[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents unaudited condensed financial statements and detailed notes on the company's financial position, performance, and cash flows [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Provides unaudited condensed financial statements and comprehensive notes detailing the company's financial position and accounting policies [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) Presents the company's financial position, including assets, liabilities, and stockholders' deficit, as of June 30, 2025, and December 31, 2024 Condensed Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $53,270 | $51,824 | | Total Liabilities | $27,614 | $26,228 | | Total Stockholders' Deficit | $(83,073) | $(70,630) | | Cash and Cash Equivalents | $33,472 | $40,125 | [Condensed Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20Three%20and%20Six%20Months%20ended%20June%2030%2C%202025%20and%202024) Details the company's revenue, expenses, and net loss for the three and six months ended June 30, 2025, and 2024 Condensed Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | $12,083 | $6,081 | $22,272 | $11,167 | | Cost of sales | $3,214 | $1,519 | $5,767 | $2,941 | | Gross profit | $8,869 | $4,562 | $16,505 | $8,226 | | Total operating expenses | $15,371 | $10,881 | $28,726 | $19,874 | | Loss from operations | $(6,502) | $(6,319) | $(12,221) | $(11,648) | | Net loss and comprehensive loss | $(6,766) | $(6,277) | $(12,495) | $(11,724) | | Net loss per share (basic and diluted) | $(1.47) | $(1.55) | $(2.94) | $(2.91) | [Condensed Statements of Convertible Preferred Stock and Stockholders' Deficit](index=8&type=section&id=Condensed%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Deficit%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Outlines changes in convertible preferred stock and stockholders' deficit for the periods ended June 30, 2025, and December 31, 2024 Condensed Statements of Convertible Preferred Stock and Stockholders' Deficit (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Series C Preferred Stock | $65,350 | $52,847 | | Additional Paid-In Capital | $593 | $541 | | Accumulated Deficit | $(83,666) | $(71,171) | | Total Stockholders' Deficit | $(83,073) | $(70,630) | [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Summarizes cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(15,197) | $(13,683) | | Net cash used in investing activities | $(910) | $(67) | | Net cash provided by financing activities | $9,454 | $44,626 | | Cash, cash equivalents, and restricted cash at end of period | $33,572 | $38,248 | [Notes to Condensed Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Provides detailed explanations of the company's accounting policies, financial accounts, and significant events [1. Organization](index=11&type=section&id=1.%20Organization) Describes the company's business, recent corporate events, and assessment of liquidity and capital resources - Carlsmed, Inc. is a commercial-stage company in the surgical device sector, designing, manufacturing, and marketing **aprevo®**, an **AI-enabled technology platform** for spine fusion surgery[33](index=33&type=chunk)[34](index=34&type=chunk) - The company effectuated a **1-for-5.58 reverse stock split** on July 10, 2025, retroactively adjusting all stock and per share data[36](index=36&type=chunk) - Completed an Initial Public Offering (IPO) on July 24, 2025, issuing 6,700,000 shares at $15.00 per share, generating **$93.5 million** in net proceeds[38](index=38&type=chunk)[40](index=40&type=chunk) - As of June 30, 2025, the company had **$33.5 million** in cash and cash equivalents and an accumulated deficit of **$83.7 million**. It expects existing cash and IPO proceeds to meet capital requirements for at least 12 months[39](index=39&type=chunk)[41](index=41&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines key accounting principles and policies applied in preparing the condensed financial statements - The unaudited condensed financial statements are prepared in accordance with GAAP for interim financial reporting[42](index=42&type=chunk) - Warrant liabilities are measured at fair value using the 'hybrid method' (combination of option-pricing and probability-weighted expected return methods) and are classified as **Level 3** within the fair value hierarchy[58](index=58&type=chunk)[59](index=59&type=chunk) - Deferred offering costs are capitalized and offset against IPO proceeds upon consummation; **$3.8 million** capitalized as of June 30, 2025[62](index=62&type=chunk)[63](index=63&type=chunk) - The company is evaluating the impact of recently issued accounting standards ASU 2024-03 (Expense Disaggregation Disclosures) and ASU 2023-09 (Income Taxes)[65](index=65&type=chunk)[66](index=66&type=chunk) [3. Balance Sheet Account Detail](index=16&type=section&id=3.%20Balance%20Sheet%20Account%20Detail) This note provides detailed breakdowns for specific balance sheet accounts, including property and equipment, net, and accrued liabilities Balance Sheet Account Detail (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Property and Equipment, Net | $972 | $260 | | Accrued Liabilities | $3,219 | $2,687 | | - Accrued sales agent commissions | $1,620 | $1,420 | | - Accrued legal and patent fees | $821 | $90 | [4. Debt](index=17&type=section&id=4.%20Debt) This note details the Customers Bank Credit Facility, including its amendments, interest rates, warrant issuances, and outstanding principal, as well as future contractual principal payments - The Customers Loan Agreement was amended multiple times, expanding the credit facility from **$12.5 million** to **$27.5 million**, with the maturity date extended to October 31, 2029[69](index=69&type=chunk)[70](index=70&type=chunk)[73](index=73&type=chunk) - The applicable interest rate was **7.75%** as of June 30, 2025. The company issued Series B and Series C warrants in connection with the amendments[70](index=70&type=chunk)[71](index=71&type=chunk)[75](index=75&type=chunk) Debt Metrics (in thousands) | Metric | Value (in thousands) | | :-------------------------------- | :------------------- | | Principal outstanding (June 30, 2025) | $15,625 | | Available to draw (June 30, 2025) | $7,500 | | Additional available upon milestone | $4,400 | | Interest expense (6 months ended June 30, 2025) | $720 | | Interest expense (6 months ended June 30, 2024) | $541 | [5. Common Stock](index=19&type=section&id=5.%20Common%20Stock) This note describes the company's common stock structure, voting rights, and shares reserved for future issuance, including details on the Common Stock Warrant - The company is authorized to issue **23,679,694 shares** of common stock and **15,324,538 shares** of convertible preferred stock[81](index=81&type=chunk) Shares Reserved (as of June 30, 2025) | Category | Shares Reserved (as of June 30, 2025) | | :-------------------------------- | :------------------------------------ | | Preferred stock, convertible | 15,245,731 | | Common stock options outstanding | 2,211,144 | | Restricted stock units outstanding | 112,478 | | Shares available for 2019 Plan | 138,988 | | Series B Warrant | 58,420 | | Series C Warrant | 20,375 | | Common Stock Warrant | 25,863 | | **Total** | **17,812,999** | - A Common Stock Warrant for **25,863 shares** was exercised on August 14, 2025, and is no longer outstanding[84](index=84&type=chunk)[85](index=85&type=chunk) [6. Stock-Based Compensation](index=20&type=section&id=6.%20Stock-Based%20Compensation) This note details the company's stock incentive plans (2019 Plan and 2025 Plan), stock option activity, restricted stock units (RSUs), and stock-based compensation costs - The 2019 Plan authorized **4,055,427 shares** for awards. The 2025 Equity Incentive Plan, adopted July 10, 2025, replaced the 2019 Plan for new grants, with **3,595,177 shares** initially available[86](index=86&type=chunk)[90](index=90&type=chunk) Stock-Based Compensation Metrics | Metric | June 30, 2025 | | :-------------------------------- | :------------ | | Stock Options Outstanding | 2,211,144 | | Weighted Average Exercise Price | $2.54 | | Restricted Stock Units (RSUs) Issued (H1 2025) | 112,478 | | Total Stock-based Compensation Cost (6 months ended June 30, 2025) | $433k | | Total Stock-based Compensation Cost (6 months ended June 30, 2024) | $87k | | Unrecognized Compensation for Unvested Options | $2.9 million | - RSUs' performance condition was met with the IPO on July 24, 2025, and expense recognition will begin in **Q3 2025**[99](index=99&type=chunk) [7. Convertible Preferred Stock](index=22&type=section&id=7.%20Convertible%20Preferred%20Stock) This note provides information on the issuance of Series C convertible preferred stock and its conversion to common stock upon the IPO - The company issued Series C convertible preferred stock in March 2024 (**$38.5 million**), September 2024 (**$14.0 million**), and January 2025 (**$12.0 million**)[101](index=101&type=chunk)[102](index=102&type=chunk) - A deemed dividend of **$0.6 million** was recorded due to Series C issuances below fair value[102](index=102&type=chunk) - All outstanding convertible preferred stock converted into **15,245,731 shares** of common stock upon the IPO on July 24, 2025[103](index=103&type=chunk) [8. Net Loss Per Share](index=24&type=section&id=8.%20Net%20Loss%20Per%20Share) This note explains the calculation of basic and diluted net loss per share, noting that all potentially dilutive common stock equivalents were anti-dilutive due to net losses - Basic and diluted net loss per share are the same due to the company reporting net losses, making all potentially dilutive common stock anti-dilutive[104](index=104&type=chunk) Anti-Dilutive Shares Excluded (as of June 30, 2025) | Anti-Dilutive Shares Excluded (as of June 30, 2025) | Count | | :------------------------------------------------- | :---- | | Stock options outstanding | 2,211,144 | | Preferred stock (common stock equivalent) | 15,245,731 | | Restricted stock units outstanding | 112,478 | | Series B Warrant (common stock equivalent) | 58,420 | | Series C Warrant (common stock equivalent) | 20,375 | | Common Stock Warrant | 25,863 | | **Total** | **17,674,011** | [9. Commitment and Contingencies](index=24&type=section&id=9.%20Commitment%20and%20Contingencies) This note discusses legal matters and operating lease commitments, including details of facility leases and associated expenses - Management believes there are no outstanding legal claims that would have a material adverse effect on the company's financial position, results of operations, or cash flows[108](index=108&type=chunk) - The company has two active operating leases for **23,000 square feet** of space in Carlsbad, California, with terms extending to **July 1, 2028**[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) Lease Commitments (in thousands) | Metric | Value (in thousands) | | :-------------------------------- | :------------------- | | Total undiscounted lease payments (June 30, 2025) | $2,594 | | Total lease expenses (6 months ended June 30, 2025) | $300 | | Total lease expenses (6 months ended June 30, 2024) | $300 | [10. Segment Reporting](index=26&type=section&id=10.%20Segment%20Reporting) This note states that the company operates as a single reportable segment and provides a breakdown of operating financial results by significant expense categories - The company operates as a single reportable segment[116](index=116&type=chunk) Operating Financial Results (in thousands) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | $22,272 | $11,167 | | Net loss | $(12,495) | $(11,724) | [11. Income Taxes](index=27&type=section&id=11.%20Income%20Taxes) This note explains the company's income tax provision, the maintenance of a full valuation allowance on deferred tax assets, and the evaluation of recent tax law changes - The company did not record income tax expense for the three and six months ended June 30, 2025 and 2024[118](index=118&type=chunk) - A full valuation allowance is maintained on net deferred tax assets, as it is more likely-than-not that they will not be monetized[118](index=118&type=chunk) - The company is evaluating the impact of the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, with expected impacts to be included in financial statements beginning **Q3 2025**[120](index=120&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of the company's financial condition, operational results, liquidity, and capital resources [Overview](index=28&type=section&id=Overview) Provides a high-level summary of the company's business, product platform, and recent financial and regulatory achievements - Carlsmed is a commercial-stage medical technology company pioneering **AI-enabled personalized spine surgery solutions** with its **aprevo Technology Platform**[123](index=123&type=chunk) - The aprevo platform includes AI-enabled software, custom-designed interbody implants, and single-use surgical instruments for lumbar spine fusion, with cervical spine fusion expected to commercialize in **2026**[123](index=123&type=chunk) - The company achieved significant revenue growth: **98.7%** for the three months ended June 30, 2025 (**$12.1 million**) and **99.4%** for the six months ended June 30, 2025 (**$22.3 million**) compared to the prior year periods[125](index=125&type=chunk) - Key regulatory milestones include **FDA Breakthrough Device Designations**, **510(k) clearances** for lumbar and cervical spine fusion, and **CMS New Technology Add-On Payments (NTAP)** for both indications[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - The company completed its IPO on July 24, 2025, raising **$93.5 million** in net proceeds[130](index=130&type=chunk) [Key Factors Affecting Our Results of Operations and Performance](index=29&type=section&id=Key%20Factors%20Affecting%20Our%20Results%20of%20Operations%20and%20Performance) Discusses the primary drivers influencing the company's operational results and financial performance - Market adoption of the aprevo Technology Platform is a key driver, with over **1,500 patients** treated and **199 surgeon users** as of June 30, 2025, up from 116 in the prior year[132](index=132&type=chunk) - Expansion of the product portfolio, including the recently FDA-cleared aprevo Technology Platform for cervical spine fusion (commercialization expected **2026**), is a focus for R&D investments[134](index=134&type=chunk)[135](index=135&type=chunk) - Reimbursement policies, including new **MS-DRG codes** providing premium rates for custom-made anatomically designed (CMAD) interbody fusion devices and **CMS X-codes** for cervical spine procedures (effective **October 1, 2025**), significantly impact market acceptance[137](index=137&type=chunk)[138](index=138&type=chunk) [Key Components of Our Results of Operations](index=30&type=section&id=Key%20Components%20of%20Our%20Results%20of%20Operations) Explains the significant elements contributing to the company's revenue, expenses, and overall financial outcomes - Revenue is recognized in the period of the aprevo interbody implant's use in a spine fusion surgical procedure[139](index=139&type=chunk) - Gross margin is expected to remain relatively constant in the short term and modestly increase over the medium and long term due to economies of production scale and increased leverage of AI technologies[141](index=141&type=chunk) - Operating expenses (R&D, Sales & Marketing, G&A) are expected to increase in absolute value to support growth and public company operations, but decrease as a percentage of revenue over time[142](index=142&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - Other income (expense) includes interest expense from the Customers Loan Agreement, interest income from cash and cash equivalents, and changes in the fair value of warrant liabilities[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Presents a detailed comparative analysis of the company's financial performance for the reported periods Results of Operations (Three Months Ended June 30, in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | | Revenue | $12,083 | $6,081 | $6,002 | 98.7% | | Cost of sales | $3,214 | $1,519 | $1,695 | 111.6% | | Gross profit | $8,869 | $4,562 | $4,307 | 94.4% | | Research and development | $4,160 | $3,998 | $162 | 4.1% | | Sales and marketing | $7,869 | $4,873 | $2,996 | 61.5% | | General and administrative | $3,342 | $2,010 | $1,332 | 66.3% | | Net loss | $(6,766) | $(6,277) | $(489) | 7.8% | Results of Operations (Six Months Ended June 30, in thousands) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :--------- | :--------- | | Revenue | $22,272 | $11,167 | $11,105 | 99.4% | | Cost of sales | $5,767 | $2,941 | $2,826 | 96.1% | | Gross profit | $16,505 | $8,226 | $8,279 | 100.6% | | Research and development | $7,310 | $7,254 | $56 | 0.8% | | Sales and marketing | $14,608 | $8,470 | $6,138 | 72.5% | | General and administrative | $6,808 | $4,150 | $2,658 | 64.0% | | Net loss | $(12,495) | $(11,724) | $(771) | 6.6% | - Gross margin for the three months ended June 30, 2025, decreased to **73.4%** from **75.0%** due to expedite production fees and other material costs[153](index=153&type=chunk) - Interest income decreased by **$0.1 million (21.5%)** for the three months ended June 30, 2025, due to lower daily average cash balances[163](index=163&type=chunk) [Non-GAAP Financial Measures](index=36&type=section&id=Non-GAAP%20Financial%20Measures) Defines and reconciles non-GAAP financial measures, including EBITDA and Adjusted EBITDA - **EBITDA** is defined as net income (loss) adjusted for net interest, income tax, depreciation, and amortization[168](index=168&type=chunk) - **Adjusted EBITDA** is defined as EBITDA further adjusted to exclude stock-based compensation expense and change in fair value of warrant liabilities[168](index=168&type=chunk) Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (%) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Adjusted EBITDA | $(6,183) | $(6,232) | (0.8)% | | | | | | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (%) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Adjusted EBITDA | $(11,687) | $(11,486) | 1.7% | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet its short-term and long-term financial obligations and funding sources - The company has historically financed operations through convertible preferred stock sales, debt facilities, and product sales, incurring net losses and negative cash flows from operations since inception[171](index=171&type=chunk)[173](index=173&type=chunk) - As of June 30, 2025, the company had **$33.5 million** in cash and cash equivalents, **$15.6 million** debt outstanding, and an accumulated deficit of **$83.7 million**[171](index=171&type=chunk) - The IPO on July 24, 2025, provided **$93.5 million** in net proceeds, which, combined with existing cash and available debt, is expected to fund operations for at least the next 12 months[172](index=172&type=chunk)[180](index=180&type=chunk) - The Customers Loan Agreement provides **$7.5 million** available for immediate draw, with an additional **$4.4 million** contingent on revenue milestones[171](index=171&type=chunk) Cash Flow Activities (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(15,197) | $(13,683) | | Net cash used in investing activities | $(910) | $(67) | | Net cash provided by financing activities | $9,454 | $44,626 | [Contractual Obligations and Other Material Cash Commitments](index=41&type=section&id=Contractual%20Obligations%20and%20Other%20Material%20Cash%20Commitments) Details the company's significant contractual obligations and future cash commitments - As of June 30, 2025, the total principal amount outstanding under the Customers Loan Agreement was **$15.6 million**, maturing on **October 31, 2029**[191](index=191&type=chunk) - Contractual obligations for operating lease payments totaled **$2.6 million** as of June 30, 2025, due over **36 months**[192](index=192&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=43&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) Highlights the accounting policies requiring significant management judgment and estimation - There have been no material changes to the critical accounting policies previously disclosed in the IPO Prospectus[193](index=193&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=43&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) Discusses the impact of new and recently adopted accounting standards on the financial statements - Refer to Note 2 – Summary of Significant Accounting Policies for information about recent accounting pronouncements[194](index=194&type=chunk) [Emerging Growth Company and Smaller Reporting Company Status](index=43&type=section&id=Emerging%20Growth%20Company%20and%20Smaller%20Reporting%20Company%20Status) Explains the company's status as an emerging growth and smaller reporting company and associated disclosure elections - The company qualifies as an **emerging growth company** under the JOBS Act, allowing for reduced disclosure requirements[195](index=195&type=chunk) - The company has elected to 'opt out' of the extended transition period for complying with new or revised financial accounting standards[195](index=195&type=chunk) - The company is also a **smaller reporting company**, which provides additional reduced disclosure obligations[197](index=197&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item states that there are no quantitative and qualitative disclosures about market risk applicable to the company - This item is not applicable[198](index=198&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with the participation of the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures, concluding they were effective at a reasonable assurance level as of June 30, 2025. No material changes in internal control over financial reporting were reported - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[199](index=199&type=chunk) - There have been no material changes in internal control over financial reporting during the period covered by this report[200](index=200&type=chunk) - The effectiveness of any internal control system is subject to inherent limitations[201](index=201&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) Provides additional information not covered in the financial statements, including legal, equity, and other disclosures [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This item refers to Note 9 – Commitments and Contingencies for discussion regarding legal proceedings - Refer to Note 9 – Commitments and Contingencies for discussion regarding legal proceedings[203](index=203&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This item states that there have been no material changes to the risk factors previously described in the IPO Prospectus - There have been no material changes to the risk factors previously described in the IPO Prospectus[204](index=204&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item reports on unregistered sales of common stock from stock option exercises and details the use of proceeds from the recent IPO - During the quarter ended June 30, 2025, the company issued **446,617 shares** of common stock upon the exercise of stock options for aggregate proceeds of **$0.2 million**[205](index=205&type=chunk) - The net proceeds from the IPO, completed on July 24, 2025, were approximately **$88.3 million**[206](index=206&type=chunk) - IPO proceeds are intended to support commercialization (**$24.7 million** for sales and marketing), fund R&D activities (**$45.9 million**), and for working capital and general corporate purposes[207](index=207&type=chunk) - There has been no material change in the intended use of proceeds from the IPO[208](index=208&type=chunk) [Item 3. Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item states that there are no defaults upon senior securities - None[209](index=209&type=chunk) [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item states that mine safety disclosures are not applicable - Not applicable[210](index=210&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) This item reports that none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025 - None of the company's directors or officers adopted or terminated a **Rule 10b5-1 trading arrangement** during the fiscal quarter ended June 30, 2025[211](index=211&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This item lists the exhibits filed with the Form 10-Q, including corporate documents, various agreements, and certifications - The exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, various warrants, stock incentive plans, employment agreements, loan and security agreements, and certifications[212](index=212&type=chunk)[214](index=214&type=chunk) [Signatures](index=50&type=section&id=Signatures) This section contains the signatures of the Principal Executive Officer and Principal Financial Officer, certifying the report - The report was signed by Michael Cordonnier (Chief Executive Officer and President) and Leonard Greenstein (Chief Financial Officer) on August 28, 2025[218](index=218&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) Carlsmed reported strong Q2 2025 results, with revenue nearly doubling, driven by AI-enabled aprevo® platform adoption [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Carlsmed reported strong financial results for the second quarter of 2025, with revenue nearly doubling year-over-year, driven by the increased adoption of its AI-enabled aprevo® technology platform Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | YOY Growth | | :---------------- | :------ | :------ | :--------- | | Revenue | $12.1M | $6.1M | **99%** | | Gross Profit | $8.9M | $4.6M | **93.5%** | | Gross Margin | 73.4% | 75.0% | **-1.6 pp** | | Net Loss | $(6.8)M | $(6.3)M | **7.9%** | | Adjusted EBITDA Loss | $(6.2)M | $(6.2)M | **0.0%** | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO highlighted strong commercial performance driven by the adoption of the aprevo® platform and its ability to deliver favorable patient outcomes. The company also successfully completed its first personalized cervical spine surgery, aiming to become the new standard of care - Strong commercial performance was driven by the continued adoption of the **AI-enabled aprevo® technology platform** and its ability to deliver more favorable patient outcomes[2](index=2&type=chunk) - Successfully completed the first personalized cervical spine surgery using the aprevo® technology platform in July, with a launch planned for **2026**[2](index=2&type=chunk) - Carlsmed is well-positioned for continued scale and aims to become the new standard of care in spine fusion surgery[2](index=2&type=chunk) [Second Quarter 2025 Detailed Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Detailed%20Financial%20Results) Carlsmed's Q2 2025 financial performance is detailed, covering revenue, gross profit, operating expenses, net loss, and Adjusted EBITDA [Revenue and Gross Profit Performance](index=1&type=section&id=Revenue%20and%20Gross%20Profit%20Performance) Revenue for Q2 2025 increased by 99% year-over-year, primarily due to a higher volume of surgical procedures. Gross profit also saw significant growth, though the gross margin slightly decreased due to expedite production fees Revenue and Gross Profit (Three Months Ended June 30) | Metric | 2025 ($M) | 2024 ($M) | YOY Change ($M) | YOY Change (%) | | :------------- | :-------- | :-------- | :-------------- | :------------- | | Revenue | $12.1 | $6.1 | $6.0 | **99%** | | Cost of Sales | $3.2 | $1.5 | $1.7 | **113.3%** | | Gross Profit | $8.9 | $4.6 | $4.3 | **93.5%** | | Gross Margin | 73.4% | 75.0% | -1.6 pp | **-2.1%** | - The increase in revenue was driven by the increased number of surgical procedures utilizing the **aprevo® technology platform**[3](index=3&type=chunk) - The decrease in gross margin was primarily driven by expedite production fees charged by the contract manufacturer to meet customer timing requirements[3](index=3&type=chunk) [Operating Expenses Breakdown](index=1&type=section&id=Operating%20Expenses%20Breakdown) Total operating expenses increased by 41% in Q2 2025, primarily due to higher personnel costs across R&D, sales and marketing expansion, and increased general and administrative costs associated with becoming a publicly traded company Operating Expenses (Three Months Ended June 30) | Expense Category | 2025 ($M) | 2024 ($M) | YOY Change ($M) | YOY Change (%) | | :----------------------- | :-------- | :-------- | :-------------- | :------------- | | Research and Development | $4.2 | $4.0 | $0.2 | **5.0%** | | Sales and Marketing | $7.9 | $4.9 | $3.0 | **61.2%** | | General and Administrative | $3.3 | $2.0 | $1.3 | **65.0%** | | **Total Operating Expenses** | **$15.4** | **$10.9** | **$4.5** | **41.3%** | - R&D expenses increased due to higher personnel costs supporting product development and AI initiatives, partially offset by lower prototype and COMPASS registry costs[3](index=3&type=chunk) - Sales and marketing expenses rose due to personnel additions, variable sales expenses tied to revenue growth, and increased marketing efforts[3](index=3&type=chunk) - G&A expenses increased primarily due to personnel additions for business growth and costs associated with the transition to a publicly traded company[3](index=3&type=chunk) [Net Loss and Adjusted EBITDA](index=1&type=section&id=Net%20Loss%20and%20Adjusted%20EBITDA) Carlsmed reported a slightly increased net loss in Q2 2025 compared to the prior year, while its Adjusted EBITDA loss remained consistent Net Loss and Adjusted EBITDA (Three Months Ended June 30) | Metric | 2025 ($M) | 2024 ($M) | YOY Change ($M) | YOY Change (%) | | :----------------- | :-------- | :-------- | :-------------- | :------------- | | Net Loss | $(6.8) | $(6.3) | $(0.5) | **7.9%** | | Adjusted EBITDA Loss | $(6.2) | $(6.2) | $0.0 | **(0.8)%** | [2025 Full Year Financial Outlook](index=2&type=section&id=2025%20Full%20Year%20Financial%20Outlook) Carlsmed provides its full-year 2025 financial outlook, projecting significant revenue growth compared to the prior year [2025 Full Year Financial Outlook](index=2&type=section&id=2025%20Full%20Year%20Financial%20Outlook) Carlsmed anticipates full-year 2025 revenue to be between $45.5 million and $47.5 million, reflecting a substantial year-over-year growth rate of 67% to 75% compared to 2024 2025 Full Year Financial Outlook | Metric | Guidance Range | | :----- | :------------- | | Revenue | **$45.5M - $47.5M** | | YOY Growth (vs 2024) | **67% - 75%** | [Recent Business Developments and Financial Position](index=2&type=section&id=Recent%20Business%20Developments%20and%20Financial%20Position) This section highlights Carlsmed's recent strategic milestones and its current cash and liquidity position [Strategic Milestones](index=2&type=section&id=Strategic%20Milestones) Carlsmed achieved key strategic milestones, including the first personalized cervical spine surgery and securing New Technology Add-On Payment (NTAP) reimbursement for its aprevo® cervical procedures - The first personalized cervical spine surgery using the **AI-enabled aprevo® technology platform** was successfully performed[10](index=10&type=chunk) - aprevo® cervical procedures received **CMS New Technology Add-On Payment (NTAP) reimbursement**, effective October 1, 2025[10](index=10&type=chunk) [Cash and Liquidity](index=2&type=section&id=Cash%20and%20Liquidity) As of June 30, 2025, Carlsmed maintained a healthy cash position, which was further bolstered by significant net proceeds from its initial public offering in July 2025 Cash and Liquidity | Metric | As of June 30, 2025 | | :-------------------- | :------------------ | | Cash and cash equivalents | **$33.5 million** | | Net proceeds from IPO (July 2025) | **$93.5 million** | [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) This section defines Adjusted EBITDA, a non-GAAP financial measure, and explains its rationale and limitations for investors [Adjusted EBITDA Definition and Rationale](index=2&type=section&id=Adjusted%20EBITDA%20Definition%20and%20Rationale) Carlsmed utilizes Adjusted EBITDA as a non-GAAP financial measure to provide investors with a clearer view of its core operating performance by excluding certain non-cash or non-recurring items, facilitating comparisons across periods and industry peers - Adjusted EBITDA is calculated as net income (loss) adjusted to exclude net interest expense/income, income tax expense/benefit, depreciation and amortization expense, stock-based compensation expense, and change in fair value of warrant liabilities[7](index=7&type=chunk) - Management believes Adjusted EBITDA helps investors understand the Company's performance in a manner similar to management's evaluation for strategic and annual operating planning[8](index=8&type=chunk) - Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP financial results[9](index=9&type=chunk) [Conference Call and Company Information](index=2&type=section&id=Conference%20Call%20and%20Company%20Information) This section provides details on the Q2 2025 conference call, company overview, forward-looking statements, and contact information [Webcast & Conference Call Details](index=2&type=section&id=Webcast%20%26%20Conference%20Call%20Details) Carlsmed hosted a conference call and concurrent webcast on August 28, 2025, to discuss its second quarter and first half 2025 financial performance - A conference call and webcast were held on **August 28, 2025, at 4:30 pm Eastern Time** to review Q2 and first half 2025 performance[5](index=5&type=chunk) [About Carlsmed](index=3&type=section&id=About%20Carlsmed) Carlsmed is a medical technology company dedicated to pioneering AI-enabled personalized spine surgery solutions with the goal of improving patient outcomes and reducing healthcare costs - Carlsmed is a medical technology company pioneering **AI-enabled personalized spine surgery solutions**[11](index=11&type=chunk) - The company's mission is to improve outcomes and decrease the cost of healthcare for spine surgery and beyond[11](index=11&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains cautionary forward-looking statements regarding future expectations and plans, emphasizing that actual results may differ materially due to various risk factors and that these statements are valid only as of the press release date - Statements about future expectations, plans, and prospects, including the ability to scale the aprevo® platform and launch aprevo® cervical in 2026, constitute forward-looking statements[12](index=12&type=chunk) - Actual results may differ materially from forward-looking statements due to various important factors, including those set forth under 'Risk Factors' in the S-1 Registration Statement[12](index=12&type=chunk) - Carlsmed disclaims any obligation to update these forward-looking statements, which should not be relied upon as representing views after the press release date[12](index=12&type=chunk) [Investor and Media Contacts](index=3&type=section&id=Investor%20and%20Media%20Contacts) Contact information for investor relations and media inquiries is provided for stakeholders seeking further information - Investor Relations contact: **Caroline Corner, PhD at IR@Carlsmed.com**[13](index=13&type=chunk) - Media contact: **LeAnn Burton, Senior Director Brand Marketing at LBurton@Carlsmed.com**[13](index=13&type=chunk) [Condensed Financial Statements](index=4&type=section&id=Condensed%20Financial%20Statements) This section presents Carlsmed's unaudited condensed statements of operations, balance sheets, and Adjusted EBITDA reconciliation [Condensed Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents the unaudited condensed statements of operations for the three and six months ended June 30, 2025, and 2024, detailing the company's revenue, cost of sales, operating expenses, and net loss Condensed Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $12,083 | $6,081 | $22,272 | $11,167 | | Cost of sales | $3,214 | $1,519 | $5,767 | $2,941 | | Gross profit | $8,869 | $4,562 | $16,505 | $8,226 | | Total operating expenses | $15,371 | $10,881 | $28,726 | $19,874 | | Loss from operations | $(6,502) | $(6,319) | $(12,221) | $(11,648) | | Net loss and comprehensive loss | $(6,766) | $(6,277) | $(12,495) | $(11,724) | | Net loss per share attributable to common stockholders, basic and diluted | $(1.47) | $(1.55) | $(2.94) | $(2.91) | [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) This section provides the unaudited condensed balance sheets as of June 30, 2025, and December 31, 2024, detailing the company's assets, liabilities, and stockholders' deficit Condensed Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | **Assets** | | | | Cash and cash equivalents | $33,472 | $40,125 | | Accounts receivable, net | $9,711 | $6,766 | | Total current assets | $46,192 | $49,351 | | Total assets | $53,270 | $51,824 | | **Liabilities, Convertible Preferred Stock, and Stockholders' Deficit** | | | | Total current liabilities | $9,484 | $8,818 | | Total liabilities | $27,614 | $26,228 | | Total stockholders' deficit | $(83,073) | $(70,630) | [Reconciliation of GAAP Net Loss to Adjusted EBITDA](index=6&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA) This section provides a reconciliation of GAAP net loss to Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, outlining the specific adjustments made to derive the non-GAAP measure Reconciliation of GAAP Net Loss to Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(6,766) | $(6,277) | $(12,495) | $(11,724) | | Interest (income) expense | $27 | $(103) | $4 | $15 | | Depreciation and amortization | $61 | $35 | $101 | $75 | | EBITDA | $(6,678) | $(6,345) | $(12,390) | $(11,634) | | Stock-based compensation | $258 | $52 | $433 | $87 | | Change in fair value of warrant liabilities | $237 | $61 | $270 | $61 | | Adjusted EBITDA | $(6,183) | $(6,232) | $(11,687) | $(11,486) |

Core Insights - Carlsmed, Inc. reported a revenue of $12.1 million for Q2 2025, marking a 99% year-over-year growth from $6.1 million in Q2 2024 [1][3] - The company anticipates full-year revenue to be between $45.5 million and $47.5 million, representing a growth of 67% to 75% compared to 2024 [4] Financial Performance - Gross profit for Q2 2025 was $8.9 million, up from $4.6 million in Q2 2024, with a gross margin of 73.4% compared to 75.0% in the prior year [3] - Operating expenses increased to $15.4 million in Q2 2025 from $10.9 million in Q2 2024, driven by higher sales and marketing costs [3] - Net loss for Q2 2025 was $6.8 million, slightly higher than the $6.3 million loss in Q2 2024 [3] Technology and Market Position - The growth in revenue was attributed to the increased adoption of the AI-enabled aprevo technology platform, which is recognized for improving patient outcomes compared to traditional devices [2] - Carlsmed successfully completed its first personalized cervical spine surgery using the aprevo platform in July 2025, with plans for a commercial launch in 2026 [2][3] Cash Position - As of June 30, 2025, Carlsmed had cash and cash equivalents of $33.5 million, bolstered by $93.5 million in net proceeds from its initial public offering in July 2025 [3]

Group 1 - Carlsmed, Inc. is set to report its second quarter 2025 financial results on August 28, 2025, after market close [1] - A conference call and webcast will be held on the same day at 1:30 PM Pacific Time to discuss the financial results [2] - Carlsmed specializes in AI-enabled personalized spine surgery solutions, aiming to improve healthcare outcomes and reduce costs [3]

Group 1: IPO Performance Overview - Seven companies went public last week, including one small IPO and five SPACs submitting initial applications [1][7] - NIQ Global Intelligence priced its IPO below the midpoint, raising $1.1 billion at a market cap of $6.2 billion, but saw a 6% decline in stock price [1][5] - Accelerant's IPO was priced above the range, raising $724 million at a market cap of $4.7 billion, with a stock price increase of 42% [1][5] Group 2: Company Highlights - McGraw Hill's IPO was priced below the range, raising $415 million with a market cap of $3.3 billion, and experienced a 1% drop in stock price [2][5] - Carlsmed raised $101 million at a market cap of $430 million, with a 3% decline in stock price [2][5] - Dreamland's IPO was priced at the lower end, raising $8 million with a market cap of $124 million, and saw a 6% drop in stock price [3][5] Group 3: Emerging Companies - Cre8 Enterprise raised $96 million at a market cap of $6 million, with a 9% increase in stock price [3][5] - Linkhome Holdings raised $6 million at a market cap of $64 million, experiencing a significant stock price increase of 158% [4][5] - Hillhouse Frontier Holdings submitted an initial application for a small IPO, targeting $6 million with a market cap of $106 million [7] Group 4: Upcoming IPOs - Figma plans to raise $979 million with a projected market cap of $15.9 billion, focusing on browser-based design software [9][11] - Shoulder Innovations aims to raise $100 million with a market cap of $432 million, providing advanced implant systems for shoulder surgeries [10][11] - Ambiq Micro plans to raise $80 million with a market cap of $435 million, specializing in ultra-low power semiconductor solutions [10][11]

As filed with the Securities and Exchange Commission on July 15, 2025. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 1 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Carlsmed, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 3841 (Primary Standard Industrial Classification Code Number) 83-1081863 (I.R.S. Employer Identification No.) Carlsmed, Inc. 1800 Aston Ave, Su ...

As filed with the Securities and Exchange Commission on June 26, 2025. Registration No. 333– UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Carlsmed, Inc. (Exact name of registrant as specified in its charter) 3841 83-1081863 (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) Carlsmed, Inc. 1800 Aston Ave, Suite 100 Carlsbad, California 92008 (760) 766-1923 (Address, including ...