debt discount associated with the 2030 Notes. Net cash interest was $5.3 million and $10.6 million for the three and six months ended June 30, 2025, respectively. Net non-cash interest was $7.0 million and $9.5 million for the three and six months ended June 30, 2025, respectively.

Current wording

Interest expense, net, increased $6.3 million, or 96%, and $15.3 million, or 86%, during the three and nine months ended September 30, 2025, respectively, compared to the same period in 2024. The increase in interest expense, net, was primarily due to drawing an additional $50.0 million on the Braidwell Term Loan in October 2024, and the amortization of debt discount associated with the 2030 Notes. Net cash interest was $5.3 million and $16.0 million for the three and nine months ended September 30, 2025, respectively. Net non-cash interest was $7.6 million and $17.1 million for the three and nine months ended September 30, 2025, respectively.

Previous wording

Loss on debt extinguishment increased $17.6 million, or 100%, during the six months ended June 30, 2025, compared to the same period in 2024. The increase in loss on debt extinguishment relates to the redemption of 80% of the 2026 Notes.

Current wording

Loss on debt extinguishment increased $17.6 million, or 100%, during the nine months ended September 30, 2025, compared to the same period in 2024. The increase in loss on debt extinguishment relates to the redemption of 80% of the 2026 Notes.

Previous wording

(Loss)/gain on derivative liability increased $16.8 million, or 100%, and $0.6 million, or 100%, during the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The increase in (loss)/gain on derivative liability relates to the change in the valuation of the derivative liability associated with 2030 Notes from inception to June 30, 2025.

Current wording

Gain on derivative liability increased $0.6 million, or 100%, during the nine months ended September 30, 2025, compared to the same period in 2024. The increase in gain on derivative liability relates to the change in the valuation of the derivative liability associated with 2030 Notes from inception to June 12, 2025, the date the conditions necessary for separate accounting of the conversion option as a derivative liability were no longer met.

Previous wording

Other income, net, increased $0.8 million, or 537%, and $1.1 million, or 385%, during the three and six months ended June 30, 2025, respectively, compared to the same period in 2024. The increase in other income, net, during the three and six months ended June 30, 2025, was primarily due to receiving the employee retention credit and fluctuations in foreign currency rates.

Current wording

Other income, net, decreased $0.3 million, or 51%, and increased $0.7 million, or 82%, during the three and nine months ended September 30, 2025, respectively, compared to the same period in 2024. The increase in other income, net, during the nine months ended September 30, 2025, was primarily due to receiving the employee retention credit and fluctuations in foreign currency rates.

Previous wording

The change in the income tax benefit for the three and six months ended June 30, 2025, compared to the same period in 2024, was primarily related to the recognition of income tax benefits in several jurisdictions.

Current wording

The change in the income tax provision (benefit) for the three and nine months ended September 30, 2025, compared to the same period in 2024, was primarily related to the recognition of income taxes in several jurisdictions.

Previous wording

While we have no material, undisclosed accruals for pending litigation or claims, litigation is inherently unpredictable, and depending on the nature and timing of a proceeding, an unfavorable resolution could materially affect our future consolidated results of operations, cash flows or financial position in a particular period. We assess contingencies to determine the degree of probability and range of possible loss for potential accrual or disclosure in our condensed consolidated financial statements. An estimated loss contingency is accrued in our condensed consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Assessing contingencies is highly subjective and requires judgments about future events because litigation is inherently unpredictable, and unfavorable resolutions could occur. When evaluating contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to reasonably possible outcomes, and as such are not meaningful indicators of our potential liability. We have disclosed all material accruals for pending litigation or investigations in Note 9, Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

We do not have any material financial exposure to one customer or one country, outside of the United States, that would significantly hinder our liquidity. We are and may become involved in various legal proceedings arising from our business activities. While we have no material, undisclosed accruals for pending litigation or claims, litigation is inherently unpredictable, and depending on the nature and timing of a proceeding, an unfavorable resolution could materially affect our future consolidated results of operations, cash flows or financial position in a particular period. We assess contingencies to determine the degree of probability and range of possible loss for potential accrual or disclosure in our condensed consolidated financial statements. An estimated loss contingency is accrued in our condensed consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Assessing contingencies is highly subjective and requires judgments about future events because litigation is inherently unpredictable, and unfavorable resolutions could occur. When evaluating contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to reasonably possible outcomes, and as such are not meaningful indicators of our potential liability. We have disclosed all material accruals for pending litigation or investigations in Note 8, Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

Cash and cash equivalents were $157.1 million and $138.8 million at June 30, 2025, and December 31, 2024, respectively. We believe that our existing funds, cash generated from our operations and our existing sources of and access to financing are adequate to satisfy our needs for working capital, capital expenditure and debt service requirements, and other business initiatives we plan to strategically pursue.

Current wording

Cash and cash equivalents were $155.7 million and $138.8 million at September 30, 2025, and December 31, 2024, respectively. We believe that our existing funds, cash generated from our operations and our existing sources of and access to financing are adequate to satisfy our needs for working capital, capital expenditure and debt service requirements, and other business initiatives we plan to strategically pursue.

Previous wording

Cash provided of $10.5 million from operating activities for the six months ended June 30, 2025, primarily driven by favorable working capital changes, partially offset by inventory purchases and the timing of cash payments and receipts.

Current wording

Cash provided of $24.5 million from operating activities for the nine months ended September 30, 2025, primarily driven by favorable working capital changes, partially offset by inventory purchases and the timing of cash payments and receipts.

Previous wording

We used cash of $23.8 million in investing activities for the six months ended June 30, 2025, which is primarily related to the purchase of surgical instruments to support the growth of our business and commercial launch of new products.

Current wording

We used cash of $37.7 million in investing activities for the nine months ended September 30, 2025, which is primarily related to the purchase of surgical instruments to support the growth of our business and commercial launch of new products and an equity investment.

Previous wording

Financing activities provided cash of $31.1 million for the six months ended June 30, 2025, which is primarily related to proceeds from our 2030 Notes, offset by the repurchase of 80% of our 2026 Notes, the purchase of capped calls of the 2030 Notes, and payments on our revolving line of credit.

Current wording

Financing activities provided cash of $29.8 million for the nine months ended September 30, 2025, which is primarily related to proceeds from our 2030 Notes, offset by the repurchase of 80% of our 2026 Notes, the purchase of capped calls of the 2030 Notes, and payments on our revolving line of credit.

Previous wording

As of June 30, 2025, we had $15.0 million outstanding under the Revolving Credit Facility. The outstanding loans under the Revolving Credit Facility bear interest at the sum of Term SOFR plus 3.5% per annum. The Revolving Credit Facility matures on the earlier of September 29, 2027, or 90 days prior to the final maturity date of any of our 2026 Notes.

Current wording

As of September 30, 2025, we had $15.0 million outstanding under the Revolving Credit Facility. The outstanding loans under the Revolving Credit Facility bear interest at the sum of Term SOFR plus 3.5% per annum. The Revolving Credit Facility matures on September 29, 2027.

Previous wording

As of June 30, 2025, we had $2.8 million in other debts that are due in monthly and quarterly installments through maturity in 2027.

Current wording

As of September 30, 2025, we had $2.3 million in other debts that are due in monthly and quarterly installments through maturity in 2027.

Previous wording

We have an inventory purchase commitment agreement with a third-party supplier, where we are obligated to meet certain minimum purchase commitment requirements through December 2026. As of June 30, 2025, the remaining minimum purchase commitment under the agreement was $7.5 million.

Current wording

We have an inventory purchase commitment agreement with a third-party supplier, where we are obligated to meet certain minimum purchase commitment requirements through December 2026. As of September 30, 2025, the remaining minimum purchase commitment under the agreement was $6.2 million.

Previous wording

Aside from the changes disclosed in Note 1 to the Notes to Condensed Consolidated Financial Statements (Unaudited) under the heading “Recently Issued Accounting Pronouncements,” if any, there have been no new accounting pronouncements or changes to accounting pronouncements during the six months ended June 30, 2025, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2024, that was filed with the SEC.

Current wording

Aside from the changes disclosed in Note 1 to the Notes to Condensed Consolidated Financial Statements (Unaudited) under the heading “Recently Issued Accounting Pronouncements,” if any, there have been no new accounting pronouncements or changes to accounting pronouncements during the nine months ended September 30, 2025, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2024, that was filed with the SEC.