Okay, up next, Adam Lowensteiner will sit down with the team at Aurora Spine for a fireside chat.
Hello again, and welcome to the Aurora Spine fireside chat. My name is Adam Lowensteiner, Vice President at Lytham Partners, and today I'll be moderating a Q&A discussion with Trent Northcutt, President and CEO, Matt Goldstone, Chief Commercial Officer, and Chad Clouse, CFO of Aurora Spine. Let's get started. Trent, Matt, and Chad, welcome.
Thank you, Adam. Pleasure to be here. Thank you for having us.
So maybe to kick things off, can you tell us a little bit about Aurora Spine?
Aurora Spine was founded back in 2014. We went public early in 2014, well, towards the end of 2013, but in 2014, we really commercialized ourselves and got out the door as a publicly traded company on the Toronto Stock Exchange. We commercialized our first product, which was a ZIP device. The ZIP device is a screwless procedure. It allows doctors to do a single-level lumbar fusion without using screws. That's really what was our purpose: to be able to do an MIS surgery without the pedicle screws that usually are drilled into the spine. We were able to clamp the spine right onto the spinous process location, low back, and be able to fuse that location in an outpatient setting. That's how we started the whole process of the company: be able to make this patented technology available and commercialized throughout the United States and into Europe.
We're no longer in Europe, but we're in North America from Canada all the way down to Mexico, and mostly sell the product in the United States.
Who do you sell your products to? Pain, spine, both? Maybe discuss the evolution of the back pain industry and where we're headed and how Aurora is positioned to capitalize on that market. I think, Trent, you referred to this as the continuum of care.
Yes, we started out in the orthopedic and the neuro spine market. We found ourselves with a product as a screwless procedure, as I mentioned, and we were excited about bringing this technology to market. We thought it was an alternative to the pedicle screw market. Well, we found that those doctors were more screw-driven than we anticipated. So later into the company's life, we went back to the board and we decided that we were going to start to commercialize this product into a third category, which was in the interventional spine space. So the interventional market was where doctors that were using non-fusion technology, such as a Coflex or a Superion product, were devices that were put in between the spine that were used more as a blocker system versus a fusion system. But those implants were no longer in the life cycle of those implants.
They'd kind of worn out. And now the patients were ready for a fusion. And this is where we started to get into a training program with those patients, with those doctors, to be able to treat those patients. And so we involved our orthopedic and our neurosurgeons to train those interventional doctors to start to use our Zip technology, which is a screwless procedure, to be able to bring in a group of doctors into cadaver lab settings to be able to teach those doctors exactly how to use the Zip product in that clinical setting. And that's what really changed the product's evolution, all the products across the board, including the Zip. And as we started to get more and more traction with that product, we found that there were more product categories that we could introduce to ortho, neuro, and pain interventional doctors across America.
I'll let Matt Goldstone talk more about that.
Yeah, as we analyze the markets and look at where these patients are actually coming from, I mean, they go from primary care into physical therapy, into the interventional markets, and those patients are sometimes without options, and so bringing some of these therapies and simplifying, which is simplifying the complex, which is Aurora's true mantra, simplifying the procedures to such an amount that it makes it possible to have the interventionalists offer these to the patients safely and efficaciously, it really does provide the opportunity to expand our portfolio and get more patients access to care.
How are you selling your products? I mean, you've been building up a direct sales team. What does that team look like? And will you be adding more to that team in 2026?
Yeah, you hit the nail on the head. I mean, really, we can't sell a product unless we have someone out there selling it, right? And so this year, we'll be rounding out the regional director team. So we'll have regional directors across the whole country. But really, a big focus of 2026 is going to be hiring territory managers underneath those regional directors. Those territory managers will be focusing heavily on direct business, which ultimately will improve our contribution margin, which only helps us be able to reinvest more money into the products, growing out the sets, and building more momentum throughout the year.
What are some initiatives that the company undertook in 2025 that will be coming to fruition in 2026?
So some of the initiatives that we've been working on in 2025, we're kind of completing some of the products that have been in our pipeline. So we'll have finalized and gotten out Apollo, which is our cervical plate. So we'll truly have that peanut butter and jelly product offering for cervical interbody with a plate and best-in-class products for both. And so really having that provides the procedural solution that makes it a lot easier for physicians to engage with one company for that procedure. We also, as you have mentioned before, had launched a couple of products last year. So it's really getting out of that alpha phase into the limited launch phase, which is now bringing more sets online and engaging with more physicians, doing more trainings, and expanding the access to that product.
To add on to that, what Matt had said, we really wanted to start to bring all the product solutions to a full product portfolio where we started with the ZIP procedure, which was a screwless lumbar product. We started to work from the neck all the way down to the low back. So from the ZIP procedure, we went back up to the cervical space, as Matt touched on, and we created the DEXA cervical cage, which goes into the neck. It's the first bone-matched, patient-matched implant where it's the only implant of its kind that actually matches the patient's bone density. Then we came out with a cervical plate called the Apollo plate. We had to do some rework on that, and we did. This plate is now being relaunched here in 2026.
And now we have a new product that we'll touch on more in this conversation, but we have a posterior approach that will go hand in hand, which is we call it a triple thread inside the building here, which will be the Apollo cervical plate along with the best-in-class DEXA cervical cage along with the AERO-C posterior approach, which will give us a 360 procedure for orthopedic and neurosurgeons to be able to treat patients that need multiple-level fusions in the neck. So this will really address the whole cervical location for patients that really have that need of care in the cervical spine. And there's a lot of these patients out there. There's well over 300,000 patients that need this type of care in the cervical spine. And from there, we pushed ourselves down to help address the lumbar spine with our DEXA technology.
Last year, in 2025, we launched the DEXA-L product. In 2026, this is going to be one of the biggest initiatives of the Aurora Spine. Our cervical spine technology is now translated into the lumbar spine where DEXA-L, the first patient bone-matched implant of its kind, will start to be used in the lumbar spine. We're already seeing some really good clinical outcomes with that product. That can be used in conjunction with our ZIP product and our AERO-L product, which is our AERO facet system that goes into the low back, again, a 360 procedure where they go into the front, and then they can go into the back.
And the doctors in the spine world, orthopedic and neuro spine, they can use this as a 360 procedure to be able to perform an outpatient procedure, all minimally invasive, where the patient can get a real good clinical outcome and get good clinical results. And on top of all that, we have launched a new biologic portfolio. Matt Goldstone put a lot of work on that and made sure that we were able to release our own first biologic product across the board, which are OsteoGraft, our TurboFuse, and our OsteoSponge. So we could then fill all of our implants with first-in-class biologics. And from there, we then moved ourselves into the SI joint space, which I'm sure we're going to talk about more.
So you mentioned the new Aurora Biologics portfolio that launched late last year. How does the integration of biologics with your implant hardware change the value proposition you offer surgeons?
Every fusion is biologics, right? I mean, the actual fusion itself is cancellous inner bone area connecting to another cancellous area and creating a bridge across that. Biologics helps create that bridge as fusion happens, which is the healing of the body between the two surfaces. The hardware is fixation that then ultimately holds those two surfaces in place while that six to nine months of healing happens. Biologics is key to the fusion. Having our own biologics is just critical to be a full one-stop shop for being able to offer fusion options for patients. Every procedure we offer at Aurora needs a biologic. Now we have best-in-class Aurora biologics that offer that for our patients.
How will having your own line of biologics help the company's financials? Will it improve margins? What can investors expect from this change?
Absolutely. So we were able to improve our margin on the biologic itself, also improve our efficiencies with shipping and moving the biologics from warehouse out to the locations. Between both of those items, we'll be able to improve the contribution margin of the biologics by over 40%. So it does improve that by quite a bit. But we also are able to focus on that and kind of support that as an Aurora-branded item. So we'll be able to offer biologics as its own product class. So facilities could buy our biologics and shelf stock them and say they want to use the best-in-class biologic for any of their procedures that they were offering outside of even what we were offering. So it becomes its own division of sales, not just as a complement to our hardware, but as an individual offering that Aurora can have.
So with the recent launches of the Aero Facet Fusion and DEXA-L in the third quarter of 2025, what specific adoption metrics, for example, number of surgeons or hospital systems as an example, can you share with investors? Are these new products doing well? Any initial feedback? That'd be great.
Yeah, all the initial feedback has been phenomenal. So we're very pleased to hear that it's gone very well. All the cases have gone well, and all the patients have done very well. So the efficacy has been phenomenal. From an impact standpoint, we are holding the governor on all of that. I mean, we are trying to work strategically with the right physicians within the number of sets we have and really get that initial feedback. We've done that now, and we're rolling in now into more of a limited launch phase where we are increasing the number of sets on all of those products and offering more trainings and opportunities to engage physicians across the U.S. So you'll see an uptick in all of those products here going into Q1 and Q2 of this year.
Another thing I want to add, and I don't want to steal the thunder from Chad, but Chad and his team did a really good job in negotiating new shipping and handling contracts in 2026. So we were able to get a big reduction in our shipping and handling fees. That's something that Chad. I'm very proud of Chad and his team to be able to get that negotiated out. So we're going to help reduce that shipping cost.
That's great. That's another good tailwind for investors to latch onto. Also, given the recent launches we discussed with Aero and DEXA-L, weaving that into the other products that you offer, how do you plan to balance market penetration for these new products while maintaining your core Zip and Silo portfolios?
Absolutely. I mean, the key to that is that they are different indications, right? When you look at neurogenic claudication, which is the symptom of stenosis, which is often what we're treating with a ZIP, that is different than what you're treating with an Aero. An Aero is truly treating facet dysfunction, right? And both of them could be DDD and instability, but what really is being treated is the underlying symptoms of each different patient. So as physicians are working patients up, a lot of patients might have been diverted to other therapies like RF or something else, injections, because they didn't have something to treat their facets. But now they do. And for that rationale, there shouldn't be a cannibalization of any of our current market. There really is an opportunity to treat more patients that weren't getting care from Aurora previously.
Regarding Aero and the DEXA-L, how large can these products become?
As big as we can take them. I mean, each one of these, I mean, DEXA-L is such a unique product that it could take the ALIF market by storm. I mean, it really does have unique features that are unparalleled by any other frame and cage out there. So for that reason, I mean, that could be a $50 million product by itself. And if you look at the facet fusion market and the opportunity of what's happening, both with the interventionalists, but also with neuro-orthosurgeons, I mean, there are companies out there in the $40 million range that are primarily just offering facet fusion. There are patients out there that are getting care that we absolutely could help with a best-in-class product of Aero.
Many orthopedic and neurosurgeons are trained either to be a posterior approach doctor, a lateral approach doctor, or an anterior approach doctor. This is for us, as Matt touched on, simplifying the complex. This is for us to offer doctors another approach to surgery. The anterior approach is the original minimally invasive approach. Open posterior approach screws were put in, but originally the anterior approach being able to go through the abdomen to be able to put a small implant in there and then fixate it, such as the DEXA-L implant, was. It's been around for a long time. What we were able to do was to change the way that the bone interfaced with the implant. This was key.
And the fact that doctors now had a solution inter-operatively or preoperatively where they could actually match the patient with the implant's bone density capabilities to be able to give that patient a better shot at fusion, to be able to have the bone, to be able to interact with it more efficiently. So we really are really excited about this technology. It's already seen really good, strong clinical results in the cervical space where we started. And this is why we pushed it down to the lumbar. This was all part of our strategy. It's not just an implant. It's a platform. And in 2026, we're going to be releasing not just the cervical as we already have in the lumbar, but we'll be moving it into the SI joint. So stay tuned.
I was just going to get to that, Trent. Any other initiatives that you're working on as we head into 2026? Maybe discuss the expansion of SiLO and AERO-C.
I'll jump in there real quick just because I want to follow up on one of the things Trent sort of alluded to, but one of our big initiatives here is proving all of the words that we're saying with clinical research, so we have completed the enrollment and finalized the REFINED study. It is off for publication, so we're hoping here in Q1 that it'll get accepted and be out for the consumption. We're also going to be putting out fusion data for the refined ZIP patients, so we'll see that as well coming out, but we're also going to see the first studies coming out on DEXA-C, so we'll have an observational study that'll come out early in the year, and I'd like to put a thank you out to Dr. Koga for all his hard work on that study.
Additionally, we'll be putting out our initial data on our prospective DEXA-C study, but also be rolling that into a more complex 360-degree cervical study that will be fantastic for all of our products and moving into having data for the lumbar space for Aero as well. Because obviously, as we have a new product out there, we want to make sure that physicians feel confident as we are about how these patients are doing and see how the clinical research shows the efficacy and the safety of these patients long-term.
Yeah, having data-driven, evidence-based medicine has always been the core belief at Aurora. So the first study that has the ZIP product, this is how we started our company. The ZIP device where we're going to have ortho-neuro and pain in a multicenter study, and we submitted it to the Journal of Spine. So we're really excited about the clinical results. We have some additional outcomes that we're recording and going to collect that data, get it out there into the public forum. And we've been talking about this at every trade show, every congress event, talking about the outcomes because we've got thousands and thousands and thousands of procedures performed with the ZIP device with ortho-neuro and pain. And we see really great clinical results.
The patients can walk into a surgery center and get a screw procedure performed on them and walk out the same day and get great, great results.
Before we head on to the next question, did you want Trent to comment on SiLO initiatives and SiLO systems and the AERO-C?
I do. And thank you for bringing that up, Adam. Yeah, SiLO is now becoming a system in itself. It's not just one product anymore. We started SiLO with our allograft system. SiLO SI fusion systems is a unique product. We give lots of credit to the pioneers ahead of us, the people that started this space and got started in the SI fusion. And while we were training doctors in our ZIP labs, we started to ask questions at these labs, these cadaver courses, and asked them what they were doing to treat SI joint pain. And we found that in these courses that there was a lot of over 1.2 million SI joint injections performed annually. And that's a big number. So we started with our first product, which was the SiLO allograft system, which performed very, very well.
And we then saw a need to create a posterior approach system, which we named the SiLO-TFX, which had a fixation with two screws that went through the backside posterior approach. And that came out with some really great biomechanical advantages. And then we started to see a need to create a lateral oblique approach, which we're just submitted with the FDA. So we're pending approval on this lateral oblique approach, which we call SiLO X. And we're really, really eager and excited about this product to come out in 2026. And of course, as we mentioned earlier, the platform of the DEXA technology is going to run through all of our technologies. And so in 2026, we will be bringing the DEXA technology into our SiLO platform. It's been a discussion of ours since the early 2000s.
And we're excited because of all the clinical results that we got out of the cervical study, now into the lumbar success and how we're continuing to push that success forward. We've decided that it's a great time for us to move this into our SI joint fusion because when patients have bone density issues, and we want to be able to match that implant to that patient's bone density. So we're very, very excited about that. And we'll be giving lots of updates on that throughout 2026.
So the third quarter of 2025 was the fifth consecutive quarter with over $4.4 million in sales. What's the company's strategy for breaking through this plateau?
Well, for us, we made some promises in 2025 that we wanted to hit some new milestones. We've always been driving towards being profitable. And that was a big milestone for us to be able to push towards that EBITDA positive position and stay very nimble and maneuverable, getting all the product initiatives out because we believe in a portfolio. We're not just one boutique product. We admire those companies that can just do it with one product, but we just believe in a lot of shots on goal. We also think that doctors prefer to have a company that has a portfolio, an array of products that they can offer implant solutions to their patients because doctors need solutions. And companies like us, we believe that we're very innovative. And microcap companies like us, well, we're innovative.
And we believe that we're the future of larger innovation because this is what we do. And for us, we wanted to really break through. Our goal is to push in 2026 to be past $20 million in revenue and to grow this company as a profitable company into the future. And we continue to make these strides. And Matt touched on it. It's going to take more firepower with new hires out across the country. We still have lots of open territory that we're hiring. So spread the word for us. We have lots of people out there we're trying to bring on in 2026. And couldn't be more happy that we're out there trying to bring in new faces into our company. I'll let Matt continue on that.
Trent's completely correct. I mean, we are expanding our team and we're hiring. I mean, I have five open headcounts right now just at the beginning of the year. I will be adding another probably five throughout the year. It'll be a huge increase to our overall sales team. And that in itself will provide access to more physicians, which will provide patients more access to the products and to the options that we have.
I would just add that we're continuing to invest in our expansion of some of the products through increased number of sets, increasing inventory and sizes and locations. And I think, Matt, maybe you want to touch on the direct sales, how we think there might be some upsell there if possible.
Absolutely. I mean, we can't service everybody with a limited number of sets. So we are in certain areas tripling, quadrupling up the number of sets. We're adding additional things to Aero, to our DEXA portfolio, to Apollo, to SiLO as well. And so with all of these additions, it's going to be able to be a lot more places quicker. And so for that, we'll be able to grow our overall revenue because we have more access to doing that. And we have other initiatives this year, which I'm not sure if we're touching on yet, that we are trying to move some of our products into a more accessible manner.
We'll touch on part of that. One of the main things we'll be doing in 2026 is moving to a hybrid of reusable kits, surgical trays as we've had historically, but we'll be offering disposable instrument kits. We've already started that initiative in 2026. We're just not going to tell you which products we're going to put out disposable yet. We'll let you guys wait and see. We're very excited about that. It'll be more than one product that will be sterile and pre-pack sterile. It'll hit the market hard.
So we're running out of time here, but to kind of wrap things up a little bit, I wanted to, with a lot of good initiatives here, wanted to point this question to Chad. How's the company's capital structure looking, Chad? I get that question a lot from investors, but are all these initiatives doable?
Yes. So currently, we have 78 million shares outstanding in debt of $2.8 million as of Q3. But we do have positive cash flow from operations, free cash flow. I think the last two to three years of sales growth, the positive EBITDA, cash from operations has given us a lot of options on how we finance the structure going forward. But currently, we're not talking about raising capital or raising our debt.
I give a lot of credit to Chad and his team. They did a tremendous job at the end of 2025, did a great job with AR collections. They also were very, very active in getting the shipping and handling contracts renegotiated for 2026. That's really going to be a major impact. We touched on the biologics. That's also reducing major, major shipping costs with biologics, which is going to increase a lot of profitability for the company. There's all sorts of new things that we had been working on that are going to impact profit and COGS and overall performance of the company in 2026. A lot of that, I give full credit to the in-house team, my CFO, and my CCO, and the whole sales team across the board. It was a really job well done.
I also want to shout out to our marketing team, Tonies and Rodolfo, who do just an amazing work out there, all the social media presence out there. Social media doesn't necessarily sell something, but it certainly does show what the company is capable of because everything we do is in-house. I think Aurora does look really great out to the public forum.
This is great. Very exciting for what's to come. Anything else you want to add before we conclude the discussion?
2026 is absolutely our year. We couldn't be more excited about what's ahead of us. This is the year that we've all been waiting for. We're driven by purpose, and we are driven by all the workup we've been doing for the last number of years. We have less R&D than ever, but we have R&D that is meant to be and what's been behind all this R&D that we've been focused on the last couple of years. The fruits of that R&D is now starting to really deliver, especially the second half of last year. It was very, very strong in the second half of last year. In 2026, you're going to see new milestones in revenue. You're going to see new product launches. You're going to see new milestones in product performance.
And I couldn't be prouder of the team that we were able to get it out that way. And I'll let Matt close out on some things.
No, I just want to echo that and say that 2026 is going to be an amazing year. We're super excited. I feel like we have such a strong foundation that we've built. It's well-diversified through both our customers and our product classes. And with that, we're going to be able to grow quite a bit this year. And it's fun. I mean, it's just a good time right now.
Thank you, Trent, Matt, and Chad. Thank you. And also thank you to everyone for watching. If you have any questions or would like to schedule a meeting with Aurora Spine, please send me an email at lowensteiner@lythampartners.com. We have additional presentations at Fireside Chats coming up next. So stick around for more. Thank you and have a great rest of your day.
Thank you, Adam and the team at Aurora Spine for the.