TREACE MEDICAL CONCEPTS, INC.

Previous wording

We are a medical technology company with the goal of advancing the standard of care for the surgical management of bunion and related midfoot deformities. Bunions are complex 3-dimensional deformities that originate from an unstable joint in the middle of the foot and affect approximately 67 million Americans, of which we estimate 1.1 million are annual surgical candidates. We have pioneered and patented the Lapiplasty 3D Bunion Correction System–a combination of instruments, implants and surgical methods designed to surgically correct all three planes of the bunion deformity and secure the unstable joint, addressing the root cause of the bunion and helping patients get back to their active lifestyles. To further support the needs of surgeons and bunion patients, we offer the Adductoplasty® Midfoot Correction System, designed for reproducible surgical correction of the midfoot, two systems for minimally invasive osteotomy procedures, namely the Nanoplasty® 3D Minimally Invasive Bunion Correction System and the Percuplasty™ percutaneous 3D Bunion Correction System, and the SpeedMTP® System for fusions of the great toe (the metatarsophalangeal ("MTP")) joint. We continue to expand our footprint in the marketplace by extending our SpeedPlate® rapid compression implant platform to new applications, as well as providing surgeons with advanced digital solutions with our IntelliGuide® patient specific, pre-op planning and cut guide technology. With our Lapiplasty System, new osteotomy systems, and other complementary products, we are continuing to execute our strategy of becoming a comprehensive bunion solutions company and supporting further penetration in the bunion market opportunity. See the "Innovation and Growth" section below for more information on our new products.

Current wording

We are a medical technology company with the goal of being the recognized leader in the surgical treatment of bunions and related deformities. Bunions are complex 3-dimensional deformities that originate from an unstable joint in the middle of the foot and affect approximately 67 million Americans, of which we estimate 1.1 million are annual surgical candidates. We have pioneered and patented the Lapiplasty 3D Bunion Correction System–a combination of instruments, implants and surgical methods designed to surgically correct all three planes of the bunion deformity and secure the unstable joint, addressing the root cause of the bunion and helping patients get back to their active lifestyles. To further support the needs of surgeons and bunion patients, we offer the Adductoplasty® Midfoot Correction System, designed for reproducible surgical correction of the midfoot, two systems for minimally invasive osteotomy procedures, namely the Nanoplasty® 3D Minimally Invasive Bunion Correction System and the Percuplasty® percutaneous 3D Bunion Correction System, and the SpeedMTP® System for fusions of the great toe (the metatarsophalangeal ("MTP")) joint. We continue to expand our footprint in the marketplace by extending our SpeedPlate® rapid compression implant platform to new applications, providing surgeons with advanced digital solutions with our IntelliGuide® patient specific, pre-op planning and cut guide technology, and offering SuperBite™ Compression Screws, which are self-drilling beveled compression screws of different sizes designed for use in other foot fusions. With our Lapiplasty System, new osteotomy systems, and other complementary products, we are continuing to execute our strategy of becoming a comprehensive bunion solutions company and supporting further penetration in the bunion market opportunity. See the "Innovation and Growth" section below for more information on our new products.

Previous wording

As of March 31, 2026, we had cash and cash equivalents of $9.5 million and marketable securities of $42.3 million available for sale to fund operations, an accumulated deficit of $267.0 million and $60.0 million of principal outstanding under our term loan and revolving loan agreements.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $12.6 million and marketable securities of $33.0 million available for sale to fund operations, an accumulated deficit of $282.8 million and $60.0 million of principal outstanding under our term loan and revolving loan agreements.

Previous wording

There is continuing uncertainty in the macroeconomic environment. Inflation, recession fears, reduced consumer confidence, higher insurance deductibles, fuel prices and other costs, and other adverse economic conditions have negatively impacted, and may continue to negatively impact, consumer demand for elective foot and ankle surgeries. While we continuously work with suppliers to mitigate higher costs and continue to invest in our direct sales channel, focused surgeon education training, and product innovations to build demand for our products, we expect these macroeconomic challenges to continue for the foreseeable future, which have impacted and likely will continue to impact the demand for our products and our results of operations.

Current wording

There is continuing uncertainty in the macroeconomic environment. Inflation, the ongoing military conflict in the Middle East, recession fears, reduced consumer confidence, higher insurance deductibles, fuel prices and other costs, and other adverse economic conditions have negatively impacted, and may continue to negatively impact, consumer demand for elective foot and ankle surgeries. While we continuously work with suppliers to mitigate higher costs and continue to invest in our direct sales channel, focused surgeon education training, and product innovations to build demand for our products, we expect these macroeconomic challenges to continue for the foreseeable future, which have impacted and likely will continue to impact the demand for our products and our results of operations.

Previous wording

Before we launched our flagship Lapiplasty System, there were no other products in the market that provided a 3D solution and specialized procedural instrumentation for traditionally freehand, difficult Lapidus surgeries. This allowed us to capitalize on our pioneering technology and grow our market share quickly. Since we launched the Lapiplasty System, we have faced increasing competition from large, mid-sized and small companies that have launched their own Lapidus products. We are also experiencing a shift in patient and surgeon preferences for treating less severe bunions through minimally invasive osteotomy solutions as well as MTP fusions, with competitive products already addressing these types of surgery. Another trend is a shift in where bunion surgeries are performed from hospitals to ambulatory surgery centers, which receive lower procedure reimbursement rates and may be part of integrated delivery networks ("IDNs") that have established relationships with large orthopaedic companies. These trends have negatively impacted, and may continue to negatively impact, our growth rates, market share, and results of operations. To address the shifting preferences for treating mild to moderate bunions, we have introduced new bunion systems, including two minimally invasive osteotomy systems and a MTP fusion system. While adoption of these new systems is increasing, they are generally sold at lower average selling prices than our Lapiplasty System. Our revenues and results of operations have been and may continue to be adversely affected by declines in sales of our Lapiplasty System that have not been fully offset by the increased sales of our new bunion systems. In addition, our customer mix initiatives, the use of stocking distributors, and advance purchases by hospitals and surgery centers have affected and may continue to affect both revenue growth and gross margins. Furthermore, we face extensive competition, and new product introductions in the Lapidus, MTP fusion and minimally invasive osteotomy markets that have adversely impacted, and may continue to adversely impact our growth rates, market share and results of operations.

Current wording

Before we launched our flagship Lapiplasty System, there were no other products in the market that provided a 3D solution and specialized procedural instrumentation for traditionally freehand, difficult Lapidus surgeries. This allowed us to capitalize on our pioneering technology and grow our market share quickly. Since we launched the Lapiplasty System, we have faced increasing competition from large, mid-sized and small companies that have launched their own Lapidus products. We are also experiencing a shift in patient and surgeon preferences for treating less severe bunions through minimally invasive osteotomy solutions as well as MTP fusions, with competitive products already addressing these types of surgery. Another trend is a shift in where bunion surgeries are performed from hospitals to ambulatory surgery centers, which receive lower procedure reimbursement rates and may be part of integrated delivery networks ("IDNs") that have established relationships with large orthopaedic companies. Hospital systems and other customers continue to seek pricing concessions from their medical device suppliers, like us, and larger medical device companies with multiple product franchises have increased their effort to leverage and contract broadly with customers across franchises by providing volume discounts, rebates and multi-year arrangements. Their contracting power has in the past limited and may continue to limit or prevent our access to these customers. These trends have negatively impacted, and may continue to negatively impact, our growth rates, market share, and results of operations. To address the shifting preferences for treating mild to moderate bunions, we have introduced new bunion systems, including two minimally invasive osteotomy systems and a MTP fusion system. While adoption of these new systems is increasing, they are generally sold at lower average selling prices than our Lapiplasty System. Our revenues and results of operations have been and may continue to be adversely affected by declines in sales of our Lapiplasty System that have not been fully offset by the increased sales of our new bunion systems. In addition, our customer mix initiatives, the use of stocking distributors, and advance purchases by hospitals and surgery centers have affected and may continue to affect both revenue growth and gross margins. Furthermore, we face extensive competition, pricing pressures, and new product introductions in the Lapidus, MTP fusion and minimally invasive osteotomy markets that have adversely impacted, and may continue to adversely impact our growth rates, market share and results of operations.

Previous wording

In research and development, our employee team and surgeon consultants are continually working on next-generation innovations for the surgical correction of bunions and other conditions that often present with bunions. Their work has resulted in the launch of a suite of new products in the past two years, including the following: (1) the Nanoplasty and Percuplasty Systems, which are minimally-invasive 3D osteotomy systems; (2) IntelliGuide PSI Cut Guides for Lapiplasty and Adductoplasty Procedures, which are cut guides created specifically for an individual patient’s foot anatomy; (3) the Mini-Adductoplasty System, which is designed to allow the Adductoplasty midfoot correction procedure to be performed through an approximately 50% smaller incision; (4) the SpeedMTP Rapid Compression Implant, a specialized implant for addressing bunions through MTP fusions; (5) new SpeedPlate configurations, including the SpeedAkin™ implant and the SpeedPlate Micro-Quad implant; and (6) single use osteotomes. We have recently begun limited market release of the SpeedTMT™ Rapid Compression Implant, which combines our SpeedPlate and FastPitch® technologies in a fixation option for tarsometatarsal ("TMT") fusions, and Percuplasty SuperBite™ Screws, which are self-drilling beveled compression screws of different sizes designed for use in other foot fusions. We expect to release other new solutions in 2026, including the Lapiplasty Lightning Next Generation Instrumentation designed to further increase the precision and speed of the Lapiplasty Procedure.

Current wording

In research and development, our employee team and surgeon consultants are continually working on next-generation innovations for the surgical correction of bunions and other conditions that often present with bunions. Their work has resulted in the launch of a suite of new products in the past two years, including the following: (1) the Nanoplasty and Percuplasty Systems, which are minimally-invasive 3D osteotomy systems; (2) IntelliGuide PSI Cut Guides for Lapiplasty and Adductoplasty Procedures, which are cut guides created specifically for an individual patient’s foot anatomy; (3) the Mini-Adductoplasty System, which is designed to allow the Adductoplasty midfoot correction procedure to be performed through an approximately 50% smaller incision; (4) the SpeedMTP Rapid Compression Implant, a specialized implant for addressing bunions through MTP fusions; (5) new SpeedPlate configurations, including the SpeedAkin™ implant and the SpeedPlate Micro-Quad implant; and (6) single use osteotomes. We have recently begun (1) full market release of the SpeedTMT™ Rapid Compression Implant, which combines our SpeedPlate and FastPitch® technologies in a fixation option for tarsometatarsal ("TMT") fusions, and SuperBite™ Compression Screws, which are self-drilling beveled compression screws of different sizes designed for use in other foot fusions, and (2) limited market release of our HyperPlate™ XM Dynamic Compression Locking Implant, which features a low profile SpeedPlate implant incorporating FastPitch locking screws in multiple sizes to accommodate a wide range of midfoot and hindfoot procedures. We expect to release other new solutions in 2026, including the Lapiplasty Lightning Next Generation Instrumentation designed to further increase the precision and speed of the Lapiplasty Procedure.

Previous wording

We actively seek to protect the technology, inventions, and improvements that we consider important to our business using patents, trade secrets, trademarks and copyrights in the United States and foreign markets. As of March 31, 2026, our patent portfolio included 97 granted U.S. patents, with an additional 37 granted patents worldwide and over 200 pending patent applications. In keeping with our strategy of protecting our intellectual property rights, on October 14, 2024, we filed a lawsuit against Stryker Corporation and its subsidiary Wright Medical Technology, Inc. (collectively, "Stryker") alleging infringement of 9 patents related to our innovative Lapiplasty 3D Bunion Correction technologies and unfair competition. The suit was filed in the United States District Court for the District of New Jersey, and seeks injunctive relief and damages. In addition, on May 12, 2025, we filed a lawsuit against Zimmer Biomet Holdings, Inc. and Paragon 28, Inc. (collectively, "ZB") alleging infringement of 4 patents related to our innovative Lapiplasty 3D Bunion Correction technologies. The suit was filed in the United States District Court for the District of Delaware and seeks injunctive relief and damages. On August 5, 2025, we filed an amended complaint alleging infringement of an additional patent.

Current wording

We actively seek to protect the technology, inventions, and improvements that we consider important to our business using patents, trade secrets, trademarks and copyrights in the United States and foreign markets. As of June 30, 2026, our patent portfolio included 101 granted U.S. patents, with an additional 45 granted patents worldwide and over 196 pending patent applications. In keeping with our strategy of protecting our intellectual property rights, on October 14, 2024, we filed a lawsuit against Stryker Corporation and its subsidiary Wright Medical Technology, Inc. (collectively, "Stryker") alleging infringement of 9 patents related to our innovative Lapiplasty 3D Bunion Correction technologies and unfair competition. The suit was filed in the United States District Court for the District of New Jersey, and seeks injunctive relief and damages. In addition, on May 12, 2025, we filed a lawsuit against Zimmer Biomet Holdings, Inc. and Paragon 28, Inc. (collectively, "ZB") alleging infringement of 4 patents related to our innovative Lapiplasty 3D Bunion Correction technologies. The suit was filed in the United States District Court for the District of Delaware and seeks injunctive relief and damages. On August 5, 2025, we filed an amended complaint alleging infringement of an additional patent.

Previous wording

We currently generate revenue from the sale of our bunion implant kit systems, single-use sterile instruments, and other complementary products. Our systems bring together single-use implant kits, reusable instrument trays, and surgical techniques. We sell the kits and single-use instruments and other products to hospitals, ambulatory surgery centers, and stocking distributors in the United States primarily through a network of employee sales representatives and independent sales agencies.

Current wording

We currently generate revenue from the sale of our implant kit systems, single-use sterile instruments, and other complementary products. Our systems bring together single-use implant kits, reusable instrument trays, and surgical techniques. We sell the kits and single-use instruments and other products to hospitals, ambulatory surgery centers, and stocking distributors in the United States primarily through a network of employee sales representatives and independent sales agencies.

Previous wording

Cost of Goods Sold, Gross Profit and Gross Margin. Cost of goods sold decreased by $0.9 million, or 8.3%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in cost of goods sold was primarily due to a $0.5 million decrease in royalties, a $0.4 million decrease in inventory provisions, and a $0.4 million decrease in direct cost of goods sold resulting from decreased sales, partially offset by a $0.4 million increase in other costs of goods sold. During the three months ended March 31, 2026, gross profit decreased by $4.5 million, or 10.7%, as compared to the same period in 2025, due to decreased sales. Gross profit margin for the three months ended March 31, 2026 decreased from 79.7% to 79.3%, as compared to the same period in 2025, primarily due to lower margin sales to stocking distributors, and higher other costs of goods sold, partially offset by a decrease in inventory provisions and royalties.

Current wording

Cost of Goods Sold, Gross Profit and Gross Margin. Cost of goods sold increased by $0.1 million, or 1.4%, for the three months ended June 30, 2026 as compared to the same period in 2025. The increase in cost of goods sold was primarily due to a $0.2 million increase in payroll and other related costs from allocations, and a $0.3 million increase in other costs of goods sold, partially offset by a $0.4 million decrease in direct cost of goods sold resulting from decreased sales. During the three months ended June 30, 2026, gross profit decreased by $2.1 million, or 5.7%, as compared to the same period in 2025, due to decreased sales. Gross profit margin for the three months ended June 30, 2026 decreased from 79.7% to 78.5%, as compared to the same period in 2025, primarily due to an increase in payroll and related costs from allocations, a shift in product mix, and higher other costs of goods sold, partially offset by decreased sales to stocking distributors at a lower margin.

Previous wording

Sales and Marketing Expenses. Sales and marketing expenses decreased by $2.3 million, or 6.5%, for the three months ended March 31, 2026 as compared to the same period in 2025. Sales and marketing expenses decreased due to a $1.4 million decrease for surgeon training and clinical-related expenses, a $1.2 million decrease in surgical instrument expense from an increase in useful life from three to five years, and a $0.8 million decrease in direct to consumer advertising costs, partially offset by a $1.0 million increase in commissions, a $0.3 million increase in payroll and related costs, and $0.3 million in higher costs for conferences and events.

Current wording

Sales and Marketing Expenses. Sales and marketing expenses decreased by $2.1 million, or 6.5%, for the three months ended June 30, 2026 as compared to the same period in 2025. Sales and marketing expenses decreased due to a $2.2 million decrease in direct to consumer advertising costs, a $0.8 million decrease for surgeon training and clinical-related expenses, and a $0.8 million decrease in payroll and related costs primarily from restructuring the size and organization of our direct employee sales force, and a $0.7 million decrease in surgical instrument expense primarily from an increase in useful life from three to five years, partially offset by a $2.5 million increase in commissions. The increase in commissions is primarily due to a change in our sales channel mix as well as changes made when we optimized the compensation structure of our employee sales force earlier in the current year.

Previous wording

Interest Income. Interest income decreased $0.3 million, or 40.4%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in interest income was primarily due to lower balances invested in marketable securities during the current year period.

Current wording

Interest Income. Interest income decreased $0.3 million, or 42.6%, for the three months ended June 30, 2026 as compared to the same period in 2025. The decrease in interest income was primarily due to lower balances invested in marketable securities during the current year period.

Previous wording

Interest Expense. Interest expense increased $0.3 million, or 19.8%, for the three months ended March 31, 2026 as compared to the same period in 2025. The increase in interest expense was primarily due to increased amortization of debt issuance costs and a higher debt balance as a result of the debt refinancing in December 2025, partially offset by slightly lower interest rates.

Current wording

Interest Expense. Interest expense increased $0.2 million, or 18.2%, for the three months ended June 30, 2026 as compared to the same period in 2025. The increase in interest expense was primarily due to increased amortization of debt issuance costs and a higher debt balance as a result of the debt refinancing in December 2025, partially offset by slightly lower interest rates.

Previous wording

Revenue. Revenue decreased by $5.4 million, or 10.2%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease was primarily driven by a mix shift from higher priced flagship Lapiplasty bunion procedure kits to lower priced minimally invasive bunion procedure kits and lower volume of bunion procedure kits sold during the quarter. Revenue for the three months ended March 31, 2026 included a $0.8 million increase in sales to stocking distributors as compared to the same period in 2025.

Current wording

Revenue. Revenue decreased by $7.4 million, or 7.4%, for the six months ended June 30, 2026 as compared to the same period in 2025. The decrease was primarily driven by lower sales to stocking distributors, a mix shift from higher priced flagship procedure kits to lower priced minimally invasive procedure kits, and lower volume of procedure kits sold during the six months ended June 30, 2026. Revenue for the six months ended June 30, 2026 included a $2.3 million decrease in sales to stocking distributors as compared to the same period in 2025.

Previous wording

Research and Development Expenses. R&D expenses decreased by $0.9 million, or 16.9%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in R&D expenses was primarily due to a $0.4 million decrease in payroll and related costs, including stock compensation expense, and a $0.3 million decrease in the Company's products and instrumentation used for the R&D process.

Current wording

Research and Development Expenses. R&D expenses decreased by $2.1 million, or 18.6%, for the six months ended June 30, 2026 as compared to the same period in 2025. The decrease in R&D expenses was primarily due to a $1.1 million decrease in payroll and related costs, including stock compensation expense, and a $0.8 million decrease in clinical and regulatory expenses, primarily due to a $0.4 million decrease in the Company's products and instrumentation used for the R&D process.

Previous wording

General and Administrative Expenses. General and administrative expenses increased by $0.4 million, or 2.4%, for the three months ended March 31, 2026 as compared to the same period in 2025. The increase in general and administrative expenses was due to a $2.1 million increase in legal fees primarily driven by ongoing litigation matters, partially offset by a $1.3 million decrease in payroll and related costs, including stock compensation expense, and a $0.4 million decrease in the provision for allowance for credit losses.

Current wording

General and Administrative Expenses. General and administrative expenses decreased by $0.5 million, or 1.6%, for the six months ended June 30, 2026 as compared to the same period in 2025. The decrease in general and administrative expenses was due to a $3.1 million decrease in payroll and related costs, primarily from lower stock compensation expense, and a $0.3 million decrease in the provision for allowance for credit losses, partially offset by a $2.9 million increase in legal fees primarily driven by ongoing litigation matters.

Previous wording

As of March 31, 2026, we had cash and cash equivalents of $9.5 million and marketable securities of $42.3 million available for sale, an accumulated deficit of $267.0 million, and principal outstanding under our new term loan of $60.0 million. We believe that our existing cash and cash equivalents, marketable securities, available debt borrowings and expected revenues will be sufficient to meet our capital requirements and fund our operations for at least twelve months from the date of issuance of these condensed financial statements. We may be required or decide to raise additional debt or equity financing to support further growth of our operations.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $12.6 million and marketable securities of $33.0 million available for sale, an accumulated deficit of $282.8 million, and principal outstanding under our new term loan of $60.0 million. We believe that our existing cash and cash equivalents, marketable securities, available debt borrowings and expected revenues will be sufficient to meet our capital requirements and fund our operations for at least twelve months from the date of issuance of these condensed financial statements. We may be required or decide to raise additional debt or equity financing to support further growth of our operations.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2025 was $4.2 million, consisting primarily of a net loss of $15.9 million, adjusted for non-cash charges of $12.4 million and a decrease in net operating assets. The non-cash charges consist primarily of $8.7 million in share-based compensation expense, $2.5 million in depreciation and amortization, $0.6 million of non-cash lease expense, and $0.4 million in the provision for allowance for credit losses. The decrease in net operating assets was primarily due to a $9.3 million decrease in accounts receivable from higher sales in the fourth quarter of 2024, a $1.4 million decrease in prepaid expenses and other current assets, a $1.3 million decrease in inventory, and an $2.7 million increase in accounts payable due to timing of payments, partially offset by a $6.2 million decrease in accrued liabilities due to timing of payments and a $0.8 million decrease in operating lease liabilities.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2026 was $2.5 million, consisting primarily of a net loss of $33.8 million, adjusted for non-cash charges of $20.5 million and a decrease in net operating assets. The non-cash charges consist primarily of $14.5 million in share-based compensation expense, $2.8 million in depreciation and amortization expense, $1.2 million in financed legal fees, $1.1 million in non-cash lease expense, and $0.5 million in amortization of debt issuance costs. The decrease in net operating assets was primarily due to a $13.2 million decrease in accounts receivable from collection on higher sales in the fourth quarter of 2025, a $9.3 million increase in accounts payable due to timing of payments, partially offset by a $3.5 million increase in inventory, a $1.7 million decrease in operating lease liabilities, and a $1.1 million increase in prepaid and other current assets.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2026 was $7.2 million, consisting primarily of a net loss of $18.0 million, adjusted for non-cash charges of $10.5 million and a decrease in net operating assets. The non-cash charges consist primarily of $8.0 million in share-based compensation expense, $0.9 million in depreciation and amortization, $0.6 million in non-cash lease expense, and $0.3 million in amortization of debt issuance costs. The decrease in net operating assets was primarily due to a $11.7 million decrease in accounts receivable from collection on higher sales in the fourth quarter of 2025, a $6.8 million increase in accounts payable due to timing of payments, and a $0.6 million decrease in prepaid and other current assets, partially offset by a $3.1 million decrease in accrued liabilities, a $0.9 million decrease in operating lease liabilities, and a $0.3 million increase in inventory. The decrease in accrued liabilities was primarily from a decrease in accrued commissions from lower sales in the first quarter of 2026 compared to the fourth quarter of 2025.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2025 was $1.1 million, consisting primarily of a net loss of $33.3 million, adjusted for non-cash charges of $25.3 million and a decrease in net operating assets. The non-cash charges consist primarily of $18.3 million in share-based compensation expense, $5.0 million in depreciation and amortization expense, $1.1 million in non-cash lease expense, and $0.6 million in provision for allowance for credit losses. The decrease in net operating assets was primarily due to a $10.0 million decrease in accounts receivable from collection on higher sales in the fourth quarter of 2024 and a $9.4 million increase in accounts payable due to timing of payments, partially offset by a $5.3 million decrease in accrued liabilities, specifically from a decrease in accrued commissions from lower sales in the second quarter of 2025 compared to the fourth quarter of 2024, a $1.6 million decrease in operating lease liabilities, and a $3.1 million increase in inventory.

Previous wording

Net cash used in investing activities was $7.8 million for the three months ended March 31, 2026, consisting primarily of $16.1 million in purchases of available-for-sale marketable securities and $3.1 million in purchases of property and equipment, partially offset by $11.3 million in sales and maturities of available-for-sale marketable securities. The purchases of property and equipment included $2.5 million in capitalized surgical instruments for the reusable instrument trays primarily related to our new products, and $0.6 million primarily for equipment and internal use software to support the business.

Current wording

Net cash used in investing activities was $0.7 million for the six months ended June 30, 2026, consisting primarily of $18.7 million in purchases of available-for-sale marketable securities and $5.3 million in purchases of property and equipment, partially offset by $23.2 million in sales and maturities of available-for-sale marketable securities. The net of marketable securities sales and maturities and purchases of $4.5 million were used to fund our current operations. The purchases of property and equipment included $4.4 million in capitalized surgical instruments for the reusable instrument trays primarily related to our new products, and $0.9 million primarily for equipment and internal use software to support the business.

Previous wording

Net cash used in investing activities was $1.9 million for the three months ended March 31, 2025, consisting primarily of $15.1 million in purchases of available for sale marketable securities and $3.5 million in purchases of property and equipment, partially offset by $16.7 million in sales and maturities of available for sale marketable securities. The net of marketable securities sales and maturities and purchases of $1.6 million were primarily used to fund our current operations. The purchases of property and equipment included $2.8 million in capitalized surgical instruments for the reusable instrument trays related to new products, and $0.7 million for equipment and leasehold improvements to support the growth of our business.

Current wording

Net cash used in investing activities was $5.2 million for the six months ended June 30, 2025, consisting primarily of $30.2 million in purchases of available-for-sale marketable securities and $8.3 million in purchases of property and equipment, partially offset by $33.4 million in sales and maturities of available-for-sale marketable securities. The net of marketable securities sales and maturities and purchases of $3.2 million were primarily used to fund our current operations. The purchases in property and equipment included $7.2 million in capitalized surgical instruments for the reusable instrument trays related to new products, and $1.1 million primarily for equipment, software, and leasehold improvements, to support the growth of our business.

Previous wording

Net cash used in financing activities was $0.6 million for the three months ended March 31, 2026, consisting primarily of $0.5 million in payments on insurance premium financing and $0.2 million of shares repurchased for tax withholding on vested restricted stock units.

Current wording

Net cash provided by financing activities was $0.1 million for the six months ended June 30, 2026, consisting primarily of $1.0 million in proceeds from insurance premium financing, partially offset by $0.7 million in payments on insurance premium financing and $0.2 million of shares repurchased for tax withholding on vested restricted stock units.

Previous wording

Net cash used in financing activities was $0.3 million for the three months ended March 31, 2025, consisting primarily of $0.4 million of shares repurchased for tax withholding on vested restricted stock units, partially offset by $0.1 million in proceeds from stock option exercises.

Current wording

Net cash provided by financing activities was $0.7 million for the six months ended June 30, 2025, consisting primarily of $1.0 million in proceeds from insurance premium financing and $0.2 million in proceeds from stock option exercises, partially offset by $0.4 million of shares repurchased for tax withholding on vested RSUs.

Previous wording

We have commitments for future payments related to our corporate headquarters office located in Ponte Vedra, Florida. We entered into a 10-year lease in February 2022 for our headquarters which expires in July 2032. Lease payments comprise the base rent plus operating costs which include taxes, insurance, and common area maintenance. We also have commitments for future payments related to our former headquarters which expire in April 2026 and have subleased this space for the remainder of our lease term. The remaining lease obligations are $19.1 million under these leases as of March 31, 2026.

Current wording

We have commitments for future payments related to our corporate headquarters office located in Ponte Vedra, Florida. We entered into a 10-year lease in February 2022 for our headquarters which expires in July 2032. Lease payments comprise the base rent plus operating costs which include taxes, insurance, and common area maintenance. We also have commitments for future payments related to our former headquarters which expire in August 2026 and have subleased this space for the remainder of our lease term. The remaining lease obligations are $18.2 million under these leases as of June 30, 2026.

Previous wording

Our critical accounting policies and estimates are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates" in our Annual Report. There were no material changes to these accounting policies during the three months ended March 31, 2026.

Current wording

Our critical accounting policies and estimates are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates" in our Annual Report. There were no material changes to these accounting policies during the six months ended June 30, 2026.