# Anteris Technologies Global Corp. (AVR) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Anteris Technologies Global Corp.'s 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/2011514/000114036125008455/ef20043984_10k.htm
Accession: 0001140361-25-008455
Filing date: 2025-03-12
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/AVR/
All MD&A years: /company/AVR/mda/
Next year: /company/AVR/mda/fy2025/ (FY 2025)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors
affecting the operating results, financial condition and liquidity, and cash flows of our company for the year ended December 31, 2024. The Company was incorporated under the laws of the state of Delaware to become the holding company of our
business pursuant to the Reorganization. Prior to completion of the Reorganization, the Company had no business or operations and, following completion of the Reorganization, the business and operations of the Company consists solely of the
business and operations of ATGC and its subsidiaries. Our financial statements as of and for the years ended December 31, 2023 and 2024 consolidate, and our future financial statements will consolidate, ATGC as an operating subsidiary. This
MD&A should be read in conjunction with our consolidated financial statements, the accompanying notes to consolidated financial statements and other financial information included in this Form 10-K. Except for historical information, the
matters discussed in this MD&A contain various forward-looking statements that involve risks and uncertainties and are based upon judgments concerning various factors beyond our control. Our actual results could differ materially from those
anticipated in these forward- looking statements. You should carefully read the section titled “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking
statements. Please also see the section of this Form 10-K titled “Cautionary Note Regarding Forward- Looking Statements.

Overview

Anteris is a structural heart company dedicated to revolutionizing cardiac care by pioneering science-driven and measurable advancements to restore heart valve patients to healthy function. Our lead
product, the DurAVR® THV system, represents a unique product opportunity in a new THV class of single-piece heart valves, for the treatment of aortic stenosis. Our DurAVR® THV system consists of a single-piece, biomimetic valve
made with our proprietary ADAPT® tissue-enhancing technology and deployed with our ComASUR® balloon-expandable delivery system. ADAPT® is our proprietary anti-calcification tissue shaping technology that is designed
to reengineer xenograft tissue into a pure, single-piece collagen bioscaffold. Our proprietary ADAPT® tissue has been clinically demonstrated to be calcium free for up to 10 years post-procedure, according to Performance of the ADAPT-Treated CardioCel® Scaffold in Pediatric Patients With Congenital Cardiac Anomalies: Medium to Long-Term Outcomes, published by
William Neethling et. al., and has been distributed for use in over 55,000 patients globally in other indications. Our ComASUR® balloon-expandable delivery system, which was developed in consultation with physicians, is designed to provide
precise alignment with the heart’s native commissures to achieve accurate placement of the DurAVR® THV system.

We clinically developed our DurAVR® THV system over several years with significant physician input with the goal of addressing hemodynamic limitations of the current standard-of-care
products. As of January 2025, a total of 83 patients have been treated with the DurAVR® THV system across the United States, Canada and Europe. In November 2021, we commenced our FIH study at the Tbilisi Heart and Vascular Clinic in
Tbilisi, Georgia.

We are a development stage company and have incurred net losses in each year since inception, however, we believe that we have significant growth potential in a large, underpenetrated and growing
market. Since the inception of the TAVR procedure, the annual volume of TAVR procedures in the United States has increased significantly year-over-year, with an estimated 73,000 patients having undergone a TAVR procedure in the United States in 2019
according to the TVT Registry. According to FMI, the total global market opportunity for TAVR in relation to severe aortic stenosis and in relation to ViV procedures is expected will reach $9.9 billion and $2.5 billion, respectively, in 2028. The key
specific markets that our Company is initially targeting are North America and Europe due to these markets accounting for the majority of the above global opportunity. FMI indicated that the North American and European markets averaged 53% and 38% of
the global market share, respectively, during the period 2016 to 2023. FMI forecasts that the market opportunity in relation to severe aortic stenosis for North America and Europe to reach $5.5 billion and $3.7 billion, respectively, in 2028; and the
market opportunity in relation to ViV procedures is forecast to reach $1.5 billion and $0.8 billion, respectively, in 2028. To calculate these future market values, FMI has relied on actual data from 2023 collated from a variety of published sources
and key medical experts and applied a projected CAGR of 14.9% for the global market, 16.2% for the North American market, and 14.0% for the European market. A non-exhaustive list of factors that may impact these forecast calculations include key
players’ historic growth; companies and manufacturers working together to develop new, affordable and timesaving technologies; new product launches and approvals; rising demand for THV replacement; availability and cost of products; growing
investment in healthcare expenditure; and increased regulatory focus on patient safety and reimbursement policies. In addition, we expect the TAVR market to benefit from general trends, including an aging population, earlier diagnosis of aortic
stenosis, increased incidence of obesity and diabetes (which contribute to heart disease), as well as the broader patient populations’ desire to pursue a more active lifestyle.

Our innovation-focused R&D practice is driven by rapid technological advancement and significant input from leading interventional cardiologists and cardiac surgeons. As a company that is
primarily in the development phase, we currently generate small amounts of revenue and income which are insufficient to cover our investment in research, development and operational activities resulting in recurring net operating losses, incurred
since inception. We, like other development stage medical device companies, experience challenges in implementing our business strategy due to limited resources and a smaller capital base as we prioritize product development, minimize the period to
the commencement of commercial sales, ensure our focus on quality as well as scale our operations. The development and commercialization of new medical devices is highly competitive. Those competitors may have substantial market share, substantially
greater capital resources and established relationships with the structural heart community potentially creating barriers to adoption of our technology. Our success will partly be based on our ability to educate the market about the benefits of our
disruptive technology including current unmet clinical needs compared to commercially available devices as well as how we plan to capture market share post commercialization.

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On December 12, 2024, our Registration Statement relating to our initial public offering became effective pursuant to which we issued and sold 14,800,000 shares of Common Stock at a public offering
price of $6.00 per share. We received net proceeds of $79.6 million, after deducting the underwriting discounts, commissions and offering expenses. This excludes the underwriters’ option to purchase additional shares, which occurred on January
15, 2025, subsequent to the year ended December 31, 2024.

Financial Overview

As a development-stage company, we have incurred significant losses since our inception. We anticipate that we will continue to incur significant losses for the foreseeable future and there can be no
assurance that we will ever achieve or maintain profitability.

We expect expenses for our research, clinical validation, development, design, manufacturing and marketing will increase and, as a result, we will need additional capital to fund our operations. Any
future funding could involve a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements, strategic alliances and licensing arrangements. We may be unable to raise additional funds or enter
into such other arrangements when needed on favorable terms or at all.

Any failure to raise capital or enter into such other arrangements as and when needed could have a negative impact on our financial condition and our ability to market our products.

Principles of Consolidation and Operating Segments

The consolidated financial statements include the accounts for our company, our wholly-owned subsidiaries, and entities for which we have a controlling financial interest, and for periods prior to
the Reorganization, the accounts of ATL, its wholly-owned subsidiaries, and entities for which ATL has a controlling financial interest. Intercompany transactions, balances and unrealized gains and losses on transactions between such entities are
eliminated.

Our management has determined that the activities of the business as reviewed by the Chief Executive Officer, the chief operating decision maker, are one segment, being the development and
commercialization of the ADAPT® anti-calcification tissue. This is focused on the DurAVR® THV system.

Components of Results of Operations

Revenue and Other Income

We currently derive revenue from the sale of regenerative tissue products. Such sales are made principally to 4C and to LeMaitre, a distributor of medical products, to whom we sold our CardioCel™ and
VascuCel™ patch business in 2019 in order to focus on development of our proprietary ADAPT® tissue for the DurAVR® THV system. Under a distribution agreement, we manufacture and sell the CardioCel™ and VascuCel™ products to
LeMaitre. The Transition Services Agreement with LeMaitre expired in January 2025. We do not expect to receive any significant future revenues from LeMaitre. The initial term of our Supply and License Agreement with 4C, expires on June 1, 2026, at
which time it automatically renews for successive one-year terms.

We earn other income primarily from tax incentive payments under the Australian Government’s R&D Tax Incentive Plan for R&D activities conducted in Australia that meet specified regulatory
criteria. A refundable tax offset is available to eligible companies with an annual aggregate turnover of less than AUD $20.0 million. Eligible companies can receive a refundable tax offset for a percentage of their R&D spending.

No revenue was earned from our FIH study in Tbilisi, Georgia during the year ended December 31, 2024. In the year ended December 31, 2023, we received reimbursements under the EFS from CMS because the
FDA has categorized DurAVR® THV as a Category B device.

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Expenses

Our most significant expenses are R&D and selling, general and administrative expenses.

Cost of products sold reflects the manufacturing cost from the sale of regenerative tissue products to 4C and to LeMaitre. These expenditures include raw materials and consumables, plus other costs
attributable to the manufacturing of these products.

R&D Expense

R&D has been a significant focus for us with investments in the DurAVR® THV system, including the DurAVR® THV, the ComASUR® delivery system, a disposable crimper,
and an expandable access sheath, as we advance towards commercial use. These components are collectively managed as part of the overall DurAVR® THV system rather than as separate projects. Since late 2021, when our DurAVR® THV
delivery system was first used in human trials in Tbilisi, Georgia, R&D efforts have focused on incorporating feedback from the early clinical trial and progressing towards commercialization. These costs have included, among others, preclinical
studies, design iterations, lab services, clinical data monitoring, project and site management, travel, data management and safety of the study.

Going Concern

Our ability to continue as a going concern is dependent upon securing additional funds. Our ability to access capital may be impacted by various factors including economic conditions, a decline in
investor confidence and sub-optimal preclinical or clinical outcomes from trials and studies. A reduced ability to access capital may result in a curtailment of the development of our product portfolio, an extended timeline to commercialization and
other operational impacts.

We believe that we have the ability to raise additional funds. Notwithstanding the above factors, we are dependent upon continued support from current stockholders to fund our operations. If we do not
receive cash inflows, there are substantial doubt as to whether we will be able to continue as a going concern.

The audit report covering the December 31, 2024 and 2023 consolidated financial statements of ATL contains a paragraph that states that ATL’s recurring losses from operations and net capital
deficiency raise substantial doubt about our ability to continue as a going concern. See Note 3 Going Concern to the accompanying audited consolidated financial statements for ATGC for the year ended
December 31, 2024.

Results of Operations

Comparison of Years Ended December 31, 2024 and December 31, 2023

The following tables set forth our results of operations for the years ended December 31, 2024, and December 31, 2023 (in thousands, except percentages).

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[[/GREPCENT_TABLE]]

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Net Sales

Net sales in 2024 was $2.7 million, a decrease of $0.03 million (1%), compared to $2.7 million in 2023, primarily due to lower sales volumes of tissue products in 2024.

Cost of Products Sold

Cost of products sold in 2024 was $1.4 million, a decrease of $0.4 million (23%), compared to $1.9 million in 2023, primarily due to a change in the mix of
products sold.

R&D Expense

R&D expenses in 2024 were $51.5 million, an increase of $20.6 million (67%) compared to $30.9 million in 2023. This is primarily due to $16.0 million relating to preparatory
activities associated with the Pivotal Trial, including on-going product development, $3.9 million relating to the upscaling of manufacturing capabilities including the expansion of headcount, $1.3 million relating to v2vmedtech development and $0.6
million relating to increased clinical costs including those associated with the enrollment of additional patients. This was partially offset by a reduction in medical affairs of $1.4 million.

Selling, General and Administrative Expense

Selling, general and administrative expenses in 2024 were $28.2 million, an increase of $10.8 million (62%) compared to $17.4 million in 2023, primarily due to $4.9 million relating to the expansion
of the work related our plans to re-domicile, list on Nasdaq and conduct our initial public offering, $1.4 million relating to the grant of additional stock options, $1.4 million relating to a legal claim, and $2.4 million including an increase
in headcount in the Corporate departments (including Finance, Human Resources, IT, Marketing) to support the growth in our operations, and annual wage index increases.

Acquired In-Process R&D

Acquired in-process R&D expenses in 2023 was $0.1 million which was for costs relating to the acquisition of v2vmedtech, including in-process research and development. We did not have a
corresponding charge in 2024.

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Other non-operating income, net

Other non-operating income, net in 2024 was $2.4 million, an increase of $0.5 million (26%) compared to $1.9 million in 2023, primarily due to the recognition of holdback income of
$0.9 million from a transaction with LeMaitre in 2019. EFS reimbursement income of $0.3 million was recognized in 2023, and we did not have corresponding income in 2024.

Net Foreign Exchange Gains/(Losses)

Net foreign exchange gains in 2024 were $1.4 million compared to $0.6 million of net foreign exchange losses in 2023, a change of $2.1 million (327%), primarily due to the change in
foreign exchange rates on intercompany and cash balances. In 2024, the United States dollar appreciated by 9% relative to the Australian dollar (“AUD $”).

Debt Issuance Costs

Debt issuance costs in 2024 was $0.5 million primarily due to the secured convertible note facility entered into during the year.  The convertible notes were recognized at fair value
through profit or loss which resulted in the costs being expensed when incurred. We did not have a corresponding charge in 2023. See “Liquidity and Capital Resources — Convertible Note Facility” for additional
details regarding the secured convertible note facility.

Loss on Debt Extinguishment

Loss on debt extinguishment in 2024 was $0.9 million primarily due to settlement of the secured convertible note facility at a loss. We did not have a corresponding charge in 2023.

Loss on Asset Acquisition of a Variable Interest Entity (‘VIE”)

Loss on asset acquisition of a VIE in 2023 was $0.5 million, as when we acquired v2vmedtech, the consideration paid exceeded the fair value of the net assets acquired. We did not have a corresponding
loss or gain in 2024.

Loss Before Income Taxes from Continuing Operations

Loss before income taxes from continuing operations was $76.0 million, an increase of $29.2 million (62%) compared to $46.8 million in 2023.

Net Income/(Loss) Attributable to Non-Controlling Interests

Net income attributable to non-controlling interests (“NCI”) was $0.3 million, an increase of $1.1 million (144%) compared to a $0.7 million loss in 2023 primarily due to the use of
the hypothetical liquidation at book approach to measure the NCI interest which is impacted by movements in creditors and prepayments.

Liquidity and Capital Resources

Capital Requirements and Sources of Liquidity

We have experienced significant recurring operating losses and negative cash flows from operating activities since inception. As of December 31, 2024 and December 31, 2023, we had an
accumulated deficit of $276.4 million and $200.1 million, respectively.

In recent years, our operations have mainly been financed through the issuance of capital stock, including in our initial public offering, convertible notes, sales of regenerative tissue products and
R&D tax incentives from the Australian government. Additional funding has come through interest earned from cash deposits. As of December 31, 2024 and December 31, 2023, we had cash and cash equivalents of $70.5 million and $21.1 million,
respectively. As of December 31, 2024 and December 31, 2023, we had capital commitments of $1.4 million and $1.6 million, respectively, relating to the lease of properties. We did not have any other material capital expenditure commitments or
contingent liabilities as of December 31, 2024. We do not believe that our current cash on hand would fund our cash needs for the 12 months following December 31, 2024, and that we will need to access the capital markets and debt markets to fund
our cash needs. However, our forecast of the period of time through which our financial resources will be adequate to support our operations involves risks and uncertainties, and actual results could vary materially.

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We anticipate that we will require substantial additional funds in order to achieve our long-term goals and complete the R&D of our current products. We do not expect to generate significant
revenue until we obtain regulatory approval to market and sell our products and sales of our products have commenced. We therefore expect to continue to incur substantial losses in the near future. In order to address our short-term capital needs, we
intend to raise funds through the issuance of our capital stock or other securities.

Our future capital requirements are difficult to forecast and will depend on many factors, including:

[[GREPCENT_TABLE]]
[["","\u2022","the scope, results and timing of clinical trials\u037e"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","the costs of preparing and completing the Pivotal Trial of our DurAVR\u00ae THV system\u037e"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","the costs and time required to obtain pre-market approval from the FDA for our DurAVR\u00ae THV system\u037e and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","the costs of establishing marketing, sales and distribution capabilities."]]
[[/GREPCENT_TABLE]]

We may seek to raise any necessary capital through a combination of public or private equity offerings or debt financings. If we raise additional capital through debt financing, we may be subject to
covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we decide to raise capital by issuing equity securities, the issuance of such equity
securities may result in dilution to our existing stockholders. See “Risk Factors - Future equity financings and sales by existing holders could adversely affect the voting power or value of our Common Stock.”
We cannot give any assurance that we will be successful in completing any financings or that any such equity or debt financing will be available to us if and when required or on satisfactory terms.

Convertible Note Facility

On October 31, 2024, ATL entered into a secured convertible note facility (the “Convertible Note Facility”) with Obsidian Global Partners, LLC (“Obsidian”) to provide additional
financing to pursue ATL’s strategic objectives, implementation of the Reorganization, and completion of our initial public offering. We were able to draw up to AUD $25.0 million with an initial AUD $7.5 million drawdown (the “First Drawdown”) and
subsequent drawdowns (each, a “Drawdown”) of AUD $5.0 million or the remaining balance of the Facility Limit, whichever was lesser. On each drawdown, we were required to (i) issue notes convertible into shares of Common Stock (“Convertible Notes”)
and (ii) pay a fee of 3% of the drawdown amount. The aggregate face value of the Convertible Notes issued pursuant to a Drawdown were equal to 115% of the principal amount of the relevant Drawdown. Each Convertible Note had a face value of $1.15.

In addition, at each Drawdown, we were to issue options, each exercisable into one share of Common Stock (“Obsidian Options”), with each Obsidian Option to have a strike price of
$15.92 and a term of three years from the date of issuance. The number of Obsidian Options issued were to be such that the aggregate strike price would be equal to 25% of the amount drawn under the relevant Drawdown. For the First Drawdown, this
equated to 75,000 Obsidian Options (the “First Tranche Obsidian Options”).

Any further Drawdowns under the Convertible Note Facility could only be made by agreement between us and Obsidian (including agreement as to the drawdown amount, Drawdown date, and
any cap on the number of shares of Common Stock into which the Convertible Notes to be issued may convert) and may have required approval from our stockholders.

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In connection with the Convertible Note Facility, Obsidian was granted a senior-ranking security interest over all of ATL’s assets.

On December 16, 2024, following the closing of our initial public offering and the Reorganization, we received a notice of redemption from Obsidian, requiring that we redeem all
outstanding Convertible Notes for cash. Accordingly, on December 19, 2024, we redeemed the outstanding Convertible Notes for an aggregate cash payment of $5.7 million and paid Obsidian an additional $0.2 million in lieu of the First Tranche Obsidian
Options (representing AUD $0.3 million converted to United States dollars using the opening spot rate reported by the Reserve Bank of Australia of $0.6367 to AUD $1.00 on December 16, 2024). Upon redemption, no Convertible Notes were outstanding
under the Convertible Note Facility.

On February 18, 2025, the Convertible Note Facility was terminated, and the security interest was released.

Cash Flows

The following table summarizes our primary sources and uses of cash for the periods presented (in thousands, except percentages):

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[[/GREPCENT_TABLE]]

Operating Activities

Net cash used in operating activities during 2024 was $61.2 million, an increase of $26.6 million (77%), compared to $34.6 million in 2023, primarily due to the acceleration of
R&D activities in preparation for the Pivotal Trial, an increase in salaries and wages linked to growth in headcount and increased costs due to the expansion of the work related to our plans to re-domicile, list on Nasdaq and conduct our initial
public offering in 2024.

Investing Activities

Net cash used in investing activities in 2024 was $2.3 million, a decrease of $0.3 million (12%), compared to $2.6 million in 2023, primarily due to $0.2 million of costs relating to
the acquisition of v2vmedtech in 2023. We did not have a corresponding cash outflow in 2024.

Financing Activities

Net cash provided by financing activities in 2024 was $112.8 million, an increase of 63.5 million (129%), compared to $49.3 million in 2023, primarily due to an increase of
$65.6 million in net proceeds received from share issuances including in our initial public offering and the exercise of options for new shares, plus $5.0 million in proceeds from the issuance of Convertible Notes, partly offset by an increase of
$6.9 million in repayments of debt instruments including related costs of issuance.

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Contractual Obligations and Commitments

Leases

We lease laboratory facilities and offices. The leases typically include options to renew at which time the lease payments are subject to market adjustments and/or set price increases. Extension and
termination options are included in a number of the leases to allow for flexibility in terms of corporate growth and managing the assets used in our operations. The leases expire between 2025 and 2029 and some include options to extend. At December
31, 2024, we had contractual commitments (on an undiscounted basis) for property leases of $1.7 million, which were recognized at $1.4 million.

Warrants

On October 25, 2017, ATL issued a 7-year warrant to Partners for Growth V, L.P. (“PFG”) for the issue of 4,938,799 ordinary shares in ATL at an exercise price of $0.1731 (AUD $0.2531) per share (the
“Warrant”). The Warrant was reconstructed due to a consolidation of capital of ATL, and entitled the holder to be issued 49,388 ordinary shares in ATL at an exercise price of $17.31 (AUD $25.31) per share. The Warrant expired on October 25, 2024.
Upon the expiration of the Warrant, PFG exercised the put option and PFG put the Warrant to ATL for $1 million  (AUD $1.5 million), which was subsequently paid on October 31, 2024.

Commitments

At December 31, 2024, we had commitments to purchase $0.3 million of plant and equipment.

Off-Balance Sheet Arrangements

We currently do not have, and did not have during the periods presented, any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

We have used various accounting policies to prepare the consolidated financial statements in accordance with generally accepted accounting principles in the United States (“United States GAAP”). Our
significant accounting policies and estimates are more fully described in Note 2 to our audited consolidated financial statements.

The preparation of the consolidated financial statements in conformity with United States GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the
consolidated financial statements and accompanying notes thereto. Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments, estimates
and assumptions on historical experience and on other various factors, including expectations regarding future events that management believes to be reasonable under the circumstances. Actual results could differ from those estimates due to risks and
uncertainties and may be material.

Management has discussed the development and selection of these critical accounting estimates with the Audit and Risk Committee and our Board. In addition, there are other items within our financial
statements that require estimation but are not deemed critical. Changes in estimates used in these and other items could have a material impact on our financial statements.

We believe that the following discussion addresses our most critical accounting policies and estimates, which are those that are most important to the portrayal of our financial condition and results
of operations and require management’s most difficult, subjective and complex judgments.

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Going Concern

Our ability to continue as a going concern and fund the path to profitability is dependent upon securing additional funds in the future. The ability to access capital may be impacted by various
factors including economic conditions, a decline in investor confidence and/or sub-optimal preclinical or clinical outcomes from trials/studies. A reduced ability to access capital may result in a curtailment of the development activities of the
product portfolio, a delayed timeline to commercialization and other operational impacts.

We believe that we have the ability to raise additional funds. If we do not receive the forecasted cash inflows, there are material uncertainties as to whether we will be able to continue as a going
concern.

R&D Tax Incentive Income

Government grants are received under the Australian government’s R&D Tax Incentive program, such that a percentage of our eligible R&D expenses are reimbursed by the Australian government
with the incentive being recognized as other income. Government grants relating to costs incurred are recognized in the consolidated statements of operations over the periods in which the entity recognizes as expenses the related costs for which they
are intended to compensate.

The R&D Tax incentive income is recognized as income once we are satisfied that we have complied with the conditions attached to the tax incentives and that the tax incentives will be received.
Significant judgment is required in determining the amount and timing of recognition, as the grant requirements are complex. The Australian Taxation Office’s interpretation of specific expenditures’ eligibility may vary, potentially leading to
variances to our estimations. We recognized income of $1.0 million and $0.7 million in the years ended December 31, 2024 and 2023, respectively, which included estimated accruals of $0.8 million and $0.7 million as of December 31, 2024 and 2023,
respectively.

Stock-Based Payments

Equity-settled stock-based compensation benefits are provided to employees, directors and consultants in exchange for the rendering of services. We measure and recognize compensation expense for all
stock- based awards based on estimated fair values determined at grant date. Fair value is determined using Black-Scholes and Monte Carlo models which require various inputs including the exercise price and share price at grant date, plus other
highly judgmental assumptions, such as share price volatility, risk-free interest rate, and the expected option term. For options with service conditions, the expense is recognized over the service period. Stock-based compensation expense is recorded
net of estimate forfeitures. Forfeitures are estimated at the time of grant and we reassess the probability of vesting at each quarter end and adjust the stock-based compensation expense based on its probability assessment. Judgment is required in
estimating which stock options will ultimately be forfeited. If actual results differ significantly from these estimates, stock-based compensation expense and our results of operations would be impacted.

The following key assumptions were used in valuing stock-based payments:

[[GREPCENT_TABLE]]
[["","\u2022","Risk-free interest rate was based on Australian government bonds aligned to the life of the securities, with the range being 3.56% - 4.48% (year to December 31, 2024) and 3.2% - 4.4% (year to December 31, 2023)."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","The expected price volatility range of 40.0% - 65.5% (year to December 31, 2024) and 55.0% - 75.1% (year to December 31, 2023) based on our historic volatility and the remaining life of the securities, adjusted for any expected changes to future volatility due to publicly available information."]]
[[/GREPCENT_TABLE]]

Consolidation of VIEs

We consolidate a VIE when the reporting entity (a) has an economic interest in another legal entity (known as a “variable interest”) that conveys more than insignificant exposure to potential losses
of or benefits from the other legal entity; and (b) has power over the most significant economic activities of the legal entity. There is significant judgment over the analysis to determine whether an entity is a VIE, to determine whether we have a
variable interest and to determine whether we are the primary beneficiary of a VIE.

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We determined that v2vmedtech is a VIE and that we are the primary beneficiary of v2vmedtech. This determination is based on our having both power over the most significant activities of v2vmedtech,
primarily through holding a majority of the positions on v2vmedtech’s Board (although v2v’s non-ATL shareholder representative on the v2v Board presently maintains certain veto rights), controlling the appointment of the chief executive officer and
chief financial officer roles, being the exclusive partner to develop v2vmedtech’s products, and benefits through equity ownership. A loss on asset acquisition of $0.5 million was recognized in 2023 as at acquisition date.

New Accounting Standards Not Yet Adopted

New accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) and adopted by us as of the specified effective date. If not explicitly addressed otherwise, we believe
that the recently issued standards, which have not yet taken effect, will not materially affect our present or near future financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of
Income Statement Expenses. This ASU is effective January 1, 2027. ASU 2024-03 will require us to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included
in certain expense captions in the Consolidated Statements of Operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require us to disclose both the amount and our definition of selling
expenses.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures. ASU 2023-09 intends to enhance income tax disclosures to address investor requests for
more information about the tax risks and opportunities present in an entity’s worldwide operations. The ASU’s two primary enhancements will require further disaggregation for existing disclosures for the effective tax rate reconciliation and income
taxes paid. This ASU is effective January 1, 2026 for smaller reporting companies. We have evaluated the effect of adopting this accounting guidance and will include the new required disclosures in future filings as needed.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies guidance for
fair value measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities. This ASU is effective January 1, 2025 for smaller reporting companies. We have assessed the
impact of adopting this accounting guidance and have determined that it does not materially impact the fair value measurement of our existing equity securities. Nevertheless, we will apply the guidance and incorporate the new required disclosures in
future filings as needed.

Emerging Growth Company and Smaller Reporting Company Status

We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year following the fifth anniversary
of the consummation of our initial public offering; (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated
filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Common Stock (including Common Stock represented by CDIs) held by non-affiliates exceeded $700.0 million as of the last business day of the second
fiscal quarter of such year; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting
requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company:

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[[GREPCENT_TABLE]]
[["","\u2022","we will avail ourselves of the exemption from the requirement to obtain an attestation and report from our independent registered public accounting firm on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002 (the \u201cSarbanes-Oxley Act\u201d);"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","we will provide less extensive disclosure about our executive compensation arrangements; and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u2022","we will not require non-binding, advisory stockholder votes on executive compensation or golden parachute arrangements."]]
[[/GREPCENT_TABLE]]

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an
emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period for any new or revised accounting
standards during the period in which we remain an emerging growth company.

As a result, the information that we provide to our investors may be different than what you might receive from other public reporting companies. However, we may adopt certain new or revised
accounting standards early.

We are also a “smaller reporting company,” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take
advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our Common Stock (including Common Stock represented by CDIs)
held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our Common
Stock (including Common Stock represented by CDIs) held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

As a smaller reporting company we will present only two years of audited annual financial statements, plus any required unaudited interim condensed financial statements, and
related management’s discussion and analysis of financial condition and results of operations.