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What changed in SI-BONE, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SI-BONE, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+463 added−480 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-27)

Top changes in SI-BONE, Inc.'s 2024 10-K

463 paragraphs added · 480 removed · 341 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

95 edited+25 added−23 removed118 unchanged
Biggest changeOther competitors have entered the market with allograft bone implants marketed as human tissue products and intended for sacroiliac stabilization and/or fusion. Many of these competitors are smaller companies and target interventional pain and other physicians not trained as orthopedic and neurological surgeons for use of these products. We also expect there to be a continued push for non-surgical alternatives.
Biggest changeThis allows them to create an ecosystem with their implant systems that can be difficult to penetrate. Other competitors have entered the market with allograft bone implants marketed as human tissue products and intended for sacroiliac stabilization and/or fusion.
Our medical affairs team works with leading spine surgeons to educate other orthopedic and neurosurgeons on the differential diagnosis of sacroiliac joint disorders and the use of our implants. Our non-surgeon physician training programs focus on interventionalists, who are generally trained as anesthesiologists, interventional radiologists, or physical medicine and rehabilitation specialists.
Our medical affairs team works with leading physician and spine surgeons to educate other orthopedic and neurosurgeons on the differential diagnosis of sacroiliac joint disorders and the use of our implants. Our non-surgeon physician training programs focus on interventionalists, who are generally trained as anesthesiologists, interventional radiologists, or physical medicine and rehabilitation specialists.
Submission and FDA approval of a premarket approval, or PMA, application is required before marketing of a Class III device can proceed. 510(k) Clearance To obtain 510(k) clearance for a medical device, an applicant must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a legally marketed device, known as a “predicate device.” A legally marketed predicate device may include a device that was legally marketed prior to May 28, 1976 for which a PMA is not required (known as a “pre-amendments device” based on the date of enactment of the Medical Device Amendments of 1976), a device that has been reclassified from Class III to Class II or Class I, or a device that was found substantially equivalent through the 510(k) process.
Submission and FDA approval of a PMA application is required before marketing of a Class III device can proceed. 510(k) Clearance To obtain 510(k) clearance for a medical device, an applicant must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a legally marketed device, known as a “predicate device.” A legally marketed predicate device may include a device that was legally marketed prior to May 28, 1976 for which a PMA is not required (known as a “pre-amendments device” based on the date of enactment of the Medical Device Amendments of 1976), a device that has been reclassified from Class III to Class II or Class I, or a device that was found substantially equivalent through the 510(k) process.
There are also criminal penalties for making or presenting a false or fictitious or fraudulent claim to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, which imposes criminal and civil liability for, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program including private third-party payors, or knowingly and willfully falsifying, concealing, or covering up a material fact or making a materially false, fictitious, or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items, or services; • the federal Physician Payment Sunshine Act, implemented by the Centers for Medicare & Medicaid Services (“CMS”) as the Open Payments program, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS, information related to payments and other “transfers of value” made to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (including physician assistants and nurse practitioners), and teaching hospitals, and requires applicable manufacturers to report annually to CMS ownership and investment interests held by physicians and their immediate family members and payments or other “transfers of value” to such physician owners; • analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers and patients; state and foreign laws that require device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and foreign beneficiary inducement laws, and state and foreign laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
There are also criminal penalties for making or presenting a false or fictitious or fraudulent claim to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, which imposes criminal and civil liability for, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program including private third-party payors, or knowingly and willfully falsifying, concealing, or covering up a material fact or making a materially false, fictitious, or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items, or services; • the federal Physician Payment Sunshine Act, implemented by the Centers for CMS as the Open Payments program, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS, information related to payments and other “transfers of value” made to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (including physician assistants and nurse practitioners), and teaching hospitals, 19 and requires applicable manufacturers to report annually to CMS ownership and investment interests held by physicians and their immediate family members and payments or other “transfers of value” to such physician owners; • analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers and patients; state and foreign laws that require device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and foreign beneficiary inducement laws, and state and foreign laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
These include: • product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; • investigational device exemptions to conduct premarket clinical trials, which include extensive monitoring, recordkeeping, and reporting requirements in compliance with good clinical practices (“GCP”) and with institutional review board (“IRB”) oversight; • Quality System Regulation (“QSR”), which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process; • labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication; • clearance of product modifications that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; • approval of product modifications that affect the safety or effectiveness of one of our approved devices; • medical device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur; • post-approval restrictions or conditions, including post-approval study commitments; • post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; • the FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations; • regulations pertaining to voluntary recalls; and • notices of corrections or removals.
These include: • product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; • investigational device exemptions to conduct premarket clinical trials, which include extensive monitoring, recordkeeping, and reporting requirements in compliance with good clinical practices (“GCP”) and with institutional review board (“IRB”) oversight; • Quality System Regulation (“QSR”) and Quality Management System Regulation ("QMSR"), which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process; • labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication; • clearance of product modifications that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; • approval of product modifications that affect the safety or effectiveness of one of our approved devices; • medical device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur; • post-approval restrictions or conditions, including post-approval study commitments; • post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; • the FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations; • regulations pertaining to voluntary recalls; and • notices of corrections or removals.
In the United States, our first-generation iFuse implants and our iFuse-3D implants are intended for sacroiliac fusion for the following conditions: sacroiliac joint dysfunction that is a direct result of sacroiliac joint disruptions and degenerative sacroiliitis, which includes conditions where symptoms began during pregnancy or in the peripartum period and have persisted postpartum for more than six months; to augment immobilization and stabilization of the sacroiliac joint in skeletally mature patients undergoing sacropelvic fixation as part of a lumbar or thoracolumbar fusion; and acute, non-acute, and non-traumatic fractures involving the sacroiliac joint.
In the United States, our first-generation iFuse implants and our iFuse-3D implants are intended for sacroiliac fusion for the following conditions: sacroiliac joint dysfunction that is a direct result of sacroiliac joint disruptions and degenerative sacroiliitis, which includes conditions where symptoms began during pregnancy or in the peripartum period and have persisted postpartum for more than six months; to 17 augment immobilization and stabilization of the sacroiliac joint in skeletally mature patients undergoing sacropelvic fixation as part of a lumbar or thoracolumbar fusion; and acute, non-acute, and non-traumatic fractures involving the sacroiliac joint.
These obligations may include limiting personal data processing to only what is necessary for specified, explicit, and legitimate purposes; requiring a legal basis for personal data processing; requiring the appointment of a data protection officer in certain circumstances; increasing transparency obligations to data subjects; requiring data protection impact assessments in certain circumstances; limiting the collection and retention of personal data; increasing rights for data subjects; formalizing a heightened and codified standard of data subject consents; requiring the implementation and maintenance of technical and organizational safeguards for personal data; mandating notice of certain personal data breaches to the relevant supervisory authority(ies) and affected individuals; and mandating the appointment of representatives in the UK and/or the EU in certain circumstances.
These obligations may include limiting personal data processing to only what is necessary for specified, explicit, and legitimate purposes; requiring a legal basis for personal data processing; requiring the appointment of a data protection officer in certain circumstances; increasing transparency 20 obligations to data subjects; requiring data protection impact assessments in certain circumstances; limiting the collection and retention of personal data; increasing rights for data subjects; formalizing a heightened and codified standard of data subject consents; requiring the implementation and maintenance of technical and organizational safeguards for personal data; mandating notice of certain personal data breaches to the relevant supervisory authority(ies) and affected individuals; and mandating the appointment of representatives in the UK and/or the EU in certain circumstances.
The laws that may affect our ability to operate include: • the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order, arrangement for, or recommendation of, items or services for which payment 18 may be made, in whole or in part, under federal healthcare programs, such as the Medicare and Medicaid programs.
The laws that may affect our ability to operate include: • the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order, arrangement for, or recommendation of, items or services for which payment may be made, in whole or in part, under federal healthcare programs, such as the Medicare and Medicaid programs.
The following are the primary competitive factors on which companies compete in our industry: • product and clinical procedure effectiveness; • ease of surgical technique and use of associated instruments; • safety; • published clinical outcomes and evidence; • sales force effectiveness; • product support and service, and customer service; • comprehensive training, including disease, anatomy, diagnosis and treatment; • product innovation and the speed of innovation; • intellectual property; • accountability and responsiveness to customers’ demands; • scientific (biomechanics) data; and • pricing and reimbursement.
The following are the primary competitive factors on which companies compete in our industry: • clinical data; • product and clinical procedure effectiveness; • ease of surgical technique and use of associated instruments; 12 • safety; • published clinical outcomes and evidence; • sales force effectiveness; • product support and service, and customer service; • comprehensive training, including disease, anatomy, diagnosis and treatment; • product innovation and the speed of innovation; • intellectual property; • accountability and responsiveness to customers’ demands; • scientific (biomechanics) data; and • pricing and reimbursement.
Because patent applications can take many years to issue, there may be applications currently unknown to us, which may later result in issued patents that our existing or future products or proprietary technologies may be alleged and/or found to infringe. 12 There has been substantial litigation regarding patent and other intellectual property rights in the medical device industry.
Because patent applications can take many years to issue, there may be applications currently unknown to us, which may later result in issued patents that our existing or future products or proprietary technologies may be alleged and/or found to infringe. There has been substantial litigation regarding patent and other intellectual property rights in the medical device industry.
The fusion sleeve provides numerous means for biological fixation (bony on-growth, in-growth and through-growth). The robust neck and the set screw design also provide more strength and reliability to the iFuse Bedrock Granite implant. Based on the implant's ability to drive fusion and fixation, iFuse 5 Bedrock Granite is designated by the FDA as a breakthrough device.
The fusion sleeve provides numerous means for biological fixation (bony on-growth, in-growth and through-growth). The robust neck and the set screw design also provide more strength and reliability to the iFuse Bedrock Granite implant. Based on the implant's ability to drive fusion and fixation, iFuse Bedrock Granite is designated by the FDA as a breakthrough device.
In April 2019, we received clearance from the United States Food and Drug Administration, or FDA, to promote the use of our iFuse-3D implants for fusion of the sacroiliac joint in conjunction with multi-level spinal fusion procedures to provide further stabilization and immobilization of the sacroiliac joint, which we call the Bedrock technique.
In April 2019, we received clearance from the United States Food and Drug Administration ("FDA") to promote the use of our iFuse-3D implants for fusion of the sacroiliac joint in conjunction with multi-level spinal fusion procedures to provide further stabilization and immobilization of the sacroiliac joint, which we call the Bedrock technique.
Procurement of certain human organs and tissue for transplantation is subject to the restrictions of the National Organ Transplant Act (NOTA), which prohibits the transfer of certain human organs, including bone tissue for valuable consideration, but permits reasonable payments associated with removal, transportation, implantation, processing, preservation, quality control and storage.
Procurement of certain human organs and tissue for transplantation is subject to the restrictions of the National Organ Transplant Act ("NOTA"), which prohibits the transfer of certain human organs, including bone tissue for valuable consideration, but 15 permits reasonable payments associated with removal, transportation, implantation, processing, preservation, quality control and storage.
In 2022, the FDA provided clearance for an expanded indication for iFuse-TORQ to include acute, non-acute and non-traumatic fractures as well as for placement across the sacroiliac joint using our Bedrock technique. In May 2022, we launched our iFuse Bedrock Granite Implant System.
In 2022, the FDA provided clearance for an expanded indication for iFuse TORQ to include acute, non-acute and non-traumatic fractures as well as for placement across the sacroiliac joint using our Bedrock technique. 5 In May 2022, we launched our iFuse Bedrock Granite Implant System.
Data Privacy and Security Laws 19 In the ordinary course of our business, we may process personal or sensitive data. Accordingly, we are, or may become, subject to numerous data privacy and security obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards related to data privacy and security.
Data Privacy and Security Laws In the ordinary course of our business, we process personal or sensitive data. Accordingly, we are, or may become, subject to numerous data privacy and security obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards related to data privacy and security.
Pervasive and Continuing Regulation After a device is placed on the market, numerous regulatory requirements continue to apply. 15 We have registered our facility with the FDA as a medical device manufacturer. The FDA has broad post-market and regulatory enforcement powers.
Pervasive and Continuing Regulation After a device is placed on the market, numerous regulatory requirements continue to apply. We have registered our facility with the FDA as a medical device manufacturer. The FDA has broad post-market and regulatory enforcement powers.
To demonstrate compliance with the GSPRs provided in the Medical Device Regulation and obtain the right to affix the CE mark, medical devices manufacturers must conduct a conformity assessment procedure, which varies according to the type of medical device and its classification.
To demonstrate compliance with the GSPRs provided in the Medical Device Regulation and obtain the right to affix the CE mark, medical devices manufacturers must conduct a conformity assessment procedure, which 16 varies according to the type of medical device and its classification.
Following a successful assessment process, the Notified Body issues a CE Certificate of Conformity. This Certificate and completion of the related conformity assessment process 16 entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EU Declaration of Conformity.
Following a successful assessment process, the Notified Body issues a CE Certificate of Conformity. This Certificate and completion of the related conformity assessment process entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EU Declaration of Conformity.
Regulation of Human Cell and Tissue Based Products Our iFuse Bone products are derived from human tissue (demineralized bone tissue). The FDA has specific regulations governing human cells, tissues, and cellular and tissue-based products ("HCT/Ps").
Regulation of Human Cell and Tissue Based Products Our iFuse INTRA products are derived from human tissue (demineralized bone tissue). The FDA has specific regulations governing human cells, tissues, and cellular and tissue-based products ("HCT/Ps").
The UK Government has established transitional provision to recognize the acceptance of CE marked medical devices on the Great Britain market. Regulatory Status In November 2008, we received 510(k) clearance to market our first generation iFuse implant from the FDA. Since 2008, we have received additional FDA 510(k) clearances for new instruments, additional implant sizes and labeling changes.
The UK Government has established transitional provisions to recognize the acceptance of CE marked medical devices on the Great Britain market. Regulatory Status In November 2008, we received 510(k) clearance to market our first generation iFuse implant from the FDA. Since 2008, we have received additional FDA 510(k) clearances for new instruments, additional implant sizes and labeling changes.
Our status in FDA’s Establishment Registration and Device Listing is active and we also maintain the Medical Device Manufacturing License issued by the State of California’s Department of Public Health Food and Drug Branch. In the EEA, we are required to comply with Quality Management System (“QMS”) requirements established in EU medical device legislation.
Our status in FDA’s Establishment Registration and Device Listing is active and we also maintain the Medical Device Manufacturing License issued by the State of California’s Department of Public Health Food and Drug Branch. In the EEA, we are required to comply with Quality Management System ("QMS") requirements established in EU medical device legislation.
We rely on our CE marks to continue to place our devices on the market in Great Britain until the requirement to obtain a UK Conformity Assessed (UKCA) mark applies to our devices. As of May 26, 2021, the European Union no longer applies the Mutual Recognition Agreement between the EEA and Switzerland.
We rely on our CE marks to continue to place our devices on the market in Great Britain until the requirement to obtain a UKCA mark applies to our devices. As of May 26, 2021, the European Union no longer applies the Mutual Recognition Agreement between the EEA and Switzerland.
SALLY (Study of Bone Growth in the Sacroiliac Joint After Minimally Invasive Surgery with Titanium Implants) is a prospective, multicenter single-arm clinical study of the same patient population (i.e., sacroiliac joint dysfunction) who underwent sacroiliac joint fusion using iFuse-3D.
SALLY (Study of Bone Growth in the Sacroiliac Joint After Minimally Invasive Surgery with Titanium Implants) is a prospective, multi-center single-arm clinical study of the same patient population (i.e., sacroiliac joint dysfunction) who underwent sacroiliac joint fusion using iFuse-3D.
Moreover, independent radiographic analysis showed a high rate of bony apposition to implants on both the sacral and iliac sides (98%) as well as a high rate of sacroiliac joint fusion (88% bridging bone) at five years. There were no reported adverse events related to the study device or procedure at five years. Ongoing studies are as follows.
Moreover, independent radiographic analysis showed a high rate of bony apposition to implants on both the sacral and iliac sides (98%) as well as a high rate of sacroiliac joint fusion (88% bridging bone) at five years. There were no reported adverse events related to the study device or procedure at five years.
Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s “general controls” for medical devices, which include compliance with the applicable portions of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.
Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s “general controls” for medical devices, which include compliance with the applicable portions of the FDA’s QSR facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.
In November 2010, we obtained a CE Certificate of Conformity from our Notified Body (DEKRA) and affixed a CE mark to our iFuse Implant System in accordance with the MDD to allow commercialization of our triangular iFuse implants in the EEA.
In November 2010, we obtained a CE Certificate of Conformity from our Notified Body (DEKRA) and affixed a CE mark to our iFuse Implant System in accordance with the Medical Device Directive ("MDD") to allow commercialization of our triangular iFuse implants in the EEA.
The AATB has issued operating standards for tissue banking. Accreditation is voluntary, but compliance with these standards is a requirement to become an AATB-accredited tissue establishment. In addition, some states have their own tissue banking regulations. As of December 31, 2023, we are licensed or have permits for tissue banking in California and Maryland.
The American Association of Tissue Banks ("AATB") has issued operating standards for tissue banking. Accreditation is voluntary, but compliance with these standards is a requirement to become an AATB-accredited tissue establishment. In addition, some states have their own tissue banking regulations. As of December 31, 2024, we are licensed or have permits for tissue banking in California and Maryland.
This technique, developed more recently, is more commonly used by interventional spine physicians. 9 Healthcare Professional Training and Education Since our inception, we have made considerable investments in teaching healthcare professionals to accurately diagnose sacroiliac joint disorders. Our surgeon training programs are for orthopedic spine surgeons, neurosurgeons, general orthopedic surgeons, and orthopedic trauma surgeons.
This technique, developed more recently, is more commonly used by interventional spine physicians. 10 Healthcare Professional Training and Education Since our inception, we have made considerable investments in teaching healthcare professionals to accurately diagnose sacroiliac joint disorders. Our physician training programs are for orthopedic spine surgeons, neurosurgeons, general orthopedic surgeons, interventional spine specialists and orthopedic trauma surgeons.
Competition We believe we are an industry leader in solving musculoskeletal disorders of the sacropelvic anatomy with our proprietary minimally invasive surgical implant systems. Over the past several years, other companies have subsequently recognized the multi-billion dollar addressable market opportunity and have entered the minimally invasive sacroiliac joint fusion market.
Competition We believe from market research data that we are an industry leader in solving musculoskeletal disorders of the sacropelvic anatomy with our proprietary minimally invasive surgical implant systems. Over the past several years, other companies have recognized the multi-billion dollar addressable market opportunity and have entered the minimally invasive sacroiliac joint fusion market.
Building on our experience with the Bedrock technique which we introduced in 2019, we introduced iFuse Bedrock Granite, a novel, patent-protected device designed for the specific demands of the sacro-pelvic anatomy at the end of spinal fusion constructs.
Building on our experience with the Bedrock technique which we introduced in 2019, we introduced iFuse Bedrock Granite, a novel, 6 patent-protected device designed for the specific demands of the sacropelvic anatomy at the end of spinal fusion constructs.
In addition to CPT code 27279, which is typically used to code for the iFuse procedure, effective January 1, 2024, the AMA adopted a separate Category 1 CPT code 27278 to describe minimally invasive sacroiliac fusion when performed using an intra-articular implant, placed directly in the joint generally from a posterior approach.
In addition to Current Procedural Terminology ("CPT") code 27279, which is typically used to code for the iFuse procedure, effective January 1, 2024, the American Medical Association ("AMA") adopted a separate Category 1 CPT code 27278 to describe minimally invasive sacroiliac fusion when performed using an intra-articular implant, placed directly in the joint generally from a posterior approach.
Further, an embedded cost-effectiveness analysis within INSITE, published in December 2015, showed the procedure to be highly cost-effective for the treatment of chronic sacroiliac joint pain. In iMIA (iFuse Implant System Minimally Invasive Arthrodesis), similar large differences were observed between subjects undergoing sacroiliac joint fusion vs. those undergoing non-surgical management.
Two-year results from INSITE were published in August 2016. Further, an embedded cost-effectiveness analysis within INSITE, published in December 2015, showed the procedure to be highly cost-effective for the treatment of chronic sacroiliac joint pain. 7 In iMIA (iFuse Implant System Minimally Invasive Arthrodesis), similar large differences were observed between subjects undergoing sacroiliac joint fusion vs. those undergoing non-surgical management.
Our products include a series of patented titanium implants and the instruments used to implant them, as well as implantable bone products. Since launching our first generation iFuse in 2009, we have launched new titanium implant product lines, iFuse-3D in 2017, iFuse-TORQ in 2021 and iFuse Bedrock Granite in 2022.
Our products include a series of patented titanium implants and the instruments used to implant them, as well as implantable bone products. Since launching our first generation iFuse in 2009, we have launched multiple implant product lines, including iFuse-3D in 2017, iFuse TORQ in 2021, iFuse Bedrock Granite in 2022, and iFuse INTRA and iFuse TORQ TNT in 2024.
Our target customer base includes over 12,000 physicians who perform advanced spinal procedures. Our direct sales organization in the United States covered eighteen sales regions as of December 31, 2023. In each region, a number of territory sales managers act as the primary customer contact.
Our target customer base includes over 12,000 physicians in the U.S. who perform advanced spinal procedures. Our direct sales organization in the United States covered 16 sales regions as of December 31, 2024. In each region, a number of territory sales managers act as the primary customer contact.
Outside the United States, as of December 31, 2023 and 2022, more than 900 physicians and 800 physicians, respectively, have been trained on iFuse and have treated at least one patient using iFuse. 10 Sales and Marketing We market and sell our implants primarily through a direct sales force and third-party sales agents.
Outside the United States, as of December 31, 2024 and 2023, more than 1,100 physicians and 900 physicians, respectively, have been trained on iFuse and have treated at least one patient using iFuse. 11 Sales and Marketing We market and sell our implants primarily through a direct sales force and third-party sales agents.
The safety, effectiveness and cost-effectiveness of our triangular iFuse implants are supported by more than 125 publications and several large prospective clinical studies, including two randomized trials, two large prospective multicenter trials and one long-term follow-up study. Additional long-term independent studies have reported follow-up data as far out as six years. Table 1. Summary of SI-BONE sponsored trials.
The safety, effectiveness and cost-effectiveness of our iFuse family of implants are supported by more than 160 publications and several prospective clinical studies, including four randomized trials, two large prospective multi-center trials and one long-term follow-up study. Additional long-term independent studies have reported follow-up data as far out as six years. Table 1. Summary of SI-BONE sponsored trials.
The agreement has a three-year initial term and automatically renews for successive one-year periods; provided, however, the agreement may be terminated early by either party, as specified in the agreement. RMS is currently our only supplier of iFuse-3D and iFuse-TORQ implants. Our iFuse Bedrock Granite implant is manufactured and assembled by third-party suppliers, including RMS.
The agreement has a three-year initial term and automatically renews for successive one-year periods; provided, however, the agreement may be terminated early by either party, as specified in the agreement. Our iFuse Bedrock Granite implant is manufactured and assembled by third-party suppliers, including RMS.
In light of the fact that the CE Marking process discussed above is set out in EU law, which no longer applies in the United Kingdom, the United Kingdom has devised a new route to market culminating in a UKCA Mark to replace the CE Mark.
In light of the fact that the CE Marking process discussed above is set out in EU law, which no longer applies in the United Kingdom (other than in Northern Ireland), the United Kingdom has devised a new route to market culminating in a UK Conformity Assessed ("UKCA") Mark to replace the CE Mark.
The combination of breakthrough designation and FDA clearance allowed us to obtain a new technology add-on payment (NTAP) from CMS. NTAP provides an additional payment to hospitals for eligible cases that use iFuse Bedrock Granite. In June 2023, we received 510(k) clearance from the FDA for iFuse-TORQ placement in the posterolateral or lateral oblique trajectory.
The combination of breakthrough designation and FDA clearance allowed us to obtain an NTAP from Centers for Medicare & Medicaid Service ("CMS"). NTAP provides an additional payment to hospitals for eligible cases that use iFuse Bedrock Granite. In June 2023, we received 510(k) clearance from the FDA for iFuse TORQ placement in the posterolateral or lateral oblique trajectory.
As of December 31, 2023 and 2022, in the United States, more than 2,700 physicians and 2,200 physicians, respectively, have been trained on iFuse and have treated at least one patient using iFuse.
As of December 31, 2024 and 2023, in the United States, more than 3,200 physicians and 2,700 physicians, respectively, have been trained on our solutions and have treated at least one patient using our solutions.
In the United States, the iFuse TORQ Implant System is indicated for sacroiliac joint fusion for: • Sacroiliac joint dysfunction including sacroiliac joint disruption and degenerative sacroiliitis. • Augmenting immobilization and stabilization of the sacroiliac joint in skeletally mature patients undergoing sacropelvic fixation as part of a lumbar or thoracolumbar fusion. 17 The iFuse TORQ Implant System is also indicated for fracture fixation of the pelvis, including acute, non-acute and non-traumatic fractures.
In the United States, the iFuse TORQ Implant System is indicated for sacroiliac joint fusion for: • Sacroiliac joint dysfunction including sacroiliac joint disruption and degenerative sacroiliitis. • Augmenting immobilization and stabilization of the sacroiliac joint in skeletally mature patients undergoing sacropelvic fixation as part of a lumbar or thoracolumbar fusion.
Moreover, outside the United States, interactions between medical device companies and healthcare professionals are also governed by strict laws, such as national anti-bribery laws of EEA countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct. In the UK, medical devices are governed by the Medical Device Regulations (UK MDR) 2002, as amended.
Moreover, outside the United States, interactions between medical device companies and healthcare professionals are also governed by strict laws, such as national anti-bribery laws of EEA countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct. In Great Britain (i.e.
The simulator is used to train physicians to perform sacroiliac joint injections, sacroiliac joint fusions, as well as iFuse Bedrock technique using iFuse-3D and iFuse-TORQ, and procedures using iFuse Bedrock Granite. We currently have 25 simulators used worldwide.
The simulator is used to train physicians to perform sacroiliac joint injections, sacroiliac joint fusions from multiple trajectories, as well as the iFuse Bedrock procedure using iFuse-3D and iFuse TORQ, procedures using iFuse Bedrock Granite, procedures using INTRA and procedures using iFuse TORQ TNT. We currently have 25 simulators used worldwide.
As of December 31, 2023, our international sales force consisted of 14 sales representatives directly employed by us and 31 third-party sales agents, which together had sales in 38 countries through December 31, 2023. We intend to continue to grow our specialized sales force to foster relationships with physicians and support revenue growth.
As of December 31, 2024, our international sales force consisted of 9 sales representatives directly employed by us and 31 third-party sales agents, which together had sales in 38 countries through December 31, 2024. We intend to continue to grow our specialized sales force to foster physician engagement and support revenue growth.
Study Name Implant Geography Condition* Design** Sample Size Follow-up period Status iMIA iFuse EU SIJD MRCT 103 2 years Complete INSITE iFuse USA SIJD MRCT 148 2 years Complete SIFI iFuse USA SIJD PMSA 172 2 years Complete LOIS iFuse USA SIJD PMSA 103 5 years Complete SALLY iFuse-3D USA SIJD PMSA 51 5 years Ongoing SILVIA iFuse-3D USA, EU & AUS ASD MRCT 220 2 years Ongoing SAFFRON iFuse-TORQ USA FFP MRCT 120 1 year Enrolling STACI iFuse-TORQ USA SIJD PMSA 110 2 years Enrolling *MRCT = multicenter randomized controlled trial; PMSA = prospective, multicenter single-arm **SIJD = sacroiliac joint dysfunction; ASD = adult spine deformity; FFP = fragility fracture of the pelvis Table 1 summarizes clinical trials sponsored by SI-BONE. 4 studies of iFuse Implant System (INSITE, iMIA, SIFI and LOIS) have been completed.
Study Name Implant Geography Condition** Design* Sample Size Follow-up period Status iMIA iFuse EU SIJD MRCT 103 2 years Complete INSITE iFuse USA SIJD MRCT 148 2 years Complete SIFI iFuse USA SIJD PMSA 172 2 years Complete LOIS iFuse USA SIJD PMSA 103 5 years Complete SALLY iFuse-3D USA SIJD PMSA 51 5 years Complete SILVIA iFuse-3D USA, EU & AUS ASD MRCT 220 2 years Complete; Publication Pending SAFFRON iFuse TORQ USA FFP MRCT 120 1 year Enrollment closed; Publication Pending PAULA iFuse Bedrock Granite USA ASD PMSA 250 2 years Enrolling STACI iFuse TORQ USA SIJD PMSA 110 2 years Follow-up *MRCT = multi-center randomized controlled trial; PMSA = prospective, multi-center single-arm **SIJD = sacroiliac joint dysfunction; ASD = adult spine deformity; FFP = fragility fracture of the pelvis Table 1 summarizes clinical trials sponsored by SI-BONE.
Our territory sales managers have extensive training and experience selling medical devices for spine problems and pain management, generally focusing on emerging technologies and markets. For large and/or high volume territories, we also employ territory representatives who cover cases.
Our territory sales managers have extensive training and experience selling medical devices for spinal surgery and pain management procedures, generally focusing on emerging technologies and markets. For large and/or high volume territories, we also employ territory representatives who cover cases and support revenue growth activities.
In May 2022, we received 510(k) clearance from the FDA for iFuse Bedrock Granite. This implant combines benefits of a pelvic fixation screw with attachment to posterior rods of pedicle screw systems and simultaneous fusion of the sacroiliac joint related to the device’s porous surface. This device previously received breakthrough device designation from the FDA in November 2021.
This implant combines benefits of a pelvic fixation screw with attachment to posterior rods of pedicle screw systems and simultaneous fusion of the sacroiliac joint related to the device’s porous surface. This device previously received breakthrough device designation from the FDA in November 2021.
Pursuant to the Manufacture and Supply Agreement, RMS manufactures certain of our implants in accordance with our specifications. The agreement provides us with the right to quality alternative sources from whom we may purchase products in the event of a supply failure by RMS. The prices we pay for products are fixed under the agreement through 2026.
The agreement provides us with the right to quality alternative sources from whom we may purchase products in the event of a supply failure by RMS. The prices we pay for products are fixed under the agreement through 2026.
Such obligations may include, without limitation, the European Union’s General Data Protection Regulation 2016/679 (“EU GDPR”), the EU GDPR as it forms part of United Kingdom (“UK”) law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (“UK GDPR”), and the ePrivacy Directive. Several states within the United States have enacted or proposed data privacy laws.
Such obligations may include, without limitation, the Federal Trade Commission Act, the European Union’s General Data Protection Regulation 2016/679 (“EU GDPR”), the EU GDPR as it forms part of United Kingdom (“UK”) law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (“UK GDPR”), and the ePrivacy Directive.
We support this with market-competitive compensation, comprehensive benefits, and health and wellness programs. In addition to ensuring workforce diversity and equitable compensation for our employees, we maintain a strong focus on enhancing employee retention and job satisfaction. To achieve this, we have established a feedback mechanism to continually monitor and respond to employee sentiment.
In addition to ensuring equitable compensation for our employees, we maintain a strong focus on enhancing employee retention and job satisfaction and promoting workforce diversity. To achieve this, we have established a feedback mechanism to continually monitor and respond to employee sentiment.
As of December 31, 2023, our U.S. sales force consisted of 82 territory sales managers and 69 clinical specialists directly employed by us, and 175 third-party sales agents. As of December 31, 2023, we had 28 employees working in our European operations across multiple countries.
As of December 31, 2024, our U.S. sales force consisted of 87 territory sales managers and 71 clinical specialists directly employed by us, and 252 third-party sales agents. As of December 31, 2024, we had 20 employees working in our European operations across multiple countries.
In INSITE (Investigation of Sacroiliac Fusion Treatment), more than 90% of subjects participating in the non-surgical group decided to cross over to sacroiliac joint fusion surgery, indicating that non-surgical treatment provided ineffective relief of pain and disability related to pain.
In INSITE (Investigation of Sacroiliac Fusion Treatment), more than 90% of subjects participating in the non-surgical group decided to cross over to sacroiliac joint fusion surgery, indicating that non-surgical treatment provided ineffective relief of pain and disability related to pain. At two years, patients undergoing sacroiliac joint fusion had sustained improvements in pain, disability and quality of life.
Acute set screw failure of sacro-alar iliac screws has been reported in approximately 5% of cases. Screw loosening within the sacrum/ilium is another common failure, occurring in 4-27% of cases and screw fracture has been reported in up to 20% of cases.
Screw loosening within the sacrum/ilium is another common failure, occurring in 4-27% of cases and screw fracture has been reported in up to 20% of cases.
INSITE and iMIA were prospective multicenter, randomized controlled trials conducted in the US and Europe, respectively. In both trials, patients with chronic sacroiliac joint pain were assigned at random to either immediate sacroiliac joint fusion using iFuse implants or individually tailored non-surgical management.
Four studies of iFuse Implant System (INSITE, iMIA, SIFI and LOIS) have been completed. INSITE and iMIA were prospective multi-center, randomized controlled trials conducted in the US and Europe, respectively. In both trials, patients with chronic sacroiliac joint pain were assigned at random to either immediate sacroiliac joint fusion using iFuse implants or individually tailored non-surgical management.
As of December 31, 2023, more than 95,000 procedures have been performed using our products by over 3,600 physicians in the United States and 38 other countries since we introduced iFuse in 2009.
As of December 31, 2024, over 115,000 procedures have been performed using our products by over 4,300 physicians in the United States and 38 other countries since we introduced iFuse in 2009.
We are awaiting issuance of our MDR Certificates of Conformity for the iFuse-3D implants. We maintain approval for iFuse in regions beyond the United States and the EEA, including Australia, New Zealand, and Israel.
Additionally, EU MDR Certificates of Conformity were issued by DEKRA 18 for iFuse and iFuse 3D surgical instruments. We are awaiting issuance of our MDR Certificates of Conformity for iFuse-3D implants and iFuse TORQ instruments and implants. We maintain approval for iFuse in regions beyond the United States and the EEA, including Australia, New Zealand, and Israel.
The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. 20 Manufacturing and Supply We use third-party manufacturers to produce our implants and instruments.
The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
As of December 31, 2023, we hav e 20 registered trademarks in the United States and have filed for three more. We have sought protection for at least two of these trademarks in 61 countries including the 27 European member countries of the Madrid Protocol.
As of December 31, 2024, we hav e 22 registered trademarks in the United States and have filed for three more. We have sought protection for at least 14 of these trademarks in 60 countries including the 27 European Union member countries.
For example, California passed the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”) (collectively, “CCPA”). Virginia passed the Consumer Data Protection Act, and Colorado passed the Colorado Privacy Act.
Several states within the United States have enacted or proposed data privacy laws. For example, California passed the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”) (collectively, “CCPA”). Virginia passed the Consumer Data Protection Act, and Colorado passed the Colorado Privacy Act.
In late-2019, we introduced iFuse Bone, an implantable bone product manufactured from sterilized recovered cadaveric bone tissue, to meet the demand of some of our surgeon customers to use implantable bone products to support and augment the patient's own bone tissue in orthopedic procedures.
In March 2020, we received FDA 510(k) clearance for an expanded indication for our triangular titanium iFuse implants to support our trauma initiative In late-2019, we introduced iFuse Bone, an implantable bone product manufactured from sterilized recovered cadaveric bone tissue, to meet the demand of some of our surgeon customers to use implantable bone products to support and augment the patient's own bone tissue in orthopedic procedures.
Intellectual Property We protect our intellectual property through our pending patent applications and issued patents. As of December 31, 2023, we had been issued 59 issued U.S. patents and had 34 pending U.S. patent applications, and we owned 18 issued foreign patents and had 22 pending foreign patent applications.
Intellectual Property We protect our intellectual property through our pending patent applications and issued patents. As of December 31, 2024, we had been issued 68 issued U.S. patents and had 40 pending U.S. patent applications, and we owned 20 issued foreign patents and had 24 pending foreign patent applications.
Within the United States, iFuse, iFuse-3D and iFuse-TORQ have clearances for applications across sacroiliac joint dysfunction and fusion, adult spinal deformity and degeneration, and pelvic trauma.
In the United States, iFuse, iFuse-3D, iFuse TORQ and iFuse Bedrock Granite have clearances for applications in sacroiliac joint dysfunction, adult spinal deformity and pelvic trauma. iFuse TORQ TNT has clearances for applications in pelvic trauma and sacroiliac joint dysfunction.
We can provide these programs in all 50 states and the District of Columbia. In early 2020, we implemented a virtual education series for physicians and mid-level practitioners. In July 2020, we began using the SI-BONE SImulator; an innovative, fully portable surgery training simulator.
We can provide these programs worldwide including in all 50 states and the District of Columbia. In July 2020, we began using the SI-BONE SImulator; an innovative, fully portable surgery training simulator.
They demonstrate the feasibility and safety of pelvic fixation utilizing a sacral-alar-iliac screw combined with iFuse-3D in the bedrock configuration. Additionally, the study reveals that sacroiliac joint pain is common among patients undergoing surgery for adult spine deformity, with a baseline prevalence of 16%. Enrollment in this trial was completed in 2022 and follow-up is ongoing.
Early study results, which focused on device placement feasibility and 90-day safety events, demonstrate the feasibility and safety of pelvic fixation utilizing a sacral-alar-iliac screw combined with iFuse-3D in the bedrock configuration. Additionally, the study reveals that sacroiliac joint pain is common among patients undergoing surgery for adult spine deformity, with a baseline prevalence of 16%.
With the introduction of iFuse-TORQ in 2021, we are specifically targeting the pelvic trauma market, which we estimate to be an approximately $350 million market opportunity. 6 Clinical Evidence Our triangular iFuse implants are the only minimally invasive products for sacroiliac joint fusion commercially available in the United States that, to our knowledge, are supported by substantial high-quality published evidence of safety, clinical effectiveness, durability, and economic utility.
Clinical Evidence Our triangular iFuse implants are the only minimally invasive products for sacroiliac joint fusion commercially available in the United States that, to our knowledge, are supported by substantial high-quality published evidence of safety, clinical effectiveness, durability, and economic utility.
Our principal executive offices are located at 471 El Camino Real, Suite 101, Santa Clara, California 95050 and our telephone number is (408) 207-0700. Our website address is www.si-bone.com .
Dunn, and orthopedic surgeon Leonard Rudolf, M.D. Corporate Information We were incorporated in March 2008 in Delaware. Our principal executive offices are located at 471 El Camino Real, Suite 101, Santa Clara, California 95050 and our telephone number is (408) 207-0700. Our website address is www.si-bone.com .
The primary endpoint of the study is the incidence of sacroiliac joint pain and/or distal junctional failures. The study aims to show that placement of iFuse-3D in the Bedrock configuration reduces the rate of these outcomes. Early study results, which focused on device placement feasibility and 90-day safety events, have been accepted for publication.
The primary endpoint of the study is the incidence of sacroiliac joint pain and/or distal junctional failures. The study aims to show that placement of iFuse-3D in the Bedrock configuration reduces the rate of these outcomes.
Our experience in both clinical trials and commercial settings indicates that at least 30% of these patients may be candidates for surgical treatment with our implants.
Studies indicate that 15% to 30% of patients with chronic low back pain may have symptoms originating with the sacroiliac joint. Our experience in both clinical trials and commercial settings indicates that at least 30% of these patients may be candidates for surgical treatment with our implants.
These benefits are supported by more than 125 published papers. We have received exclusive reimbursement coverage in the United States by certain payors based upon our differentiated product and quality of our evidence. We believe that we have the largest dedicated direct salesforce focused on spinopelvic solutions competing in our segment.
We have received exclusive reimbursement coverage in the United States by certain payors based upon our differentiated product and quality of our evidence as well as NTAP and TPT given the breakthrough designation of certain devices. We believe that we have the largest dedicated direct salesforce focused on sacropelvic solutions competing in our segment.
Five-year results, published in April 2018, showed sustained improvements in pain, disability and quality of life as well as a high satisfaction rate at 5 years.
In LOIS (Long-term Outcomes of INSITE and SIFI), subjects participating in INSITE and SIFI were enrolled in a long-term follow-up study. Five-year results, published in April 2018, showed sustained improvements in pain, disability and quality of life as well as a high satisfaction rate at five years.
In March 2020, we received FDA 510(k) clearance for an expanded indication for our triangular titanium iFuse implants to support our trauma initiative. In February 2021, we launched iFuse-TORQ, a line of 3D-printed threaded implants designed for use in pelvic trauma, as well as applications in sacroiliac joint dysfunction and degeneration.
In February 2021, we launched iFuse TORQ, a line of 3D-printed threaded implants designed for use in pelvic trauma, as well as applications in sacroiliac joint dysfunction and degeneration.
Long-term results are expected to be completed in 2025. SAFFRON (Sacral Fracture Fusion/Fixation for Rapid Rehabilitation) is a prospective randomized controlled trial comparing pelvic fracture fixation and sacroiliac joint fusion using iFuse-TORQ with non-surgical management in patients with debilitating fragility fractures of the sacrum. We anticipate initial results to be available in late 2024.
Five year results were published in SPINE in 2024. SAFFRON (Sacral Fracture Fusion/Fixation for Rapid Rehabilitation) is a prospective randomized controlled trial comparing pelvic fracture fixation and sacroiliac joint fusion using iFuse TORQ with non-surgical management in patients with debilitating pelvic fragility fractures. We stopped recruiting patients in mid-2024 and expect to publish the results in 2025.
As a result, most patients are prescribed bed-rest, involving significant capacity and financial burdens on the health care system, and a one-year mortality rate range of 14%-27%.
Traditional trauma screws do not integrate with the surrounding bone and therefore loosen in more than 20% of the cases in which they are used. As a result, most patients are prescribed bed-rest, involving significant capacity and financial burdens on the health care system, and a one-year mortality rate range of 14%-27%.
We estimate that our total addressable market in the United States exceeds $3.0 billion. Sacroiliac Joint Dysfunction and Degeneration Over 30 million American adults are estimated to have chronic lower back pain. Studies indicate that 15% to 30% of patients with chronic low back pain may have symptoms originating with the sacroiliac joint.
Market Opportunity As a sacropelvic solutions company, our products have applications across sacroiliac joint dysfunction and degeneration, spinopelvic fixation, and pelvic fractures. We estimate that our total addressable market in the United States exceeds $3.0 billion. Sacroiliac Joint Dysfunction and Degeneration Over 30 million American adults are estimated to have chronic lower back pain.
The study’s eligibility criteria are similar to those of prior U.S. studies (INSITE, SIFI and SALLY). Like previous studies, STACI endpoints include improvement in pain, disability and quality of life. The study is currently enrolling and early study results are expected to be available in late 2024.
The study’s eligibility criteria are similar to those of prior U.S. studies (INSITE, SIFI and SALLY). Like previous studies, STACI endpoints include improvement in pain, disability and quality of life. Early results showed no device-related adverse events and improvements in pain and disability are similar to those of prior studies of iFuse and iFuse-3D implants in similar patient population.
The purpose of the study was to show that the 3D printed version of the device produces results 7 similar to prior studies of iFuse. Two-year results, published in June 2021, showed similar improvements in pain, disability and quality of life compared to prior studies of iFuse as well as CT evidence of earlier fusion of the sacroiliac joint.
Two-year results, published in June 2021, and five-year results, published in September 2024, showed similar improvements in pain, disability and quality of life compared to prior studies of iFuse as well as CT evidence of earlier fusion of the sacroiliac joint. The study also showed marked reduction in opioid use and improvement in objective functional tests.
In August 2022, the Centers for Medicare and Medicaid Services, or CMS, issued a final decision for a New Technology Add-on Payment, or NTAP, of up to $9,828 for eligible cases using iFuse Bedrock Granite.
In August 2022, the Centers for Medicare and Medicaid Services ("CMS") issued a final decision for a NTAP of up to $9,828 for eligible cases using iFuse Bedrock Granite in the hospital inpatient setting. The NTAP became effective October 1, 2022 and will be effective for a period of up to three years and is exclusive to iFuse Bedrock Granite.
Using this feedback, we deploy strategies that enhance the skills of our people managers and improve internal communications with employees. Furthermore, we provide ongoing learning and leadership training opportunities to support professional growth. In 2023, we conducted instructor-led trainings designed to build people leadership capabilities and train managers on delivering actionable feedback.
Using this feedback, we deploy strategies that enhance the skills of our people managers and improve internal communications with employees. Furthermore, we provide ongoing learning and leadership training opportunities to support professional growth. We seek to create a transparent and open culture that promotes lawful and ethical conduct.
Pelvic Trauma Current treatment options for pelvic fragility fractures are sub-optimal. Sacroplasty has high rates of cement leakage and therefore lacks consistent coverage by payors. Traditional trauma screws do not integrate with bone and therefore loosen in more than 20% of the cases in which they are used.
Pelvic Trauma Current treatment options for pelvic fragility fractures are sub-optimal. Sacroplasty, in which bone cement is extruded into the sacrum to help fix the fracture, is associated with high rates of cement leakage and therefore lacks consistent coverage by payors.
The Breakthrough Device Designation and NTAP award were based on the FDA's recognition of iFuse Bedrock Granite as a new technology that can provide substantial clinical improvement over already available therapies. The NTAP became effective October 1, 2022 and will be effective for a period of up to three years and is exclusive to iFuse Bedrock Granite.
The Breakthrough Device Designation was based on the FDA's recognition of iFuse Bedrock Granite as a new technology that can provide substantial clinical improvement over already available therapies.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn particular, we and our suppliers are required to comply with FDA’s Quality System Regulations (“QSR”) and EU QMS requirements applicable to medical device s for the manufacture of our products and other regulations which cover the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage, and shipping of any product for which we obtain regulatory clearance or approval, or a CE Certificate of Conformity. 45 The failure by us or one of our suppliers to comply with applicable statutes and regulations, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions: • untitled letters, warning letters, fines, injunctions, consent, and civil penalties; • unanticipated expenditures to address or defend such actions; • customer notifications for repair, replacement, refunds; • recall, detention, or seizure of our products; • operating restrictions or partial suspension or total shutdown of production; • refusing or delaying our requests for 510(k) clearance or premarket approval and applications for or conduct of conformity assessments of new products or modified products; • limitations on the intended uses for which the product may be marketed; • operating restrictions; • withdrawing 510(k) clearances or PMA approvals that have already been granted; • suspension, variation or withdrawal of CE Certificates of Conformity; • refusal to grant export approval for our products; and • criminal prosecution.
Biggest changeThe failure by us or one of our suppliers to comply with applicable statutes and regulations, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions: • untitled letters, warning letters, fines, injunctions, consent, and civil penalties; • unanticipated expenditures to address or defend such actions; • customer notifications for repair, replacement, refunds; • recall, detention, or seizure of our products; • operating restrictions or partial suspension or total shutdown of production; 50 • refusing or delaying our requests for 510(k) clearance or premarket approval and applications for or conduct of conformity assessments of new products or modified products; • limitations on the intended uses for which the product may be marketed; • operating restrictions; • withdrawing 510(k) clearances or PMA approvals that have already been granted; • suspension, variation or withdrawal of CE Certificates of Conformity; • refusal to grant export approval for our products; and • criminal prosecution.
In addition, most of our supply and manufacturing agreements do not have minimum manufacturing or purchase obligations. As such, with many of our suppliers, we have no obligation to buy any given quantity of products, and the suppliers have no obligation to sell us or to manufacture for us any given quantity of components or products.
In addition, most of our supply and manufacturing agreements do not have minimum manufacturing or purchase obligations. As such, with many of our suppliers, we have no obligation to buy any given quantity of products, and the suppliers have no obligation to sell to us or to manufacture for us any given quantity of components or products.
The GDPR provides that EU Member States may introduce further conditions, including limitations, to the processing of genetic, biometric, or health data, which could limit our ability to collect, use and share personal data, or could cause our compliance costs to increase, ultimately having an adverse impact on our business.
The EU GDPR provides that EU Member States may introduce further conditions, including limitations, to the processing of genetic, biometric, or health data, which could limit our ability to collect, use and share personal data, or could cause our compliance costs to increase, ultimately having an adverse impact on our business.
For example, on March 10, 2023, Silicon Valley Bank ("SVB"), was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation ("FDIC"), as receiver. Although a statement by the U.S.
For example, on March 10, 2023, Silicon Valley Bank, a California corporation ("SVB"), was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation ("FDIC"), as receiver. Although a statement by the U.S.
These provisions include: • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors, or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the management of our business or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
These provisions include: • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors, or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the management of our business or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from 60 conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
Failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions such as: • warning letters; • fines; • injunctions; 41 • civil penalties; • termination of distribution; • recalls or seizures of products; • delays in the introduction of products into the market; • total or partial suspension of production; • facility closures; • refusal of the FDA or our Notified Body or other regulator to grant future clearances or approvals or to issue CE Certificates of Conformity; • withdrawals, variation, or suspensions of current clearances or approvals and CE Certificates of Conformity, resulting in prohibitions on sales of our products; and • in the most serious cases, criminal penalties.
Failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions such as: • warning letters; • fines; • injunctions; • civil penalties; • termination of distribution; • recalls or seizures of products; • delays in the introduction of products into the market; • total or partial suspension of production; • facility closures; • refusal of the FDA or our Notified Body or other regulator to grant future clearances or approvals or to issue CE Certificates of Conformity; • withdrawals, variation, or suspensions of current clearances or approvals and CE Certificates of Conformity, resulting in prohibitions on sales of our products; and • in the most serious cases, criminal penalties.
We may also have difficulty obtaining similar components from other suppliers that are acceptable to the FDA, other foreign regulatory authorities, or applicable QMS requirements and the failure of our suppliers to comply with strictly enforced regulatory requirements could expose us to delays in obtaining clearances approvals or CE Certificates of Conformity, regulatory action including warning letters, product recalls, termination of distribution, operating restrictions, interruption of production, delays in the introduction of products into the market, product seizures, civil, administrative, or criminal penalties and the suspension, variation, or withdrawal of our CE Certificates of Conformity.
We may also have difficulty obtaining similar components from other suppliers that are acceptable to the FDA, other foreign regulatory authorities, or applicable QMS requirements and the failure of our suppliers to comply with strictly enforced regulatory requirements could expose us to delays in obtaining marketing clearances, approvals or CE Certificates of Conformity, regulatory action including warning letters, product recalls, termination of distribution, operating restrictions, interruption of production, delays in the introduction of products into the market, product seizures, civil, administrative, or criminal penalties and the suspension, variation, or withdrawal of our CE Certificates of Conformity.
Our sales and results of operations will be affected by numerous factors, including, among other things: • payor coverage and reimbursement; • the number of products sold in the quarter and our ability to drive increased sales of our products; • our ability to establish and maintain an effective and dedicated sales force; • pricing pressure applicable to our products, including adverse third-party coverage and reimbursement outcomes; • the impact of COVID-19 or other infectious disease outbreaks on our business; • results of clinical research and trials on our existing products and products in development; • the mix of our products sold because profit margins differ amongst our products; • timing of new product offerings, acquisitions, licenses or other significant events by us or our competitors; • the ability of our suppliers to timely provide us with an adequate supply of materials and components; • the evolving product offerings of our competitors; • the demand for, and pricing of, our products and the products of our competitors; • factors that may affect the sale of our products, including seasonality and budgets of our customers; • domestic and international regulatory clearances or approvals, or CE Certificates of Conformity, and legislative changes affecting the products we may offer or those of our competitors; • interruption in the manufacturing or distribution of our products; • the effect of competing technological, industry and market developments; • our ability to expand the geographic reach of our sales and marketing efforts; • the costs of maintaining adequate insurance coverage, including product liability insurance; • the availability and cost of components and materials; • the number of selling days in the quarter; • fluctuation in foreign currency exchange rates; and • impairment and other special charges.
Our sales and results of operations will be affected by numerous factors, including, among other things: • payor coverage and reimbursement; • the number of products sold in the quarter and our ability to drive increased sales of our products; • our ability to establish and maintain an effective and dedicated sales force; • pricing pressure applicable to our products, including adverse third-party coverage and reimbursement outcomes; • the impact of infectious disease outbreaks on our business; • results of clinical research and trials on our existing products and products in development; • the mix of our products sold because profit margins differ amongst our products; • timing of new product offerings, acquisitions, licenses or other significant events by us or our competitors; • the ability of our suppliers to timely provide us with an adequate supply of materials and components; • the evolving product offerings of our competitors; • the demand for, and pricing of, our products and the products of our competitors; • factors that may affect the sale of our products, including seasonality and budgets of our customers; • domestic and international regulatory clearances or approvals, or CE Certificates of Conformity, and legislative changes affecting the products we may offer or those of our competitors; • interruption in the manufacturing or distribution of our products; • the effect of competing technological, industry and market developments; • our ability to expand the geographic reach of our sales and marketing efforts; • the costs of maintaining adequate insurance coverage, including product liability insurance; • the availability and cost of components and materials; • the number of selling days in the quarter; • fluctuation in foreign currency exchange rates; and • impairment and other special charges.
Potential and completed acquisitions and strategic investments involve numerous risks, including: • problems assimilating the purchased technologies, products, or business operations; • issues maintaining uniform standards, procedures, controls, and policies; • unanticipated costs and liabilities associated with acquisitions; • diversion of management’s attention from our core business; • adverse effects on existing business relationships with suppliers and customers; • risks associated with entering new markets in which we have limited or no experience; 38 • potential loss of key employees of acquired businesses; and • increased legal and accounting compliance costs.
Potential and completed acquisitions and strategic investments involve numerous risks, including: • problems assimilating the purchased technologies, products, or business operations; • issues maintaining uniform standards, procedures, controls, and policies; • unanticipated costs and liabilities associated with acquisitions; • diversion of management’s attention from our core business; • adverse effects on existing business relationships with suppliers and customers; • risks associated with entering new markets in which we have limited or no experience; • potential loss of key employees of acquired businesses; and • increased legal and accounting compliance costs.
To the extent that these contract sterilizers are unable to sterilize our products, whether due to capacity, availability of materials for sterilization, regulatory or other constraints, including reductions in operations and/or worker absences due to health epidemics, we may be unable to transition to other contract sterilizers, sterilizer locations or sterilization methods in a timely or cost effective manner or at all, which could have a material impact on our results of operations and financial condition.
To the extent that these contract sterilizers are unable to sterilize our products, whether due to capacity, availability of materials for sterilization, regulatory or other constraints, including reductions in operations and/or worker absences due to health 32 epidemics, we may be unable to transition to other contract sterilizers, sterilizer locations or sterilization methods in a timely or cost effective manner or at all, which could have a material impact on our results of operations and financial condition.
The FDA can delay, limit or deny clearance or approval of a device for many reasons, including: • we may not be able to demonstrate to the FDA’s satisfaction that our products are safe and effective for their intended uses; • the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required; and • the manufacturing process or facilities we use may not meet applicable requirements.
The FDA can delay, limit or deny clearance or approval of a device for many reasons, including: • we may not be able to demonstrate to the FDA’s satisfaction that our products are safe and effective for their intended uses; 44 • the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required; and • the manufacturing process or facilities we use may not meet applicable requirements.
We expect that market demand, government regulation, third-party coverage, and reimbursement policies and societal pressures will continue to change the worldwide healthcare industry, resulting in further business consolidations and alliances among our customers, which may reduce competition, exert further downward pressure on the prices of our products, and adversely impact our business, results of operations, or financial condition.
We expect that market demand, government regulation, third-party coverage, and reimbursement policies and societal pressures will continue to change the worldwide healthcare industry, resulting in further business consolidations and alliances among our customers, which may reduce competition, exert further downward pressure on the prices of our products, 27 and adversely impact our business, results of operations, or financial condition.
Any failure to comply with applicable legal and regulatory obligations in the United States or abroad could adversely affect us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments and restrictions on certain business activities.
Any failure to comply with applicable legal and regulatory obligations in the United States or abroad could adversely affect us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments and restrictions on certain business 38 activities.
In addition, prior to 42 our IPO, a small number of our current customer surgeons acquired from us less than 1.0% of our current outstanding common stock, which they either purchased in an arm’s length transaction on terms identical to those offered to others or received from us as fair market value consideration for consulting services performed.
In addition, prior to our IPO, a small number of our current customer surgeons acquired from us less than 1.0% of our current outstanding common stock, which they either purchased in an arm’s length transaction on terms identical to those offered to others or received from us as fair market value consideration for consulting services performed.
These and other provisions in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including delay or impede a merger, tender offer, or proxy contest involving 56 our company.
These and other provisions in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including delay or impede a merger, tender offer, or proxy contest involving our company.
Although we maintain third-party product liability insurance coverage, it is possible that claims against us may exceed the coverage limits of our insurance policies or cause us to record a self-insured loss. Even if any product liability loss is covered by an insurance policy, these policies typically have substantial retentions or deductibles that we are responsible for.
Although we maintain third-party product liability insurance coverage, it is possible that claims against us may exceed the coverage limits of our insurance policies or cause us to record a self-insured loss. Even if any product liability loss is covered by an 54 insurance policy, these policies typically have substantial retentions or deductibles that we are responsible for.
While we believe these factors have historically provided and may continue to provide us with effective tools in estimating the total market for our iFuse products and procedures and health cost savings, these estimates may not be correct and the conditions supporting our estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
While we believe these factors have historically provided and may continue to provide us with effective tools in estimating the total market potential for our iFuse products and procedures and health cost savings, these estimates may not be correct and the conditions supporting our estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
If passed into law, patent reform legislation currently pending in the U.S. Congress could significantly change the risks associated with bringing or defending a patent infringement lawsuit. 53 In addition, we generally indemnify our customers and third-party sales agents and resellers with respect to infringement by our products of the proprietary rights of third parties.
If passed into law, patent reform legislation currently pending in the U.S. Congress could significantly change the risks associated with bringing or defending a patent infringement lawsuit. In addition, we generally indemnify our customers and third-party sales agents and resellers with respect to infringement by our products of the proprietary rights of third parties.
The shifting compliance environment and the need to build and maintain robust and expandable systems and processes to comply with different compliance and/or reporting requirements in multiple jurisdictions increase the possibility that we may run afoul of one or more of the requirements or that federal or state regulatory authorities might challenge our current or future activities under these laws.
The shifting compliance environment and the need to build and maintain robust and expandable systems and processes to comply with different compliance and/or reporting requirements in multiple jurisdictions increase the possibility that we may run afoul of one or more of the requirements or that federal 47 or state regulatory authorities might challenge our current or future activities under these laws.
Our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled direct sales representatives and third-party sales agents and resellers with significant technical knowledge in various areas, such as spine and pelvic health and treatment. New hires require training and take time to achieve full productivity.
Our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled direct sales representatives and third-party sales agents and resellers with significant technical knowledge in various areas, such as spine and pelvic health and treatment. New sales representatives and agents require training and take time to achieve full productivity.
In addition, future growth could strain the ability of our suppliers to deliver products, materials, and components. Suppliers often experience difficulties in scaling up production, including financial issues, or problems with production yields and quality control and assurance. For example, from time to time, we have experienced certain delays and may experience delays from our suppliers in the future.
In addition, future growth could strain the ability of our suppliers to deliver products, materials, and components. Suppliers often experience difficulties in scaling up production, including financial issues, or problems with production yields and quality 29 control and assurance. For example, from time to time, we have experienced certain delays and may experience delays from our suppliers in the future.
Many of our products come in sets, which feature components in a variety of sizes so that the implant or device may be chosen for size based on the patient’s needs. In order to market our products effectively, we often maintain and provide physicians and hospitals with back-up products and products of different sizes.
Many of our products come in sets, which feature components and implants in a variety of sizes so that the implant or device may be chosen for size based on the patient’s needs. In order to market our products effectively, we often maintain and provide physicians and hospitals with back-up products and products of different sizes.
We may be unable to fulfil these obligations, or our Notified Body may consider that we have not adequately demonstrated compliance with our related obligations to merit a CE Certificate of Conformity on the basis of the Medical Device Regulation. The FDA and other regulatory authorities, including foreign authorities, have broad enforcement powers.
We may be 45 unable to fulfil these obligations, or our Notified Body may consider that we have not adequately demonstrated compliance with our related obligations to merit a CE Certificate of Conformity on the basis of the Medical Device Regulation. The FDA and other regulatory authorities, including foreign authorities, have broad enforcement powers.
For example, we are subject to the federal health care Anti-Kickback Statute, the federal civil False Claims Act, the Health Insurance Portability and Accountability Act (“HIPAA”) and the federal Physician Payment Sunshine Act, each of which is described in detail in "Item 1. Business - Healthcare Fraud and Abuse” and “-Data Privacy and Security Laws”.
For example, we are subject to the federal health-care Anti-Kickback Statute, the federal civil False Claims Act, the Health Insurance Portability and Accountability Act (“HIPAA”) and the 46 federal Physician Payment Sunshine Act, each of which is described in detail in "Item 1. Business - Healthcare Fraud and Abuse” and “-Data Privacy and Security Laws”.
In addition, procurement of certain human organs and tissue for transplantation is subject to the National Organ Transplant Act ("NOTA"), which prohibits the transfer of certain human organs, including skin and related tissue, for valuable consideration, but permits the reasonable payment for costs associated with the removal, transportation, implantation, processing, preservation, quality 51 control, and storage of human tissue and skin.
In addition, procurement of certain human organs and tissue for transplantation is subject to the National Organ Transplant Act ("NOTA"), which prohibits the transfer of certain human organs, including skin and related tissue, for valuable consideration, but permits the reasonable payment for costs associated with the removal, transportation, implantation, processing, preservation, quality control, and storage of human tissue and skin.
Even to the extent our product and procedures using our product are currently covered and reimbursed by third-party private and public payors, adverse changes in coverage and reimbursement policies that affect our products, discounts, and number of implants used may also drive our prices and revenue down and harm our ability to market and sell our products.
Even to the extent our products and procedures using our products are currently covered and reimbursed by third-party private and public payors, adverse changes in coverage and reimbursement policies that affect our products, discounts, and number of implants used may also drive our prices and revenue down and harm our ability to market and sell our products.
If we are unable to satisfy commercial demand for our system in a timely manner, our ability to generate revenue would be impaired, market acceptance of our products could be adversely affected, and customers may instead purchase or use our competitors’ products. Additionally, we could be forced to seek alternative sources of supply.
If we are unable to satisfy commercial demand for our system in a timely manner, our ability 30 to generate revenue would be impaired, market acceptance of our products could be adversely affected, and customers may instead purchase or use our competitors’ products. Additionally, we could be forced to seek alternative sources of supply.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”), (collectively, “CCPA”) applies to personal data of consumers, business representatives, and employees who are California residents, and requires 43 businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”), (collectively, “CCPA”) applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
Accordingly, our success will depend in part on our ability to respond quickly to changes in technology and the practice of medicine through the development and introduction of new products. Product development involves a high degree of risk and there can be no assurance that our new product development efforts will result in any commercially successful products.
Accordingly, our success will depend in part on our ability to respond quickly to changes in technology and the practice of medicine through the development and introduction of new products. Product 39 development involves a high degree of risk and there can be no assurance that our new product development efforts will result in any commercially successful products.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. Risks Related to Our Business and Our Industry We have incurred significant operating losses since inception, we expect to continue to incur operating losses in the future, and we may not be able to achieve or sustain future profitability.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. Risks Related to Our Business and Our Industry We have incurred significant operating losses since inception, we may continue to incur operating losses in the future, and we may not be able to achieve or sustain future profitability.
If we are found to infringe the intellectual property rights of third parties, we could be required to pay substantial damages, including treble, or triple, damages if an infringement is found to be willful, and/or royalties and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement.
If we are found to infringe the intellectual property rights of third parties, we could be required to pay substantial damages, including treble damages if an infringement is found to be willful, and/or royalties and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement.
Our professional education program seeks to teach these physicians, and other health care providers, about the benefits of our iFuse products, with the intent of either having them adopt and perform our procedures or refer 28 their patients with sacroiliac joint dysfunction to physicians who have been trained to perform our procedures.
Our professional education program seeks to teach these physicians, and other health care providers, about the benefits of our iFuse products, with the intent of either having them adopt and perform our procedures or refer their patients with sacroiliac joint dysfunction to physicians who have been trained to perform our procedures.
We might not be able to successfully develop, obtain domestic and international regulatory clearances or approvals, or CE Certificates of Conformity for, or market new products, and our future products might not be accepted by the physicians or the third-party payors who reimburse for many of the procedures performed with our products.
We might not be able to successfully develop, obtain domestic and international regulatory clearances or approvals, or CE Certificates of Conformity for, or market new products, and our future products might not be accepted 36 by the physicians or the third-party payors who reimburse for many of the procedures performed with our products.
Because of the size of the potential market, other companies have dedicated, and likely will continue to dedicate, significant resources to developing competing products. The number of competitors that we are aware of marketing sacroiliac joint fusion products in the United States has grown since 2008.
Because of the size of the potential market, other companies have dedicated, and likely will continue to dedicate, significant resources to developing competing products. The number of competitors that we are aware of marketing sacroiliac joint fusion products in the United States has grown considerably since 2008.
In addition, we estimate cost savings to the economy and healthcare system as a result of the iFuse procedure based on our market research. If our estimates and projections overestimate the size of this market or these benefits and cost savings, our sales growth may be adversely affected.
In addition, we estimate cost savings to the economy and healthcare system as a result of the iFuse procedure based on our market research. If our 37 estimates and projections overestimate the size of this market or these benefits and cost savings, our sales growth may be adversely affected.
Our ability to successfully grow through acquisitions depends upon our ability to identify, negotiate, complete, and integrate suitable target businesses and to obtain any necessary financing. These efforts could be expensive and time consuming, and may disrupt our ongoing business and prevent management from focusing on our operations.
Our ability to successfully grow through acquisitions depends upon our ability to identify, negotiate, complete, and integrate suitable target businesses and to obtain any necessary financing. These efforts could be expensive and time consuming, and may disrupt our ongoing business and prevent management from focusing on our 42 operations.
Any material decline in available funding or our ability to access our cash and cash equivalents could adversely impact our ability to meet our operating expenses, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws, any of which could have material adverse impacts on our operations and liquidity.
Any material decline in available funding or 61 our ability to access our cash and cash equivalents could adversely impact our ability to meet our operating expenses, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws, any of which could have material adverse impacts on our operations and liquidity.
Failure to hire or retain qualified direct sales representatives or third-party sales agents and resellers would prevent us from expanding our business and 31 generating sales. If our direct sales representatives or third-party sales agents fail to adequately promote, market and sell our products or decide to leave or cease to do business with us, our sales could significantly decrease.
Failure to hire or retain qualified direct sales representatives or third-party sales agents and resellers would prevent us from expanding our business and generating sales. If our direct sales representatives or third-party sales agents fail to adequately promote, market and sell our products or decide to leave or cease to do business with us, our sales could significantly decrease.
If we fail to effectively educate physicians and other medical professionals, they may not include a sacroiliac joint evaluation as part of their diagnosis and, as a result, those patients may continue to receive unnecessary surgical procedures or only non-surgical treatment.
If we fail to effectively educate physicians and other medical professionals, they may not 24 include a sacroiliac joint evaluation as part of their diagnosis and, as a result, those patients may continue to receive unnecessary surgical procedures or only non-surgical treatment.
If we were to be found to have violated NOTA's prohibition on the sale or transfer of human tissue for valuable consideration, we would potentially be subject to criminal enforcement sanctions, which could materially and adversely affect our results of operations.
If 55 we were to be found to have violated NOTA's prohibition on the sale or transfer of human tissue for valuable consideration, we would potentially be subject to criminal enforcement sanctions, which could materially and adversely affect our results of operations.
In addition, the off-label use of our products may increase the risk of injury to patients, and, in turn, the risk of product liability claims. Product liability claims are expensive to defend and could divert our management’s attention, result in substantial damage awards against us and harm our reputation.
In addition, the off-label use of our products may increase the risk of injury to patients, and, in turn, the risk of product liability claims. 51 Product liability claims are expensive to defend and could divert our management’s attention, result in substantial damage awards against us and harm our reputation.
If we or others later identify adverse events caused by our products: • sales of the product may decrease significantly, and we may not achieve the anticipated market share; • regulatory authorities or our Notified Body may require changes to the labeling of our product.
If we or others later identify adverse events caused by our products: 34 • sales of the product may decrease significantly, and we may not achieve the anticipated market share; • regulatory authorities or our Notified Body may require changes to the labeling of our product.
Quarterly comparisons of our financial results may not always be meaningful and should not be relied upon as an indication of our future performance. 55 We may be unable to utilize our federal and state net operating loss carryforwards to reduce our income taxes.
Quarterly comparisons of our financial results may not always be meaningful and should not be relied upon as an indication of our future performance. We may be unable to utilize our federal and state net operating loss carryforwards to reduce our income taxes.
Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments.
Department of Treasury, FDIC and Federal Reserve Board announced a program to provide up to $25 billion of loans to financial institutions secured by such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments.
In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups and, we are, or may become subject to such obligations in the future. For example, we may also be subject to the Payment Card Industry Data Security Standard (“PCI DSS”).
In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups and, we are, and may become subject to such obligations in the future. For example, we may also be subject to the Payment Card Industry Data Security Standard (“PCI DSS”).
Our failure to successfully grow the market for iFuse and increase our share within that market or any other event impeding our ability to sell iFuse, could adversely affect our results of operations, financial condition and continuing operations.
Our failure to successfully grow the market for our solutions and increase our share within that market or any other event impeding our ability to sell iFuse, could adversely affect our results of operations, financial condition and continuing operations.
If our quarterly or annual operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly or annual fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.
If our quarterly or annual operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly or annual fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate 59 substantially.
Disruptions 50 at FDA and other agencies may also slow the time necessary for new product applications to be reviewed and/or approved by necessary government agencies, which could adversely affect our business.
Disruptions at FDA and other agencies may also slow the time necessary for new product applications to be reviewed and/or approved by necessary government agencies, which could adversely affect our business.
In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the United States or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
Business disruptions have included, and could continue to include, disruptions or restrictions on our ability to travel or to distribute our products, government orders suspending the performance of elective surgical procedures, inability of our customers to meet their financial commitments due to strain on the healthcare system, as well as temporary closures of our facilities or the facilities of our suppliers and their contract manufacturers, and a reduction in the business hours of hospitals and ambulatory surgery centers.
Business disruptions have included, and could in the future include, disruptions or restrictions on our ability to travel or to distribute our products, government orders suspending the performance of elective surgical procedures, inability of our customers to meet their financial commitments due to strain on the healthcare system, as well as temporary closures of our facilities or the facilities of our suppliers and their contract manufacturers, and a reduction in the business hours of hospitals and ambulatory surgery centers.
Some of these risks include: • failure to complete sterilization on time or in compliance with the required regulatory standards; • transportation and import and export risk; • delays in analytical results or failure of analytical techniques that we depend on for quality control and release of products; • large-scale epidemics of communicable diseases such as COVID-19; • supply chain disruptions, including those caused by material and labor supply shortages and prolonged inflation; • natural disasters, labor disputes, financial distress, raw material availability, issues with facilities and equipment, or other forms of disruption to business operations affecting our manufacturers or suppliers; and • latent defects that may become apparent after products have been released and that may result in a recall or field safety corrective action with respect to such products.
Some of these risks include: • failure to complete sterilization on time or in compliance with the required regulatory standards; • transportation and import and export risk; • delays in analytical results or failure of analytical techniques that we depend on for quality control and release of products; 35 • large-scale epidemics of communicable diseases; • supply chain disruptions, including those caused by material and labor supply shortages and prolonged inflation; • natural disasters, labor disputes, financial distress, raw material availability, issues with facilities and equipment, or other forms of disruption to business operations affecting our manufacturers or suppliers; and • latent defects that may become apparent after products have been released and that may result in a recall or field safety corrective action with respect to such products.
Our expected future capital requirements depend on many factors including expanding our physician base, the expansion of our sales force, investment in implants and instruments, the timing and extent of spending on the development of our technology to increase our product offerings, and potential investment in additional product and service offerings through the acquisition of other businesses.
Our expected future capital requirements depend on many factors including expanding our physician base, the expansion of our sales force including through hybrid sales agencies, investment in implants and instruments, the timing and extent of spending on the development of our technology to increase our product offerings, and potential investment in additional product and service offerings through the acquisition of other businesses.
If 47 the FDA disagrees with our determinations, they could require us to report those actions as recalls. A future recall announcement could harm our reputation with customers and negatively affect our sales. In addition, the FDA could take enforcement action for failing to report the recalls when they were conducted.
If the FDA disagrees with our determinations, they could require us to report those actions as recalls. A future recall announcement could harm our reputation with customers and negatively affect our sales. In addition, the FDA could take enforcement action for 52 failing to report the recalls when they were conducted.
Our dependence on such a limited number of suppliers exposes us to risks, including, among other things: • third-party contract manufacturers or suppliers may fail to comply with regulatory requirements or make errors in manufacturing that could negatively affect the safety or effectiveness of our products or cause delays in shipments of our products; • third-party contract manufacturers or suppliers may fail to maintain good manufacturing practices, leading to quality control problems or regulatory findings that could cause disruptions in their manufacturing processes and affect the safety or effectiveness of our products or cause or lead to delays in shipments of our products; • we or our third-party manufacturers and suppliers may not be able to respond to unanticipated changes in customer orders, and if orders do not match forecasts, we or our suppliers may have excess or inadequate inventory of materials and components; 33 • we or our third-party manufacturers and suppliers may be subject to price fluctuations due to a lack of long-term supply arrangements for key components; • we or our third-party manufacturers and suppliers may lose access to critical services, raw materials and components, or experience significant delays in obtaining them, resulting in an interruption in the manufacture, assembly and shipment of our systems; • we or our third-party manufacturers could experience plant closures due to local epidemics of communicable diseases, such as COVID-19, or local outbreaks of such diseases among their workforce, thereby shuttering a plant in which our products are manufactured; • we may experience delays in delivery by our third-party manufacturers and suppliers due to changes in demand from us or their other customers; • fluctuations in demand for products that our third-party manufacturers and suppliers manufacture for others may affect their ability or willingness to deliver components to us in a timely manner; • our third-party manufacturers and suppliers may wish to discontinue supplying components or services to us for risk management reasons; • we may not be able to find new or alternative components or reconfigure our system and manufacturing processes in a timely manner if the necessary components become unavailable; and • our third-party manufacturers and suppliers may encounter financial hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
Our dependence on such a limited number of suppliers exposes us to risks, including, among other things: • third-party contract manufacturers or suppliers may fail to comply with regulatory requirements or make errors in manufacturing that could negatively affect the safety or effectiveness of our products or cause delays in shipments of our products; • third-party contract manufacturers or suppliers may fail to maintain good manufacturing practices, leading to quality control problems or regulatory findings that could cause disruptions in their manufacturing processes and affect the safety or effectiveness of our products or cause or lead to delays in shipments of our products; • we or our third-party manufacturers and suppliers may not be able to respond to unanticipated changes in customer orders, and if orders do not match forecasts, we or our suppliers may have excess or inadequate inventory of materials and components; • we or our third-party manufacturers and suppliers may be subject to price fluctuations due to a lack of long-term supply arrangements for key components; • we or our third-party manufacturers and suppliers may lose access to critical services, raw materials and components, or experience significant delays in obtaining them, resulting in an interruption in the manufacture, assembly and shipment of our systems; • we or our third-party manufacturers could experience plant closures due to local epidemics of communicable diseases or local outbreaks of such diseases among their workforce, thereby shuttering a plant in which our products are manufactured; • we may experience delays in delivery by our third-party manufacturers and suppliers due to significant changes in our ordering volumes; • fluctuations in demand for products that our third-party manufacturers and suppliers manufacture for others may affect their ability or willingness to deliver components to us in a timely manner; • our third-party manufacturers and suppliers may wish to discontinue supplying components or services to us for risk management reasons; • we may not be able to find new or alternative components or reconfigure our system and manufacturing processes in a timely manner if the necessary components become unavailable; and • our third-party manufacturers and suppliers may encounter financial hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
Fines for non-compliance with the GDPR will be significant — the greater of € 20 million or 4% of global turnover.
Fines for non-compliance with the EU GDPR will be significant — the greater of € 20 million or 4% of global turnover.
In the event that a substantial portion of our inventory becomes obsolete, it could have a material adverse effect on our earnings and cash flows due to the resulting costs associated with the inventory impairment charges and costs required to replace such inventory.
In the event that a substantial portion of our inventory becomes obsolete, it could have a material adverse effect on our earnings and cash flows due to the resulting costs associated with the inventory impairment charges and costs that may be required to replace such inventory.
These interventionalists often offer a variety of non-surgical and surgical interventions to sacroiliac joint dysfunction patients, including, but not limited to, steroid injections, radiofrequency ablation of the nerves serving the sacroiliac joint, and implantation of neurostimulation devices, allografts, fusion devices and other products intended to treat the sacroiliac joint or the pain it can cause.
These interventionalists often offer a variety of non-surgical and surgical interventions to sacroiliac joint dysfunction patients, including, but not limited to, steroid injections, radiofrequency ablation of the nerves serving the sacroiliac joint, and implantation of neurostimulation devices, stabilization and fusion implants and other products intended to treat the sacroiliac joint or the pain it can cause.
Physicians may also hesitate to change their medical treatment practices for other reasons, including the following: • lack of experience with minimally invasive procedures; • perceived liability risks generally associated with the use of our products and procedures; • costs associated with the purchase of our products; and • time commitment that may be required for training.
Physicians may also hesitate to change their medical treatment practices for other reasons, including the following: • lack of experience with similar procedures; • perceived liability risks generally associated with the use of our products and procedures; • costs associated with the purchase of our products; and • time commitment that may be required for training.
We rely on third-party suppliers to manufacture and supply substantially all of our products. For us to be successful, our suppliers must be able to provide us with products and components in substantial quantities, in compliance with regulatory requirements, in accordance with agreed upon specifications, at acceptable prices, and on a timely basis.
We rely on third-party suppliers to manufacture and supply substantially all of our products. For us to be successful, we need our suppliers to provide us with products and components in substantial quantities, in compliance with regulatory requirements, in accordance with agreed upon specifications, at acceptable prices, and on a timely basis.
In addition, some physicians may choose to use fewer implants due to their interest in the profitability of the ASC. An accelerated shift of procedures using our products to ASCs could adversely impact the average selling prices of our products and our revenues could suffer as a result.
In addition, some physicians may choose to use fewer implants due to their interest in the profitability of the ASC or OBL. An accelerated shift of procedures using our products to ASCs and OBLs could adversely impact the average selling prices of our products and our revenues could suffer as a result.
Our operating results are directly dependent upon the sales and marketing efforts of both our direct sales force and of our third-party sales agents and resellers. As we launch new products and increase our marketing efforts with respect to existing products, we will need to expand the reach of our marketing and sales networks.
Our operating results are directly dependent upon the sales and marketing efforts of both our direct sales force and of our third-party sales agents and resellers. As we launch new products, expand physician call points, and increase our marketing efforts with respect to existing products, we will need to expand the reach of our marketing and sales networks.
While these states, like the CCPA, also exempt some data processed in the context of clinical trials, these developments further complicate compliance efforts, and increase legal risk and compliance costs for us, the third parties upon whom we rely, and our customers. Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security.
While these states, like the CCPA, also exempt some data processed in the context of clinical trials, these developments further complicate compliance efforts, and increase legal risk and compliance costs for us, the third parties with whom we work, and our customers. Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security.
Also, the failure to comply with applicable legal and regulatory obligations could result in the disruption of our distribution and sales activities. 36 In addition, some of the countries in which we sell or plan to sell our products are, to some degree, subject to various risks, including: • exposure to different legal and regulatory standards; • lack of stringent protection of intellectual property; • inability of the local healthcare system to absorb prices for our product that would enable our business to become profitable in those markets; • obstacles to obtaining domestic and foreign export, import, and other governmental approvals, permits, and licenses and compliance with foreign laws; • lower average selling prices of our implants in most foreign markets; • reliance on a more concentrated surgeon base in international markets due to the surgeon acquisition costs relative to the selling price of our implants; • potentially adverse tax consequences and the complexities of foreign value-added tax systems; • adverse changes in tariffs and trade restrictions; • limitations on the repatriation of earnings; • difficulties in staffing and managing foreign operations; • insufficient numbers of patients requiring procedures that use our products; • transportation delays and difficulties of managing international distribution channels; • longer collection periods and difficulties in collecting receivables from foreign entities; • increased financing costs; • currency risks; and • political, social, and economic instability and increased security concerns.
In addition, some of the countries in which we sell or plan to sell our products are, to some degree, subject to various risks, including: • exposure to different legal and regulatory standards; • lack of stringent protection of intellectual property; • inability of the local healthcare system to absorb prices for our product that would enable our business to become profitable in those markets; • obstacles to obtaining domestic and foreign export, import, and other governmental approvals, permits, and licenses and compliance with foreign laws; • lower average selling prices of our implants in most foreign markets; • reliance on a more concentrated surgeon base in international markets due to the surgeon acquisition costs relative to the selling price of our implants; • potentially adverse tax consequences and the complexities of foreign value-added tax systems; • adverse changes in tariffs and trade restrictions; • limitations on the repatriation of earnings; • difficulties in staffing and managing foreign operations; • potentially insufficient numbers of patients requiring procedures that use our products; • transportation delays and difficulties of managing international distribution channels; • longer collection periods and difficulties in collecting receivables from foreign entities; • increased financing costs; • currency risks; and • political, social, and economic instability and increased security concerns.
While all Medicare Administrative Contractors are regularly reimbursing for minimally invasive sacroiliac joint fusion utilizing laterally placed transfixing devices, a small number of private payors still have policies that treat the procedure as experimental or investigational and do not regularly reimburse for the procedure.
While all Medicare Administrative Contractors are regularly reimbursing for minimally invasive sacroiliac joint fusion utilizing laterally placed transfixing devices under CPT Code 27279, a small number of private payors still have policies that treat the procedure as experimental or investigational and do not regularly reimburse for the procedure.
If more physicians elect to offer, or more patients elect to undergo, procedures described by CPT Code 27278, or if we are unable to demonstrate to physicians the comparative benefits of our products, sales of our iFuse implants could decline or fail to grow, which could adversely affect our business, results of operations and financial condition.
If more physicians elect to offer, or more patients elect to undergo, procedures described by CPT Code 27278, or if we are unable to demonstrate to physicians the comparative benefits of our products that are intended for use in CPT Code 27278 procedures, sales of our iFuse implants could decline or fail to grow, which could adversely affect our business, results of operations and financial condition.
In the EEA, we must report serious incidents, field safety corrective actions and trend reports through the EUDAMED module on vigilance and post-market surveillance. However, EUDAMED is not yet fully functional and the related module on vigilance and post-market surveillance is not available yet.
In the EEA, we must report serious incidents, field safety corrective actions and trend reports through the European Database on Medical Devices ("EUDAMED") module on vigilance and post-market surveillance. However, EUDAMED is not yet fully functional and the related module on vigilance and post-market surveillance is not available yet.
In particular, the European Economic Area (“EEA”) and the United Kingdom (“UK”) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate. Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.
In particular, the European Economic Area (“EEA”) and the United Kingdom (“UK”) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate. Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws.
If clinical experience with our iFuse Bedrock technique, iFuse Bedrock Granite product, or iFuse-TORQ product does not result in positive outcomes for patients, or if clinical trials involving the use of iFuse Bedrock, iFuse Bedrock Granite and/or iFuse-TORQ fail to show meaningful patient benefit, sales of our iFuse, iFuse-3D, iFuse-TORQ and/or iFuse Bedrock Granite implants could be adversely impacted.
If clinical experience with our iFuse Bedrock technique or our iFuse Bedrock Granite, iFuse TORQ, or iFuse INTRA products do not result in positive outcomes for patients, or if clinical trials involving the use of iFuse Bedrock, iFuse Bedrock Granite, iFuse INTRA and/or iFuse TORQ fail to show meaningful patient benefit, sales of our iFuse, iFuse-3D, iFuse TORQ and/or iFuse Bedrock Granite implants could be adversely impacted.
Additionally, we cannot predict the impact of any changes in these laws, whether or not retroactive. We are subject to stringent and evolving U.S. and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.
Additionally, we cannot predict the impact of any changes in these laws, whether or not retroactive. We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.
In February 2021, we launched iFuse-TORQ, a line of 3D-printed threaded implants designed for use in pelvic trauma, as well as applications in sacroiliac joint dysfunction and degeneration. In 2022, the FDA provided clearance for an expanded indication for iFuse-TORQ to include acute, non-acute and non-traumatic fractures as well as for placement across the sacroiliac joint using our Bedrock technique.
In February 2021, we launched iFuse TORQ, a line of 3D-printed threaded implants designed for applications in pelvic trauma and sacroliliac fusion. In June 2022, the FDA provided clearance for an expanded indication for iFuse TORQ to include acute, non-acute and non-traumatic fractures as well as for placement across the sacroiliac joint using our Bedrock technique.
As of December 31, 2023, our international sales force consisted of 14 sales representatives directly employed by us and a total of 31 third-party sales agents and resellers, which together have had sales in 38 countries through December 31, 2023.
As of December 31, 2024, our international sales force consisted of 9 sales representatives directly employed by us and a total of 31 third-party sales agents and resellers, which together have had sales in 38 countries through December 31, 2024.
If we fail to train new hires adequately, or if we experience high turnover in our sales force in the future, we cannot be certain that new hires will become as productive as may be necessary to maintain or increase our sales.
If we fail to train new sales representatives and agents adequately, or if we experience high turnover in our sales force in the future, we cannot be certain that new sales representatives and agents will become as productive as may be necessary to maintain or increase our sales.
Changes that our suppliers may make outside the purview of our direct control can have an impact on our processes, quality of our products, and the successful delivery of products to our customers. Mistakes and mishandling are not uncommon and can affect supply and delivery.
The manufacture, sterilization, and distribution of our products is challenging. Changes that our suppliers may make outside the purview of our direct control can have an impact on our processes, quality of our products, and the successful delivery of products to our customers. Mistakes and mishandling are not uncommon and can affect supply and delivery.
Misconduct by these parties could include intentional, reckless and/or negligent conduct that violates applicable laws and regulations, such as FDA reporting requirements, manufacturing standards, federal, state and foreign healthcare laws and regulations, data privacy laws and laws that require the true, complete and accurate reporting of financial information or data.
Misconduct by these parties could include intentional, reckless and/or negligent conduct that violates applicable laws and regulations, such as FDA reporting requirements, manufacturing standards, federal, state and foreign healthcare laws and regulations including those related to fraud and abuse, data privacy laws and laws that require the true, complete and accurate reporting of financial information or data.
We have incurred net losses since our inception in 2008. For the years ended December 31, 2023 and 2022, we had net losses of $43.3 million and $61.3 million, respectively. As of December 31, 2023, we had an accumulated deficit of $400.4 million.
We have incurred net losses since our inception in 2008. For the years ended December 31, 2024, 2023, and 2022 we had net losses of $30.9 million, $43.3 million, and $61.3 million, respectively. As of December 31, 2024, we had an accumulated deficit of $431.4 million.
We are not aware of an independent third-party study that reliably reports the potential market size for invasive sacroiliac fusion performed using a lateral approach or cost savings as a result of the procedure.
We are not aware of an independent third-party study that reliably reports the potential market size for minimally invasive sacroiliac fusion or cost savings as a result of the procedure.
Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers; and other adverse business consequences.
Our (and the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.
The capital markets have deteriorated substantially since the beginning of 2022, especially with respect to securities issued by companies in the medical device and technology sectors. Equity and debt capital have become substantially more expensive and difficult to raise on attractive terms.
The capital markets have deteriorated substantially since the beginning of 2022, especially with respect to securities issued by small- and mid-cap companies in the medical device sector. Equity and debt capital have become substantially more expensive and difficult to raise on attractive terms.
Our iFuse Bone product is derived from human bone tissue, and as a result is subject to FDA and certain state regulations regarding human cells, tissues and cellular or tissue-based products, or HCT/Ps.
Our iFuse INTRA implants are derived from human bone tissue, and as a result are subject to FDA and certain state regulations regarding human cells, tissues and cellular or tissue-based products, or HCT/Ps.
Food and Drug Administration (“FDA”) requires us to document that our product is “substantially equivalent” to another 510(k)-cleared product. The 510(k) process is shorter and typically requires the submission of less supporting documentation than other FDA approval processes, such as a premarket approval (“PMA”), and does not usually require pre-clinical or clinical studies.
The 510(k) clearance process of the FDA requires us to document that our product is “substantially equivalent” to another 510(k)-cleared product. The 510(k) process is shorter and typically requires the submission of less supporting documentation than other FDA approval processes, such as a PMA, and does not usually require pre-clinical or clinical studies.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe engage third-party services to assist us from time to time to conduct evaluations of our security controls, whether through penetration testing, independent audits or consulting on practices to address new challenges. We conduct audits and evaluations of our IT infrastructure, network architecture, and software applications to help us identify vulnerabilities, potential entry points, and areas for improvement.
Biggest changeThird parties also play a role in our cybersecurity efforts. We engage third-party services to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example through penetration testing, independent audits or consulting on practices to address new challenges.
Depending on the environment, we employ strategies and practices designed to protect and mitigate cybersecurity material risks to our Information Systems and Data, including but not limited to: • Utilizing third-party tools to monitor threats and cybersecurity vulnerabilities, reduce risk, and enhance governance, risk, and compliance management. • Engaging a managed cybersecurity service provider to monitor and assess cybersecurity threats, serve as a point of contact for incident notification, and collaborate with our in-house IT team. • Maintaining security policies, procedures, and standards considering evolving threats and industry standards. • Engaging external subject matter experts and advisors to inform us of current cyber practices, policies, and programs. • Conducting tabletop exercises focused on scenarios such as ransomware, disaster recovery, and business continuity. • Providing mandatory annual security and privacy awareness training to all employees who have access to company email and connected devices. • Conducting phishing simulations and cyber hygiene training sessions to educate employees and promote responsible cybersecurity practices. • Maintaining an incident response plan and conducting tabletop exercises.
Depending on the environment, systems, and data, we employ strategies and practices designed to protect and mitigate cybersecurity material risks to our Information Systems and Data, including but not limited to: • Utilizing third-party tools to monitor threats and cybersecurity vulnerabilities, reduce risk, and enhance governance, risk, and compliance management. • Engaging a managed cybersecurity service provider to monitor and assess cybersecurity threats, serve as a point of contact for incident notification, and collaborate with our in-house IT team. • Maintaining security policies, procedures, and standards considering evolving threats and industry standards. • Engaging external subject matter experts and advisors to inform us of current cyber practices, policies, and programs. • Conducting tabletop exercises focused on scenarios such as ransomware, disaster recovery, and business continuity. • Providing mandatory annual security and privacy awareness training to all employees who have access to company email and connected devices. • Conducting phishing simulations and cyber hygiene training sessions to educate employees and promote responsible cybersecurity practices. • Maintaining an incident response plan.
“Risk Factors”, including “If we experience significant disruptions in our information technology systems, our business, results of operations, and financial condition could be adversely affected".
“Risk Factors”, including “If we experience significant disruptions in our information technology systems, our business, results of operations, and financial condition could be adversely affected". 63
We perform assessments considering principles from the National Institute of Standards and Technology Cybersecurity Framework and by using an external third-party security assessor from time to time.
We conduct audits and evaluations of our IT infrastructure, network architecture, and software applications to help us identify vulnerabilities, potential entry points, and areas for improvement. We perform assessments considering principles from the National Institute of Standards and Technology Cybersecurity Framework and by using an external third-party security assessor from time to time.
Our CFO, Anshul Maheshwari, and Senior Vice President of Operations & Technology, Jeff Bertolini, provide briefings to our audit committee on the effectiveness and progress of our cybersecurity risk management program on regular basis. Mr.
Our CFO, Anshul Maheshwari, and Vice President of Information Technology, Michael Vedda, provide briefings to our audit committee on the effectiveness and progress of our cybersecurity risk management program on regular basis. Mr. Vedda has more than 20 years of experience and engages with trusted third-party experts for support and guidance when additional guidance is required.
Our risk management framework includes risk assessments, internal controls, and systems monitoring mechanisms. We have established processes designed to assess, identify, and manage material risks from cybersecurity threats to our IT systems and critical data, including intellectual property, confidential information, and personal 58 data (“Information Systems and Data”). Third parties also play a role in our cybersecurity efforts.
We have implemented and maintain various processes designed to assess, identify, and manage material risks from cybersecurity threats to our IT systems and critical data, including intellectual property, confidential information, that is proprietary, strategic or competitive in nature, health and medical data, clinical trial data, and personal data (“Information Systems and Data”).
Removed
Bertolini has completed the Chief Technology Officer program at the Wharton School of the University of Pennsylvania and has over 30 years of experience leading all aspects of operations and IT.
Added
Our risk management framework includes risk assessments, internal controls, and systems monitoring mechanisms.
Added
Prior to joining SI-BONE, he managed cybersecurity functions, where he was responsible for overseeing cybersecurity strategy and operations, including incident response, threat intelligence, security awareness training programs, risk assessments and remediation, and regulatory and compliance matters.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our leased headquarters in Santa Clara, California, comprises approximately 21,848 square feet, and the lease for this space expires in May 2025. Our headquarters houses our product development, marketing, finance, education, and administration functions.
Biggest changeItem 2. Properties. Our leased headquarters in Santa Clara, California, comprises approximately 21,848 square feet, and the lease for this space expires in July 2026. Our headquarters houses our product development, marketing, finance, education, and administration functions.
We believe our facilities are adequate and suitable for our current needs but in the future we may need additional space. 59
We believe our facilities are adequate and suitable for our current needs but in the future we may need additional space.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeHolders of Record As of February 20, 2024, we had 132 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Biggest changeHolders of Record As of February 20, 2025, we had 116 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Item 4. Mine Safety Disclosures Not Applicable. 60 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Price of Common Stock Our common stock is listed on the Nasdaq Global Market under the symbol “SIBN”.
Item 4. Mine Safety Disclosures Not Applicable. 64 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Price of Common Stock Our common stock is listed on the Nasdaq Global Market under the symbol “SIBN”.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5.02 1/10/2022 10.26*# Second Amendment to Loan and Security Agreement, dated January 25 , 202 4 between SI-BONE, Inc. and Silicon Valley Bank 10.27*# Man ufacture and Supply Agreement, dated February 23, 2024, between SI-BONE, Inc. and RMS Company 97.1* 2023 Recoupment (Clawback) Policy 21.1* List of Subsidiaries of Registrant 23.1* Consent of PricewaterhouseCoopers, Independent Registered Public Accounting Firm 24.1* Power of Attorney (contained in the signature page of this report) 31.1* Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS* Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 106 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith. ** Furnished herewith.
Biggest changeWest 10.29+* F orm of Finan cial Performance -Based Restricted Stock Unit Agreement 19.1* I nsider Trading Policy 21.1* List of Subsidiaries of Registrant 23.1* Consent of PricewaterhouseCoopers, Independent Registered Public Accounting Firm 24.1* Power of Attorney (contained in the signature page of this report) 31.1* Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1 2023 Recoupment (Clawback) Policy 10-K 001-38701 97.1 2/27/2024 101.INS* Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 110 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith. ** Furnished herewith.
Exhibit 32.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall such exhibit be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing. + Indicates a management contract or compensatory plan. # Confidential treatment has been granted with respect to certain portions of this exhibit.
Exhibit 32.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall such exhibit be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing. + Indicates a management contract or compensatory plan. # The Company has omitted portions of the referenced exhibit pursuant to Item 601(b) of Regulation S-K because it (a) is not material and (b) the type of information that the Registrant both customarily and actually treats as private or confidential.
Added
Item 5.02 1/10/2022 10.24# Second Amendment to Loan and Security Agreement, dated January 25, 2024 between the Registrant and Silicon Valley Bank 10-K 001-38701 10.26 2/27/2024 10.25# Manufacture and Supply Agreement, dated February 23, 2024, between the Registrant and RMS Company 10-K 001-38701 10.27 2/27/2024 10.26 S econd Amendment to Lease Agreement, dated July 17, 2024, between the Registrant and Bixby SPE Finance 11, LLC. 8-K 001-38701 10.1 7/19/2024 10.27# T hird Amendment to Loan and Security Agreement, dated November 8, 2024, between the Registrant and Silicon Valley Bank 10-Q 001-38701 10.2 11/12/2024 10.28+ * O ffer Letter Agreement dated April 17, 2024 , between the Registrant and T h omas A.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

54 edited+10 added−23 removed56 unchanged
Biggest changeNet cash outflows from changes in operating assets and liabilities for the year ended December 31, 2022 were primarily due to higher inventory build-up related to our iFuse-TORQ and iFuse Bedrock Granite implants and higher accounts receivable due to timing of collections and the increase in revenue in the fourth quarter of 2022, offset in part by a decrease in prepaid expenses due to timing of payments for software subscriptions and lower prepaid annual insurance premiums, an increase in accounts payable due to the timing of vendor payments, and an increase in accrued liabilities and other due to timing of other third-party payments and higher compensation and benefits accruals.
Biggest changeNet cash outflows from changes in operating assets and liabilities for year ended December 31, 2024 were primarily due to higher accounts receivable due to timing of collections and the increase in revenue in the fourth quarter of 2024, higher inventory due to build-up related to our newly introduced products, offset in part by an increase in account payable and accrued liabilities due to normal timing of expenses.
Net cash outflows from changes in operating assets and liabilities for year ended December 31, 2023 were primarily due to higher accounts receivable due to timing of collections and the increase in revenue in the fourth quarter of 2023, higher inventory build-up related to our implants, higher prepaid expenses due to timing of payments, and lower accounts payable attributable to the normal course timing of expenses, offset in part by an increase in accrued liabilities and other due to timing of other third-party payments and higher compensation and benefits accruals.
Net cash outflows from changes in operating assets and liabilities for the year ended December 31, 2023 were primarily due to higher accounts receivable due to timing of collections and the increase in revenue in the fourth quarter of 2023, higher inventory build-up related to our implants, higher prepaid expenses due to timing of payments, and lower accounts payable attributable to the normal course timing of expenses, offset in part by an increase in accrued liabilities and other due to timing of other third-party payments and higher compensation and benefits accruals.
We also offer an allograft bone implant for physicians who believe that this kind of implant can be important to obtaining stabilization and /or fusion. In June 2022, we completed enrollment in SILVIA, a two-year prospective international multi-center randomized controlled trial of two different methods for pelvic fixation in adult patients undergoing multi-segmental, or long-construct, spinal fusion.
We also offer an allograft bone implants for physicians who believe that this kind of implant can be important to obtaining stabilization and /or fusion. In June 2022, we completed enrollment in SILVIA, a two-year prospective international multi-center randomized controlled trial of two different methods for pelvic fixation in adult patients undergoing multi-segmental, or long-construct, spinal fusion.
Lastly, we are integrating our demand planning and manufacturing systems, to ensure we leverage actual usage trends as we build surgical capacity to support our growth. 64 Components of Results of Operations Revenue Our revenue from sales of implants fluctuate based on volume of cases (procedures performed), discounts, mix of international and U.S. sales, different implant pricing and the number of implants used for a particular patient.
Lastly, we are integrating our demand planning and manufacturing systems, to ensure we leverage actual usage trends as we build surgical capacity to support our growth. 68 Components of Results of Operations Revenue Our revenue from sales of implants fluctuate based on volume of cases (procedures performed), discounts, mix of international and U.S. sales, different implant pricing and the number of implants used for a particular patient.
However, taken as a whole, seasonality does not have a material impact on our financial results. 72 Recent Accounting Pronouncements See Note 2 of Notes to Consolidated Financial Statements for related discussions on recently adopted accounting standards and updates on recently issued accounting standards not yet effective, which information is incorporated by reference here.
However, taken as a whole, seasonality does not have a material impact on our financial results. 76 Recent Accounting Pronouncements See Note 2 of Notes to Consolidated Financial Statements for related discussions on recently adopted accounting standards and updates on recently issued accounting standards not yet effective, which information is incorporated by reference here.
Using this feedback, we deploy strategies that enhance the skills of our people managers and improve internal communications with employees. Furthermore, we provide ongoing learning and leadership training opportunities to support professional growth. In 2023, we conducted instructor-led trainings designed to build people leadership capabilities and train managers on delivering actionable feedback.
Using this feedback, we deploy strategies that enhance the skills of our people managers and improve internal communications with employees. Furthermore, we provide ongoing learning and leadership training opportunities to support professional growth. In 2024, we conducted instructor-led trainings designed to build people leadership capabilities and train managers on delivering actionable feedback.
The increase in interest income for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was mainly due to higher interest earned on our investments in marketable securities, primarily as a result of higher interest rates earned on higher cash and investment balances. Interest Expense .
The increase in interest income for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was mainly due to higher interest earned on our investments in marketable securities, primarily as a result of higher interest rates earned on higher cash and investment balances. Interest Expense .
With iFuse-3D, iFuse-TORQ and iFuse Bedrock Granite, we believe that the value of our innovative, versatile, and complementary product portfolio provides physicians with a comprehensive set of alternatives, and positions us as the top choice for physicians for sacropelvic solutions.
With iFuse-3D, iFuse TORQ, iFuse Bedrock Granite, iFuse INTRA and iFuse TORQ TNT, we believe that the value of our innovative, versatile, and complementary product portfolio provides physicians with a comprehensive set of alternatives, and positions us as the top choice for physicians for sacropelvic solutions.
We receive payment for the implants consumed during the surgery and do not receive additional or separate consideration for the use of the instrument tray furnished for the physicians’s use. We identify the instrument trays as a lease component and the implants as a non-lease component in our arrangements with our customers.
We receive payment for the implants consumed during the surgery and do not receive additional or separate consideration for the use of the instrument tray furnished for the physicians’ use. We identify the instrument trays as a lease component and the implants as a non-lease component in our arrangements with our customers.
We may do this by adding more clinical support specialists and third-party sales agents as part of hybrid arrangements for case coverage, and by consigning instrument trays and implants at selective sites of service. Our average revenue per territory sales manager has increased to approximately $1.6 million in fiscal year 2023, from $1.2 million in fiscal year 2022.
We may do this by adding more clinical support specialists and third-party sales agents as part of hybrid arrangements for case coverage, and by consigning instrument trays and implants at selective sites of service. Our average revenue per territory sales manager has increased to approximately $1.8 million in fiscal year 2024, from $1.6 million in fiscal year 2023.
The decrease in net loss, net of non-cash items for the year ended December 31, 2023 compared to the year ended December 31, 2022 was mainly due to increased revenues.
The decrease in net loss, net of non-cash items for the year ended December 31, 2024 compared to the year ended December 31, 2023 was mainly due to increased revenues.
We are targeting over 12,000 U.S. physicians including over 8,000 orthopedic and neurological surgeons and approximately 4,500 interventional spine physicians, to perform our procedures. As of December 31, 2023 and 2022, in the United States more than 2,700 physicians and 2,200 physicians, respectively, have been trained on iFuse and have treated at least one patient.
We are targeting over 12,000 U.S. physicians including over 8,000 orthopedic and neurological surgeons and approximately 4,500 interventional spine physicians, to perform our procedures. As of December 31, 2024 and 2023, in the United States more than 3,200 physicians and 2,700 physicians, respectively, have been trained on our solutions and have treated at least one patient.
Upon entry into the Amended Loan Agreement, we borrowed $36.0 million pursuant to a new term loan (the “Term Loan”), which was substantially used to repay in full the $35.0 million term loan facility outstanding under the Original Loan Agreement and secured a revolving credit facility in an aggregate principal amount of up to $15.0 million (the “Revolving Line").
Upon entry into the Amended Loan Agreement, we borrowed $36.0 million pursuant to a new term loan (the “First Amendment Term Loan”), which was substantially used to repay in full the $35.0 million Original Term Loan outstanding under the Original Loan Agreement, and we also obtained a secured a revolving credit facility in an aggregate principal amount of up to $15.0 million (the “Revolving Line").
We anticipate the results for the primary endpoint in 2025. In September 2022 we enrolled the first of the targeted 120 patients in our SAFFRON study, a prospective randomized controlled trial of surgery using our iFuse-TORQ device vs. non-surgical management in patients with debilitating sacral fragility or insufficiency fractures. We anticipate results to be available in late 2024.
We anticipate the results for the primary endpoint in 2025. In September 2022 we enrolled the first of the targeted 120 patients in our SAFFRON study, a prospective randomized controlled trial of surgery using our iFuse TORQ device vs. non-surgical management in patients with debilitating sacral fragility or insufficiency fractures.
Net cash used in inves ting activities for the year ended December 31, 2023 consisted of purchases of property and equipment of $7.8 million related to individual components in instrument trays to support increased case volumes and capitalized costs related to the lease in Santa Clara and equipment and purchases of our marketable securities, net of maturities, of $52.0 million.
Net c ash used in investing activities for the year ended December 31, 2023 consisted of purchases of property and equipment of $7.8 million related to individual components in instrument trays to support increased case volumes and capitalized costs related to the lease in Santa Clara and equipment and purchases of our marketable securities, net of maturities, of $52.0 million.
During the years ended December 31, 2023 and 2022, we incurred a net loss of $43.3 million and $61.3 million, respectively, and expect to incur additional losses in the future. We have not achieved positive cash flow from operations to date.
During the years ended December 31, 2024 and 2023, we incurred a net loss of $30.9 million and $43.3 million, respectively, and expect to incur additional losses in the future. We have not achieved positive cash flow from operations to date.
We have financed our operations primarily through our public offerings and debt financing arrangements. As of December 31, 2023 and 2022 we had $36.1 million and $35.2 million outstanding debt, respectively. As of December 31, 2023, we had an accumulated deficit of $400.4 million.
We have financed our operations primarily through our public offerings and debt financing arrangements. As of December 31, 2024 and 2023 we had $35.5 million and $36.1 million outstanding debt, respectively. As of December 31, 2024, we had an accumulated deficit of $431.4 million.
Other income (expense), net changed from expense to income for the year ended December 31, 2023 as compared to the year ended December 31, 2022 due to foreign currency fluctuations. 68 Liquidity and Capital Resources As of December 31, 2023, we had cash and marketable securities of $166.0 million compared to $97.3 million as of December 31, 2022.
Other income (expense), net changed from income to expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 due to foreign currency fluctuations. 72 Liquidity and Capital Resources As of December 31, 2024, we had cash and marketable securities of $150.0 million compared to $166.0 million as of December 31, 2023.
As of December 31, 2023, our U.S. sales force consisted of 82 territory sales managers and 69 clinical support specialists directly employed by us and 175 third-party sales agents, compared to 88 territory sales managers and 73 clinical support specialists directly employed by us and 105 third-party sales agent as of December 31, 2022.
As of December 31, 2024, our U.S. sales force consisted of 87 territory sales managers and 71 clinical support specialists directly employed by us and 252 third-party sales agents, compared to 82 territory sales managers and 69 clinical support specialists directly employed by us and 175 third-party sales agent as of December 31, 2023.
Robust clinical evidence is central to drive adoption and favorable reimbursement, and we remain focused on continuing to set the industry standard in delivering evidence-based care through best-in-class clinical trials that demonstrate the efficacy, safety, and economic benefit of our solutions.
Robust clinical evidence is central to drive adoption and favorable reimbursement, and we remain focused on continuing to set the industry standard in delivering evidence-based care through best-in-class clinical trials that demonstrate the efficacy, safety, and economic benefit of our solutions. In 2024, we spent $16.6 million on research and development, equating to 10% of our 2024 revenue.
As of December 31, 2023, more than 95,000 procedures have been performed by over 3,600 physicians in the United States and 38 other countries since we introduced iFuse in 2009.
As of December 31, 2024, more than 115,000 procedures have been performed by over 4,300 physicians in the United States and 38 other countries since we introduced iFuse in 2009.
Outside the United States, as of December 31, 2023 and 2022, more than 900 and 800 physicians, respectively, have been trained on iFuse and have treated at least one patient.
Outside the United States, as of December 31, 2024 and 2023, more than 1,100 and 900 physicians, respectively, have been trained on our solutions and have treated at least one patient.
In addition to ensuring workforce diversity and equitable compensation for our employees, we maintain a strong focus on enhancing employee retention and job satisfaction. To achieve this, we have established a feedback mechanism to continually monitor and respond to employee sentiment.
We support this with market-competitive compensation, comprehensive benefits, and health and well-being programs. 67 In addition to ensuring workforce diversity and equitable compensation for our employees, we maintain a strong focus on enhancing employee retention and job satisfaction. To achieve this, we have established a feedback mechanism to continually monitor and respond to employee sentiment.
Our data-driven approach enables us to focus our investment on the most cost-effective programs. Physician Engagement Engaging and educating physician and other healthcare professionals about the clinical merits and patient benefits of our solutions will be important to grow physician adoption. Our medical affairs team works closely with our sales team to increase physician engagement and activation.
Physician Engagement Engaging and educating physician and other healthcare professionals about the clinical merits and patient benefits of our solutions will be important to grow physician adoption. Our medical affairs team works closely with our sales team to increase physician engagement and activation.
Net cash used in operation activities for the year ended December 31, 2022 of $41.7 million resulted from cash outflows due to net loss of $61.3 million, adjusted for $27.6 million of non-cash items and cash outflows from changes in operating assets and liabilities of $8.0 million.
Net cash used in operation activities for the year ended December 31, 2023 of $18.7 million resulted from cash outflows due to net loss of $43.3 million, adjusted for $29.5 million of non-cash items and cash outflows from changes in operating assets and liabilities of $4.8 million.
Cash provided by financing activities for the year ended December 31, 2022 was $2.2 million related to proceeds from the issuance of common stock under our stock-based incentive compensation plans. 71 Critical Accounting Policies, Significant Judgments, and Use of Estimates This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.
Cash provided by financing activities for the year ended December 31, 2023 was $90.9 million resulting from proceeds of $83.7 million from the issuance of common stock under our follow-on public offering, proceeds of $6.6 million from the issuance of common stock under our stock-based incentive compensation plans, and net proceeds of $0.7 million from the refinancing of our term loan with First-Citizens. 75 Critical Accounting Policies, Significant Judgments, and Use of Estimates This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.
On January 6, 2023, we entered into a First Amendment to Loan and Security Agreement (the “Amendment”) with SVB, which amends our Original Term Loan pursuant to which we had a term loan facility in an aggregate principal amount of $35.0 million (the “Original Loan Agreement” and with the Amendment, collectively the “Amended Loan Agreement”).
Pursuant to the Original Loan Agreement, SVB provided us with a term loan in the aggregate principal amount of $35.0 million (the “Original Term Loan”). On January 6, 2023, we entered into a First Amendment to Loan and Security Agreement with SVB (the “First Amendment”, and together with the Original Loan Agreement, collectively the “Amended Loan Agreement”).
The increase in interest expense for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily due to higher interest rates associated with the First-Citizens Term Loan. Other Income (Expense), Net.
The decrease in interest expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to lower interest rates associated with the First-Citizens Third Amended Loan Agreement. Other Income (Expense), Net.
Cash Used In Investing Activities Net cash used in investing activities in the year ended December 31, 2023 was $59.8 million compared to net cash used in investing activities of $2.8 million in the year ended December 31, 2022.
Cash Used In and Provided by Investing Activities Net cash provided by investing activities in the year ended December 31, 2024 was $12.6 million compared to net cash used in investing activities of $59.8 million in the year ended December 31, 2023.
Gain operational efficiency To support our growing portfolio of solutions, we continue to evolve our business processes to identify, measure and improve operational efficiency. The information developed will allow us to optimize processes, increase sales force productivity and improve asset utilization. We are focused on increasing our territory sales managers and sales representatives capacity, efficiency and productivity.
The information developed will allow us to optimize processes, increase sales force productivity and improve asset utilization. We are focused on increasing our territory sales managers and sales representatives capacity, efficiency and productivity.
The increase in sales and marketing expenses for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily due to a $6.1 million increase in commissions driven by higher revenues, partially offset by a $3.6 million decrease in employee related costs and travel related costs driven by lower headcount within sales and marketing as well as timing of certain commercial activities.
The increase in sales and marketing expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to a $6.4 million increase in commissions and employee related costs driven by higher revenues, an increase of $1.1 million in physician training and engagement expenses, and an increase in travel expenses of $0.4 million, partially offset by a $1.1 million decrease in certain advertising and marketing activities and consulting.
As of December 31, 2023, our international sales force consisted of 14 sales representatives directly employed by us and 31 third-party sales agents and resellers, compared to 18 sales representatives directly employed by us and 30 third-party sales agents and resellers as of December 31, 2022. 62 As of December 31, 2023, over 20 percent of our procedures for sacroiliac joint dysfunction were performed at ambulatory surgery centers, or ASCs.
As of December 31, 2024, our international sales force consisted of 9 sales representatives directly employed by us and 31 third-party sales agents and resellers, compared to 14 sales representatives directly employed by us and 31 third-party sales agents and resellers as of December 31, 2023. 66 For fiscal year ended December 31, 2024, over 25 percent of our procedures for sacroiliac joint dysfunction were performed at ASCs and OBLs.
Term Loan Our outstanding debt is related to a term loan pursuant to the Loan and Security Agreement dated August 12, 2021 (the “Effective Date”), entered into by us and Silicon Valley Bank (“SVB”). Pursuant the agreement, SVB provided a term loan in the aggregate principal amount of $35.0 million to us (the “Original Term Loan”).
Term Loan Our outstanding debt is related to a Loan and Security Agreement (the “Original Loan Agreement”) dated August 12, 2021 (the “Effective Date”), entered into by us and Silicon Valley Bank, a California corporation (“SVB”).
We are working with a select group of physicians on STACI, a prospective study on the use of iFuse-TORQ in patients with sacroiliac joint dysfunction. The purpose of STACI is to provide post-market information on the safety and effectiveness of minimally invasive sacroiliac joint fusion procedures performed with iFuse-TORQ.
The purpose of STACI is to provide post-market information on the safety and effectiveness of minimally invasive sacroiliac joint fusion procedures performed with iFuse TORQ.
The table below summarizes our results of operations for the periods presented (percentages are amounts as a percentage of revenue), which we derived from the consolidated financial statements: Year ended December 31, 2023 Year ended December 31, 2022 Amount % Amount % (in thousands, except for percentages) Consolidated Statements of Operations Data: Revenue $ 138,886 100 % $ 106,409 100 % Cost of goods sold 29,466 21 % 15,705 15 % Gross profit 109,420 79 % 90,704 85 % Operating expenses: Sales and marketing 110,254 79 % 107,726 101 % Research and development 15,028 11 % 13,627 13 % General and administrative 31,069 22 % 28,960 27 % Total operating expenses 156,351 113 % 150,313 141 % Loss from operations (46,931) (34) % (59,609) (56) % Interest and other income (expense), net: Interest income 6,916 5 % 1,304 1 % Interest expense (3,462) (2) % (2,819) (3) % Other income (expense), net 141 — % (132) — % Net loss $ (43,336) (31) % $ (61,256) (58) % We derive the majority of our revenue from sales to customers in the United States.
The table below summarizes our results of operations for the periods presented (percentages are amounts as a percentage of revenue), which we derived from the consolidated financial statements: Year ended December 31, 2024 Year ended December 31, 2023 Amount % Amount % (in thousands, except for percentages) Consolidated Statements of Operations Data: Revenue $ 167,178 100 % $ 138,886 100 % Cost of goods sold 35,057 21 % 29,466 21 % Gross profit 132,121 79 % 109,420 79 % Operating expenses: Sales and marketing 117,054 70 % 110,254 79 % Research and development 16,560 10 % 15,028 11 % General and administrative 33,755 20 % 31,069 22 % Total operating expenses 167,369 100 % 156,351 113 % Loss from operations (35,248) (21) % (46,931) (34) % Interest and other income (expense), net: Interest income 7,848 5 % 6,916 5 % Interest expense (3,440) (2) % (3,462) (2) % Other income (expense), net (73) — % 141 — % Loss before income taxes $ (30,913) (18) % $ (43,336) (31) % We derive the majority of our revenue from sales to customers in the United States.
Cash Provided by Financing Activities Cash provided by financing activities in the year ended December 31, 2023 was $90.9 million resulting from proceeds of $83.7 million from the issuance of common stock under our follow-on public offering, proceeds of $6.6 million from the issuance of common stock under our stock-based incentive compensation plans, and net proceeds of $0.7 million from the refinancing of our term loan with First-Citizens.
Cash Provided by Financing Activities Cash provided by financing activities in the year ended December 31, 2024 was $2.0 million resulting from proceeds of $2.7 million from the issuance of common stock under our stock-based incentive compensation plans, offset by the payment of $0.8 million for the final fee relative to the refinancing of our term loan with First-Citizens.
The increase in research and development expenses for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily due to a $0.9 million increase in employee related costs and stock-based compensation due to higher compensation, a $0.4 million increase in consulting costs and travel related costs driven by more projects in development, and a $0.1 million increase in facilities and other related costs resulting from the research and development facility.
Research and Development Expenses. The increase in research and development expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to a $0.9 million increase in employee related costs and stock-based compensation due to higher headcount and a $0.6 million increase in product development costs. General and Administrative Expenses .
(2) Represents the future interest obligations on our First-Citizens Term Loan estimated using an interest rate of 9.0% as of December 31, 2023.
(2) Represents the future interest obligations on our First-Citizens Third Amended Loan Agreement estimated using an interest rate of 7.0% as of December 31, 74 2024. This compared to $49.2 million of contractual obligations as of December 31, 2023.
The increase in general and administrative expenses for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily due to a $1.6 million increase in employee related costs and stock-based compensation, a $0.6 million increase in the allowance for credit losses and a $0.3 million increase in accounting and audit fees primarily associated with Sarbanes-Oxley compliance requirements, partially offset by a $0.4 million decrease in consulting costs.
The increase in general and administrative expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to a $1.8 million increase in employee related costs and stock-based compensation, and a $0.9 million increase in consulting, accounting, audit, and legal expenses.
This compared to $48.7 million of contractual obligations as of December 31, 2022. 70 Cash Flows The following table sets forth the primary sources and uses of cash for each of the periods presented below: Year Ended December 31, 2023 2022 $ Change (in thousands) Net cash provided by (used in): Operating activities $ (18,713) $ (41,655) $ 22,942 Investing activities (59,798) (2,815) (56,983) Financing activities 90,933 2,197 88,736 Effects of exchange rate changes on cash and cash equivalents 132 (429) 561 Net increase in cash and cash equivalents $ 12,554 $ (42,702) $ 55,256 Cash Used in Operating Activities Net cash used in operating activities for the year ended December 31, 2023 of $18.7 million resulted from cash outflows due to net loss of $43.3 million, adjusted for $29.5 million of non-cash items and cash outflows from changes in operating assets and liabilities of $4.8 million.
Cash Flows The following table sets forth the primary sources and uses of cash for each of the periods presented below: Year Ended December 31, 2024 2023 $ Change (in thousands) Net cash provided by (used in): Operating activities $ (12,425) $ (18,713) $ 6,288 Investing activities 12,623 (59,798) 72,421 Financing activities 1,958 90,933 (88,975) Effects of exchange rate changes on cash and cash equivalents (479) 132 (611) Net increase in cash and cash equivalents $ 1,677 $ 12,554 $ (10,877) Cash Used in Operating Activities Net cash used in operating activities for the year ended December 31, 2024 of $12.4 million resulted from cash outflows due to net loss of $30.9 million, adjusted for $28.6 million of non-cash items and cash outflows from changes in operating assets and liabilities of $10.1 million.
The table below summarizes our revenue by geography: Year ended December 31, 2023 Year ended December 31, 2022 Amount % Amount % (in thousands except for percentages) United States $ 130,621 94 % $ 98,751 93 % International 8,265 6 % 7,658 7 % $ 138,886 100 % $ 106,409 100 % Comparison of the years ended December 31, 2023 and 2022 Revenue, Cost of Goods Sold, Gross Profit, and Gross Margin : Year Ended December 31, 2023 2022 $ Change % Change (in thousands except for percentages) Revenue $ 138,886 $ 106,409 $ 32,477 31 % Cost of goods sold 29,466 15,705 13,761 88 % Gross profit $ 109,420 $ 90,704 $ 18,716 21 % Gross margin 79 % 85 % Revenue.
The table below summarizes our revenue by geography: Year ended December 31, 2023 Year ended December 31, 2022 Amount % Amount % (in thousands except for percentages) United States $ 158,416 95 % $ 130,621 94 % International 8,762 5 % 8,265 6 % $ 167,178 100 % $ 138,886 100 % Comparison of the years ended December 31, 2024 and 2023 Revenue, Cost of Goods Sold, Gross Profit, and Gross Margin : Year Ended December 31, 2024 2023 $ Change % Change (in thousands except for percentages) Revenue $ 167,178 $ 138,886 $ 28,292 20 % Cost of goods sold 35,057 29,466 5,591 19 % Gross profit $ 132,121 $ 109,420 $ 22,701 21 % Gross margin 79 % 79 % Revenue.
The increase in revenue is due to the increase in case volumes, driven by a seasoned and growing base of active physicians and an expanded product portfolio. 67 Gross Profit and Gross Margin. Gross profit increased $18.7 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 driven by higher revenue.
The increase in revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023 comprised a $27.8 million increase in our U.S. revenue from increased case volumes due to our expanded portfolio and growing base of active physicians and an increase of $0.5 million i n our international revenue due to the increase in case volumes. 71 Gross Profit and Gross Margin.
Interest Expense Interest expense is primarily related to borrowings, amortization of debt issuance costs, and accretion of final fees on the First-Citizens Term Loan. Other Income (Expense), Net Other income (expense), net consists primarily of net foreign exchange gains and losses on foreign transactions. 66 Results of Operations We manage and operate as one reportable segment.
Other Income (Expense), Net Other income (expense), net consists primarily of net foreign exchange gains and losses on foreign transactions. 70 Results of Operations We manage and operate as one reportable segment.
Operating Expenses : Year Ended December 31, 2023 2022 $ Change % Change (in thousands, except for percentages) Sales and marketing $ 110,254 $ 107,726 $ 2,528 2 % Research and development 15,028 13,627 1,401 10 % General and administrative 31,069 28,960 2,109 7 % Total operating expenses $ 156,351 $ 150,313 $ 6,038 4 % Sales and Marketing Expenses.
Operating Expenses : Year Ended December 31, 2024 2023 $ Change % Change (in thousands, except for percentages) Sales and marketing $ 117,054 $ 110,254 $ 6,800 6 % Research and development 16,560 15,028 1,532 10 % General and administrative 33,755 31,069 2,686 9 % Total operating expenses $ 167,369 $ 156,351 $ 11,018 7 % Sales and Marketing Expenses.
Net c ash used in investing activities for the year ended December 31, 2022 consisted of purchases of property and equipment of $9.5 million related to individual components in instrument trays to support increased case volumes, increased demand for iFuse-TORQ and the launch of iFuse Bedrock Granite, as well as capitalized costs related to the lease in Santa Clara, partially offset by maturities of our marketable securities, net of purchases of $6.7 million.
Net cash provided by inves ting activities for the year ended December 31, 2024 consisted of purchases of property and equipment of $10.5 million related to individual components in instrument trays to support increased case volumes and software, offset by maturities of our marketable securities, net of purchases, of $23.1 million.
To attract, retain, and develop our talent, we seek to create a diverse and inclusive workplace with opportunities for our employees to thrive and advance in their careers. We support this with market-competitive compensation, comprehensive benefits, and health and wellness programs.
Enhance Employee Experience and Engagement Our ability to recruit, develop and retain highly skilled talent is a significant determinant of our success. To attract, retain, and develop our talent, we seek to create a diverse and inclusive workplace with opportunities for our employees to thrive and advance in their careers.
Expected timing of those payments are as follows: Payments Due By Period Total Less than 1 year 1-3 years 4-5 years More than 5 years (in thousands) Principal obligations and final fee on long-term debt (1) $ 36,720 $ — $ 22,800 $ 13,920 $ — Interest obligations (2) 8,899 3,294 5,006 599 — Operating leases obligations 3,118 1,543 1,566 9 — Purchase obligations 430 430 — — — Total $ 49,167 $ 5,267 $ 29,372 $ 14,528 $ — (1) Represents the principal obligations and the final fee at maturities of our First-Citizens Term Loan.
Expected timing of those payments are as follows: Payments Due By Period Total Less than 1 year 1-3 years 4-5 years More than 5 years (in thousands) Principal obligations on long-term debt (1) $ 36,000 $ — $ 6,000 $ 30,000 $ — Interest obligations (2) 9,474 2,555 5,056 1,863 — Operating leases obligations 2,150 1,238 901 11 — Purchase obligations 438 438 — — — Total $ 48,062 $ 4,231 $ 11,957 $ 31,874 $ — (1) Represents the principal obligations at maturities of our First-Citizens Third Amended Loan Agreement.
We have also adopted a goal for each of our managers to have regular check-ins with employees to discuss their personal goals and career plans in furtherance of our commitment to career and professional development. We maintain a commitment to employee retention by leveraging insights from exit interviews and engagement surveys to continuously enhance the workplace experience.
We have also adopted a goal for each of our managers to have regular check-ins with employees to discuss their personal goals and career plans in furtherance of our commitment to career and professional development. Gain operational efficiency To support our growing portfolio of solutions, we continue to evolve our business processes to identify, measure and improve operational efficiency.
We may elect to prepay the Term Loan in whole prior to the Term Loan Maturity Date subject to a prepayment fee equal to 2% of the principal amount of the Term Loan prepaid at such time. No prepayment fee would be due if the Term Loan is refinanced by First-Citizens.
The Company may elect to prepay the Third Amendment Term Loan in whole prior to the Third Amendment Term Loan Maturity Date, subject to a prepayment fee equal to 1.5% of the original principal amount of the Third Amendment Term Loan if the loan is prepaid within 18 months following the closing of the Third Amendment.
Since launching our first generation iFuse in 2009, we have launched new titanium implant product lines, iFuse-3D in 2017, iFuse-TORQ in 2021 and iFuse Bedrock Granite in 2022. Within the United States, our iFuse, iFuse-3D and iFuse-TORQ have clearances for applications across sacroiliac joint dysfunction and fusion, adult deformity and degeneration, and pelvic trauma.
Since launching our first generation iFuse in 2009, we have launched multiple implant product lines, including iFuse-3D in 2017, iFuse TORQ in 2021, iFuse Bedrock Granite in 2022, and iFuse INTRA and iFuse TORQ TNT in 2024.
General and Administrative Expenses General and administrative expenses primarily consist of salaries, stock-based compensation expense, and other costs for finance, accounting, legal, insurance, compliance, and administrative matters. 65 Interest Income Interest income is primarily related to our investments of excess cash in money market funds and marketable securities.
As such, we anticipate that research and development expenses will continue to increase in the future. General and Administrative Expenses General and administrative expenses primarily consist of salaries, stock-based compensation expense, and other costs for finance, accounting, legal, insurance, compliance, and administrative matters.
Gross margin was 79% for the year ended December 31, 2023 compared to 85% in the prior year.
Gross profit increased $22.7 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 driven by higher revenue. Gross margin was 79% for the years ended December 31, 2024 and December 31, 2023.
Interest and Other Income (Expense), Net : Year Ended December 31, $ Change % Change 2023 2022 (in thousands, except for percentages) Interest income $ 6,916 $ 1,304 $ 5,612 430 % Interest expense (3,462) (2,819) (643) (23) % Other income (expense), net 141 (132) 273 207 % Total interest and other income (expense), net $ 3,595 $ (1,647) $ 5,242 318 % Interest Income.
Interest and Other Income (Expense), Net : Year Ended December 31, $ Change % Change 2024 2023 (in thousands, except for percentages) Interest income $ 7,848 $ 6,916 $ 932 13 % Interest expense (3,440) (3,462) 22 1 % Other income (expense), net (73) 141 (214) 152 % Total interest and other income (expense), net $ 4,335 $ 3,595 $ 740 (21) % Interest Income.
Gross margin decreased due to procedure and product mix given the higher total costs of iFuse-TORQ and iFuse Bedrock Granite implants including royalties, the increase in inventory reserve expense and the increase in depreciation costs to support the growth of the business .
Gross margin was consistent with prior year due to higher total costs related to iFuse TORQ and iFuse Bedrock Granite implants including royalties, offset by a decrease in depreciation costs and inventory reserves.
Removed
We have been making targeted investments in digital marketing initiatives to drive patient awareness, to empower and educate patients as they manage their sacroiliac joint dysfunction and associated pain. These marketing programs are targeted at patients in chronic, severe sacroiliac joint pain who have been in conservative care for an extended period of time.
Added
In the United States, iFuse, iFuse-3D, iFuse TORQ and iFuse Bedrock Granite have clearances for applications in sacroiliac joint dysfunction, adult spinal deformity and pelvic trauma. iFuse TORQ TNT has clearances for applications in pelvic trauma and sacroiliac joint dysfunction.
Removed
We are focused on connecting patients with physicians in their area who perform minimally invasive sacroiliac joint procedures through our Find-a-Doctor website tool. Through a variety of channels, including search, social and display, we have deployed a number of campaigns and are continually optimizing to maximize patient awareness and to connect patients with physicians.
Added
We are no longer actively recruiting patients in our SAFFRON study and anticipate publishing follow-up results in 2025. We are working with a select group of physicians on STACI, a prospective study on the use of iFuse TORQ in patients with sacroiliac joint dysfunction.
Removed
In 2023, we spent $15.0 million on research and development, equating to 11% of our 2023 revenue. 63 Enhance Employee Experience and Engagement Our ability to recruit, develop and retain highly skilled talent is a significant determinant of our success.
Added
Interest Income Interest income is primarily related to our investments of excess cash in money market funds and marketable securities. 69 Interest Expense Interest expense is primarily related to borrowings, amortization of debt issuance costs, and accretion of final fees on the First-Citizens Third Amended Loan Agreement.
Removed
As such, we anticipate that research and development expenses will continue to increase in the future.
Added
On January 25, 2024, we entered into a Second Amendment to Loan and Security Agreement with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as successor in interest to SVB (“First-Citizens”) which further amended our Amended Loan Agreement (the “Second Amendment” and together with the Amended Loan Agreement, collectively, the “Second Amended Loan Agreement”).
Removed
The increase in revenue for the year ended December 31, 2023 compared to the year ended December 31, 2022 comprised a $31.9 million increase in our U.S. revenue and an increase of $0.6 million i n our international revenue.
Added
The Second Amendment revised certain provisions related to financial covenants and the periods in which such covenants applied.
Removed
On March 14, 2023 all of SVB’s assets and liabilities, including all of SVB’s rights as the lender pursuant to the Amended Loan Agreement, were assigned to Silicon Valley Bridge Bank. On March 27, 2023, all of Silicon Valley Bridge Bank’s assets and liabilities were assigned and assumed by First-Citizens Bank & Trust Company (“First-Citizens”).
Added
On November 8, 2024, we entered into a Third Amendment to Loan and Security Agreement with First-Citizens (the “Third Amendment” and together with the Second Amended Loan Agreement, collectively, the “Third Amended Loan Agreement”), relative to a new term loan in the original aggregate principal amount of $36.0 million extended by First-Citizens to the Company (the “Third Amendment Term Loan”), which was substantially used to refinance and repay in full the then-outstanding $36.0 million existing First Amendment Term Loan.
Removed
The Amended Loan Agreement also includes an uncommitted accordion term loan in an aggregate principal amount of up to $15.0 million, which accordion may be approved by First-Citizens, solely in its discretion, upon our request. The Term Loan matures on December 1, 2027 (the “Term Loan Maturity Date”).
Added
We also paid a certain final payment fee due relative to such prior First Amendment Term Loan.
Removed
Interest on the Term Loan will be payable monthly at a floating annual rate set at the greater of the prime rate as published in the Wall Street Journal plus 0.5% or 6.75%. Commencing on July 1, 2025, we will be required to make monthly principal Term Loan amortization payments.
Added
The Third Amendment set the maturity date for the Third Amendment Term Loan to September 1, 2029 (the "Third Amendment Term Loan Maturity Date"), and set the first principal repayment due date relative to the Third Amendment Term Loan to October 1, 2027; provided that upon the achievement of the Performance Milestone (as defined in the Third Amendment), the first principal payment shall become due on October 1, 2028.
Removed
A final fee payment of 2% of the original principal amount of the Term Loan is due upon the earlier of the Term Loan Maturity Date, termination, acceleration by First-Citizens following an event of default, or prepayment of the Term Loan.
Added
Interest on the outstanding principal balance of the Third Amendment Term Loan is payable monthly at a floating rate per annum equal to the greater of 4.25% and the WSJ prime rate minus 0.5%.
Removed
Pursuant to the terms of the Amended Loan Agreement, revolving loans may be borrowed, repaid and reborrowed until the maturity date, which will be July 6, 2025 (the “Revolving Line Maturity Date”). Borrowings under the Revolving Line are based on 80% of eligible domestic accounts receivable borrowing base.
Added
The Third Amendment further revised certain provisions related to financial covenants 73 and the periods in which such covenants apply, and First-Citizens and the Company also agreed to terminate the Revolving Line and an uncommitted accordion term loan provision.
Removed
Interest on the outstanding balance of the Revolving Line will be payable monthly at a floating annual rate set at the greater of the prime rate as published in the Wall Street Journal or 6.25%.
Removed
Interest on borrowings is due monthly and any principal balance is due on the Revolving Line Maturity Date, provided that when Revolving Line Advances are outstanding, in the event we do not maintain an adjusted quick ratio of at least 1.5 to 1.0, then falling below such threshold will allow First-Citizens to apply accounts receivable collections to outstanding Revolving Line borrowings.
Removed
We will pay a total commitment fee of $187,500 on account of the Revolving Line payable in installments, but fully earned at close.
Removed
We will also be required to pay a fee of $150,000 if we terminate the Amended Loan Agreement or the Revolving Line prior to Revolving Line Maturity Date, or if First-Citizens terminates the Loan Agreement or the Revolving Line following an event of default.
Removed
No termination fee would be due if the Revolving Line is replaced with a new facility with First-Citizens. No amounts were outstanding under the Revolving Line as of December 31, 2023. 69 On March 10, 2023, we violated certain terms of the credit facility by opening bank accounts with another financial institution and transferring funds from SVB.
Removed
We entered into a letter agreement with Silicon Valley Bridge Bank waiving enforcement of this covenant and providing us the right to hold a portion of our cash at other financial institutions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Removed
Item 7A. Quantitative and Qualitative Disclosures about Market Risk While we became a large accelerated filer as of December 31, 2023, we are not required to reflect the change in our smaller reporting company status and comply with the associated increased disclosure obligations until our quarterly report for the three-month period ending March 31, 2024.
Added
Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to market risks, including changes to foreign currency exchange rates and interest rates. Foreign Currency Exchange Risk We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the Euro.
Removed
As a result, we are not required to provide the information otherwise required by this Item 73
Added
Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, have in the past, and may in the future, negatively affect our revenue and other operating results as expressed in U.S. dollars.
Added
We have experienced and will continue to experience fluctuations in net loss as a result of transaction gains or losses related to remeasuring certain current asset and current liability balances denominated in currencies other than the functional currency of the entities in which they are recorded.
Added
At this time, we have not entered into, but in the future we may enter into, derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk. It is difficult to predict the effect hedging activities would have on our results of operations.
Added
Foreign currency gains or losses, net recognized in the years ended 2024, 2023 and 2022 were not material. A hypothetical 100 basis point change in foreign exchange rates during any of the periods presented would not have had a material impact on our consolidated financial statements.
Added
Interest Rate Risk Our exposure to changes in interest rates relates to interest earned and market value on our cash and cash equivalents and short-term investments. Our cash and cash equivalents and short-term investments consist of cash, money market funds, U.S. government securities. The market value of our marketable securities may decline if current market interest rates rise.
Added
Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements. We do not make investments for trading or speculative purposes.
Added
With the execution of the Third Amendment with First-Citizens relative to the Third Amendment Term Loan, interest is payable monthly at a floating annual rate set at the greater of the prime rate as published in the Wall Street Journal minus 0.5% or 4.25%. Rising interest rates will increase the amount of interest paid on this debt.
Added
We believe that our exposure to interest rate risk is not significant due to the low risk profile of our investments and the amount of our Third Amendment Term Loan, therefore a hypothetical 100 basis point in market interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements. 77

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