Financial Data and Key Metrics Changes - The company reported a 27% year-over-year revenue growth in Q1 2020, with 56% of that growth attributed to new products, compared to 22% in Q1 2019 and less than 10% in fiscal year 2018 [8][9] - Average revenue per case grew by 15% year-over-year, reflecting increased confidence in new devices, up from 30% growth in Q1 2018 [9] - The company ended Q1 with $27.5 million in cash, and after a draw on its credit facility, it had a pro forma cash balance of $47.5 million [15][16] Business Line Data and Key Metrics Changes - Strategic distribution channels saw a 34% year-over-year revenue growth, driven by increased surgical volume and case complexity [17] - The company experienced a consistent gross margin, although there was a drag from excess and obsolescence on legacy products, which is expected to normalize in 2021 [17][18] Market Data and Key Metrics Changes - The company noted signs of recovery in surgical volumes, particularly in spine surgeries, although it is still early to predict full recovery [14] - There is a growing pent-up demand for postponed surgeries, with hospitals increasing operating room hours to accommodate this demand [22] Company Strategy and Development Direction - The company remains committed to innovation in the spine market, with plans for 8 to 10 new product releases in 2020 [10] - The focus is on creating clinical distinction, compelling surgeon adoption, and revitalizing the sales force, with a strong emphasis on training during the slowdown [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of surgical volumes and the company's ability to emerge stronger from the current crisis [6][14] - The leadership highlighted the importance of maintaining employee engagement and preserving cash flow during the pandemic [5][7] Other Important Information - The company secured a $35 million commitment from Squadron Capital, extending its financial runway and removing financial covenants from its credit facility [8][16] - Regulatory submissions for new products have continued without significant delays due to COVID-19 [57] Q&A Session Summary Question: Is there pent-up demand for spine surgeries? - Management confirmed that postponed surgeries are expected to be rescheduled as hospitals increase operating hours to accommodate demand [22] Question: How has COVID-19 affected the launch of Alpha Informatix or SafeOp? - Management noted that product development has continued, and they are confident in the integration of the system into surgical procedures [24][25] Question: What is the current state of collaboration with EOS? - Management expressed disappointment but remains optimistic about future collaboration opportunities, emphasizing the need for a different approach [28][29] Question: What are the terms of the new financing with Squadron? - The financing terms include LIBOR plus 8%, with a 10% floor and 13% ceiling, providing the necessary runway for growth [31] Question: What drove the revenue growth in Q1? - The growth was attributed to increased confidence in new devices, attracting more surgeons, and higher case complexity [34][35] Question: What was the impact of COVID-19 on procedural volumes in March and April? - There was a significant slowdown in March, but early signs of recovery were noted in April, with volumes exceeding expectations [44] Question: What types of cases are being performed during the recovery? - The focus has been on single and two-level cervical cases and minimally invasive procedures that do not require extensive ICU resources [46] Question: What is the medium-term margin outlook? - Management expects to maintain gross margins in the mid-70% range, despite potential near-term headwinds [48] Question: How far along is the adoption of SafeOp among the distribution channel? - Management indicated that they are in the early stages of adoption, with about 25% penetration into their group [51]

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, 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 jurisd ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Alphatec is a medical technology company revolutionizing spine surgery with distinct products, a strategic sales channel, and the EOS imaging acquisition [Company Overview and Mission](index=3&type=section&id=1.1%20Company%20Overview%20and%20Mission) Alphatec improves spinal disorder treatment by integrating innovative products with the SafeOp Neural InformatiX System for enhanced surgical safety - The company's mission is to revolutionize spine surgery through clinical distinction, leveraging its wholly-owned subsidiaries Alphatec Spine, Inc. and SafeOp Surgical, Inc.[4](index=4&type=chunk) - Products and solutions integrate with the SafeOp Neural InformatiX System to provide real-time, objective nerve information, enhancing safety and reproducibility of spine surgery[4](index=4&type=chunk) [Sales and Distribution Strategy](index=3&type=section&id=1.2%20Sales%20and%20Distribution%20Strategy) Alphatec markets products in the U.S. via independent distributors and direct sales, strategically shifting to an exclusive sales channel for significant revenue growth - The company markets and sells products in the U.S. through independent distributors and direct sales representatives, aiming for consistent, predictable growth[4](index=4&type=chunk) - Revenue from the strategic sales channel grew by more than **40% in 2019**, comprising nearly **90% of U.S. revenues**, up from approximately **60% in 2017**[5](index=5&type=chunk)[15](index=15&type=chunk) - The strategy involves attracting large, experienced distributors seeking partnerships with spine-focused companies offering innovative and robust product portfolios[6](index=6&type=chunk)[14](index=14&type=chunk) [Recent Developments: EOS imaging Acquisition](index=3&type=section&id=1.3%20Recent%20Developments%3A%20EOS%20imaging%20Acquisition) Alphatec announced an agreement to acquire EOS imaging, enhancing its AlphaInformatiX platform with advanced surgical planning and alignment capabilities - Alphatec announced an agreement to acquire EOS imaging, SA, a leader in outcome-improving orthopedic medical imaging and software solutions, on February 28, 2020[7](index=7&type=chunk) - The EOS technology provides rapid, low-dose, biplanar full-body imaging and 3D modeling, informing the entire surgical process from diagnosis to post-operative assessment[7](index=7&type=chunk) - The acquisition is expected to advance Alphatec's AlphaInformatiX platform, adding capabilities in surgical planning, patient-specific implants, and intraoperative alignment reconciliation[7](index=7&type=chunk) [Strategy](index=3&type=section&id=1.4%20Strategy) Alphatec aims to be the standard-bearer in spine by creating clinically distinct solutions, compelling surgeon adoption, and revitalizing its sales channel - Alphatec's vision is to be the standard bearer in spine by creating clinically distinct solutions that improve surgical outcomes and capture a greater share of the U.S. spine market[9](index=9&type=chunk) - The company is committed to attracting and retaining top talent and driving organizational transformation through vital initiatives: creating clinical distinction, compelling surgeon adoption, and revitalizing the sales channel[10](index=10&type=chunk) [Spine Anatomy](index=5&type=section&id=1.5%20Spine%20Anatomy) This section describes the human spine's structure, regions, and components, highlighting its role in support, movement, and spinal cord protection [The Alphatec Solution & Product Portfolio](index=6&type=section&id=1.6%20The%20Alphatec%20Solution%20%26%20Product%20Portfolio) Alphatec offers a broad portfolio of 'Approach Technologies' for spinal disorders, with new products contributing significantly to revenue and enhancing surgical safety - Alphatec's principal procedural offerings, 'Approach Technologies,' aim to improve patient outcomes by achieving decompression, stabilization, and alignment in spine surgery[20](index=20&type=chunk) - New products launched since late 2017 accounted for nearly **50% of total revenue in Q4 2019**, with full-year 2019 U.S. product revenue growth of nearly **30%**[20](index=20&type=chunk) - The SafeOp Neural InformatiX System, acquired in 2018, delivers real-time, objective, actionable nerve location and health information, enhancing safety, efficiency, and reproducibility[20](index=20&type=chunk) [Products and Technologies Under Development](index=10&type=section&id=1.7%20Products%20and%20Technologies%20Under%20Development) Alphatec is expanding its product portfolio with 8-10 new launches in 2020 and integrating EOS imaging technology for advanced surgical planning - Alphatec plans to launch **8-10 new products** during 2020 to enhance clinical outcomes across multiple pathologies[36](index=36&type=chunk) - The acquisition of EOS imaging, expected to close in Q3 2020, will provide advanced capabilities in surgical planning, patient-specific implants, and intraoperative alignment reconciliation[37](index=37&type=chunk)[38](index=38&type=chunk) - EOS technology offers standing full-body assessment, reduced radiation exposure, and precise 3D measurements, with software solutions for surgical planning and OR integration[37](index=37&type=chunk) [Research and Development](index=11&type=section&id=1.8%20Research%20and%20Development) Alphatec's R&D focuses on improving core products and introducing new ones to increase U.S. spine market penetration, collaborating with surgeons for enhanced outcomes - The R&D department aims to continually improve core product offerings and introduce new products to increase U.S. spine market penetration[39](index=39&type=chunk) - Development programs focus on technology platforms and products for degenerative and deformity spine pathologies, utilizing integrated teams to reduce time from concept to commercialization[39](index=39&type=chunk) - The company collaborates with surgeon partners to design products that enhance the surgeon experience, simplify techniques, reduce costs, and improve patient outcomes[39](index=39&type=chunk) [Sales and Marketing](index=11&type=section&id=1.9%20Sales%20and%20Marketing) Alphatec markets products through independent distributors and direct sales, transitioning to a dedicated sales channel and securing hospital access via a national accounts team - Products are marketed and sold through a sales force of dedicated and non-dedicated independent distributors and dedicated employee direct sales representatives[40](index=40&type=chunk) - Significant changes are underway to drive a more dedicated sales channel, including eliminating traditional stocking distributors and attracting new, high-quality dedicated distributors for future growth[41](index=41&type=chunk) - A national accounts team is responsible for securing access at hospitals and GPOs across the U.S., which is a key differentiator and source of current business[44](index=44&type=chunk) [Surgeon Training and Education](index=12&type=section&id=1.10%20Surgeon%20Training%20and%20Education) Alphatec emphasizes peer-to-peer surgeon training to impart critical technical skills, drive customer conversion, and promote adoption of its innovative spinal fusion solutions - Surgeon training efforts focus on delivering critical technical skills for the entire spinal fusion procedure through a peer-to-peer approach to qualified surgeon customers[46](index=46&type=chunk) - The company believes effective training and education build market demand, increase product use, and promote the merits and distinguishing features of its products[47](index=47&type=chunk)[49](index=49&type=chunk) [Manufacture and Supply](index=12&type=section&id=1.11%20Manufacture%20and%20Supply) Alphatec relies on third-party suppliers for manufacturing implants and instruments, managing supply chain risks for raw materials and biologics products - Alphatec relies on third-party suppliers for manufacturing all implants and instruments, which reduces capital investment and operational expenses[50](index=50&type=chunk) - Key raw materials include titanium, stainless steel, cobalt chrome, ceramic, allograft, and PEEK, with Invibio being a limited supplier for PEEK[52](index=52&type=chunk) - The company's biologics products, processed from human tissue, can face supply challenges, but Alphatec has not experienced significant disruptions[53](index=53&type=chunk) - The supply agreement with Globus Medical Ireland, Ltd. for international markets was extended through August 2020[54](index=54&type=chunk) [Competition](index=13&type=section&id=1.12%20Competition) The spinal implant industry is highly competitive, driven by rapid technological change, with Alphatec facing larger competitors possessing greater resources - The spinal implant industry is highly competitive, characterized by rapid technological change and new product introductions[55](index=55&type=chunk) - Principal competitive factors include improved outcomes, ease of use, product quality, effective sales and marketing, technical leadership, surgeon services, and product price[55](index=55&type=chunk) - Significant competitors include Medtronic, Johnson & Johnson (DePuy/Synthes), Stryker, NuVasive, Zimmer, Biomet, Globus, and K2M Medical, many with substantially greater financial resources[56](index=56&type=chunk) [Intellectual Property](index=14&type=section&id=1.13%20Intellectual%20Property) Alphatec protects its intellectual property through patents, trademarks, copyrights, trade secrets, and contractual agreements - Alphatec relies on patent, trademark, copyright, trade secret, and other intellectual property laws, along with nondisclosure agreements, to protect its proprietary rights[59](index=59&type=chunk) Intellectual Property Portfolio (as of December 31, 2019) | Category | Count | | :------- | :---- | | Issued U.S. Patents | 194 | | Pending U.S. Patent Applications | 39 | | Issued or Pending Foreign Patents | 217 | | Registered U.S. Trademarks | 26 | | Registered Foreign Trademarks | 9 | [Government Regulation](index=14&type=section&id=1.14%20Government%20Regulation) Alphatec's medical devices and HCT/Ps are subject to extensive FDA and other governmental regulations covering design, manufacturing, labeling, and post-market surveillance - Alphatec's products are subject to extensive regulation by the FDA and other U.S. federal and state regulatory bodies, as well as comparable authorities in other countries[62](index=62&type=chunk) - Medical devices require either 510(k) clearance (for most Class

Alphatec Holdings, Inc. (NASDAQ:ATEC) Q4 2019 Earnings Conference Call March 5, 2020 4:30 PM ET Company Participants Patrick Miles - Executive Chairman, CEO & President Jeffrey Black - EVP & CFO Conference Call Participants Brooks O'Neil - Lake Street Capital Markets Andrew Stafford - Piper Sandler & Co. Kyle Rose - Canaccord Genuity Sean Kang - H.C. Wainwright & Co. Operator Good afternoon, everyone, and welcome to Alphatec's Fourth Quarter and Fiscal Year 2019 Financial Results Announcement. We would lik ...

Financial Performance & Outlook - The company increased its FY 2019E total revenue expectation from $104 million to $109 million, and then again to $109 million to $112 million[19] - The company increased FY 2019E U S revenue expectation from $100 million to $104 million, and then again to $105 million to $107 million[19] - Strategic distribution revenue grew 42% YoY in Q3 2019, reaching $25 million compared to $17.6 million in Q3 2018[55] - Total U S product revenue increased 34% YoY in Q3 2019, from $21 million to $28.1 million[56] - The company anticipates approximately 40% revenue growth from the strategic distribution network in 2019, offset by a 22% to 28% decline in legacy and terminated distribution relationships[53] Strategic Initiatives & Innovation - The company launched 12 new products to date in 2019, aligning with its commitment to create clinical distinction[19] - New products are expected to drive over 80% of revenue by 2022, a significant increase from less than 10% in 2018 and approximately 35% in 2019E[26] - The company is focused on approach-specific procedural solutions, aiming to capture more revenue per surgical approach[42] Sales Channel & Market Adoption - The company has revitalized its sales channel by reducing distributor contracts from over 200 in 2016 to 80 in 2018, creating a strategic, exclusive network[46] - The company experienced a 17% YoY increase in revenue per case in Q3 2019, the highest rate of growth since the inception of the new ATEC[43] - Approximately 68% revenue growth from top 20 surgeons YoY reflects compelling surgeon adoption of the new ATEC[43]

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, 2019 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) Q3 2019 Earnings Conference Call October 30, 2019 4:30 PM ET Executives Pat Miles - Chairman and Chief Executive Officer Jeff Black - Chief Financial Officer Analysts Brooks O'Neil - Lake Street Capital Matthew O'Brien - Piper Jaffray Kyle Rose - Canaccord Sean Lee - H.C. Wainwright Operator Good afternoon, everyone, and welcome to Alphatec's Third Quarter 2019 Conference Call. We would like to remind everyone that participants on the call will make forward-looking stat ...