EFTA01438106.pdf

For Key Client Partner Clients or U.S. Institutional Investors. Not for Retail Distribution COMPANY OVERVIEW I JULY 2018 EFTA01438106 The next breakthrough technology from the Link Group 1 Targeting the outpatient market with a novel MIS midline kit providing physician procedural flexibility and efficiency 2 First of its kind affordable navigation system coupled with a unique, highly engineered, portfolio of consumable products 3 Aligned with the future of healthcare: better for the patient better for the physician better for the provider (facility) 4 Robust, capital-light growth model, validated by successful beta launch, highly attractive gross margins, and existing reimbursement 5 Commercial-ready investment developed by the LINK Group who has a proven track record 2 EFTA01438107 1 Targeting the outpatient market with a novel MIS midline kit providing physician procedural flexibility and efficiency The transition to outpatient care 2015 2005 Outpatient 5% Outpatient 45% VCF 5% 2017 spinal device market opportunity Other 13% Traditional 41% In patient 95% In patient 55% Interbody 22% Efficiency of care will continue to drive cases to the outpatient setting Degenerative spinal cases are increasingly being performed in ASCs There has been a nine-fold increase in procedures performed in an outpatient setting since 2005 IS midline spine surgery focus r ASC facilities and providers are keenly focused upon efficiency of care given the reimbursement environment MIS Midline techniques are suitable for the ASC environment given he low morbidity associated with the procedure Products that are well-engineered, simple, reproducible and that rovide end-to-end MIS procedural solutions will win 11 1 The market needs the right product for the right setting; specifically an unparalleled continuum of fusion implants that are applied according to a patients pathology and surgical requirements and not a "one size fits all" approach EFTA01438108 $8 billion globally (2% CAGR) LinkSPINE currently addresses —60% of the spinal market or $5 billion annually Biologics 19% MidlineChoice platform LINKSPINE's "MidlineChoice" platform of products positions the company to not only participate in, but to define the relatively new Midline Spine Surgery sector MidlineChoice can be used for traditional and interbody spinal procedures f MidlineChoice consists of a consolidated kit which offers versatile reatment alternatives dependent upon the patients needs Eliminates the need for excess inventory and is ideal for hospitals and ASCs where storage space is limited The MidlineChoice platform is aimed at the fastest growth areas of the market: outpatient surgery, and the growing population of elderly patients suffering from degenerative spine pathology Note: LinkSPINE currently addresses the blue shaded areas in the charts above Sources: Orthopedic Review, OrthoWorld, iData Research, Orthopedic Network news 3 EFTA01438109 2 First of its kind affordable navigation system coupled with a unique, highly engineered, portfolio of consumable products Spinal navigation Spine navigation 5% Spine robotics 16% Product I The trend towards MIS techniques has led to increased use of x-ray in order to see the relevant anatomy. Spine surgeons are exposed to 50x more radiation than hip surgeons Standard of Care 79% —$2.5 billion in 2017 12% annual growth I Navigation can reduce exposure to physicians by 80-90% H Navigation options are limited in use in outpatient surgery given the high cost of systems LinkSPINE consumable products Description H Novel, inter-fixated device offers a compelling alternative to conventional pedicle screws / rods I Unique product designs create an effective, economical operating room solution H Specialized instruments to optimize delivery of MIS two screw constructs I Compact kit and straightforward technique designed specifically for ASCs I Powerful, versatile, and deep platform that can be used in any degenerative lumbar fusion cases I Offers intra-operative customization to match patient anatomy and pathology I User-friendly interface EFTA01438110 I Novel, chip-based software platform to facilitate placement of screws I Razor / blade model I Drives strong customer adoption of LinkSPINE's end-to-end MIS solutions I Expected launch in 2H 2019 I Costs —10% of conventional navigation / robotics system I ASP of typical navigation / robotics system is >$500,000 I Compact device specifically designed for outpatient centers / ASCs I Activated with a pull tab and requires no change to surgical workflow Unique to Market Access I Compact design for ASC application I PLIF and TLIF cages manufactured out of unique, roprietary blend of Hydroxyapatite & PEEK f I Early mover on an osteoconductive interbody fusion device I Comprehensive MIS access, decompression, and disc preparation kit to facilitate safe, reproducible outcomes 1 1 1 Commercial 1 1 Deep bench of best-in-class commercial products provides premium, end-to-end solutions for minimally invasive midline surgeries Early to Market Note: MIS — Minimally Invasive Surgery; ASP — Average Selling Price; ASC Ambulatory Surgical Center 4 MidlineChoice MidlineChoice MidlineChoice EFTA01438111 3 Aligned with the future of healthcare Better for patients Better for physicians I Reduced surgical time and lower radiation exposure with TargetLlNK H Minimally invasive surgery involves less trauma to the patient, hence a faster recovery I Lower out of pocket costs to the patients due to: I Treatment in outpatient center / ASCs cheaper than normal full-service hospitals IIShorter recovery times (no overnight stay at hospitals, fewer rehabilitation visits, etc.) I Reduction in radiation exposure as TargetLlNK can capture the required images in 2 images, versus —50 x-rays in current MIS spine procedures I Shorter learning curve; open spine surgeons often gain familiarity with MidlineChoice after 2-4 cases I Surgeons may decide on the type of MIS surgery intra-operatively as the kit provides a full continuum of MIS options I Faster surgeries allow physicians to see more patients Better for facilities I TargetLlNK is an affordable and effective alternative versus robotics I Minimally invasive surgery leads to shorter hospital stays or even outpatient treatment I Less storage space needed for the compact surgical kits and navigation system I No need to purchase extra inventory for a "just-in-case" situation as the products are interchangeable 5 EFTA01438112 4 Robust capital-light growth model validated by successful beta launch, highly attractive gross margins and existing reimbursement llinkSPINE highlights I Successful US-beta launch with minimal sales activity, corroborated by trong numbers in Europe d Strong gross margin on low volumes provide business flexibility and owers the Company's cash burn D LinkSPINE's kit approach lowers the working capital requirements of a raditional spine company i LinkSPINE's FDA-approved devices fit seamlessly to the existing reimbursement pathway for lumbar fusion constructs ll$25mm capital invested in LinkSPINE H1'17 Lumbar spinal fusion reimbursements $60 Cages alone 10% Other 4% Cages and l screws 15% Fusions in lumbar spine are most often performed with cages and screws or with only screws LinkSPINE's FDA-approved product platform addresses a combined 86% f the lumbar fusion constructs 1 Screws only 41% In 2017, reimbursement varied from —$9k to —$15k, providing ample margin opportunity for LinkSPINE $0 2017 EFTA01438113 2018 2019 Sales 2020 2021 Gross margin Note: General medical device company includes: Stryker, Hospira, Medtronic, Becton Dickenson, Boston Scientific, J&J, Baxter; pure play spine companies include Alphatec, SeaSpine, K2M, Globus, NuVasive 6 2022 $30 $9.3 $0.8 $2.1 60% H2'17 Revenue and gross margin 100% H1'18 56 US LinkSPINE progress Number of implantation cases utilizing LinkSPINE devices has approximately doubled from H1'17 to H1'18 despite having minimal commercial activity 110 90 89.5% 89.0% 87.8% 80% EFTA01438114 5 Commercial-ready investment developed by the LINK Group who has a proven track record (LINK Group Global leader in orthopedics with a premium line of large joints and custommade solutions Leading player in the Revision market Complete in-house production from the liquid metal to the coated and sterile-packed products LINK Group is headquartered in Hamburg, Germany and founded by aldemar Link in 1948 ri Sale of SB Charite Artificial Disc for $325 million plus future ayments from ISI3 fl Sale of Cervitech for $80 million including future payments from NuVasive Sale of the STAR Ankle to SBI for an ndisclosed amount I Stryker subsequently acquired SBI in a transaction up to $375 million LINK has a proven track record Engineering is LINK's key to success (ley management Technology driven company that is on the forefront of innovation for 70+ }ears EFTA01438115 Consistently the early mover in many orthopedic innovations Efficient use of engineering resources — small teams with broad knowledge and cooperation with key opinion leaders Dennis Farrell CEO, LinkSPINE Helmut Link Proprietor, Link Group Norbert Ostwald CEO, Link Group Peter Willenborg CFO, Link Group Has been with LinkSPINE since 2011, serving as president since 2015 and previously leading Sales, Marketing and Product Development initiatives 7 EFTA01438116 Investment opportunity Differentiated Approved Commercial Reimbursed Derisked 1 1 1 1 1 Proposed raise: $20-25mm Investment proceeds will be used to: Emerging player in the minimally invasive outpatient pain market, focusing on the relatively infant "Midline" Spine Surgery sector Riding industry tailwinds of aging demographics, transition to outpatient care settings, and strong focus on faster recovery and risk-reduction Strong track record with support from the LINK Group in terms of industry and technological expertise, intellectual and financial capital, commercial experience, and etc. Build a robust commercial sales and marketing infrastructure Deutsche Bank key contacts: Expand geographically, specifically in the sun-belt states of Florida, l eorgia, Texas, Arizona and California I1 Hybrid distribution strategy to include direct representation and partnership with independent agents that focus upon novelty Launch, commercialize, and tightly integrate unique and low-cost avigation system for maximized pull through of implant platform ii Continue to innovate highly-engineered novelty minimally-invasive products Seth Damergy Managing Director Global Head of Medical Technology [email protected] W: (212) 250-3284 M: (917) 292-2052 Benjamin Bible Vice President Healthcare, Medical Technology [email protected] EFTA01438117 W: (212) 250-5264 M: (651) 343-6709 8 EFTA01438118 Disclaimer THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS PROVIDED AS INFORMATION ONLY. THIS PRESENTATION DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS MATERIAL TO AN INVESTOR. BY ATTENDING THE PRESENTATION OR BY READING THE PRESENTATION SLIDES YOU AGREE TO BE BOUND AS FOLLOWS: This document has been prepared by, and is the sole responsibility of LinkSPINE Inc. ("Company" or "LinkSPINE"). It is confidential and contains proprietary information and intellectual property belonging to LinkSPINE. Such information is solely for information purposes and is being furnished through Deutsche Bank AG, acting through its New York Branch (and/or any of its affiliates and/or branches) ("DB", the "Financial Adviser"). The Financial Adviser has been authorized by the Company to provide this document to each of the recipients on the Company's behalf. This information is confidential and may not be excerpted from, summarized, distributed, reproduced, published or used under any circumstances without the prior express written consent of the Company and the Financial Adviser. Failure to comply with this restriction may constitute a violation of applicable securities laws. DB is acting solely for the Company and for no one else and, accordingly, will not be responsible to any other person for providing the protections afforded to their respective clients or for advising any person in relation to this document. Neither the receipt of this information by any person, nor any information contained herein constitutes, or shall be relied upon as constituting the giving of investment advice by the Financial Adviser to any such person. For the avoidance of doubt, the Financial Adviser has not acted or is not acting (and does not purport to act in any way) in a fiduciary capacity. All communications or inquiries related to the Company or the potential transaction should be directed to the Financial Adviser. Under no circumstances should the Company or any of its employees be directly contacted in connection with this information or your possible interest in any transaction contemplated herein. Although LinkSPINE believes reasonable efforts have been made to ensure the accuracy of the information contained in this document, it may include certain inaccuracies or typographical errors and may be changed or updated later, at the sole discretion of the Directors of the Company. This document is intended for discussion purposes only and is provided without warranty of any kind. No reliance should be placed on any information presented herein and any reliance is at your own risk. This document is not a prospectus for any securities and does not constitute an offer or invitation for the sale or purchase of any securities described herein and shall not form the basis of, or be relied on in connection with, any contract, commitment or investment decision in relation thereto. EFTA01438119 The information set out herein is preliminary and should not be relied upon to form the basis of any decision to acquire LinkSPINE or for any purpose. LinkSPINE, the Financial Adviser and their respective directors, officers, employees, members, partners, shareholders, affiliates, agents, advisers and other representatives (collectively, "Representatives") and their respective contributors hereby disclaim all warranties (express and implied) and conditions with regard to this information and any and all sections of the document and the accuracy or completeness of such information. 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