Aurora Spine Corporation. (OTCQB:ASAPF) Q4 2022 Earnings Conference Call May 1, 2023 12:00 PM ET
Company Participants
Adam Lowensteiner – Vice President, Investor Relations
Trent Northcutt – President and Chief Executive Officer
Chad Clouse – Chief Financial Officer
Conference Call Participants
Tom Fedichin – Microcap Connections
Operator
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. [Operator Instructions] Please note this event is being recorded. I would now like to hand the conference over to Adam Lowensteiner, with Lytham Partners. Please go ahead.
Adam Lowensteiner
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 ended 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 maybe considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E 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 material different from those projected. For 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 the 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 EBITDAC, adjusted EBITDAC, 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 not 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 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 now, I like to now turn the call over to Mr. Trent Northcutt, President and Chief Executive Officer of Aurora Spine. Trent, please proceed.
Trent Northcutt
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 in this press release, but 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 of the status to talk about each key initiatives and products like ZIP and SiLO, as well as our initiatives on the spine division, including our decks of product line. Chad will then give a recap to the financial results. We will conduct a Q&A session at the end.
The key events in fourth quarter, guess for the year 2022, I’m going to give you a market overview of the dynamics of the products and our clinical status. The fiscal 2022 was a great year for Aurora. We had several accomplishments. Many of them bode well within the future. At a high level, we reported record revenues. It was 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 decks of technology with the FDA clearance of the DEXA-L. We also won an award for the best new product of the year’s at this year NAS event for the DEXA product.
We also embarked on clinical studies with many of our products during 2022 into 2023. And it’s important to have the data to share with the industry when selling our products. We received a positive results from our ZIP device, which has been building momentum as well. Looking into 2023, we believe that our proper track to continue to every growth. While the fourth quarter was a bit slower, than anticipated as well as the first quarter of 2023, we took the, it took time to make some of the changes to compare 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. These are highly focused on the big picture, and has energized about our unique product offering, and working diligently in building out our strategic sales organization.
On the macro level, we continue to see momentum gaining in the minimally invasive surgery market, especially with regards to the reimbursement coating, as assurances are embracing more procedures that can be done minimally invasive manner, and have a patient recoup at home, at home for quicker time frame. Aurora’s products like the ZIP and the SiLO are very complimentary to doctors and their patients, and especially designed for minimally basic procedures.
I believe it is with 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, the medication is possible, especially giving 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 and 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 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 an 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 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’re pleased to learn of the initial positive interim results from our clinical study using the ZIP, which is published in an abstract posting in the publication pain and therapy, the title of a prospective observational open label — brand non-randomized multi-center study measuring functional outcomes in a novel interspinous interlaminar [Ph] fusion device versus low pain, REFINE study. The publication discussed the results of the interim 3-month analysis, which included 54 patients, of which 82% reported improvement as a result of the procedure, while 65% of the patients demonstrated clinically 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 that 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 set by, to be published at a 12-month collection point and believe will continue to trend positively for our physicians and their patients.
Last but not least, moving on to DEXA, we’ve had, 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 and 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 were 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 it’s a key priority amongst our sales team and now that we 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 and 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’s CFO, who will review the financial results. Chad, please proceed.
Chad Clouse
Thank you, Trent. The numbers highlighted in detail in the press release let me focus my comments in a few areas and add in 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. Improvement in revenues in 2022 were due to more procedures conducted in ambulatorial surgical pain centers or ASCs that incorporated Aurora products like the ZIP and SiLO.
In addition, 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 ASCs. 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. EBITDAC, a non-GAAP IFRS measure, was a negative $0.36 million for the fourth quarter of 2022 compared to a negative $0.57 million in the fourth quarter of 2021. EBITDAC was negative $0.26 million for fiscal 2022 compared to a negative $1.76 million in fiscal 2021.
EBITDAC 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 a negative $0.01 per share in the fourth quarter of 2022 and negative $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 ended the fourth quarter with 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 started building up the SiLO TFX kits. We continue to monitor our expenses and have tight control of our costs.
That concludes my comments. I will turn it back to Trent.
Trent Northcutt
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. We obviously have more work to do but the company is in a very good position to capitalize on the IP improvements we’ve established in 2022. We were highly successful in creating new proprietary products and 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. So 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.
Question-and-Answer Session
Operator
[Operator Instructions] The first question comes from Tom Fedichin with Microcap Connections. Please go ahead.
Tom Fedichin
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, for $700,000 that was posted. That wasn’t included in these financials. I’m guessing, given they were exercised in Q1. Could you confirm?
Chad Clouse
Yes, they were exercised in Q1.
Tom Fedichin
Okay, perfect.
Chad Clouse
No 16 subsequent events, it notes the amount of warrants and the amount of money collected.
Tom Fedichin
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?
Trent Northcutt
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 ten kits to take it out of the alpha phase into a beta phase. And then from those ten kits, we’ll make an additional kit, maybe ten or more, to decide how many we want to build out in regards to demand.
Operator
The next question comes from Lindsey Lee, a retail investor. Please go ahead.
Unidentified Analyst
Hi, congratulations on a strong quarter. I wanted to ask about the billing codes for SiLO TFX and what the current situation is.
Trent Northcutt
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 implementation earlier this year, and we’ll continue to stay on that coding, unless we are notified otherwise.
And the allograft system that was created in the previous years, that system has been moved to a new T code for coding reimburses. But so far, the reimbursements have been favorable, and we haven’t seen any major changes on the allograft reimbursement dollar amounts. So with that, we’re pleased.
Unidentified Analyst
Okay, thank you.
Operator
[Operator Instructions] The next question is a follow-up from Tom Fedichin with Microcap Connections. Please go ahead.
Tom Fedichin
I 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, getting up to 20 kits, during Q2, or in all 40 out by Q3, Q4? Like, what’s the timeline to get all 40 kits out?
Trent Northcutt
I would like to get all the kits out, before the year is over, of course, and rotating regularly within our network, and then the expanding network that we think 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 will be 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 that they go from a hospital over to a surgery center.
Yes, 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, 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. So I think that we will get to all the systems in circulation before the year is over. It’s taking longer than I’ve wanted it to, but we are working on it week in and week out.
Tom Fedichin
Okay, can you speak to profitability for the company? Do you feel that’s the second half story to look out for, or do you think it comes sooner?
Trent Northcutt
I think it’s the second half of the year study, because the second half of the year, because of the extra kits that will be going out with the TFX, we’ll have more users, we’re getting a good price point on that product, we’re getting favorable results. I think the clinical results so far have been very promising, and I’m encouraged by that. And I think we already have a list of doctors and surgeons that want to use this product, so it’s not a shortage of users. And I also, as I mentioned with the DEXA-C, I think the DEXA-C will just start to get more approvals in different hospital settings around the country, and more surgery centers around the country. And I think that that’ll help contribute to a profitable month and quarters in the second half of the year.
Operator
The next question comes from Sergio Hiber [Ph] with Hiber Research. Please go ahead.
Unidentified Analyst
Hi guys, congratulations on a great quarter. It’s much better than everybody expected. And my question is about Priya. Does your contract with Priya include all the devices, including the TFX?
Trent Northcutt
It does. Priya covers all pre-authorizations for everyone of our products. So there’s no limitation on our side or on their side that I believe that as far as like helping with pre-authorization for which are the procedures that doctors perform in cervical fusion, lumbar fusion and the SI joint fusion.
Unidentified Analyst
So wouldn’t they be involved with limiting any coding problems?
Trent Northcutt
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 issue guidelines of each CPT code because there’s a description in each CPT code that’s given. And the doctor has to dictate what they just performed on that patient. So in the case of an SI joint fusion, they would say that they just formed surgery and that the technique that they use was the step to step to step. And each one of those steps would be part of that description for the CPT code reimbursement. And the pre-up of 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 felt that this product does meet requirements and try to push it through and work directly with that insurance carrier from the pre-year representation.
Operator
[Operator Instructions] The next question comes from Tom Fedichin with Microcap Connection. Please go ahead.
Tom Fedichin
Hey, Trent I’d like to know the book break even. I know we discussed in the past 1.2 million a month was the breakeven point and we adjusted that due to inflationary cost 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 the study with the ZIP. Now it was a $600,000 loss and I think there was $300,000 and merchandise was added so I guess that would account for half of that. But I think the expense, the loss was a little bit higher than I was anticipating. Could you, could you dig into why that was and where the cost were, why the cost were a little bit higher?
Trent Northcutt
Sure. The break even for us is right about $1.5 million for break even for us now. Cost increase cost increased throughout the throughout the year in different areas such as cadavers and travel costs and hotel costs and food costs. So that’s we saw that continuously increase in almost every area that was different from the previous years and different from an increase. So blame it on the inflation if you want. It’s just the cost of doing travel business definitely had done up substantially including cadaver cost, like instead of it being a $1500 cadaver cost it’s now a $3,000 cadaver cost or $3500 cadaver cost and those were cost that were not part of the factoring just a year prior. So things like that’s what has increased dramatically for us.
And 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 that cost from a one five break even down because we’re not doing a lot of R&D and that’s going to be part of one of our questions is that we can lower those costs internally then bring it down from 1.5 down to 1.4 and then show more of a profitable number and that’s the number we’re pushing towards.
Tom Fedichin
Okay, okay.
Operator
The next question comes from Lindsey Leeds [Ph] a retail investor. Please go ahead.
Unidentified Analyst
Hi, I wanted to talk about the SiLO TFX and here 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 going to be hospital versus surgery centers?
Trent Northcutt
Well, I think that we are. We already have been selling more of our devices at surgery centers and in your staff, that we saw a flip of that during COVID since the surgery centers opened back out for more elective surgeries and hospitals. We are always real top I don’t know, it’s a heavy we’re just mostly in hospitals and we’re not really trying to expand out. So I think the TFX because it is a walk in and walk out procedure and outpatient procedure. We’ll see a blend of that between hospitals and surgery centers, but if I were to guess I would say it would be done more in an outpatient center this year and up. I’ll actually probably put out some stats on that towards the second half of the year just to kind of keep tracking what we’re doing more hospital or surgery center, but my feeling is going to be more surgery center.
Unidentified Analyst
Okay, in the pain management doctor market is for SiLO TFX is that a contested market between yourself and SI bone and other competitors or is that a pretty open market still?
Trent Northcutt
Well, for us, we in at we work with both ortho and neuro and interventional pain physicians with our zipped product and our SiLO and SiLO TFX products. So I know that SI bone traditionally speak for them, but for 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 surgeons does not do that many SI joint injections that do far less than that and that the interventional doctors are the ones who see a lot of the SI joint.
The pain, in pain issues that are going on with that with that particular patient. So 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 zipped device and we’ll continue to push forward on that. So I don’t think I think SI bone will continue to do it with what they do and we’re certainly open to expanding the market.
Unidentified Analyst
Thank you, I’ll jump back into queue.
Operator
[Operator Instructions] The next question comes from Tom Fedichin with Microcap Connection. Please go ahead.
Tom Fedichin
I would like to begin to the training and 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 and how will that look going forward given that the SiLO TFX is now garnered approval, you’re starting to roll out these first initial kits these training kits will any new training consists of just a SiLO TFX are you still training with the old SiLO that predecessor SiLO. And of course, is it I’m assuming we’ll be included, but will it be also including any of the decks of products with the same training program?
Trent Northcutt
With the DEXA, we always have the DEXA technology out on the table. If you will, we always have brochures out there. We want to continue to educate people who show up to our courses to learn more about DEXA technologies. So to my delight, I was really encouraged by what I heard when I spoke to interventionalists that were that we’re into with bone density and the idea of patients having good bone quality or poor bone quality and that this is a direct effect on some of the patients health and also how their pain is related to them.
So I’m glad that and we share this information with them, although they’re never going to use a DEXA-C product or DEXA -L product. There might be a future for some of our other devices for DEXA as we’ve talked about in the past on. And regards to training the one thing that we did we did more national labs over the last few years and we felt we did national labs and we did regional labs and we got a better ROI out of our regional labs that we did on our national labs and so we’re focused this year and more on the regional labs. That will be more specific to a certain market area. We do, we will show at that. At the courses we’ll show ZIP SiLO and SiLO TFX. I think that most people will levitate towards TFX, but it’s a kind of limited alpha release. We want to make sure that we capture that opportunity to show that particular surgeon or doctor that SiLO is here and is available to them.
The surgical technique between the two products are very, very similar and that was by design. We wanted to pre-train doctors on the SiLO system and make it as reproducible and we’ll be launched with SiLO TFX and I think we’ve done a good job of that. There’s a couple of extra steps that those steps are all in line with the existing silo system. So the SiLO TFX and the SiLO system are virtually similar in a lot of ways and we don’t think there’s a big giant learning curve between the two systems and I’ve seen it in action and I think that it’s a very intuitive system with TFX but some doctors just say they want to use bone over a TF a metal implant and that’s not uncommon in the industry.
Tom Fedichin
And how many doctors do you plan on training this year?
Trent Northcutt
I don’t have a set goal of how many doctors want to train. My type of set goal of getting a positive ROI on all of our training so we do have a course coming up I think in the next 45 days. We’ve already done one small regional lab that we had 12 doctors that to give you a number I think this new lab we have — was on the west coast was here in California and then we have another lab coming up in in the east coast. I think that has like 10 or 12 doctors, so that will be 24 doctors roughly and within the first four or five months of the year.
Tom Fedichin
Okay. Okay to carry on how was the how was the training program going I know Chrissy steps aside you brought a new trainer and I believe. And I’m assuming this is 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 see Aurora Spine to profitability.
Trent Northcutt
Chrissy has not been moved aside, she is still in charge of all the all the training programs and has ran — the last course we just ran she was fully in charge of it and in charge of course it’s up there in the next couple of weeks and it’s still she’s a boss of that, she’ll be the one to tell you that every time.
We added that goldstone as a trigger of sales and sales organization and also to help structure a sales organization that can meet the demand, follow through in support of training and education. I think that was to when your questions are do you have a manpower that was why we added that goldstone I needed somebody On the team who could structurally lead the sales organization and 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 and all the labs and then he goes out and just helps cover the doctors first few cases the nature of those cases go smooth and if there’s anything that he needs a report back engineering like I said he reports to engineering. And then that goldstone added some more sales people to the team one in the Midwest and one on the west coast. And so we’re going to add more sales people to also support those training to follow up. I think that’s something that was probably certainly missed last year, but we need to get with it and get with the right people to help to support those cases.
Tom Fedichin
Okay, yes, I guess I misunderstood the promotion I think is what Chrissy had and I just assumed that she’s set aside this this other fellow came in, but thanks for clarifying, fantastic. Last question for me is if there’s any if there was any outlook that you can give investors for 2023 any potential positive surprises or anything that that you think we should be looking forward to pay attention to what would that be?
Trent Northcutt
Well, I think it’s encouraging for what we saw in the ZIP study a couple years ago when we were talking about embarking on this multi center study. It certainly, raise some eyes because we were entering into a study that would show that interventional mentally invasive a screwless procedure working in collaboration having ortho and [Indiscernible] to training programs with the interventional and all of us coming together to start this multi center study to build a put out now that — now it’s two years later we’re able to record some really positive results that patients are getting better. So all the stuff that I stand on myself box and yell out if this is come through.
The second part was all of last year and in the previous couple of years was when you’re going to get your TFX approval. We now have that TFX approval the first case is just a few less than 20 surgery so far have all has some really good positive outcomes in that and that surgery. So the TFX is something to keep your eye on along with the continued ZIP study and we, 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. So we will have simultaneously we’ll have three different studies going at the same time and ZIP sales increased the previous year or 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 and I think we’ll get the exact same type of traction with the DEXA-C 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.
Tom Fedichin
Perfect. Thank you.
Trent Northcutt
Thank you, Tom.
Operator
The next question comes from Sergio Heaver [Ph] with Heaver Research. Please go ahead.
Unidentified Analyst
So guys, I’ll ask you the question that everybody wants to know the open in the room is the will you need to do a capital raise or are you looking for a credit facility.
Trent Northcutt
I’m worried about how collections have gone with the company. It seems to be an industry thing as well or just lower payments have come in from hospitals about [Indiscernible] to pay their bills on time. So, I’m definitely you put that out there that I am concerned about that. We’re small Microcap company and we’re — every dollar to less matters. We’re working with our — with our institutions that we work in to help them get more online with pain on a regular basis and a more on time basis then we’re 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.
And I want to get away from talking about COVID because I don’t want to keep using COVID as an excuse. But certainly people are paying their bills slower for some reason. And I want to fix that with us and it’s a concern for me. And I am looking into that right now to make sure that we cover that that that Delta of cash that is slower to come in and it should be. So I’m looking into it Sergio and I am monitoring it closely because it is a concern of mine.
Unidentified Analyst
Okay, I guess you answer is that if collections don’t pick up then you will do a capital raise.
Trent Northcutt
Yes, I’ll have to look at all my options. I’ll have to look at either a bridge or a line credit or or get the people to pay the bill. And those are things I’m working on the one two and the three. First and foremost, I’m working on people to pay the bills on time. And two and three, I’m starting to have conversations on that because I want to make sure that all this effort that we put into what we’re doing just keeps us, going in a forward and upper direction.
Unidentified Analyst
And regarding the TFX once will you be doing any price incentive, will you be selling to discount to introduce the TFX. And also if I get two questions into one of the TFX, and so from what I could see that on LinkedIn the procedure is a lot, it takes a lot less time than any competitor. Am I correct?
Trent Northcutt
So yes, we don’t we’re not, we don’t track our times and how fast but 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 it’s good for the patient first and foremost, it’s less time that the patient has an open wound so less blood loss, time in the operating room table. But we don’t we don’t ask a doctor and set the stopwatch on him. 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. And in these early innings that we’ve performed on the TFX procedure we’ve had some really good feedback from an orthopaedic surgeon, a neurosurgeon and an interventional surgeon all with lots of experience with surgery and SI joint. And so we’re not offering any discount extra on the procedure. In fact, we’re just priced our product out with spare market and some prices are stronger than others, but yes, we’re not offering any special discount we’re rolling the product out as the same price point is even say SI bone.
Unidentified Analyst
And do you think that TFX will roll out faster because it’s going dominantly to a pain management and not a hospital.
Trent Northcutt
I think, I think that because of what was being, I think the ortho neuro and intervention, I do think we have a big list of doctors that want to use TFX and a lot of it has to do with the headwinds that were brought up in 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.
And now here we are a January, they implemented the T code for the allograft system. But the coding and the reimbursement has been pretty much the same. So there hasn’t been any major deduction for the doctor’s time and 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, but the TFX is filled out on the 27279 [Ph] and we filled that that’s right and that’s follows the guidelines of the code.
And I think that it’ll roll out smoothly and we’ve already made some changes internally on the design of the tooling and how the procedure goes based upon the feedback we got from the surgeons and these were are all internal changes that we are making. We were able to make these quick adjustments and we had an earmarked in our discussions with these doctors early on and so I think I think TFX is going to be tremendously successful.
Unidentified Analyst
And Trent to my last question, do you want to talk at all about licensing because that’s a unlimited revenue source. Are you working in that direction or is it too early?
Trent Northcutt
I think it’s a little bit early and I think that what the people groups that might, that are out there that might take and keep one eye open. I know there’s people who follow us, I can only see who does say LinkedIn. And I’ve had some discussions with different people that have asked the questions about our technology and I keep those conversations going.
So certainly I’m open to 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 the hip and knee recon trauma products because we were not in that business and we don’t plan to be in that business, but I think if you can have an implant that helps match that patient’s bone density and have patient match the implants, why wouldn’t you want to license our DEXA technology, we’re certainly open to it.
Unidentified Analyst
Thank you. That’s one of my questions.
Trent Northcutt
Thank you Sergio.
Operator
The next question comes from Lindsey Lee, a retail investor. Please go ahead.
Unidentified Analyst
Hi, on the DEXA-C, is that something your manufacturing in-house or do you purchase that outside?
Trent Northcutt
The manufacturing facility is in the is a third party, but they’re just walking distance, they’re about 500 walking steps from my office here in Carlsbad California and there are 3D printing facility manufacturers for many other companies that are out there, but they really helped us fine tune that we collaborate well with them on the DEXA. So DEXA is patented and proprietary to Aurora. It’s an issue patent and so they only make that technology that 3D printing facility for Aurora.
Unidentified Analyst
Okay. I’m talking about the accounts receivable, are you concerned that some of those won’t be collected, or is it just mainly these are these are large payers, they will eventually pay, but but they’re dragging their feet.
Trent Northcutt
The large…
Chad Clouse
Yes, let me take that one. So yes, it’s a lot of the larger hospitals that are that 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.
Unidentified Analyst
I see. Okay. The shipping of your various products, who bears the cost of the shipping?
Is it Aurora or is it the customer?
Trent Northcutt
We do. We sometimes can share it, but mostly us.
Unidentified Analyst
Okay. That’s all the questions I have. Thank you so much gentlemen for your time.
Trent Northcutt
Thank you.
Operator
This concludes our question-and-session. I would like to turn the conference back over to Trent Northcutt, ready closing remarks.
Trent Northcutt
Thank you. Thank you for joining us. We appreciate your time and interest in Aurora Spine. And 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. And we’d be happy to schedule a follow up call. Thanks again, everyone. Have a great rest of your day.
Operator
The conference has now included. Thank you for attending today’s presentation. You may now disconnect.
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