Financial Data and Key Metrics Changes - In Q1 2021, U.S. revenue reached $43.7 million, reflecting a 50% growth year-over-year, while total revenue was $44.1 million, up 47% compared to the prior year [21][22] - Non-GAAP U.S. gross margin was 77.9%, consistent with the prior year, while operating expenses increased to $42 million, approximately 95% of sales, reflecting investments in growth [22][24] - Cash usage was approximately $34 million in Q1, primarily driven by capital expenditures, which accounted for over 62% of cash burn [25] Business Line Data and Key Metrics Changes - The company reported a 50% year-over-year growth in revenue, with 77% of revenue coming from new product contributions [4][20] - Average revenue per surgeon grew by 17% year-over-year, and average revenue per case increased by 13% [4][14] - The average products sold per surgery slightly increased to above 1.9 categories [13] Market Data and Key Metrics Changes - The company noted a slight dip in surgical volumes early in Q1, but March showed a breakout month, indicating a potential backlog of procedures [32][33] - The company is focused on expanding its geographical presence, with significant opportunities in major metro areas where it currently lacks representation [46][19] Company Strategy and Development Direction - The company aims to revolutionize spine surgery through the launch of new products like PTP and InVictus, emphasizing clinical distinction and surgeon adoption [4][10] - The strategy includes revitalizing the sales force and expanding the distribution network to enhance market coverage [18][19] - The company is committed to organic innovation and developing a comprehensive product portfolio to address various surgical needs [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth trajectory, citing a strong start to 2021 and an increase in full-year revenue guidance to approximately $188 million, implying a 33% year-over-year growth [26][27] - The management highlighted the importance of clinical outcomes and predictive analytics in driving future growth and improving surgical procedures [16][60] - The company is focused on integrating EOS technology to enhance preoperative planning and improve surgical outcomes [60][75] Other Important Information - The company secured approximately $132 million through PIPE funding, ending the quarter with over $190 million in cash, with plans to invest in growth initiatives [24] - The EOS transaction is progressing as planned, with expectations to close during the current quarter [25][26] Q&A Session Summary Question: What is the current marketplace activity and backlog of procedures? - Management noted softness in January and February, with March showing improvement and a potential backlog of procedures to capture [32][33] Question: What is the status of PTP and its adoption? - Management indicated that PTP is in the early phases of adoption, with surgeons starting with simpler procedures and gradually moving to more complex surgeries [40][41] Question: Can you elaborate on the distribution channel and exclusivity? - Management emphasized the need for strong clinical acumen in the distribution network and highlighted significant geographical gaps that need to be filled [46][19] Question: What is the value proposition for EOS? - Management stated that EOS offers immediate value with its new imaging technology, which significantly improves surgical decision-making [75][76]

Financial Performance - U.S product revenue increased by 50% year-over-year, reaching $43.7 million in Q1 2021 compared to $29.1 million in Q1 2020[58] - Total revenue grew by 47% year-over-year, amounting to $44.1 million in Q1 2021 versus $30.1 million in Q1 2020[59] - U.S gross profit increased by 50% year-over-year, reaching $34.1 million in Q1 2021 compared to $22.7 million in Q1 2020[62] - The company maintains a positive net cash position, with $191 million in cash and $60 million in debt[63] Growth Drivers - New product revenue contributed 17% in Q1 2021, compared to 56% in Q1 2020 and less than 10% in FY2018[8] - Revenue per surgeon increased by 17% year-over-year[8,39] - Average revenue per case grew by 13% year-over-year[8] - U.S revenue growth from strategic distribution was 60%[53] Future Outlook - The company anticipates U.S revenue of approximately $188 million, representing a 33% year-over-year increase for FY 2021[68] - Total revenue for FY 2021 is projected to be around $190 million, indicating a 31% year-over-year growth[69] - International revenue is expected to be approximately $2 million, a decrease of 47% year-over-year for FY 2021[69]

[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]

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 ...

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 ...