[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and MD&A for Q1 2021 [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements for Q1 2021, covering balance sheets, operations, cash flows, and key event notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets rose to **$404.5 million** by March 31, 2021, driven by a **$191.1 million** cash increase from a private placement | Metric | March 31, 2021 (in thousands) | Dec 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash | $191,137 | $107,765 | | Inventories, net | $57,376 | $46,001 | | Total Assets | $404,503 | $261,223 | | **Liabilities & Equity** | | | | Total Current Liabilities | $70,149 | $58,312 | | Long-term debt, less current portion | $38,580 | $38,034 | | Contingently redeemable common stock | $131,838 | $0 | | Total Stockholders' Equity | $108,292 | $129,880 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2021 total revenue grew **47%** to **$44.1 million**, gross profit up **51%**, but net loss widened to **$22.9 million** due to higher expenses | Metric | Q1 2021 (in thousands) | Q1 2020 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue from U.S. products | $43,716 | $29,070 | +50.4% | | Total revenue | $44,121 | $30,115 | +46.5% | | Gross profit | $31,858 | $21,031 | +51.5% | | Operating loss | ($19,046) | ($17,808) | +7.0% | | Net loss | ($22,903) | ($20,722) | +10.5% | | Net loss per share | ($0.26) | ($0.33) | N/A | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2021 cash flows: **$18.6 million** used in operations, **$26.0 million** in investing, **$130.8 million** from financing, resulting in **$191.1 million** cash balance | Cash Flow Activity | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($18,604) | ($17,048) | | Net cash used in investing activities | ($25,994) | ($2,629) | | Net cash provided by (used in) financing activities | $130,776 | ($39) | | Net increase (decrease) in cash | $83,372 | ($19,647) | | Cash at end of period | $191,137 | $27,466 | - Financing activities were dominated by **$131.8 million** in proceeds from a public offering (private placement)[27](index=27&type=chunk) - Investing activities included **$15.2 million** for purchases of property and equipment and **$9.1 million** in cash paid for the investment in EOS[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the **$116.9 million** EOS acquisition, **$138.0 million** private placement, **$45.0 million** Term Loan, **$4.3 million** PPP Loan, and NuVasive litigation - The company initiated a tender offer to acquire EOS imaging S.A. for up to **$116.9 million**, with the transaction expected to close in Q2 2021[32](index=32&type=chunk)[141](index=141&type=chunk) - A private placement of **12,421,242** shares at **$11.11** per share closed on March 1, 2021, raising gross proceeds of **$138.0 million**. These shares are contingently redeemable if the EOS acquisition does not close by July 31, 2021, and are therefore classified outside of stockholders' equity[112](index=112&type=chunk) - As of March 31, 2021, the company had **$45.0 million** in principal outstanding under its Term Loan with Squadron Medical and a **$4.3 million** PPP Loan for which a forgiveness application was under review[66](index=66&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - The company is engaged in ongoing patent litigation with NuVasive, Inc. Management believes the claims lack merit and has not recorded an accrual for a contingent liability, as a loss is not considered probable or reasonably estimable[85](index=85&type=chunk)[92](index=92&type=chunk) | Metric | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | Total Revenue | $44,121 | $30,115 | | Gross Profit | $31,858 | $21,031 | | Operating Loss | ($19,046) | ($17,808) | | Net Loss | ($22,903) | ($20,722) | | Metric | March 31, 2021 (in thousands) | Dec 31, 2020 (in thousands) | | :--- | :--- | :--- | | Total Assets | $404,503 | $261,223 | | Total Liabilities | $140,770 | $107,739 | | Total Stockholders' Equity | $108,292 | $129,880 | | Cash Flow Activity | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($18,604) | ($17,048) | | Net cash used in investing activities | ($25,994) | ($2,629) | | Net cash provided by financing activities | $130,776 | ($39) | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights Q1 2021 **47%** revenue growth to **$44.1 million** from U.S. product sales and new product adoption, covering EOS acquisition, COVID-19 impact, and liquidity - The company's growth strategy focuses on product innovation and transitioning to a more dedicated and loyal sales channel[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) - The strategic distribution channel's contribution to U.S. revenue increased to **95%** in Q1 2021 from **89%** in Q1 2020, demonstrating progress in sales network transformation[140](index=140&type=chunk)[157](index=157&type=chunk) - Management believes its existing cash of **$191.1 million** (including **$103.3 million** in escrow for the EOS acquisition) and available borrowings are adequate to fund operations, capital needs, and strategic initiatives[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) [Overview](index=25&type=section&id=Overview) Alphatec focuses on spine surgery innovation and sales channel expansion, with the EOS acquisition expected in Q2 2021 and recovering demand post-COVID-19 volatility - The company's primary focus is on designing, developing, and advancing technology for the surgical treatment of spinal disorders[137](index=137&type=chunk) - A public tender offer was commenced to acquire EOS imaging S.A. for a total purchase price of up to **$116.9 million**, funded in part by a private placement that raised net proceeds of **$131.8 million**[141](index=141&type=chunk)[143](index=143&type=chunk) - The COVID-19 pandemic caused volatility in sales trends due to the impact on elective surgeries, but demand has since recovered to varying degrees[144](index=144&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Q1 2021 total revenue grew **47%** to **$44.1 million**, U.S. product revenue up **50%** from new products, gross margin improved to **72.2%**, operating expenses rose **31%** | Metric | Q1 2021 (in thousands) | Q1 2020 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $44,121 | $30,115 | +47% | | U.S. Product Revenue | $43,716 | $29,070 | +50% | | Gross Profit | $31,858 | $21,031 | +51% | | Gross Margin | 72.2% | 69.8% | +2.4 p.p. | - Revenue from new products increased to approximately **77%** of U.S. product revenue, up from **56%** in the prior-year period[157](index=157&type=chunk) - Sales, general and administrative (SG&A) expenses increased by **$12.8 million** (**47%**) due to higher compensation-related costs and variable selling expenses tied to revenue growth[162](index=162&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Cash increased to **$191.1 million** by March 31, 2021, due to a **$131.8 million** private placement, providing sufficient liquidity with **$45.0 million** Term Loan outstanding - Cash increased to **$191.1 million** at March 31, 2021, from **$107.8 million** at Dec 31, 2020, mainly due to a **$131.8 million** private placement[167](index=167&type=chunk) - The company has an **$85.0 million** Term Loan with Squadron Medical, with **$45.0 million** outstanding and **$40.0 million** available in additional borrowings[168](index=168&type=chunk)[169](index=169&type=chunk) - The company received a **$4.3 million** PPP loan in April 2020 and submitted an application for forgiveness in November 2020, which was still under review[170](index=170&type=chunk)[171](index=171&type=chunk) | Obligation Type | Total (in thousands) | | :--- | :--- | | Squadron Medical Term Loan | $45,000 | | Facility lease obligations | $35,034 | | Litigation settlement obligations, gross | $11,733 | | **Total Contractual Obligations** | **$134,746** | [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Interest rate risk on **$49.3 million** floating-rate debt could reduce pre-tax income by **$0.5 million** annually with a **100-basis point** increase, commodity risk is immaterial - The company is exposed to interest rate risk on **$49.3 million** of outstanding floating-rate debt. A **100-basis point (1%)** increase in interest rates would decrease pre-tax income and cash flow by approximately **$0.5 million** annually[188](index=188&type=chunk) - Commodity price risk from raw materials such as titanium and stainless steel is not considered to have a material impact on results of operations[190](index=190&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2021, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[191](index=191&type=chunk) - No material changes were made to the internal control over financial reporting during the first quarter of 2021[192](index=192&type=chunk) [PART II – OTHER INFORMATION](index=35&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered equity sales, other information, and exhibits [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 6 for details on ongoing NuVasive, Inc. litigation, with no material accruals as loss is not probable or estimable - The company refers to Note 6 for details regarding the NuVasive, Inc. litigation[195](index=195&type=chunk) - The company has not accrued an estimated loss contingency for litigation, as it is not considered probable that a liability has been incurred and the amount cannot be reasonably estimated[194](index=194&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from 2020 Annual Report, except for LIBOR discontinuation risk which could increase funding interest rates - There have been no material changes to risk factors from the 2020 Annual Report on Form 10-K, except for the risk related to LIBOR discontinuation[196](index=196&type=chunk) - The discontinuation of LIBOR after 2021 could result in interest rate increases on the company's funding arrangements, which could adversely affect cash flows and operating results[196](index=196&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Report indicates 'None' for this item, meaning no unregistered equity sales or use of proceeds beyond prior disclosures - The company reported 'None' for this item[197](index=197&type=chunk) [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) Report indicates 'None' for this item, meaning no other material information required disclosure was not already covered - The company reported 'None' for this item[197](index=197&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Exhibits filed with the 10-Q report include an employment agreement, CEO/CFO certifications, and iXBRL financial data files - Exhibits filed include an employment agreement, CEO and CFO certifications pursuant to the Sarbanes-Oxley Act, and iXBRL data files[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk)

Financial Data and Key Metrics Changes - Average revenue growth over the past 8 quarters has been 30% [5] - U.S. revenue growth year-over-year in Q4 was 38% [7] - Year-over-year growth in revenue per surgeon was 15% [7] - Gross margins are running in the high 70% range on a non-GAAP basis, and in the low 70% on a GAAP basis [19] - The company expects $176 million in U.S. revenue for 2021, representing 25% growth [23] Business Line Data and Key Metrics Changes - 75% of revenue is coming from new products [7] - Average revenue per case increased by 13%, marking the ninth consecutive double-digit year-over-year growth [7][14] - The average product categories sold per case increased to 1.9 [14] Market Data and Key Metrics Changes - The company is experiencing significant growth in the U.S. market, with a 47% revenue growth from its strategic distribution group [17] - The international supply agreement for legacy products is winding down and will expire in mid-2021 [18] Company Strategy and Development Direction - The company aims to revolutionize spine surgery through innovative products and clinical distinction [5][25] - The acquisition of EOS is expected to enhance cross-selling opportunities and expand the product portfolio [24] - The company is focused on increasing clinical sophistication and expanding its sales force capabilities [6][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery from COVID-19 impacts and the potential for continued growth [18][49] - The company is focused on maintaining a strong balance sheet and investing in product development and sales channels [21][20] - Management believes there is significant runway for growth, with a focus on understanding the requirements of the surgical environment [64] Other Important Information - The company has secured $250 million in new capital to fund continued investments and acquisitions [22] - The company is committed to maintaining high levels of R&D investment as a percentage of revenue [20] Q&A Session All Questions and Answers Question: Assessment of overall journey and milestones for 2021 - Management believes they are still early in their journey and emphasizes the importance of informatics in surgery [28][30] Question: Distinction between their approach and robotic surgery - Management prioritizes patient positioning and neurophysiology over robotic solutions, emphasizing the importance of understanding procedural requirements [32] Question: Evolution of the SafeOp platform - Management sees significant opportunities for SafeOp technology in various surgical applications and plans to continue its development [34][35] Question: Metrics on PTP rollout and surgeon adoption - The rollout has been well-received, particularly among surgeons experienced in lateral surgery, and management is optimistic about expanding adoption [58] Question: Growth drivers for 2021 - Management indicates that growth drivers remain similar to 2020, with a focus on expanding product categories and geographic reach [60][62] Question: Sustainable growth rate for 2022 and beyond - Management believes there is significant runway for growth and is focused on maintaining a steady course without overextending [64] Question: Impact of COVID-19 on business - Management acknowledges some lumpiness due to COVID-19 but feels confident about recovery and growth moving forward [66]

Financial Risks - As of December 31, 2020, the company's outstanding floating rate indebtedness totaled $49.3 million, with a potential pre-tax income decrease of approximately $0.5 million for a 100-basis point increase in interest rates [308]. - The company is exposed to market risks related to changes in interest rates due to its borrowings under the credit facility [308]. - A 10% change in commodity prices would not have had a material impact on the company's results of operations for the twelve months ended December 31, 2020 [309]. - The company has not experienced any material impact on its results of operations from changes in commodity prices due to the small portion of raw material prices in the cost of revenue [309]. Internal Controls - The company has identified deficiencies in internal controls over revenue and inventory cycles, which could lead to material misstatements in financial reporting [316]. - Remediation efforts for identified material weaknesses included improved documentation and review procedures, additional compensating controls, and enhanced training for personnel [318]. - The company maintained effective internal control over financial reporting as of December 31, 2020, according to the audit conducted based on COSO criteria [322]. - The company has developed a remediation plan to address material weaknesses associated with revenue and inventory controls [316]. - The company’s management has assessed the effectiveness of internal control over financial reporting, identifying deficiencies that were remediated during the fiscal year [318]. - The company’s disclosure controls and procedures were deemed effective as of December 31, 2020, allowing timely decisions regarding required financial disclosures [311].

Alphatec Holdings, Inc. (NASDAQ:ATEC) Q3 2020 Results Earnings Conference Call November 5, 2020 4:30 PM ET Company Participants Pat Miles - Chairman and CEO Jeff Black - Chief Financial Officer Conference Call Participants Kyle Rose - Canaccord Patrick Bartoski - Piper Sandler Josh Jennings - Cowen Brooks O'Neil - Lake Street Capital Matthew Blackman - Stifel Jason Wittes - Northland Sean Lee - H.C. Wainwright Operator Good afternoon, everyone. And welcome to Alphatec’s Third Quarter 2020 Financial Results ...

Financial Performance - U S product revenue increased to $40 million in Q3 2020, a 43% year-over-year growth, and reached $98 million year-to-date, a 27% increase compared to $77 million in YTD 2019[64] - Total revenue reached $41 million in Q3 2020, a 41% year-over-year increase, and $101 million year-to-date, a 24% increase compared to $81 million in YTD 2019[64] - The company anticipates Q4 2020 U S revenue to be between $42 million and $44 million, and full-year 2020 U S revenue to be between $140 million and $142 million, representing approximately 25% growth[66] - The company's Q3 2020 GAAP U S gross profit was $29 million with a 73% margin, while non-GAAP gross profit was $31 million with a 78% margin[69] Growth Drivers and Strategies - The company outpaced the industry with revenue growth exceeding 40% in Q3 2020[4] - New product revenue contribution was greater than 70% in Q3 2020[30] - Year-over-year growth in cases with more than one product category sold was 50%[45] - U S revenue growth year-over-year among the top 20 distributors was 43%[60] Sales Channel and Distribution - 92% of sales were driven by the strategic channel in Q3 2020, compared to 89% in Q3 2019[60] - U S revenue growth from strategic distribution was 47%[60] - The company aims to drive revenue per agent toward $4 million or more[75]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-52024 ALPHATEC HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 20-2463898 (State or other ju ...

Alphatec Holdings, Inc. (NASDAQ:ATEC) Q2 2020 Earnings Conference Call August 6, 2020 4:30 PM ET Company Participants Patrick Miles - Chairman & Chief Executive Officer Jeff Black - Executive Vice President & Chief Financial Officer Conference Call Participants Brooks O'Neil - Lake Street Capital Markets Jason Wittes - Northland Capital Kyle Rose - Canaccord Genuity Sean Lee - H.C. Wainwright Operator Good afternoon everyone, and welcome to Alphatec's Second Quarter 2020 Financial Results and Recent Corpora ...