Alphatec Holdings, Inc.

Previous wording

Our discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an on-going basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowances for accounts receivable, inventories, intangible assets, stock-based compensation, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumption conditions.

Current wording

Our discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowances for accounts receivable, inventories, intangible assets, stock-based compensation, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumption conditions.

Previous wording

Revenue from products and services increased $28.0 million, or 15%, and $50.9 million, or 14%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to an increase in product volume that was due to the increase in our surgeon user base, continued expansion of our new product portfolio, and increasing adoption of our technology.

Current wording

Revenue from products and services increased $24.7 million, or 13%, and $75.6 million, or 14%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to an increase in product volume that was due to the increase in our surgeon user base, continued expansion of our new product portfolio, and increasing adoption of our technology.

Previous wording

Cost of sales increased $3.0 million, or 5%, and $5.4 million, or 5% for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to an increase in product volume.

Current wording

Cost of sales increased $3.7 million, or 6%, and $9.1 million, or 5% for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to an increase in product volume.

Previous wording

Sales, general and administrative expenses. Sales, general and administrative expenses increased $15.5 million, or 13%, and $25.5 million, or 10%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to higher compensation-related costs and variable selling expenses associated with the increase in revenue, and our continued investment in building our strategic distribution channel.

Current wording

Sales, general and administrative expenses. Sales, general and administrative expenses increased $8.2 million, or 7%, and $33.7 million, or 9%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily due to higher compensation-related costs and variable selling expenses associated with the increase in revenue, and our continued investment in building our strategic distribution channel.

Previous wording

Litigation-related expenses. Litigation-related expenses decreased $1.7 million, or 105%, and $13.4, or 97%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The decrease was primarily related to a litigation settlement during the six months ended June 30, 2025.

Current wording

Litigation-related expenses. Litigation-related expenses decreased $5.9 million, or 91%, and $19.3 million, or 95%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The decrease was primarily related to a litigation settlement during the nine months ended September 30, 2025.

Previous wording

Amortization of acquired intangible assets. Amortization of acquired intangible assets remained consistent for the three and six months ended June 30, 2026, compared to the same periods in 2025.

Current wording

Amortization of acquired intangible assets. Amortization of acquired intangible assets remained consistent for the three and nine months ended September 30, 2026, compared to the same periods in 2025.

Previous wording

Restructuring expenses. Restructuring expenses decreased $0.4 million, or 100%, for the six months ended June 30, 2026, compared to the same period in 2025. The decrease in restructuring expenses is primarily due to personnel related expenses in the prior period that did not recur.

Current wording

Restructuring expenses. Restructuring expenses decreased $0.4 million, or 100%, for the nine months ended September 30, 2026, compared to the same period in 2025. The decrease in restructuring expenses is primarily due to personnel related expenses in the prior period that did not recur.

Previous wording

Interest expense, net, decreased $1.3 million, or 11%, and increased $2.5 million, or 13%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The decrease in interest expense, net, for the three months ended June 30, 2026, was primarily due to a decrease in cash interest expense. The increase in interest expense, net, for the six months ended June 30, 2026 was primarily due to the amortization of debt discount associated with the 2030 Notes. Net cash interest was $4.3 million and $9.3 million for the three and six months ended June 30, 2026, respectively. Net non-cash interest was $6.6 million and $13.4 million for the three and six months ended June 30, 2026, respectively.

Current wording

Interest expense, net, decreased $2.3 million, or 18%, and increased $0.3 million, or 1%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The decrease in interest expense, net, for the three months ended September 30, 2026, was primarily due to a decrease in cash interest expense. The increase in interest expense, net, for the nine months ended September 30, 2026 was primarily due to the amortization of debt discount associated with the 2030 Notes. Net cash interest was $4.1 million and $13.5 million for the three and nine months ended September 30, 2026, respectively. Net non-cash interest was $6.5 million and $19.8 million for the three and nine months ended September 30, 2026, respectively.

Previous wording

Loss on debt extinguishment decreased $11.9 million, or 100%, and $5.7 million, or 32%, for the three and six months ended June 30, 2026, compared to the same periods in 2025. The decrease in loss on debt extinguishment relates to the redemption of 80% of the 2026 Notes in March 2025 offset by the extinguishment of the Braidwell Term loan and MidCap Revolving credit facilities during the three months ended June 30, 2026.

Current wording

Loss on debt extinguishment decreased $5.7 million, or 32%, for the nine months ended September 30, 2026, compared to the same period in 2025. The decrease in loss on debt extinguishment relates to the redemption of 80% of the 2026 Notes in March 2025 compared to the extinguishment of the Braidwell Term Loan and MidCap Revolving Credit Facility during the nine months ended September 30, 2026.

Previous wording

(Loss) gain on derivative liability decreased $16.8 million, or 100%, and $0.6 million, or 100%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The decrease 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. As of June 12, 2025 the conditions necessary for separate accounting of the conversion option as a derivative liability were no longer met.

Current wording

Gain on derivative liability decreased $0.6 million, or 100%, for the nine months ended September 30, 2026, compared to the same period in 2025. The decrease in gain on derivative liability relates to the change in the valuation of the derivative liability associated with 2030 Notes from inception to June 30, 2025. As of June 12, 2025, the conditions necessary for separate accounting of the conversion option as a derivative liability were no longer met.

Previous wording

Other (expense) income, net, increased $1.9 million, or 188%, and $1.8 million, or 132%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increase in other income, net, during the six months ended June 30, 2026, was primarily due to fluctuations in foreign currency rates.

Current wording

Other (expense) income, net, increased $0.4 million, or 131%, and $2.2 million, or 132%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase in other (expense) income, net, during the nine months ended September 30, 2026, was primarily due to fluctuations in foreign currency rates.

Previous wording

The change in the income tax provision (benefit) for the three and six months ended June 30, 2026, compared to the same period in 2025, was primarily related to the recognition of income taxes in several jurisdictions.

Current wording

The change in the income tax (benefit) provision for the three and nine months ended September 30, 2026, compared to the same periods in 2025, was primarily related to a partial valuation allowance release as a result of the aforementioned asset acquisition and the recognition of income taxes in several jurisdictions.

Previous wording

Our principal sources of liquidity are our existing cash and cash equivalents, our JPM Revolving Credit Facility and cash from operations. Our liquidity and capital structure are evaluated regularly within the context of our annual operating and strategic planning process. We consider the liquidity necessary to fund our operations, which includes working capital needs, investments in research and development, investments in inventory and instrument sets to support our customers, as well as other operating costs. Our future capital requirements will depend on many factors including our rate of revenue growth, the timing and extent of spending to support development efforts, the expansion of sales, marketing and administrative activities, the timing of introductions of new products and enhancements to existing products, and the international expansions of our business.

Current wording

Our principal sources of liquidity are our existing cash and cash equivalents, our JPM Revolving Credit Facility and cash from operations. Our liquidity and capital structure are evaluated regularly within the context of our annual operating and strategic planning process. We consider the liquidity necessary to fund our operations, which includes working capital needs, investments in research and development, investments in inventory and instrument sets to support our customers, as well as other operating costs. Our future capital requirements will depend on many factors including our rate of revenue growth, the timing and extent of spending to support development efforts, the expansion of sales, marketing and administrative activities, the timing of introductions of new products and enhancements to existing products, and the international expansion of our business.

Previous wording

Cash and cash equivalents were 118.7 million and $160.8 million at June 30, 2026, and December 31, 2025, respectively. We believe that our existing funds, cash generated from our operations and our existing sources of and access to financing are adequate to satisfy our 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 $79.9 million and $160.8 million at September 30, 2026, and December 31, 2025, respectively. We believe that our existing funds, cash generated from our operations and our existing sources of and access to financing are adequate to satisfy our working capital, capital expenditure, debt service, and other strategic business requirements.

Previous wording

Operating activities provided net cash of $21.8 million for the six months ended June 30, 2026, which is primarily related to cash collections offset by costs associated with the continued expansion of our business and inventory purchases.

Current wording

Operating activities provided net cash of $40.7 million for the nine months ended September 30, 2026, which is primarily related to cash collections offset by costs associated with the continued expansion of our business and inventory purchases.

Previous wording

We used cash of $42.6 million in investing activities for the six months ended June 30, 2026, which is primarily related to the purchase of surgical instruments to support the growth of our business and commercial launch of new products and a $5.0 million note receivable.

Current wording

We used cash of $64.4 million in investing activities for the nine months ended September 30, 2026, which is primarily related to the purchase of surgical instruments to support the growth of our business and commercial launch of new products, the acquisition of intangible assets and a $5.0 million note receivable.

Previous wording

As of June 30, 2026, we had $175.0 million outstanding under the JPM Term Loan. The outstanding loans under the JPM Term Loan bear interest at the sum of Term SOFR plus an applicable margin determined by reference to the Company’s Senior Secured Net Leverage Ratio. The JPM Term Loan Matures on May 1, 2031.

Current wording

As of September 30, 2026, we had $173.9 million outstanding under the JPM Term Loan. The outstanding loans under the JPM Term Loan bear interest at the sum of Term SOFR plus an applicable margin determined by reference to the Company’s Senior Secured Net Leverage Ratio. The JPM Term Loan matures on May 1, 2031.

Previous wording

As of June 30, 2026, we had $40.0 million outstanding under the JPM Revolving Credit Facility. The outstanding loans under the JPM Revolving Credit Facility bear interest at the sum of Term SOFR plus an applicable margin determined by reference to the Company’s Senior Secured Net Leverage Ratio. The JPM Revolving Credit Facility matures on May 1, 2031.

Current wording

As of September 30, 2026, we had $70.0 million outstanding under the JPM Revolving Credit Facility. The outstanding loans under the JPM Revolving Credit Facility bear interest at the sum of Term SOFR plus an applicable margin determined by reference to the Company’s Senior Secured Net Leverage Ratio. The JPM Revolving Credit Facility matures on May 1, 2031.

Previous wording

As of June 30, 2026, there have been no material changes, outside the normal course of business, in our outstanding contractual obligations from those disclosed within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Current wording

Except as described in Notes 7 and 8 of our Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, as of September 30, 2026, there have been no material changes, outside the normal course of business, in our outstanding contractual obligations from those disclosed within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

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, 2026, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2025, that was filed with the SEC.

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, 2026, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2025, that was filed with the SEC.

Previous wording

our estimates regarding anticipated operating losses, future revenue, expenses, capital requirements, uses and sources of cash and liquidity, including our anticipated revenue growth and cost savings;

Current wording

our estimates regarding anticipated operating income or losses, future revenue, expenses, capital requirements, uses and sources of cash and liquidity, including our anticipated revenue growth and cost savings;