NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
CARLSBAD, Calif., April 27, 2018 — Aurora Spine Corporation (“Aurora Spine” or the “Company”) (TSXV:ASG) announces financial results for the year ended December 31, 2017.To our Shareholders:
2017 was a productive year for Aurora Spine. During 2017 we continued the integration of our family of products into our Screwless Procedure™, a cutting-edge surgical approach to spine fusion. The Screwless Procedure features: our ZIP® MIS Fusion Systems, our TiNano® Interbody cages, and our COMPASS 4D™ MIS lateral retractor system.Highlights from 2017 On April 12, 2017, Aurora announced the issuance of its United States Patent entitled, “Polyaxial Interspinous Fusion Implant and Bone Growth Stimulation System”. An addition to Aurora’s implant family of ZIP® ISPs, the Polyaxial ZIP® permits for full maneuverability of the implant components in difficult situations during minimally invasive fusion cases. Aurora will either develop this proprietary technology internally as funds permit or offer its new Polyaxial ZIP® Interspinous device patent for out-licensing or private label opportunities.
During the year, the Company reduced its General and Administrative and Professional Fee expenses in 2017 by a combined $218,234 or 16.7% as compared to 2016. Much of this expense reduction (over 50% from $254,160 in 2016 to $157,940 in 2017) was a result of Aurora successfully renegotiating a new lease with its landlord that terminates on March 31, 2023. The total expense reduction was even more significant in Q4. During the last quarter Operating expenses were lowered by more than $250,000 (16.8%) to $1,230,740 compared to $1,503,071 in Q4 2016.
Throughout 2017, the Company completed several private placements comprising both equity and debt. More than US$700,000 was raised to support operations and a significant portion of the funding came from a major shareholder and director of the Company.
The Company participated at the 2017 North American Spine Society Annual Meeting held in October 2017 at the Orange County Convention Center in Orlando, Florida. Aurora Spine showcased its Screwless Procedure™ product portfolio and highlighted its latest fusion technologies, including the patented ZIP® MIS Interspinous fusion systems.Highlights subsequent to year endOn February 6, 2018, the Company strengthened its balance sheet through completion of an equity offering for aggregate gross proceeds of more than US$740,000.In 2017, we continued driving growth by training surgeons and distributors on Aurora Spine’s unique technology and increasing the reach of our sales force.The management team also was able to achieve lower manufacturing costs on most of its Ti-PEEK products. As such, within cost of sales, Aurora recorded a non-cash adjustment to the inventory standard cost of these products, resulting in a one-time write down of approximately $405K. The adjustment resulted in a 7% decrease in gross margin for the year. Without the adjustment, margins would be little changed from the previous year. More importantly, going forward, the gross profit margin on these products will increase reflecting the lower inventory cost on the Company’s balance sheet.We are optimistic about 2018. We have added some outstanding surgeons to our customer base that value our products and wish to be a part of our success. We continue to review our new product development within the framework of financial responsibility to achieve our long-term growth and profitability objectives.We remain fully committed to developing our U.S. sales through engaging new and existing distributors and improving our direct relationship experience with our surgeons. This should allow us to generate increased sales and provide improved customer service going forward. In 2018 we also expect to strengthen our sales team in the U.S.We are certain that these initiatives will create value for our shareholders. Management and I thank our shareholders for their continued support in these endeavors. None of this would be possible without the dedication and commitment of our hardworking colleagues at Aurora. I want to thank them for the great accomplishments they have made this year, for Aurora and ultimately, for patients. They have embraced change and risen to the numerous challenges before them, and I am grateful for their ongoing support of our company and our mission.I would also like to thank you, our investors, for your continued support. Together, we have built a strong foundation, and I look forward to the opportunities ahead of us. I am truly grateful to be part of an organization that makes such a positive improvement in the lives of patients around the world.The Financial Statements together with the Management Discussion and Analysis can be found on SEDAR at www.sedar.com.Trent J. Northcutt
President and Chief Executive OfficerAbout Aurora Spine
Aurora Spine is focused on bringing new solutions to the spinal implant market through a series of innovative, minimally invasive, regenerative spinal implant technologies.For more information, please contact:Aurora Spine Corporation
Trent Northcutt Sarina Mason
President and Chief Executive Officer Chief Financial Officer
(760) 424-2004 (760) 424-2004
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