Good day and welcome to the Aurora Spine Reports fourth quarter and fiscal year 2022 financial results conference call. All participants will be in a 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 a touch-tone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Adam Lowensteiner with Lytham Partners. Please go ahead.
Thank you, Betsy. Welcome, everyone, and thank you all for joining us today to review the financial results for Aurora Spine for the fourth quarter and fiscal year ended December 31, 2022. With us on the call representing the company today are Trent Northcutt, President and CEO of Aurora Spine, and Chad Clouse, CFO 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 in Section 21E of the Securities Exchange 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. A 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, 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 be considered in addition to and not as a substitute for or superior to any measure of performance prepared in accordance with GAAP. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures in accordance with SEC Regulation G can be found on the company's earnings release. I'd like to now turn the call over to Mr. Trent Northcutt, President and Chief Executive Officer of Aurora Spine. Trent, please proceed.
Thank you, Adam. I'd like to welcome everyone to the Aurora Spine's fourth quarter and fiscal 2022 financial results conference call. Earlier today, we issued a press release detailing our financial results. Hopefully, you've had a chance to review this press release. If not, a copy can be found on our website at www.aurora-spine.com under the Investors section or other financial websites. To lay out the agenda for today's call, let me first summarize a few key events of the quarter and the year. I'll then take a bit status to talk about each key initiatives in products like ZIP and SiLO, as well as our initiatives on the spine division, including our DEXA product line. Chad will give a recap to the financial results. We will conduct a Q&A session at the end.
The key events in fourth quarter and fiscal year 2022, I'm going to give you a market overview of the dynamics of the products in our clinical studies. The fiscal 2022 was a great year for Aurora. We had several accomplishments, many of the brough went well with the future. At a high level, we reported record revenues with strong growth of 41% to $14.9 million. We received FDA clearance for our SiLO TFX, which was a tremendous event for our company and the SiLO franchise. By now, having a metal implant with transfixing capabilities, we also advanced our DEXA technology with the FDA clearance of the DEXA-L. We also won an award for the best new product of the years at this year's NASS event for the DEXA product.
We also embarked on clinical studies with many of our products during 2022 into 2023. It's important to have the data to share with the industry when selling our products. We received early positive results from our ZIP device, which has been building momentum as well. Looking into 2023, we believe that our proper track to continued revenue growth, while the fourth quarter was a bit slower than we anticipated, as well as the first quarter of 2023, it took time to make some of the changes to prepare the company for a long term, including adding some new personnel like Matt Goldstone, Aurora's new Chief Business Officer. Matt has hit the ground running and has quickly able to add new positions that have already opened up some key accounts for Aurora.
He is a highly focused on the big picture and is energized about our unique product offering and working diligently in building out our strategic sales organization. On a macro level, we continue to see momentum gaining in the minimally invasive surgery market, especially with regards to the reimbursement coding, as insurances are embracing more procedures that can be done minimally invasive manner and have a patient recoup at home for quicker timeframe. Aurora's products like the ZIP and the SiLO are very complementary to doctors and their patients, and especially designed for minimally invasive procedures. I believe it is at this catalyst that while our products are able to gain traction, and we've been receiving.
In addition, our products offer alternative ways for doctors to treat patients with a little pain and medications as possible, especially given opioid epidemic that has hit the United States in the recent decade. This too is a main tailwind for the med tech industry. While Q4 was a little bit on the quiet side, we've been very busy behind the scenes in preparing the SiLO TFX for commercialization. We received FDA clearance for the TFX only a few months ago, and it was a very important catalyst for Aurora as it is a major future growth opportunity within the SI joint market, which is still fairly early stage innings. Obtaining this clearance approves our IP franchise, but also demonstrates that we've created a new product that offers transfixing capabilities, which is something many doctors are desiring.
We have already began an alpha launch stage for this product with initial surgeries taking place during the first quarter of 2023, and so far it has been a breakthrough product for doctors and patients. We are currently gearing up for the next phase of the product launch and preparing additional kits to gear up for commercialization later this year. We'll definitely keep investors updated as things progress with the TFX, as we believe this will be a contributor to our growth for several years to come. The ZIP series continues to be a nice contributor to Aurora.
During Q4, we were pleased to learn of the initial positive interim results from our clinical study using the ZIP, which was published in an abstract posting in the publication Pain and Therapy, the title of a prospective, observational, open-label, non-randomized, multi-center study measuring functional outcomes in a novel interspinous interlaminar fusion device. This is a low pain called the REFINE study. The publication discussed the results of a interim three-month analysis which included 54 patients, of which 82% reported improvements as a result of the procedure, while 65% of the patients demonstrated clinical meaningful improvement in their pain and function. The publication also demonstrated that the use of the ZIP device was both effective and safe at a three-month follow-up.
The study remains active and enrollment is continuing with more follow-up data expected in the future and more patient data is completed. The study included results gathering 11 doctors and was conducted on behalf of Aurora Spine to determine the utility of using the interspinous fusion device as a fusion therapy for the treatment of lumbar stenosis. The treatment of lumbar stenosis is a large unmet treatment bridges the gap between conservative measurements and invasive surgery procedures. This publication is an exciting validation of Aurora Spine's ability to provide safe and effective outcomes by utilizing the Aurora ZIP product line. We look forward to additional results to be published at a 12-month collection point and believe it will continue to trend positively for our physicians and their patients. Last but not least, moving on to DEXA.
We have invested heavily during 2022 building several surgical kits for the DEXA-C, and we are in the midst of placing them to doctors as we speak. We started 2022 initially with two kits in the field and were able to ship another two early in September. To date, we have 10 kits shipped out in the field, working on shipping out the remaining 30 we have ordered. We will hopefully, hoping to place these kits sooner, but did incur a minor manufacturing issue and required some easy fixes that have been rectified. We are working diligently to place these kits with doctors that will utilize the product as well as partnering with the appropriate hospitals that can accept new products. Getting the DEXA-C placed has been a bit challenging but is a key priority amongst our sales team.
Now that we've received IRB approval for a study using the DEXA-C, we are confident that we can place these kits into the field in the coming months. To summarize, I'm extremely proud of our team's performance in staying focused on building this company. We are well-positioned to take advantage of the growth markets with several new proprietary products. We remain focused on penetrating these markets further this year through continuing training sessions and clinical trials. Looking to longer terms, we are well-positioned for success, especially we have the new products and more clinical studies proving out our technologies and teaching of our doctors to use the Aurora products. We remain highly focused on the opportunities that are in front of us and continue to invest our growth in each of our major platforms, the ZIP, the SiLO, and the DEXA technology.
I will now turn the call over to Chad Clouse, Aurora Spine CFO, who will review the financial results. Chad, please proceed.
Thank you, Trent. The numbers highlighted in detail in the press release let me focus my comments in a few areas and add some color where I can. Total revenue for the fourth quarter of 2022 were $3.61 million, an increase of 21.7% compared to the $2.96 million in the same quarter one year ago. The improvement in revenues in 2022 were due to more procedures conducted in ambulatory surgical pain centers or ASCs that incorporated Aurora products like the ZIP and SiLO. Due to increased marketing and development, like the clinical studies, the company has experienced increases in ZIP sales in this quarter. Total revenues for fiscal 2022 were $14.88 million compared to $10.54 million for fiscal 2021, an increase of 41.1%.
Primarily due to increased activities at surgical centers where patients stay a much shorter duration through the use of Aurora's ZIP and SiLO. Gross margin on total revenues were 50.6% for the fourth quarter of 2022 compared to 46.0% for Q4 in 2021. Gross margins on total revenues for fiscal year were 52.5% compared to 45.8% for 2021. The year-over-year improvement in gross margin is attributable to the company's strategy of selling proprietary Aurora Spine products and into the market with improved pricing at the ASC. As the company continues to focus on growing sales, gross margin has the capability of additional improvements depending on sales mix and shipping costs.
Total operating expenses were $2.67 million for the fourth quarter of 2022 compared to $2.26 million for the fourth quarter of 2021. Total operating expenses for fiscal 2022 were $9.379 million, which includes $1 million of non-cash expenses, compared to $7.54 million, which includes $0.79 million of non-cash expenses for fiscal year 2021. Operating expenses increased primarily due to the increase in the ZIP study. EBITDA, a non-GAAP IFRS measure, was -$0.36 million for the fourth quarter of 2022 compared to -$0.57 million in the fourth quarter of 2021. EBITDA was -$0.26 million for fiscal 2022 compared to -$1.76 million in fiscal 2021.
EBITDA improvements were due to higher revenue and gross margin levels. Net loss was $0.84 million for the fourth quarter of 2022 compared to the fourth quarter of 2021, which is a loss of $0.903 million. Basic and diluted loss income per share was -$0.01 per share in the fourth quarter of 2022 and -$0.01 per share in the fourth quarter of 2021. Net loss was $1.5 million for fiscal 2022 compared to a loss of $2.36 million for fiscal 2021. Basic and diluted net loss per share was $0.02 for fiscal 2022 and a net loss of $0.04 for fiscal 2021.
Turning to the balance sheet, the company end of the fourth quarter was approximately $425,000 in cash and cash equivalents. Subsequent to the quarter, we received approximately $700,000 in proceeds from a conversion of warrants. Accounts receivable slightly decreased sequentially, but we have continued to work on our collection. Our inventories increased by $350,000 in the quarter as we start building out the SiLO TFX kits. We continue to monitor our expenses and have tight control over our costs. That concludes my comments. I will now turn it back to Trent.
Thank you, Chad. Before we open up the call for questions, I'd like to conclude that we continue to make improvements internally to make sure that we remain on track for continued revenue growth. The company is in a very good position to capitalize on the IT improvements we've established in 2022. We were highly successful in creating new proprietary products, now it's time to demonstrate that we can scale the company on the commercialization side of the business. I appreciate everyone's patience and believe that we are in the early stages of reaping the rewards of our efforts. Far, we are very pleased with the progress of these initiatives and very excited about the remainder of the year and beyond. With that said, operator, we are ready for any questions.
We will now begin the question and answer session. To ask the question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing a key. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. In the interest of time, please limit yourself to one question and one follow-up. Please jump back into the queue if you have additional questions. At this time, we will pause momentarily to assemble our roster. The first question comes from Tom Fedichin with Microcap Connection. Please go ahead.
Well, good morning, guys. Congratulations on a good quarter. A bit more curious about the cash on hand. You've got a $400,000 showing. There was a warrant exercise, I believe, $700,000 that was posted that wasn't included in these financials, I'm guessing given they were exercised in Q1. Could you confirm?
Yes, they were exercised in Q1.
Okay, perfect.
If, note 16 subsequent events, it notes the amount of warrants and the amount of money collected.
Perfect. The second question is on the SiLO TFX. Initial sales have taken place. Do you have any kits currently out in the field? If so, how many?
We just have a few alpha kits out in the field, similar to what we did with the DEXA-C launch. Our goal is to get through this alpha phase with three- key individual surgeons out in the field and then roll out the first 10 kits to take it out of the alpha phase into a beta phase. From those 10 kits, we'll make an additional kits, you know, maybe 10 or more to decide how many we wanna build out in regards to demand.
The next question comes from Lindsay Leeds, a retail investor. Please go ahead.
Hi. Congratulations on a strong quarter. I wanted to ask about the billing codes for SiLO TFX and what the current situation is?
The SiLO TFX still remains on the established billing codes similar to other SI systems in the market, which is CPT code 27279. We've been billing the product as such since its first implantation earlier this year. We'll continue to stay on that coding until unless we are notified otherwise. The allograft system that was created in the previous years, that system has been moved to a new T-code for coding reimbursements. So far, the reimbursements have been favorable, and we haven't seen any major changes on the allograft reimbursement dollar amounts. With that, we're pleased.
Okay. Thank you.
As a reminder, if you have a question, please press star then one to be joined into the question queue. The next question is a follow-up from Tom Fedichin with Microcap Connection. Please go ahead.
would like to get some clarity on the DEXA-C. You've got 10 kits currently outstanding. You've got 40, I believe, built in total that could hit the market. How do you foresee this rolling out? Do you see, you know, getting up to 20 kits, you know, during Q2 or, and all 40 out by Q3, Q4? Like, what's the timeline to get all 40 kits out?
I would like to get all the kits out, you know, before the year is over, of course, and rotating regularly within our network and then the expanding network that we are working to establish. We did enter into an IRB study with the DEXA-C, so we know that we'll have a select group of doctors that we part of that study, so each one of those doctors will have a few sets or a couple sets, I should say, in their facility, including facilities if they go from a hospital over to a surgery center. Yeah, we have to. We're trying to maintain a price point with this technology and not just drop it into a standard category of cervical cages.
We're trying to get a, you know, what we say is a premium for that product, and we're trying to maintain that line that the product is unique and different than what they've used in the past. I think that we will get all the systems in circulation before the year is over. It's taking longer than I wanted it to, we are working on it, week in and week out.
Okay. Can you speak to profitability for the company? Do you feel that's the second half story to look out for? Do you think it comes sooner?
I think it's a second half of the year study or second half of the year because of the extra kits that will be going out with the TFX. We'll have more users getting a good price point on that product. We're getting favorable results. I think the clinical results so far have been very promising. I'm encouraged by that. I think we already have a list of doctors and surgeons that wanna use this product, so it's not a shortage of users. I also, as I mentioned with the DEXA-C, I think that the DEXA-C will just start to get more approvals in different hospital settings around the country and more surgery centers around the country.
I think that that'll help contribute to a profitable months and quarters in the second half of the year.
The next question comes from Sergio Hiver with Heber Research. Please go ahead.
Hi, guys. Congratulations on a great quarter. It's much better than everybody expected. My question is about The Premia Group. Is your contract with The Premia Group include all the devices, including the TFX?
It does. The Premia Group covers all pre-authorizations for every one of our products. There's no limitation on our side or on their side that I believe that, as far as, like, helping with pre-authorization, for whichever procedure the doctor is performing, cervical fusion, lumbar fusion, and SI joint fusion.
Wouldn't they be involved with remedying any coding problems?
Not necessarily remedying it, but they would work with the insurance carrier to point out that the system that's been created is part of the issued guidelines of each CPT code, 'cause there's a description in each CPT code that's given, and the doctor has to dictate what they just performed on that patient.
In the case of an SI joint fusion, they would say that I, that they just performed surgery and that the technique that they used was this step, this step, this step, and each one of those steps would be part of that description for the CPT code. Reimbursement and pre-op in advance of that would have already pre-authorized that surgery, or got a denial if in case the insurance carrier denied the case, they would then represent us to say, "Well, we feel that this product does meet requirements," and try to push it through and work directly with that insurance carrier from the pre-op representation. Remedying it-
Once again to ask.
Yeah. Yeah, sorry.
Once again, to ask a question, please press star then one to be joined into the question queue. The next question comes from Tom Fedichin with Microcap Connection. Please go ahead.
Hey, Trent. I'd like to know about break even. I know we discussed in the past $1.2 million a month was the break-even point, and we adjusted that due to inflationary costs to $1.3 million. Is that still accurate? I know this past quarter we did see an $800,000 loss, of which $200,000 could be equated for for the study with the ZIP. Now, you know, it was $600,000 loss, and I think there was $300,000 in merchandise that was added, so I guess that would account for half of that. I think the expense, the loss was a little bit higher than I was anticipating.
Could you dig into why that was and where the costs were, why the costs were a little bit higher?
Sure. The break even for us is right about $1.5 million for break even for us now.
Okay.
Costs increased throughout the year in different areas such as, you know, cadavers and travel costs and hotel costs and food costs. We saw that continuously increase in almost every area that was different from the previous years and different from an increase. You can blame it on the inflation if you want, but just the cost of doing travel business definitely had gone up substantially, including cadaver costs. Like, instead of it being a $1,500 cadaver cost, it's now a $3,000 cadaver cost or $3,500 cadaver cost. Those were costs that were not part of the factoring just a year prior. Things like that.
Mm-hmm.
Is what increased dramatically for us. We're pushing on those to try to cut a corner where we can and try to cost save in areas so we can try to move that cost from a 1.5 break even down. 'Cause we're not doing a lot of R&D. I know it's gonna be part of one of our questions, is that if we can lower those costs internally, then bring it from 1.5 down to 1.4 and then show more of a profitable number. That's the number we're pushing towards.
Okay. Okay.
The next question comes from Lindsay Leeds, a retail investor. Please go ahead.
Hi. I wanted to talk about the SiLO TFX and hear what you have to say about, what that market looks like as far as, outpatient, surgery centers versus hospitals. What do you think the revenue mix is gonna be, hospitals versus surgery centers?
I think that we already have been selling more of our devices at surgery centers than in years past. We saw a flip of that during COVID since the surgery centers opened back up for more elective surgeries than the hospitals. We are always real top, I don't wanna say heavy, but we were just mostly in hospitals, and then that really started to expand out. I think the TFX, because it is a walk-in and walk-out procedure an outpatient procedure, we'll see a blend of it between hospitals and surgery centers. If I were to guess, I would say it would be done more in an outpatient center this year.
I'll actually probably put out some stats on that towards the, towards the second half of the year just to kinda keep tracking what we're doing more of hospital or surgery center, but my feeling is we're gonna do more surgery center.
Okay. in the, in the pain management doctor market, for SiLO TFX, is that a contested market between yourself and SI-BONE and other competitors, or is that a pretty open market still?
Well, for us, we work with both ortho, you know, neuro and interventional pain physicians with our ZIP product and our SiLO and SiLO TFX product. I know that SI-BONE, traditionally, I don't wanna speak for them, but from what I understand, they only sell to ortho and neuro. We think that there's a strong collaboration between the three groups, especially because the pain interventional doctors do an estimated $1.2 million SI joint injections annually, where your typical orthopedic surgeon or neuro spine surgeon does not do that many SI joint injections. They do far less than that.
That the interventional doctors are the ones who see a lot of the SI joint pain and pain issues that are going on with that, with that particular patient. I think there's a strong collaboration between those three groups that can come together. We saw the same type of collaboration happen with our ZIP device, and we'll continue to push forward on that. I think SI-BONE will continue to do what they do, and we're certainly open to expanding the market.
Thank you. I'll jump back in the queue.
Once again, to ask a question, please press star then one to be joined into the question queue. The next question comes from Tom Fedichin with Microcap Connection. Please go ahead.
would like to dig into the training. I know training was put on a hold towards the end of last year given the T-code issue that arose. Has that started back up again? How will that look going forward, given that the SiLO TFX has now garnered approval, you're starting to roll out, you know, these first initial kits, these training kits. Will any new training consist of just the SiLO TFX, or are you still training with the old SiLO, the predecessor SiLO? Of course, ZIP, I'm assuming will be included, but will you be also including any of the DEXA products with the same training program?
With the DEXA, we always have the DEXA technology out on the table, if you will. We always have brochures out there. We wanna continue to educate people who show up to our courses to learn more about DEXA technologies. To my delight, I was really encouraged by what I heard when I spoke to interventionalists that were in tune with bone density and the idea of patients having, you know, good bone quality or poor bone quality, and that this has a direct effect on some of the patients' health and also how their pain is related to them. I'm glad. We share this information with them, although they're never going to use a DEXA C product or a DEXA L product.
There might be a future for some of our other devices, for DEXA, as we've talked about in the past, Tom. In regards to training, one of the things that we did, we did more national labs over the last two years. We did national labs, and we did regional labs. We got a better ROI out of our regional labs than we did on our national labs. We're focused this year more on the regional labs that will be more specific to a certain market area. We will show at the courses, we'll show ZIP, SiLO and SiLO TFX.
I think that most people will levitate towards the TFX, but since it's on a limited alpha release, we wanna make sure that we capture that opportunity to show that particular surgeon or doctor that the SiLO is here and is available to them. The surgical technique between the two products are very, very similar. That was by design. We wanted to pre-train doctors on the SiLO system and make it as reproducible when we launched the SiLO TFX. I think we've done a good job of that. There's a couple of extra steps, those steps are all in line with the existing SiLO systems. The SiLO TFX and the SiLO system are virtually similar in a lot of ways, we don't think there's a big, giant learning curve between the two systems.
You know, I've seen it in action, and I think that it's a very intuitive system, the TFX. Some doctors just say they wanna use bone over a TFX, a metal implant, and that's not uncommon in the industry.
How many doctors do you plan on training this year?
I don't have a set goal of how many doctors we wanna train. I have a set goal of getting a positive ROI, you know, on all of our training. We do have a course coming up, I think in the next 45 days. We've already done 1 small regional lab that we had 12 doctors at, to give you a number. I think this new lab we have, it was on the West Coast. It was here in California. We have another lab coming up in the East Coast. I think that has, like, 10 or 12 doctors. It'd be 24 doctors roughly in the, you know, within the first, you know, four or five months of the year.
Okay. Okay. To carry on, how is the training program going? I know Chrissy has stepped aside. You brought a new trainer in, I believe. You know, I'm assuming this is, you know, for the new products coming out with the DEXA-C now being rolled out and, of course, with the SiLO TFX. Do you have enough manpower with both sales, with training in place to, you know, see Aurora Spine to profitability?
Chrissy has not been moved aside. Chrissy is still in charge of all the training programs and has ran the last course we just ran, she was fully in charge of it and in charge of the course that's coming up here in the next couple weeks. She's, that's, she's the boss of that. She'll be the one to tell you that every time. We added Matt Goldstone as a trigger of sales and sales organization and also to help structure a sales organization that can meet the demand, follow up, follow through in support of training and education. I think that was to one of your questions there, do we have enough manpower? That was why we added Matt Goldstone.
I needed somebody on the team who could structurally lead the sales organization. He has done that, and he's already added. We've added a national trainer who works, he works within engineering and then works with Chrissy in all the labs. He goes out and just helps cover the doctor's first few cases to make sure those cases go smooth. If there's anything that he needs to report back to engineering, like I said, he reports to engineering. Matt Goldstone added some more salespeople to the team, one in the Midwest and one on the West Coast. So we're gonna add more sales people to also support those training follow-up.
I think that was something that was, probably sorely missed last year, but we needed to get with it and get with the right people to help support those cases.
Okay. Yeah, I guess I misunderstood. The promotion, I think, is what Chrissy had, and I just assumed that she stepped aside and this other fellow came in. Thanks for clarifying. Fantastic. Last question for me, is if there was any outlook that you can give investors for 2023, any potential positive surprises or anything that you think we should be looking forward to pay attention to, what would that be?
Well, I think it's encouraging for what we saw in the ZIP study. You know, a couple of years ago when we were talking about embarking on this multi-center study, it certainly, you know, raised some eyes because we were entering into a study that would show that interventional, minimally invasive, a screwless procedure, working in collaboration, having ortho and neuros come to training programs with the interventional and all of us coming together to start this multi-center study, to be able to put out now that now it's two years later and we're able to record some really positive results that patients are getting better. All the stuff that I, you know, stand on my soapbox and yell out has come through.
The second part was, you know, all of last year and in the previous couple years was when are you gonna get your TFX approval? We now have that TFX approval. The first cases, just a few less than 20 surgeries so far, have all had some really good positive outcomes in that in that surgery. The TFX is something to keep your eye on along with the continued ZIP study. We got IRB approval for the DEXA-C, which was always part of the strategy, and we'll also get an IRB approval on the TFX. Simultaneously, we'll have three different studies going at the same time.
As ZIP sales increased in the previous year over 111% in growth, and that was based upon the studies, the activity within the study, within the training programs, getting more ZIP users around the country, having positive outcomes in that ZIP study. I think we'll get the exact same type of traction with the DexC as more doctors will be open to it, more publications will be out there, more information, and same with TFX. TFX will start to catch more attention from people to see how this product indeed is good for the patient, good for the doctor, and overall good for the industry.
Perfect. Thank you.
Thank you, Tom.
The next question comes from Sergio Heber with Heber Research. Please go ahead.
Guys, I'll ask you the question that everybody wants to know. The elephant in the room is, will you need to do a capital raise or are you looking for a credit facility?
I'm worried about how collections have gone with the company. It seems to be an industry thing as well, where just slower payments have come in from hospitals, people just dragging their feet to pay their bills on time. I'm definitely have put that out there that I'm concerned about that. You know, we're a small micro-cap company and we're, you know, every dollar to us matters. We're working with our institutions that we work in to help them get more online with paying on a regular basis and a more on-time basis than we've been seeing. It's been very slow with some of these payment from these groups, hospitals and surgery centers across the country, slower than pre-COVID years.
I, and I wanna get away from talking about COVID because I don't wanna keep using COVID as an excuse. Certainly, people are paying their bills slower for some reason, and I wanna fix that with us, and it's a concern for me. I am looking into that right now to make sure that we cover that delta of cash that is slower to come in than it should be. I'm looking into it, Sergio, and I am monitoring it closely because it is a concern of mine.
I guess your answer is that if collections don't pick up, then you will do a capital raise.
Yeah. I'll have to look at all my options. I'll have to look at either a bridge or a line credit or get the people to pay the bill, you know. Those are the things I'm working on, the one, two, and three. First and foremost, I'm working on people to pay their bills on time. Two and three, you know, I'm starting to have conversations on that because I wanna make sure that all this effort that we put into what we're doing just keeps us, you know, going in a forward and upward direction.
Regarding the TFX launch, will you be doing any price incentive? Will you be selling at a discount to introduce the TFX? Also, can I get two questions in on the TFX? From what I could see that on LinkedIn, it takes a lot less time than any competitor. Am I correct?
Yeah. We don't, you know, we don't track our times and how fast, we certainly like the fact that we are quite efficient in the steps of the procedure. We have fewer steps for that procedure to be performed, which always is good for the patient, first and foremost. It, you know, it's less time that the patient has an open wound, so less blood loss. Less time in the operating room table. We don't ask a doctor and set the stopwatch on them. You know, we want the doctor to be methodical and fluent with the procedure. We know we've reduced the steps. We know that we're getting good results so far.
In these early innings that we've performed on the TFX procedure, we've had some really good feedback from an orthopedic surgeon, a neurosurgeon, and an interventional surgeon, all with lots of experience with surgery in SI joint. We're not offering any discount extra on the procedure. In fact, we're just priced our product out with fair market, and some prices are stronger than others. Yeah, we're not offering any special discount. We're rolling the product out at the same price point as even, say, SI-BONE.
Do you think that TFX will roll out faster because it's going predominantly to pain management and not hospital centers?
I think that because of what was being... I think that the ortho, neuro, and interventional, I do think we have a big list of doctors that wanna use TFX, and a lot of it has to do with the headwinds that were brought up and the confusion, I'll even say it that way, last year because there was no certain anything mentioned last year. There was a bunch of just loose conversation about what the code might mean. Now here we are in January, they implemented the T-code for the allograft system, but the coding and reimbursement's been pretty much the same. You know, surgery hasn't been any major deduction for the doctor's time and to perform the procedure. It's a new billing code that they're using, but it's tied directly to an SI joint fusion.
Will that stay the same in January of next year? I don't know. I guess my crystal ball is broken on that one, and I think everyone else's too. The TFX is billed out on the 27279, and we feel that that that's right and that follows the guidelines of the code. I think that it'll roll out smoothly. We've already made some changes internally on the design of the tooling and how the procedure goes based upon this feedback we got from these surgeons. These were all internal changes that we are making. We were able to make these quick adjustments, and we had them earmarked in our discussions with these doctors early on. So I think TFX is gonna be tremendously successful.
Trent, my last question. Do you wanna talk at all about licensing? Because that's an unlimited revenue source. Are you working in that direction, or is it too early?
I think it's a little bit early, and I think that with the people, you know, groups that are out there that might take, you know, keep one eye open. I know there's people who follow us. I can always see who does on, say, LinkedIn. I've had some discussions with some different people that have asked me questions about our technology, and I keep those conversations going. Certainly, I'm open to a licensing technology, especially in the things that we don't make, dental implants, hips, knees, recon, trauma type products. I think the DEXA platform, it would be a real opportunity for many of those companies, such as the dental implant market or hip and knee and recon trauma products, 'cause we're not in that business, and we don't plan to be in that business.
I think if you can have an implant that helps match that patient's bone density and have patient-matched implants, why wouldn't you want to license our DEXA technology? We're certainly open to it.
Thank you. That's all my questions.
Thank you, Sergio.
The next question comes from Lindsay Leeds, a retail investor. Please go ahead.
Hi. On the DEXA-C, is that something you're manufacturing in-house, or do you purchase that outside?
It's the manufacturing facility is a third party, but they're just walking distance. They're about 500 walking steps from my office here in Carlsbad, California. They're a 3D printing facility that manufactures for many other companies that are out there. They really helped us fine-tune. We collaborated well with them on the DEXA. DEXA is patented and proprietary to Aurora. It's an issued patent. They only make that technology at that 3D printing facility for Aurora.
Okay. Talking about the accounts receivable, are you concerned that some of those won't be collected, or is it just mainly these are large payers, they will eventually pay, but they're dragging their feet?
The, the, the larger-
Trent, I'll take that one.
Oh, okay. Go ahead.
Yeah, let me take that one. Yeah, it's a lot of the larger hospitals that have kind of extended us out. We do believe that we will collect it in the long run. It's just taking a great amount of time at this point.
I see. Okay. The shipping of your various products, who bears the cost of the shipping? Is it Aurora, or is it the customer?
Mo-
Aurora.
Mostly we incur. We do.
Yeah.
We sometimes can share it, but mostly us.
That's all the questions I have. Thank you so much, gentlemen, for your time.
Thank you.
You're welcome.
This concludes our question and answer session. I would like to turn the conference back over to Trent Northcutt for any closing remarks.
Thank you. Thank you for joining us. We appreciate your time and interest in Aurora Spine. We are very excited about what's ahead of us in 2023 and beyond. We look forward to speaking with many of you in the weeks ahead. If you have any questions, please reach out to Adam from Lytham Partners. We'd be happy to schedule a follow-up call. Thanks again, everyone. Have a great rest of your day.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.