Aurora Spine Corporation (ASG) Earnings Call Transcript & Summary

Good morning, and welcome to the Aurora Spine First Quarter Financial Year 2025 Results Conference Call. [Operator Instructions] 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, Gary. Welcome, everyone, and thank you for joining us today to conduct an update with investors and review the financial results for Aurora Spine for the first quarter fiscal year 2025 that ended March 31, 2025. With us on the call representing the company today are Mr. Trent Northcutt, President and CEO of Aurora Spine; and Mr. Chad Clouse, Chief Financial Officer of Aurora Spine. Before we begin, I would like to remind everyone that statements made during the course of this call may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 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 for future performance and are subject to risks and uncertainties and other important factors that could cause actual performance or achievements to be materially different from those projected. For 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 sections. Aurora Spine does not intend to update or revise any forward-looking statements, whether as a result of new information or future events or otherwise. On this call, management may refer to EBITDAC, adjusted EBITDAC, adjusted net income and adjusted EPS, which are not measures of financial performance under generally accepted accounting principles or GAAP. Management believes that these non-GAAP figures, in addition to other GAAP measures provide meaningful supplemental information regarding the company's operational performance. Investors should recognize that these non-GAAP figures might not be comparable to similarly titled measures of other companies. These measures should 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 compared GAAP measures in accordance with SEC Regulation G can be found in the company's earnings release. With that, I'd now like to turn the call over to Mr. Trent Northcutt, President and CEO of Aurora Spine. Trent, please proceed.

Thank you, Adam. I'd like to welcome everyone to this call to update everyone about Aurora Spine. To lay out the agenda for today's call, I plan sharing some brief remarks about the company's operations as it's only 3 weeks since our last conference call. And then I'll hand the call over to Chad to review financials afterwards. Then I will make some brief concluding remarks, and then open the call to answers -- and answer any questions you may have. I'm very pleased with our financial results reported today for the first quarter results, which recorded Aurora's best first quarter revenue figures in the company's history. As we -- as discussed, a few weeks ago, we expected to build some momentum in our revenues through the rest of the year, as our team engages with more doctors and have more procedures built through the year. Combined with the launch of the new products in the coming months. Helping us achieve these improved first quarter revenues was due to our internal sales team, which has done a great job at building strong relationships with our customers. These relationships are highly beneficial in knowing the future of what -- in the midst of launching additional products. Our amazing internal sales team is now a 14 people with their diligent efforts are to drive behind our growth and getting our proprietary products into more doctors' hands and patients. Assisting our sales team will be providing out success with our proprietary products and sharing the data we receive behind the usage of our products. Along these lines, we expect to share regarding our proprietary ZIP Interspinous Fixation Device at the upcoming American Society of Pains at Neurosciences, known as Aspen Conference in July. We are also that eager to share -- We are also eager to share the results of the REFINE study, we conducted with our ZIP device, which is used for patients suffering from back pain due to symptomatic degenerative disc disease. The results will be presented at the Aspen Annual Conference mid-July and will be spotlight Aurora Spine's commitment to evidence-based innovation. We anticipate that the REFINE study's findings will reinforce the efficiency and safety of its ZIP system, further solidifying Aurora Spine physician as a trailblazer in the spine implant market. Aurora Spine remains committed to empowering physicians and providing patient outcomes through a ground making clinical evidence and minimally invasive solutions. The company's success also continues to come from our key proprietary product platforms, especially the SiLO TFX system, where revenues were $1.7 million in the first quarter, an increase of 33.8% from the first quarter of last year. The SiLO TFX series is just 1 of 5 proprietary product platforms that we've developed in the past few years and has gained significant traction in a short amount of time. We still believe it's early innings in the SI joint market opportunity and expect TFX to continue to expand the market share. We believe that the TFX, along with our portfolio of proprietary products have a potential for future growth and adoption given that all has been designed to prove ease of use for the doctor and can be implanted using minimally invasive procedure. Simultaneously, our goal is also to create better outcomes for patients through things like smaller incisions, which limit blood loss, allows patients to return to home the same day of the procedure and experienced faster recovery times. We believe that this is our secret sauce by creating products with both the doctor and the patients in mind. As we say here at Aurora, we simplify the complex. Just a brief update on DEXA. We are working diligently to open up more hospitals to use DEXA and have a couple of our sales team working and adding more every day. As many of you know, DEXA will be a little bit different of the sales than some of the other products, but we are making inroads to educate doctors on our offering and many early indications are that the value-add with the technology can enable surgeons to proceed with their surgeries even if the patient's bone density isn't so strong. DEXA-C has been contributing to the company's revenues, we should have data to share on the product in the upcoming months. In addition, we expect that the launch of the DEXA-L for lumbar procedures during the second half of 2025. We received the FDA clearance on the DEXA-L, a little less than a year ago and are very excited about this launch in the coming months. We have the kits built, and we have already identified a few surgeons that will -- that are prepared to start using the product. We have high hopes for DEXA-L as science issues occur more frequently in the lumbar section of the spine due to heavier loads that are put on the portion of the spine. We are gearing up, excited about the launch, and we'll update investors as things progress. I'd like to also talk about our new product series that we received FDA clearance during the first quarter, the AERO Facet Fusion system. It is a very small implant, smallest implant we've made and that will be used in the facet joint pain and obtain fusion to remove back pain patients from -- that patients are experiencing. The procedure is very new to the industry, but it's designed in feasibility to create similarity to the ways that the SiLO TFX through use of needle placement in the joint and then use the GhostTube to easily install the necessary implant with the exact precision. Our thinking behind the arrow was to be designed with the understanding that many of our more injections are offered to patients than implants, nearly 5 million annually in the U.S. market alone. The AERO design is intended for doctors to utilize needles and can easily identify and access to facet joint. In addition to having a similar design, the AERO simplistic to the implant, it's -- is minimally invasive where the procedure is done in less than an hour and patients go home the same day. Economic profile is also similar to the TFX, which might have initially better economics in a smaller device, which makes it easier to manufacture, less materials needed to manufacture it as well. Where things differ on the economic side, it's unlike the TFX, which is intended for the SI joint, the individual only has 2 SI joints as opposed to facets, where there is a total of 48. This isn't to say that the AERO will be implanted in every joint, but there's potential for more shots on goal, so to speak. But I must remind investors that AERO has received FDA clearance for the entire spine C2 to S1 inclusive, which is extremely important for us. It allows us to market the AERO broadly to doctors and interventionalists and detail of the products for the cervical and the lumbar procedures. These are just a few catalysts as we are extremely excited about the AERO's future. We have already ordered initial kits for the AERO, and they are in the midst of being produced as we speak. We plan on updating investors as we develop, but for now, we are anticipating an initial surgeries of the AERO to commence over the summer months. That concludes my formal comments. I will now turn the conversation over to Chad Clouse, Aurora's CFO for commentary on our financials. Chad, please proceed.

Thank you, Trent. The company's financial performance in the first quarter continue to show excellent progress. We'll discuss some highlights. Total revenues for the first quarter of 2025 were $4.42 million, an increase of 10% when compared to the $4.01 million in the same quarter a year ago. The improvements in revenue in 2024 -- 2025 were due to more procedures conducted in the inventory, surgical and pain centers that incorporated Aurora products like the ZIP and SiLO TFX. The company targeted the pain market with increased marketing training and new product releases and an increase in sales staff. Moving on to discussions of gross margin, which on total revenues were 58% for the first quarter of 2025 compared to 61.9% in Q1 of 2024. Gross margin was lower compared to last year due to increased shipping costs, higher distributor commissions and offset by lower royalty costs. The company continues to focus on growing sales in proprietary products. Of course, margin has the capability for additional improvements depending upon product mix, manufacturing shipping costs. Total operating expense were $2.9 million for the first quarter of 2025 compared to $2.75 million for the first quarter of 2024. Operating expenses in Q1 2025 include $0.285 million of noncash expenses compared to $0.39 million of noncash expenses. Operating expenses are higher due to the current quarter primarily due to an increase in total compensation, discretionary education, training spend and health insurance offset by a decrease in consulting professional fees and research and development. EBITDAC and non-GAAP figure was negative $0.02 million for the first quarter of 2025 compared to positive $0.12 million in the first quarter of 2024. EBITDAC was slightly lower from year ago results due to higher expenses for implementation of internal sales team. Net loss was a negative $0.35 million for the first quarter of 2025 compared to the first quarter of 2024, which is a loss of a negative $0.267 million, basic and diluted net loss per share was $0.0 per share first quarter 2025 and $0.0 per share for the first quarter of 2024. Moving on to the balance sheet. We ended the quarter with nearly $0.5 million in cash. Accounts receivables were elevated in the quarter, most of which has been collected and was a result of improved sales during March. Cash collections continue to be a major focus for us as we have been successful in improving collections, especially with order receivables. As I mentioned in the past, we've added personnel to assist in improving our collections and process and the majority of receivables on the balance sheet reflect those that are 30 days or less. We believe the capital structures are significant to meet our budget needs this year, and we should continue to improve. We can make progress on our collection efforts and experience growth in the business. That concludes my comments. I'll turn the conversation back to Trent.

Thanks, Chad. To summarize, I'm extremely proud of our team's performance and staying focused on building this company. We're well positioned to take advantage of the growing markets with several new proprietary products. We remain focused on penetrating these markets, furthering this year's -- further this year through continued training sessions, clinical trials and sharing data on the success of our products. As I mentioned a few weeks ago, we do believe as the year progresses, that revenue should continue to show year-over-year growth, and we have budgeted annual revenue growth for at least 20% and profitability on an annual basis. We're extremely bullish on our outlook, and we believe that we're on track to continue growth and success. With that said, operator, we are ready for any questions.

[Operator Instructions] Our first question is from Tom Fedichin with Microcap Connection.

Congratulations on another solid quarter. I would like to start off by asking about the DEXA-C line. You had some nice growth from that device, 415,000 versus 204,000 for the preceding quarter 2024. So I guess the question I have is, what are your expectations for DEXA-C in 2025? Is this a number that should continue to grow now that you've got more effort being put in to push this product into the market?

Thanks, Tom. Yes, we are very thrilled with the DEXA-C, and it's still slow growth, but it's growth that we like. It's focused growth, too. We are working towards getting more distribution channels, excited about the technology. We're able to talk about it more because we see that the clinical results that we have as part of the study that we're in that has continued to show positive results. And since we're able to talk about it, and then we're obviously working towards publishing those results, but be able to talk to distributors and doctors that we're having good results. Is been a benefit to us, and this is partial why we're seeing the second part -- why we're seeing growth. The second part to that is our Director of Spine, who is sole focus is just to get out there and to speak about the spinal implant market, speaking with ortho and neuro. We participated early this year at a separate spine conference down in Florida. Just to highlight and show some of the advancements in Aurora's proprietary technology. And Ron has done a great job of getting after it and getting some people to come on board to not only just trial, but actually embrace the technology along with his efforts. The third part was all of his efforts from early last year when he joined us through Q1, Q2, 3 and 4 getting new hospital registration approvals and surgery center approvals across the country. And that also is tied to some military facilities and VA facilities. So we should continue to see growth in the DEXA-C product. The last thing I'll comment on that is that we're close to finishing up some of the instruments that were not working well with the APOLLO plate, and we got those instruments fixed, and we're working on that and machining some of those new parts. So with the increase of cervical plate sales, which is the APOLLO and having more cervical plate trays available for the sales force, it's that bread and butter, that salt and pepper you got to have -- if you have the cage, you got to have the plate. And the DEXA-C is a very, very good cage, but it makes it a little bit more difficult to move if you're not supplying the plate along with it. So we're bullish on that, too, and feel good about it.

Wonderful. Now on the last earnings call, you spoke about the seasonality of your business, and you'd alluded to the fact that Q1 would see slower revenues as the seasonality of insurance resets hits. Looking forward, do you see that the growth has continued into Q2? And where are you seeing the growth coming from? Is it -- is it going to be on the backs of TFX, ZIP, Osteo Onyx? Maybe you can speak to what you've seen towards the latter part of Q1 and even forward-looking.

Yes. We certainly -- our company and our pure sales cycle with our company for the last at least 3 years, we have seasonality, and that's just what it is. We have a dip in December. We have to come out of it through January, and then we see it again in March, and then we see an uptick in Q2. And we're off to a great start in Q2, very, very excited about where we are in Q2 and in Q1, there were some really good results that came out of Q1, which was seeing more DEXA sales, which is great because that's that balance I was telling some of you at the Microcap Conference was doing over $1 million in paying interventional sales, and then start to add on to our spine sales and moving that up closer to $500,000, $600,000, $700,000. That's that breakthrough number where we say firm, not to drop below $1.5 million in a month, and then catching ourselves closer and closer to the first $2 million month and then ultimately get to that first $5 million quarter. So I feel really good about what we're doing. And yes, I'm happy with everything we did in Q1. I always want to see more, but happy with what we did, and we're off to great start in Q2.

Wonderful. And how is the doctor training labs gone? Have you -- you've had, I think, a large one in Q1 that you spoke about at the conference. But are you consistent in your approach with doctor training throughout the year? Is that -- I know you had smaller labs that you take part in. Can you speak about how that is, say, for new investors that are listening to the call, how you proceed with your trainings, and what your expectations are moving forward in that regard with the addition of new doctors and such?

One of the things we added this year versus last year was we added a new VP of Training and Education, somebody who had strong success. He was -- he joined us from companies like Vertiflex and Alphatec and other companies of such, and he really knows how to run a training program, where those training programs are not just surgeon training programs, but they're also sales rep training, where the sales reps have to come in, they have a test they have to take. They have to learn about the products. They have to put their hands on the products even in the cadaveric setting. So they have a better understanding when they're in the operating room with those doctors to be able to understand and explain our technology clearly and they've actually look the doctor in the eye and say, I put my hands on this product in a kind of very setting to be able to help you doctors understand our product better. And the doctors, they've appreciated that. And we've also added that first Q1 training, which was a larger training, but it was more laser-pointed where we really focused on which doctors that were signing up for our courses. We weren't having a problem getting people to sign up. But what we wanted to have was people who were signing up that we're going to be real users because they see the value and the technology and their communities...

Okay. And...

So Adam managing that.

Yes. Okay, that was great. The -- can you speak to the importance of the pain studies. You had mentioned that during your opening remarks there. of how the ZIP has got a study going on that will be released coming out this summer. But I believe you've got studies on DEXA-C as well and SiLO TFX. Can you let investors know the importance of these studies and what it means to doctors and adoption for your company?

Certainly. The ZIP study, which I'll start with, was -- it was really key for us to do this study because it was the first one of its kind. And what do I mean by that? What I mean is that we decided to branch into a new marketplace, which was the interventional spine market. And we had addressed this market because of the many, many interventional doctors that have used Interspinous or Interlaminar non-fusion technologies. And they had a lot of patients out there because those companies have done a good job with getting a lot of implants put into patients around the country. Those implants are non-fusion based. So the interventional market was looking for fusion-based because they're going to take those implants out or they're going to address the levels above or below for [indiscernible] segment. And we were the first company to actually pull together a group of orthopedic neuro spine and interventional pain doctors and put them into 1 study, which is the ZIP study for the -- that was going to -- that, that did show that the patients could have good clinical outcomes with a lumbar fusion system for the first time. I mean, this was something that this did not exist in the market. So the REFINE study included that we had over a large amount of patients over -- we did a couple of hundred patients, but we registered off over 80 patients that showed that they had no adverse effects. They had good clinical results, lowered their pain scores, they got a fusion rate, patients did better, and they did a majority of these patients in an outpatient setting. So the REFINE study was our first entry into evidence-based medicine to be able to prove to everyone that the ZIP could be used in the hands of ortho, neuro and pain. Since then, we have entered into a second study, which was for our DEXA-C technology. And DEXA, as you know, is a platform. DEXA technology is an implant opportunity to make it for all an implant that acts within any type of bone structure. So your cervical space, your lumbar space, your SI joint space anywhere where the bone is being interfaced together, you want to be able to have an implant that can best match that patient's bone density, but we had to prove that. And so DEXA technology is not just 3D printing, it's actually additive manufacturing. So we were able to prove and are continuing to prove that the implant works better in bone of either good quality or high quality all the way down to patients that have poor quality. So it allows that doctor to make any decision interoperatively or preoperatively, which implant should I put into this patient body. So we started with cervical. Cervical has very high success rate. But if we could show an improvement on an area of the body that already has good success rate versus just lumbar fusion or decompressions -- sorry, cervical fusion or cervical decompressions. And if we could add that benefit with our cage, which is the DEXA-C that we felt that doctors would respond to that, and they have so far. So they see that there is a clinical result for them and there's a clinical benefit to them to have that option that they never had before. Every product that's out there, competitive wise, does not have that ability to offer lower density, a softer landing for the patient's bone and especially if the patient has poor bone quality. And third, we have a safety study for the SiLO TFX. We are -- we presented this to a publisher to -- and we were middle some edits right now, but we've submitted that to the editor. We're making the adjustments on the edits on that paper, and that published results, and the results are fantastic. They're absolutely great. So we're pleased and ready and excited to release those. We're just waiting for the edits to commence so they can be published. So we'll have all 3 of those, and then we have a series of study options for what we're calling the GUARDIAN study, which will carry more of our product portfolio and through 2025 and beyond. And the GUARDIAN study will be -- will take all of our technologies separate pathology such as cervical, lumbar, SI joint and other to be able to show that whichever device they're using in case that the doctor has done, say, a ZIP in 1 patient and the patient comes back and now that doctor wants to use AERO, that they would be able to extend on that GUARDIAN study. So the ZIP is not -- the patient isn't showing that they've had an adjacent segment failure that they shown that the patient is just degenerated. The spine is not of health, so they have to have another procedure performed and they had such a good result with the segment below such with the ZIP or other devices that Aurora offers, now we're going to carry that study, and that's why we call them the GUARDIAN study, we're continuing forward with those patients to help treat them for as long as they will be part of our studies and beyond.

Wonderful. No, I appreciate you giving the color there. Now you've -- switching gears, you've added a number of new regional sales directors over the last year, year plus. And I saw you recently hired Cassandra Murphy from Medtronic. Just as an example, can you speak about the expectations for each regional sales director, the time frame required for these individuals to be fully trained and contributing. And what sort of expectations, I guess, for what you're looking for per hire as you bring them on? You've got 14 of these regional sales directors now or, I guess, I should say sales personnel now. I believe on our last call; you had mentioned you're looking at hiring potentially 4 more this year. Maybe you can add some color as to what you -- what we can expect this year from these new hires? And maybe also talk about the -- how the margins, I guess, are improved. I know in the earnings statement, you had mentioned -- or it was mentioned that margins had declined a little bit due to shipping, but also due to distributor costs and whatnot. So if you can add some color there, that would be great.

You got it. Yes, Cassandra joined us from Medtronic. She was very, very strong in her area of the Northeast and continues to do amazing work. We've added another new salesperson in the Mid-Atlantic location who comes from -- experience from companies like Nalu and from other competitive companies where they have good reputation in their backyard and their region where they have doctor touches where they can get out there and talk to those accounts. We will continue to look at pockets of the country that we do not have regional coverage. And we can -- we're interviewing all the time. So we're still interviewing process in the Great Lakes area as we're speaking. We're trying to add some people in that location. The Northwest is another area that we would like to address as soon as we can. We were interviewing somebody as early as yesterday here in the office. So we are constantly interviewing trying to find the right fit for us. So we want to make sure that we're the right fit for them, and they're the right fit for us. And we're looking for people that have a vast experience in areas that we're not getting any new traction because we just don't have people there. Attraction, meaning there's just no 1 there. So with Ron and Matt and Matt Paxton, they are focused, if they can't get a regional director, sales director in a location. We're open to having independent distribution there because that will cover those procedures and potentially get the doors open for us in areas that we don't have a regional sales directors. Those commissions or -- when you pay a distributor, you got to pay them more than you pay a direct person to manage accounts. So distributors get to eat what they kill, if you will. And that does affect the margin of the company. It's a give and a take, right? The give is that you got to pay them some commissions to get out there and go get cultivate that marketplace because they're experts in their own market. The advantage to that is that they run a business, and they're an independent distributor. So we have those distributors all across the country, but we want to add it in more pockets of areas that we -- where we think that we can get good sales revenues in areas, especially with the high MSA areas and places like Seattle and Chicago and Denver. We've just done some recent first surgeries in Denver, which went really, really well, and we're now in the Colorado market getting started, and we think we're going to ramp up. That's a state that had basically had 0 sales revenue for us for the last couple of years. So they have new sales revenues in Colorado, new sales revenues in places like Kentucky and other areas. Those are exciting locations for us because they are growth areas. And as we continue to develop those areas, we'll look for regional sales directors, or we'll use independent distributors or a blend of both.

Would you expect if a new hire has been posted 3 months just until you start to see revenues come in from that new regional sales director? Or how long does it take for someone to be fully trained and actually up and running.

Yes, that's right. I didn't answer it completely. So yes, if you're direct with us, it takes about -- I mean it would be great that you could hit the ground running in 30 days, but the first 30 days they're onboard, they're getting themselves organized. But definitely within that 60-, 90-day period, we expect some beginning results in that area. And that's very similar to even what happens with distributors. Independent distributors, you have to get a -- you have to enter into a contract with them. They have to take a look at your products. They have to talk to their sales team as part of that independent distributor. We have to train them and talk to them in the office. It's not cadaveric necessarily, but it is product review, product training. And then they typically take 30, 60, 90 days to ramp up as well once you execute a contract with a new distributor or a new regional sales director.

Okay. A couple of more questions. DEXA-L and the facets will be released this summer. Are you expecting them to be released late Q3, early Q4? What sort of time frame are you looking at for releases on both? And you've got the kits for both, I assume?

Yes. We'll have the kids manufactured for both. So mid- to late Q2 -- I'm sorry, mid-to-late Q3 -- excuse me, for DEXA-L and for AERO. We might be able to pick up a couple of trial cases, but we're really focused for the later half of Q3 with both those products.

Okay. And a question on the accounts receivables. They increased to $4.1 million, and your cash is around $500,000. Have you been able to collect since Q1 ended? Are you confident that you don't need to raise any additional capital there?

We are confident on that.

Yes, go ahead, Chad.

I can answer. The actual trade receivables part of that is only up $200,000 and some of that is due to pretty strong sales in March. Our DSOs around 78 days or -- in that area. So [indiscernible] a lot of sales end up in the later half of the quarter, and we end up with a higher balance there. But to answer your question, yes, we've collected most of that. And we're very confident that we don't need to raise money with what -- which Trent was about to say.

Perfect. Perfect. And I guess another question here is that I have, and this is just more for my personal modeling of the core business, which is ZIP SiLO series and the DEXA. Last year ZIP grew, I believe it was approximately 35% and SiLO grew, the TFX grew 135%, do you foresee ZIP continuing on that growth rate through 2025? And do you believe that even the TFX will grow even at 50% with all these -- with new sales efforts with new regional sales directors and doctors further adopting these products. Is that something you foresee? Do you foresee a similar rate of growth?

Well, we're absolutely committed to continually marketing the brand of ZIP products and SiLO TFX pipe, but ZIP in particular where I think you're going to see more growth with the ZIP devices is 2 parts. The number one part is that we have to add more salespeople in distribution. So adding headcount is going to be the driver for all of our products. Specifically the products that are currently our core base products that -- when we enter into new markets, that's new growth, that's new opportunity. The second part to that for ZIP is the DEXA-L is an anterior approached product where the cage goes through the abdomen and fixates itself into the abdomen, that has a very good COG and a very high price point for the device. So we're really thrilled on the potential of how the implant can be built out. But the second part of that is that doctors can do a couple of different things. They can put in the DEXA-L and cage, so the patient up, and they'll be good to go, and that's one approach. The surgeons, the orthopedic and the neurosurgeons can actually increase their billables if they roll the patient over into proposition and put in 3 different products that it has -- the Aurora has. It's Osteo Onyx products, which would be screws. They can put those in posterior. They could put it in ZIP device, which would be a very -- a faster approach to doing a 360 lumbar fusion procedure and get maximum billable for that particular doctor. And then, of course, later in Q3, the doctors could roll a patient over after they do a DEXA-L and put in the AERO posteriorly. So we're going to have additional shots on goal with the Osteo Onyx product, the ZIP product and the AERO product following an anterior approach procedure with DEXA-L So the doctors that we are working with and a part of our DEXA-L development team, they do 360 procedures. So they often roll the patient over and add posterior fixation.

Wonderful. Wonderful. No, that's great to hear their trend. Osteo Onyx speaking of that, have you seen an improvement in sales since the rollout of that quarter-over-quarter?

We see that it is growing. It's pockets and pocket locations, but we've got more sets in just the other day, more kits just came into the building. It's usually an inventory thing, but we got more kits in the building just the other day. So yes, I think by the end of the year and throughout the year, we'll constantly see Osteo Onyx increasing and growing as a product offering. That will also help with the other product that it's in our queue, which is the DEXA-SD cage, which is a posterior cage that goes into the back and then you fixate that with either a ZIP or with crews. And that's those big lumbar surgeries that we try to promote against, if you will, because we're more of that minimally invasive approach. But we got some new percutaneous MIS systems in from -- for Osteo Onyx that are screw-based, and those kits came in and they'll be supporting the growth for our Spine division, which is why we're bullish on where spine is going to go in 2025 and beyond.

The next question is from [ Lindsay Leeds ], a Private Investor.

Congratulations on a like for Q1. I wanted to ask about the DEXA-L and the higher price point. Is that going to help you penetrate with the market with maybe some doctors that were looking for a higher dollar product?

Yes, absolutely. The DEXA-L has been anticipated for a long, long time. I made the decision to start with cervical first because I wanted to make sure we had good outcomes. And so we are having good outcomes with the DEXA-C. But DEXA-L has always been what -- when we first -- did our first-round table, we had -- I think it was -- 9 ortho neurosurgeons come to San Diego in a roundtable, in R&D discussion. They were all like, give us the lumbar systems, we want that to come out as fast as we want cervical to come out, we had to start somewhere. And so we picked our lane, we did get good results. And so now that there's -- it's a higher ticket item, a procedure that's widely accepted around the country. It's all approved by every insurance. It's not every orthopedic spine surgeon does interior approaches. But the ones that do are very, very good at it. It's a very good procedure, a very robust procedure, meaning the fixation because you're -- I've been in many of these procedures, and you literally can see the spinal cord -- the spinal column there through the anterior part of the belly. You can actually see it when you put the implant in there, you see how it's fixated down, and how it seats nicely and flush up against the spine. It's a very satisfying procedure and the ortho and neuro doctors that perform these procedures are very skilled and it's a great result. So yes, we do think that there -- we think there's a lot of doctors out there that would love to hear that we've had such good success with the DEXA-C and how it's helping subsidence and helping the -- even are showing lowering patients' pain score with our product versus competitors. So if we can prove that in the lumbar space, that would be a win for Aurora.

Okay. I also wanted to ask about with the launch of AERO, is that a potential thing that could help you attract talented salespeople that you want to recruit?

No question. Every product I make, I'm trying to make products that are considered door opening devices that get the -- for sure, get the appointment and then it's up to the salesperson and of course, the technology to perform. But having a story that is true and having a story that is benefiting patients, meeting the coding and reimbursement criteria. And then, of course, the easy use and as we put in our slogan, to simplify the complex. It's not just a slogan. It's actually how we created the company. We wanted to reduce the steps and wanted to make things as minimally invasive as possible. And with AERO, we're talking about making an incision about the size of a pencil eraser. It's going to be the smallest implant we've ever made. It's going to be the smallest skin incision we perform. It's going to absolutely draw people in that see the results of this. We have a roundtable scheduled in July with ortho, neuro and pain, a big group of people coming in. We've got our first 5 alpha sites. They're already searching for patients right now that are part of their practice. So we are working on this as we speak. And I think it's going to draw in some really good talent because of the results, I think, are going to be great. We're going to ride into a safety and efficacy study on it because we want to prove our results and the performance of the product, but we're very encouraged by the biomechanics of it and the cadaver labs that we've done with these 5 alpha sites. And we're really excited. And the other thing I meant that you asked, but I'll just bring it up. This is a product that's approved from C2 to S1. So we'll focus on the lumber today, but it's going to give us an entire spine to work on with potentially on the smallest implant ever, right, one of the smallest implants all outpatient driven.

So for you to adopt that product for, I guess, the cervical part of the spine are you -- what's the effort involved there?

It would be -- obviously, as you go up, your spine, the size of our vertebra and the shape of the vertebra changes. So the way that the facets articulate from your lumbar through your thoracic region all the way up to your cervical, the facets are in different locations, right, the way that the spine moves. So making some modifications for -- you have 7 cervical vertebrae. You don't put typically anything up in your C1 because that's the top of your head, right? But C2, 3, 4, 5, 6 and 7 and then that junction between C7 and T1, which C1 is your thoracic region. Again, every level has a facet. And facet treatment is the #1 procedure in the interventional market and ortho, neuro doctors also have to deal with the pain and facet issues. And so giving doctors an implant that's so minimal that can offer up, in our opinion, and of course, we have to prove it, but can offer that patient a minimally invasive approach to a lumbar fusion without having to put the big screws in there or anything that's more complicated, if you will, of a technology and certainly smaller versus bigger implants. And of course, not everyone is going to be an ideal candidate for AERO, just like not every patient is ideal for pedicle screws.

[Operator Instructions] Showing no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Trent Northcutt for any closing remarks.

Sorry, I had it on mute. I apologize. Thank you for joining us. We appreciate your time and interest in Aurora Spine. We are very excited on what's ahead. We appreciate your interest and support in Aurora Spine and looking forward to updating everyone in the coming months on our progress. We will be participating in the Lytham Partners Spring 2025 Investor Conference next week on May 29. And if you'd like to participate and meet with us, please reach out to Adam Lowensteiner from Lytham Partners, and we'd be happy to schedule a meeting. Thanks again, everyone, and have a great rest of your day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.