The following discussion and analysis of our financial condition and results
of operations should be read in conjunction with our condensed consolidated
financial statements and the related notes to those statements included
elsewhere in this Quarterly Report on Form 10-Q, and with the consolidated
financial statements and management's discussion and analysis of our financial
condition and results of operations in our Annual Report on Form 10-K filed with
the SEC on March 2, 2023. Some of the information contained in this discussion
and analysis, or set forth elsewhere in this Quarterly Report on Form 10-Q,
including information with respect to our plans and strategy for our business,
includes forward-looking statements that involve risks and uncertainties. As a
result of many important factors, including those set forth in the "Risk
Factors" section of this Quarterly Report on Form 10-Q, our actual results could
differ materially from the results described in, or implied, by these
forward-looking statements.

Przegląd

We are a medical device company dedicated to solving musculoskeletal disorders
of the sacropelvic anatomy. Leveraging our knowledge of pelvic anatomy and
biomechanics, we have pioneered proprietary minimally invasive surgical implant
systems to address sacroiliac joint dysfunction as well as address unmet
clinical needs in pelvic fixation and management of pelvic fractures. Our
products include a series of patented titanium implants and the instruments used
to implant them. Since launching our first generation iFuse in 2009, we have
launched three new 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.

We market our products primarily with a direct sales force as well as a number
of third-party sales agents in the U.S., and with a combination of a direct
sales force, and sales agents and resellers in other countries. As of March 31,
2023, more than 80,000 procedures have been performed by over 3,000 surgeons in
the United States and 38 other countries since we introduced iFuse in 2009.

Wpływ COVID-19

The global COVID-19 pandemic, and the healthcare and economic disruptions it
caused, may continue to pose future risks with the emergence of new variants.
Even with the public health actions that have been taken to reduce the spread of
the virus, the market could experience disruptions with respect to demand for
our procedures, or the ability of healthcare facilities to provide our elective
procedures to patients.

Elevated infection rates and measures taken to reduce infection have also
impacted, and may continue to impact, our third-party manufacturers and
suppliers, and could in turn adversely impact the availability or cost of
materials, which could disrupt our supply chain. Periodic resurgence of the
COVID-19 pandemic negatively impacted our revenues at various periods throughout
2022 as evidenced by case deferrals attributed to COVID-19. This effect could
continue in 2023.

Istnienie i dalszy czas trwania pandemii COVID-19 może również dodatkowo zaostrzyć pewne zagrożenia, jak opisano w „Części II – Pozycja 1A – Czynniki ryzyka” poniżej.

Czynniki wpływające na wyniki operacji i kluczowe wskaźniki wydajności

We monitor certain key performance indicators that we believe provide us and our
investors indications of conditions that may affect results of our operations.
Our revenue growth rate and commercial progress is impacted by, among other
things, our key performance indicators, including our ability to expand access
to solutions, increase surgeon penetration, launch new products, address human
capital needs and gain operational efficiencies.

Rozwiń Dostęp do rozwiązań

As we expand our portfolio, the experience, caliber, and strong clinician
relationships of our sales force, including our network of third-party sales
agents, will be crucial to drive adoption of our future products and procedures.
Since our initial public offering in 2018, we have made significant investments
in our commercial infrastructure to build a valuable sales team to expand the
market, drive surgeon engagement and deliver revenue growth.
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While we will continue to selectively expand our sales force, we are also
focused on increasing our sales managers capacity and driving sales force
productivity by adding more clinical support specialists and implementing hybrid
models, including selectively adding third-party sales agents for case coverage
and by consigning instrument trays and implants at selective sites of service.
This expansion of our sales force is one aspect of increasing the overall number
of procedures in a given period that we can support with products, which is what
we call "surgical capacity." Our surgical capacity is also limited by the volume
of implant inventory and the number of instrument trays held ready for surgery,
either at our headquarters facility, forward deployed with our sales force or
consigned to customer facilities. As we grow, and as adoption of our solutions
continues to mature, our overall surgical capacity may become an important
driver of the amount of revenue that we can generate.

As of March 31, 2023, our U.S. sales force consisted of 87 territory sales
managers and 67 clinical support specialists directly employed by us and 126
third-party sales agents, compared to 88 territory sales managers and 66
clinical support specialists directly employed by us and 66 third-party sales
agents as of March 31, 2022. As of March 31, 2023, our international sales force
consisted of 12 sales representatives directly employed by us and a total of 31
third-party sales agents and resellers, compared to 18 sales representatives
directly employed by us and a total of 31 third-party sales agents and resellers
as of March 31, 2022.

With the steady increase in the numbers of minimally invasive procedures,
including sacroiliac joint fusion procedures, being performed at ASCs, we
continue to actively engage the ASCs to educate them on our clinical evidence,
exclusive commercial payor coverage and focus on driving improved education and
pathways between pain physicians and surgeons. As of March 31, 2023, over 20
percent of procedures for sacroiliac joint dysfunction using our products were
performed at ASCs.

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. We are focused on connecting
patients with surgeons in their area who perform minimally invasive SI-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 surgeons. Our data-driven approach enables us to focus our
investment on the most cost-effective programs.

Zaangażowanie chirurga

Engaging and educating surgeons and other healthcare professionals about the
clinical merits and patient benefits of our solutions will be important to grow
surgeon adoption. Our medical affairs team works closely with our sales team to
increase surgeon engagement and activation. Surgeon activity includes both the
number of surgeons performing our procedures as well as the number of procedures
performed per surgeon. In addition to training new surgeons, we have several
initiatives to re-engage inactive surgeons.

We utilize a combination of hands-on cadaveric and dry-lab training, as well as
SI-BONE SImulator - a portable, radiation-free, haptics and computer-based
simulator for training purposes, and optimize our programs to improve adoption
rate, time to first case and ultimately surgeon productivity.

As of March 31, 2023 and 2022, in the U.S. more than 2,300 surgeons and 1,800
surgeons, respectively, have been trained on iFuse and have treated at least one
patient. Outside the U.S., as of March 31, 2023 and 2022, more than 900 surgeons
and 700 surgeons, respectively, have been trained on iFuse and have treated at
least one patient. We will continue to pursue approximately 5,200 target
surgeons in the U.S., as well as international surgeons to train and retrain in
the future. Since launching our academic training program in August 2018, we
have trained residents and fellows in over 215 academic programs in the U.S.,
resulting in the training of over 1300 surgical residents and fellows.
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Rozwiń rynki adresowalne

Expanding our platform of sacropelvic solutions to address sacroiliac joint
dysfunction, pelvic fixation and pelvic trauma has been a key tenet of our
strategy, and we have made substantial progress on this mission. With iFuse-3D,
iFuse-TORQ and iFuse Bedrock Granite, we believe that the value of our
innovative, versatile, and complementary product portfolio provides surgeons
with a comprehensive set of alternatives, and positions us as the top choice for
surgeons for sacropelvic solutions.

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 long-construct spinal fusion.
We anticipate the results for the primary endpoint in 2024. 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 continue to invest in R&D initiatives to bring new and differentiated
solutions to the market that deliver on our vision of improving patient quality
of life through differentiated solutions to target segments with a clear unmet
clinical need. 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.
During three months ended March 31, 2023, we spent $3.3 million on R&D, equating
to 10% of our revenue.

Zwiększ doświadczenie i zaangażowanie pracowników

Our ability to recruit, develop and retain highly skilled talent is a
significant determinant of our success. To facilitate talent attraction,
retention, and development, we strive to make SI-BONE an inclusive, diverse, and
safe workplace with opportunities for our employees to grow and develop in their
careers, supported by strong compensation, benefits, and health and wellness
programs, as well as by programs that build connections between our employees
and the communities in which they live and work.

In addition to ensuring workforce diversity as well as fair and equitable pay to
our employees, we remain focused on enhancing employee retention and job
satisfaction. To that effect, we have created a feedback framework to monitor
and respond to employee sentiment on an ongoing basis. Leveraging the insights
from this feedback, we are focused on implementing strategies to enhance
productivity and increase employee empowerment to drive quick decision making
and prioritization across the organization. Additionally, we offer ongoing
learning and leadership training opportunities that support growth and
development. In 2022 we conducted a formal management training program and
implemented a new career development program which includes a formalized
framework that reflects how an employee can advance their career within the
company. Through our engagement programs and voluntary and giving activities, we
are also focused on building connections between our employees, their families,
and our communities to create a more meaningful and fulfilling workplace. We
experienced a decrease in voluntary employee attrition during 2022, which we
believe was at least in part to due to our actions to improve employee
experience.

Zyskaj wydajność operacyjną

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 sales managers and sales representatives
capacity, efficiency and productivity. 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. At the end of March 31, 2023, our trailing twelve months
average revenue per territory in the U.S. was $1.3 million dollars.

We have made significant investments in instrument sets used to perform
surgeries. Our goal is to deploy instrument sets to the market where the demand
exists to increase our asset utilization rates over time and use capital more
effectively, by having our instrument sets used in more surgeries in any given
time period. Given supply chain disruptions impacting the industry, we are
working closely with our suppliers to reduce lead time for our implants to
ensure we can support our expanding surgeon footprint and over time build the
resilience in our supply chain to reduce our cash investment in inventory.
Additionally, we are partnering with our suppliers around design for
manufacturing, specifically for newer products, to reduce the overall cost of
the implants as we scale, and reduce waste and rework. 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.
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Składowe wyników operacji

Przychód

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. Similar to other orthopedic companies, our case volume can vary from
quarter to quarter due to a variety of factors including reimbursement, sales
force changes, physician activities, seasonality, and the impact of COVID-19. In
addition, our revenue is impacted by changes in average selling price as we
respond to the competitive landscape and price differences at different medical
facilities, such as hospitals and ambulatory surgical centers, or ASCs. Further,
revenue results can differ based upon the mix of business between U.S. and
international sales mix of our products used, and the sales channel through
which each procedure is supported. Our revenue from international sales is
impacted by fluctuations in foreign currency exchange rates between the U.S.
dollar (our reporting currency) and the local currency.

Our business is affected by seasonal variations. For instance, we have
historically experienced lower sales in the summer months and higher sales in
the last quarter of the fiscal year as patients have more time in the winter
months to have the procedure completed or want to take advantage of their annual
insurance coverage limits. However, taken as a whole, seasonality does not have
a material impact on our financial results from year to year.

Starting March 2020, the impact of COVID-19 on our revenue has varied by period
and region based on various factors, including stage of containment, resurgence
of variants, success of regional vaccination campaigns, and associated
government and hospital actions around elective procedures, and the direct and
indirect impacts of economic and financial measures taken to mitigate the
economic impacts of the pandemic.

Koszt sprzedanych towarów, zysk brutto i marża brutto

We utilize third-party manufacturers for production of our implants and
instrument sets. Cost of goods sold consists primarily of costs of the
components of implants and instruments, instrument set depreciation, royalties,
scrap and inventory obsolescence, as well as distribution-related expenses such
as logistics and shipping costs. Our cost of goods sold has historically
increased as case levels increase.

Our gross profit and gross margin are affected by factors impacting revenue and
cost of goods sold. In addition, our gross margins are typically higher on
products we sell directly as compared to products we sell through third-party
sales agents. As a result, changes in the mix of direct versus third-party sales
agents sales can directly influence our gross margins.

Koszty operacyjne

Our operating expenses consist of sales and marketing, research and development,
and general and administrative expenses. Personnel costs are the most
significant component of operating expenses and consist of salaries, sales
commissions and other cash and stock-based compensation related expenses. We
intend to make investments to execute our strategic plans and operational
initiatives. We anticipate certain operating expenses will continue to increase
to support our growth.

Sales and Marketing Expenses

Sales and marketing expenses primarily consist of salaries, stock-based
compensation expense, and other compensation related costs, for personnel
employed in sales, marketing, medical affairs, reimbursement and professional
education departments. In addition, our sales and marketing expenses include
commissions and bonuses, generally based on a percentage of sales, as well as
certain commission guarantees paid to our senior sales management, direct
territory sales managers, clinical support specialists and third-party sales
agents.

Wydatki na badania i rozwój

Our research and development expenses primarily consist of engineering, product
development, clinical and regulatory expenses (including clinical study
expenses), consulting services, outside prototyping services, outside research
activities, materials, depreciation, and other costs associated with development
of our products. Research and development expenses also include related
personnel compensation and stock-based compensation expense. We expense research
and development costs as they are incurred.

Research and development expenses for engineering projects fluctuate with
project timing. Based upon our broader set of product development initiatives
and the stage of the underlying projects, we expect to continue to make
investments in research and development. As such, we anticipate that research
and development expenses will continue to increase in the future.

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Koszty ogólnoadministracyjne

General and administrative expenses primarily consist of salaries, stock-based
compensation expense, and other costs for finance, accounting, legal, insurance,
compliance, and administrative matters.

Wynik z tytułu odsetek

Przychody z tytułu odsetek dotyczą przede wszystkim naszych inwestycji nadwyżki środków pieniężnych w fundusze rynku pieniężnego i papiery wartościowe przeznaczone do obrotu.

Koszt odsetek

Koszty odsetek związane są przede wszystkim z pożyczkami, amortyzacją kosztów emisji długu oraz naliczaniem opłat końcowych z tytułu pożyczki terminowej First-Citizens.

Inne przychody (wydatki), netto

Pozostałe przychody (koszty) netto obejmują głównie dodatnie i ujemne różnice kursowe netto na transakcjach zagranicznych.

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Wyniki operacji

We manage and operate as one reportable segment. 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 accompanying condensed
consolidated financial statements:

                                                 Three Months Ended March 31,
                                                2023                               2022
                                         Amount                   %         Amount          %
                                            (in thousands, except for percentages)
Consolidated Statements of Operations Data:
Revenue                       $          32,708                 100  %    $  22,439       100  %
Cost of goods sold                        5,924                  18  %        2,983        13  %
Gross profit                             26,784                  82  %       19,456        87  %
Operating expenses:
Sales and marketing                      27,313                  84  %       25,605       114  %
Research and development                  3,291                  10  %        3,580        16  %
General and administrative                7,473                  23  %        7,139        32  %
Total operating expenses                 38,077                 117  %       36,324       162  %
Loss from operations                    (11,293)                (35) %      (16,868)      (75) %
Interest and other income (expense), net:
Interest income                             932                   3  %           73         -  %
Interest expense                           (838)                 (3) %         (561)       (3) %
Other income (expense), net                  74                   -  %          (54)        -  %
Net loss                      $         (11,125)                (35) %    $ (17,410)      (78) %

Większość naszych przychodów uzyskujemy ze sprzedaży klientom w Stanach Zjednoczonych. Przychody według położenia geograficznego oparte są na adresie rozliczeniowym klienta. Poniższa tabela podsumowuje nasze przychody według lokalizacji geograficznej:

                                     Three Months Ended March 31,
                                    2023                               2022
                              Amount                   %         Amount         %
                                (in thousands except for percentages)
United States     $         30,450                    93  %    $ 20,367        91  %
International                2,258                     7  %       2,072         9  %
                  $         32,708                   100  %    $ 22,439       100  %



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Porównanie trzech miesięcy zakończonych 31 marca 2023 i 2022 roku

Przychód, koszt sprzedanych towarów, zysk brutto i marża brutto:

                            Three Months Ended March 31,
                           2023                        2022         $ Change      % Change
                                     (in thousands, except for percentages)
Revenue              $      32,708                  $ 22,439       $ 10,269          46%
Cost of goods sold           5,924                     2,983          2,941          99%
Gross profit         $      26,784                  $ 19,456       $  7,328          38%
Gross margin                    82   %                    87  %



Revenue. The increase in revenue for the three months ended March 31, 2023 as
compared to the three months ended March 31, 2022 comprised a $10.1 million
increase in our U.S. revenue and an increase of $0.2 million in our
international revenue. The increase in revenue is due to the increase in case
volumes and higher domestic average selling prices.

Gross Profit and Gross Margin. Gross profit increased $7.3 million for the three
months ended March 31, 2023 as compared to the three months ended March 31,
2022, mainly driven by higher revenue. The gross margin was 82% for the three
months ended March 31, 2023 as compared to 87% for the three months ended March
31, 2022. Gross margin decreased in the first quarter 2023 due to procedure and
product mix given the higher total costs of the newly launched implants, and the
increase in depreciation and freight costs to support the growth of the
business. Gross margins also include the impact of foreign exchange on our
international revenue.

Operating Expenses:
                                    Three Months Ended March 31,
                                         2023                    2022        $ Change      % Change
                                              (in thousands, except for percentages)
Sales and marketing          $        27,313                  $ 25,605      $  1,708            7  %
Research and development               3,291                     3,580          (289)          (8) %
General and administrative             7,473                     7,139           334            5  %
Total operating expenses     $        38,077                  $ 36,324      $  1,753            5  %


Sales and Marketing Expenses. The increase in sales and marketing expenses for
the three months ended March 31, 2023 as compared to the three months ended
March 31, 2022 was primarily due to (a) increases in employee related costs,
commissions and stock-based compensation of $1.7 million driven by headcount
changes and higher revenues, and (b) higher levels of travel resulting in an
increase of $0.2 million, partially offset by (c) lower consulting and training
fees of $0.2 million associated with more targeted surgeon training programs.

Research and Development Expenses. The decrease in research and development
expenses for the three months ended March 31, 2023 compared to the three months
ended March 31, 2022 was primarily due to a decrease of $0.5 million in
consulting and research and development activities related to the timing of new
product development, partially offset by an increase of $0.2 million in employee
related costs and stock-based compensation.

General and Administrative Expenses. The increase in general and administrative
expenses for the three months ended March 31, 2023 compared to the three months
ended March 31, 2022 was primarily due to an increase of $0.3 million in
employee related costs and stock-based compensation driven by higher headcount.
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Odsetki i inne dochody (wydatki), netto:

                                            Three Months Ended March 31,
                                              2023                  2022             $ Change               % Change
                                                             (in thousands, except for percentages)
Interest income                         $          932          $      73          $      859                     1177  %
Interest expense                                  (838)              (561)               (277)                     (49) %
Other income (expense), net                         74                (54)                128                      237  %

Razem odsetki i inne wydatki, netto $ 168 $ (542)

        $      710                      131  %

Wynik z tytułu odsetek. Wzrost przychodów z tytułu odsetek za okres trzech miesięcy zakończony 31 marca 2023 roku w porównaniu z okresem trzech miesięcy zakończonym 31 marca 2022 roku wynikał głównie z wyższych odsetek uzyskanych z naszych inwestycji w zbywalne papiery wartościowe, głównie w wyniku wyższych stóp procentowych.

Interest Expense. The increase in interest expense for the three months ended
March 31, 2023 as compared to the three months ended March 31, 2022 was
primarily due to higher interest rates associated with the First-Citizens Term
Loan.

Other Income (Expense), Net. The change in other income (expense), net for the
three months ended March 31, 2023 compared to the three months ended March 31,
2022 was due to foreign currency fluctuations.

Płynność i zasoby kapitałowe

As of March 31, 2023, we had cash and marketable securities of $86.0 million
compared to $97.3 million as of December 31, 2022. We have financed our
operations primarily through our public offerings and debt financing
arrangements. As of March 31, 2023, we had $35.9 million in outstanding debt,
compared to $35.2 million as of December 31, 2022 .

As of March 31, 2023, we had an accumulated deficit of $368.2 million, compared
to $357.1 million as of December 31, 2022. During the three months ended March
31, 2023, we incurred a net loss of $11.1 million. During the years ended
December 31, 2022 and 2021, we incurred a net loss of $61.3 million and $56.6
million, respectively, and expect to incur additional losses in the future. We
have not achieved positive cash flow from operations to date.

Based upon our current operating plan, we believe that our existing cash and
marketable securities will enable us to fund our operating expenses and capital
expenditure requirements over the next 12 months and beyond. However, the
economic impact of the duration and potential resurgence of the COVID-19
pandemic and uncertainties affecting the economic and capital markets
environment and the financial services industry pose risks and uncertainties in
our future available capital resources. Further, we may face challenges and
uncertainties and, as a result, may need to raise additional capital as our
available capital resources may be consumed more rapidly than currently expected
due to, but not limited to, the following as a result of the COVID-19 pandemic
or otherwise: (a) decreases in sales of our products and the uncertainty of
future revenues from new products; (b) changes we may make to the business that
affect ongoing operating expenses; (c) changes we may make in our business
strategy; (d) regulatory and reimbursement developments affecting our existing
products; (e) changes we may make in our research and development spending
plans; and (f) other items affecting our forecasted level of expenditures and
use of cash resources. In addition, as we seek to deploy new product offerings,
the need for additional capital to fund the purchase of inventories of implants
and instrument sets may become more acute and may limit the number of revenue
opportunities that we pursue. Each new product family introduced typically
requires the purchase of consumable implant inventory as well as investment in a
fleet of instrument sets required to support procedures nationwide.

Kredyt terminowy

The 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 an aggregate
principal amount of $35.0 million to us (the "SVB Term Loan").

On January 6, 2023, we entered into a First Amendment to Loan and Security
Agreement (the "Amendment") with SVB, which amends our SVB 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"). Upon entry into the Amended Loan Agreement, we
borrowed $36.0 million pursuant to a 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
"Revolver"). On March 14, 2023 all of SVB's assets and liabilities, including
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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"). 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"). 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. 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. 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. 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 "Revolver Maturity
Date"). Borrowings under the Revolver are based on 80% of eligible domestic
accounts receivable borrowing base. Interest on the outstanding balance of the
Revolver 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%. Interest on
borrowings is due monthly and any principal balance is due on the Revolver
Maturity Date, provided that when Revolver 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 Revolver borrowings. We will pay a total
commitment fee of $187,500 on account of the Revolver payable in installments,
but fully earned at close. We will also be required to pay a fee of $150,000 if
it terminates the Amended Loan Agreement or Revolver prior to Revolver Maturity
Date. No termination fee would be due if the Revolver is replaced with a new
facility with First-Citizens. No amounts were outstanding under the Revolver as
of March 31, 2023.

On March 10, 2023, we violated one of the terms of the credit facility by
opening bank accounts with another financial institution and transferring funds
from SVB. 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. A future violation of any
covenants could result in a default under the Amended Loan Agreement that would
permit First-Citizens to restrict our ability to further access the Revolving
Line of Credit for loans and require the immediate repayment of any outstanding
loans under the agreement. As of March 31, 2023, we were in compliance with all
debt covenants, provided, however, that in order to access future credit
advances under the Revolving Line of Credit, we will be required to transfer
certain cash management accounts back to First-Citizens. As of March 31, 2023,
we had cash management accounts with a financial institution other than
First-Citizens and instructed our customers to direct payments to us to these
separate operating accounts. Until such operating accounts are closed and the
funds moved back to cash collateral accounts held at First-Citizens, we will be
unable to obtain credit advances under the Revolver.

The Amended Loan Agreement contains customary events of default, including
bankruptcy, the failure to make payments when due, the occurrence of a material
impairment on First-Citizens's security interest over the collateral, a material
adverse change, the occurrence of a default under certain other indebtedness of
our company and our subsidiaries, the rendering of certain types of judgments
against us and our subsidiaries, the revocation of certain government approvals,
violation of covenants, and incorrectness of representations and warranties in
any material respect. In addition, the Amended Loan Agreement contains a
financial covenant which requires us to maintain, at all times when the
Financial Covenant Measuring Period is in effect, certain net revenue levels as
agreed upon by us and First-Citizens. If we do not comply with the various
covenants under the Amended Loan Agreement and an event of default occurs under
the Amended Loan Agreement, the interest rate on outstanding amounts can
increase by 3% and First-Citizens may, subject to various customary cure rights,
decline to provide additional advances under the Revolver, require the immediate
payment of all amounts outstanding under the Amended Loan Agreement, and
foreclose on all collateral.

Our material cash requirements include various contractual and other obligations
consisting of long-term debt obligations with First-Citizens, operating lease
obligations and purchase obligations with some of our suppliers and have not
changed materially since the Form 10-K filed with the SEC on March 2, 2023. As
of March 31, 2023, expected timing of those payments are as follows:

                                                                                 Payments Due By Period
                                                        Less than 1                                                More than 5
                                         Total              year            1-3 years          4-5 years              years
                                                                            (in thousands)
Principal obligations and final fee
on debt (1)                           $ 36,720          $       -          $   8,400          $  28,320          $          -
Interest obligations (2)                10,742              2,338              6,031              2,373                     -
Operating lease obligations              4,256              1,195              2,522                539                     -
Purchase obligations                     1,837              1,837                  -                  -                     -
Total                                 $ 53,555          $   5,370          $  16,953          $  31,232          $          -




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(1)Represents the principal obligations and the final fee at maturities of our
First-Citizens Term Loan.
(2)Represents the future interest obligations on our First-Citizens Term Loan
estimated using an interest rate of 8.50% as of March 31, 2023.

To w porównaniu do 48,7 mln USD zobowiązań umownych na dzień 31 grudnia 2022 r.

Cash Flows

The following table sets forth the primary sources and uses of cash for each of
the periods presented below:
                                                        Three Months Ended March 31,
                                                          2023                  2022              $ Change
Net cash provided by (used in):                                          (in thousands)
Operating activities                               $       (10,753)         $  (13,512)         $    2,759
Investing activities                                        11,703             (22,608)             34,311
Financing activities                                         1,205                 169               1,036
Effects of exchange rate changes on cash and cash
equivalents                                                     97                (139)                236
Net increase (decrease) in cash and cash
equivalents                                        $         2,252          

(36 090) 38 342 $

Środki pieniężne wykorzystane w działalności operacyjnej

Net cash used in operating activities for the three months ended March 31, 2023
of $10.7 million resulted from cash outflows due to a net loss of $11.1 million,
adjusted for $7.0 million of non-cash items, and cash outflows from net changes
in operating assets and liabilities of $6.6 million. Net cash used in operating
activities for the three months ended March 31, 2022 of $13.5 million resulted
from cash outflows due to a net loss of $17.4 million, adjusted for $6.5 million
of non-cash items, and cash outflows from changes in operating assets and
liabilities of $2.6 million. The decrease in net loss, net of non-cash items for
the three months ended March 31, 2023 compared to the three months ended March
31, 2022 was mainly due to increased revenues. Net cash outflows from changes in
operating assets and liabilities for the three months ended March 31, 2023 were
primarily due to higher accounts receivable due to timing of collections, higher
inventory due to the inventory build-up related to our implants, lower accounts
payable, accrued liabilities and prepaid expenses attributable to the normal
course timing of expenses. Net cash outflows from changes in operating assets
and liabilities for the three months ended March 31, 2022 were primarily due to
higher inventory due to the timing of inventory build-up related to our
iFuse-TORQ implants and higher accrued liabilities and others due to timing of
other third-party payments and higher compensation and benefit accruals,
partially offset by a decrease in accounts receivable due to timing of
collections and an increase in accounts payable due to timing of vendor
payments.

Przepływy pieniężne z działalności inwestycyjnej

Net cash provided by investing activities in the three months ended March 31,
2023 was $11.7 million compared to cash used in investing activities of $22.6
million in the three months ended March 31, 2022. Net cash provided by investing
activities for the three months ended March 31, 2023 consisted of maturities of
our marketable securities net of purchases of $14.3 million, partially offset by
purchases of property and equipment of $2.6 million primarily related to
individual components in instrument sets to support revenue growth, as well as
leasehold improvements made to the building used for research and development
and warehouse space in Santa Clara. We will continue to invest in instruments
trays to support our products. Net cash provided by investing activities for the
three months ended March 31, 2022 consisted of purchases of marketable
securities, net of maturities of $20.3 million, and purchases of property and
equipment of $2.3 million primarily related to individual components in
instrument sets as we anticipated increased case volumes.

Środki pieniężne dostarczane przez działalność finansową

Cash provided by financing activities in the three months ended March 31, 2023
was $1.2 million resulting from net proceeds of $0.7 million from the
refinancing of our term loan with First-Citizens and proceeds of $0.5 million
from the issuance of common stock under our stock-based incentive compensation
plans. This compares to $0.2 million provided by financing activities in the
three months ended March 31, 2022, which consisted solely of proceeds from the
issuance of common stock under our stock-based incentive compensation plans.


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Krytyczne zasady rachunkowości, znaczące osądy i wykorzystanie szacunków

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 U.S. GAAP. The preparation of these consolidated
financial statements requires us to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the consolidated financial statements, as
well as the reported revenue generated, and expenses incurred during the
reporting periods. Our estimates are based on our historical experience and on
various other factors that we believe are reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
value of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates.

Our critical accounting policies and estimates are described in "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Critical Accounting Policies, Significant Judgments, and Use of Estimates" in
our Annual Report on Form 10-K filed with the SEC on March 2, 2023. There had
been no material changes to the descriptions of these accounting policies,
judgments and estimates.

Sezonowość

Our business is affected by seasonal variations. For instance, we have
historically experienced lower sales in the summer months and higher sales in
the last quarter of the fiscal year. However, taken as a whole, seasonality does
not have a material impact on our financial results.

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