Good day and welcome to the Aurora Spine fourth quarter and financial year 2024 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event has been recorded. I would now like to turn the conference over to Adam Lowensteiner with Lytham Partners. Please go ahead.
Thank you, Jacob. Welcome, everyone, and thank you for joining us today to conduct an update with investors and review the financial results for Aurora Spine for the fourth quarter and fiscal year 2024 ended December 31st, 2024. With us on the call representing the company today are Mr. Trent Northcutt, President and CEO of Aurora Spine, and Mr. Chad Clouse, Chief Financial Officer of Aurora Spine. Before we begin, I would like to remind everyone that statements made during the course of this call may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21A of the Securities Act of 1934. These statements reflect current expectations concerning future events and results.
Words such as expect, intend, believe, may, will, should, could, anticipate, and similar expressions are words that are used to identify forward-looking statements, but their absence does not mean a statement is not forward-looking. These statements are not guarantees of future performance and are subject to risks and uncertainties and other important factors that could cause actual performance or achievements to be materially different from those projected. For full discussion of these risks, uncertainties, and factors, you are encouraged to read Aurora Spine's documents on file with SEDAR, including those set forth in periodic reports filed under the forward-looking statements and risk factors section. Aurora Spine does not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
On this call, management may refer to EBITDA, Adjusted EBITDA, adjusted net income, and adjusted EPS, which are not measures of financial performance under generally accepted accounting principles or GAAP. Management believes that these non-GAAP figures, in addition to other GAAP measures, provide meaningful supplemental information regarding the company's operational performance. Investors should recognize that these non-GAAP figures might not be comparable to similarly titled measures of other companies. These measures should not be considered in addition to, and not as a substitute for, or superior to any other measure of performance prepared in accordance with GAAP. The reconciliation of non-GAAP measures to the most directly comparable GAAP measures in accordance with SEC Regulation G can be found in the company's earnings release. With that, I'd now like to turn the call over to Mr. Trent Northcutt, President and CEO of Aurora Spine. Trent, please proceed.
Thank you, Adam. I'd like to welcome everyone to this call to update everyone about Aurora Spine. The layout is the agenda for today's call. I'll review the company's operational and performance during the fourth quarter and the year then in hand to call over. I'll send it over to Chad to review all the financials. After Chad's remarks, I'll provide a summary and we'll open the call to answer any questions you may have. I am very pleased with our financial results reported today, both for the fourth quarter and for the fiscal year. Fiscal 2024 was a great year for Aurora Spine, with many achievements, including a 21% increase in revenue, very strong margin improvement, and our first full-year positive EBITDA. The company's solid performance continues to be fueled by proprietary products, primarily the SiLO TFX system, which experienced an increase of 135% in revenues during the year.
We also saw contributions from our ZIP Series, including ZIP 51, which offers patients and doctors unique products to conduct fusion in the lowest part of the spine without any need of screws. Also, rounding out the record results were additional sales from the DEXA technology, primarily the DEXA-C. Helping us achieve great results was due to the decision that was made to the company a little over a year ago, which was to start to build an internal sales force team to detail our products. The purpose of this investment was to assist our sales efforts with many distributors we work with, but also build a strong relationship with our customers. Knowing that Aurora was in the midst of development, additional products these very doctors can use.
I'm very pleased with our amazing internal sales team, which is now at 14 people, and their diligent efforts are driven behind our growth and getting our proprietary products to more doctors, hands, and patients. As part of our growth as an organization, we recently announced the promotion of Matt Paxton to the Executive Vice President of Sales and Caitlin Sims to the Area Vice President of Commercialization and Key Accounts. Both Matt and Caitlin's commitment to excellence, innovation, and delivering exceptional patient outcomes has been the cornerstone of their success, and they are embodied the Aurora Spine's purpose-driven mentality and brings a relentless focus and innovation and patient-centric care to their new roles. Through their dedication and hard work, both leaders have played pivotal roles in advancing Aurora Spine's mission to revolutionizing spinal healthcare and cutting-edge solutions that improve the quality of life for patients worldwide.
Both promotions reflect Aurora Spine's strategic focus on enhancing its leadership team to the capabilities and the opportunities ahead. We are excited to make these promotions to Matt and Caitlin based on their contribution, but also the value of their guidance and support, which would be an integral part of further building our organization and internal sales team. The SiLO TFX. Moving on to some detail on how the proprietary products are performing, the SiLO series, which includes the SiLO TFX, is selling extremely well and has had a banner 2024 as revenues of that product increased by 135%. We attribute this increase to higher adoption of the product as we conducted several training sessions throughout the year. Also, our sales team has done a great job identifying new doctors that were seeking an SI joint product as part of their practice.
Adoption of the SI joint market is still very much in early innings and, in our opinion, should continue to grow and expand for the next several years. Also, helping sales in the year was the additional kits available to our customers. Adding more kits enabled us to obviously conduct more procedures, but also allowed us to streamline shipping of the kits and manage the logistics a lot better. Moving on to the ZIP series, our products, which continue to be workhorses for Aurora Spine, especially the ZIP 51, which saw a 69% increase in sales during 2024. The ZIP product continues to offer doctors a fusion procedure without the use of screws, which has been a favorite amongst the interventionalists we are working with.
Subsequent to the fiscal year end, we are announcing the completion of a patient enrollment REFINE study of the ZIP inner fixation device for patients suffering from back pain due to symptomatic degenerative disc disease. This respective multi-specialty clinical trial is the first of its kind to evaluate the safety and efficacy of lumbar interlaminar fusion devices, making a significant milestone in its advancements of spinal care. The REFINE study, designed to bridge the gap between conservative treatment and more invasive surgical options, has successfully enrolled its full cohort of patients across multi-centers in the United States. Data from this pioneering study will be published out to one year, with subsequent cohort publications extended two years, offering robust long-term insights into patient outcomes. The results will be presented at the American Society of Pain Neurosciences ASPN, the annual conference in July 2025, spotlighting Aurora Spine's commitment to evidence-based innovation.
Stay tuned. The DEXA. Just a brief update on DEXA. We are working diligently to open up more hospitals to the use of DEXA and have completed our sales team working with more every day. As many of you know, the DEXA will be a little bit of a different sale than some of our other products, but we are making inroads to educate doctors on our offerings and many early indications that the value add of the technology can be enabled to pay surgeons to proceed with their surgeries, even if the patient's bone density is not so strong. DEXA-C has been contributing to the company's revenues, and we should have data to share on the products in the coming months. In addition, we expect to launch DEXA-L for the lumbar procedures during the second half of 2025. Arrow.
I'd also like to briefly talk to you about our new product series that received FDA clearance March 2025, subsequent to the quarter and year-end. The Arrow fusion system is a very small implant that will be used in the facet joint to obtain fusion to remove back pain patients that are experiencing. The procedure is very new to the industry, but similar to our SiLO TFX, the Arrow was designed with the understanding that many more injections are offered to patients, and the Arrow's design is intended for the doctors who utilize needles and easily identify and access the facet joint. In addition to having a similar design, the Arrow also simplistically to the implant is minimally invasive, where the procedure is done in less than an hour, and patients can go home the same day.
Economic profile is also similar to the TFX, but might have initially better economics as it's a smaller device, which makes it easier to manufacture. Less material is needed to manufacture it as well. Where things are different on the economic scale is unlike the TFX, which is intended for the SI joint pain. An individual only has two SI joints as opposed to facet joints where there are a total of 48 facet joints. This isn't to say that the Arrow would be implanted in every single joint, but there's definitely the opportunity for more shots on goal, so to speak. Also, treatment of the facet is more prevalent within the industry, with over 4.5 million injections administered annually in the U.S., compared to 1.2 million injections to the SI joint.
There are just a few catalysts of why we are extremely excited about the Arrow, and we are anticipating initial surgeries of the product to be commenced in the later half of 2025. While we're very pleased with this FDA clearance, I must acknowledge and tip my hat to our R&D team, which worked very diligently to create and design this product in rapid fashion. That concludes my formal comments. I will now turn the conversation over to Chad Clouse, Aurora CFO, for some commentary on our financials. Chad, please proceed.
Thank you, Trent. The company's financial performance in the fourth quarter and fiscal year demonstrated excellent progress. Let's discuss some highlights. Total revenue for the fourth quarter of 2024 was $4.7 million, an increase of 16.3% when compared to $4.04 million in the same quarter a year ago. Total revenues for the fiscal year 2024 were $17.56 million compared to $14.52 million for fiscal year 2023, an increase of over $3 million or approximately 21%. The improvements in revenue over 2023 were due to more procedures conducted in ambulatory surgical and pain centers that incorporated Aurora products like the ZIP and SiLO TFX. The company targeted the pain market with increased marketing, training, and increase in sales staff, which now stands at 14. Moving on to gross margins, which also showed improvement both in the quarter and the fiscal year.
Gross margins on total revenues were 57.8% for the fourth quarter of 2024 compared to 56.7% in Q4 of 2023. Gross margins on total revenues for the fiscal year 2024 were 60.5% compared to 56.5% for the fiscal 2023. The year-over-year improvement in gross margins is attributed to the company's strategy of selling more proprietary and Aurora Spine products and into markets with improved pricing like ambulatory surgery centers. As the company continues to focus on growing sales of proprietary products, gross margin has the capabilities for additional improvements depending on product sales and manufacturing and shipping costs. Moving on to operating expenses. Total operating expenses were $3.22 million for the fourth quarter of 2024 compared to $2.58 million for the fourth quarter of 2023.
Total operating expenses for fiscal year 2024 were $11.438 million, which includes $1.11 million of non-cash expenses compared to $9.89 million, which included $1.32 million of non-cash expenses for fiscal year 2023. Operating expenses increased during the fourth quarter primarily due to costs for training of new physicians, attending several society meetings, and the training of internal staff. Operating expenses for fiscal year 2024 increased primarily due to the addition of more salespeople for direct sales, increased commissions due to increased sales. EBITDA and non-IFRS figure is defined as earnings before interest, tax, depreciation, amortization, and share-based compensation was a - $0.32 million for the fourth quarter of 2024 compared to a + $0.11 million in the fourth quarter of 2023. EBITDA was $0.28 million for the fiscal year 2024 compared to a - $0.31 million for fiscal 2023.
EBITDA levels in Q4 were negatively affected by the fair value accounting under IFRS of a - $0.154 million for the net receivable. EBITDA improvements during the year were due to higher revenue levels, improved gross margins, and managed expense controls. Net loss was $0.653 million for the fourth quarter of 2024, including compared to the fourth quarter of 2023, which was a loss of $0.85 million. Basic and diluted net loss per share was minus $0.01 per share in the fourth quarter of 2024 and basically zero and negative zero per share in the fourth quarter of 2023. Net loss was $1.003 million for fiscal year 2024 compared to a net loss of $1.68 million for fiscal 2023. Basic and diluted loss per share was $0.01 per share for fiscal 2024 and a loss of $0.02 per share for fiscal 2023.
Moving on to the balance sheet, we ended the quarter with $826,000 in cash. Cash collections improved during the year and quarter, and we've been successful in collecting over half of the order receivables, lowering it to below $500,000. As I mentioned in the past, we've added personnel to assist me in improving our collections and process. Majority of the receivables on the balance sheet reflect those that are 30 days or less. As we collected cash during the quarter, we were very prudent in allocating our resources and used the proceeds to reinvest back into the business through additional trainings, marketing, and sales personnel. We believe the capital structure is sufficient to meet our budget needs this year and should continue to improve as we continue to make progress on our collection efforts and experience growth in the business. That concludes my comments.
I'll now turn the conversation back to Trent.
Thank you, Chad. To summarize, I'm extremely proud of our team's performance and staying focused on building this company. We are well positioned to take advantage of growing markets with several new proprietary products. We remain focused on penetrating these markets further in this year through continued training sessions and clinical trials. While we're still a few weeks away from reporting our first quarter results, I understand that since the quarter has been completed, many investors would like to know how the quarter performed. While we're still a few weeks away from reporting those results, I am limited in what I can share with investors, but expect the quarter to be the best first quarter in Aurora's history. While on sequential basis, revenues were slightly lower in the first quarter, as usual, seasonality, and it's a slower time of the year due to the patients' access to their healthcare plans.
Whether it be various available benefits or deductibles as the year progresses, we do believe that as the year progresses, revenues should continue to show year-over-year growth, and we have budgeted annual revenue growth at least 20% of profitability on an annual basis. Looking to the longer term, we are well positioned for success, especially as we have new products and more clinical studies proving our technologies and educating more doctors on the benefits of using Aurora's products. We remain highly focused on the opportunities in front of us and continue to invest in our growth with each of our major platforms: ZIP, SiLO, DEXA, and now Arrow. With that said, Operator, we are ready for any questions.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble a roster. The first question comes from Tom Fedichin with Microcap Connections. Please go ahead.
Hey, good morning, everyone. Congratulations on another solid quarter. Obviously, the company is hitting an inflection point. You've had two quarters of $4.7 million and above in a row. Can you explain where the sales are coming from? Is it attributed to the onboarding of new doctors, or is it from new products like Osteo Onyx, or just increased usage per doctor? Maybe if you can elaborate on that, that'd be great.
Our lumbar business is at 61%, where our SI business is around 37%. I'm talking about total of the sales revenue. Cervical is still that smaller sledge. We are seeing good outcomes with all of our devices, such as the new Osteo Onyx in the lumbar region, ZIP 51, showing an increase in growth and sales on that. Obviously, the 135% for the year increase on SiLO TFX. The SI market gets the door opened. Certainly, with some of our new regional salespeople that are out in the field, they're getting access to interventional and ortho and neuro doctors out there, getting the door open for them to be able to show the new devices from Aurora.
If it's a spine surgeon, we're certainly showing them DEXA and Osteo Onyx, but not missing the opportunity to ask them questions such as, "What do you use currently for your SI?" If we're talking to an interventional, we're showing them the features and benefits of ZIP 51, where it's, I think, the premier product for L5-S1. Of course, we think the best in class is the SiLO TFX. Those are our shots on goal when we're in front of those customers.
Perfect. Now, you've had an incredible year. Sales increased right across the board. Can you give us a breakdown as to how much the SiLO TFX and the SiLO attributed, what the ZIP represents, the DEXA-C, and actually even the Osteo Onyx? I know it's a brand new product, but maybe give us an idea as to the revenue breakdown for that or percentage breakdown even.
Yeah. The SiLO TFX is running about, I said it the other day when I was with you, between that 35% to as high as 47% in certain months, right? It all depends on the month. Where the ZIP family of products, which is the ZIP LP and the ZIP 51, they also run the opposite of that, about 35%-42% in monthly sales given any month on that. The lumbar systems, such as Osteo Onyx and DEXA-C for cervical, the Apollo Plate for cervical, and the Hydra, all that is blended into those numbers. Those numbers are anywhere from 2.7% or 4% of the number on the sales revenues. We're seeing there's some ebbs and flows to it, but we're seeing an increase in our spine business versus our interventional business, as we like to break it out in our daily sales report.
As we continue to grow on the interventional side, the purposes of us having Ron Echols to the team, who is our Director of Spine nationally, he goes all around the country. His sole focus is to train our regional sales directors and then be in front of all the leading spine surgeons across the country to show them DEXA-C, show them Osteo Onyx. Ron is also very keen on the SiLO TFX, and he's also very bullish on the new Arrow product.
Perfect. Now, you've added a number of regional sales directors to your team. I know you plan on expanding on that throughout the year. You've mentioned in your earnings release about possible compression of margins through distributorship model. With the addition of new regional sales directors, do you believe that the margins will actually maintain? Will it decrease? I know there's expenses with regional sales directors. Maybe you can elaborate on that as well.
I certainly want to improve on our direct sales versus distribution. We do not want to turn nothing against our distributors. We are arm in arm with our key distributors around the country, and we know that we are going to find some new distribution opportunities. That margin is always going to be a little bit higher. It can be 25%, 30%, 35% commission to that distributor. That is just how it has played out in those regions that you do not have direct coverage. A lot of the map that I stare at still has a lot of open areas. Our direct areas where we are selling direct are obviously very important, very valuable to the company because we do not have to pay as high as commission, and we are actually in the face of that customer from company to the customer directly.
That is an important part of our business that we are focused on. Where we can get that adoption, we are going to do it. Where we have to go independent distribution, because it is just a better way for us to conduct business in that region, we will have to. The margins are certainly better for us if we are direct.
Perfect. Can you speak about the new Arrow implant device and on the rollout of that, what that's going to look like, the initial phase with so many doctors, and how many kits will be available at that time, and maybe what sort of a return, if you're able to say that right now, you expect for the Arrow implant?
The alpha phase, and we're all set up for this. We have five key doctors that are involved in this alpha rollout. We have one ortho, one ortho spine surgeon, one neuro spine surgeon, one interventional radiologist, and two pain doctors that are on the alpha trial. Each one of these locations, which are throughout the United States in different areas, key areas for us, have all agreed to do a series of implants. They've already been doing workups with patients that they can add to these surgeries. We're going to do a quick series of cases, and we're instantly going to have that IRB approved and entered into a safety and efficacy study to show that it's got some merits and some value to patient care. That'll be part of that alpha phase.
We have a big meeting scheduled in July following where we have 40 doctors all identified and have actually come forth to want to be part of the beta phase of the release of the product, which we will be starting in the lumbar region. If many of you who took a look at my press release or read through the press release, and I touched on this last week at the Planet MicroCap meeting, was we got approval from C2 to S1. That means from your top of your neck all the way to the lowest part of your back. We'll be focusing on the low back, and we're very, very excited about the Arrow project.
Those first five will be the first steps into the alpha phase, and then we'll quickly move into the beta phase coming off the success of the, knock on wood, the success of the alpha phase.
You believe that the market is much greater than the size of the SiLO based on our conversations at the Planet Microcap. Can you elaborate on that to investors?
Yeah. It's always been something I've identified, and it's how we wrote the business strategy for SiLO TFX. What I mean by that is that the SiLO TFX was meant to be put into the marketplace based upon this potential growth, as Adam Lowensteiner always liked to say, the early innings are still present. We saw that with nearly 300,000 estimated annual procedures performed in SI fusions, but the injections that were performed was 1.2 million. So 300,000 versus 1.2 million really got our attention, and that's why we wrote the plan and wrote the model that we did for the SiLO TFX. This is why we're having results with the SiLO TFX.
To stay on topic with Arrow, when we started looking at an area of the market that we felt was widely served with an implant that could be used as a mechanical fixation, asking ortho and neuro in the interventional market, those doctors, how many do you estimate facet injections to perform annually? Between facet injections and facet ablations and all the treatments that go into facet, we believe that this product in the hands would represent over 4 million injections that are performed annually, where now the doctors would have a mechanical fixation device to be able to treat that patient on the most minimally invasive approach to mechanical fixation that Aurora has ever created.
We just think that this is going to really give the doctors that extra arrow in the quiver that they can use to help treat their patients beyond opioids, beyond injections, beyond steroids, beyond neuroablation, actually giving them that chance to walk into a surgery center in pain and walk out the same day pain-free.
Amazing. Amazing. Is there any competition in the market today doing the minimally invasive procedures that you would be providing?
There are. There's a few. The contrast between the SI market and the facet market is that there's probably in the area of about 65-80 players in the SI joint market, and there's probably another 20 or more that are maybe not players in the market that are maybe coming into the market. Call it 80-100 SI products out into the marketplace, where in the facet marketplace from mechanical fixation, the way that we're going about it, there's less than 10 competitors.
Wow. That's awesome. Maybe we can move on to talking about your accounts receivables. I did notice they've increased. Can you speak about the efforts to keep this in check? I know you get asked this every call, and I'm sure I know the answer, but is there any need to raise capital to help pursue growth?
No. We recognize that the AR is.
Oh, your accounts receivable—hold on, hold on, hold on. Accounts receivable went down, by the way. It's not up. Just so we're staying on script here.
Yeah, yeah. Yep. I appreciate that. We're always paying close attention to the AR, and we have an internal team that's out there collecting on the AR in hospital systems and surgery center systems around the country. That's that ebb and flow of collecting that money. Yeah, we work real diligently because there's substantial money that still needs to be paid back to Aurora, and we address it every single day. Seven days a week, we address it.
Okay. Yeah. I believe that's.
The second part of your question is—sorry.
Seven. It did go down. You have 3.7 versus 3.9. Sorry about that there, Chad. You are correct. Sorry, they are trying—go ahead.
We are not actively looking out to raise any money. We do need to pick up the AR because that's our money, and we want to get that money back into the company for all its right purposes. We are not having any conversations with any companies to raise any money.
Perfect. Do you have plans to maintain profitability in 2025? Is that the focus, or is it to pursue growth?
In 2023, I told everyone that my main focus for 2024 was to be EBITDA positive. It's my main focus in 2025 to be not just EBITDA, but full cash flow positive, where we have actual real money into the bank, into our accounts, into our operating capital. It will be the—it will be—there's seasonality. We go from the end of the year, and we get that dip in December, and then we come up into January, and then it starts to dip right around spring break, and everyone has to take—do their spring breaks and get that vacation time in, and kids in school, and all those things that happen in and out of school. We get into the summertime, which will hit another wave of seasonality into the summer.
We have started off the year, we think, on the right step, and we really think that this is setting us up nicely for a profitable year. We did put some early expenses into training. We hit the year off with a conference that was in Orlando right off the bat in January. We had a big cadaver lab, a completely sold out, if you will, cadaver lab with a blend of ortho and neuro pain in that lab, which was in Austin, Texas. We highlighted—not only did we highlight a couple of key things, which were ZIP 51 and SiLO TFX, we also showed some surgeons our new upgrades to the Apollo Plate system with Grauciano, who runs a lot of R&D for us and does a lot of really innovative stuff for the company. He works directly with us.
We highlighted that with some ortho and neuro surgeons at that lab. That is how we started the year off. We put a little bit of cash towards the Q1 because we wanted to be able to hit the ground running hard to get these people trained because we knew the dip would come in the spring break area.
Do you plan on doing many more training sessions? I know you do mention this in your earnings that you will maintain and increase. Is it a dramatic increase, or is it more steady, Eddie, for throughout the year compared to, say, 2024?
There won't be as many large national labs because as much as we'd like to host them all, it just takes a lot of follow-up. We are working toward, and we've already started this in the second in the Q2, focusing in on some more regional boutique training sessions where there are six people that are trained or 10 people that are trained because it just allows us to be laser-focused on those accounts and obviously lower some costs too. We think we can get a better impact on that. There is another national lab scheduled in the year. In fact, I think there are a few more, but they are all TBD because we want to make sure that, one, we run a cash-positive business this year, a profitable year, and with some good top-line revenue results in line with that.
Wonderful. Two more questions. How many more new regional sales directors do you plan to have in 2025? You've got 14 salespeople now. Do you plan to get up to 20 that high?
It's not scheduled to be a 20 today, but it's two at a time, right? We look at it. We go into each region. There's lots of pockets that are wide open. We just added a new regional sales director, Ian Hauck, who just joined us, and he's in Virginia, North Carolina, South Carolina, Kentucky, Tennessee area. We have wide open spots still in the Northwest, in and around Montana, Wyoming, North Dakota, South Dakota, Nebraska, Kansas, Missouri, Iowa, Minnesota, and we have another open area in the Great Lakes area, so Wisconsin, Illinois, Indiana, Ohio, Michigan, Upper Peninsula. Those are all real key areas that we still need to add. With adding the addition of Ian, who we put into the—we call the Mid-Atlantic—we're going to be identifying the Great Lakes area next.
If those two people really, really connect and click, then we'll start to expand into the Northwest and into the Midwest further in a lot like the Dakota areas because there's a lot of really nice pocket areas that do lots of surgery because they have a good little MSA in those locations, and patients need to get back up on their feet, especially in areas where there's fracking and areas where there's some real hard work to be done. We want to get those people back out in the workforce as best we can.
Perfect. Last question is the break-even, the monthly break-even. Before, it was $1.5 million. Is it moving closer to $1.6 million now? What is the monthly break-even for you guys?
Chad, go ahead if you want to jump in on this one.
It depends because there's product mix and how much training we do a month and things like that. I mean.
On average. It doesn't have to be—it doesn't have to be an exact science. It's more of just an average of if you hit a certain number, you're happy.
I mean, I would say the $1.5 million area would be a good spot at this point. Again, there's a lot of stuff that goes into a month: products and training and things like that.
Okay. Fair enough. Thank you, guys. A great quarter.
You're welcome.
Okay. No, I appreciate that, Chad. Fantastic quarter. Appreciate it, guys, and wish you the very best for 2025. I'm excited to see what you have coming forward.
Thank you, Tom.
Thank you. Again, if you have a question, please press star then one. The next question comes from Lindsay Leeds with Microcap Connections. Please go ahead.
Hi, and congratulations on a strong Q4 and overall 2024. I wanted to start out talking about AERO. Trent, can you talk about the AERO instrument kit and how it compares to the instrument kit of the SiLO TFX?
Yeah, Lindsay, good to hear from you. Yes, it's a really, really slick, well-precised designed instrument. The steps that are involved in the SiLO TFX are the exact same steps that are taken in the new AERO implant device. We say this because the doctors that we currently work with, they don't even realize they're being trained on it already, right? I say that tongue in cheek. I'm really, really excited that we were able to essentially minimize everything down. The instruments we're talking about, the same six instruments that you use to get into the facet versus how you get into the SI joint, and it allows that doctor to have full access, all manual. There's no power. They don't have to pull up any power tools, and they're able to just get right in there and go bilateral with the AERO implant device.
It is really, really amazing. I can't wait for everyone to see it. Obviously, it is still under wraps a little bit as we go into our alpha phase, but I couldn't be more thrilled with how the design of the instruments came together and how slick the procedure is. We will do two phases with it, though, which I think will be really exciting for investors and shareholders to understand is that we will start with the reusable instruments that are kind of the razor blade handle concept, where we will consign the instruments at centers that are doing good rapid growth with the product.
We are working in a phase two, which will come later towards 2026 at some time, but a disposable kit where the kit can be flown in and merchandised, if you will, on the doctor's shelf, and they can just open up the kit with everything in it. When they're done, they can actually just throw the kit away, and they don't have to worry about reprocessing the instrument set. This will be a really exciting thing for us to be talking about in late 2026, but it's part of the plan.
Awesome. I love to hear that. You were talking about the AERO alpha phase and 40 doctors in July. Are you training them in July, and then they are free to start doing some surgeries? Did I understand that correctly?
We have the first. The first five alpha sites are going to do a quick series of implants. We have asked them to all do between three to five or three to six implants and to be able to collect that data, put it right into a safety and efficacy write-up and review to be submitted, an IRB submission on that, an actual study that shows that there were good outcomes just on that first initial patient. Obviously, those patients still need to be followed for more than a few months. This is to be long-term. We are meeting with a second group of doctors, and it's a good list. It's a really good list of people, really good people, really good doctors, really good hands that really want to see this because they have been interested in this approach, this type of implant.
We're going to select out of that group of 40 that is coming to a meeting, and we'll start to roll that beta phase out with them. I don't know what the numbers will be because it'll have to be based upon their practice size and how they identify these patients. Because of the size of the market, the estimates of the market are so great with the over 4 million injections that are performed annually in the facet or the ablation treatment in the facet, this could be that outcome, that device they need for that positive outcome that they're looking for because patients might respond really well to this.
It is going to all get, we are all going to be discovered, but we believe that like we see in the success of the SiLO TFX, we think we are going to see even greater success with the AERO implant device project.
You were saying that the approach to the surgery for the AERO procedures, it's very similar to the SiLO TFX approach, but they still require training to be able to run the AERO procedure. Would that be correct?
That would be correct. That's a good question, but it's also really great that from my perspective, here we are where we've got these doctors coming to the trainings, and our first training started out with what? It started out with, "Here's the ZIP product." Then it was the ZIP 51 product. From the ZIP 51 product, it was the SiLO allograft system, if you recall, Lindsay. From the SiLO allograft, we introduced the SiLO TFX system. Now we're going to be able to show them the lumbar AERO. Later down the road here, we'll be able to show them the AERO for cervical. How exciting it'll be for a doctor to be able to walk into a lab.
Let's say they've never done a fusion, that they're still just doing injections and they're learning this, or an ortho or a neurosurgeon who usually use big hardware now want to come in and see what Aurora's doing on the most minimal approach to lumbar fusion, cervical fusion. We think our labs are really taking shape. I think they're a lab that people are going to want to participate at because what they're going to get out of that lab is going to cover so much ground with them, and it's going to be a real opportunity for Aurora, as we like to say, get more shots on goal.
Okay. If you have a sales rep, and let's just say hypothetically, they're selling $1 million of product a year today, is there room for them to say, "Sell $1.5 million a year by adding AERO sales into their mix," and then that's just they're making more commission and Aurora's making a better margin, and you're not really increasing your cost that much?
Certainly. Yeah. If you've got the attention of an account already and we're actively they're busy with us with SI or they're busy with us with ZIP. ZIP and AERO are two different treatments, right? I mean, they're in the lumbar, but they're a way of treating different indications for that patient's problem, either with the back pain, back stabilization, and whatever the doctor identifies in there, this is going to give them an additional option. Can they go from $1 million- $1.5 million? I would love to see it. It could be as simple as going from $1 million- $1.1 million and then $1.2 million and start to expand on it.
It also might just be that some doctors who see the ZIP, it's just not something that they want to use or just not something they feel comfortable using, and maybe the AERO gets them that gets that door opened for us because we've been showing the AERO to some selected ortho and neuro and the pain interventional markets, and I'm yet to have somebody look at me and say, "That's something I would never use." I have nothing but every single meeting I've had, and I've had lots of them, they all look at me and say, "When's it going to be available?" Yeah, proof will be in the results, and we got to crawl before we walk and run, but the early conversations, the early indications have all been positive arrows up.
Okay. I think I'm going to switch gears to SiLO TFX. Are you still seeing that as a growth opportunity? 135% in 2024, that's going to be impossible to match in 2025, but do you still see maybe strong double-digit growth in SiLO TFX in 2025?
I do. It has to continue to be penetrated, and it has to continue to be presented. I would love to say the product can sell itself, but this business is always relationship-driven, and we need to always stay out in front. We need to be sharing the successful data. We've recently put out a safety and efficacy study on the SiLO TFX in a publication, and we're showing we showed our biomechanics paper, which shows some great clinical results and biomechanic results. We need to continue to share that information. The growth was good, but I don't want to just lay on our laurels and say that the product's going to sell itself. It's still going to take some getting up and getting after it and asking doctors to take a closer look at the SiLO TFX because it's unique.
Its patented approach is, I think, one of the best of its kind. I've been in a number of surgeries, and I'm impressed every single time I see somebody do it because it's been in different hands, and I've seen some really, really great outcomes, such good outcomes with the product. We have many patients now that have had one side done. They feel so good. Now they've had their contralateral side done. That way, their SIs are now both fused because it's just taken away that pain that they've had. It's on my business card now. I've got an X-ray that shows a bilateral TFX procedure and a ZIP 51 on the same patients, and that patient's doing great to this day.
Great. Last question for me. I see in your CDR filings that you guys spent more money on conferences in 2024, it looks like. Are you seeing a good ROI on attending the kind of trade conferences where you're showing your product? Are you picking up any positions from those?
I think we're always getting we get FaceTime. I'm watching them very closely, Lindsay. I don't want to just go to a meeting just to go to a meeting. In fact, I'm even kind of tailoring some of that down this year, but I want to make sure that we still got to be strategic. We want to be at certain conferences because they're important to the exposure for Aurora to be there and be able to interact with the different doctors. Certainly, if some of these conferences start to price themselves out, I don't need to just spend money to go to them. I'd rather create my own meeting and get some FaceTime with the doctors in certain regions if that's a better outcome for us because sometimes the trade shows can be a bit expensive.
Some of them have some really great information, and I usually post on where I thought the meeting was worth it, and sometimes I do not feel like it is worth it. We look at those meetings, and even this year, I am starting to move some things around because I do not know if we need to participate at every single one. Obviously, it is impossible to go to all of them, but to be more selective, I guess, is what I am trying to say, and be cost-conscious on that because I want to be really profitable this year. This is the goal. This is the year that I want to be able to not just show top-line revenue, not just be EBITDA positive, but actually be able to put some money in the bank.
Excellent. Thank you so much. That's all for me.
Thank you.
Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Trent Northcutt for any closing remarks.
Thank you for joining us. We appreciate your time, your interest in Aurora Spine, and we're very excited about what's ahead. If you have any questions, please feel free to reach out to Adam Lowensteiner of Lytham Partners, and we'd be happy to schedule any follow-up calls. Thanks again, everyone, and have a great rest of your day.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.