In April 2008, the Company adopted the 2008 Stock Option Plan (the “2008 SOP”), as amended, under which the Board of Directors may issue incentive and non-qualified stock options to employees, directors and consultants. In October 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 EIP”), which serves as the successor to the 2008 SOP, under which the Board of Directors may issue incentive and non-qualified stock options, RSUs and PSUs to employees, directors and consultants. No new options have been granted under the 2008 SOP since August 2018. Outstanding options under the 2008 SOP continue to be subject to the terms and conditions of that plan.

The number of shares of common stock reserved for issuance under the 2018 EIP will automatically increase on January 1 of each year, beginning January 1, 2019, and continuing through and including January 1, 2028, by 5% of the total number of shares of the Company's capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Company's Board of Directors. As of December 31, 2022, a total of 4,029,313 shares of common stock are available for future grants under the 2018 EIP. On January 1, 2023, the total number of shares of common stock reserved for issuance under the 2018 EIP automatically increased by 1,736,578 shares.

The Board of Directors has the authority to determine to whom options will be granted, the number of shares, the term and the exercise price. If an individual owns stock representing more than 10% of the outstanding shares, the price of each share shall be at least 110% of the fair market value, as determined by the Board of Directors. The exercise price of an incentive stock option and a non-qualified stock option shall not be less than 100% and 85%, respectively, of the fair market value on the date of grant.

Options granted have a term of 10 years, except, options granted to individuals holding more than 10% of the outstanding shares have a term of five years. Options generally vest over a four-year period. RSUs granted under the 2018 EIP generally vest over two to four years based upon continued services and are settled at vesting in shares of the Company's common stock.


	Options Outstanding
	Number of Shares	Weighted-Average Exercise Price	Weighted-Average Contractual Remaining Life (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2020	2,405,957	$8.54
Exercised	(369,375)	$6.94
Canceled and forfeited	(27,069)	$15.85
Outstanding as of December 31, 2021	2,009,513	$8.73

Exercised	(80,571)	$4.70
Canceled and forfeited	(25,601)	$15.05
Outstanding as of December 31, 2022	1,903,341	$8.82	3.92	$	12,919
Options vested and exercisable as of December 31, 2022	1,892,990	$8.75	3.91	$	12,919
Options vested and expected to vest as of December 31, 2022	1,901,995	$8.81	3.94	$	12,919

The aggregate intrinsic value of options exercised during the years ended December 31, 2022 and 2021 amounted to $1.0 million and $8.1 million, respectively, representing the difference between the fair value of the Company's common stock at the date of exercise and the exercise price paid. The aggregate intrinsic values of options outstanding, options vested and exercisable, and options vested and expected to vest as of December 31, 2022 represents the difference between the exercise price and the closing price of the Company’s common stock on the last trading day of the year.


Exercise Price			Options Outstanding			Options Vested and Exercisable
			Number of Shares	Average Remaining Contractual Life (Years)	Weighted- Average Exercise Price	Number of Shares	Weighted- Average Exercise Price
$3.24	-	$3.69	378,748	1.52	$3.40	378,748	$3.40
$3.70	-	$4.41	490,008	2.99	$4.30	490,008	$4.30
$4.42	-	$5.31	407,247	4.34	$4.67	407,180	$4.67
$5.32	-	$20.51	233,794	5.45	$12.06	232,013	$12.01
$20.52	-	$22.00	393,544	6.04	$22.00	385,041	$22.00
			1,903,341	3.91	$8.82	1,892,990	$8.75

As of December 31, 2022, there was approximately $22,000 of unrecognized compensation cost related to stock options granted. These costs are expected to be recognized over a period of approximately 0.5 years.

Restricted stock units (“RSUs”) are share awards that entitle the holder to receive freely tradable shares of the Company’s common stock upon vesting. RSUs generally vest over two to four years based upon continued services and are settled at vesting in shares of the Company's common stock. The grant date fair value of the RSUs is equal to the closing price of the Company’s common stock on the grant date.

In January 2022, the Company granted performance-based restricted stock unit awards subject to market and service vesting conditions to certain executive officers under SI-BONE's 2018 Equity Incentive Plan (“PSUs”). The shares subject to the PSUs vest over a three-year performance period beginning January 1, 2022 and ending December 31, 2024. The actual number of PSUs that will vest in each measurement period will be determined by the Compensation Committee based on the Company’s total shareholder return (“TSR”) relative to the TSR of the Median Peer Companies (as defined in the award agreement). The grant date fair value of each stock award with a market condition was determined using the Monte Carlo valuation model. The table below summarizes the assumptions used to estimate the grant date fair value of the PSUs granted:


	Year Ended December 31, 2022
Expected volatility of common stock				48.9%	to	58.7%
Expected volatility of peer companies						24.2%	to	152.5%
Correlation coefficient of peer companies				(0.13)	to	1.00
Risk-free interest rate						0.4%	to	1.2%
Dividend yield	—%	to	1.0%


	RSUs		PSUs
	Number of Shares	Weighted- Average Grant Date Fair Value	Number of Shares	Weighted- Average Grant Date Fair Value
Outstanding as of December 31, 2020	1,165,295	$20.07	—	$—
Granted	1,187,143	$28.46	—	$—
Vested	(574,195)	$21.76	—	$—
Canceled and forfeited	(211,721)	$24.76	—	$—
Outstanding as of December 31, 2021	1,566,522	$25.17	—	$—
Granted	1,264,835	$20.66	155,596	$19.50
Vested	(806,204)	$24.03	—	$—
Canceled and forfeited	(230,225)	$23.46	—	$—
Outstanding as of December 31, 2022	1,794,928	$22.72	155,596	$19.50

As of December 31, 2022, the unrecognized compensation cost related to the RSUs was $33.2 million, which is expected to be recognized over a period of approximately 2.5 years. As of December 31, 2022, the unrecognized compensation cost related to the PSUs was $1.5 million, which is expected to be recognized over a period of approximately 2.0 years.

The Company’s 2018 Employee Stock Purchase Plan (the “ESPP”) allows eligible employees to purchase shares of the Company's common stock through payroll deductions at the price equal to 85% of the lesser of the fair market value of the stock as of the first date or the ending date of each six month offering period. The offering period generally commences in May and November. On March 26, 2020, the Company's Compensation Committee approved the amendment of the terms of future offerings under the ESPP which, among other things, increased the maximum number of shares that may be purchased on any single purchase date and provided for automatic enrollment in a new offering.

As of December 31, 2022, a total of 1,050,179 shares of common stock are available for future grants under the ESPP. On January 1, 2023, the total number of shares of common stock reserved for issuance under the ESPP Plan increased by 347,315 shares.

The fair value of the ESPP shares is estimated using the Black-Scholes option pricing model, which is being amortized over the requisite service period. The Company issued 170,717 shares and 147,295 shares under the ESPP during the years ended December 31, 2022 and 2021, respectively, representing $1.8 million and $2.3 million in employee contributions. For each of the years ended December 31, 2022 and 2021, total accumulated ESPP related employee payroll deductions amounted to $0.3 million, which were included within accrued compensation and related expenses in the consolidated balance sheets. For the years ended December 31, 2022 and 2021, the Company recognized $0.7 million and $0.8 million, respectively, of stock-based compensation expense related to ESPP. As of December 31, 2022, the unrecognized compensation cost for the ESPP was $0.5 million.


	Year Ended December 31,
	2022			2021
Expected term (years)	0.5			0.5
Expected volatility	49.5%	to	62.1%	48.8%	to	49.5%
Risk-free interest rate	0.07%	to	1.54%	0.04%	to	0.07%
Dividend yield	—%			—%


	Year Ended December 31,
	2022		2021
	(in thousands)
Cost of goods sold	$	484	$	530
Sales and marketing	11,006		8,448
Research and development	2,637		1,710
General and administrative	8,934		6,178
	$	23,061	$	16,866