Pat Miles: Yes. I would start, Matt, and then ask Todd to pipe in. But – as you start to look at the demographics of the marketplace and you look at the closing time of the Nuva GMED thing, it was not assured that it was going to go through. And I think that doing anything prior to it being completed would have been found upon as well. And so I think when that being closed, I think seeing the disruption, the other disruption in terms of just leadership Orthofix SeaSpine. I think those things presented themselves in a unique time. And when you – what I tried to do with regard to the presentation is reflect the non-linear elements of getting sales teams over. And I think if I look back at the history of the company, when we talk about creating clinical distinction and compelling people, it’s taken us time to create a portfolio that ultimately would be reflective of the type of sales teams that are coming over today.
And now you start to see the sales teams coming over, we had 15 join us in the Northeast. And so when you start to look at what the influence that has on the required instruments and implants, it’s significant. And so for us to start to look forward and say, hey, are we going to capitalize on this growth opportunity or not? We said, let’s lean in. Our history has been one of execution. And so we felt great about that opportunity and thought to ourselves the time is now. And so I think that as we look back historically, people are going to forget all about this because what you’re going to see is us build a behemoth based upon the type of aggressive perspectives of aggressive kind of efforts that we’ve previously made. And so my sense was the time is now again, not the perfect market by any stretch of the imagination.
That’s not lost on us. But again, every time we’ve raised money, we’ve created value, and this is going to be no different. And so we felt like let’s lean in. This is an opportunity.
Todd Koning: And Matt, I think you’re totally right in the way you’re thinking about the $150 million. I mean, if we say $0.75 for every dollar that implies an incremental $200 million kind of above of where we’re at. And so I totally think that’s the way to think about the opportunity of creating value through this raise, which is incremental revenue and incremental adjusted EBITDA sooner relative to expectations. And so I think that is – that’s a key component of it. And the point is, how do you do that? It’s by attracting the competitive reps and ensuring they got the asset they need to run the business and drive that incremental revenue. And so that fundamentally is the value creation opportunity to be growing faster and delivering more profitability sooner. And so that’s fundamentally what we’re driving here.
Matthew O’Brien: Got it. Thank you.
Operator: Your next question will come from the line of Joshua Jennings with TD Cowen. Please go ahead.
Joshua Jennings: Hi, thanks for taking the questions and congratulations on the strong results and the raise. I wanted to just check in on see if you can share any trends for LTP and the ramp there since the full launch earlier in the year. And also just wanted to just confirm that LTP adoption coming from previous PTP adopters? Are they – is it bringing new ATEC surgeons in? And is LTP adding to revenue per case and ATEC products used per case those metrics? Thanks for taking the question.
Pat Miles: Yes, Josh, yes, great question. And this is why I feel like, gosh, we’ve never been more fortunate with regard to the demographics of the marketplace. And so you see a company that had a significant laterally positioned patient position business, XLIF, and then you see our opportunity to launch LTP and then expand its utility. It’s reflecting the very demographics that we expected. And yes, what – it’s expanding the average selling price per surgery. And so the very demographics that were contemplated with regard to the addition of a patient positioner the ability to do 5:1, the convoy sales associated with a biologic assembly. Like all of those elements are coming to fruition in a way that ultimately is reflective of a growth rate, and then you bring in an expertise from a sales force perspective in groups and you love the dynamics.
And so I would tell you that yes, yes and yes. Like the things are happening as expected, it’s expanding the ASP and is being accepted – well accepted. We are competing against taking someone to a bed. And so you love the chances when those are the competitive dynamics in a space that has historically been dominated by somebody else.
Operator: Your next question will come from the line of Bill Plovanic with Canaccord Genuity. Please go ahead.
Unidentified Analyst: Hey. This is George on for Bill. Thanks for taking our questions. So, the first question we have is, you made a couple of recent Board additions. Can you kind of talk about how these additions have maybe already made an impact? And any specifics of what they will bring long-term value that has been lacking before their appointment. And then just a quick one, just a point of clarification, actually, you were talking about how with the 3x ROI number from your investments. Did you mention that being shorter than the 5-year span in terms of the industry disruption competitive reps you are bringing in? Thanks.
Todd Koning: Could you just repeat the last question? I got…
Unidentified Analyst: Yes. So, just talking about the – what you said about the 3x free cash flow return of investments. Really a nice chart you guys provided in year five, but I thought I caught something about you guys saying that, that would be more of an accelerated timeline for more of these competitive rep conversions you are getting from the disruptions?
Todd Koning: Well, maybe I can just answer that one quickly and then pass it back to Pat to speak the Board of Directors additions that we made. The 3x really is, I think independent of which sales reps are using it. So ultimately, it’s a function of and you make your investment initially in this case, $75 million. You pay for COGS and then you get – you pay for variable commission rates and you drop about $0.30 on that full year in the first year. And then in the years afterwards, you dropped about $0.50 on the sales dollar, that $100 million. And so you look at your revenue of $100 million, you look at your COGS at $25 million, and look at your selling expense roughly of $25 million. And ultimately, that drops $50 million.
And that’s kind of regardless of which sales rep is there. And while there is some variation between what the sales agents are and their individual economics, on the whole, it’s not much different. And so I think what we showed would be the same regardless of which selling entity is selling it. You want to speak to the Directors…?
