What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-26 compared with 2024-02-27 · 145 added, 273 removed, 1134 unchanged (27% of the section changed)

16 unchanged sentences

In anticipation of the filing of this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer, with the assistance of other members of our management, performed an evaluation of any change in internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

We are in the process of implementing a new enterprise resource planning (“ERP”) system that affects many of our financial processes and is expected to improve the efficiency and effectiveness of certain financial and business transaction processes, as well as the underlying systems environment.

There has been no change to our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

11 unchanged sentences

Executive Vice President and Chief Financial Officer

November 13, 2023

April 30, 2024

Tyson Marshall

General Counsel and Corporate Secretary

November 14, 2023

August 14, 2024

December 31, 2025

Karen McGinnis

Member of the Board of Directors

December 31, 2025

Disclosure Regarding Foreign J urisdictions that Prevent Inspections

118 unchanged sentences

(Exhibit 10.29)

Exhibit Description

Incorporated by

Reference herein

Employment Agreement by and among Dave Sponsel, Alphatec Spine, Inc., and Alphatec Holdings, Inc., dated March 4, 2018

3 unchanged sentences

(Exhibit 10.2)

Exhibit Description

Incorporated by

Reference herein

Severance Agreement between Patrick S.

23 unchanged sentences

(Exhibit 10.1)

Exhibit Description

Incorporated by

Reference herein

First Amendment to 2016 Equity Incentive Plan

4 unchanged sentences

(Exhibit 10.2)

Exhibit Description

Incorporated by

Reference herein

Fourth Amendment to 2016 Equity Incentive Plan

25 unchanged sentences

Sixth Amendment to the 2016 Employment Inducement Award Plan, dated October 25, 2023

(Exhibit 10.39)

Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under the 2016 Employment Inducement Award Plan

(Exhibit 10.3)

Exhibit Description

Incorporated by

Reference herein

Form of Stock Option Grant Notice and Stock Option Agreement under the 2016 Employment Inducement Award Plan

3 unchanged sentences

Loan Agreements

Credit, Security and Guaranty Agreement, dated as of January 6, 2023, by and among Alphatec Holdings, Inc., as borrower, the guarantors from time to time party thereto, the lenders from time to time party thereto, and Wilmington Trust, National Association, as agent

Credit, Security and Guaranty Agreement, dated as of January 6, 2023, by and among

(Exhibit 10.1)

Exhibit Description

Incorporated by

Reference herein

Alphatec Holdings, Inc., as borrower, the guarantors from time to time party thereto, the lenders from time to time party thereto, and Wilmington Trust, National Association, as agent

Credit Agreement, dated as of September 29, 2022, by and among Alphatec Holdings, Inc., Alphatec Spine, Inc.

4 unchanged sentences

(Exhibit 10.2)

Amendment No.

1, dated as of October 29, 2024, to Credit, Security and Guaranty Agreement, dated as of January 6, 2023, by and among Alphatec Holdings, Inc., as borrower, the guarantors from time to time party thereto, the lenders from time to time party thereto, and Wilmington Trust, National Association, as agent

(Exhibit 10.1)

Amendment No.

2, dated April 23, 2024, to Credit, Security and Guaranty Agreement, dated as of January 6, 2023, by and among Alphatec Holdings, Inc., Alphatec Spine, Inc., SafeOp Surgical, Inc., MidCap Funding IV Trust, as agent and the lenders party thereto

(Exhibit 10.1)

Amendment No.

3 to Credit, Security and Guaranty Agreement, dated as of January 6, 2023, by and among Alphatec Holdings, Inc., Alphatec Spine, Inc., SafeOp Surgical, Inc., MidCap Funding IV Trust, as agent and the lenders party thereto

(Exhibit 10.2)

Insider Trading Policy

Subsidiaries of the Registrant and Wholly Owned Subsidiaries of the Registrant's Subsidiaries

Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit Description

1 unchanged sentence

Reference herein

Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification pursuant to 18 U.S.C.

6 unchanged sentences

() Confidential treatment has been granted by the Securities and Exchange Commission as to certain portions.

Form 10 -K Summary

Not applicable

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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Mortimer Berkowitz III

/s/Beth Altman

February 27, 2024

/s/Evan Bakst

6 unchanged sentences

February 26, 2025

/s/Marie Meynadier

February 26, 2025

Marie Meynadier

February 27, 2024

/s/Jeffrey P.

February 26, 2025

/s/Keith Valentine

February 26, 2025

Keith Valentine

February 26, 2025

87 unchanged sentences

Intangible assets, net

Liabilities and Stockholders’ Equity (Deficit)

Liabilities and Stockholders’ (Deficit) Equity

Current liabilities:

11 unchanged sentences

Commitments and contingencies (Note 7)

Stockholders’ equity (deficit):

Series A convertible preferred stock, $ 0.0001 par value;

15 shares authorized, and 0 shares issued and outstanding at December 31, 2023 and 2022

Stockholders’ (deficit) equity:

Common stock, $ 0.0001 par value;

5 unchanged sentences

Accumulated deficit

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

Total stockholders’ (deficit) equity

Total liabilities and stockholders’ (deficit) equity

See accompanying notes to consolidated financial statements.

4 unchanged sentences

Revenue from products and services

Revenue from international supply agreement

Total revenue

Cost of sales

3 unchanged sentences

Litigation-related expenses

Amortization of acquired intangible assets

Amortization expense

Transaction-related expenses

2 unchanged sentences

Operating loss

Interest and other expense, net:

Other expense, net:

Interest expense, net

Loss on debt extinguishment, net

Other income (expense), net

Total interest and other expense, net

Other (expense) income, net

Total other expense, net

Net loss before taxes

Income tax benefit

Income tax provision (benefit)

Net loss per share, basic and diluted

9 unchanged sentences

ALPHATEC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF ST OCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF ST OCKHOLDERS’ (DEFICIT) EQUITY

(In thousands)

12 unchanged sentences

Reclassification of equity-based liability

Common stock offerings, net of offering costs of $ 12,136

Issuance of common stock warrant

Common stock issued for asset acquisition

Foreign currency translation adjustments

2 unchanged sentences

ALPHATEC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(In thousands)

5 unchanged sentences

Stock-based compensation

Sales agent equity incentives

Common stock issued for conversion

of Series A preferred stock

Common stock issued for warrant exercises

4 unchanged sentences

shares withheld for tax liability

Reclassification of liability-classified

Common stock issued for asset acquisition

Reclassification of equity-based liability

Common stock offerings, net of offering costs of $ 12,136

Foreign currency translation adjustments

2 unchanged sentences

ALPHATEC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(In thousands)

Shareholder note

Accumulated other comprehensive

Accumulated other

stockholders’

income (loss)

comprehensive loss

(deficit) equity

Balance at December 31, 2021

1 unchanged sentence

Sales agent equity incentives

Common stock issued for warrant

Common stock issued for conversion

of Series A preferred stock

Common stock issued for warrant exercises

Common stock issued for employee

3 unchanged sentences

shares withheld for tax liability

Issuance of common stock for private

placement, net of offering costs

Shareholder note receivable

Repurchase of common stock

Purchase of capped calls

Reclassification of liability-classified

Common stock issued for asset acquisition

Foreign currency translation adjustments

13 unchanged sentences

Loss on disposal of assets

Loss on debt extinguishment, net

Impairment of investment

Changes in operating assets and liabilities:

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Acquisition of business, net of cash acquired

Purchase of OCEANE

Cash paid for investments

Settlement of forward contract

Net cash used in investing activities

1 unchanged sentence

Proceeds from Revolving Credit Facility and line of credit

Repayment of Revolving Credit Facility and line of credit

Proceeds from term debt, net of debt discount

Net cash paid for common stock exercises

Payment of debt issuance costs

Proceeds from common stock offerings, net of offering costs

Proceeds from issuance of convertible notes

Net cash paid for common stock exercises

Purchase of capped calls

Repurchase of common stock

Proceeds from term debt, net of debt discount

Repayment of Revolving Credit Facility and line of credit

Repayment of OCEANEs

Repayment of Squadron Medical Term Loan

Repayment of Inventory Financing Agreement

Net cash provided by financing activities

7 unchanged sentences

Supplemental disclosure of noncash investing and financing activities:

PPP Loan Forgiveness

Debt issuance costs

1 unchanged sentence

Financed property and equipment

Financed inventory

Purchases of property and equipment in accounts payable and accrued expenses

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Basis of Presentation and Principles of Consolidation

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S.

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S.

GAAP") and include the accounts of the Company and its wholly owned subsidiaries.

2 unchanged sentences

The Company operates in one reportable business segment.

Prior-year Adjustment

Subsequent to the issuance of the Company’s consolidated financial statements as of and for the year ended December 31, 2022, the Company identified that a deferred tax liability and additional goodwill related to the acquisition of EOS should have been recorded at the time of the acquisition.

The Company corrected the errors in the accompanying consolidated financial statements as of the earliest year presented and has concluded that the correction of these errors is not material to the previously issued financial statements.

The correction to the accompanying consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive loss, consolidated statements of stockholders' equity, and consolidated statements of cash flows are as follows (in thousands):

At December 31, 2022

Consolidated Balance Sheets

Other long-term liabilities

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders' deficit

Total liabilities and stockholders' deficit

Year Ended December 31, 2022

Year Ended December 31, 2021

Consolidated Statements of Operations

Income tax provision (benefit)

Net loss per share, basic and diluted

Year Ended December 31, 2022

Year Ended December 31, 2021

Consolidated Statements of Comprehensive Loss

Foreign currency translation adjustments

Comprehensive loss

At December 31, 2022

At December 31, 2021

Consolidated Statements of Stockholders' (Deficit) Equity

Foreign currency translation adjustments

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders' (deficit) equity

Year Ended December 31, 2022

Year Ended December 31, 2021

Consolidated Statements of Cash Flows

Other long-term liabilities

Net cash used for operating activities

Effect of exchange rate changes on cash

Reclassification

Certain financial statement line items in the consolidated financial statements for the year ended December 31, 2022 have been disaggregated to conform to the current year’s presentation.

Certain financial statement line items in the consolidated financial statements for the year ended December 31, 2022 have been aggregated to conform to the current year’s presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses.

Actual results could differ from those estimates.

Significant items subject to such estimates and assumptions include the useful lives of property and equipment, goodwill, intangible assets, allowances for doubtful accounts, deferred tax assets, inventory, stock-based compensation, revenues, income tax uncertainties, and other contingencies.

The carrying amount of financial instruments consisting of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses, and short-term debt included in the Company’s consolidated financial statements are reasonable estimates of fair value due to their short maturities.

Concentrations of Credit Risk and Significant Customers

14 unchanged sentences

If the historical data used to calculate the allowance provided for doubtful accounts does not reflect the Company’s future ability to collect outstanding receivables or if the financial condition of customers were to deteriorate, resulting in impairment of their ability to make payments, an increase in the provision for doubtful accounts may be required.

The Company’s accounts receivable generally have net 30 -day payment terms.

The Company’s accounts receivable have payment terms commensurate with the local business practice depending on the country of sale.

The Company generally does not allow returns of products that have been delivered.

3 unchanged sentences

Most of the Company’s inventory is comprised of finished goods, which is primarily produced by third-party suppliers.

Specialized implants, fixation products, and biologics are determined by utilizing a standard cost method that includes capitalized variances which approximates the weighted average cost.

Imaging equipment and related parts are valued at weighted average cost.

Specialized implants, fixation products, biologics, and imaging equipment are determined by utilizing a standard cost method that includes capitalized variances which approximates the weighted average cost.

Component parts related to the imaging equipment are valued at weighted average cost.

Inventories are stated at the lower of cost or net realizable value.

35 unchanged sentences

Valuation of Intangible Assets

Intangible assets are comprised primarily of purchased technology, customer relationships, trade name, trademarks, and in-process research and development.

Intangible assets are comprised primarily of purchased technology, internally developed software, customer relationships, trade name, trademarks, and in-process research and development.

The Company makes significant judgments in relation to the valuation of intangible assets resulting from business combinations and asset acquisitions.

22 unchanged sentences

Warrants are accounted for in accordance with the applicable accounting guidance as either derivative liabilities or as equity instruments depending on the specific terms of the agreements.

All warrants qualify for classification within stockholders' equity.

All warrants qualify for classification within stockholders' (deficit) equity.

Fair Value Measurements

7 unchanged sentences

The Company recognizes revenue from product sales in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Revenue from Contracts with Customers (“Topic 606”).

This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements, and financial instruments.

This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases.

Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.

6 unchanged sentences

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

Sales are derived primarily from the sale of spinal implant products, imaging equipment, and related services to hospitals and medical centers through direct sales representatives and independent sales agents.

Sales are derived primarily from the sale of spinal implant products, imaging equipment, and related services to hospitals and medical centers.

Revenue is recognized when obligations under the terms of a contract with customers are satisfied, which occurs with the transfer of control of products to customers, either upon shipment of the product or delivery of the product to the customer depending on the shipping terms, or when the products are used in a surgical procedure (implanted in a patient).

Revenue from the sale of imaging equipment is recognized as each distinct performance obligation is fulfilled and control transfers to the customer, beginning with shipment or delivery, depending on the terms.

Revenue from other distinct performance obligations, such as maintenance on imaging equipment and other imaging related services, is recognized in the period the service is performed, and makes up less than 10 % of the Company’s total revenue.

Revenue is measured based on the amount of consideration expected to be received in exchange for the transfer of the goods or services specified in the contract with each customer.

In certain cases, the Company does offer the ability for customers to lease its imaging equipment primarily on a non-sales type basis, but such arrangements are immaterial to total revenue in the years presented.

In certain cases, the Company does offer the ability for customers to lease its imaging equipment, but such arrangements are immaterial to total revenue in the years presented.

The Company generally does not allow returns of products that have been delivered.

Costs incurred by the Company associated with sales contracts with customers are deferred over the performance obligation period and recognized in the same period as the related revenue, except for contracts that complete within one year or less, in which case the associated costs are expensed as incurred.

Costs incurred by the Company associated directly with sales contracts with customers are deferred over the performance obligation period and recognized in the same period as the related revenue, except for contracts that complete within one year or less, in which case the associated costs are expensed as incurred.

Payment terms for sales to customers may vary but are commensurate with the general business practices in the country of sale.

5 unchanged sentences

When the Company sells a product or service with a future performance obligation, revenue is deferred on the unfulfilled performance obligation and recognized over the related performance period.

Generally, the Company does not have observable evidence of the standalone selling price related to its future service obligations; therefore, the Company estimates the selling price using an expected cost plus a margin approach.

The transaction price is allocated using the relative standalone selling price method.

Generally, the Company estimates the selling price of promised services included in the equipment sales price using an expected cost plus a margin approach and/or the separately observable price of such service, if available.

The transaction price for a contract’s various performance obligations is allocated using the relative standalone selling price method.

The use of alternative estimates could result in a different amount of revenue deferral.

5 unchanged sentences

Transaction-related costs are expensed as incurred.

Transaction-related expenses consist of certain costs incurred related primarily to the acquisition and integration of Valence, as defined below, and EOS.

Transaction-related expenses consist of certain costs incurred related primarily to the acquisition and integration of Valence, as defined below.

Product Shipment Cost

Product shipment costs for surgical sets are included in sales, general and administrative expenses in the accompanying consolidated statements of operations.

Product shipment costs totaled $ 17.3 million , $ 14.8 million and $ 8.3 million for the years ended December 31, 2023, 2022 and 2021 respectively.

Product shipment costs total ed $ 21.8 million , $ 17.3 million and $ 14.8 million for the years ended December 31, 2024, 2023 and 2022 respectively.

Stock-Based Compensation

34 unchanged sentences

Year Ended December 31,

Series A convertible preferred stock

Options to purchase common stock and employee stock purchase plan

2 unchanged sentences

Senior convertible notes

Recently Adopted and Issued Accounting Pronouncements

In August 2021, the FASB issued Accounting Standards Update ("ASU") No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The guidance requires application of Topic 606, Revenue from Contracts with Customers to recognize and measure contract assets and contract liabilities acquired in a business combination.

2021-08 adds an exception to the general recognition and measurement principle in Topic 805 where assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from contracts with customers, are measured at fair value on the acquisition date.

Under the new guidance, the acquirer will recognize acquired contract assets and contract liabilities as if the acquirer had originated the contract.

The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted.

The Company adopted ASU No.

2021-08 as of January 1, 2023 , on a prospective basis.

The adoption of ASU No.

2021-08 did no t have a material impact on the Company's consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued Accounting Standard Update ("ASU") No.

2023-09, Income Taxes (Topic 740):

3 unchanged sentences

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company does not intend to early adopt the standard and is in the process of assessing the impact on its consolidated financial statements and related disclosures.

The Company is in the process of assessing the impact of this standard on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Topic 220-40).

Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.

The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses.

The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted.

The Company is in the process of assessing the impact of this standard on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

3 unchanged sentences

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company does not intend to early adopt the standard and is in the process of assessing the impact on its consolidated financial statements and related disclosures.

In October 2023, the FASB issued ASU No.

2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

The guidance amends the ASC to incorporate certain disclosure requirements from SEC Release No.

33-10532 Disclosure Update and Simplification issued in 2018.

The effective date for each amendment will be the date on which the Securities and Exchange Commission's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

2023-06 is not expected to have a material impact on the Company's financial statements.

The Company adopted the new accounting pronouncement on January 1, 2024 .

The adoption of this guidance did no t have an effect on the Company’s financial position, results of operations and cash flows.

See Note 12 - Business Segment and Geographic Disclosure for additional disclosures.

Business Combination

3 unchanged sentences

The Company paid the Sellers cash consideration of $ 55.0 million at closing, which represented the total purchase consideration.

The acquisition was accounted for as a business combination and the Company did not acquire any material assets or assume any material liabilities in connection with the acquisition, excluding intangible assets and goodwill.

The acquisition is treated as an asset purchase for income tax purposes;

1 unchanged sentence

Refer to Note 4 for further details on intangible assets and goodwill acquired.

The Company is in the process of finalizing the purchase price allocation.

While the Company does not expect material changes in the valuation outcome, certain assumptions and findings that were in place at the date of acquisition could result in changes in the purchase price allocation.

In May 2021, the Company completed the acquisition of EOS.

The Company paid cash of $ 100.0 million to acquire 100 % of all issued and outstanding ordinary shares and 57 % of the outstanding convertible bonds of EOS ("OCEANEs").

Fair Value Measurements

11 unchanged sentences

The fair value, based on a quoted market price (Level 1), of the Company’s outstanding 0.75 % Convertible Senior Notes due 2026 (the "2026 Notes") was approximately $ 299.6 million at December 31, 2024 and approximately $ 335.4 million at December 31, 2023.

The fair value, based on a quoted market price (Level 1), of the Company’s outstanding OCEANEs was approximately $ 13.3 million at December 31, 2022.

As of December 31, 2023, no OCEANEs remained outstanding.

See Note 6 for further information.

Balance Sheet Details

18 unchanged sentences

December 31, 2023

Goodwill acquired during the year

Foreign currency fluctuation

5 unchanged sentences

Developed product technology

Internally developed software

Trademarks and trade names

17 unchanged sentences

The intangible asset acquired will be amortized on a straight-line basis over a useful life of seven years .

Total expense related to amortization of intangibl e assets was $ 15.2 million , $ 10.2 million and $ 6.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Total amortization expense was $ 16.4 million , $ 15.2 million and $ 10.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Software in development assets begin amortizing when the projects are complete and the assets are ready for their intended use.

In-process research and development assets and software in development assets both begin amortizing when the related products reach full commercial launch or are approved and ready for their intended use.

In-process research and development assets and software in development assets begin amortizing when the related products reach full commercial launch.

Future amortization expense related to intangible assets as of December 31, 2024 is as follows (in thousands):

5 unchanged sentences

Accrued legal expenses

Administration fees

Taxes and fees

Inventory in-transit

Other taxes payable

Admin fees and rebates

Professional fees

Orthotec litigation settlement obligation

Debt issuance costs

Total accrued expenses and other current liabilities

Total accrued expenses

Other Long-Term Liabilities

8 unchanged sentences

Contract assets

The Company had current and non-current contract liabilities tot aling $ 13.9 million and $ 2.6 million, respectively, as of December 31, 2023.

The Company had current and non-current contract liabilities t otaling $ 10.5 million and $ 3.1 million, respectively, as of December 31, 2024.

The Company had current and non-current contract liabilities totaling $ 13.9 million and $ 2.6 million, respectively, as of December 31, 2023.

The non-current contract liabilities balance is included in other long-term liabilities on the consolidated balance sheets.

Contract liabilities relates to contracts with customers for which partial or complete payment of the transaction price has been received from the customer and the related obligations must be completed before revenue can be recognized.

Contract liabilities relate to contracts with customers for which partial or complete payment of the transaction price has been received from the customer and the related obligations must be completed before revenue can be recognized.

These amounts primarily relate to undelivered equipment, services, or maintenance agreements.

The Company recognized $ 24.8 million of revenue from its contract liabilities during the year ended December 31, 2024, of which $ 13.8 millio n was recognized from the beginning contract liabilities balance.

The Company recognize d $ 28.2 million of revenue from its contract liabilities during the year ended December 31, 2023, of which $ 10.9 million was recognized from the beginning contract liabilities balance.

The Company recognized $ 21.6 million of revenue from its contract liabilities during the year ended December 31, 2022, of which $ 12.9 million was recognized from the beginning contract liabilities balance.

The Company recognized $ 14.6 million o f revenue from its contract liabilities during the years ended December 31, 2021.

The opening and closing balances of the Company’s contract liabilities are as follows (in thousands):

Balance at December 31, 2022

Payments received

Revenue recognized

Foreign currency fluctuation

Balance at December 31, 2023

On January 6, 2023, the Company entered into a $ 150.0 million term loan credit facility with Braidwell Transaction Holdings, LLC (the “Braidwell Term Loan”).

1 unchanged sentence

On September 28, 2023, the Company drew an additional $ 50.0 million (the “delayed draw term loan(s)” or the “DDTL”).

On October 29, 2024, the Company entered into an amendment of the Braidwell Term Loan, which provides for an additional term loan of $ 50.0 million, subject to the terms of the original term loan credit facility.

The Braidwell Term Loan matures on January 6, 2028 .

11 unchanged sentences

During the year ended December 31, 2024, the Company recognized interest expense on the Braidwell Term Loan of $ 18.9 million, which includes $ 0.7 million for the amortization of debt issuance costs and $ 0.3 million for the debt discount.

During the year ended December 31, 2023, the Company recognized interest expense on the Braidwell Term Loan of $ 13.2 million, which includes $ 0.4 million for the amortization of debt issuance costs and $ 0.2 million for the debt

Upon the Braidwell Term Loan’s maturity, any outstanding principal balance, unpaid accrued interest, and all other obligations under the Braidwell Term Loan will be due and payable.

6 unchanged sentences

In September 2022, the Company entered into a revolving credit facility (the “Revolving Credit Facility”) with entities affiliated with MidCap Financial Trust (“MidCap”).

The Revolving Credit Facility provides up to $ 50.0 million in borrowing capacity to the Company based on a borrowing base.

The Revolving Credit Facility originally provided up to $ 50.0 million in borrowing capacity to the Company with an accordion feature up to $ 75.0 million in borrowing capacity, based on a defined borrowing base.

The borrowing base is calculated based on certain accounts receivable and inventory assets.

The Company may request a $ 25.0 million increase in the Revolving Credit Facility for a total commitment of up to $ 75.0 million.

The Revolving Credit Facility matures on the earlier of September 29, 2027 , or 90 days prior to the final maturity date of the Company’s 2026 Notes, as defined below.

The Company subsequently exercised the accordion feature and increased the borrowing capacity by $ 25.0 million up to the full $ 75.0 million borrowing capacity.

The Revolving Credit Facility matures on the earlier of September 29, 2027 , or 90 days prior to the final maturity date of the Company’s 2026 Notes.

As of December 31, 2024, the outstanding balance under the Revolving Credit Facility was $ 63.3 million.

In January 2024, the Compa ny repaid $ 42.0 million o f the outstanding balance.

In January 2025, the Company repaid $ 52.8 million of the outstanding balance.

In conjunction with obtaining the Revolving Credit Facility, the Company incurred $ 1.4 million in debt issuance costs.

7 unchanged sentences

The Company recognized interest expense on the Revolving Credit Facility of $ 2.0 million during the year ended December 31, 2023, which includes $ 0.3 million for the amortization of debt issuance costs.

The Company recognized interest expense on the Revolving Credit Facility of $ 0.2 million during the year ended December 31, 2022, which includes $ 0.1 million for the amortization of debt issuance costs.

Upon the Revolving Credit Facility’s maturity, any outstanding principal balance, unpaid accrued interest, and all other obligations under the Revolving Credit Facility will be due and payable.

11 unchanged sentences

Interest on the 2026 Notes is payable semi-annually in arrears on February 1 and August 1 of each year, beginning on February 1, 2022 .

The net proceeds from the sale of the 2026 Notes were approximately $ 306.2 million after deducting the initial purchasers’ offering expenses and before cash used for the privately negotiated capped call transactions (the "Capped Call Transactions"), as described below, the repurchase of stock, as descri bed in Note 9, and the repayment of the outstanding unsecured term loan with Squadron Medical Finance Solutions, LLC (the “Squadron Medical Term Loan") and outstanding obligation under the Inventory Financing Agreement, as described below.

The net proceeds from the sale of the 2026 Notes were approximately $ 306.2 million after deducting the initial purchasers’ offering expenses and before cash used for the privately negotiated capped call transactions (the "Capped Call Transactions"), as described below, the repurchase of stock , and the repayment of the outstanding unsecured term loan with Squadron Medical Finance Solutions, LLC (the “Squadron Medical Term Loan") and outstanding obligation under the Inventory Financing Agreement, as described below.

The 2026 Notes do not contain any financial covenants .

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The annual effective interest rate for the 2026 Notes is 1.4 %.

The Company recognized interest expense on the 2026 Notes of $ 4.4 million, $ 4.4 million and $ 1.7 million during the years ended December 31, 2023, 2022 and 2021, respectively, which inclu des $ 2.0 million, $ 2.0 million and $ 0.8 million for the amortization of debt issuance costs during the years ended December 31, 2023, 2022 and 2021, respectively.

The Company recognized interest expense on the 2026 Notes of $ 4.4 million during the years ended December 31, 2024, 2023 and 2022, which inclu des $ 2.0 million for the amortization of debt issuance costs during the years ended December 31, 2024, 2023 and 2022.

The Company uses the if-converted method for assumed conversion of the 2026 Notes to compute the weighted average shares of common stock outstanding for diluted earnings per share, if applicable.

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The Capped Call Transactions meet all of the applicable criteria for equity classification and, as a result, the related $ 39.9 million cost was recorded as a reduction to additional paid-in capital on the Company’s consolidated statements of shareholders’ (deficit) equity for the year ended December 31, 2021.

OCEANE Convertible Bonds

On May 31, 2018, EOS issued 4,344,651 OCEANEs denominated in Euros, due May 2023 for aggregate gross proceeds of $ 34.3 million.

The OCEANEs were unsecured obligations of EOS, ranked equally with all other unsecured and unsubordinated obligations of EOS, and paid interest at a rate equal to 6 % per year, payable semiannually in arrears on May 31 and November 30 of each year, beginning November 30, 2018 .

The OCEANEs matured on May 31, 2023 and the outstanding OCEANEs and accrued interest were paid in full on May 31, 2023.

As of December 31, 2023, no OCEANEs remained outstanding.

Interest expense was $ 0.3 million and $ 0.8 million for the years ended December 31, 2023 and 2022, respectively, and $ 0.7 million from the date of the EOS acquisition to December 31, 2021.

Other Debt Agreements

The Company has two loan agreements under French government sponsored COVID-19 relief initiatives (“PGE” loans).

Each PGE loan initially contained a 12 -month term, with an option to extend, and 90 % of the principal balance of each loan is state guaranteed.

The cost of the state guaranty is 0.25 % of the loan amounts.

The commercial banks loan of $ 3.6 million is interest free and the lenders loan of $ 1.6 million bears interest of 1.75 %.

The loan capital and loan guaranty costs are payable in full at the end of the 12-month term or the loan may be extended up to 5 additional years.

In February 2022, the Company extended the maturity for each loan agreement to 2027 .

Each loan has a 12 -month period from the applicable extension date where interest only payments will occur (the “Interest Only Period”).

Following the Interest Only Period, monthly and quarterly installments of principal and interest under each loan agreement is due until the original principal amounts and applicable interest is fully repaid in 2027.

The Company has two loan agreements under French government sponsored COVID-19 relief initiatives (“PGE” loans) which mature in 2027.

Monthly and quarterly installments of principal and interest under each PGE loan agreement is due until the original principal amounts and applicable interest is fully repaid in 2027.

The outstanding obligation under each loan as of December 31, 2024 w as $ 2.1 million and $ 0.9 million at weighted average interest rates of 0.95 % and 1.25 %, respectively, and weighted average costs of the state guaranty of 0.68 % and 1.0 %, respectively.

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Other notes payable

EOS PGE Loans

Braidwell Term Loan, including final payment fee of $ 6,500

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Long-term debt

Paycheck Protection Loan

On April 23, 2020, the Company received the proceeds from a loan in the amount of $ 4.3 million (the “PPP Loan”) from Silicon Valley Bank, as lender, pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act.

The Company used the loan proceeds for purposes consistent with the terms of the PPP and applied for forgiveness of the entire $ 4.3 million loan balance, which was granted in July 2021.

The Company recorded a gain on debt extinguishment of $ 4.3 million, which is included in loss on debt extinguishment, net, on the consolidated statements of operations for the year ended December 31, 2021.

Squadron Medical Credit Agreement

On November 6, 2018, the Company entered into the Squadron Medical Term Loan that was subsequently amended in March 2019, May 2020 and December 2020 to expand the availability of additional term loans, extend the maturity, remove all financial covenant requirements and, in the December 2020 amendment, incorporate a debt exchange.

In December 2020, the Company amended the Squadron Medical Term Loan to expand the credit facility by an additional $ 15.0 million and to extend the maturity of the Squadron Medical Term Loan to June 30, 2026 .

In conjunction with the Squadron Medical Term Loan amendment in December 2020, the Company entered into a debt exchange agreement whereby the Company exchanged $ 30.0 million of the Company’s outstanding debt obligations under the Squadron Medical Term Loan for the issuance of 2,700,270 shares of the Company’s Common Stock to Squadron Capital LLC and a participant lender, based on a price of $ 11.11 per share.

The debt exchange resulted in additional debt issuance costs of $ 3.8 million calculated as the difference between the Company’s stock price on the date of issuance and the issuance price.

The Company accounted for the March 2019, May 2020, and December 2020 amendments of the Squadron Medical Term Loan as debt modifications with continued amortization of the existing and inclusion of the new debt issuance costs amortized into interest expense utilizing the effective interest rate method.

The Company determined that the $ 30.0 million pre-payment associated with the December 2020 amendment should be accounted for as a partial extinguishment of the November 6, 2018 Squadron Medical Term Loan, as amended.

As a result of the partial extinguishment the Company elected, as an accounting policy in accordance with ASC 470-50-40-2, to write off a proportionate amount of the unamortized fees at the time that the financing was partially settled in accordance with the terms of the Squadron Medical Term Loan.

The unamortized debt issuance costs were allocated between the remaining original loan balance and the portion of the loan paid down on a pro-rata basis.

At the time of prepayment, the Company recorded a loss on extinguishment of $ 6.1 million, which was included in loss on debt extinguishment, net, on the consolidated statements of operations for the year ended December 31, 2020 and capitalized $ 3.8 million in non-cash debt issuance closing costs.

On August 10, 2021, the Company terminated and repaid all obligations under the Squadron Medical Term Loan, which consisted of the $ 45.0 million outstanding principal and $ 0.2 million accrued interest.

As a result of the early termination of the Squadron Medical Term Loan, the Company recorded a loss on debt extinguishment associated with the unamortized debt issuance costs of $ 11.7 million, which is included in loss on debt extinguishment, net, on the consolidated statements of operations for the year ended December 31, 2021.

In connection with the initial 2018 Squadron Medical Term Loan and subsequent amendments, the Company issued an aggregate of 6,759,530 warrants to Squadron Medical and a participant lender.

See Note 9 for further information on the warrants issued.

OCEANE Convertible Bonds

On May 31, 2018, EOS issued 4,344,651 OCEANEs denominated in Euros, due May 2023 for aggregate gross proceeds of $ 34.3 million.

The OCEANEs matured on May 31, 2023 and the outstanding OCEANEs and accrued interest were paid in full on May 31, 2023.

As of December 31, 2023, no OCEANEs remained outstanding.

Interest expense was $ 0.3 million and $ 0.8 million for the years ended December 31, 2023 and 2022, respectively.

Commitments and Contingencies

The Company determines if an arrangement is a lease at inception by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time.

If both criteria are met, the Company records the associated lease liability and corresponding ROU asset upon commencement of the lease using a discount rate based the incremental borrowing rate of interest that the Company would borrow on a collateralized basis for an amount equal to the lease payments in a similar economic environment.

Any short-term leases defined as twelve months or less or month-to-month leases are excluded and continue to be expensed each month.

Total costs associated with these short-term leases is immaterial to all years presented.

If both criteria are met, the Company records the associated lease liability and corresponding ROU asset upon commencement of the lease using a discount rate based on the incremental borrowing rate of interest that the Company would borrow on a collateralized basis for an amount equal to the lease payments in a similar economic environment.

Any short-term leases defined as twelve months or less or month-to-month leases are excluded and are expensed each month.

Total costs associated with these short-term leases are immaterial to all periods presented.

The Company leases office and storage facilities and equipment under various operating and financing lease agreements.

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The Company had an immaterial amount of financing leases as of December 31, 2024, which is included in property and equipment, net, accrued expenses and other current liabilities, and other long-term liabilities, on the consolidated balance sheets.

The Company occupies 121,541 square feet of office space as its headquarters in Carlsbad, California.

On December 4, 2019, the Company entered into a 10 -year operating lease that commenced on February 1, 2021 and will terminate on January 31, 2031 , subject to two sixty-month options to renew which are not reasonably certain to be exercised.

Base rent under the building lease increases annually by 3 % throughout the remainder of the lease.

On May 11, 2022, the Company entered into a lease amendment for the build out of additional space within the building which resulted in a lease modification increasing the ROU asset and lease liability.

On December 1, 2023, the Company entered into a nine-year operating lease in Paris, France that commenced on April 1, 2024 , and will terminate on December 31, 2032 .

Future minimum annual lease payments for all operating leases of the Company are as follows as of December 31, 2024 (in thousands):

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The Company is and may become involved in various legal proceedings arising from its business activities.

While management is not aware of any litigation matter that in and of itself would have a material adverse impact on the Company’s consolidated results of operations, cash flows or financial position, litigation is inherently unpredictable, and depending on the nature and timing of a proceeding, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows or financial position in a particular year.

The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual or disclosure in the Company’s consolidated financial statements.

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In addition, damage amounts claimed in litigation against the Company may be unsupported, exaggerated or unrelated to reasonably possible outcomes, and as such are not meaningful indicators of the Company’s potential liability.

In February 2018, NuVasive, Inc.

filed suit against the Company in the United States District Court for the Southern District of California (NuVasive, Inc.

Alphatec Holdings, Inc.

et al., Case No.

3:18-cv-00347-CAB-MDD (S.D.

Cal.)), alleging that certain of the Company’s products, infringed, or contributed to the infringement of, U.S.

7,819,801, 8,355,780, 8,361,156, 8,439,832, 8,753,270, 9,833,227 and U.S.

Design Patent Nos.

D652,519 and D750,252.

In June 2022, the parties reached a final resolution of all matters and executed a confidential settlement agreement.

The Court dismissed the action with prejudice.

The outcome of these proceedings did not have any material adverse effect on the Company’s consolidated results of operations, cash flows or financial position.

Indemnifications

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It is not possible to determine the maximum potential amount of future payments, if any, due under these indemnities due to the conditional nature of the obligations and the unique facts and circumstances involved in each agreement.

In October 2017, NuVasive filed a lawsuit in Delaware Chancery Court against Mr.

In October 2017, NuVasive, Inc.

filed a lawsuit in Delaware Chancery Court against Mr.

Miles, the Company’s Chairman and CEO, who was a former officer and board member of NuVasive.

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Miles’ legal fees incurred in pursuing advancement of his fees, pursuant to an indemnification agreement between NuVasive and Mr.

As of December 31, 2024, the Company has not recorded any liability on the consolidated balance sheets related to this matter.

The Company has entered into various intellectual property agreements requiring the payment of royalties based on the sale of products that utilize such intellectual property.

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Royalties are included on the accompanying consolidated statements of operations as a component of cost of sales.

Orthotec Settlement

On September 26, 2014, the Company entered into a Settlement and Release Agreement, dated as of August 13, 2014, by and among the Company and its direct subsidiaries, including Alphatec Spine, Inc., Alphatec Holdings International C.V., Scient'x S.A.S.

and Surgiview S.A.S.;

HealthpointCapital, LLC, HealthpointCapital Partners, L.P., HealthpointCapital Partners II, L.P., John H.

Foster and Mortimer Berkowitz III;

and Orthotec, LLC and Patrick Bertranou, (the “Settlement Agreement”).

Pursuant to the Settlement Agreement, the Company agreed to pay Orthotec, LLC $ 49.0 million in cash, including initial cash payments totaling $ 1.75 million, which the Company paid in March 2014, and an additional lump sum payment of $ 15.75 million, which the Company paid in April 2014.

The Company agreed to pay the remaining $ 31.5 million in 28 quarterly installments of $ 1.1 million and one additional quarterly installment of $ 0.7 million, commencing October 1, 2014.

The unpaid balance of the principal amount due accrued interest at the rate of 7 % per year until paid in full.

The accrued but unpaid interest was paid in quarterly installments of $ 1.1 million (or the full amount of the accrued but unpaid interest if less than $ 1.1 million) following the full payment of the $ 31.5 million in quarterly installments.

As of December 31, 2023, the Company has paid all installment payments due, including imputed interest, under the Settlement Agreement and no balance remains outstanding.

There were 200,000,000 shares of common stock authorized at December 31, 2024 and 2023.

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The net proceeds from the Offering were approximately $ 57.5 million, including the underwriting discounts and commissions and offering expenses paid by the Company.

On March 1, 2021, the Company completed the sale of 12,421,242 shares of common stock for gross proceeds of $ 138.0 million, and net proceeds of approximately $ 131.8 million, net of $ 6.2 million in fees.

On August 3, 2021, the Company’s Board of Directors authorized the Company to repurchase an aggregate of up to $ 25.0 million of shares of the Company’s common stock.

On August 10, 2021, The Company repurchased 1,806,358 shares of its common stock for approximately $ 25.0 million in privately negotiated transactions.

There were no repurchases of common stock during the years ended December 31, 2023 or 2022.

Redeemable Preferred Stock

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The SafeOp Warrants expired in May 2023, and no SafeOp Warrants remained outstanding as of December 31, 2023.

During the year ended December 31, 2023, there were 937,000 cashless SafeOp Warrant exercises.

During the year ended December 31, 2023, there were 937,000 cashless SafeOp Warrant

During the year ended December 31, 2022, there were approximately 257,000 cashless SafeOp Warrant exercises.

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Executive Warrants

The Company issued warrants to Mr.

Miles, the Company’s Chairman and Chief Executive Officer (the “Executive Warrants”).

The Company issued warrants to its Chairman and Chief Executive Officer (the “Executive Warrants”).

The Executive Warrants had a five-year term and are exercisable by cash or cashless exercise.

In October 2022, the term was extended to seven years .

In October 2022, the term was extended to seven years and in May 2024, the term was extended to nine years .

No Executive Warrants have been exercised as of December 31, 2024.

L-5 Healthcare Partners Warrants

Pursuant to an order entered by the Delaware Chancery Court on September 27, 2024, the Company issued 1,133,160 common stock warrants, to L-5 Healthcare Partners, LLC, a stockholder of the Company (the "L-5 Healthcare Warrants"), at a purchase price of $ 1.98 per share, for each of the shares represented by the warrant, for a total purchase price of approximately $ 2.2 million.

The L-5 Healthcare Warrants expire in August 2026 and are exercisable by cashless exercise.

No L-5 Healthcare Warrants have been exercised as of December 31, 2024.

A summary of all outstanding warrants as of December 31, 2024 is as follows (in thousands):

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December 2026

L-5 Healthcare Warrants

Various through June 2026

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In 2016 the Company adopted its 2016 Equity Incentive Plan (the “2016 Plan”), which replaced the Company’s 2005 Employee, Director and Consultant Stock Plan.

The 2016 Plan allows for the grant of options, restricted stock, restricted stock unit awards and performance unit awards to employees, directors, and consultants of the Company.

Under the 2016 Plan, the Company is authorized to grant up to 26,383,000 shares of options, restricted stock, restricted stock unit awards and performance unit awards to employees, directors, and consultants of the Company.

The Board of Directors determines the terms of the grants made under the 2016 Plan.

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Restricted stock unit awards and performance unit awards generally vest over a three or four year period and vest immediately upon a change in control of the Company.

On June 14, 2023, the Company’s shareholders approved an amendment to the 2016 Plan which increased the shares of common stock available for issuance under the 2016 Plan by 9,300,000 shares, resulting in total common stock reserved for issuance under the 2016 Plan of 26,383,333 shares.

As of December 31, 2024 , approximately 4,209,000 shares of common stock remained available for issuance under the 2016 Plan.

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On October 4, 2016, the Company’s Board of Directors adopted the 2016 Employment Inducement Award Plan (the “Inducement Plan”).

The Inducement Plan allows for the grant of options, restricted stock, restricted stock unit awards and performance unit awards to new employees of the Company by granting an award to such new employee as an inducement for the employee to begin employment with the Company.

On October 25, 2023, the Company’s Board of Directors approved an amendment to the Company’s Inducement Plan which increased the shares of common stock available for issuance under the Inducement Plan by 600,000 shares, resulting in total common stock available for issuance under the plan of 4,150,000 shares.

As of December 31, 2023 the Inducement Plan had approximately 567,000 shares of common stock reserved for issuance, which may only be granted to an employee who has not previously been an employee or member of the board of directors of the Company.

Under the Inducement Plan, the Company is authorized to grant up to 4,150,000 shares of options, restricted stock, restricted stock unit awards and performance unit awards to new employees of the Company by granting an award to such new employee as an inducement for the employee to begin employment with the Company.

The terms of the Inducement Plan are substantially similar to the terms of the Company’s 2016 Plan with two principal exceptions:

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and (ii) the annual compensation paid by the Company to specified executives will be deductible only to the extent that it does not exceed $ 1.0 million.

As of December 31, 2024 the Inducement Plan had approximately 320,000 shares of common stock reserved for issuance, which may only be granted to an employee who has not previously been an employee or member of the board of directors of the Company.

2019 Management Objective Strategic Incentive Plan

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The warrants and restricted stock units issued under the plan are subject to time based or net sales-based vesting conditions.

On October 26, 2023, the Company’s Board of Directors approved an amendment to the Company’s Distributor Inducement Plan which increased the shares of common stock available for issuance under the Distributor Inducement Plan by 500,000 shares, resulting in total common stock available for issuance under the plan of 1,500,000 shares.

As of December 31, 2024 , approximately 345,000 warrants and approximately 731,000 shares of restricted common stock were granted under the 2017 Distributor Inducement Plan.

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The Company has entered into Development Services Agreements for development of a wide variety of potential products and intellectual property, with the possibility of issuing shares of common stock.

On October 26, 2023, the Company’s Board of Directors approved an amendment to the Company’s Development Services Plan which increased the shares of common stock available for issuance under the Development Services Plan by 2,000,000 shares, resulting in total common stock available for issuance under the plan of 10,000,000 shares.

As of December 31, 2024, 3,858,000 shares have been earned or issued under the Development Services Plan.

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December 31, 2024

The weighted-average grant-date fair value per share of stock options granted during the year ended December 31, 2021 was $ 9.88 .

There were no stock options granted during the years ended December 31, 2023 and 2022.

The total intrinsic value of stock options exercised was $ 5.2 million, $ 3.4 million and $ 6.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The aggregate intrinsic value of options at December 31, 2023 is based on the Company’s closing stock price on the last business day of 2023 of $ 15.11 p er share.

The weighted average assumptions used to compute the stock-based compensation costs for the stock options granted during the year ended December 31, 2021 are as follows:

Year Ended December 31,

Risk-free interest rate

Expected dividend yield

Weighted average expected life (years)

As of December 31, 2023, there was $ 0.2 million of unrecognized compensation expense for stock options which is expected to be recognized on a straight-line basis over a weighted average period of approximately 1.18 years.

There were no stock options granted dur ing the years ended December 31, 2024, 2023 and 2022.

The total intrinsic value of stock options exercised during the years ended December 31, 2024, 2023 and 2022 was $ 2.1 mil lion, $ 5.2 million and $ 3.4 million, respectively.

The aggregate intrinsic value of options at December 31, 2024 is based on the Company’s closing stock price on the last business day of 2024 of $ 9.18 per shar e.

As of December 31, 2024, there was nominal unrecognized compensation expense for stock options which is expected to be recognized on a straight-line basis over a weighted average period of approximately 0.43 years.

Restricted Stock Units and Performance Based Restricted Stock Units

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Unrecognized tax benefit at the beginning of the year

Increases in tax positions for current year relating to

Increases in tax positions for prior years

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For the years ended December 31, 2024, 2023 and 2022, the Company purchased inventory in the amounts of $ 21.2 million, $ 19.6 million and $ 10.3 million, respectively, from the Squadron Supplier Affiliate.

As of December 31, 2023 and 2022, the Company had $ 5.4 million and $ 2.4 million, respectively, due to the Squadron Supplier Affiliate.

As of December 31, 2024 and 2023, the Company had $ 1.8 mil lion and $ 5.4 million, respectively, due to the Squadron Supplier Affiliate.

Business Segment and Geographic Information

The Company operates in one segment based upon the Company’s organizational structure, the way in which the operations and investments are managed and evaluated by the chief operating decision maker (“CODM”) as well as the lack of available discrete financial information at a level lower than the consolidated level.

The CODM is the Chief Executive Officer .

The Company shares common, centralized support functions which report directly to the CODM and decision-making regarding the Company’s overall operating performance and allocation of Company resources is assessed on a consolidated basis.

Significant segment expenses regularly provided to the CODM are consolidated research and development expenses and consolidated sales, general and administrative expenses.

Refer to the consolidated statements of operations for consolidated research and development expenses and consolidated sales, general and administrative expenses.

The Company determined that consolidated net loss is the Company’s measure of segment profit or loss.

Net revenue and property and equipment, net, by geographic region are as follows (in thousands):

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures