Treace Medical第二季虧損收窄至每股0.24美元 收入按年跌4.2%

10-Q
 
 
 
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 

  
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
Form 10-Q
(Mark one)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
 
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from___ to___
Commission file number: 001-40355
Treace Medical Concepts, Inc.
(Exact name of registrant as specified in its charter)
 

 
 
 
 
 

 
 Delaware

 47-1052611

 

 
 (State or other jurisdiction of incorporation or organization)

 (I.R.S. Employer Identification No.)

 

 100 Palmetto Park Place
Ponte Vedra, Florida 32081
(Address of principal executive offices, including zip code)
(904) 373-5940
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

 
 
 
 
 
 

 
 Title of each class

 Trading symbol(s)

 Name of each exchange on which registered

 

 
 Common stock, $0.001 par value

 TMCI

 The Nasdaq Global Select Market

 

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 
 
 
 
 
 
 

 
 Large accelerated filer

 ☐

 Accelerated filer

 ☒

 

 
 Non-accelerated filer

 ☐

 Smaller reporting company

 ☐

 

 
  

  

 Emerging growth company

 ☐

 

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 31, 2026, 65,034,552 shares of the registrant’s common stock, $0.001 par value per share, were outstanding.
 

  

 
  

 TREACE MEDICAL CONCEPTS, INC. 
 
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026
 
Table of Contents
 

 
 
 
 
 

 
 Special Note Regarding Forward-Looking Statements

 1

 

  
Part I: Financial Information

 
 
 
 
 
 

 
 Item 1.

 Condensed Financial Statements

 4

 

 
  

 Condensed Balance Sheets

 4

 

 
  

 Condensed Statements of Operations and Comprehensive Loss

 5

 

 
  

 Condensed Statements of Stockholders' Equity

 6

 

 
  

 Condensed Statements of Cash Flows

 7

 

 
  

 Notes to Condensed Financial Statements

 8

 

 
 Item 2.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 17

 

 
 Item 3.

 Quantitative and Qualitative Disclosures About Market Risk

 26

 

 
 Item 4.

 Controls and Procedures

 26

 

  

 
 
 
 
 
 

 
  

 Part II: Other Information

  

 

 
 Item 1.

 Legal Proceedings

 27

 

 
 Item 1A.

 Risk Factors

 28

 

 
 Item 2.

 Unregistered Sales of Equity Securities and Use of Proceeds

 28

 

 
 Item 3.

 Defaults Upon Senior Securities

 28

 

 
 Item 4.

 Mine Safety Disclosures

 28

 

 
 Item 5.

 Other Information

 28

 

 
 Item 6.

 Exhibits

 29

 

 
  

 Signatures

 31

 

  

  

 
  

 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 
As used in this Quarterly Report on Form 10-Q ("Quarterly Report"), unless expressly indicated or the context otherwise requires, references to "Treace Medical Concepts," "we," "us," "our," or the "Company," refer to Treace Medical Concepts, Inc. This Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "assume," "believe," "contemplate," "continue," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "predict," "potential," "positioned," "seek," "should," "slated," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. 
These forward-looking statements include, but are not limited to, statements about: 
•the expected use of our products by physicians, including our ability to expand the number of active surgeons and maintain or increase the use of our products by existing and new surgeon customers; 

•the expected growth of our business and our organization and expected improvements in profitability, cash usage and other financial results; 

•our ability to increase case volumes and market share and effectively respond to and mitigate the impact of challenges in the current market environment, including evolving surgeon and patient preferences for bunion surgery treatments, the extensive competition in our industry and new product introductions from other industry participants, including both the Lapidus market and the minimally invasive osteotomy market, and shifts in the setting of care for elective bunion surgeries from hospitals to ambulatory surgery centers;

•our ability to control and reduce expenses to help offset changes in revenue growth rates, product mix, and other events;

•our plans and expected timeline related to our products, or developing, commercially releasing or acquiring new or improved products, to address additional indications or otherwise, and the timing and extent that customers adopt and continue to use our products, including our flagship Lapiplasty® system which has higher average selling prices than our newer osteotomy and great toe fusion systems;

•our ability to maintain sufficient balance sheet strength to continue executing on our strategic investments and growth initiatives for the foreseeable future;

•expected seasonality; 

•the impact of softening consumer sentiment, higher insurance deductibles and costs, higher fuel prices, inflationary pressures, interest rate changes, business downturns, evolving or increased tariffs, armed conflicts, changes in trade policy or global trade disruptions, protracted government shutdowns, and general economic conditions on the overall state of the economy, on patient behavior and demand for elective surgeries, on customers' and suppliers' operations, and on our business and results of operations;

•our expectations regarding our ability to leverage investments and manage expenses in our commercial organization to support demand for our products and improve profitability;

•our expectations regarding government and third-party payor coverage and reimbursement; 

•the economic success and viability of the hospitals, ambulatory surgery centers, surgeons, and stocking distributors that buy our products;

•the impact of sales to stocking distributors and other customers on product revenues in future periods, particularly if softening demand means that products already purchased by customers are used more slowly for future cases; 

•our estimates of our expenses, ongoing losses, future revenue, and capital requirements, our ability to comply with covenants under our 5-year credit facilities, and our need for, or ability to obtain, additional financing or refinancing of outstanding debt at or before maturity; 

 1

 
  

 •our expected uses of our existing cash, cash equivalents and marketable securities and the sufficiency of such resources to fund our planned operations; 

•our ability to retain and recruit key personnel and optimize our existing sales and marketing infrastructure;

•our ability to obtain an adequate supply of materials and components for our products, some of which are single-source suppliers; 

•our ability to obtain and maintain intellectual property protection for our products; 

•our ability to protect and enforce our intellectual property, and the time and expense involved in monitoring unauthorized uses of our intellectual property, including in connection with the lawsuits we initiated in October 2024 and May 2025; 

•our ability to successfully defend against infringement of our intellectual property by third parties, including our competitors; 

•the impact on our operations, business, supply chain, patient demand for elective surgeries, case cancellations, and hospital and surgeon availability as a result of natural or other disasters, including hurricanes, floods, tornadoes and other climate-related events, power loss, strikes or other events beyond our control;

•the anticipated pace of growth in the foot and ankle market; 

•our ability to obtain, maintain and expand regulatory clearances for our products and any new products we develop or acquire;

•our ability to expand our business in current and new geographic markets; 

•our compliance with Nasdaq requirements and government laws, rules and regulations; 

•the impact of geopolitical tensions and international conflicts on the economy and our business;

•the impact of a bankruptcy filing by any of our customers;

•our plans to expand clinical data supporting our products and conduct further clinical studies;

•the outcome and expense of pending and threatened litigation, or legal proceedings, including a pending purported federal securities class action; and

•the effect of any infectious disease outbreak and its impact or potential impact on our business or on the healthcare industry, particularly elective surgeries where our products are used.

We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management's beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control. As a result, any or all of our forward-looking statements in this Quarterly Report and in other written materials or oral statements made by senior management to analysts, investors, representatives of the media or others may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 and any subsequent Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission ("SEC"), and this Quarterly Report under "Risk Factors" and elsewhere in this Quarterly Report. Readers and investors are urged to consider these factors carefully in evaluating the forward-looking statements. 
These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to actual results or to changes in our expectations. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 2

 
  

 You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed with the SEC as exhibits to this Quarterly Report with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. 

 3

 
  

 PART I–FINANCIAL INFORMATION
Item 1. Condensed Financial Statements.
Treace Medical Concepts, Inc. 
Condensed Balance Sheets 
(in thousands, except share and per share amounts)
(unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 June 30,

  

  

 December 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Assets

  

  

  

  

  

  

 

 
 Current assets

  

  

  

  

  

  

 

 
 Cash and cash equivalents

  

 $

 12,610

  

  

 $

 10,708

  

 

 
 Marketable securities, short-term

  

  

 33,009

  

  

  

 37,659

  

 

 
 Accounts receivable, net of allowance for credit losses of $1,597 and $1,824 as of June 30, 2026 and December 31, 2025, respectively

  

  

 28,732

  

  

  

 42,155

  

 

 
 Inventories

  

  

 39,542

  

  

  

 36,031

  

 

 
 Prepaid expenses and other current assets

  

  

 6,561

  

  

  

 5,501

  

 

 
 Total current assets

  

  

 120,454

  

  

  

 132,054

  

 

 
 Property and equipment, net

  

  

 32,496

  

  

  

 29,752

  

 

 
 Intangible assets, net of accumulated amortization of $2,850 and $2,375 as of June 30, 2026 and December 31, 2025, respectively

  

  

 6,650

  

  

  

 7,125

  

 

 
 Goodwill

  

  

 12,815

  

  

  

 12,815

  

 

 
 Operating lease right-of-use assets

  

  

 7,139

  

  

  

 7,614

  

 

 
 Other non-current assets, net of allowance for credit losses of $35 and $69 as of June 30, 2026 and December 31, 2025, respectively

  

  

 1,501

  

  

  

 1,221

  

 

 
 Total assets

  

 $

 181,055

  

  

 $

 190,581

  

 

 
 Liabilities and Stockholders’ Equity

  

  

  

  

  

  

 

 
 Current liabilities

  

  

  

  

  

  

 

 
 Accounts payable

  

 $

 16,061

  

  

 $

 6,726

  

 

 
 Accrued liabilities

  

  

 6,281

  

  

  

 5,784

  

 

 
 Accrued commissions

  

  

 6,740

  

  

  

 9,365

  

 

 
 Accrued compensation

  

  

 8,087

  

  

  

 6,331

  

 

 
 Other liabilities

  

  

 4,327

  

  

  

 2,429

  

 

 
 Total current liabilities

  

  

 41,496

  

  

  

 30,635

  

 

 
 Long-term debt, net

  

  

 56,042

  

  

  

 55,583

  

 

 
 Operating lease liabilities, net of current portion

  

  

 13,091

  

  

  

 13,982

  

 

 
 Other long-term liabilities

  

  

 2,689

  

  

  

 3,049

  

 

 
 Total liabilities

  

  

 113,318

  

  

  

 103,249

  

 

 
 Commitments and contingencies (Note 7)

  

  

  

  

  

  

 

 
 Stockholders’ equity

  

  

  

  

  

  

 

 
 Preferred stock, $0.001 par value, 5,000,000 shares authorized as of June 30, 2026 and December 31, 2025; 0 shares issued as of June 30, 2026 and December 31, 2025

  

  

 —

  

  

  

 —

  

 

 
 Common stock, $0.001 par value, 300,000,000 shares authorized; 65,236,297 and 64,029,378 shares issued as of June 30, 2026 and December 31, 2025, respectively

  

  

 65

  

  

 64

  

 

 
 Additional paid-in capital

  

  

 351,966

  

  

  

 337,371

  

 

 
 Accumulated deficit

  

  

 (282,826

 )

  

  

 (248,992

 )

 

 
 Accumulated other comprehensive income (loss)

  

  

 (52

 )

  

  

 72

  

 

 
 Treasury stock, at cost; 259,673 and 165,513 shares as of June 30, 2026 and December 31, 2025, respectively

  

  

 (1,416

 )

  

  

 (1,183

 )

 

 
 Total stockholders’ equity

  

  

 67,737

  

  

  

 87,332

  

 

 
 Total liabilities and stockholders’ equity

  

 $

 181,055

  

  

 $

 190,581

  

 

 The accompanying notes are an integral part of these condensed financial statements.

 4

 
  

 Treace Medical Concepts, Inc.
Condensed Statements of Operations and Comprehensive Loss 
(in thousands, except share and per share amounts) 
(unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended June 30,

  

  

 Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

  

 2026

  

  

 2025

  

 

 
 Revenue

  

 $

 45,376

  

  

 $

 47,387

  

  

 $

 92,574

  

  

 $

 99,957

  

 

 
 Cost of goods sold

  

  

 9,769

  

  

  

 9,635

  

  

  

 19,560

  

  

  

 20,312

  

 

 
 Gross profit

  

  

 35,607

  

  

  

 37,752

  

  

  

 73,014

  

  

  

 79,645

  

 

 
 Operating expenses

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Sales and marketing

  

  

 30,940

  

  

  

 33,084

  

  

  

 64,715

  

  

  

 69,206

  

 

 
 Research and development

  

  

 4,376

  

  

  

 5,498

  

  

  

 8,998

  

  

  

 11,060

  

 

 
 General and administrative

  

  

 15,249

  

  

  

 16,144

  

  

  

 31,426

  

  

  

 31,935

  

 

 
 Total operating expenses

  

  

 50,565

  

  

  

 54,726

  

  

  

 105,139

  

  

  

 112,201

  

 

 
 Loss from operations

  

  

 (14,958

 )

  

  

 (16,974

 )

  

  

 (32,125

 )

  

  

 (32,556

 )

 

 
 Interest income

  

  

 445

  

  

  

 775

  

  

  

 946

  

  

  

 1,616

  

 

 
 Interest expense

  

  

 (1,562

 )

  

  

 (1,321

 )

  

  

 (3,132

 )

  

  

 (2,632

 )

 

 
 Other income, net

  

  

 202

  

  

  

 122

  

  

  

 477

  

  

  

 252

  

 

 
 Other non-operating income (expense), net

  

  

 (915

 )

  

  

 (424

 )

  

  

 (1,709

 )

  

  

 (764

 )

 

 
 Net loss

  

 $

 (15,873

 )

  

 $

 (17,398

 )

  

 $

 (33,834

 )

  

 $

 (33,320

 )

 

 
  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Other comprehensive income (loss)

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Unrealized gain (loss) on marketable securities

  

  

 (26

 )

  

  

 (7

 )

  

  

 (124

 )

  

  

 (47

 )

 

 
 Comprehensive loss

  

 $

 (15,899

 )

  

 $

 (17,405

 )

  

 $

 (33,958

 )

  

 $

 (33,367

 )

 

 
  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Net loss per share, basic and diluted

  

 $

 (0.24

 )

  

 $

 (0.28

 )

  

 $

 (0.52

 )

  

 $

 (0.53

 )

 

 
 Weighted-average shares used in computing net loss per share, basic and diluted

  

  

 65,049,844

  

  

  

 63,006,891

  

  

  

 64,822,526

  

  

  

 62,843,337

  

 

 The accompanying notes are an integral part of these condensed financial statements. 

 5

 
  

 Treace Medical Concepts, Inc.
Condensed Statements of Stockholders’ Equity
(in thousands, except share amounts) 
(unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

  

  

  

  

  

  

  

  

  

  

  

 Accumulated

  

  

  

  

  

  

  

 

 
  

  

  

  

  

  

  

 Additional

  

  

  

  

  

 Other

  

  

  

  

  

 Total

  

 

 
  

 Common Stock

  

  

 Paid-In

  

  

 Accumulated

  

  

 Comprehensive

  

  

 Treasury

  

  

 Stockholders’

  

 

 
  

 Outstanding Shares

  

  

 Amount

  

  

 Capital

  

  

 Deficit

  

  

 Income (Loss)

  

  

 Stock

  

  

 Equity

  

 

 
 Balances at December 31, 2025

  

 63,863,865

  

  

 $

 64

  

  

 $

 337,371

  

  

 $

 (248,992

 )

  

 $

 72

  

  

 $

 (1,183

 )

  

 $

 87,332

  

 

 
 Issuance of common stock upon exercise of stock options

  

 106,420

  

  

  

 —

  

  

  

 91

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 91

  

 

 
 Issuance of common stock for vesting of restricted stock units

  

 898,014

  

  

  

 1

  

  

  

 (1

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Share-based compensation expense

  

 —

  

  

  

 —

  

  

  

 8,034

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 8,034

  

 

 
 Net loss

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (17,961

 )

  

  

 —

  

  

  

 —

  

  

  

 (17,961

 )

 

 
 Unrealized gain (loss) on available-for-sale marketable securities

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (98

 )

  

  

 —

  

  

  

 (98

 )

 

 
 Shares directly withheld from employees for tax payment

  

 (82,613

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (207

 )

  

  

 (207

 )

 

 
 Balances at March 31, 2026

  

 64,785,686

  

  

 $

 65

  

  

 $

 345,495

  

  

 $

 (266,953

 )

  

 $

 (26

 )

  

 $

 (1,390

 )

  

 $

 77,191

  

 

 
 Issuance of common stock upon exercise of stock options

  

 5,500

  

  

  

 —

  

  

  

 8

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 8

  

 

 
 Issuance of common stock for vesting of restricted stock units

  

 196,985

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Share-based compensation expense

  

 —

  

  

  

 —

  

  

  

 6,463

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 6,463

  

 

 
 Net loss

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (15,873

 )

  

  

 —

  

  

  

 —

  

  

  

 (15,873

 )

 

 
 Unrealized gain (loss) on available-for-sale marketable securities

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (26

 )

  

  

 —

  

  

  

 (26

 )

 

 
 Shares directly withheld from employees for tax payment

  

 (11,547

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (26

 )

  

  

 (26

 )

 

 
 Balances at June 30, 2026

  

 64,976,624

  

  

 $

 65

  

  

 $

 351,966

  

  

 $

 (282,826

 )

  

 $

 (52

 )

  

 $

 (1,416

 )

  

 $

 67,737

  

 

 
  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Balances at December 31, 2024

  

 62,361,710

  

  

 $

 62

  

  

 $

 303,004

  

  

 $

 (189,990

 )

  

 $

 97

  

  

 $

 (281

 )

  

 $

 112,892

  

 

 
 Issuance of common stock upon exercise of stock options

  

 82,829

  

  

  

 1

  

  

  

 118

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 119

  

 

 
 Issuance of common stock for vesting of restricted stock units

  

 499,572

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Share-based compensation expense

  

 —

  

  

  

 —

  

  

  

 8,693

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 8,693

  

 

 
 Net loss

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (15,922

 )

  

  

 —

  

  

  

 —

  

  

  

 (15,922

 )

 

 
 Unrealized gain (loss) on available-for-sale marketable securities

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (40

 )

  

  

 —

  

  

  

 (40

 )

 

 
 Shares directly withheld from employees for tax payment

  

 (52,605

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (401

 )

  

  

 (401

 )

 

 
 Balances at March 31, 2025

  

 62,891,506

  

  

 $

 63

  

  

 $

 311,815

  

  

 $

 (205,912

 )

  

 $

 57

  

  

 $

 (682

 )

  

 $

 105,341

  

 

 
 Issuance of common stock upon exercise of stock options

  

 87,313

  

  

  

 —

  

  

  

 116

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 116

  

 

 
 Issuance of common stock for vesting of restricted stock units

  

 65,389

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

 

 
 Share-based compensation expense

  

 —

  

  

  

 —

  

  

  

 9,577

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 9,577

  

 

 
 Net loss

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (17,398

 )

  

  

 —

  

  

  

 —

  

  

  

 (17,398

 )

 

 
 Unrealized gain (loss) on available-for-sale marketable securities

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (7

 )

  

  

 —

  

  

  

 (7

 )

 

 
 Shares directly withheld from employees for tax payment

  

 (1,894

 )

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

 (14

 )

  

  

 (14

 )

 

 
 Balances at June 30, 2025

  

 63,042,314

  

  

 $

 63

  

  

 $

 321,508

  

  

 $

 (223,310

 )

  

 $

 50

  

  

 $

 (696

 )

  

 $

 97,615

  

 

 The accompanying notes are an integral part of these condensed financial statements. 

 6

 
  

 Treace Medical Concepts, Inc.
Condensed Statements of Cash Flows 
(in thousands)
(unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Cash flows from operating activities

  

  

  

  

  

  

 

 
 Net loss

  

 $

 (33,834

 )

  

 $

 (33,320

 )

 

 
 Adjustments to reconcile net loss to net cash provided by (used in) operating
   activities

  

  

  

  

  

  

 

 
 Depreciation and amortization expense

  

  

 2,787

  

  

  

 5,037

  

 

 
 Provision for allowance for credit losses

  

  

 243

  

  

  

 581

  

 

 
 Share-based compensation expense

  

  

 14,497

  

  

  

 18,270

  

 

 
 Non-cash lease expense

  

  

 1,103

  

  

  

 1,133

  

 

 
 Amortization of debt issuance costs

  

  

 505

  

  

  

 148

  

 

 
 Amortization (accretion) of premium (discount) on marketable securities, net

  

  

 11

  

  

  

 (114

 )

 

 
 Other, net

  

  

 1,383

  

  

  

 219

  

 

 
 Net changes in operating assets and liabilities, net of acquisitions

  

  

  

  

  

  

 

 
 Accounts receivable

  

  

 13,180

  

  

  

 9,985

  

 

 
 Inventory

  

  

 (3,511

 )

  

  

 (3,142

 )

 

 
 Prepaid expenses and other assets

  

  

 (1,060

 )

  

  

 84

  

 

 
 Other non-current assets

  

  

 (320

 )

  

  

 (365

 )

 

 
 Operating lease liabilities

  

  

 (1,683

 )

  

  

 (1,553

 )

 

 
 Accounts payable

  

  

 9,335

  

  

  

 9,437

  

 

 
 Accrued liabilities

  

  

 (372

 )

  

  

 (5,309

 )

 

 
 Other, net

  

  

 278

  

  

  

 57

  

 

 
 Net cash provided by (used in) operating activities

  

  

 2,542

  

  

  

 1,148

  

 

 
  

  

  

  

  

  

  

 

 
 Cash flows from investing activities

  

  

  

  

  

  

 

 
 Purchases of available-for-sale marketable securities

  

  

 (18,669

 )

  

  

 (30,249

 )

 

 
 Sales and maturities of available-for-sale marketable securities

  

  

 23,184

  

  

  

 33,408

  

 

 
 Purchases of property and equipment

  

  

 (5,263

 )

  

  

 (8,310

 )

 

 
 Net cash provided by (used in) investing activities

  

  

 (748

 )

  

  

 (5,151

 )

 

 
  

  

  

  

  

  

  

 

 
 Cash flows from financing activities

  

  

  

  

  

  

 

 
 Proceeds from insurance premium financing

  

  

 983

  

  

  

 983

  

 

 
 Debt issuance costs

  

  

 (6

 )

  

  

 —

  

 

 
 Payments on insurance premium financing

  

  

 (735

 )

  

  

 (98

 )

 

 
 Proceeds from exercise of employee stock options

  

  

 99

  

  

  

 235

  

 

 
 Taxes from withheld shares

  

  

 (233

 )

  

  

 (415

 )

 

 
 Net cash provided by (used in) financing activities

  

  

 108

  

  

  

 705

  

 

 
 Net increase (decrease) in cash and cash equivalents

  

  

 1,902

  

  

  

 (3,298

 )

 

 
 Cash and cash equivalents at beginning of period

  

  

 10,708

  

  

  

 11,350

  

 

 
 Cash and cash equivalents at end of period

  

 $

 12,610

  

  

 $

 8,052

  

 

 
  

  

  

  

  

  

  

 

 
 Supplemental disclosure of cash flow information

  

  

  

  

  

  

 

 
 Cash paid for interest

  

 $

 2,193

  

  

 $

 2,495

  

 

 
 Noncash investing activities

  

  

  

  

  

  

 

 
 Unrealized (gains) losses, net on marketable securities

  

 $

 124

  

  

 $

 47

  

 

 
 Noncash financing activities

  

  

  

  

  

  

 

 
 Legal cost financing

  

 $

 1,176

  

  

 $

 228

  

 

 The accompanying notes are an integral part of these condensed financial statements. 

 7

 
  

 TREACE MEDICAL CONCEPTS, INC.
Notes to Condensed Financial Statements
(unaudited)
1. Formation and Business of the Company
Treace Medical Concepts, Inc. (the "Company") is a medical technology company with the goal of being the recognized leader in the surgical treatment of bunions and related deformities. The Company has 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, the Company has expanded its product offerings to continue to execute its strategy of becoming a comprehensive bunion solutions company and further penetrating the bunion market opportunity. The Company operates from its corporate headquarters located in Ponte Vedra, Florida.

2. Summary of Significant Accounting Policies
The Company prepared the unaudited interim condensed financial statements included in this report in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC") related to quarterly reports on Form 10-Q.
Basis of Presentation 
The condensed financial statements have been prepared on the same basis as the Company’s annual financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026. The condensed financial statements included herein reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending December 31, 2026.
Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Updates ("ASU") of the Financial Accounting Standards Board ("FASB").

Use of Estimates 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.
Significant estimates and assumptions include valuation of intangible assets and goodwill, reserves and write-downs related to accounts receivable, inventories, the recoverability of long-term assets, deferred tax assets and related valuation allowances, contingencies, and stock-based compensation. 

Property and Equipment, Net
Effective January 1, 2026, the Company adjusted the useful life of its capitalized surgical instruments from three years to five years. The change in useful life was made as a prospective adjustment and resulted in a decrease of depreciation expense of $1.2 million and $2.4 million, respectively, for the three and six months ended June 30, 2026 and a decrease of $0.02 and $0.04, respectively, on a loss per share basis for the three and six months ended June 30, 2026. The change in useful life is expected to reduce depreciation expense by $4.6 million for the year ended 2026 based on capitalized surgical instruments balances during the year.

 8

 
  

 Concentration of Credit Risk 
Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash, cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash with established financial institutions and has exposure for balances in excess of the Federal Deposit Insurance Corporation insured limits. The Company's available-for-sale securities portfolio primarily consists of U.S. treasury and agency securities, money market funds, commercial paper, Yankee CDs, high credit quality asset-backed securities and corporate debt securities. The Company's investment policy requires its available-for-sale securities to meet certain criteria including investment type, credit ratings, and a maximum portfolio duration of one year. 
The Company earns revenue from the sale of its products to customers such as hospitals, ambulatory surgery centers, and stocking distributors. The Company’s accounts receivable are derived from revenue earned from customers. At June 30, 2026 and December 31, 2025, no customer accounted for more than 10% of accounts receivable. For the three and six months ended June 30, 2026 and 2025, there were no customers that represented 10% or more of revenue.

Rental Income
The Company recorded rental income for its subleases of $0.2 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively. The Company recorded rental income for its subleases of $0.6 million and $0.3 million for the six months ended June 30, 2026 and 2025, respectively. All subleases are classified as operating leases. 

3. Recent Accounting Pronouncements
Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures Topic 220-40 ("ASC 220-40"). The update requires all public business entities at interim and annual reporting periods to disclose in (1) a tabular format the amounts of