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REVOLUTIONIZING SPINE SURGERYPAT MILES, CHAIRMAN & CEO | JANUARY 15, 2025
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FORWARD LOOKING STATEMENTSThis presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company’s revenue, balance sheet, growth, adjusted EBITDA, profitability, free cash flow, financial outlook and commitments; planned product launches, timelines, introductions, regulatory submissions or clearances; expansion of international markets; increases in U.S. market share and procedural volume, the ability to drive surgeon adoption, gain hospital access and create clinical distinction; the development and monetization of informatics platforms; the ability to transform the sales channel; and the Company’s ability to finance its operations and sufficiency of its cash runway. Important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to: the uncertainty of success in developing and commercializing new products or products currently in the pipeline; the uncertainties in the Company’s ability to execute upon its strategic operating and long-range plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of the Company’s products by the surgeon community; failure to obtain FDA or other regulatory clearance or approval or unexpected or prolonged delays in the process; continuation of favorable third-party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to achieve profitability; uncertainty of additional funding; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company’s intellectual property; competitive pressures and market dynamics; and the Company’s ability to meet its financial obligations and achieve expected financial outcomes. A further list and description of these and other factors, risks and uncertainties can be found in the Company's most recent annual report, and any subsequent quarterly and current reports, filed with the Securities and Exchange Commission. ATEC disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.
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$8B+1 clinically unsettled market needs ATEC INFORMATIC MOATPerpetuating growth fueled 2024 profitability inflection - cash flow inflection 2025E LATERAL LEADERSHIP 1. Management estimate Adoption of procedural strategy has a long runwaySUSTAINABLE REVENUE GROWTHLARGE, GROWING MARKETXLIF-originators advancing spine’s fastest-growing approach INCREASINGLY PROFITABLEIntegrating outcome-improving data pre-, intra- and post-op
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REVOLUTIONIZE SPINE SURGERYOUR MISSION OUR STRATEGIC OBJECTIVES COMPEL SURGEON ADOPTIONCREATE CLINICAL DISTINCTION 2 1 Distinguishing ATEC through procedures & informatics Strengthening sales team and enhancing operations EXPAND & ELEVATE SALES FORCE3Attracting new surgeon users by improving surgery THE SPINE INDUSTRY NEEDS ATEC
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SURGEON ADOPTION HAS FUELED MARKET-LEADING GROWTH $0$100$200$300$400$500$600$700$800 2021202220232024E^2025E^ >40%CAGR 5 REVENUE ($M)
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$0$100$200$300$400$500$600$700$800 2021202220232024E^2025E^6 REVENUE ($M) ~3%Market share* ~8%Market share*27%FY‘24E total revenue growth 2024 WAS NO EXCEPTIONGROWTH FUELED BY CLINICAL DISTINCTION IS UNMISTAKABLY DURABLE | *Management estimate | ^ Results are preliminary & unaudited
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IN 2025, WE INTEND TO GROW AT MULTIPLES OF THE MARKET, AGAIN $0$100$200$300$400$500$600$700$800 2021202220232024E^2025E^7 REVENUE ($M) | ^ Results are preliminary & unaudited | 2025E guidance communicated in an 8K on file with the SEC on 1.13.25 20%Revenue growth
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2024Inflection to profitability GROWTH & INFRASTRUCTURE INVESTMENT HAVE DRIVEN PROFIT IMPROVEMENT 8| Reference non-GAAP reconciliation in appendix. | *Assumes FY‘24E AEBITDA of $27M (& implied Q4’24E AEBITDA of $17M), in line with guidance shared with release of Q3’24 financial results AEBITDA $MAEBITDA % -20% -10% 0% 10% 20% -$20 -$10 $0 $10 $20 Q1'22 Q2'22 Q3'22 Q4'22Q1'23 Q2'23Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24E* 2,800bps of margin expansion
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SALES GROWTHASSET EFFICIENCYOPERATING LEVERAGEDRIVING IMPROVED ROI THROUGHOUT THE ORGANIZATION Surgical set efficiency Sales force maturity Infrastructure utilization Sales force penetration/ density Data insights 9 Data/ surgical planning
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MORE PROFIT IMPROVEMENT EXPECTED IN 2025 | *Assumes 2024E AEBITDA of $27M, in line with guidance shared with release of Q3’24 financial results | ^ Reference non-GAAP reconciliation in appendix10 AEBITDA $MAEBITDA % -15%-10%-5%0%5%10%15%20%25% -$50 -$25 $0 $25 $50 $75 2021202220232024E^2025E^
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ROBUST OUTLOOK FOR 2025CONTINUED CLINICAL DISTINCTION-DRIVEN REVENUE & PROFIT GROWTH 11| Reference non-GAAP reconciliation in appendix. Total revenue$732MAdjusted EBITDA$75MFree cash flowpositive
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~8%US MARKET SHARE 2024^ SELF-FUNDED MARKET SHARE EXPANSION ADULT DEFORMITY SURGERY 3%>5%TOTAL KNEE TOTAL HIP REPLACEMENT5 years10 years 10-15% 1 to 3 yearsDEGENERATIVE SURGERY 25-30% 2 to 5 years % OF SURGERIES THAT REQUIRE REVISION* EARNING MARKET SHARE * See appendix for references | ^ Management estimates %US MARKET SHARE 2027E^ 12 LOW DOUBLE DIGIT ADDRESSING SPINE’S GREATEST CHALLENGE:LACK OF DURABILITY WHAT’S AHEAD?
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ATEC IS DIFFERENT 13 WHAT IS DRIVING STICKY MARKET SHARE EXPANSION? 100%Spine focus KNOWHOWUnmatched expertise PROCEDURALIZATIONAssembling technologies that improve spine procedures - not widgets CLINICAL DISTINCTIONDriving surgeon adoption with the most compelling portfolio INFORMATICSIntegrating data to improve clinical decision-making FULL BAGComprehensive solutions to treat spine pathologies
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ATEC INNOVATION COMES FROM THE OPERATING ROOMNOT THE BOARD ROOM WHY DOES 100% SPINE FOCUS & KNOWHOW MATTER? 14 CLINICAL FOCUS
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WE INTEGRATE TECHNOLOGIES TO CREATE PREDICTABILITYPROCEDURALIZATION ≈ VARIABLE MITIGATION 15 We design, develop and integrate technology to address the goals of spine surgery:1.Decompression2.Stabilization3.Alignmentspecifically for each approach.ACCESS BIOLOGICS FIXATION IMPLANTS ALPHAINFORMATIX POSITIONERS PRE-BENT RODS NAVIGATION
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CLINICAL DISTINCTION OUR EVANGELICAL APPROACH TO IMPROVING SURGERY IS SHARED BY THOSE WE PARTNER WITHCLINICAL DISTINCTION COMPELS SURGEON ADOPTIONSURGEON ADOPTION LEADING SALES TALENT Leveraging thought leadership to avail procedurally integrated (device + informatic) spine surgery designed from the ground up More surgeon users + increasing utilization The most distinct portfolio + strong growth make ATEC the most attractive spine company to work for GOOD SURGERY IS GOOD BUSINESS16
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17 LATERAL HAS SIGNIFICANT, CLINICALLY VERIFIED ADVANTAGES | * Source data on file - 100 200 300 400 500 600 700 800 - 2 4 6 8 10 12 - 1 2 3 BLOOD LOSS*cc/ levelHOSPITAL STAY*daysDAYS UNTIL WALKING* Lateral TraditionalLateral TraditionalLateral Traditional ALIF TLIF PLIF ALIF TLIF PLIF >500PEER-REVIEWED CLINICAL PUBLICATIONSON LATERAL WE CREATED LATERAL SURGERY | WE ARE UNIQUELY POSITIONED TO ADVANCE IT
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APPLYING LEARNINGS FROM FIRST-GEN LATERAL 18 1. DECOMPRESSION2. STABILIZATION 3. ALIGNMENT FIRST-GEN LATERAL: INDIRECTDIFFICULTCHALLENGING CONE OF ECONOMY HURDLES TO ADOPTION: MINIMALLY INVASIVE = MINIMALLY EFFECTIVE (COMPROMISE REQUIRED)3 GOALS OF SPINE SURGERY: ATEC PTP LATERAL: DIRECTSIMPLEPREDICTABLE
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19 Proprietary, knowhow-backed technology designed to address the most common, documented complication in lateral surgery (ie: a neurological event) OBSOLETES FIRST–GEN NEUROMONITORING BY IDENTIFYING REAL-TIME CHANGES IN NERVE HEALTH Actionable feedback was highly predictive of neurological events during LIF”1 1. Tohmeh A et al. Saphenous SSEP monitoring of femoral nerve health during prone transpsoas lateral lumbar interbody fusion. Eur Spine J 2022. 2. Lehmen JA, Gerber EJ. MIS lateral spine surgery: a systematic literature review of complications, outcomes, and economics. Eur Spine J 2015;24(Suppl 3):S287-313 OUR COMPETITIVE MOAT IN LATERAL
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SINGLE APPROACH ADDRESSES ALL 3 GOALS OF SPINE SURGERY 20 REPRODUCIBILITYProne position simplifies OR set up & eliminates need to secure patient with tapeREPRODUCIBILITYRetractor placement is orthogonal & intuitive DECOMPRESSION + STABILIZATIONSimultaneous access to front & back of spine PREDICTABILITYNeuromonitoring provides automated information regarding nerve location & health ALIGNMENTProne position enables predictable lordosis correction ✓✓ ✓ NO COMPROMISE REQUIRED
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MIDLINE ALIFLATERAL POSTERIOR FIXATION SINGLE-POSITION VERSATILITY FOR L3 TO S1:MOST COMMONLY TREATED LEVELS 21
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INTEGRATING INFORMATICS Lateral surgery integration 2025 releaseMEP integration Software feature set CorpectomyMulti-levelDeformity INCREASING COMPLEXITY SOPHISTICATION3D printed implantsExpandable implantsPre-bent rods FURTHER DISTANCING ATEC LATERAL 22
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THOUGHT LEADERSHIP IN LATERALSTANDING ROOM ONLY FOR FIRST PTP DEMONSTRATION @ NASS ‘24 SURGICAL STADIUM 23
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$1B EARNING LATERAL SHARE 24 U.S. LATERAL MARKET*~16%ATEC 2024E LATERAL SHARE* | * Management estimates
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EARNING LATERAL SHARE 25 U.S. LATERAL MARKET* $1B & EXPANDING THE OPPORTUNITYU.S. TLIF & PLIF*conventional techniques that can be treated laterally $2B* Management estimates. Graphics not to scale.
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EARNING LATERAL SHARE 26 U.S. LATERAL*$1B & EXPANDING THE OPPORTUNITY U.S. TLIF & PLIF*$2BPLIF/TLIFALIFPOSTERIOR FXBIOLOGICS CREATES A HALO EFFECT$8BU.S. SPINE MARKET* ACDFPCF OUR LATERAL THOUGHT LEADERSHIP INCREASES UTILIZATION PORTFOLIO-WIDE * Management estimates. Graphics not to scale.
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EOS INFORMED IMAGING 27 Full-bodyStanding, functional global alignment assessmentNo stitching errorsNo magnification errorLess radiation – 5x< DRReduced exam time3D anatomical reconstructions LR CREATING INFORMATICS FROM THE MOST COVETED IMAGE IN SPINE
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SPINE NEEDS OBJECTIVE PRECISIONWE DEVELOPED INSIGHT TO ADDRESS CLINICAL UNCERTAINTY <10%of the ~5,000 spine surgeons plan their surgeries*A FRACTIONof spine surgeons use surgical planning software* 50%of spine surgeries are revisions*90%of those are due to malignment* International Spinal Deformity SymposiumBassel George Diebo, MD | December 2024Department of Orthopedics Discrepancies in Preoperative Planning and Operative Execution in the Correction of Sagittal Spinal Deformities 28| * Diebo BG, Singh M, Balmaceno-Criss M, Daher M, Lenke LG, Ames CP, Burton DC, Lewis SM, Klineberg EO, Lafage R, Eastlack RK, Gupta MC, Mundis GM, Gum JL, Hamilton KD, Hostin R, Passias PG, Protopsaltis TS, Kebaish KM, Kim HJ, Shaffrey CI, Line BG, Mummaneni PV, Nunley PD, Smith JS, Turner J, Schwab FJ, Uribe JS, Bess S, Lafage V, Daniels AH; International Spine Study Group (ISSG). Defining modern iatrogenic flatback syndrome: examination of segmental lordosis in short lumbar fusion patients undergoing thoracolumbar deformity correction. Eur Spine J. 2024 Dec;33(12):4627-4635. doi: 10.1007/s00586-024-08531-z. Epub 2024 Oct 23. PMID: 39443371..
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IMPROVING THE DURABILITY OF SPINE CARE FURTHERS SURGEON ADOPTION 29 ATEC INFLUENCE = EOS INSIGHT •Initially targeting EOS Edge base – now ~100 in U.S. •Monetizing via implant pull-through •Workflow & clinical benefits from short to long constructs•Automated data collection expanding exponentiallyAutomated alignment reports Automated surgical planning PRE-OPINTRA-OPPOST-OP Pre-bent rods Intra-op alignment/ reconciliation Assessment & follow-up DATA
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AUTOMATED PRE-OP PLAN INTEGRATES ATEC IMPLANTS 30 AUTOMATED ALIGNMENTAI-driven alignment assessment available in minutes INFORMED BY THE REQUIREMENT MOST CORRELATED TO LONG-TERM OUTCOMES 3D SURGICAL PLANNINGAutomatic integration of ATEC implants into surgical plan based on patient’s 3D spine model
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INTRA-OP ALIGNMENT & PLAN RECONCILIATION + PRE-BENT ATEC RODS INTRA-OP RECONCILIATIONInforms surgeon of key parameters as case progresses PATIENT-SPECIFIC CUSTOMIZED PRE-BENT RODSSeamless ordering, approval & delivery PRE / POST OP INTEGRATIONImports surgical plan data into O.R. and exports for post-op review 31
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PROPRIETARY FOUNDATION FOR PREDICTIVE CARE SPINE’S ONLY END - TO - END STANDARDIZED IMAGING 32 PRE-OPPOST-OPFOLLOW-UP Patient follow-up & trends Surgeon practice analyticsLiving clinical research databaseContinuous data-derived product improvements ✓✓✓✓ Gait analysis✓✓Surgical likelihood score Capturing an exponential number of objective datapoints to inform: Operational efficiencies✓
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REPLICATING A PROVEN INFORMATICS PLAYBOOK 33 SAFEOP INFLUENCESLATERAL EOS WILL INFLUENCE DEFORMITY Procedurally integrated objective information drives surgeon decision making in lateral Procedurally integrated objective information will drive surgeon decision making in short & long-segment surgery AUTOMATED NEUROMONITORING IS TO LATERAL WHAT EOS WILL BE TO DEFORMITY
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CLINICAL VALUE CREATION VIA PROCEDURALLY INTEGRATED WORKFLOWS | 1. Soliman MA, Khan A, O'Connor TE, Foley K, Pollina J. Accuracy and Efficiency of Fusion Robotics™ Versus Mazor-X™ in Single-Level Lumbar Pedicle Screw Placement. Cureus. 2021 Jun 26;13(6):e15939. doi: 10.7759/cureus.15939. PMID: 34211815; PMCID: PMC8236238. ATEC PROCEDURAL THESISSOLVE PERVASIVE CHALLENGES 33% FASTER WORKFLOW2025 Enhance procedures with streamlined setup & integrated informaticsNO duplicative, massive machines that only place pedicle screws -Precision-Efficiency-Affordability Compared to costly, leading platforms with equivalent accuracy1Mid-year alpha evaluations; support placements via small team & flexible acquisition options 34 -ASC suitability-Excessive radiation-Avoid complications OUR DIFFERENTIATED APPROACH TO ROBOTICS
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BETTER ACHIEVING THE GOALS OF SURGERY FROM PRE-OP TO POST-OP OUR PROCEDURES INTEGRATE PROPRIETARY, KNOWHOW-BACKED INFORMATICS 35
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AUSTRALIA/ NEW ZEALANDJAPANMarket Size*$250M$450MRegulatory Clearance✓✓Surgeon TrainingUnderwayUnderwaySales Presence✓✓Office & warehouse✓✓ Leading with lateralANZ: PTP fully clearedJapan: progressing as planned-First case completed December ’24: 3-level LTP with SafeOp-Full launch of PTP expected ‘26Planning continued deliberate progress toward $30M in revenue by ‘27E PROFITABLE INTERNATIONAL EXPANSION 36| *Management estimates APPLYING LEARNINGS TO ENSURE POSITIVE ROI & BRAND INTEGRITY
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ALIGNED & FOCUSED ON ACHIEVING LONG-TERM FINANCIAL COMMITMENTS Revenue$482M$1BAdjusted EBITDA*($9M)$180MAdjusted EBITDA Margin*(2%)18%Free Cash Flow($159M)$65M 2027 202320%REVENUE CAGR 2,000CASH FLOW POSITIVE 2025 BPS MARGIN EXPANSION 37 SELFCASH FLOWING IN 2025 SUSTAINABLE GROWTH LEADERSHIPINCREASING PROFITABILITY SPINEVALUE CREATION
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Growth & infrastructure investment driving progress SELF-FUNDED GROWTH AHEADCASH FLOWING Distinction-driven surgeon adoption fueling 20%+ revenue growthSUSTAINABLE GROWTH LEADERSHIPINCREASING PROFITABILITYDisciplined & committed to deliver 2025 inflection Ample liquidity to execute plan and create shareholder value SPINE-FOCUSED VALUE CREATION