Anteris Technologies Global Corp

Anteris Technologies Global Corp. (“ATGC,” “Anteris,” “Company,” “we,” “us,” or “our”) was incorporated in Delaware on January 29, 2024. ATGC was formed for the purpose of reorganizing the operations of Anteris Technologies Ltd (“ATL”), an Australian public company originally registered in Western Australia, Australia and listed on the Australian Securities Exchange (“ASX”), into a structure whereby the ultimate parent company would be a Delaware corporation (the “reverse recapitalization”).

On December 16, 2024, the Company received all the issued and outstanding shares of ATL pursuant to a scheme of arrangement under Australian law between ATL and its shareholders (the “Scheme”) under Part 5.1 of the Australian Corporations Act 2001 (Cth) (the “Corporations Act”). Contemporaneously with implementation of the Scheme, ATL cancelled all existing options it had outstanding in exchange for the ATGC issuing replacement options to acquire shares of ATGC’s common stock, par value $0.0001 per share (“Common Stock”) pursuant to a scheme of arrangement between ATL and its option holders (the “Option Scheme”) under Part 5.1 of the Corporations Act.

Prior to completion of the reverse recapitalization, ATGC had no business or operations and following completion of the reverse recapitalization, the business and operations of ATGC consist solely of the business and operations of ATL and its subsidiaries. As a result of the reverse recapitalization, ATGC became the parent company of ATL, and for financial reporting purposes the historical financial statements of ATL became the historical financial statements of ATGC as a continuation of the predecessor.

On December 16, 2024, the Company completed the reverse recapitalization. On December 16, 2024, following the reverse recapitalization, the Company completed an initial public offering (“IPO”) of 14,800,000 shares of Common Stock.

ATGC’s principal activities consist of:

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). These policies have been consistently applied to all the years presented, unless otherwise stated.

Unless noted otherwise, all dollar amounts are in thousands of United States dollars (“US dollars” or “$”). Some amounts may not reconcile due to rounding.

For the year ended December 31, 2024, the consolidated financial statements reflect the consolidated results of operations, comprehensive loss, cash flows, and changes in equity of ATL and its wholly-owned subsidiaries for the period of January 1, 2024 up to December 16, 2024, the closing date of the reverse recapitalization (the “Closing Date”), and the consolidated results of operations, comprehensive income/(loss), cash flows, and changes in stockholders’ equity of ATGC and its consolidated subsidiaries, including ATL, for the period of December 16, 2024 through December 31, 2024. The Consolidated Balance Sheet at December 31, 2024 presents the financial condition of the Company and its consolidated subsidiaries, including ATL, and reflects the initial recording of ATGC’s assets and liabilities at their historical cost.

In accordance with ASC 805, Business Combinations, ATL’s historical equity has been retrospectively restated for all periods up to the Closing Date to reflect the number of shares of Common Stock issued to Legacy ATL Holders in connection with the reverse recapitalization. Additionally, the par value of Common Stock has been restated to align with the post-transaction capital structure.

The Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), which permits the Company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies.

The consolidated financial statements include the accounts of ATGC, its wholly-owned subsidiaries, entities for which the Company has a controlling financial interest, as well as any variable interest entities (“VIEs”) for which ATGC has been determined to be the primary beneficiary. ATGC and its subsidiaries together are referred to in these financial statements as the “Group”.

Subsidiaries are all those entities over which the Group has control. Control is the power to govern the financial and operating policies of an entity. All subsidiaries of ATGC have a reporting year end of December 31.

Intercompany transactions, balances and unrealized gains or losses on transactions between entities in the Group are eliminated.

The preparation of consolidated financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. 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 of 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 the Board of Directors (the “Board”). In addition, there are other items within the financial statements that require estimation but are not deemed critical as defined above. Changes in estimates used in these and other items could have a material impact on the financial statements.

Significant items subject to such estimates and assumptions include, but are not limited to the following:

The financial statements are presented in United States dollars, which is ATGC’s reporting currency.

Foreign currency transactions

Foreign currency transactions are translated using the average monthly currency exchange rates in effect during the period. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are included as operating income or expense in the Consolidated Statements of Operations.

Conversion to presentation currency

The assets and liabilities of non-U.S. dollar functional currency entities are translated into U.S. dollars using period-end exchange rates, and the revenues and expenses of those entities are translated into U.S. dollars using the average exchange rates, which approximates the rate at the date of the transaction. Equity accounts are translated at historical rates, except for the change in retained earnings during the year, which is the result of the income statement translation process. The cumulative translation adjustments associated with the net assets of foreign subsidiaries are recorded in accumulated other comprehensive loss in the Consolidated Statements of Comprehensive Loss and Stockholders’ Equity.

The determination of the functional and reporting currency of each Group company is based on the primary currency in which the Group company operates. ATGC and Anteris Technologies Corporation have the U.S. dollar (USD or $) as their functional currency, ATL and the Australian subsidiaries’ use the Australian dollar (AUD $) as their functional currency, and another subsidiary has the Swiss franc (CHF) as its functional currency.

Net sales from the sale of goods, which is primarily ADAPT® tissue, are recognized at a point in time when the performance obligation is satisfied, typically being upon delivery to the customer’s premises when control of the goods transfers to the customer. Revenue is recognized at an amount which reflects the consideration to which the Group expects to be entitled in exchange for those goods.

The Company generates its revenue from direct product sales and typically does not have any significant unusual payment terms beyond 30 days in its contracts with customers.

The Company offers volume rebates to certain customers, with these volume rebates being recorded as a reduction to sales. The amount of sales rebates are estimated based on contracted rebate terms, projected sales and historical experience.

Revenue recognition is determined by considering sales rebates and returns, which are assessed through sales terms, historical data, and trend analysis. When estimating rebates, the Company takes into account factors such as the stated rebate rates, trending volumes and other relevant information. Adjustments to rebates and returns reserves are recorded by the Company as either revenue increases or decreases. The Company offers warranties on its tissue and valves that they conform to the specifications, fit for their intended purpose, and do not have material defects.

Taxes assessed by a governmental authority that are both imposed on specific revenue producing transactions and collected by the Company from customers (for example, sales, use, value added, and some excise taxes) are not included in revenue.

Shipping costs to move products from the Company’s premises to the customer’s premises, are included in “Selling, General, and Administrative Expenses.” Handling costs, which are costs incurred to store at the Company’s premises, move, and prepare products for shipment, are included in “Cost of products sold.”

Interest income

Interest income is recognized as interest accrues using the effective interest method. This is a method of calculating the amortized cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts contractual future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Other income

Other income is recognized when it is received or when the right to receive payment is established.

Research and development tax incentive income

Government grants are received under the Australian government’s research and development tax incentive program, such that a percentage of eligible research and development 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 research and development tax incentive income is recognized as income once the Group is satisfied that the Group has complied with the conditions attached to the tax incentives and that the tax incentives will be received. The value is estimated based on an assessment of actual and budgeted eligible research and development expenditure data for the period. Significant judgment is required in determining the amount and timing of recognition, as the grant requirements are complex.

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. The Company’s restricted cash primarily represent funds placed in escrow related to operating leases and as collateral for a credit line. As of December 31, 2024, the restricted cash balance was $0.4 million.

Accounts receivable are amounts due from customers for direct product sales in the ordinary course of business. They are generally due for settlement within 30 days and therefore all classified as current. Accounts receivable are recognized initially at the amount of consideration that is unconditional. The Company holds the accounts receivable with the objective to collect the contractual cash flows and therefore measures them subsequently at amortized cost less impairment allowances.

An allowance is maintained for estimated losses in the collection of accounts receivable based on customer-specific analysis. The allowance is assessed by considering factors including the recent sales experience, the aging of receivables and historical collection rates. Uncollectible amounts are written-off against the allowance when it is determined that a customer account is uncollectible. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Company, and a failure to make contractual payments for a period greater than 120 days past due. Subsequent recoveries on amounts previously written off are credited against the same line item.

Other receivables are recognized at amortized cost, less any expected loss allowance.

Raw materials, work in progress and finished goods are stated at the lower of cost and net realizable value on a weighted average cost formula. Cost comprises direct materials and delivery costs, direct labor, import duties and other taxes, plus an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The Company recognizes an inventory reserve to recognize write-downs recorded against the carrying value of inventories for items that are obsolete, damaged, nearing its expiration date, or slow-moving.

Recognition and measurement

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Additions and improvements that extend the lives of the assets are capitalized, while expenditures for repairs and maintenance are expensed as incurred.

Costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalized to software and systems. Costs capitalized include external direct costs of materials and services.

An item of plant and equipment is derecognized upon disposal or when there is no future economic benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to the Consolidated Statements of Operations. The Company assesses plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Depreciation

Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their expected useful lives. Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

Impairment of Long-lived assets

The Group assesses impairment of long-lived assets at each reporting date by evaluating conditions specific to the Group and to the asset or asset group that may lead to impairment. If an impairment trigger exists and the review indicates that the assets will not be fully recoverable based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair market value. For the purposes of identifying and measuring impairment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

The Company’s lease agreements include leases accounted for as operating leases and those accounted for as finance leases. Finance lease right-of-use assets are included in plant and equipment, net, and finance lease liabilities are included in current debt obligations and long-term debt on the Consolidated Balance Sheets.

The Group leases laboratory facilities and offices through operating leases. The Group leases IT equipment through finance leases.

See note 8 Leases for further information.

Anteris is not a lessor in any lease arrangement.

Anteris as the Lessee

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

At the lease commencement date, the Group recognizes a right-of-use (“ROU”) asset (the right to use the leased item) and a corresponding lease liability, except for short term leases. Anteris have made an accounting policy election to apply the short-term lease election to all classes of underlying assets, being those leases which have a term of 12 months or less. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

The Company determines the lease term as the noncancellable period of the lease and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease liabilities

For operating and finance leases, the lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date.

Lease liabilities are subsequently measured by reducing the balance to reflect the principal lease repayments made and increasing the carrying amount by the interest on the lease liability. The Group is required to remeasure the lease liability and make an adjustment to the right of use asset in the following instances:

Lease liabilities which will be repaid within twelve months are recognized as current and the liabilities which will be repaid in excess of twelve months are recognized as non-current liabilities.

Lessees are required to discount future lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Generally, for operating leases, the Group cannot determine the interest rate implicit in the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s deferred initial direct costs. Therefore, the Group generally uses its incremental borrowing rate as the discount rate for the lease. The incremental borrowing rate is the rate of interest that the Group would have to pay to borrow an amount equal to the lease payments in a similar economic environment and on a collateralized basis over a similar term.

ROU assets

The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, less any lease incentives received.

For finance leases, the ROU asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. Any remeasurement of the lease liability is also applied against the ROU asset value.

For operating leases, the ROU asset is subsequently measured at the amount of the remeasured lease liability, adjusted for the remaining balance of any lease incentives, accrued or prepaid rents. The carrying amount of the ROU asset approximates the present value of the remaining benefits to the Group at each measurement date.

Extension and termination options

Extension and termination options are included in a number of property operating leases across the group and are an area of judgment. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognized at cost. Finite life intangible assets are subsequently measured at cost less amortization and any impairment.

The method and useful lives of finite life intangible assets are reviewed at each reporting period. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortization method or period.

The Group holds finite life intangible assets which are amortized on a straight-line basis with estimated useful lives.

The Group holds intellectual property relating to the ADAPT® tissue engineering technology which was recognized based on an external valuation via a business combination. It is being amortized on a straight-line basis over the period of its expected benefit, being 14 years.

Significant costs associated with the registration of patents and trademarks are deferred and amortized on a straight-line basis over the period of their expected benefit. The term of individual patents depends upon the legal term for patents in the countries in which they are granted. In most countries, including the United States and Australia, the patent term is 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country.

In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the United States Patent and Trademark Office in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date.

Impairment of intangible assets

Intangible assets with finite lives are tested for impairment when an event occurs or circumstances change that would indicate the carrying amount of the assets or asset group may be impaired. If an impairment trigger exists, the recoverable amount of the asset is determined. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit, and adverse legal or regulatory developments. If it is determined that such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair market value. Estimated fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved.

The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with Accounting Standards Codification (“ASC”) 815 Derivatives and Hedging. The accounting treatment of derivative financial instruments requires that the Company record embedded conversion options and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. Conversion options are recorded as a discount to the host instrument and are amortized as amortization of debt discount on the Consolidated Statements of Operations over the life of the underlying instrument. Hybrid instruments measured at fair value are not evaluated for embedded derivatives.

Derivative instrument liabilities are classified in the balance sheet as current or non-current liabilities based on whether or not net-cash settlement of the derivative instrument is expected within twelve months of the balance sheet date.

Derivative financial instruments are recognized at fair value and on a gross basis in the Consolidated Balance Sheets. Since the Company does not elect to apply hedge accounting, the gains and losses on the fair value movements of the derivative financial instruments are recognized in the Consolidated Statements of Operations.

Interest-bearing debt obligations

Debt obligations are initially recognized at fair value, net of transaction costs incurred. Debt obligations are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the Consolidated Statements of Operations over the period of the borrowings using the effective interest method.

Convertible notes

The Company elected to measure its convertible note financial liabilities at fair value through profit or loss. Related upfront costs and fees are recognized in earnings as incurred and not deferred.

Warrant liabilities

Warrants are freestanding derivatives which meet the definition of a liability pursuant to ASC 480 Distinguishing Liabilities from Equity, with changes in fair value recognized in profit or loss.

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those deferred tax assets and liabilities are expected to be recovered or settled. A valuation allowance is provided to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred taxes, including valuation allowances, are determined separately for each tax-paying component in each jurisdiction. The factors used to assess the likelihood of realization are future reversals of existing taxable temporary differences, carryback availability, both historical experience and the Company’s forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Unrecognized tax benefits

The Group recognizes the effect of income tax positions only if those positions are more likely than not (greater than 50% likelihood) of being sustained upon examination by the taxing authorities, based on the technical merits of the position. Where the Group expects a tax position to be sustained, it recognizes the tax benefit as the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgment is required in determining unrecognized tax benefits. The Group records liabilities or makes other adjustments for unrecognized tax benefits based on the Group’s current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact current and deferred taxes in the period in which such determination is made. The Group has not recorded any unrecognized tax benefits at December 31, 2024.

Inherent in determining the income tax amounts, including the valuation allowance, are judgments regarding business plans, tax planning opportunities and expectations about future outcomes. Realization of certain deferred tax assets is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Currently, management has recognized a valuation allowance for the amount of the deferred tax assets not supported by future reversals of existing taxable temporary differences as management believes that it is more likely than not that those deferred tax assets will not be realized.

Equity-settled stock-based compensation benefits are provided to employees, directors and consultants in exchange for the rendering of services. Cash-settled stock-based payment transactions provide employees with the right to cash payments upon the satisfaction of vesting conditions.

The Company measures and recognizes compensation expense for all stock-based awards based on estimated fair values determined at grant date.

The fair value of the cash-settled stock-based obligation is recognized as an expense on a straight-line basis over the requisite service period, with a corresponding increase in liabilities. Upon satisfaction of the vesting conditions attached to the rights, the provision becomes a payable. The liability is remeasured at each reporting date and at settlement date based on the fair value of the rights. Any changes in the liability are recognized in profit or loss.

If equity-settled awards are modified, an additional expense is recognized, over the remaining vesting period, for any modification that increases the total fair value of the stock-based compensation benefit as of the date of modification.

Employee service-based stock-based compensation

Anteris offers employees service-based stock options and restricted stock units (“RSUs”) as it believes that the grant of these awards to employees assists with attracting, motivating and aligning the interest of employees with those of its stockholders.

Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period (vesting period) on a straight-line basis. Forfeitures are estimated at the time of grant and the Company reassesses the probability of vesting at each quarter end and adjusts the stock-based compensation expense based on its probability assessment. Upon exercise of stock options and upon completion of the RSU vesting conditions, the Company issues shares of Common Stock.

Director stock options

The directors have been awarded service-based stock options with the same terms and conditions as the above-mentioned employee service-based stock options. The treatment of these stock options is consistent with the employee stock options.

The directors have also been issued stock options which in addition to the service-based conditions, contain target share price market conditions. The fair value of these options is determined using the Monte Carlo option pricing model which takes into consideration the market conditions. Compensation cost is recognized provided that the service is rendered, regardless of when, if ever, the market condition is satisfied. The fair value of the award is recognized as an expense over the longer of the requisite service period and the derived service period for the market condition.

Stock options and shares issued to external consultants

On occasion, the Company has granted options or shares to external consultants as consideration for services provided. Awards granted to non-employees are measured at the grant date by estimating the fair value of the equity instruments to be issued in exchange for goods or services received. The expense is recognized in the same manner as if the Company had paid cash for the services.

Fair value estimates

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. 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 the results of operations would be impacted.

Basic earnings (or loss) per share is computed by dividing net profit/loss by the weighted-average Common Stock outstanding during the period. Diluted earnings/loss per share is computed based on the weighted-average Common Stock outstanding plus the effect of dilutive potential Common Stock outstanding during the period calculated using the treasury stock method. Dilutive potential Common Stock includes employee equity stock options, non-vested shares, and similar equity instruments granted by the Company. Potential Common Stock equivalents have been excluded where their inclusion would be anti-dilutive.

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either in the principal market; or in the absence of a principal market, in the most advantageous market.

Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements:

Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

The Company records a liability in the consolidated financial statements where it is probable that a liability has been incurred, and the amount may be reasonably estimated. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed.

Lease asset retirement obligation

The lease asset retirement obligation relates to the removing of leasehold improvements including laboratories, clean rooms and office spaces and returning the premises to their original condition in accordance with the lease agreements. The calculation of this obligation requires assumptions such as closure dates and cost estimates. The amount recognized for each site is periodically reviewed and updated based on the facts and circumstances available at the time.

Liabilities for employment benefits, which include wages and salaries, bonuses, post-employment benefits, annual leave and long-term service benefits expected to be settled within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

The liability for annual leave and long-term service benefits not expected to be settled within 12 months of the reporting date are measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Defined contribution savings plans

Contributions to defined contribution plans are expensed in the period in which they are incurred.

Australian employees are entitled to contributions to defined contribution plans (superannuation) at 12.0% of the participant’s annual eligible compensation (post July 1, 2024) subject to certain contribution caps. The rate has increased by 0.5% annually for the past three years. The net expense related to these plans was $0.7 million and $0.6 million in fiscal years 2024 and 2023, respectively.

The Company’s employees in the United States are eligible to participate in a qualified defined contribution plan. Employees receive 3% employer contributions limited by the eligible compensation threshold.

Research and development expenses are recognized in the Consolidated Statements of Operations in the period in which they are incurred. Research and development costs include costs of research, engineering, and technical activities to develop a new product or service or make significant improvement to an existing product or manufacturing process. Research and development costs also include pre-approval regulatory and clinical trial expenses. Research and development costs also include expenses associated with the purchase of intellectual property relating to a particular research and development project that has no alternative future uses, costs of inventory in jurisdictions where regulatory approval from regulatory authorities has not yet been obtained, services and supplies associated with clinical studies, registries and sponsored research. These costs include direct salary and employee benefit-related costs for research and development personnel, costs for materials used and costs for outside services.

The Company evaluates acquisitions of entities or assets to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If this screen criteria is met, the transaction is accounted for as an asset acquisition. If not, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. The Company measures and segment recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets.

In an asset acquisition, the cost allocated to acquire in-process research and development (“IPR&D”) with no alternative future use is charged to research and development expense at the acquisition date. The Company recognizes assets acquired and liabilities assumed in asset acquisitions, including contingent assets and liabilities and non-controlling interests (“NCI”) in the acquired assets at their estimated fair values as of the date of acquisition.

Under ASC 810 Consolidation (“ASC 810”), when the Company obtains an economic interest in an entity, it evaluates the entity to determine if it should be deemed a Variable Interest Entity (“VIE”), and, if so, whether the Company is the primary beneficiary and is therefore required to consolidate the VIE, based on significant judgment whether the Company (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

On an ongoing basis, the Company re-evaluates the VIE assessment based on potential changes in facts and circumstances, including but not limited to, the stockholder loans to the entity and the execution of any future significant agreements between the entity and its stockholders and/or other third parties.

Segment information is presented using a management approach, meaning that segment information is provided on the same basis as information is used for internal reporting purposes by the chief operating decision maker (“CODM”) which is the Vice Chairman and Chief Executive Officer (“CEO”), who makes key strategic decisions. The CODM is responsible for the allocation of resources and assessing the performance of the Group. Management has determined that the activities of the business as reviewed by the CODM are one segment, being the development and commercialization of the ADAPT® anti-calcification tissue. This is focused on the DurAVR® THV system.

In accordance with ASC 805, Business Combinations, when ATGC (or “the legal parent”) acquired ATL (“the legal subsidiary”), the transaction was accounted for as a reverse recapitalization. The substance of the transaction was that the pre-transaction shareholders of ATL (the accounting acquirer) had effectively obtained control of ATGC.

Under reverse recapitalization accounting, the consolidated financial statements are issued under the name of the legal parent (being ATGC) but, with the exception of stockholder’s equity, the financial statements will represent a continuation of ATL’s (the legal subsidiary’s) financial information. ATL’s assets and liabilities will be recognized at historical cost with no goodwill or other intangible assets recorded in the financial statements.

At the date of acquisition, the assets and liabilities of the Group were recognized and measured in the consolidated financial statements at their pre-combination carrying amounts and added to the assets and liabilities of ATGC.

The Consolidated Statement of Stockholders’ Equity for comparative periods has been restated to reflect the equity structure of ATGC, while maintaining the historical retained earnings of ATL.

In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations. The ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. This ASU was effective January 1, 2024 for smaller reporting companies. The adoption of ASU 2022-04 on January 1, 2024 resulted in additional disclosures as shown in note 11 Debt Obligations.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures. ASU 2023-07 enhances segment reporting by expanding the breadth and frequency of segment disclosures required for public entities. The amendments in this ASU notably allow registrants to disclose multiple measures of segment profit or loss and clarify single reportable segment entities must apply Topic 280 in its entirety. This ASU was effective January 1, 2024. The adoption of ASU 2023-07 on January 1, 2024 resulted in additional disclosures as shown in note 21 Segment reporting.

New accounting pronouncements are issued by the FASB and adopted by the Company as of the specified effective date. If not explicitly addressed otherwise, the Company believes that the recently issued standards, which have not yet taken effect, will not materially affect its 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 the Company 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 the Company to disclose both the amount and the Company’s 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 certain emerging growth companies. The Company has 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. The Company has assessed the impact of adopting this accounting guidance and has determined that it does not materially impact the fair value measurement of our existing equity securities. Nevertheless, the Company will apply the guidance and incorporate the new required disclosures in future filings as needed.

The consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and realization of assets and discharges of liabilities in the ordinary course of business. As disclosed in the financial statements, the Group incurred a net loss of $76.2 million and had net cash outflows from operating activities of $61.2 million for the financial year ended December 31, 2024. As of that date, the Group had a cash balance of $70.5 million.

The Group has been investing in research and development activities associated with the continuing development and proposed commercialization of DurAVR® THV system, as well as continuing to invest in research and development. In the year ended December 31, 2024, amounts invested in research and development activities and general operations exceeded cash inflows associated with sales of CardioCel TM and VascuCel TM products tissue products plus research and development tax incentives from the Australian government. The Company generated proceeds of $127.2 million from the issue of equity securities (before underwriting discounts, commissions and other transaction costs).

The Group anticipates that additional funds will need to be generated in order to achieve the Group’s long-term goals and complete the research and development of current products. The Group does not expect to generate significant revenue until after regulatory approvals to commercially sell DurAVR® THV system have been obtained and sales have commenced. The Group therefore expects to continue incurring substantial losses in the near future.

To become and remain profitable, the Group has commenced conducting clinical trials and obtaining regulatory approvals with the aim of commercializing, manufacturing and supplying products, including DurAVR® THV system, that generate significant revenue. For medtech devices, including DurAVR® THV system, this will require the Group to obtain further relevant regulatory approvals, successfully complete product clinical trials, develop and expand quality management systems, obtain regulatory approval post completion of clinical trials, expand manufacturing and distribution capabilities and comply with ongoing post-market regulatory requirements.

Prior to achieving commercialization, the Group will periodically require capital infusion through the issuance of shares of Common Stock, debt instruments, or other securities that can be converted into Common Stock. The future success of the Company is dependent on its ability to attract additional capital and ultimately, upon its ability to develop future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. If the Group is unable to obtain adequate capital resources to fund operations, it may be necessary to delay, scale back or eliminate some or all of its operations, which may have a material adverse effect on the business, results of operations and its ability to operate as a going concern. However, the Group has established a track record of successfully raising new capital and debt facilities. This includes completing an IPO of 14,800,000 shares of Common Stock for gross proceeds of $88.8 million before underwriting discounts, commissions and other transaction costs in Q4 2024.

The above conditions give rise to substantial doubt as to whether the Group will be able to continue as a going concern for one year from the issuance date of these financial statements.

The Directors and management believe that the going concern basis of preparation is appropriate for the reasons outlined above.

Should the Group be unable to continue as a going concern, it may be required to realize its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the Group be unable to continue as a going concern.

In 2023, the agreement with LeMaitre was amended to require LeMaitre to be responsible for obtaining regulatory approvals under the EUMDR. Anteris is entitled to receive a holdback amount of $2.0 million less the associated regulatory approval costs incurred by LeMaitre (capped at €0.6 million) payable in the following instalments:

The second holdback entitlement was recognized as income as of December 31, 2024 as it was considered probable that LeMaitre will receive the regulatory approval and a significant reversal of the income will not occur. Subsequent to year-end, LeMaitre confirmed that they had received the regulatory approvals from the EUMDR.

No income tax expense/(benefit) has been recognized because the Group has historically incurred operating losses and maintains a valuation allowance against its deferred tax assets not supported by future reversals of existing taxable temporary differences.

The components of the loss/(income) before income taxes from continuing operations, based on tax jurisdiction, are as follows:

Deferred tax assets and liabilities are attributable to the following:

The valuation allowance of $54.5 million as of December 31, 2024 and $37.1 million as of December 31, 2023 reduces deferred tax assets to amounts that are more likely than not to be realized. This allowance primarily relates to the net operating loss carryforwards of the Group as management does not believe that it is more likely than not that these net operating losses will be utilized. The increase in the valuation allowance is primarily related to the additional net operating losses and capitalized research and development recorded during the fiscal year.

The portion of the valuation allowance for deferred tax assets for which subsequently recognized tax benefits would be applied directly to contributed capital was $2.1 million in 2024 and 2023.

Information about net operating and capital loss carryforwards at December 31, 2024 is summarized as follows:

Included within the Australian carryforwards disclosed above, the Australian tax consolidated group has $4.1 million of transferred losses at December 31, 2024, which are subject to loss recoupment testing and their available fraction which limits the annual rate at which losses may be claimed by the parent entity.

The Group’s operating loss carryforwards are subject to examination with taxing authorities specific to each geography in which they were incurred and the filing and finalization of income tax returns. The actual operating loss carryforwards available on filing of these returns may be different. The operating loss carryforwards may not be realizable in whole or in part due to the generation of significant future income being dependent on obtaining the necessary regulatory approvals, which are not in place as of December 31, 2024.

At December 31, 2024, the Company had $220.5 million of operating loss carryforwards in the United States, Australia and other international jurisdictions, of up to $145.5 million carryforward indefinitely, with the remaining $75.0 million due to expire during fiscal years 2026 through to 2045 if not used.

The Group files income tax returns in a number of jurisdictions including the United States, Australia, Switzerland and Singapore. Income tax returns for all wholly-owned subsidiaries have been filed for the period ended December 31, 2023. With limited exceptions, all years prior to 2020 in Australia and 2021 in the United States are no longer subject to examination by taxation authorities.

Operating loss carryforwards

The operating loss carryforwards, including the year they are scheduled to expire, are set out below:

Tax credit carryforwards for the period are summarized as follows:

Tax credit carryforwards will carry forward indefinitely and are not subject to expiration.

The Company’s reported income tax expense varied from the amount of income tax expense that would result from applying the statutory income tax rate of the parent entity, the income tax rate of the parent entity’s country of domicile, as follows (in thousands of dollars):

The 25% tax rate used is the Australian corporate tax rate. The basis for using this rate is that as of December 31, 2023, the registered office of ATL, the parent entity at that time, was based in Australia.

Current tax expense includes an income tax benefit of $0.2 million and $0.1 million in 2024 and 2023, respectively, for the realization of operating loss carryforwards for which a valuation allowance has been previously applied against the related deferred tax asset.

Depreciation expense of $1.3 million and $1.0 million was recognized in fiscal years 2024 and 2023, respectively.

The Group’s lease agreements include leases accounted for as operating leases and those accounted for as finance leases. This note provides information for leases where the Group is a lessee.

The Group leases laboratory facilities and offices through operating leases. These leases typically include lease options to renew the lease at which time the lease payments are renegotiated or adjusted to reflect pre-agreed charges or market rentals. Extension and termination options are included in a number of the property leases to allow for flexibility in terms of corporate growth and managing the assets used in the Group’s operations.

The Group leases IT equipment through finance leases with contract terms of 2-5 years. In order to extend the leases, both parties must agree. Finance lease ROU assets are included in plant and equipment, net and finance lease liabilities are included in current debt obligations and long-term debt on the Consolidated Balance Sheets. The ROU assets, lease liabilities, lease costs, cash flows, and lease maturities associated with the Group’s finance leases were not material to the consolidated financial statements for fiscal years 2024 and 2023.

The below table discloses the balance sheet information relating to the Group’s operating leases:

Operating lease costs of $806,475 and $689,721 were recognized in fiscal years 2024 and 2023, respectively. The Company recognizes variable lease payments not included in its lease liabilities in the period in which the obligation for those payments is incurred. Short term and variable lease payments for fiscal year 2024 and 2023 were not material.

As of December 31, 2024, the weighted-average remaining lease terms of the Group’s operating leases was 2.6 years, compared to 2.2 years as of December 31, 2023. The weighted-average discount rate applied to the Group’s operating leases was 14.8% for both 2024 and 2023.

The following table summarizes the ROU assets obtained in exchange for lease liabilities and as a result of lease modifications:

The following table summarizes the maturities of the Company’s operating leases at December 31, 2024. The amounts disclosed in the table are the contractual undiscounted cash flows. It is not expected that the cash flows included in the below maturity analysis could occur significantly earlier, or at significantly different amounts.

Estimated legal contingency liability

The Company has received a legal claim in connection with an equity raise undertaken in 2024 and the subsequent United States IPO. Anteris denies the claims and no court proceedings have been filed at this stage. A provision of $1.4 million has been recognized in relation to this claim. Any further developments that could impact this estimate will be assessed in future reporting periods.

Cash-settled stock-based payment provision

Refer to note 16 Stock-based Compensation.

Lease asset retirement obligation

The lease asset retirement obligation relates to the removing of leasehold improvements including laboratories, clean rooms and office spaces and returning the premises to their original condition in accordance with the lease agreements. The calculation of this obligation requires assumptions such as closure dates and cost estimates. The amount recognized for each site is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for sites are recognized in the balance sheet by adjusting the asset and the liability.

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 Scheme, and implementation of the IPO. The Convertible Note Facility was assumed by the Company upon completion of the Scheme. In connection with the Convertible Note Facility, Obsidian was granted a senior-ranking security interest over all of ATL’s assets.

ATL or ATGC (following the implementation of the Scheme) was able to draw up to AUD $25.0 million (the “Facility Limit”, equivalent to $15.5 million as of December 31, 2024) from the Convertible Note Facility, with an initial AUD $7.5 million drawdown (the “First Drawdown”) and subsequent drawdowns (subject to mutual agreement) in increments of AUD $5.0 million or the balance of the Facility Limit, whichever was lesser. On each drawdown, we were required to (i) issue notes convertible into 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, ATL would issue options to Obsidian, each exercisable into one ordinary share of ATL or share of Common Stock (following the implementation of the Scheme) (“Obsidian Options”), with each Obsidian Option to have a strike price of $15.92 (AUD $25.00) 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.

On November 7, 2024, 4,956,750 Convertible Notes were issued as a result of the First Drawdown of $5.0 million (AUD $7.5 million). As a result of the First Drawdown, ATL had an obligation to grant the Obsidian Options (subject to ATL obtaining shareholder approval), or if shareholder approval was not obtained, ATL or the Company (following the implementation of the Scheme) was obliged to pay AUD $0.3 million to Obsidian.

On December 16, 2024, following the closing of the IPO and the Scheme, the Company received a notice of redemption from Obsidian, requiring the Company to redeem all outstanding convertible notes for cash. On December 19, 2024, the Company paid Obsidian $5.7 million for the Convertible Notes and additional $0.2 million in lieu of the Obsidian options required to be issued in connection with the first drawdown (representing AUD $0.3 million converted to U.S. dollars using the opening spot rate reported by the Reserve Bank of Australia of $0.6367 to AUD $1.00 on December 16, 2024). The loss on debt extinguishment has been disclosed in the Consolidated Statements of Operations. No Convertible Notes were outstanding under the Convertible Note Facility.

Warrant liabilities

In conjunction with receiving a loan facility from Partners For Growth (“PFG”) in October 2017, ATL issued PFG a 7-year warrant for the issue of 49,388 ordinary shares in ATL at an exercise price of $17.31 (AUD $ 25.32) per share. The holder of the warrant also had the option to put the warrant to the Company for $1.0 million (AUD $1.5 million) on the expiration or on the occurrence of certain events. Prior to expiration of the warrant on October 26, 2024, PFG exercised the put option. On October 31, 2024, ATL settled the warrant liability by making a $1.0 million payment to PFG. At December 31, 2023, the outstanding balance was $0.9 million.

Supplier financing arrangements

The Group utilizes supplier financing arrangements to fund insurance premiums. Under the arrangements, the settlement of the supplier obligation is paid directly by the financier. Anteris pays the financier a set amount per month over an agreed period of 10 months. These repayments are recognized as financing cash outflows. In the event that Anteris defaults on payments to the financier, the financier can cancel the related insurance.

At the time of initial recognition of the supplier financing arrangement, an asset (recognized in other assets) and a corresponding debt obligation is recognized representing both the future insurance benefits and the obligation to repay the financier respectively. The asset is subsequently expensed on a straight-line basis over the period of the insurance term. No amounts payable to the financier were outstanding at December 31, 2024 or December 31, 2023.

The roll forward of Anteris’ outstanding payment obligations to the insurance supplier under this arrangement, are as follows:

Contractual obligations

The Company had no significant financing arrangements outstanding as of December 31, 2024, or December 31, 2023.

The following table summarizes the balance sheet classification and fair value of derivative instruments included in the Consolidated Balance Sheets as of December 31, 2023. No balances were outstanding as of December 31, 2024. The Company has not designated any derivatives as hedging instruments. The fair value amounts are presented on a gross basis and are segregated by type of contract.

No significant gains or losses have been recognized in relation to derivative liabilities not designated as hedging instruments.

The consolidated financial statements include financial instruments for which the fair value of such instruments may differ from the amounts reflected on a historical cost basis. Financial instruments consist of cash deposits, accounts and other receivables, accounts payable, accrued liabilities and debt obligations. The carrying value of these financial instruments generally approximates fair value due to their short-term nature.

Fair value hierarchy

The following table summarizes the Group’s financial assets and liabilities, measured or disclosed at fair value, using a three-level hierarchy, based on the lowest level of input that is significant to the fair value measurement. The carrying amounts of other financial assets and liabilities not measured at fair value approximate their fair values.

Changes in the fair value of the level 3 liabilities were as follows:

Fair value of warrant liabilities – Level 3

As of December 31, 2023, the fair value of outstanding warrants were valued using a Black-Scholes model that incorporated a share price hurdle and a discounted cashflow methodology. During the year ended December 31, 2024, the warrant liability was fully settled for $1.0 million. The inputs used in the measurement of the fair values of the warrant liabilities (translated using prior year-end exchange rates) are detailed below.

As the fair value of the other variable liabilities was insignificant as of December 31, 2024 and December 31, 2023, no additional disclosure has been included.

The Company’s authorized share capital consists of 400,000,000 shares of Common Stock, par value $0.0001 per share, and 40,000,000 shares of preferred stock, par value $0.0001 per share (“preferred stock”).

Prior to the reverse recapitalization, ATL’s issued ordinary shares had no par value, as permitted under the Corporations Act, which also does not require companies to have authorized capital.

Stockholders of the Company hold either Common Stock or a CHESS Depositary Interest (“CDI”). CDIs confer the beneficial ownership of the Company’s Common Stock on each CDI holder, with the legal title to such securities held by an Australian depositary entity, CHESS Depositary Nominees Pty Limited (the “Depositary Nominee”), which is a wholly-owned subsidiary of ASX Limited, being the operator of the ASX. The Depositary Nominee will be the registered holder of those shares of our Common Stock held for the benefit of the holders of CDIs.

The Company has never declared or paid any cash dividends on its capital stock and does not anticipate paying any cash dividends in the foreseeable future.

During the year ended December 31, 2024 and prior to the reverse recapitalization, ATL issued the following ordinary shares:

In connection with the IPO and completion of the reverse recapitalization in December 2024, ATGC issued 14,800,000 shares of Common Stock at the IPO price of $6.00 per share for gross $88.8 million prior to underwriting discounts, commissions and other estimated offering expenses.

For the comparable year ended December 31, 2023, ATL issued the following ordinary shares:

As of December 31, 2024 and December 31, 2023, the Company had 6,047,807 and 6,026,608 options outstanding, respectively, with varying exercise prices and expiration dates. For those options issued as stock-based compensation, information is detailed in note 16 Stock-based Compensation. The remaining options held by investors total 1,958,933 and 2,361,933, respectively, to purchase shares of Common Stock, with exercise prices ranging from $6.37 to $18.46 and expiration dates between February 2025 and September 2025. As of December 31, 2024, these options had no intrinsic value, as the exercise price exceeded the market price of the underlying shares. As of December 31, 2023, these options had intrinsic value of $5.7 million. The weighted average exercise price of these options was $15.37 and $13.83 as of December 31, 2024 and December 31, 2023, respectively.

The below table presents the computation of basic and diluted loss per share:

As of December 31, 2024 and 2023, there were outstanding stock options, RSUs and warrants for the purchase of 6,797,806 and 6,075,996 shares, respectively, which were not included in the calculation of diluted earnings per share given that the potential shares are anti-dilutive. Details of the terms and conditions of these instruments are disclosed in notes 14 Equityand 16 Stock-based Compensation.

Details of the issues of Common Stock that occurred since reporting date are included in note 25 Subsequent Events.

On December 16, 2024, contemporaneously with implementation of the Scheme (refer note 1 Description of Business), ATL amended all existing options it had on issue to be options to acquire Common Stock pursuant to a scheme of arrangement between ATL and its option holders (the “Option Scheme”). Upon amendment of the options, the exercise prices, base prices and share price hurdles of all stock-based compensation instruments outstanding (primarily those held by non-Australian employees and directors) were converted to U.S. dollars using the spot rate of $0.6367 to AUD $1.00. The amendment was structured as an exchange of equivalent awards, so that holders remained in the same economic position with unchanged vesting conditions and terms following the recapitalization. Since the amendment did not change the fair value, vesting conditions, or other terms of the awards, it was not treated as a modification under ASC 718 Compensation—Stock Compensation, and no incremental compensation expense was recognized.

In connection with the reverse recapitalization, the Company has adopted the ATGC Equity Incentive Plan (the “Equity Plan”) for purposes of granting options in the Company and other awards based on the shares of the Company to employees and other service providers of the Company. Stock awards, including restricted stock, RSUs, cash incentive awards, performance shares, PSUs, and other equity-based awards may be granted under the Equity Plan. No further grants will be made under the incentive plans previously established by ATL.

Number of Authorized Shares

Initially, the aggregate number of shares of Common Stock which may be issued or transferred pursuant to awards granted under the Equity Plan will not exceed, in the aggregate, 5,163,023 shares of Common Stock (the “Share Limit”). The Share Limit will be increased by 5% of the total number of issued and outstanding shares of Common Stock on a fully-diluted basis on the last day of the preceding fiscal year on the first day of each fiscal year, for a period of ten years commencing in the first fiscal year following the effective date of the Equity Plan, provided, however, that the Board may act prior to the first day of a given fiscal year to provide that the increase for such fiscal year will be a lesser number of shares of Common Stock. The aggregate number of shares of Common Stock actually issued or transferred by the Company upon the exercise of incentive stock options will not exceed 4,312,777 shares of Common Stock, which limit will increase by 5% of the total number of issued and outstanding shares of Common Stock as of the IPO, for a period of ten years commencing in the first fiscal year following the effective date of the Equity Plan.

The maximum number of shares subject to awards granted on or following the effective date during a single calendar year to any non-employee director, taken together with any cash fees paid to such nonemployee director during the fiscal year, may not exceed $0.75 million in total value (calculating the value of any such awards based on the fair value of such awards as of their approval effectiveness date); provided, that such calendar year limit shall be $1 million for (i) the non-executive chair of our Board and (ii) a new non-employee director during his or her first year of service on our Board.

In the event of certain changes in the capitalization of the Company, the administrator of the Equity Plan will adjust the number and kind of shares of Common Stock available for issuance under the Equity Plan and all awards shall be adjusted as the Committee, in its sole discretion, determines is equitably required. Except in specific circumstances, shares subject to an award under the Equity Plan that are cancelled, forfeited, expire, or become un-exercisable without having been exercised in full will be available for subsequent awards under the Equity Plan. Shares withheld in payment of the exercise price of an option or withholding taxes related to an award will be returned to the Share Limit for future grants of awards under the Equity Plan and will not reduce the Share Limit.

Any references in the Equity Plan and this summary to “shares of Common Stock” may be read as a reference to a CDI or shares of Common Stock as the context reasonably requires, unless the contrary intention is expressly stated in the Equity Plan.

The following table presents the components and classification of stock-based compensation expense recognized for stock options, cash-settled stock-based payments rights, restricted stock units and shares issued to employees, directors and consultants:

• The reduction in the research and development related stock-based compensation expense is due to the decline in the share price impacting the fair value of the SPP rights.

Stock options issued by the Company to employees, directors and consultants have been described below. Each option, when exercised, entitles the holder to subscribe for and be allotted one share in the capital of the Company.

Employee service-based stock options

The key terms of the 2020 EIP currently outstanding include:

Director stock options

On June 19, 2024, following approval by ATL stockholders at the Annual General Meeting on May 29, 2024, the Company issued 475,000 options with an exercise price of $15.29 equivalent (AUD $23.00) per share to the following Directors:

The above director share options expire after 5 years and vest in three tranches on the completion of at least 12, 24 and 36 months of service from the date of issue. These options were awarded as part of the existing 2020 EIP.

On September 15, 2023 following approval by ATL stockholders at an Extraordinary General Meeting held on September 6, 2023, the Company issued 1,018,500 options with an exercise price of $15.37 equivalent (AUD $24.00) per share to the following directors relating to the 2023 financial year:

The above director stock options expire after 5 years and vest in three tranches on the completion of at least 12, 24 and 36 months of service commencing from the date of issue. These options were not awarded as part of the existing 2020 EIP. There were no performance conditions attached to the director options issued. These options were valued using the Black-Scholes model.

Modification of director options

On February 17, 2023, in relation to options issued in the 2020 year, the Board exercised their discretion to extend the period to achieve the share price hurdle, by an additional 12 months, from March 19, 2023 to March 19, 2024. The incremental fair value of these options was $6.18 per option, resulting in an increased fair value of $0.9 million. The value was expensed at the date of the modification.

Consultant options

No options were issued to consultants during the year ended December 31, 2024. On February 15, 2023, ATL granted 500,000 options as consideration for lead manager services and underwriting services provided, with the value of the issues being recognized as an equity transaction cost.

Service-based stock options

The number and weighted-average exercise prices of service-based stock options (EIP and director options), excluding those with share price performance hurdles, under stock-based payment arrangements were as follows:

A change of control event is a non-market condition which has not been taken into consideration in the valuation of the options. A change of control event was not considered probable as of December 31, 2024.

The following table summarizes the status of Anteris’ non-vested service-based stock options:

As of December 31, 2024, there was $5.0 million of total unrecognized compensation cost related to non-vested stock option arrangements granted. That cost is expected to be recognized over a weighted-average period of 1.3 years.

Stock options with share price performance hurdles

The number and weighted-average exercise prices of stock options with share price performance hurdles issued to the directors under stock-based payment arrangements were as follows:

The 145,500 options were only to vest if the Company’s share price reached at least $22.98 (AUD $33.60) for a minimum of 10 days within any 20 sequential trading days by March 19, 2024. The share price hurdle was not met by the expiration date and the associated options were canceled on March 20, 2024.

Stock options issued to consultants

The below table shows the number and weighted-average exercise prices of stock options issued to consultants under stock-based payment arrangements. They contain no vesting conditions.

Exercises of stock-based compensation options

The following table summarizes the total cash received from the issuance of new shares upon stock option award exercises, the total intrinsic value of options exercised, and the related income tax benefit:

On July 30, 2024, 41,000 shares were issued to a consultant as compensation for services received. On April 17, 2023, ATL issued 1,000 shares as compensation for expert advisory services received. No amounts were payable for the issue of the shares.

The Share Price Performance Plan (“SPP”) provides employees with the right to receive cash payments calculated by considering the rise in Anteris’ share price from the base price specified at grant date. The SPP rights expire after 5 years. There are two types of arrangements:

The base prices and share price hurdles were converted to U.S. dollars in connection with the Scheme to ensure that holders retained the value of their outstanding SPP Units both immediately before and after the reverse recapitalization. All other vesting terms and conditions remained unchanged.

The following table summarizes the SPP rights activity during the year:

As of December 31, 2024, there was $0.3 million of total unrecognized compensation cost related to non-vested SPP rights outstanding. That cost is expected to be recognized over a weighted-average period of 1.5 years.

The fair value of the RSUs is based on the market value of the Company’s Common Stock on the date of grant. RSUs vest over 3 years with the compensation cost, adjusted for estimated forfeitures, being recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. RSUs are not considered issued or outstanding Common Stock of the Company. Dividend equivalent units are accumulated on RSUs during the vesting period and are subject to the same restrictions on transferability as the underlying RSUs.

The following table summarizes the RSU activity during the year:

As of December 31, 2024, there was $4.4 million of total unrecognized compensation cost related to non-vested RSU arrangements granted. That cost is expected to be recognized over a weighted-average period of 2.0 years.

On December 16, 2024, in connection with the IPO, the Board, approved the grant of RSUs with the following target fair values as of the date of the pricing of the IPO, each of which are subject to approval by stockholders in accordance with the rules of the ASX. Each grant of RSUs will vest annually over a three-year period:

As of December 31, 2024, the Company has not recognized any stock-based compensation expense for the director’s RSUs, as the grant date has not been established under ASC 718.

(f) Fair Value Disclosures

The Company uses the Black-Scholes model to determine the fair value of stock options and SPP rights at the grant date. The fair value of stock options under the Black-Scholes model requires management to make assumptions regarding projected employee stock option exercise behaviors, expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option

Director options

The following table presents the weighted average inputs (based on number of options granted) used in the measurement of the fair values at grant date of the stock-based payments options granted each year.

EIP options

The following table provides the weighted average fair value of options granted to employees during the year and the related assumptions used in the Black-Scholes model.

Consultant options

The following table provides the weighted average fair value of options granted to consultants during the year and the related assumptions used in the Black-Scholes model. No options were granted to consultants during the year ended December 31, 2024.

SPP rights

The inputs used in the measurement of the fair values of the SPP rights at each reporting date were as follows:

At each reporting period, the Company reassesses whether it remains the primary beneficiary for VIEs consolidated under the VIE model.

On April 18, 2023, the Group entered into a series of agreements with v2v to develop an innovative heart valve repair device for the minimally invasive treatment of mitral and tricuspid valve regurgitation. As part of the binding agreements, the Group acquired 30% interest in v2v for consideration of $0.2 million, with the remaining 70% retained by the sellers. The transaction was accounted for as an asset acquisition under ASC 805 Business Combinations, as substantially all of the fair value of the gross assets acquired were concentrated in a single identifiable in-process research and development (“IPR&D”) asset. In accordance with the accounting for asset acquisitions, an entity that acquires identifiable IPR&D assets in an asset acquisition follows the guidance in ASC 730 Research and Development, which requires that both tangible and intangible identifiable research and development assets with no alternative future use be allocated a portion of the consideration transferred and recorded as research and development expense at the acquisition date. The Company provides non-reciprocal contributions to fund research and development.

Pursuant to the guidance under ASC 810, the Company determined that v2v is a VIE and that the Company is the primary beneficiary of v2v. This determination is based on the Company having both power over the most significant activities of v2v, primarily through appointing and holding a majority of the Board and certain benefits through equity ownership. Therefore, the Company consolidated v2v from the acquisition date of its equity interest.

The following table presents the assets and liabilities for VIE:

Included in other current liabilities is a loan from v2v’s parent entity amounting to $0.02 million as of December 31, 2024, and $0.02 million as of December 31, 2023. This loan has been provided to support v2v’s working capital needs. It is unsecured and repayable on demand. This balance is eliminated in the condensed consolidated financial statements. v2v is wholly financed by the Group. The Group contributed $2.4 million to v2v to finance its operations during the year ended December 31, 2024.

Non-controlling Interests

Non-controlling interests represent the equity in a subsidiary not attributable, directly or indirectly, to the parent company. The Group uses the Hypothetical Liquidation at Book Value (“HLBV”) approach to measure the non-controlling interests. Under HLBV, the non-controlling interests are calculated as the amount that would be paid to non-controlling interest holders upon a hypothetical liquidation of the entity at book value as of the reporting date.

The Company recognizes non-controlling interests related to v2v and provides a roll forward of the non-controlling interests balance, as follows (in thousands):

The following table presents the components of Accumulated Other Comprehensive Loss:

No income taxes have been allocated to the translation adjustments.

The accounting parent entity within the Group is ATL.

The legal parent entity within the Group is ATGC.

The Company may provide letters of support to its subsidiary companies when required.

During the year ended December 31, 2023, the Group acquired an initial 30% stake in v2v, to develop minimally invasive treatment of mitral and tricuspid valve regurgitation. v2v has been recognized as a subsidiary (refer note 17 Variable Interest Entity). There have been no other changes in the Company’s ownership interests in subsidiaries during the year ended December 31, 2024.

As of December 31, 2024 the Group had commitments to purchase $0.3 million of plant and equipment, as compared to no commitments at December 31, 2023.

Anteris is involved in various ongoing proceedings arising in the normal course of business, including proceedings related to product, labor, intellectual property and other matters.

Contingent liabilities

The Group records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is considered probable, and the amount may be reasonably estimated. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages with incomplete scientific facts or legal discovery, involve unsubstantiated or indeterminate claims for damages, potentially involve penalties, fines or punitive damages, or could result in a change in business practice.

Segment information is presented using a management approach, meaning that segment information is provided on the same basis as information is used for internal reporting purposes by the CODM which is the Vice Chairman and CEO, who makes key strategic decisions. The CODM is responsible for the allocation of resources and assessing the performance of the Group. Management has determined that the activities of the business as reviewed by the CODM are one segment, being the development and commercialization of the ADAPT® anti-calcification tissue. This is focused on the DurAVR® THV system.

The revenue and cost information relating to all of the ADAPT® products including both the DurAVR® THV system and regenerative tissue products are regularly reviewed by the CODM on an aggregate basis.

The CODM assesses performance and allocates resources based on the Company’s Consolidated Statements of Operations and key components and processes of the Company’s operations are managed centrally. Segment asset information is not used by the CODM to allocate resources. As a single reportable segment entity, the Company’s segment performance measure is net income / (loss).

No detailed asset information by reportable segment has been reported given that the single segment’s information is already presented in the Consolidated Balance Sheets. Refer to the Consolidated Statements of Cash Flows for significant non-cash items and total expenditure for additions of long-lived assets.

Segment revenues (net sales) have been based on the geographic location of the customers taking possession of the products. Geographic long-lived assets are attributed to the country based on the physical location of the assets.

The following table summarizes revenues from major customers that individually accounted for 10% or more of the Company’s total revenues during the years ended December 31, 2024 and 2023:

Amounts outstanding from these customers at reporting date was $0.2 million and $0.1 million, as of December 31, 2024 and 2023, respectively.

Allowance for doubtful accounts

The allowances for doubtful accounts deductions represent accounts receivable which have been written off.

The Group’s revenues are primarily derived from two external customers, both of which have no recent history of default. As of December 31, 2024 and 2023, no trade receivables were expected to default.

Inventory reserve

When applicable, the Group maintains reserves for excess or slow-moving inventory, and inventory which is obsolete, damaged, nearing its expiration date, or slow moving. Estimates are made regarding the future recoverability of the costs of these products and record provisions based on historical experience, expiration of sterilization dates and expected future trends. At December 31, 2024 and 2023, it was determined that no provisions for reserves were required.

Deferred tax asset valuation allowance

The deferred tax asset valuation allowances are provided for all deferred tax assets that are not be recognized due to insufficient future taxable income.

Amounts charged to other accounts includes valuation allowance movements which are allocated to other comprehensive income as a result of foreign currency translation adjustments.

ATGC and ATL (ACN 088 221 078) are party to a deed of cross guarantee dated December 20, 2024 (“Deed”). ATGC and ATL were the only parties to the Deed at December 31, 2024, and comprise the “closed group” for the purposes of the Deed and, as there are no other parties to the Deed that are controlled by ATGC, ATGC and ATL also represent the “extended closed group.” By entering into the Deed, ATGC and ATL have guaranteed the debts of each other. There have been no changes in ownership of any members of the closed group or in the parties to the deed of cross guarantee since December 31, 2024.

A consolidated Statement of Operations and Other Comprehensive Income and consolidated Balance Sheet, comprising the Company and controlled entities which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, for the year ended December 31, 2024 is set out as follows:

No dividends were declared or paid during the year.

• Reserves includes the foreign currency translation reserve and the stock-based compensation reserve.

Australian Securities Investments Commission (“ASIC”) has granted ATL relief from the requirement to prepare a financial report and directors’ report for the financial year ended December 31, 2024 by issuing ASIC Instrument 25-0066 (the “Relief Instrument”). ATL obtained the financial reporting relief under the Relief Instrument because, during the financial year ended December 31, 2024, ATL was a “disclosing entity” and therefore would otherwise not be eligible for relief under the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785). The effect of the Relief Instrument is that subject to various conditions, including compliance with the conditions of the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785)(other than the requirement in relation to “disclosing entities”), and certain other additional conditions as set out in the Relief Instrument, ATL is relieved from the requirement to prepare a financial report and directors’ report for the financial year ended December 31, 2024.

As detailed in note 2(y) Reverse recapitalization, when ATGC acquired ATL, the transaction was accounted for as a reverse recapitalization. The substance of the transaction was that the pre-transaction shareholders of ATL (the accounting acquirer) had effectively obtained control of ATGC. The effect of this is that the consolidated financial statements of ATL are equivalent to the consolidated financial statements of ATGC.

A consolidated Statement of Comprehensive Income and movements in retained earnings and reserves, comprising ATL and its controlled entities for the year ended December 31, 2024 is set out as follows:

• Reserves includes the foreign currency translation reserve and the stock-based compensation reserve.

Management has evaluated the impact of subsequent events through to March 3, 2025.

On January 15, 2025, TD Cowen, Barclays and Cantor, as representatives of the underwriters in the IPO, partially exercised the option to purchase additional shares granted by the Company in connection with the IPO in respect of 78,481 shares of Common Stock of the Company at the IPO price of $6.00 per share, generating $0.5 million in gross proceeds, before underwriting discounts and commissions of $0.42 per share.

Since December 31, 2024, 1,955,416 options have been cancelled due to expiration or forfeiture. The weighted average exercise price of these options was $18.46.

On March 6, 2025 the Board appointed Mr. St Denis as the Company’s President and a Class II director of the Board, effective immediately. As a non-independent director, Mr. St Denis will not serve on any committees of the Board.