Aurora Spine Corporation (OTCQB:ASAPF) Q2 2022 Earnings Conference Call August 29, 2022 11:00 AM ET
Company Participants
Adam Lowensteiner – Investor Relations, Lytham Partners
Trent Northcutt – President & Chief Executive Officer
Chad Clouse – Chief Financial Officer
Conference Call Participants
Tom Fedichin – Microcap Connection
Operator
Good day, and welcome to the Aurora Spine Reports Second Quarter Fiscal Year 2022 Financial Results. All participants will be in listen only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. Please note that this event is being recorded.
I would now like to turn the conference over to Adam Lowensteiner, Vice President at Lytham Partners. Please go ahead.
Adam Lowensteiner
Thank you, Cole, and good morning, everyone, thank you all for joining us today to review the financial results for Aurora Spine for the second quarter ended June 30, 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 21(e) 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’re 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 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 comparable GAAP measures in accordance with SEC Regulation G can be found in the company’s earnings.
With that, I’d like to now turn over the call to Mr. Trent Northcutt, President and CEO of Aurora Spine. Trent, please proceed.
Trent Northcutt
Thank you, Adam. I’d like to welcome everyone to the Aurora Spine second quarter 2022 financial results conference call. Earlier today, we issued a press release detailing our financial results. Hopefully, you’ve had a chance to review this news release. But, if not, a copy can be found on our website at aurora-spine.com, that’s aurora, hyphen, spine.com under the Investor section and other financial websites, you’ll find more listings.
To lay out the agenda for today’s call, let me first summarize a few events of the quarter, including some of the brief commentary on the numbers. And then I’ll talk a bit about the status of each of our key initiatives and products, like ZIP and SiLO, as well as our initiatives on the Spine division, including the new DEXA line. Chad will then give you a recap of the financial results, and we can conduct a Q&A session at the end.
Key events in Q2, the market overview and dynamics of new products and clinical studies. The second quarter was one of the many accomplishments, a major highlight of today’s call are the financial results for the second quarter, which produced Aurora’s highest quarterly revenue on record. These results demonstrate that investments we placed in 2021 are starting to pay off, and our growth strategy is working.
In addition to higher revenue, we also delivered solid levels of gross profit margin, which has also revealed that we are selling more proprietary products. We also continue to sell DEXA-C on a limited basis in the second quarter, which is still in beta phase as we gear up for full launch phase later this year. I’ll expand on DEXA later in my comments.
On a micro level, the momentum we built in the past few quarters has continued into a second quarter. As the pandemic issue in healthcare seems to be mostly behind us and patients are coming out to take care of health issues and doctors are welcoming them back. Also, many doctors have pivoted during the pandemic to conduct their procedures at surgery centers, so they can schedule procedures and get them completed.
Aurora products like the ZIP and the SiLO are very compelling to doctors and their patients. For doctors, it means treating patients by conducting procedures in a minimally invasive manner. For patients, they undergo a minor procedure and can usually turn home in the same day, usually, resuming their normal activity and routines.
I believe that these reasons are — our products are able to gain in traction, and we’ve been able to have been receiving, in addition to our products, alternative ways for doctors to treat patients as little pain medication as possible, especially given the opioid epidemic that has hit the United States in the recent decade.
During the quarter, we continued to work diligently and put focus on our proprietary products by educating doctors through our cadaver lab training. In the quarter, we continued to train many doctors and pass more than 200 we’ve trained from last year.
We have stated — slated to conduct more sessions in the fall and on track to double the number of doctors we trained in 2021. The trainings are done in various cities throughout the United States and allows around 20 doctors to learn more about Aurora products, specifically the ZIP and the SiLO at the same turning.
The ZIP series continues to lead the charge for Aurora, which was 30.6% of the sales in the second quarter, or $1.2 million. Our clinical study for this product returning solid data and getting the product into the hands of many doctors that didn’t know it existed.
The product is a key value-add product to mini pain interventionalists who can now conduct a fusion procedure in a minimally invasive manner and incorporated such a therapy into their practice and patients, which they didn’t offer before.
The clinical trial for the ZIP continues and is growing very well. And as mentioned, it has attracted many new doctors to try the device and many have embraced it now and have incorporated into their practice.
Subsequent to the quarter end, we announced the FDA clearance of a new Lumbar Stenosis Indication for use in our ZIP family of MIS implants. Spinal Stenosis when the spinal canal narrows, which can lead back to leg pain. Adding Lumbar Stenosis to the existing FDA clearance indicates degenerative disc disease and spondylolisthesis, trauma or tumor allows physicians to identify and treat new patient population using the ZIP MIS implant device.
The receipt of this additional Lumbar Spinal Stenosis or LSS, indicated for the spine of ZIP MIS Interspinous Fusion System is another key milestone for Aurora Spine, and allows us to expand our spinal product portfolio and act as nice tailwind for the product series at which will open up to ZIP for more potential procedures and would be a more attractive option for doctors going forward.
SiLO, our SI Joint Device also was an important contributor to the company’s growth in the second quarter. Its revenues represented 23.5% of the total revenues in the quarter or nearly $1 million, as SI Joint Procedures continues to be adopted by paying doctors across the country, it is still in infancy and expects the SiLO franchise for its own right to have very positive future ahead.
As SI joint procedures continues to be adopted by paying doctors across the country, it is still in infancy and expect the SiLO franchise for its own right to have very positive future ahead.
As SI joint procedures continue to be introduced to the marketplace, we have been busy making sure that our current supply is available, but also working diligently with the FDA obtaining approvals on our next-generation SI joint system, the SiLO-TFX, which will be a titanium version with additional fixation capabilities. We continue to conduct biomechanical testing on the product, and the results are coming back positive. We are hopeful for an approval in the coming months.
Another area we have advanced our IP during the quarter is our DEXA technology platform. We have secured a key patent with the DEXA and we have hit the ground running with creating our first DEXA product, the DEXA-C, which sits a Cervical, which retained FDA clearance during the third quarter in 2021 and during the second quarter of 2022, we received 510(k) clearance on our DEXA SOLO-L, which stands for lumbar spinal fusion system, a 3D printed standalone anterior lumbar interbody fusion device, ALIF.
The device SOLO-L – sorry, the DEXA SOLO-L part of the DEXA Technology platform is a standalone device for anterior lumbar lateral — lumbar interbody fusion, the procedures in its first of its kind device for Lumbar Spine in the world. It’s also the first color-coded, bone-mimicking structure implant in the marketplace and will help doctors match the patient to the patient’s bone quality and density.
Now with two DEXA products with FDA clearance, we are in the miscibility product sets and inventory and expect to detail these products further in the second half of the year, as supply chain is currently ramping up. We are now working towards marketing of this product, including training, sessions and partnerships.
Before I pass the call over to Chad, it’s important to note that during the second quarter, we also continue to make advancements in our product pipeline has received a patent from the United States Patent Office for a spinal implant for motion preservation fusion. This patent covers the Aurora ZIPFlex, a technology for minimally invasive posterior interlaminar implant for motion preservation that can be adapted in a fusion or a non-fusion device, while implanting into a patient via small modular attachment.
This new patent covers interlaminar motion preservation, fusion and is also one device that could treat lumbar spinals generation. Such as Spinal Stenosis, we are continuing to work on our prototypes of the ZIPFlex and we expect to advance it during the 2023. This patent shows the improvements we have made with our intellectual property and patent portfolio. We have built Aurora — as we build Aurora and we continue to grow, which is also been important to our investors, we are consistently working and thinking about the next generation of proprietary products that makes it easier for the doctors and for the patients.
In summary, I’m extremely proud of our team’s performance and seeing focus on building this company. We are well positioned to take advantage of growth markets in several of our new proprietary products. We remain focused on penetrating these markets, furthering this year through continued training sessions and clinical trials.
Looking to the long-term, we are well positioned for success and especially, we have new products more clinical studies providing out our technologies and teaching for more doctors to use the Aurora products. We remain highly focused at the opportunities that are in front of us and continue to invest our growth with each of our major platforms, that’s ZIP, SILO and the DEXA platform.
I will now turn the call over to Chad Clouse, Aurora Spine’s CFO, who will review the second quarter financial results. Chad, please proceed.
Chad Clouse
Thank you, Trent. Before I proceed with my final remarks, I want to share that during the quarter, we implemented a new ERP system, which was a major improvement for Aurora going forward. This has already been extremely useful in managing the business and we anticipated to allow us to report financial results sooner, which is something I know investors have been requesting.
The numbers highlighted in detail in the press release, let me focus my comments in a few areas and by adding color where I can. Revenue during the second quarter of 2022 was $4.1 million, a 68% increase from $2.4 million in the second quarter of 2021, and a 15% sequential increase from the $3.6 million in the first quarter of 2022. The improvement in revenues was driven by a strong usage of proprietary products, especially the ZIP and SiLO devices, as well as the introduction of DEXA-C, whereby, Q2 was the first full quarter of selling that product.
Gross profit in the second quarter was $2.1 million, an increase of 113% from $1 million in the second quarter of 2021, and a 12.6% increase from $1.9 million in the first quarter of 2022. Gross margin was 22.6% in the second quarter of 2022, up from 41.4% recorded in the same quarter a year ago compared to approximately 53.5% of revenue in the first quarter of 2022.
Gross margin showed continued progress improvement on a year-over-year basis as more proprietary products are part of our revenues, we believe over time that margins have the capability of continued expansion beyond these levels, especially as proprietary product sales increased. Margins reflected in the second quarter would have been even better if it weren’t for the rise in shipping costs due to higher energy prices and inflationary pressures in the marketplace.
Total revenues in the second quarter were $2.4 million, slightly higher on a sequential basis from the first quarter of 2022, and elevated from Q2 a year ago of $1.9 million, as the company continues to make key investments to grow the business, which include new sales people conducting clinical studies, training sessions and R&D expenses towards new products.
Investors should anticipate these expenses to remain at these levels in the coming quarters, but should peak out next quarter as some R&D expenditures should come to an end. We do believe these investments will put the company in a proper position for accelerated growth and profitability.
EBITDAC, earnings before interest, tax, depreciation and stock-based compensation in the second quarter of 2022 was $96,000, an improvement from the first quarter of 2021, which was a loss of $154,000, compared year-over-year EBITDAC was a loss of $481,000, but included receipt of a PPP loan of $175,000.
Net loss in the second quarter was a negative $0.2 million, or $0.00 per basic and diluted share, an improvement from first quarter of 2022, which was a negative $0.4 million, or a negative $0.01 per basic and diluted share, an improvement from a net loss of $0.7 million, or a negative $0.01 compared to second quarter of 2021 results. These improvements come directly from improved sales and gross margin.
Turning to the balance sheet. The company ended the second quarter with $0.8 million in cash and cash equivalents, which we believe to be sufficient to fund the company in the coming quarters. Accounts receivable grew sequentially to approximately $4.1 million from $3.7 million in the first quarter, primarily due to very strong sales in June over the last month of the quarter, similar to what we experienced in the first quarter.
Thus said, the receivables peaked at the end of the second quarter. And since the quarter’s end, we have been recently successful in collecting some of these receivables, and believe we are on our way to receiving additional funds in the coming weeks.
We are constantly monitoring our receivables and working diligently to collect in a timely fashion. We also continued to build inventory, which increased a little over $0.5 million, as we conduct this additional training and start to also prepare kits for sales of new products.
While we have deployed a good amount of capital to these resources, we are hopeful some of these expenses will come to an end in the fourth quarter. We believe we have adequate liquidity to grow the company and achieve profitability.
That concludes my comments. I will now turn the conversation back to Trent.
Trent Northcutt
Thank you, Chad. Before we open the call to questions, I’d like to conclude that we believe that, we have put the company in a solid track for sizable growth. These several catalysts to take the company to the next level, we used the pandemic to make the investment internally and necessary expenditures to make sure the company captures the opportunities that are evolving in the spine and the pain care markets and the first half results of 2022 are demonstrating the success of these decisions.
Some of these new initiatives include building inventory and additional kits, and making some key new hires to improve our sales and our licensing efforts. We are very pleased with the progress of these investments and are very excited about the remainder of the year and beyond.
Given our very unique situation as an innovative medical device company, we remain very confident that our opportunities to create substantial long-term value and shareholder alike.
With that said, operator, we are ready for any questions.
Question-and-Answer Session
Operator
Thank you. And we will now begin the question-and-answer session. [Operator Instructions] And our first question today will come from Tom Fedichin with Microcap Connection. Please, go ahead.
Tom Fedichin
Good morning, guys. Congratulations on an excellent quarter. You guys — yeah, you’re saying what your — you’re doing what you’re saying and your sales are obviously proving it out. So congratulations.
A question, I guess, I have would be on DEXA-C, what sort of sales did you see in this quarter? I know — I think the previous quarter, I believe, was $280,000. Was it equivalent? So that’s the first question.
Second question is on doctors. You expressed a concern that doctors are going to take more time off this summer. Have you witnessed that? I’ve got a few more questions, but I’ll leave those two for now, and we can pick it up in a second.
Trent Northcutt
Yes. Thanks, Tom. Appreciate the kind words. In DEXA-C, yes, we continue to roll that product out in its alpha phase. But the good news is that, from the alpha phase, we now have received most of the kits that we were trying to build out. These are the individual instrumentation kits that allow the doctor to size which size implant they’re going to use.
So from alpha, we’ll now move to the beta phase here in September, and we’ll be able to move it into a beta phase. And then by the time we get to the fourth quarter, we should be able to go into almost a full release for the DEXA-C technology, which we’re really thrilled about. We were able to get a lot of manufacturing caught up in regards to the DEXA-C implants and a lot of it was waiting for some of the manufacturing. The supply chain had definitely slowed down, and that ties into next — your second question, which was vacation.
Yes, we did indeed see a lot of vacation. We saw some of this spark up during spring break. We saw people kind of taking a little extra time during spring break off. And that’s what was one of the indicators for us that people were going to be taking some extended vacation times this summer.
So yes, we saw a lot of that in — right away in July, where we saw people take not just a one-week vacation or two-week vacation. Sometimes they were three weeks or beyond even 20-plus days of vacation time, some different accounts that work with us, and we’ve heard about that from other companies as well that they had some doctors that took extended time off.
Tom Fedichin
Would you say that we are behind that, now that’s looking forward, it’s kind of full steam ahead. And in saying that, with DEXA-C and DEXA-L, is there any training required? So knowing you’re going to be doing a full rollout, will you be doing many more of these training sessions, but on DEXA-related products going forward?
Trent Northcutt
It’s a good question. So DEXA-C requires no training from the doctors. The doctors are very skilled in cervical fusions. And we’re really — it’s a nice procedure for them to replicate their existing technique. So we’ve done that with our instrumentation, the tooling that we’ve made. The instrument kits that we’ve made are intuitive. The doctors are familiar with it. We have another product in our portfolio, which is called the DISCOVERY cage, which is a cervical cage and it mimics that exact technique, which is a high-volume procedure.
These are the kind of procedures that doctors can put in eight, 10, even up to 20 implants per month versus, say, like a SiLO where a doctor might only do three or four procedures a month with a SiLO device. So, it’s a nice comparison between the two type implants. And we expect that the doctors will have no learning curve whatsoever to put DEXA-C implants.
Tom Fedichin
Perfect. Perfect. How many monthly buying, purchasing doctors do you have currently now versus, say, the previous months? I think it was 60 in Q1 or as high as 60, I should say. How many do you have today?
Trent Northcutt
Let me pull that up. But we are — Chad, you got something quicker than I got it right here. We are running between about 48 the doctors that we have. But we had added on from 48. I see here we have another 12 pain interventionalist, so that was an add-on to that. So, that puts us a little bit over 60 from 48 adding on.
Yes. So, it’s just head over but it’s consistent. The good news is that some of these customers that we see here that are returning customers each month, like they’re continuously using the product and not just a new name.
Tom Fedichin
Nice. Nice. And would you — with the training of SiLO — or actually, there’s no training for the DEXA, I should say. But with the rollout, would it go to all these previous like these existing monthly purchasing doctors, these kits that you’re producing. That’s the plan you’ll have as many kits as there are monthly purchasing doctors?
Trent Northcutt
Yeah. So if you remember in Q1, we talked about how we were planning a roundtable at the end of April. And we did that roundtable with — we had 10 scheduled doctors, nine of them were able to make it. It was a blend of ortho and neuro. We had doctors from universities from around the country of standard practice type of orthopedist or neurospine surgeons, all came in for that end of August, excuse me, end of April meeting, all nine of those, in fact, I should say all 10, because the one who couldn’t make was just on call, so she could make it. But all 10 of those doctors are going to use the DEXA-C implants. And we’ve gone from two users that we were part of that alpha phase now to four users, and then we’re going to move to all 10 of those users and beyond. And we will have — by the end of September, going into October, we will have over 40 instrument kits available for DEXA-C.
Tom Fedichin
Wonderful. Wonderful. Okay. Where do you see profitability? What’s the breakeven point for profitability going forward?
Trent Northcutt
It’s right there. Like I said before, it’s right about between like $1.1 million, $1.2 million right in that zone, which is where we’ve been able to get to month in and month out. And then we’ve had spikes where we’ll be able to get up to as high as $1.5 million. And I think that that’s just kind of the ebb and flow of the business, I expect the second half of this year, and I don’t think I answered one of your question, which was, do I see it coming back, people coming — people — kids are not going back to school. And it seems like all the schools are open now. And I think that that’s going to be key to the second half of this year is that the doctors are — have come off vacations, they’re now going back to their practices. Many of them had opened up surgery centers or expanded into surgery centers from the hospital. And that was part of the question I didn’t answer for you.
And then the second part of that is, yeah, I think that this moves us into that profitability area, because now we — now we’re going to be build a show, a new technology, and it won’t be an alpha phase, it will be into the beta phase, which will go into a full commercial launch here in the fourth quarter.
And those sales and those are higher volume units that we’ll be able to sell more of those units, be able to do more procedures. So our surgical count will go way up, and the kits will be available to us because we have those kits now being populated here in the office, and it will be sent out, and we do expect to be profitable in the fourth quarter.
Tom Fedichin
Wonderful, wonderful. Okay.
Chad Clouse
Let me jump in here real quick. Just so a part of that is our R&D is we’ve really spending a lot of money in R&D in the last couple of quarters, and we expect some of that to come to an end in Q3. So I think that will really help Q4 and the end of the year.
Tom Fedichin
Okay. Yeah. I, kind of, gathered that actually from when you were given your presentation, Chad. That’s great. Any supply chain issues at the moment?
Trent Northcutt
Well, we still dealt with a lot of — nothing that’s really glaring at the moment, but definitely, things are still trying to unstick themselves in the supply chain. It’s not — these are vendors that many of the other companies are using. So it’s not like one of our vendors is having problems over somebody else. I just think we’re getting caught up. I do think people are coming back to work. I hear a lot of that has to still do with the holidays — excuse me, the seasonality of the summer vacations and stuff.
And I believe that many of these vendors are now starting to try to pick up their strides, our DEXA manufacturers are right on pace. So they’re doing great. We’re on par with them, but the instrumentation was one of the delays that we had. And then the trade providers, people who make surgical kits, which actually moved us into another area where we had to be a little bit creative with how do we get surgical kits available.
And our engineering team, our head of our manufacturing came up with just a fantastic solution to allowing us to make new Rydel instrument kits. It’s a material that we’ve used in other caddies within our surgical kits and now we’ve been able to actually machine these new Rydel trays into full-size kits, which has been great for us, because they’re lower profile and thinner and the pain interventional doctors love it, because it fits into their autoclave and the surgery centers love it because it’s smaller and it’s lighter to carry. So this actually evolved us, and we’re now starting to make more of these smaller surgical kits that fit into the smaller surgery center’s autoclaves. So we’re kind of proud of ourselves on that model.
Tom Fedichin
Nice, nice. Can you speak about approval for SiLO-TFX? And I know we’re all anxiously anticipating the approval. Have you heard anything? And when would a full rollout of SiLO-TFX take place if approval has had?
Trent Northcutt
So, yes, we’ve had to do some additional testing, which we are conducting as we speak. This was — took us to an area where they were missing — in their comments, they said, we need this one more data point from Aurora, we were already queued up for that, just in case they asked on that, and we did that. And we’re in that testing cycle right now, and we will come off that testing cycle this month, we’ll actually finish it before the month even ends and today being the 29th.
So it’s coming right here to the — probably Wednesday or Thursday this week, and then we’ll go back with the testing data, which has been nothing but positive for Aurora in our device versus the predicate that we’re using and we will get that resubmitted, and that puts us back on the clock with the FDA with the remaining 30 days with the FDA.
So if in a best case scenario that they have, they have everything, say, no later than the — right after the Labor Day holiday, say, 6, 7 of September, they have everything in their hands. They could give us an FDA approval within that first week of October.
And then we would be able to do a couple of alpha cases before the year is over in, let’s say, towards December. But then that would give us a lot of time to ramp up and start to manufacturing. We’re ready for that, to manufacture the devices and we have key users that will be using the implant once we get an FDA approval, fingers are crossed, of course.
Tom Fedichin
Okay, okay. Are there any new device products that we can look forward to seeing in the latter half or hearing about that maybe haven’t been discussed. And, obviously, when I say, hearing about today, I’m not talking released, but just in development.
Trent Northcutt
Yes. We’re mostly focused on just the manufacturing and the rollout of all the technologies that we built over the last, say, in the last two years that we’ve been working on. It’s to get the DEXA-C implants out in a full-fledged, full marketing launch.
We do expect to do our first DEXA-L procedure before the year is over, which would be the replacement of our SOLO 3D-printed ALIF standalone system to be turned to a DEXA implant, and we do expect to at least have that device available to a couple of alpha users in the company.
And then, of course, we’re all optimistic that we’re going to get a TFX — SiLO-TFX approval, which would be the third product, so the DEXA-C, the DEXA-L the TFX, all will be used this year before the year is over. And then that would really queue us up nicely for next year, because – although DEXA-L and DEXA-C don’t need surgical training, the doctors are very familiar. TFX would go right into our training protocols for ZIP, SiLO in SiLO-TFX. So we would add that to our training protocols. And my suspicion would be that, we would have to probably increase our attendance locations, because I think we would have a windfall of doctors that would really want to be part of that TFX training protocol.
Tom Fedichin
Wonderful. Two more questions and I’ll leave it to others. So far, you’ve trained 200 doctors this year. And I believe you said, you plan on training another 200. Is that – was that correct for 2022?
Trent Northcutt
Between the trainings and the – the presenting to the ones like some who don’t necessarily go into a cadaver lab, they go into, say, saw bone training, or they have an in-office training. Yeah, we’re going to train more doctors, double it up from last year to this year, for sure.
Tom Fedichin
Okay. And do you foresee a $5 million quarter in the second half? You’ve done $4 million now, which is wonderful. Do you forecast, or do you see given the growth that doctor training, the adoption, new products, DEXA-L or actually DEXA-C first, DEXA-L will just be outside the stage at the end of the year. But do you forecast continued growth as we’ve seen and the possibility of a $5 million quarter?
Trent Northcutt
Yeah, without any real guidance on this, I am – I’m optimistic that we can get to that $5 million fourth quarter, right? I think in the fourth quarter, that if everything lines up the way we want it to, especially with everything, the products are rolling out. For us to achieve a $5 million quarter and then we also continue to expand it off that. I think you’ve heard me use words like springboard off each quarter, and we did that last year. Each quarter, we went through, we springboarded off of one quarter to the next quarter in a positive direction going upward that is.
And then reducing costs and then improving margin and able to really get closer and closer, and then — indeed show some profitability into the fourth quarter and then going into next year is our goal. So yeah, I think it’s there. It’s right there. It’s a matter of procedures. I’m not worried about the COVID. I’m not worried – not as worried about supply chain as I was in the first half of the year. It’s now we have to execute, and we’ve got the products to do it. And I know, the team is really excited about selling the DEXA technology and everyone’s been holding their breath all year long for the TFX, because it really gives us a lot to talk about. And we’ve got a training program in place for doctors to be ready to go on TFX, and then we’ve got early adopters and many people that we’ll be excited about DEXA-C, one, because we’re going to be participating at the North American Spine Society, NASS, which will be in Chicago this year.
Last year, NASS was in Boston. It was not well attended, and I think it had a lot to do with still the COVID and people traveling. But I think that, Chicago could be a better trade show. And if it is, I always run into new customers at NASS and this would – we have a full booth available. We’ll be able to do demonstrations in the booth to show the DEXA-C technology, and I think we’ll be able to pick up doctors, who want to use DEXA-L in the future and now start to shift over to the DEXA-C.
And if in October, we have a TFX announcement that would be a great place to introduce the TFX at the North American Spine Society Conference followed-up by our PSPS meeting, which is going to be in Las Vegas here also in October. So, we’re going to have a really busy trade show fourth quarter. We have a cadaver course coming up here in Austin here in September, and we have several products to introduce to these doctors throughout the rest of the year.
Tom Fedichin
Wonderful. And actually, I apologize. I do have one other question. It was actually towards — I gear towards Chad, and that was regarding the cash on the balance sheet of $750,000. You had mentioned you have enough cash to see it through. There’s no need to raise capital here. Can you elaborate on that? And I see the receivables have grown over $4 million.
Chad Clouse
Right.
Tom Fedichin
Have you been able to collect within a timely fashion? Is this just a function of the growth rate is increasing. And obviously, maybe you can just elaborate?
Chad Clouse
Sure. June was a very big month for us. I think it came in at $1.5 million. Obviously that puts our — that increase our receivables in and of itself. But yeah, we’ve started to focus — once we hit the $4 million mark, we really kind of bear down and focus on receivables. When I say, I think we’ve got enough cash and obviously that involves collecting receivables.
We haven’t really had any much loss there in the past and not too much in the future. So I believe, it’s almost all of it is collectible. And then, if we collect it in a timely fashion, like we’ve been trying to do. And we’ve been succeeding in the last month. I think we’re able to find the cash, and I don’t think we need to raise any.
Tom Fedichin
Okay. Perfect. Well, thank you, guys, for your time. I’ll leave it to others to ask questions as they will. But thank you again and congratulations on the wonderful quarter there, guys.
Trent Northcutt
Thank you, Tom.
Chad Clouse
Thanks Tom.
Operator
[Operator instructions] And this will conclude our question-and-answer session. I’d like to turn the conference back over to Trent Northcutt for any closing remarks.
Trent Northcutt
Thank you for joining us. We appreciate your time and interest in Aurora Spine. We are very excited about what’s ahead of us in 2022 and beyond. We look forward to speaking to many of you in the weeks ahead. If you have any questions, please reach out to Adam at 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 concluded. Thank you for attending today’s presentation. You may now disconnect your lines at this time.
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