SI-BONE, Inc. (NASDAQ:SIBN) Q2 2023 Earnings Conference Call August 7, 2023 4:30 PM ET Company Participants Conference Call Participants Operator Good afternoon, and welcome to SI-BONE's Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s call. As a reminder, this call is being recorded for replay purposes. And I would now like to turn the call over to Saqib Iqbal, Senior Director of ...

PART I [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents SI-BONE, Inc.'s unaudited condensed consolidated financial statements for Q1 2023, detailing financial position, operations, and cash flows, showing revenue growth and a reduced net loss [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets were **$149,076 thousand**, decreasing from **$157,552 thousand** at year-end 2022, primarily due to reduced short-term investments Condensed Consolidated Balance Sheets (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $128,401 | $137,611 | | **Total Assets** | **$149,076** | **$157,552** | | **Total Current Liabilities** | $16,628 | $21,178 | | **Total Liabilities** | **$55,117** | **$59,250** | | **Total Stockholders' Equity** | **$93,959** | **$98,302** | | **Total Liabilities and Stockholders' Equity** | **$149,076** | **$157,552** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q1 2023, revenue increased **46%** to **$32,708 thousand**, gross profit grew to **$26,784 thousand**, and net loss narrowed to **$11,125 thousand** or **($0.32) per share** Q1 2023 vs Q1 2022 Statement of Operations (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Revenue | $32,708 | $22,439 | | Gross Profit | $26,784 | $19,456 | | Loss from Operations | ($11,293) | ($16,868) | | Net Loss | ($11,125) | ($17,410) | | Net Loss Per Share | ($0.32) | ($0.52) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for Q1 2023 improved to **$10,753 thousand**, while investing activities provided **$11,703 thousand**, ending the period with **$22,969 thousand** in cash Q1 2023 vs Q1 2022 Cash Flows (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($10,753) | ($13,512) | | Net cash provided by (used in) investing activities | $11,703 | ($22,608) | | Net cash provided by financing activities | $1,205 | $169 | | **Net increase (decrease) in cash** | **$2,252** | **($36,090)** | | **Cash and cash equivalents at end of period** | **$22,969** | **$27,329** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details the company's business, accounting policies, debt structure, and stock-based compensation, focusing on minimally invasive surgical implants and revenue recognition - The company is a medical device firm specializing in a proprietary minimally invasive surgical implant system for sacroiliac joint fusion, with products including iFuse, iFuse-3D, iFuse-TORQ, and iFuse Bedrock Granite[25](index=25&type=chunk) Revenue by Geography (in thousands) | Region | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | United States | $30,450 | $20,367 | | International | $2,258 | $2,072 | | **Total** | **$32,708** | **$22,439** | - In January 2023, the company amended its loan agreement, borrowing **$36,000 thousand** to repay a previous **$35,000 thousand** facility and securing a new **$15,000 thousand** revolving credit facility[59](index=59&type=chunk) - The lender is now First-Citizens Bank & Trust Company following the failure of Silicon Valley Bank[59](index=59&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Cost of goods sold | $137 | $123 | | Sales and marketing | $2,910 | $2,594 | | Research and development | $752 | $633 | | General and administrative | $2,395 | $2,157 | | **Total** | **$6,194** | **$5,507** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 financial performance, highlighting **46%** revenue growth driven by case volumes and pricing, analyzing gross margin changes, operating expenses, and liquidity [Overview and Key Performance Indicators](index=25&type=section&id=Overview%20and%20Key%20Performance%20Indicators) This section outlines the company's focus on sacropelvic anatomy disorders, detailing key performance indicators and growth drivers including sales force expansion and new product launches - The company is focused on expanding its sales force, increasing surgeon engagement, launching new products, and improving operational efficiency to drive growth[88](index=88&type=chunk) U.S. Sales Force Composition | Role | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Territory Sales Managers | 87 | 88 | | Clinical Support Specialists | 67 | 66 | | Third-party Sales Agents | 126 | 66 | - As of March 31, 2023, over **2,300** surgeons in the U.S. and over **900** surgeons outside the U.S. have been trained and have used the iFuse system[96](index=96&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q1 2023 revenue increased **46%** to **$32,708 thousand**, driven by U.S. sales, while gross margin decreased to **82%** due to product mix and costs, and operating expenses rose **5%** Financial Performance Comparison (in thousands) | Metric | Q1 2023 | Q1 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $32,708 | $22,439 | $10,269 | 46% | | Gross Profit | $26,784 | $19,456 | $7,328 | 38% | | Gross Margin | 82% | 87% | - | - | | Total Operating Expenses | $38,077 | $36,324 | $1,753 | 5% | - The increase in U.S. revenue was due to higher case volumes and improved domestic average selling prices[122](index=122&type=chunk) - Gross margin decreased due to procedure and product mix from newly launched implants with higher costs, as well as increased depreciation and freight expenses[123](index=123&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, the company held **$86,000 thousand** in cash and marketable securities, expected to fund operations for 12 months, following a debt refinancing in January 2023 - The company had **$86,000 thousand** in cash and marketable securities as of March 31, 2023, and believes this is sufficient to fund operations for the next **12 months**[129](index=129&type=chunk)[131](index=131&type=chunk) - In January 2023, the company entered into an amended loan agreement, borrowing **$36,000 thousand** under a term loan maturing in 2027 and securing a **$15,000 thousand** revolver[133](index=133&type=chunk)[134](index=134&type=chunk) - The lender is now First-Citizens following the failure of SVB[134](index=134&type=chunk) Cash Flow Summary (in thousands) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Operating Activities | ($10,753) | ($13,512) | | Investing Activities | $11,703 | ($22,608) | | Financing Activities | $1,205 | $169 | [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "small reporting company," SI-BONE is not required to provide quantitative and qualitative disclosures about market risk - As a "small reporting company", SI-BONE is not required to provide quantitative and qualitative disclosures about market risk[146](index=146&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - Management concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective[149](index=149&type=chunk) - No changes were made to the company's internal controls over financial reporting during the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, internal control[150](index=150&type=chunk) PART II-OTHER INFORMATION [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions in the normal course of business but reports no pending matters currently deemed material - The company is not presently a party to any material legal proceedings that would have a material adverse effect on the company if determined adversely[152](index=152&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks including operating losses, reliance on the iFuse product family, supply chain disruptions, regulatory challenges, and intellectual property and financial market risks [Risks Related to Business and Industry](index=39&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Our%20Industry) The company faces business and industry risks including significant operating losses with an accumulated deficit of **$368,200 thousand**, high dependence on the iFuse product family, and supply chain disruptions - The company has a history of significant operating losses, with a net loss of **$11,100 thousand** for Q1 2023 and an accumulated deficit of **$368,200 thousand** as of March 31, 2023[157](index=157&type=chunk) - The business is highly dependent on revenue from a single family of products (iFuse, iFuse-3D, iFuse-TORQ, iFuse Bedrock Granite), making it vulnerable to market shifts or issues with this product line[194](index=194&type=chunk) - The company faces risks from prolonged inflation and supply chain disruptions, which could lead to higher costs, lost revenue, and decreased profit margins[160](index=160&type=chunk)[161](index=161&type=chunk) - Maintaining adequate coverage and reimbursement from third-party payors is critical, and any negative changes could significantly harm sales[163](index=163&type=chunk) [Risks Related to Legal and Regulatory Environment](index=57&type=section&id=Risks%20Related%20to%20Our%20Legal%20and%20Regulatory%20Environment) The company faces significant legal and regulatory risks, including compliance with FDA and foreign regulations, fraud and abuse laws, and challenges related to the new EU Medical Device Regulation (MDR) - The medical device industry is extensively regulated by the FDA and foreign agencies, and failure to comply with requirements for design, manufacturing, marketing, and sales could cause the business to suffer[236](index=236&type=chunk) - The company must comply with numerous U.S. federal and state fraud and abuse laws, including anti-kickback and false claims statutes, and failure to do so could result in significant penalties[247](index=247&type=chunk)[248](index=248&type=chunk) - Product modifications may require new 510(k) clearances or approvals, and a disagreement with the FDA on this could lead to marketing cessation or recalls[274](index=274&type=chunk) - The new EU Medical Device Regulation (MDR) introduces substantial changes and more stringent requirements, which will require a significant transition effort and could disrupt business in the EEA[288](index=288&type=chunk)[291](index=291&type=chunk) [Risks Related to Intellectual Property](index=71&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's intellectual property risks include the expiration of core U.S. patents on the iFuse implant in November 2024, potential patent litigation, and challenges in protecting trade secrets - The company's core U.S. patents on the triangular shape of the iFuse implant expire in November 2024, which could allow competitors to introduce similar products[298](index=298&type=chunk) - The company may be subject to costly patent litigation, as the medical device industry is characterized by frequent infringement claims, which could divert management attention and financial resources[307](index=307&type=chunk) - The company relies on trade secrets and confidentiality agreements, which may not provide meaningful protection if breached or if competitors independently develop similar technology[302](index=302&type=chunk) [Risks Related to Ownership of Common Stock](index=74&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Risks related to common stock ownership include price volatility, fluctuating operating results, adverse banking industry developments, and restrictive covenants in the company's debt agreement - The company's stock price may be volatile due to factors like fluctuating operating results, regulatory actions, and general market conditions for healthcare stocks[309](index=309&type=chunk) - Adverse events in the banking industry, such as the failure of Silicon Valley Bank, could affect the company's operations and liquidity, although access to funds was restored[325](index=325&type=chunk)[326](index=326&type=chunk) - The company's term loan with First-Citizens contains covenants that restrict certain business activities, and a breach could lead to default and acceleration of debt[329](index=329&type=chunk)[331](index=331&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There is nothing to report under this item for the period - Nothing to report[336](index=336&type=chunk) [Defaults Upon Senior Securities](index=80&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[337](index=337&type=chunk) [Mine Safety Disclosures](index=80&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[338](index=338&type=chunk) [Other Information](index=80&type=section&id=Item%205.%20Other%20Information) The company violated a debt covenant on March 10, 2023, by transferring funds from SVB, which was later waived, but future credit access requires transferring accounts back to First-Citizens - The company violated a debt covenant on March 10, 2023, by transferring funds from SVB to another bank[339](index=339&type=chunk) - A waiver was obtained on March 24, 2023, but access to the revolving line of credit is restricted until cash management accounts are moved back to First-Citizens[339](index=339&type=chunk) [Exhibits](index=81&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to loan agreements and officer certifications

SI-BONE, Inc. (NASDAQ:SIBN) Q1 2023 Earnings Conference Call May 1, 2023 4:30 PM ET Company Participants Marissa Bych - IR, Gilmartin Group Laura Francis - Chief Executive Officer Anshul Maheshwari - Chief Financial Officer Conference Call Participants Craig Bijou - Bank of America Drew Ranieri - Morgan Stanley Young Li - Jefferies Sam Brodovsky - Truist Dave Turkaly - JMP Securities Kyle Rose - Canaccord Ross Osborn - Cantor Fitzgerald David Saxon - Needham & Company Operator Good afternoon, and welcome to ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) SI-BONE specializes in proprietary minimally invasive surgical implant systems for sacropelvic disorders, marketed globally [Overview](index=8&type=section&id=Overview) **SI-BONE** focuses on minimally invasive surgical implant systems for sacropelvic disorders, with over **75,000 procedures** performed by year-end **2022** - The company specializes in minimally invasive surgical implant systems for sacropelvic anatomy, with key product lines including **iFuse**, **iFuse-3D**, **iFuse-TORQ**, and **iFuse Bedrock Granite**[20](index=20&type=chunk) - As of year-end **2022**, over **75,000 procedures** have been performed by more than **3,000 surgeons** across the U.S. and **38 other countries** since the first **iFuse** launch in **2009**[21](index=21&type=chunk) [Product and Applications](index=8&type=section&id=Product%20and%20Applications) The company's **iFuse** product line has evolved to include **3D-printed** and threaded implants, with the **Bedrock Granite** receiving **FDA Breakthrough Device Designation** and **NTAP** - The **iFuse** product line includes the original machined titanium implant (**2009**), the **iFuse-3D** with a proprietary **3D-printed** porous surface (**2017**), and the **iFuse-TORQ** threaded implant for trauma and **SI** joint applications (**2021**)[22](index=22&type=chunk)[24](index=24&type=chunk) - The **iFuse Bedrock Granite** implant, launched in May **2022**, is designed for sacroiliac fusion and sacropelvic fixation. It received **FDA Breakthrough Device Designation** and a **CMS New Technology Add-on Payment (NTAP)** effective October **1, 2022**[25](index=25&type=chunk) - The company also provides enabling technologies compatible with **Medtronic's** surgical navigation and **Mazor** robotic systems[26](index=26&type=chunk) [Market Opportunity](index=10&type=section&id=Market%20Opportunity) **SI-BONE** estimates its total U.S. addressable market at approximately **$3.0 billion**, segmented across sacroiliac joint dysfunction, adult deformity, and pelvic trauma U.S. Total Addressable Market Estimate | Market Segment | Estimated Annual Market Size | | :--- | :--- | | Sacroiliac Joint Dysfunction & Degeneration | ~$2.4 billion | | Adult Deformity & Degeneration | ~$250 million | | Pelvic Trauma | ~$350 million | | **Total** | **~$3.0 billion** | [Clinical Evidence](index=10&type=section&id=Clinical%20Evidence) The company's **iFuse** implants are supported by over **100 publications** and multiple clinical trials demonstrating safety, effectiveness, and economic utility - The company's products are supported by over **100 publications**, including two randomized controlled trials (**INSITE** and **iMIA**) and long-term follow-up studies (**LOIS**) showing sustained improvements in pain, disability, and quality of life for up to **five years**[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - The **SILVIA** trial, a randomized study of **iFuse-3D** in multilevel spine fusion, completed enrollment in **2022** with long-term results expected in **2024**[38](index=38&type=chunk) - The **SAFFRON** trial, a randomized study comparing **iFuse-TORQ** to non-surgical management for sacral fragility fractures, is currently enrolling with results anticipated in late **2024**[39](index=39&type=chunk) [Coverage and Reimbursement](index=13&type=section&id=Coverage%20and%20Reimbursement) Substantially all U.S. payors reimburse for sacroiliac joint fusion, with many providing exclusive positive coverage for **SI-BONE's** patented triangular implants - A significant number of U.S. payors provide exclusive positive coverage for **SI-BONE's** patented triangular titanium implants for sacroiliac joint fusion, based on the company's clinical evidence[43](index=43&type=chunk) [Healthcare Professional Training and Education](index=14&type=section&id=Healthcare%20Professional%20Training%20and%20Education) **SI-BONE** invests in educating healthcare professionals using a portable simulator, training over **2,200 U.S. surgeons** and **800 international surgeons** by year-end **2022** - The company utilizes **25 portable**, computer-based **SI-BONE SImulators** worldwide for surgeon training on **SI** joint fusion and **Bedrock** techniques without needing an operating room[47](index=47&type=chunk) Number of Trained Surgeons (Cumulative) | Region | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | U.S. | >2,200 | >1,800 | | International | >800 | >700 | [Sales and Marketing](index=15&type=section&id=Sales%20and%20Marketing) The company primarily uses a direct sales force in the U.S. and a mix of direct sales and distributors internationally, complemented by digital marketing efforts Sales Force Composition (as of Dec 31, 2022) | Region | Direct Employees (Managers & Specialists) | Third-Party Distributors | | :--- | :--- | :--- | | U.S. | 161 (88 managers, 73 specialists) | 105 | | International | 18 | 30 | [Competition](index=15&type=section&id=Competition) **SI-BONE** faces competition from larger medical device companies but differentiates itself through its unique implant design and extensive clinical evidence - Primary competitors in the U.S. are **Globus Medical, Inc.** and **Medtronic plc**. In Europe, they are **Globus Medical** and **SIGNUS Medizintechnik GmbH**[54](index=54&type=chunk) - The company differentiates itself through its triangular titanium implant design and extensive clinical evidence, including over **100 published papers**, which has resulted in exclusive reimbursement coverage from certain U.S. payors[55](index=55&type=chunk) [Intellectual Property](index=16&type=section&id=Intellectual%20Property) As of year-end **2022**, the company held **51 U.S.** and **16 foreign patents**, with key original **iFuse** patents expiring in November **2024** and **iFuse-3D** patents in September **2035** - As of year-end **2022**, the company held **51 issued U.S. patents** and **16 issued foreign patents**, with **32 U.S.** and **18 foreign applications** pending[56](index=56&type=chunk) - Key U.S. patents on the original **iFuse** triangular shape expire in November **2024**, while patents on the **iFuse-3D** design expire in September **2035**[56](index=56&type=chunk) [Regulation](index=18&type=section&id=Regulation) The company's products are subject to extensive **FDA** and international regulations, including **510(k)** clearance, **QSR**, fraud and abuse laws, and data privacy compliance - The company's products are regulated by the **FDA**, primarily through the **510(k)** premarket notification process for **Class II devices**[62](index=62&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk) - The **iFuse Bedrock Granite** implant received **FDA breakthrough device designation** in November **2021** and **510(k)** clearance in May **2022**, which facilitated obtaining a **New Technology Add-on Payment (NTAP)** from **CMS**[88](index=88&type=chunk) - Internationally, the company must comply with regulations such as the **EU's Medical Device Regulation (MDR)**, the **UK's UKCA mark** requirements, and Swiss medical device ordinances[80](index=80&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - The company is subject to federal and state fraud and abuse laws, including the **Anti-Kickback Statute** and the **Physician Payment Sunshine Act**, as well as data privacy laws like **HIPAA** in the U.S. and **GDPR** in the **EU**[95](index=95&type=chunk)[96](index=96&type=chunk)[100](index=100&type=chunk)[103](index=103&type=chunk) [Manufacturing and Supply](index=30&type=section&id=Manufacturing%20and%20Supply) **SI-BONE** outsources all manufacturing to third parties, primarily **rms Company (RMS)** as a sole source for key implants, requiring compliance with **FDA QSR** and **ISO 13485:2016** standards - The company relies on third-party manufacturers for all its products, with **rms Company (RMS)** being the primary and sole supplier for **iFuse-3D** and **iFuse-TORQ** implants[107](index=107&type=chunk)[108](index=108&type=chunk) - Manufacturing facilities are subject to **FDA's Quality System Regulation (QSR)** and international standards, and the company holds **ISO 13485:2016** certification for its Santa Clara and Gallarate locations[110](index=110&type=chunk)[111](index=111&type=chunk) [Human Capital Resources](index=30&type=section&id=Human%20Capital%20Resources) As of December **31, 2022**, the company had **357 employees**, emphasizing diversity, competitive compensation, and career development programs to manage attrition - As of December **31, 2022**, the company had **357 employees**, with a direct field sales organization of **161** in the U.S. and **18** in Europe[116](index=116&type=chunk) - The voluntary employee attrition rate was approximately **11%** in **2022**[116](index=116&type=chunk) - The company promotes diversity, with **four of nine board members** being women and two identifying as Asian American. It implemented a new career development program in **2022** to enhance employee retention[118](index=118&type=chunk)[124](index=124&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of operating losses, reliance on the **iFuse** product family, supply chain disruptions, and extensive regulatory and intellectual property challenges - The company has a history of significant operating losses (**$61.3M** in **2022**) and may not achieve or sustain profitability[132](index=132&type=chunk) - Business is highly dependent on revenue from the **iFuse** family of products, making it vulnerable to market shifts or issues with this single product line[164](index=164&type=chunk) - Risks include dependence on third-party payor coverage and reimbursement, which can be uncertain and subject to change, and pricing pressure from competitors and ambulatory surgical centers (**ASCs**)[137](index=137&type=chunk)[154](index=154&type=chunk)[157](index=157&type=chunk) - The company faces extensive governmental regulation (**FDA**, international bodies), and failure to comply with complex rules, including fraud and abuse laws, could result in severe penalties[211](index=211&type=chunk)[223](index=223&type=chunk) - Key patents for the original **iFuse** triangular shape expire in November **2024**, which may allow competitors to market similar devices[272](index=272&type=chunk) [Properties](index=69&type=section&id=Item%202.%20Properties) The company's headquarters and additional R&D/warehouse space are leased in Santa Clara, California, with smaller offices supporting European operations - The company leases its headquarters in Santa Clara, CA (approx. **21,848 sq. ft.**, lease expires May **2025**) and has additional leased facilities in California, Italy, Germany, and the **UK**[297](index=297&type=chunk) [Legal Proceedings](index=69&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings that would have a significant adverse effect on its operations - The company is not currently involved in any material legal proceedings[298](index=298&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=70&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on **Nasdaq Global Market** under '**SIBN**', with no cash dividends ever paid or planned for the foreseeable future - Common stock is listed on the **Nasdaq Global Market** under the symbol "**SIBN**"[302](index=302&type=chunk) - The company has never declared or paid cash dividends and does not plan to in the foreseeable future[304](index=304&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=71&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In **2022**, revenue grew **18%** to **$106.4 million**, but net loss widened to **$61.3 million** due to increased operating expenses, though liquidity is deemed sufficient for the next **12 months** [Impact of COVID-19 Pandemic](index=71&type=section&id=Impact%20of%20COVID-19%20Pandemic) The **COVID-19** pandemic continues to negatively impact revenues through case deferrals and disrupt the global supply chain for instruments and implants - The **COVID-19** pandemic has negatively impacted revenues through case deferrals and has caused disruptions in the global supply chain, leading to delays, product shortages, and rising costs for instruments and implants[312](index=312&type=chunk)[314](index=314&type=chunk) [Factors Affecting Results of Operations and Key Performance Indicators](index=72&type=section&id=Factors%20Affecting%20Results%20of%20Operations%20and%20Key%20Performance%20Indicators) Performance is driven by expanding solutions access, increasing surgeon penetration, and new product launches, supported by sales force growth and R&D investment - The U.S. sales force grew to **88 territory managers** and **73 clinical support specialists** by the end of **2022**, up from **85** and **65** respectively at the end of **2021**[319](index=319&type=chunk) - Average revenue per U.S. territory manager increased to approximately **$1.21 million** in **FY2022**, up from **$1.06 million** in **FY2021**[332](index=332&type=chunk) - The number of U.S. surgeons trained on **iFuse** grew from over **1,800** at **YE 2021** to over **2,200** at **YE 2022**[325](index=325&type=chunk) - R&D spending was **$13.6 million** in **2022**, representing **13%** of revenue, focused on new solutions and clinical trials like **SILVIA** and **SAFFRON**[328](index=328&type=chunk) [Results of Operations](index=77&type=section&id=Results%20of%20Operations) For **2022**, revenue increased **18%** to **$106.4 million**, but gross margin declined and operating expenses rose, leading to a wider net loss of **$61.3 million** Comparison of Operations (2022 vs 2021) | Metric | 2022 (in thousands) | 2021 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Revenue | $106,409 | $90,152 | 18% | | Gross Profit | $90,704 | $79,724 | 14% | | Gross Margin | 85% | 88% | -3 pts | | Total Operating Expenses | $150,313 | $131,394 | 14% | | Loss from Operations | ($59,609) | ($51,670) | 15% | | Net Loss | ($61,256) | ($56,572) | 8% | - The **$16.3 million** revenue increase was primarily driven by a **$16.0 million** rise in U.S. revenue due to higher case volumes from an expanding sales force and surgeon base[349](index=349&type=chunk) - Sales and marketing expenses increased by **$13.8 million (15%)** mainly due to higher employee-related costs and commissions from increased headcount and revenue[351](index=351&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=Liquidity%20and%20Capital%20Resources) As of December **31, 2022**, the company had **$97.3 million** in cash and marketable securities, with a net loss of **$61.3 million**, and refinanced its term loan in January **2023** Cash and Debt Position (Year-End) | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and Marketable Securities | $97.3 million | $147.0 million | | Outstanding Debt | $35.2 million | $35.0 million | | Accumulated Deficit | ($357.1 million) | ($295.8 million) | Cash Flow Summary | Cash Flow Activity | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($41,655) | ($39,533) | | Net cash (used in) provided by investing activities | ($2,815) | $51,580 | | Net cash provided by (used in) financing activities | $2,197 | ($1,711) | - In January **2023**, the company refinanced its debt, repaying a **$35.0 million SVB** term loan and entering into a new agreement with **SVB** for a **$36.0 million** term loan and a **$15.0 million** revolving credit facility[364](index=364&type=chunk)[537](index=537&type=chunk) [Critical Accounting Policies, Significant Judgments, and Use of Estimates](index=83&type=section&id=Critical%20Accounting%20Policies%2C%20Significant%20Judgments%2C%20and%20Use%20of%20Estimates) Critical accounting policies involve significant judgments in revenue recognition upon procedure completion and valuing stock-based compensation using **Monte-Carlo** simulations - Revenue is primarily recognized upon completion of a surgical procedure and customer authorization, as this is when control of the product is transferred[374](index=374&type=chunk)[375](index=375&type=chunk) - The fair value of performance-based restricted stock units with market conditions is estimated using a **Monte-Carlo** simulation, a key area of management judgment[376](index=376&type=chunk) [Financial Statements and Supplementary Data](index=85&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements, audited by **PricewaterhouseCoopers LLP** with an unqualified opinion, detail the company's financial position and results, highlighting revenue recognition as a critical audit matter [Report of Independent Registered Public Accounting Firm](index=86&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) **PricewaterhouseCoopers LLP** issued an unqualified opinion on the financial statements, identifying U.S. implantation product sales revenue recognition as a critical audit matter - The auditor, **PricewaterhouseCoopers LLP**, issued an unqualified (clean) opinion on the company's consolidated financial statements[384](index=384&type=chunk) - The auditor identified Revenue Recognition for U.S. implantation product sales as a **Critical Audit Matter**, citing the high degree of auditor effort involved in testing these transactions[389](index=389&type=chunk)[390](index=390&type=chunk) [Consolidated Financial Statements](index=88&type=section&id=Consolidated%20Financial%20Statements) The financial statements show total assets of **$157.6 million** and a net loss of **$61.3 million** for **2022**, with stockholders' equity decreasing to **$98.3 million** Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash, cash equivalents & short-term investments | $97,290 | $146,979 | | Accounts receivable, net | $20,674 | $14,246 | | Inventory | $17,282 | $11,498 | | **Total Assets** | **$157,552** | **$190,506** | | **Liabilities & Equity** | | | | Total current liabilities | $21,178 | $16,890 | | Long-term borrowings | $35,171 | $34,973 | | **Total Liabilities** | **$59,250** | **$56,086** | | **Total Stockholders' Equity** | **$98,302** | **$134,420** | Consolidated Statement of Operations Data (in thousands) | Account | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Revenue | $106,409 | $90,152 | | Gross Profit | $90,704 | $79,724 | | Loss from Operations | ($59,609) | ($51,670) | | Net Loss | ($61,256) | ($56,572) | | Net Loss Per Share | ($1.79) | ($1.71) | [Notes to Consolidated Financial Statements](index=92&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail revenue recognition, debt agreements including a January **2023** refinancing, significant **NOL** carryforwards with a full valuation allowance, and a related party joint development agreement - The majority of revenue is recognized upon completion of the surgical procedure and customer authorization, net of any rebates or discounts[434](index=434&type=chunk) - As of Dec **31, 2022**, the company had a **$35.0 million** term loan with **SVB**, which was refinanced in January **2023**. The loan is secured by substantially all company assets except intellectual property[483](index=483&type=chunk) - As of Dec **31, 2022**, the company had federal and state **Net Operating Loss (NOL)** carryforwards of **$298.6 million** and **$238.7 million**, respectively. A full valuation allowance is maintained against these deferred tax assets[521](index=521&type=chunk) - The company has a joint development agreement with **SeaSpine**, a related party, for a next-generation device, involving reimbursement payments and future royalties[533](index=533&type=chunk)[534](index=534&type=chunk)[535](index=535&type=chunk) [Controls and Procedures](index=118&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December **31, 2022**, with no auditor attestation required as a smaller reporting company - Management concluded that as of December **31, 2022**, the company's disclosure controls and procedures were effective at the reasonable assurance level[545](index=545&type=chunk) - Management concluded that internal control over financial reporting was effective as of December **31, 2022**. An auditor's attestation report was not included as the company is exempt as a "smaller reporting company"[546](index=546&type=chunk) Part III [Directors, Executive Compensation, Security Ownership, and Principal Accountant Fees](index=119&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) This section incorporates information on directors, executive compensation, security ownership, and principal accountant fees by reference from the forthcoming **2023 Proxy Statement** - Information for **Items 10 (Directors, Executive Officers and Corporate Governance), 11 (Executive Compensation), 12 (Security Ownership), 13 (Certain Relationships and Related Transactions)**, and **14 (Principal Accountant Fees and Services)** is incorporated by reference from the company's **2023 Proxy Statement**, to be filed within **120 days** of the fiscal year-end[551](index=551&type=chunk)[553](index=553&type=chunk)[554](index=554&type=chunk)[555](index=555&type=chunk)[556](index=556&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=120&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the **10-K**, including corporate governance documents, material agreements, and various certifications - This section provides an index of all exhibits filed with the **10-K**, including corporate governance documents, material agreements (such as the loan agreement with **SVB** and manufacturing agreement with **rms Company**), and executive compensation plans[559](index=559&type=chunk)[560](index=560&type=chunk)[563](index=563&type=chunk)

SI-BONE, Inc. (NASDAQ:SIBN) Q4 2022 Earnings Conference Call February 27, 2023 4:30 PM ET Company Participants Saqib Iqbal - Director of Investor Relations Laura Francis - Chief Executive Officer Anshul Maheshwari - Chief Financial Officer Conference Call Participants Kyle Rose - Canaccord David Rescott - Truist Securities Craig Bijou - Bank of America Ross Osborn - Cantor Fitzgerald Dave Turkaly - JMP Securities Drew Ranieri - Morgan Stanley David Saxon - Needham & Company Operator Good afternoon, and welc ...

SI-BONE 1 Corporate Overview February 2023 Safe Harbor Statement This presentation contains "forward-looking statements," which are statements related to events, results, activities or developments that SI-BONE expects, believes or anticipates will or may occur in the future. Forward-looking often contain words such as "intends," "estimates," "anticipates," "hopes," "projects," "plans," "expects," "seek," "believes," "see," "should," "will," "would," "target," and similar expressions and the negative versio ...

SI-BONE, Inc. (NASDAQ:SIBN) Q3 2022 Earnings Conference Call November 7, 2022 4:30 PM ET Company Participants Marissa Bych - IR, Gilmartin Group Laura Francis - Chief Executive Officer Anshul Maheshwari - Chief Financial Officer Conference Call Participants Kyle Rose - Canaccord Craig Bijou - Bank of America David Rescott - Truist Securities Andrew Ranieri - Morgan Stanley David Turkaly - JMP Securities Ross Osborn - Cantor Fitzgerald Young Li - Jefferies David Saxon - Needham & Company Operator Good aftern ...

SI-BONE 1 Corporate Overview June 2022 Safe Harbor Statement This presentation contains "forward-looking statements," which are statements related to events, results, activities or developments that SI-BONE expects, believes or anticipates will or may occur in the future. Forward-looking often contain words such as "intends," "estimates," "anticipates," "hopes," "projects," "plans," "expects," "seek," "believes," "see," "should," "will," "would," "target," and similar expressions and the negative versions t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-38701 SI-BONE, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 26-2216351 (State or O ...

SI-BONE, Inc. (NASDAQ:SIBN) Q2 2022 Earnings Conference Call August 8, 2022 4:30 PM ET Company Participants Matt Bacso - IR, Gilmartin Group Laura Francis - Chief Executive Officer Anshul Maheshwari - Chief Financial Officer Conference Call Participants David Saxon - Needham & Company Craig Bijou - Bank of America David Rescott - Truist Securities Andrew Ranieri - Morgan Stanley David Turkaly - JMP Securities Operator Good afternoon, and welcome to SI-BONE's Second Quarter Earnings Conference Call. At this ...