LIBERTY ALL STAR GROWTH FUND INC. Q4 FY2025 earnings call

Management highlighted fiscal 2025 as a solid year with record annual revenues and a first $5 million revenue quarter. The sales team was expanded in 2025, with 17 sales and marketing personnel currently, and plans to increase the sales force by 50% this year. New territories in the northwest and central US were covered. The company launched DEXA - L in the third quarter and has plans for two new product extensions later in 2026, including a SI joint pain product in disposable kit format and DEXA - fied versions of existing products. Financials showed Q4 2025 revenues at $5.02 million, up from prior quarters, with improved profit margins and EBITDA improvements due to higher sales and tight expense controls.

In the fourth quarter, Zip had sales increased around 24%. The Silo platform, primarily dominated by TFX, contributed solidly to revenue growth. DEXA - L was officially launched in the later part of the third quarter and is making strong inroads. Zip accounted for approximately 40% of the quarter's sales, Silo (TFX) around 60%, and DEXA - L is a growing contributor. For fiscal year 2025, Zip and Silo (TFX) were key drivers, with DEXA - L starting to make an impact on revenue contribution.

Management expects continued sales growth in 2026, with the sales force expansion to drive this. Anticipates the new products, especially DEXA - L and the upcoming extensions, to be growth catalysts. Mentions aiming for increased sales of biologics in 2026, which contributed 34% growth in 2025.

Risks include uncertainties related to FDA approval for products like the facet implant. Also, risks associated with forward - looking statements where actual performance may differ from projections, and risks related to competition and market acceptance of new products.

Q: Hey, good morning, guys. Congratulations on a solid quarter. Would like to dig into how sales are looking as we move forward into 2026. Of course, you're well into Q1. Are you seeing a continuation, as you've seen in Q4, of the increased demand?

A: Yeah, we've seen a Great adoption across the country. As we've hired new people, those people spend their first so many months gathering up momentum and really getting new facilities onboarded through back processes and engaging physicians in training. So we have seen great engagement from the markets. As we've seen for the last five plus years, the beginning of the year kind of starts a little slower and it ramps out through the year. So we do continue to see just the typical ebbs and flows of the annual cycle.

Q: And do you anticipate being full on cash flow positive moving throughout 2026, given you're basically right on the cusp right now? Is that... the direction that you see, or do you see Q1 will be traditionally a little bit slower, and then you'll see a ramp up going forward? What is the baseline that you're looking at on a quarterly basis throughout 2026?

A: Well, we always have seasonality. We talk about this year over year, so seasonality always kicks off for us in the beginning of the year, especially going towards the kickoff of the year. But I feel like we are landing in the right position to spring forward and continue to come off the momentum that we got at the close of the year. Second half of the year was very strong for us. So we had a slower start last year than the beginning of the year. So we are ahead of the curve this year than we were previous last year. But obviously we're always just striving for When the line extensions enter and then, of course, adding some new feet on the street, you get that big push towards the end of the year. So we're focused on each month and each quarter, but that's the second part of your question to answer your question. But the raising cash, we're not talking to anyone about raising cash. We've had some people approach us with it, but we get that on a pretty – pretty semi, you know, multiple monthable per month questions get asked to us. We want to raise money on a regular basis.

Q: The facets, you had sales of a facet come through, and it appears that you're going to be doing some optimization of this implant. When do you expect sales to come back online for a facet? And I apologize, I didn't catch it right off the first couple minutes I missed, so you might have covered this already, but when do you expect sales of a facet just to restart?

A: We don't know now because we have meetings with the FDA and we're discussing with them. We have nearly 50 patients that were already performed with the implant and the clinical results were outstanding. We couldn't be more proud of those results and patients are doing terrific. We have some questions and answers that we want to go back and forth with the FDA as we continue to build up the design history of the product and design the file of the product with the FDA and working closely with them to keep the product going forward. It is still FDA approved. The product is still FDA approved, but we both agreed between ourselves, Aurora, and the FDA that we would have this dialogue. So we don't know yet to answer your question. Sometime in the first half is my projection, but I don't have a crystal ball on that with the FDA.

Q: What are you most excited about as you go into 2026 for sales growth?

A: Well, people are coming to us looking to join Aurora's Fine, so I'm proud of that. It's set us on the hunt for trying to add people. People are hearing about Aurora, right? I'm excited that last year I made some promises to the street that we'd hit a $5 million quarter, and we did. I told the street last year that we'd get a $2 million quarter. We almost hit that. We were just a hair underneath that. I'm excited about our biologic portfolio that we brought into our company, which is going to give us a, it gave us in 2025, a 34% increase over 2024. And with more units sold in 2026, which is our goal, that'll be added with biologics. So you'll see that increase with it. And I'm really excited about how we have a longer runway this year for the DEXA - L product, which is the lumbar, which is a big, big ticket item. You know, it's got a low COG, very high reimbursement product, and it keeps us relevant with our ortho and neuro spine community. We just did a recent talk at the ISAS conference down in Florida where we had standing room only hearing about DEXA technology. So I'm still really bullish on the DEXA platform. And if you, if you heard my, you know, and read, you know, heard what I was talking about with DEXA products, I say it all the time. We're going to DEXA - fy everything that we can inside of Aurora and back that up with clinical data and, and, Nope. Did I lose you? No, I'm still here. Oh, yeah, I'm still there. Sorry, the phone cut out there. Apologies.

Q: Speaking of DEXA, the Salvo TFX, you plan to DEXA - fy that. Is that in the calling card for 2026?

A: You never know. Could be. Maybe. We'll see.

Q: And... I guess one of my last questions is you noted in the MD&A about the TFX and maybe some sort of contractual issue. Is that being sorted out with the vendor?

A: It is. I think that I can't comment on it because it is in a discussion, but yeah, I think we're making progress.