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What changed in Inogen Inc's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Inogen 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.

+566 added−759 removedSource: 10-K (2025-02-28) vs 10-K (2024-03-01)

Top changes in Inogen Inc's 2024 10-K

566 paragraphs added · 759 removed · 474 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

158 edited+31 added−47 removed65 unchanged
Biggest changeThese include: • establishment registration and device listing; • quality system regulation, 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 the FDA prohibitions against the promotion of products for un-cleared, unapproved or “off-label” uses, and other requirements related to promotional activities; • medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; • corrections and removals reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the Federal Food, Drug and Cosmetic Act that may present a risk to health; and • post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
Biggest changeThese include: • establishment registration and device listing; • quality system regulations, which require device manufacturers to comply with both design control requirements and good manufacturing practice requirements (such as requirements for purchasing controls, document controls, production and process controls, labeling and packaging controls, control of nonconforming product, complaint handling, corrective and preventative actions, storage, handling, distribution, and servicing); • labeling regulations (including FDA's Unique Device Identification requirements), the FDA's prohibitions against the promotion of devices for un-cleared, unapproved or “off-label” uses, and other requirements related to promotional activities; • medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; • corrections and removals reporting regulations, which require that manufacturers report to the FDA corrections and removals of distributed devices (including repairs, modifications, adjustments, relabeling, destruction, or inspection of a device without physical removal) if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; and • post-market surveillance regulations, which apply, upon FDA order, to certain devices to help address important public health questions regarding the safety and effectiveness of a device. 11 After a device receives 510(k) clearance or De Novo authorization, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, will require submission and clearance of a new 510(k).
The Centers for Disease Control (CDC) and Prevention in the United States estimates that prevalence of COPD among adults 18 years or older was approximately 6.1% based on CDC data of age-adjusted prevalence of COPD from 2011 to 2021. COPD is a major cause of disability and the sixth leading cause of death according to the CDC.
The Centers for Disease Control and Prevention, or CDC, in the United States estimates that prevalence of COPD among adults 18 years or older was approximately 6.1% based on CDC data of age-adjusted prevalence of COPD from 2011 to 2021. COPD is a major cause of disability and the sixth leading cause of death according to the CDC.
A peer-reviewed article in the New England Journal of Medicine has stated that long-term oxygen therapy has been shown help COPD patients who have severely low blood oxygen or hypoxemia. Hypoxemic patients are unable to convert oxygen found in the air into the bloodstream in an efficient manner.
A peer-reviewed article in the New England Journal of Medicine has stated that long-term oxygen therapy has been shown to help COPD patients who have severely low blood oxygen or hypoxemia. Hypoxemic patients are unable to convert oxygen found in the air into the bloodstream in an efficient manner.
Department of Health & Human Services Office of Inspector General (OIG) to seek civil monetary penalties (CMPs) against an individual or entity based on a wide variety of conduct including violations of the Anti-Kickback Statute, Stark Law, and False Claims Act.
Department of Health & Human Services Office of Inspector General, or OIG, to seek civil monetary penalties, or CMPs, against an individual or entity based on a wide variety of conduct including violations of the Anti-Kickback Statute, Stark Law, and False Claims Act.
Smith served as Executive Vice President of Business Development at Gel-e, Inc., as Chief Commercial Officer at Sensium Healthcare, as Global Vice President of Sales & Marketing at Teleflex, and served in various sales and marketing roles in medical device companies. Mr.
Smith served as Executive Vice President of Business Development at Gel-e, Inc., as Chief Commercial Officer at Sensium Healthcare, as Global Vice President of Sales & Marketing at Teleflex, and in various sales and marketing roles in medical device companies. Mr.
As a result, patients can rent or purchase our systems at the same patient obligation as other in-network oxygen suppliers. Private payors typically provide reimbursement at a rate similar to Medicare allowables for in-network plans. We anticipate that private payor reimbursement levels will generally be reset in accordance with Medicare payment amounts.
As a result, many patients can rent or purchase our systems at the same patient obligation as other in-network oxygen suppliers. Private payors typically provide reimbursement at a rate similar to Medicare allowables for in-network plans. We anticipate that private payor reimbursement levels will generally be reset in accordance with Medicare payment amounts.
A business associate is a person or entity that performs certain functions or activities on behalf of a covered entity that involve the use or disclosure of protected health information in connection with recognized healthcare operations activities. As a result, business associates are now subject to significant civil and criminal penalties for failure to comply with applicable standards.
A business associate is a person or entity that performs certain functions or activities on behalf of a covered entity that involve the use or disclosure of protected health information in connection with recognized healthcare operations activities. As a result, business associates are subject to significant civil and criminal penalties for failure to comply with applicable standards.
Additionally, an independent internal review is performed, and our products are not deployed until after physician paperwork is processed and reimbursement eligibility is verified and communicated to the patient. We have contracts with Medicaid, Medicare Advantage, government and private payors that qualify us as an in-network provider for these payors.
Additionally, an independent internal review is performed, and our products are not deployed until after physician paperwork is processed and reimbursement eligibility is verified and communicated to the patient. 7 We have contracts with Medicaid, Medicare Advantage, government and private payors that qualify us as an in-network provider for these payors.
None of our employees are represented by a collective bargaining agreement and we believe that our employee relations are good. Employee culture Inogen strives to instill a culture based on our foundational values of (1) We always do what is right, (2) Invest in people, and (3) Treat people right.
None of our employees are represented by a collective bargaining agreement and we believe that our employee relations are good. 16 Employee culture Inogen strives to instill a culture based on our foundational values of (1) We always do what is right, (2) Invest in people, and (3) Treat people right.
We have also launched Inogen Connect, a wireless connectivity platform for the Inogen One G4, Inogen One G5 and Rove 6 consisting of a front-end mobile application for use by long-term oxygen therapy users and a back-end database portal for use by homecare providers.
We have also launched Inogen Connect, a wireless connectivity platform for the Inogen One G4, Inogen One G5, Inogen Rove 4 and Inogen Rove 6 consisting of a front-end mobile application for use by long-term oxygen therapy users and a back-end database portal for use by homecare providers.
Over time it can lead to a lack of oxygen in organs and tissues (hypoxia) and acute respiratory failure. As COPD progresses into later stages, patients may need long-term oxygen therapy as part of their treatment.
Over time it can lead to a lack of oxygen in organs and tissues, known as hypoxia, and acute respiratory failure. As COPD progresses into later stages, patients may need long-term oxygen therapy as part of their treatment.
We believe that any policy to regulate GHG emissions should fairly account for companies that have already taken voluntary steps to reduce their GHG emissions. Inogen is a responsible corporate citizen that has done business in 62 countries and territories around the world. Our business success and our environmental stewardship both depend on the efficiency of our global distribution network.
We believe that any policy to regulate GHG emissions should fairly account for companies that have already taken voluntary steps to reduce their GHG emissions. Inogen is a responsible corporate citizen that has done business in 65 countries and territories around the world. Our business success and our environmental stewardship both depend on the efficiency of our global distribution network.
We also supply lower cost third-party manufactured stationary concentrators to our rental patients who require secondary sources of oxygen as a part of their CMS contract or to meet other clinical or payer requirements. Airway clearance We added Simeox, an airway clearance device, to our portfolio through the acquisition of Physio-Assist in September 2023.
We also supply lower cost third-party manufactured stationary concentrators to our rental patients who require secondary sources of oxygen as a part of their CMS contract or to meet other clinical or payor requirements. Airway clearance We added Simeox, an airway clearance device, to our portfolio through the acquisition of Physio-Assist in September 2023.
Our ability to rent to Medicare patients directly, bill Medicare and other third-party payors on their behalf, and service patients in their homes requires that we hold a valid Medicare supplier number, are accredited by an independent agency approved by Medicare, and comply with the differing licensure and process requirements in the 50 states in which we serve patients.
Our ability to rent to Medicare patients directly, bill Medicare and other third-party payors on their behalf, and service patients in their homes requires that we hold a valid Medicare supplier number, are accredited by an independent agency approved by Medicare, and comply with the different licensure and process requirements in the 50 states in which we serve patients.
No single international customer and no single foreign country represented more than 10% of our total revenue in 2023, 2022 or 2021. Our wholly-owned subsidiary, Inogen Europe B.V. operates a European customer support site in the Netherlands. This site offers multi-lingual customer service and sales support to improve our European customer support at lower cost.
No single international customer and no single foreign country represented more than 10% of our total revenue in 2024, 2023 or 2022. Our wholly-owned subsidiary, Inogen Europe B.V. operates a European customer support site in the Netherlands. This site offers multi-lingual customer service and sales support to improve our European customer support at lower cost.
State fraud and abuse provisions Many states have also adopted anti-kickback and self-referral laws similar and statutes similar to the False Claims Act that apply to DMEPOS suppliers regardless of the payor source, and violations of such laws could result in fines, penalties and restrictions on our ability to operate in these jurisdictions.
State fraud and abuse provisions Many states have also adopted anti-kickback and self-referral laws similar and statutes similar to the Federal Anti-Kickback Statute and False Claims Act that apply to DMEPOS suppliers regardless of the payor source, and violations of such laws could result in fines, penalties and restrictions on our ability to operate in these jurisdictions.
Our proprietary Inogen One® and Inogen Rove systems concentrate the air around the patient to offer a source of supplemental oxygen 24 hours a day, 7 days a week with a battery and can be plugged into an outlet when at home, in a car, or in a public place with outlets available.
Our proprietary Inogen One ® and Inogen Rove ® systems concentrate the air around the patient to offer a source of supplemental oxygen 24 hours a day, seven days a week with a battery and can be plugged into an outlet when at home, in a car, or in a public place with outlets available.
Our current accreditation with Medicare is due to expire in May 2024. Several states require that durable medical equipment providers be licensed in order to sell products to patients in that state. Certain of these states require that durable medical equipment providers maintain an in-state location. Most of our state licenses are renewed on an annual or bi-annual basis.
Our current accreditation with Medicare is due to expire in May 2027. Several states require that durable medical equipment providers be licensed in order to sell products to patients in that state. Certain of these states require that durable medical equipment providers maintain an in-state location. Most of our state licenses are renewed on an annual or bi-annual basis.
We compete with a number of manufacturers and distributors of portable oxygen concentrators, as well as providers of other long-term oxygen therapy solutions such as home delivery of oxygen tanks or cylinders, stationary concentrators, transfilling concentrators, and liquid oxygen. Some of our competitors are large, well-capitalized companies with greater resources and other advantages than we have.
We compete with a number of manufacturers and distributors of POCs, as well as providers of other long-term oxygen therapy solutions such as home delivery of oxygen tanks or cylinders, stationary concentrators, transfilling concentrators, and liquid oxygen. Some of our competitors are large, well-capitalized companies with greater resources and other advantages than we have.
The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act enacted in 2018, extends the reporting and transparency requirements under the Physician Payments Sunshine Act to physician assistants, nurse practitioners and other mid-level practitioners, with reporting requirements going into effect in 2022 for payments made in 2021.
The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act enacted in 2018, extended the reporting and transparency requirements under the Physician Payments Sunshine Act to physician assistants, nurse practitioners and other mid-level practitioners, with reporting requirements going into effect in 2022 for payments made in 2021.
Further, our customers can change or cancel orders with limited or no penalty and limited advance notice prior to shipment. Geographic information During the years ended December 31, 2023, 2022, and 2021, substantially all of our long-lived assets were located within the United States.
Further, our customers can change or cancel orders with limited or no penalty and limited advance notice prior to shipment. Geographic information During the years ended December 31, 2024, 2023, and 2022, substantially all of our long-lived assets were located within the United States.
On February 14, 2014, we completed an initial public offering of common stock and began trading on the Nasdaq Global Select Market, trading under the ticker symbol "INGN". We incorporated Inogen Europe Holding B.V., a Dutch limited liability company, on April 13, 2017.
On February 14, 2014, we completed an initial public offering of common stock and began trading on the Nasdaq Global Select Market, trading under the ticker symbol “INGN”. We incorporated Inogen Europe Holding B.V., a Dutch limited liability company, on April 13, 2017.
In addition to generating consumer demand, we believe our products can create value for our business partners by either creating a retail sale opportunity for them or by reducing the need for costly home deliveries associated with oxygen tanks.
In addition to generating consumer demand, we believe our products can create value for our business partners by either creating a retail sale opportunity for them or by reducing the need for costly home deliveries associated with the delivery model for oxygen tanks.
The Federal Anti-Kickback Statute applies to our arrangements with our United States sales representatives, customers and healthcare providers. Although we believe that we have structured such arrangements to comply with the Anti-Kickback Statute and other applicable laws, regulatory authorities may determine otherwise.
The Federal Anti-Kickback Statute applies to our arrangements with our United States sales representatives, customers and healthcare providers, among others. Although we believe that we have structured such arrangements to comply with the Anti-Kickback Statute and other applicable laws, regulatory authorities may determine otherwise.
One example of a patent in this category is U.S. patent 9,907,926, which is directed to an oxygen concentrator for mechanical ventilation. This category of patents expired in 2023 or later (without taking into account any patent term adjustments).
One example of a patent in this category is U.S. patent 9,907,926, which is directed to an oxygen concentrator for mechanical ventilation. This category of patents expires in 2023 or later (without taking into account any patent term adjustments).
As of December 31, 2023, we had a dedicated customer service team that was trained on our products, a clinical support team made up of licensed nurses or respiratory therapists, a patient intake team, an order intake team, and a dedicated billing services team.
As of December 31, 2024, we had a dedicated customer service team that was trained on our products, a clinical support team made up of licensed nurses or respiratory therapists, a patient intake team, an order intake team, and a dedicated billing services team.
The Inogen Connect app is compatible with Apple and Android platforms and includes patient features such as oxygen purity status, battery run time, product support functions, notification alerts, and remote software updates.
The Inogen Connect application, or app, is compatible with Apple and Android platforms and includes patient features such as oxygen purity status, battery run time, product support functions, notification alerts, and remote software updates.
In support of our European sales, we use a contract manufacturer located in the Czech Republic to manufacture low to medium volume products and perform product repairs to improve delivery to our European accounts. We typically enter into master service agreements with our major vendors for these components that specify supply requirements, quality and delivery terms.
In support of our European sales, we use a contract manufacturer located in the Czech Republic to manufacture high-volume products and perform product repairs to improve delivery to our European accounts. We typically enter into master service agreements with our major vendors for these components that specify supply requirements, quality and delivery terms.
We have sponsored clinical studies and real-world data analyses that recently resulted in several publications in the areas of the following: use of portable oxygen concentrators, impact of oxygen treatment modality and patient mobility on mortality and healthcare resource utilization, as well as the impact of ventilatory support in addition to oxygen therapy on exercise tolerance in patients with COPD.
We have sponsored clinical studies and real-world data analyses that recently resulted in several publications in the areas of the following: use of POCs, impact of oxygen treatment modality and patient mobility on mortality and healthcare resource utilization, as well as the impact of ventilatory support in addition to oxygen therapy on exercise tolerance in patients with COPD.
In terms of economic impact, the total economic cost from COPD in the United States was approximately $49 billion in 2020 with close to 925,000 COPD emergency department visits in 2020.
In terms of economic impact, the total economic cost from COPD in the United States was projected to be approximately $49 billion in 2020 with close to 925,000 COPD emergency department visits in 2020.
The tanks and cylinders must be delivered regularly and have a finite amount of oxygen, which requires patients to plan activities outside of their homes around delivery schedules and a finite oxygen supply. Additionally, patients must attach long, cumbersome tubing to their stationary concentrators simply to enable mobility within their homes.
The tanks and cylinders must be delivered regularly and contain a finite amount of oxygen, which requires patients to plan activities outside of their homes around delivery schedules and a finite oxygen supply. Additionally, patients must attach long, cumbersome tubing to their stationary concentrators to enable mobility within their homes.
In addition, the FDA will conduct a preapproval inspection of the manufacturing facility to ensure compliance with quality system regulations. 10 Clinical trials Clinical trials are almost always required to support pre-market approval and are sometimes required for 510(k) clearance.
In addition, the FDA will conduct a preapproval inspection of the manufacturing facility to ensure compliance with quality system regulations. 10 Clinical trials Clinical trials are almost always required to support pre-market approval and are sometimes required for 510(k) clearance and De Novo authorization.
Two customers each represented more than 10% of our net accounts receivable balance with net accounts receivable balances of $8.6 million and $5.0 million as of December 31, 2023 and $22.6 million and $9.9 million as of December 31, 2022. 6 We rent products directly to consumers for insurance reimbursement, which resulted in a customer concentration relating to Medicare’s service reimbursement programs.
Two customers each represented more than 10% of our net accounts receivable balance with net accounts receivable balances of $8.6 million and $5.0 million, respectively, as of December 31, 2023. We rent products directly to consumers for insurance reimbursement, which resulted in a customer concentration relating to Medicare’s service reimbursement programs.
One such category includes patents and patent applications directed to system and component designs that may be incorporated into Inogen’s oxygen therapy product line which includes the Inogen One G3, Inogen One G4, Inogen One G5, and the Inogen At Home oxygen concentrators.
One such category includes patents and patent applications directed to system and component designs that may be incorporated into Inogen’s oxygen therapy product line which includes the Inogen One G3, Inogen One G4, Inogen One G5, Inogen Rove 4, Inogen Rove 6, and the Inogen At Home oxygen concentrators.
Accounts receivable balances relating to Medicare’s service reimbursement programs (including held and unbilled receivables, net of allowances) amounted to $2.1 million or 4.9% of total net accounts receivable as of December 31, 2023 compared to $2.1 million or 3.4% of total accounts receivable as of December 31, 2022.
Accounts receivable balances relating to Medicare’s service reimbursement programs (including held and unbilled receivables, net of allowances) amounted to $1.1 million or 3.7% of total net accounts receivable as of December 31, 2024 compared to $2.1 million, or 4.9%, of total accounts receivable as of December 31, 2023.
We use a combination of research and development staff along with third party resources to develop our products. As of December 31, 2023, our research and development staff included 25 engineers and scientists with expertise in air separation, compressors, pneumatics, electronics, embedded software, mechanical design, sensor, automation, connectivity, digital health, and manufacturing automation.
We use a combination of research and development staff along with third party resources to develop our products. As of December 31, 2024, our research and development staff included 28 engineers and scientists with expertise in air separation, compressors, pneumatics, electronics, embedded software, mechanical design, sensor, automation, connectivity, digital health, and manufacturing automation.
To pursue a direct-to-consumer rental strategy, our manufacturing competitors would need to meet national accreditation and state-by-state licensing requirements and secure Medicare billing privileges as well as compete with the home medical equipment providers who many of our manufacturing competitors sell to across their entire homecare business.
To pursue a direct-to-consumer rental strategy, our manufacturing competitors would need to meet national accreditation and state-by-state licensing requirements and secure Medicare billing privileges as well as compete with the home medical equipment providers to whom many of our manufacturing competitors sell across their entire homecare businesses.
Pre-market approval pathway A pre-market approval application must be submitted to the FDA if the device cannot be cleared through the 510(k) or De Novo process. The pre-market approval application process is much more demanding than the 510(k) premarket notification process.
Pre-market approval pathway A pre-market approval application must be submitted to the FDA if the device cannot be cleared or authorized through the 510(k) or De Novo process. The pre-market approval application process is more demanding than the 510(k) pre-market notification process.
Ramade holds a bachelor’s degree in International Business with a minor in Economics from the American University of Paris and an MBA in International Business and Marketing from the Ecole Nationale des Ponts et Chausses School of International Management. 20
Ramade holds a B.A. in International Business with a minor in Economics from the American University of Paris and an MBA in International Business and Marketing from the Ecole Nationale des Ponts et Chausses School of International Management. 20
We provide our patients with a dedicated 24/7 hotline for which patients have direct access to our customer service representatives who can handle product-related questions. Additionally, clinical staff is on call 24/7 and available to patients whenever needed by the patient or the customer service representative.
We provide our patients with a dedicated 24/7 hotline, allowing direct access to our customer service representatives who can handle product-related questions. Additionally, clinical staff is on call 24/7 and available to patients whenever needed by the patient or the customer service representative.
The symptoms of COPD can range from chronic cough and sputum production to insufficient levels of oxygen in the blood, and severe shortness of breath. COPD has a huge impact on patients and also to the healthcare system. According to the Forum of International Respiratory Societies, an estimated 200 million people in the world have COPD.
The symptoms of COPD can range from chronic cough and sputum production to insufficient levels of oxygen in the blood and severe shortness of breath. COPD has a huge impact on patients and the healthcare system. According to a report published by the Forum of International Respiratory Societies in 2022, an estimated 200 million people in the world have COPD.
We believe that we can develop the market and expand growth opportunities by educating providers and generating clinical evidence. Our clinical approach involves investing in clinical studies and engaging with KOLs through our Scientific Advisory Board.
We believe that we can develop the market and expand growth opportunities by educating providers and generating clinical evidence. Our clinical approach involves investing in clinical studies and engaging with key opinion leaders, or KOLs, through our Scientific Advisory Board.
The KOLs goals are focused on advocating for the right therapy for patients and changing the behavior of prescribers. 4 Our products Our Inogen One and Inogen Rove portable oxygen systems provide patients who require long-term oxygen therapy with a reliable, lightweight single solution product that we believe allows patients the chance to remain ambulatory while managing the impact of their disease and eliminates dependence on both oxygen tanks and cylinders as well as stationary concentrators.
The KOLs are focused on advocating for the right therapy for patients and changing the behavior of prescribers. 4 Our products Our Inogen One and Inogen Rove portable oxygen systems provide patients who require long-term oxygen therapy with a reliable, lightweight solution that we believe allows patients the chance to remain ambulatory while managing the impact of their disease and eliminates dependence on both oxygen tanks and cylinders.
ARRA includes the Health Information Technology for Economic and Clinical Health, or HITECH, which, among other things, made HIPAA’s privacy and security standards directly applicable to business associates of covered entities effective February 17, 2010.
ARRA includes the Health Information Technology for Economic and Clinical Health, or HITECH, which, among other things, made HIPAA’s privacy and security standards directly applicable to business associates of covered entities.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, among other things, imposed public reporting requirements on medical device manufacturers for payments or other transfers of value made by them to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
The Physician Payments Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, imposed public reporting requirements on medical device manufacturers for payments or other transfers of value made by them to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
Failure to submit required ownership and investment interest information may result in civil monetary penalties of up to an aggregate of $0.2 million per year (or up to an aggregate of $1.363 million per year for “knowing failures”), for all payments, transfers of value or ownership or investment interests that are not timely, accurately and completely reported in an annual submission.
Failure to submit required ownership and investment interest information may result in civil monetary penalties of up to an aggregate of $211,000 per year (or up to an aggregate of $1.4 million per year for “knowing failures”), for all payments, transfers of value or ownership or investment interests that are not timely, accurately and completely reported in an annual submission.
Government regulation Inogen One systems, Inogen At Home systems, and related accessories are medical devices subject to extensive and ongoing regulation by the FDA, as well as other federal and state regulatory bodies in the United States and comparable authorities in other countries.
Government regulation Inogen's products, including the Inogen One and Rove systems, Inogen At Home systems, Simeox, and related accessories, are medical devices subject to extensive and ongoing regulation by the FDA, as well as other federal and state regulatory bodies in the United States and comparable authorities in other countries.
As of December 31, 2023, we had 371 people located in the United States who focused on selling our products and providing service and support to distributors and house accounts worldwide and 8 in-house and contract employees and independent employees located in Europe who provided sales and customer support services to a portion of our international customers.
As of December 31, 2024, we had 333 people located in the United States who focused on selling our products and providing service and support to distributors and house accounts worldwide and 23 in-house and contract employees and independent employees located in Europe who provided sales and customer support services to a portion of our international customers.
Other diseases including cystic fibrosis or congestive heart failure may lead to lower oxygen in the bloodstream and may also benefit from long-term oxygen therapy. 3 Oxygen therapy Inogen created its first portable oxygen concentrators with a goal of creating a product that allows patients the chance to remain ambulatory while managing the impact of their disease.
Other diseases including cystic fibrosis or congestive heart failure may lead to lower oxygen in the bloodstream and may also benefit from long-term oxygen therapy. 3 Oxygen therapy Inogen created its first POCs with a goal of creating products that allow patients the chance to remain ambulatory while managing the impact of their disease.
To date, we have sold our products in a total of 62 countries outside the United States through distributors or directly to large “house” accounts, which include gas companies and home oxygen providers. In this case, we sell to and bill the distributor or house accounts directly, leaving the patient billing, support, and clinical setup to the local provider.
To date, we have sold our products in a total of 65 countries outside the United States through distributors or directly to large “house” accounts, which include gas companies and home oxygen providers. For international sales, we sell to and bill the distributor or house accounts directly, leaving the patient billing, support, and clinical setup to the local provider.
While other manufacturers have also begun direct-to-consumer marketing campaigns to drive patient sales, we believe we are the only manufacturer of portable oxygen concentrators that employs a direct-to-consumer rental strategy in the United States, meaning we bill Medicare or insurance on their behalf.
While other manufacturers have also begun direct-to-consumer marketing campaigns to drive patient sales, we believe we are the only manufacturer of POCs that employs a direct-to-consumer rental strategy in the United States, meaning we bill Medicare or insurance on the patient's behalf.
International regulation International sales of medical devices are subject to foreign governmental regulations, which vary substantially from country to country. The time required to obtain clearance or approval by a foreign country may be longer or shorter than that required for FDA clearance or approval, and the requirements may be different.
International sales of medical devices are subject to foreign government regulations and registration, which may vary substantially from country to country. The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA approval/clearance, and the requirements may differ.
In accordance with Medicare regulations, we do not initially contact patients directly and contact them only upon an inbound inquiry or upon receipt of a physician’s order. We have been targeting private payors to become an in-network provider of oxygen therapy solutions, which we expect will reduce patient co-insurance amounts associated with using our solution.
In accordance with Medicare regulations, we do not initially contact patients directly and contact them only upon an inbound inquiry or upon receipt of a physician’s order. We work with private payors to become an in-network provider of oxygen therapy solutions where possible, which we expect will reduce patient co-insurance amounts associated with using our products.
On May 4, 2017, Inogen Europe Holding B.V. acquired all issued and outstanding capital stock of MedSupport Systems B.V. (MedSupport) and began operating under the name Inogen Europe B.V. We merged Inogen Europe Holding B.V. and Inogen Europe B.V. on December 28, 2018. Inogen Europe B.V. is the remaining legal entity. We completed the acquisition of New Aera, Inc.
On May 4, 2017, Inogen Europe Holding B.V. acquired all issued and outstanding capital stock of MedSupport Systems B.V., or MedSupport, and began operating under the name Inogen Europe B.V. We merged Inogen Europe Holding B.V. and Inogen Europe B.V. on December 28, 2018. Inogen Europe B.V. is the remaining legal entity.
We believe the following have hindered the market acceptance of portable oxygen concentrators: • to obtain portable oxygen concentrators, patients are dependent on home medical equipment providers, which have made significant investments in the physical distribution infrastructure to support the distribution and delivery of stationary devices and therefore may be disincentivized to encourage adoption of portable oxygen concentrators; • home medical equipment providers cannot easily convert their businesses to non-delivery models in oxygen due to low total reimbursement for oxygen therapy, capital expenditure constraints, investments that are spread across multiple product lines, and uncertainty around reimbursement rate changes; • lack of access to switch from oxygen tank or liquid deliveries to a portable oxygen concentrator using their insurance benefits due to the nature of the capped reimbursement structure; and • constrained manufacturing costs of conventional portable oxygen concentrators, driven by home medical equipment provider preference for products that have lower upfront equipment cost.
We believe the following factors have hindered the market acceptance of POCs: • to obtain POCs, many patients are dependent on home medical equipment providers, which may have significant investments in the physical distribution infrastructure to support the delivery model for stationary devices and therefore may be disincentivized to encourage adoption of POCs; • home medical equipment providers cannot easily convert their businesses to non-delivery models in oxygen due to low total reimbursement for oxygen therapy, capital expenditure constraints, investments that are spread across multiple product lines, and uncertainty around reimbursement rate changes; • due to the nature of the capped reimbursement structure, patients' lack of ability to use their insurance benefits to switch from oxygen tanks or liquid deliveries to POCs; and • constrained manufacturing costs of conventional POCs, driven by home medical equipment provider preference for products that have lower upfront equipment cost.
The method of assessing conformity varies depending on the type and class of the product, but normally involves a combination of self-assessment by the manufacturer and a third-party assessment by a notified body, an independent and neutral institution appointed by a country to conduct the conformity assessment.
The method of assessing conformity under the MDR varies depending on the type and class of the product, but normally involves a combination of self-assessment by the manufacturer and a third-party assessment by a notified body, an independent and neutral institution designated by a Member State country to conduct the conformity assessment.
Our SEC reports can be accessed through the investor relations page of our website located at http://investor.inogen.com . The SEC also maintains a website that contains our SEC filings.
Our SEC reports can be accessed through the investor relations page of our website located at http://investor.inogen.com . The SEC also maintains a website that contains our SEC filings. The address of the site is www.sec.gov .
We make available on our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission, or SEC.
Our website address is www.inogen.com . We make available on our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We have created a market leading portfolio of portable oxygen concentrators. POC product features We market our current portable product offerings, the Inogen Rove 6 system and the Inogen One G4 system as ambulatory solutions for long-term oxygen therapy.
We have created a market leading portfolio of POCs. POC product features We market our current portable product offerings, the Inogen Rove and Inogen One systems, as ambulatory solutions for long-term oxygen therapy.
We are committed to the ongoing innovation to meet the needs of patients, providers, and our business-to-business partners to manage lower blood oxygen and shortness-of-breath associated with COPD and other disease indications. 3. Support adoption of Inogen products through clinical evidence and Key Opinion Leaders (KOLs) advocacy .
Enhance our business through innovation. We are committed to the ongoing innovation to meet the needs of patients, providers, and our business-to-business partners to manage lower blood oxygen and shortness-of-breath associated with COPD and other chronic conditions. 3. Support adoption of Inogen products through clinical evidence and key opinion leaders' advocacy .
A particular advantage of this technology is that it can be used by patients capable of generating productive cough, regardless of the body size, chest wall abnormalities or back pains. The efficacy and safety of Simeox was demonstrated in 10 clinical trials. It is marketed in Europe under MDD regulations.
A particular advantage of this technology is that it can be used by patients capable of generating productive cough, regardless of the body size, chest wall abnormalities or back pains. The efficacy and safety of Simeox has been demonstrated in 10 clinical trials.
A pre-market approval application must be supported by extensive data, including but not limited to technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction reasonable evidence of safety and effectiveness of the device.
A pre-market approval application must be supported by extensive data, generally including but not limited to, technical information, preclinical testing, clinical trials, manufacturing information, and labeling to demonstrate reasonable assurance of safety and effectiveness of the device.
We, the FDA or the IRB at each site at which a clinical trial is being performed may suspend a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the benefits.
We, the FDA or the IRB may suspend a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the benefits.
The team is augmented with expertise and resources of our third-party partners specialized in medical device development. Our current research and development efforts are focused primarily on increasing functionality, improving design for ease-of-use, and reducing production costs of our existing products, as well as developing our next-generation oxygen concentrators.
The team is augmented with expertise and resources of our third-party partners specialized in medical device development. Our current research and development efforts are focused primarily on increasing functionality, improving design for ease-of-use, and reducing the total cost of ownership of our products, as well as developing our next-generation oxygen concentrators and further developing the Simeox product line.
We believe features of the back-end database portal such as remote troubleshooting, equipment health checks, and a location tracker will drive operational efficiencies for home oxygen providers and lower the total cost of servicing oxygen therapy patients. We released our latest portable oxygen concentrator, Rove 6, in Europe in December 2022, and in the U.S. in July 2023.
We believe features of the back-end database portal such as remote troubleshooting, equipment health checks, and a location tracker will drive operational efficiencies for home oxygen providers and lower the total cost of servicing oxygen therapy patients. We released our latest portable oxygen concentrator, Rove 4, in the U.S. and European Union in October 2024.
This third-party assessment may consist of an audit of the manufacturer’s quality system, review of technical documentation, and specific testing of the manufacturer’s device. Such an assessment may be required in order for a manufacturer to commercially distribute the product throughout these countries. ISO 13485 certification is a voluntary standard.
This third-party assessment may consist of an audit of the manufacturer’s quality system by reference to ISO 13485, review of technical documentation, and specific testing of the manufacturer’s device. Such an assessment may be required in order for a manufacturer to commercially distribute the product throughout the EEA.
Respironics announced in early 2024 that it would be leaving the U.S. portable oxygen concentrator market until further regulatory assessments but continues to have product in the market. This is not an exhaustive list of competitors.
Respironics (a subsidiary of Koninklijke Philips N.V.) announced in early 2024 that it was leaving the U.S. portable oxygen concentrator market until further regulatory assessments but continues to have product in the market. This is not an exhaustive list of competitors.
Our significant manufacturing competitors are Respironics (a subsidiary of Koninklijke Philips N.V.) Caire Medical (subsidiary of NGK Spark Plug), DeVilbiss Healthcare (a subsidiary of Drive Medical), O2 Concepts, Precision Medical, Gas Control Equipment (subsidiary of Colfax), Nidek Medical, 3B Medical, SysMed, and Belluscura.
Our significant manufacturing competitors are Caire Medical (a subsidiary of NGK Spark Plug), DeVilbiss Healthcare (a subsidiary of Drive Medical), O2 Concepts, Precision Medical, Gas Control Equipment (a subsidiary of Colfax), Nidek Medical, 3B Medical, SysMed, iRhythm Technologies, Inc., and Belluscura.
As of December 31, 2023, we employed 379 people in our Sales and Marketing organization. Concentration of customers We primarily sell our products to traditional home medical equipment providers, distributors, and resellers in the United States and in foreign countries on a credit basis. We also sell our products direct-to-consumers on a primarily prepayment basis.
Concentration of customers We primarily sell our products to traditional home medical equipment providers, distributors, and resellers in the United States and in foreign countries on a credit basis. We also sell our products direct-to-consumers on a primarily prepayment basis.
HIPAA The Health Insurance Portability and Accountability Act of 1996, or HIPAA, established uniform standards governing the conduct of certain electronic healthcare transactions and protecting the security and privacy of individually identifiable health information maintained or transmitted by healthcare providers, health plans and healthcare clearinghouses, which are referred to as “covered entities.” Three standards have been promulgated under HIPAA’s regulations: the Standards for Privacy of Individually Identifiable Health Information, which restrict the use and disclosure of certain individually identifiable health information, the Standards for Electronic Transactions, which establish standards for common healthcare transactions, such as claims information, plan eligibility, payment information and the use of electronic signatures, and the Security Standards, which require covered entities to implement and maintain certain security measures to safeguard certain electronic health information, including the adoption of administrative, physical and technical safeguards to protect such information.
HIPAA The Health Insurance Portability and Accountability Act of 1996, or HIPAA, established uniform standards governing the conduct of certain electronic healthcare transactions and protecting the security and privacy of individually identifiable health information maintained or transmitted by most healthcare providers, health plans and healthcare clearinghouses, which are referred to as “covered entities.” Among the standards that have been promulgated under HIPAA’s regulations: the Standards for Privacy of Individually Identifiable Health Information, which restrict the use and disclosure of certain individually identifiable health information, the Standards for Electronic Transactions, which establish standards for common healthcare transactions, such as claims information, plan eligibility, payment information and the use of electronic signatures, the Security Standards, which require covered entities to implement and maintain certain security measures to safeguard certain electronic health information, including the adoption of administrative, physical and technical safeguards to protect such information, and the Breach Notification Standards, which establish standards for notification in the event of a breach of unsecured individually identifiable health information. 13 In 2009, Congress passed the American Recovery and Reinvestment Act of 2009, or ARRA, which included sweeping changes to HIPAA, including an expansion of HIPAA’s privacy and security standards.
Health and safety Our approach to health and safety uses our management systems, preventative training, problem solving safety committees, and our quality culture to minimize workplace incidents and maximize the care taken for employees who suffer from a workplace incident, per our health and safety policy. Inogen also has a corporate wellness program to promote improved physical and emotional wellbeing.
Health and safety Our approach to health and safety uses our management systems, preventative training, problem solving safety committees, and our quality culture to minimize workplace incidents and maximize the care taken for employees who suffer from a workplace incident, per our health and safety policy.
Smith also served as interim President and Chief Executive Officer and Director at OncoSec Medical, Inc., a biotechnology company. In his previous roles Mr.
Smith also served as interim President and Chief Executive Officer from 2021 to 2022 and as a Director from February 2020 to June 2023 at OncoSec Medical, Inc., a biotechnology company. In his previous roles, Mr.
The performance parameters around our systems allow us to serve ambulatory long-term oxygen patients based on their clinical needs. Our products enable us to address a patient’s particular clinical needs, as well as lifestyle and performance preferences.
The Inogen Rove 4 is among the lightest products on the market and has among the highest oxygen production capabilities. The performance parameters around our systems allow us to serve ambulatory long-term oxygen patients based on their clinical needs. Our products enable us to address a patient’s particular clinical needs, as well as lifestyle and performance preferences.
We believe that any climate change policy should be technology-neutral and designed to encourage private sector innovation and investment so that emissions reductions can be achieved in the most efficient manner possible. 3.
We believe that any global or national strategy to address climate change must be environmentally sustainable and economically viable. 2. We believe that any climate change policy should be technology-neutral and designed to encourage private sector innovation and investment so that emissions reductions can be achieved in the most efficient manner possible. 3.
Patients who choose to use their Medicare or private insurance benefits typically rent our systems. Those who purchase our product outright are typically patients who are not eligible to use their insurance benefits due to their capped rental status or their personal preferences.
Those who purchase our products outright are typically patients who are not eligible to use their insurance benefits due to their capped rental status or exercise their personal preferences.
Our entire organization is responsible for quality management. Our Quality Assurance and Regulatory Affairs departments oversee this by tracking component, device and organization performance and by training team members outside the Quality Assurance and Regulatory Affairs departments to become competent users of our Quality Management system.
We also manufacture the Simeox device in a leased facility in Montpelier, France. Our entire organization is responsible for quality management. Our Quality Assurance and Regulatory Affairs departments oversee quality management by tracking component, device and organization performance and by training team members outside the Quality Assurance and Regulatory Affairs departments to become competent users of our Quality Management system.
We market the Inogen One G3, Inogen One G4, and Inogen One G5 systems pursuant to the original Inogen One 510(k) clearance. We obtained 510(k) clearance for the Inogen At Home system on June 20, 2014.
We market the Inogen One G4 and Inogen One G5 systems pursuant to the original Inogen One 510(k) clearance. We obtained 510(k) clearance for the Inogen At Home system on June 20, 2014. We obtained 510(k) clearance for the Rove 4 system on December 9, 2022 and 510(k) clearance for the Rove 6 system on June 30, 2023.
We believe that our portable oxygen therapy solutions can help patients with chronic respiratory conditions, including patients with chronic obstructive pulmonary disease, (COPD). COPD is a group of lung diseases including chronic bronchitis and emphysema.
The market Chronic obstructive pulmonary disease We are focused on oxygen therapy and other opportunities in the global respiratory care market. We believe that our portable oxygen therapy solutions can help patients with chronic respiratory conditions, including patients with chronic obstructive pulmonary disease, or COPD. COPD is a group of lung diseases including chronic bronchitis and emphysema.
Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: warning letters, fines, injunctions, civil or criminal penalties, recall or seizure of our products, operating restrictions, partial suspension or total shutdown of production, refusing our request for 510(k) clearance or pre-market approval of new products, rescinding previously granted 510(k) clearances or withdrawing previously granted pre-market approvals. 11 As a medical device manufacturer, our manufacturing facilities are subject to periodic inspections and audits by the FDA, certain other regulatory agencies and authorities and our notified body.
Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: warning letters, fines, injunctions, civil or criminal penalties, recall or seizure of our products, import detention, operating restrictions, partial suspension or total shutdown of production, refusing our request for 510(k) clearance or pre-market approval of new products, rescinding previously granted 510(k) clearances or withdrawing previously granted pre-market approvals.
As of December 31, 2023, we had 206 employees in operations, manufacturing, quality assurance, manufacturing engineering and repair in the United States. 8 Research and development We are committed to ongoing research and development to stay at the forefront of patient preference in the oxygen concentrator field.
As of December 31, 2024, we had 187 employees in operations, manufacturing, quality assurance, manufacturing engineering and repair in the United States. 8 Research and development We are committed to ongoing research and development to stay at the forefront of the respiratory market.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we were to lose one of our key customers or have a key customer significantly reduce its volume of business with us, such as we previously experienced with the large national homecare provider, our revenue may be materially reduced and there would be an adverse effect on our business, financial condition and results of operations. 23 We obtain some of the components, subassemblies and completed products included in our products from a single source or a limited group of manufacturers or suppliers, and in some cases components required to manufacture and assemble our products are available in only limited supplies from limited manufacturers or suppliers, and the partial or complete loss of one or more of these manufacturers or suppliers or limitation on availability could cause significant production delays or stoppages, an inability to meet customer demand, substantial loss in revenue, and an adverse effect on our financial condition and results of operations.
Biggest changeIn some cases, components required to manufacture and assemble our products are available in only limited supplies from limited manufacturers or suppliers, and the partial or complete loss of one or more of these manufacturers or suppliers or limitation on availability could cause significant production delays or stoppages, an inability to meet customer demand, substantial loss in revenue, and have an adverse effect on our financial condition and results of operations.
We may not be able to compete as effectively with our competitors and ultimately satisfy the needs and preferences of our customers unless we can continue to enhance existing products, acquire companies with new or different products, sell our existing products, and develop new innovative products ourselves. Product development requires significant financial, technological and other resources.
We may not be able to compete as effectively with our competitors and ultimately satisfy the needs and preferences of our customers unless we can continue to enhance existing products, acquire companies with new or different products, sell our existing products, and develop new and innovative products ourselves. Product development requires significant financial, technological and other resources.
Consumer demand for our products may not reach our targets, or may decline, when there is an economic downturn or economic uncertainty in our key markets and our customers could be delayed in making payments for our products.
Consumer demand for our products may not reach our targets, or may decline, when there is an economic downturn or uncertainty in our key markets and our customers could be delayed in making payments for our products.
This was effective beginning January 1, 2018. Due to budgetary shortfalls, many states are considering, or have enacted, cuts to their Medicaid programs. In addition, many private payors reimburse at a percentage of the Medicare rates.
This was effective beginning January 1, 2018. In addition, due to budgetary shortfalls, many states are considering, or have enacted, cuts to their Medicaid programs. In addition, many private payors reimburse at a percentage of the Medicare rates.
Bribery Act, data privacy and data protection regulations, such as the European Union General Data Protection Regulation (GDPR), labor laws, and anti-competition regulations; • export or import delays and restrictions; • obtaining and maintaining regulatory clearances, approvals and certifications; • laws and business practices favoring local companies; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • unstable economic, political, and regulatory conditions, including as a result of recessionary effects or inflationary pressures; • supply chain complexities; • fluctuations in currency exchange rates; • fluctuations in demand due to country-specific tenders and tender uncertainty and capital expenditure constraints; • potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements, and other trade barriers; • any other government actions, by the United States, China or other countries, that impose barriers or restrictions that would impact our ability to sell or ship products to customers; and • difficulties protecting or procuring intellectual property rights.
Bribery Act, data privacy and data protection regulations, such as the European Union General Data Protection Regulation, or GDPR, labor laws, and anti-competition regulations; • export or import delays and restrictions; • obtaining and maintaining regulatory clearances, approvals and certifications; • laws and business practices favoring local companies; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • unstable economic, political, and regulatory conditions, including as a result of recessionary effects or inflationary pressures; • supply chain complexities; • fluctuations in currency exchange rates; • fluctuations in demand due to country-specific tenders and tender uncertainty and capital expenditure constraints; • potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements, and other trade barriers; • any other government actions, by the United States, China or other countries, that impose tariffs, barriers or restrictions that would impact our ability to sell or ship products to customers; and • difficulties protecting or procuring intellectual property rights.
We have never paid dividends on our capital stock, and we do not anticipate paying any cash dividends in the foreseeable future. We have paid no cash dividends on any of our classes of capital stock to date and currently intend to retain our future earnings to fund the development and growth of our business.
We have never paid any dividends on our capital stock, and we do not anticipate paying any cash dividends in the foreseeable future. We have paid no cash dividends on any of our classes of capital stock to date and currently intend to retain our future earnings to fund the development and growth of our business.
These factors include: • actual or anticipated quarterly variation in our results of operations or the results of our competitors; • announcements of secondary offerings; • announcements by us or our competitors of new commercial products, significant contracts, commercial relationships, or capital commitments; • issuance of new or changed securities analysts’ reports or recommendations for our stock; • developments or disputes concerning our intellectual property or other proprietary rights; • commencement of, or our involvement in, litigation; • market conditions in the oxygen therapy market; 57 • reimbursement or legislative changes in the oxygen therapy market; • failure to complete significant sales; • manufacturing disruptions that could occur if we were unable to successfully expand our production in our current or an alternative facility or due to any other reason; • any future sales of our common stock or other securities; • any major change to the composition of our board of directors or management; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; • the other factors described in this “Risk Factors” section; and • general economic conditions and slow or negative growth of our markets.
These factors include: • actual or anticipated quarterly variation in our results of operations or the results of our competitors; • announcements of secondary offerings; • announcements by us or our competitors of new commercial products, significant contracts, commercial relationships, or capital commitments; • issuance of new or changed securities analysts’ reports or recommendations for our stock; • developments or disputes concerning our intellectual property or other proprietary rights; • commencement of, or our involvement in, litigation; • market conditions in the oxygen therapy market; • reimbursement or legislative changes in the oxygen therapy market; • failure to complete significant sales; • manufacturing disruptions that could occur if we were unable to successfully expand our production in our current or an alternative facility or due to any other reason; • any future sales of our common stock or other securities; • any major change to the composition of our board of directors or management; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; • the other factors described in this “Risk Factors” section; and • general economic conditions and slow or negative growth of our markets.
These fluctuations are due to numerous factors, including: fluctuations in consumer demand for our products; seasonal cycles in consumer spending; HME providers’ ability to adopt and finance POC purchases and restructure their businesses to remove delivery expenses; our ability to design, manufacture and deliver products to our consumers in a timely and cost-effective manner; quality control problems in our manufacturing operations; our ability to timely obtain adequate quantities of the components used in our products; new product introductions and enhancements by us and our competitors; unanticipated increases in costs or expenses; declines in sales personnel productivity; increased marketing cost per generated lead; unanticipated regulatory reimbursement changes that could result in positive or negative impacts to our earnings; changes or updates to generally accepted accounting principles; additional legal costs associated with pending legal matters; and fluctuations in foreign currency exchange rates.
These fluctuations are due to numerous factors, including: fluctuations in consumer demand for our products; seasonal cycles in consumer spending; HME providers’ ability to adopt and finance POC purchases and restructure their businesses to remove delivery expenses; our ability to design, manufacture and deliver products to our consumers in a timely and cost-effective manner; quality control problems in our manufacturing operations; our ability to timely obtain adequate quantities of the components used in our products; new product introductions and enhancements by us and our competitors; unanticipated increases in costs or expenses; declines in sales personnel productivity; increased marketing cost per generated lead; unanticipated regulatory reimbursement changes that could result in positive or negative impacts to our earnings; changes or updates to generally accepted accounting principles; additional legal costs associated with legal matters; and fluctuations in foreign currency exchange rates.
Our thirteenth amended and restated certificate of incorporation, filed with the Delaware Secretary of State on February 20, 2014, and our amended and restated bylaws, as amended and restated effective as of October 27, 2022, provide that, unless we consent in writing to the selection of an alternative forum (an “Alternative Forum Consent”), the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (iii) any action or proceeding asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine of the State of Delaware.
Our thirteenth amended and restated certificate of incorporation, or the certificate of incorporation, filed with the Delaware Secretary of State on February 20, 2014, and our amended and restated bylaws, as amended and restated effective as of October 27, 2022, or the bylaws, provide that, unless we consent in writing to the selection of an alternative forum, referred to as an “Alternative Forum Consent”, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (iii) any action or proceeding asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine of the State of Delaware.
In addition, we may become subject to covenants under future debt arrangements that place restrictions on our ability to pay dividends. As a result, capital appreciation, if any, of our common stock is expected to be your sole source of gain for the foreseeable future. 60 ITEM 1B. UNRESOLVE D STAFF COMMENTS None.
In addition, we may become subject to covenants under future debt arrangements that place restrictions on our ability to pay dividends. As a result, capital appreciation, if any, of our common stock is expected to be your sole source of gain for the foreseeable future. ITEM 1B. UNRESOLVE D STAFF COMMENTS None.
The master list is updated annually and published in the Federal Register. The presence of an item on the master list does not automatically mean that a PA is required. CMS selects a subset of these master list items for its “Required Prior Authorization List.” There will be a notice period of at least 60 days prior to implementation.
The master list is updated annually and published in the Federal Register. The presence of an item on the master list does not automatically mean that a prior authorization is required. CMS selects a subset of these master list items for its “Required Prior Authorization List.” There will be a notice period of at least 60 days prior to implementation.
Regulatory enforcement or inquiries, or other increased scrutiny on us, could affect the perceived safety and performance of our products and dissuade our customers from using our products. If we modify our FDA cleared devices, we may need to seek additional clearances or approvals, which, if not granted, would prevent us from selling such modified products.
Regulatory enforcement or inquiries, or other increased scrutiny on us, could affect the perceived safety and performance of our products and dissuade our customers from using our products. If we modify our FDA cleared devices, we may need to seek additional clearances, authorizations, or approvals, which, if not granted, would prevent us from selling such modified products.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. The Sarbanes-Oxley Act requires, among other things, that we assess and document the effectiveness of our internal control over financial reporting annually and the effectiveness of our disclosure controls and procedures quarterly.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. 52 The Sarbanes-Oxley Act requires, among other things, that we assess and document the effectiveness of our internal control over financial reporting annually and the effectiveness of our disclosure controls and procedures quarterly.
The commercialization of medical devices in the UK are also subject to additional national requirements (e.g., registration and where the manufacturer is not established in the UK, the appointment of a UK Responsible Person). 47 If we fail to obtain and maintain regulatory approval in foreign jurisdictions, our market opportunities will be limited.
The commercialization of medical devices in the UK are also subject to additional national requirements (e.g., registration and where the manufacturer is not established in the UK, the appointment of a UK Responsible Person). If we fail to obtain and maintain regulatory approval in foreign jurisdictions, our market opportunities will be limited.
Respiratory therapy providers compete primarily on the basis of product features and service, rather than price, since reimbursement levels are established by Medicare and Medicaid, or by the individual determinations of private payors. Some of our competitors are large, well-capitalized companies with greater resources than we have.
Respiratory therapy providers compete primarily on the basis of product features and service, rather than price, since reimbursement levels are established by Medicare and Medicaid, or by the individual determinations of private payors. 22 Some of our competitors are large, well-capitalized companies with greater resources than we have.
Congress also is debating federal privacy legislation, which if passed, may restrict our business operations and require us to incur additional costs for compliance. 40 Any new laws, regulations, other legal obligations or industry standards, or any changed interpretation of existing laws, regulations or other standards may require us to incur additional costs and restrict our business operations.
Congress also is debating federal privacy legislation, which if passed, may restrict our business operations and require us to incur additional costs for compliance. Any new laws, regulations, other legal obligations or industry standards, or any changed interpretation of existing laws, regulations or other standards may require us to incur additional costs and restrict our business operations.
In addition, the Sarbanes-Oxley Act of 2002 and rules enforced by the Public Companies Oversight Board (PCAOB) subsequently implemented by the SEC and the NASDAQ Global Select Market impose numerous requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
In addition, the Sarbanes-Oxley Act of 2002 and rules enforced by the Public Companies Oversight Board, or PCAOB, subsequently implemented by the SEC and the Nasdaq Global Select Market impose numerous requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
For example, California has passed the California Consumer Privacy Act (CCPA), which went into effect on January 1, 2020, and among other things, requires new disclosures to California consumers and affords such consumers new abilities to opt out of certain sales of personal information.
For example, California has passed the California Consumer Privacy Act, or CCPA, which went into effect on January 1, 2020, and among other things, requires new disclosures to California consumers and affords such consumers new abilities to opt out of certain sales of personal information.
CMS has issued a final rule to require Medicare prior authorization (PA) for certain DMEPOS that the agency characterizes as “frequently subject to unnecessary utilization” and that have an average purchase fee of $1,000 or greater, or an average rental fee schedule of $100 or greater.
CMS has issued a final rule to require Medicare prior authorization for certain DMEPOS that the agency characterizes as “frequently subject to unnecessary utilization” and that have an average purchase fee of $1,000 or greater, or an average rental fee schedule of $100 or greater.
The foregoing shall not apply to any claims under the Exchange Act. Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our securities shall be deemed to have notice of and consented to the foregoing provisions of the bylaws and certificate of incorporation.
The foregoing shall not apply to any claims under the Exchange Act. 54 Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our securities shall be deemed to have notice of and consented to the foregoing provisions of the bylaws and certificate of incorporation.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock; • require that any action to be taken by our stockholders be affected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of the board of directors, or the Chief Executive Officer; • establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms; • provide that our directors may be removed only for cause; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • specify that no stockholder is permitted to cumulate votes at any election of directors; and • require a super-majority of votes to amend certain of the above-mentioned provisions.
Our certificate of incorporation and bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock; • require that any action to be taken by our stockholders be affected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of the board of directors, or the Chief Executive Officer; • establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms; • provide that our directors may be removed only for cause; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; 55 • specify that no stockholder is permitted to cumulate votes at any election of directors; and • require a super-majority of votes to amend certain of the above-mentioned provisions.
In addition, California voters recently passed the California Privacy Rights Act (CPRA), which modified the CCPA significantly as of January 1, 2023, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.
In addition, California voters recently passed the California Privacy Rights Act, or CPRA, which modified the CCPA significantly as of January 1, 2023, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.
Both the IFR and temporary regulatory changes show significant flexibility from CMS to improve access for oxygen and other DMEPOS items during this COVID-19 PHE. These changes were retroactive to early March 2020.
Both the IFR and temporary regulatory changes show significant flexibility from CMS to improve access for oxygen and other DMEPOS items during the COVID-19 PHE. These changes were retroactive to early March 2020.
These rates are typically updated annually each January as they are subject to Consumer Price Index (CPI) and sequestration adjustments but can also be subject to adjustments during the year due to legislative rulings.
These rates are typically updated annually each January as they are subject to Consumer Price Index, or CPI, and sequestration adjustments but can also be subject to adjustments during the year due to legislative rulings.
We cannot assure you that we will be able to successfully retain or develop our relationships with third-party distributors internationally. In addition, we are subject to United States export control and economic sanctions laws relating to the sale of our products, the violation of which could result in substantial penalties being imposed against us.
We cannot assure you that we will be able to successfully retain or develop our relationships with third-party distributors internationally. In addition, we are subject to United States and European Union export control and economic sanctions laws relating to the sale of our products, the violation of which could result in substantial penalties being imposed against us.
Any adverse determination related to litigation could require us to change our technology or our business practices, pay monetary damages or enter into royalty or licensing arrangements, which could adversely affect our business, financial condition and results of operations. 38 We depend on the services of our senior executives and other key technical personnel, the loss of whom could negatively affect our business.
Any adverse determination related to litigation could require us to change our technology or our business practices, pay monetary damages or enter into royalty or licensing arrangements, which could adversely affect our business, financial condition and results of operations. 37 We depend on the services of our senior executives and other key technical personnel, the loss of whom could negatively affect our business.
Any acquisition or investment could expose us to unknown liabilities. Moreover, we cannot assure you that we will realize the anticipated benefits of any acquisition or investment.
Any acquisition, collaboration or investment could expose us to unknown liabilities. Moreover, we cannot assure you that we will realize the anticipated benefits of any acquisition, collaboration or investment.
In addition, currency hedging may result in a reduction or increase in revenue should the currency strengthen or decline during the contract period. A discussion of the hedging program is contained in Item 7A. Quantitative and Qualitative Disclosures about Market Risk in this Annual Report on Form 10-K for the year ended December 31, 2023.
In addition, currency hedging may result in a reduction or increase in revenue should the currency strengthen or decline during the contract period. A discussion of the hedging program is contained in Item 7A. Quantitative and Qualitative Disclosures about Market Risk in this Annual Report on Form 10-K for the year ended December 31, 2024.
Average Medicare reimbursement rates in non-former CBAs, non-rural areas E1390 E1392 As of January 1, 2024 $ 93.61 $ 46.12 As of January 1, 2023 $ 125.41 $ 46.49 As of January 1, 2022 $ 115.14 $ 43.69 As of April 1, 2021 $ 109.39 $ 42.12 As of January 1, 2021 (retroactively revised March 1, 2021) $ 104.07 $ 40.06 As of January 1, 2020 $ 74.84 $ 36.87 As of January 1, 2019 $ 72.32 $ 35.64 As of January 1, 2018 $ 69.31 $ 38.10 CMS is required to conduct future rounds of competitive bidding, which could reduce reimbursement rates, negatively impact the premium for POCs over other oxygen modalities, or limit beneficiary access to our technologies.
Average Medicare reimbursement rates in non-former CBAs, non-rural areas E1390 E1392 As of January 1, 2025 $ 96.42 $ 47.51 As of January 1, 2024 $ 93.61 $ 46.12 As of January 1, 2023 $ 125.41 $ 46.49 As of January 1, 2022 $ 115.14 $ 43.69 As of April 1, 2021 $ 109.39 $ 42.12 As of January 1, 2021 (retroactively revised March 1, 2021) $ 104.07 $ 40.06 As of January 1, 2020 $ 74.84 $ 36.87 As of January 1, 2019 $ 72.32 $ 35.64 As of January 1, 2018 $ 69.31 $ 38.10 CMS is required to conduct future rounds of competitive bidding, which could reduce reimbursement rates, negatively impact the premium for POCs over other oxygen modalities, or limit beneficiary access to our technologies.
We cannot predict the extent to which reimbursement for our products will be affected by competitive bidding or by initiatives to reduce costs for private payors. Failure to maintain or obtain new private payor contracts or the unavailability of third-party coverage or inadequacy of reimbursement for our products would adversely affect our business, financial condition and results of operations.
We cannot predict the extent to which reimbursement for our products will be affected by initiatives to reduce costs for private payors. Failure to maintain or obtain new private payor contracts or the unavailability of third-party coverage or inadequacy of reimbursement for our products would adversely affect our business, financial condition and results of operations.
We sell our products to certain HME providers, distributors, private label partner and resellers on unsecured credit, with terms that vary depending upon the customer’s credit history, solvency, cash flow, credit limits and sales history, as well as prevailing terms with similarly situated customers and whether sufficient credit insurance can be obtained.
We sell our products to certain HME providers, distributors, private label collaborator and resellers on unsecured credit, with terms that vary depending upon the customer’s credit history, solvency, cash flow, credit limits and sales history, as well as prevailing terms with similarly situated customers and whether sufficient credit insurance can be obtained.
For example, some major competitors have implemented direct-to-consumer sales models, which may increase their competitiveness and sales to patients, and we have recently seen the cost per generated lead trend higher than historical averages that may in part be due to increased competition.
For example, some of our major competitors have implemented direct-to-consumer sales models, which may increase their competitiveness and sales to patients, and we have recently seen the cost per generated lead trend higher than historical averages that may in part be due to increased competition.
For example, we have previously experienced a decline in sales to one large national homecare provider who purchased through our private label partner. We have also experienced a decline in sales from other HME providers and these providers have communicated to us that they continue to be subject to capital constraints.
For example, we have previously experienced a decline in sales to one large national homecare provider who purchased through our private label collaborator. We have also experienced a decline in sales from other HME providers and these providers have communicated to us that they continue to be subject to capital constraints.
As a result, our business, financial condition and results of operations could be materially harmed. We may expand through acquisitions of, or investments in, other companies, each of which may divert our management’s attention, result in additional dilution to our stockholders, increase expenses, disrupt our operations, and harm our results of operations.
As a result, our business, financial condition and results of operations could be materially harmed. We may expand through acquisitions of, collaborations with, or investments in, other companies, each of which may divert our management’s attention, result in additional dilution to our stockholders, increase expenses, disrupt our operations, and harm our results of operations.
Average Medicare reimbursement rates in rural areas E1390 E1392 As of January 1, 2024 $ 168.96 $ 51.18 As of January 1, 2023 $ 164.48 $ 50.44 As of January 1, 2022 $ 151.15 $ 48.39 As of April 1, 2021 $ 143.48 $ 47.13 As of January 1, 2021 $ 136.84 $ 44.99 As of January 1, 2020 $ 136.71 $ 44.93 As of January 1, 2019 $ 134.71 $ 44.32 As of January 1, 2018 $ 76.31 $ 41.91 31 Rates in non-former CBAs that are not defined as rural are set based on the rates in former CBAs.
Average Medicare reimbursement rates in rural areas E1390 E1392 As of January 1, 2025 $ 173.32 $ 51.63 As of January 1, 2024 $ 168.96 $ 51.18 As of January 1, 2023 $ 164.48 $ 50.44 As of January 1, 2022 $ 151.15 $ 48.39 As of April 1, 2021 $ 143.48 $ 47.13 As of January 1, 2021 $ 136.84 $ 44.99 As of January 1, 2020 $ 136.71 $ 44.93 As of January 1, 2019 $ 134.71 $ 44.32 As of January 1, 2018 $ 76.31 $ 41.91 Non-former CBAs in non-rural areas: Rates in non-former CBAs that are not defined as rural are set based on the rates in former CBAs.
CMS delayed the implementation date for the revised national coverage determination until January 3, 2023. 29 • On March 11, 2021, the American Rescue Plan Act of 2021 (ARP) became federal law. The ARP, among other things, increased spending without offsets to other federal programs.
CMS delayed the implementation date for the revised national coverage determination until January 3, 2023. • On March 11, 2021, the American Rescue Plan Act of 2021, or ARP, became federal law. The ARP, among other things, increased spending without offsets to other federal programs.
Travel Act, the USA PATRIOT Act, the United Kingdom Bribery Act of 2010 and possibly other anti-corruption, anti-bribery and anti-money laundering laws in the more than sixty-two countries around the world where we have conducted activities and have sold our products.
Travel Act, the USA PATRIOT Act, the United Kingdom Bribery Act of 2010 and possibly other anti-corruption, anti-bribery and anti-money laundering laws in the more than sixty-five countries around the world where we have conducted activities and have sold our products.
These may include claims, suits, and proceedings involving labor and employment, wage and hour, commercial, alleged securities laws violations or other investor claims, patent defense and other matters. The outcome of any litigation, regardless of its merits, is inherently uncertain.
These may include claims, lawsuits, and proceedings involving labor and employment, wage and hour, commercial, alleged securities laws violations or other investor claims, patent defense and other matters. The outcome of any litigation, regardless of its merits, is inherently uncertain.
Before we can market or sell a medical device in the United States, we must obtain either 510(k) clearance, clearance under the de novo process or approval of a pre-market approval application from the FDA, unless an exemption applies.
Before we can market or sell a medical device in the United States, we must obtain 510(k) clearance, authorization under the De Novo process or approval of a pre-market approval application from the FDA, unless an exemption applies.
While we expended $20.8 million, $21.9 million and $16.6 million for the years ended December 31, 2023, 2022, and 2021, respectively, in research and development efforts, we cannot assure that this level of investment will be sufficient to maintain a competitive advantage in product innovation, which could cause our business to suffer.
While we expended $21.6 million, $20.8 million and $21.9 million for the years ended December 31, 2024, 2023, and 2022, respectively, in research and development efforts, we cannot assure that this level of investment will be sufficient to maintain a competitive advantage in product innovation, which could cause our business to suffer.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA or state agencies, which may include any of the following sanctions: • adverse publicity, warning letters, fines, injunctions, consent decrees and civil penalties; • recalls, termination of distribution, or seizure of our products; • operating restrictions or partial suspension or total shutdown of production; • delays in the introduction of products into the market; • refusal to grant our requests for future 510(k) clearances or approvals of new products, new intended uses, or modifications to exiting products; 45 • withdrawals or suspensions of current 510(k) clearances or approvals, resulting in prohibitions on sales of our products; and • criminal prosecution.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA or state agencies, which may include any of the following sanctions: • adverse publicity, warning letters, fines, injunctions, consent decrees and civil penalties; • recalls, import detentions, termination of distribution, or seizure of our products; • operating restrictions or partial suspension or total shutdown of production; • delays in the introduction of products into the market; • refusal to grant our requests for future 510(k) clearances or approvals of new products, new intended uses, or modifications to existing products; • withdrawals or suspensions of current 510(k) clearances or approvals, resulting in prohibitions on sales of our products; and • criminal prosecution.
If experienced employees leave, we could experience inefficiencies or a lack of business continuity due to loss of historical knowledge and a lack of familiarity of the new employees with business processes, operating requirements, policies and procedures.
In addition, if experienced employees leave, we could experience inefficiencies or a lack of business continuity due to loss of historical knowledge and a lack of familiarity of the new employees with business processes, operating requirements, policies and procedures.
Any such acquisition or investment could materially and adversely affect our financial condition and results of operations. We may issue equity securities which could dilute current stockholders’ ownership, incur debt, assume contingent or other liabilities and expend cash in acquisitions, which could negatively impact our financial condition, stockholder equity, and stock price.
Any such acquisition, collaboration or investment could materially and adversely affect our financial condition and results of operations. We may issue equity securities which could dilute current stockholders’ ownership, incur debt, assume contingent or other liabilities and expend cash in acquisitions, collaborations or investments, which could negatively impact our financial condition, stockholder equity, and stock price.
See the table below for average Medicare rates in these non-former CBAs, non-rural areas, using a simple average of rates in each state. These rates are typically updated annually each January as they are subject to the Consumer Price Index (CPI) and sequestration adjustments but are also subject to adjustments during the year due to legislative rulings.
See the table below for average Medicare rates in these non-former CBAs, non-rural areas, using a simple average of rates in each state. These rates are typically updated annually each January as they are subject to the CPI and sequestration adjustments but are also subject to adjustments during the year due to legislative rulings.
One or more of these business partners could delay payments or default on credit extended to them, either of which could adversely affect our business, financial condition and results of operations. 35 We generate a substantial portion of our revenue internationally and are subject to various risks relating to such international activities, which could adversely affect our operating results.
One or more of these business collaborators could delay payments or default on credit extended to them, either of which could adversely affect our business, financial condition and results of operations. We generate a substantial portion of our revenue internationally and are subject to various risks relating to such international activities, which could adversely affect our operating results.
If we fail to implement timely and appropriate corrective actions that are acceptable to the FDA or if our other manufacturing facilities or those of any of our component manufacturers, contract manufacturers, or suppliers are found to be in violation of applicable laws and regulations, or we or our manufacturers or suppliers fail to take prompt and satisfactory corrective action in response to an adverse inspection, the FDA could take enforcement action, including any of the following sanctions: • adverse publicity, untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; • customer notifications or 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 pre-market approval of new products or modified products; • withdrawing 510(k) clearances or pre-market approvals that have already been granted; • refusal to grant export approval for our products; or • criminal prosecution.
If we fail to implement timely and appropriate corrective actions that are acceptable to the FDA or if our other manufacturing facilities or those of any of our contract manufacturers are found to be in violation of applicable laws and regulations, or we or our contract manufacturers fail to take prompt and satisfactory corrective action in response to an adverse inspection, the FDA could take enforcement action, including, among others, the following sanctions: • adverse publicity, untitled letters, warning letters, import detentions, fines, injunctions, consent decrees and civil penalties; • customer notifications or 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 pre-market approval of new products or modified products; • withdrawing 510(k) clearances or other pre-market approvals that have already been granted; • refusal to grant export approval for our products; or • criminal prosecution.
More broadly, if we fail to comply with export control laws or successfully develop our relationship with international distributors, our sales could fail to grow or could decline, and our ability to grow our business could be adversely affected.
If we fail to comply with export control laws or successfully develop our relationship with international distributors, our sales could fail to grow or could decline, and our ability to grow our business could be adversely affected.
As manufacturers of medical devices, we may be subject to substantial warranty or product liability claims or other litigation in the ordinary course of business that may require us to make significant expenditures to defend these claims or pay damage awards. For example, our Inogen One systems contain lithium ion batteries, which, under certain circumstances, can be a fire hazard.
As manufacturers of medical devices, we may be subject to substantial warranty or product liability claims or other litigation in the ordinary course of business that may require us to make significant expenditures to defend these claims or pay damage awards. For example, our POCs contain lithium ion batteries, which, under certain circumstances, can be a fire hazard.
There are a number of risks associated with our dependence on a contract manufacturer, including: • reduced control over delivery schedules and planning; • reliance on the quality assurance procedures of a third party; • risks associated with our contract manufacturer failing to manufacture our products according to our specifications, quality regulations, including the FDA’s Quality System regulations, or otherwise manufacturing products that we or regulatory authorities deem to be unsuitable for commercial use; • risks associated with our contract manufacturer’s ability to successfully undergo FDA and other regulatory authority quality inspections; • potential uncertainty regarding manufacturing yields and costs; • availability of manufacturing capability and capacity, particularly during periods of high demand; • risks and uncertainties associated with the location or country where our products are manufactured, including potential manufacturing disruptions caused by social, geopolitical or environmental factors; • changes in U.S. law or policy governing foreign trade, manufacturing, development and investment in the countries where we manufacture our products, including the World Trade Organization Information Technology Agreement or other free trade agreements; • delays in delivery by suppliers due to customs clearing delays, shipping delays, scarcity of raw materials and changes in demand from us or their other customers; • limited warranties provided to us; and • potential misappropriation of our intellectual property. 34 These and other risks could impair our ability to fulfill orders, harm our sales and impact our reputation with customers.
There are a number of risks associated with our dependence on a contract manufacturer, including: • reduced control over delivery schedules and planning; • reliance on the quality assurance procedures of a third party; • risks associated with our contract manufacturer failing to manufacture our products according to our specifications, quality regulations, including the FDA’s quality system regulations, or otherwise manufacturing products that we or regulatory authorities deem to be unsuitable for commercial use; • risks associated with our contract manufacturer’s ability to successfully undergo FDA and other regulatory authority quality inspections; • potential uncertainty regarding manufacturing yields and costs; • availability of manufacturing capability and capacity, particularly during periods of high demand; • risks and uncertainties associated with the location or country where our products are manufactured, including potential manufacturing disruptions caused by social, geopolitical or environmental factors; • changes in U.S. law or policy governing foreign trade, manufacturing, development and investment in the countries where we manufacture our products, including the World Trade Organization Information Technology Agreement or other free trade agreements; • delays in delivery by suppliers due to customs clearing delays, shipping delays, scarcity of raw materials and changes in demand from us or their other customers; • limited warranties provided to us; and • potential misappropriation of our intellectual property.
In August 2020, CMS resumed medical review of claims and the prior authorization program for certain DMEPOS. • CMS issued a final rule in December 2021 (CMS-1738-P) to establish payment amounts that were to be effective after the COVID-19 PHE for DMEPOS products and services covered under Medicare. • CMS established three different fee schedule adjustment methodologies for non-CBAs after the termination of the COVID-19 PHE: (1) for non-contiguous non-CBAs; (2) for contiguous non-CBAs defined as rural areas; and (3) for non-rural non-CBAs within the contiguous United States.
In August 2020, CMS resumed the prior authorization program for certain DMEPOS. • CMS issued a final rule in December 2021 (CMS-1738-F) to establish payment amounts that were to be effective after the COVID-19 PHE for DMEPOS products and services covered under Medicare. • CMS established three different fee schedule adjustment methodologies for non-CBAs after the termination of the COVID-19 PHE: (1) for non-contiguous non-CBAs; (2) for contiguous non-CBAs defined as rural areas; and (3) for non-rural non-CBAs within the contiguous United States.
Further, even with respect to those future products where a pre-market approval is not required, we cannot assure you that we will be able to obtain the 510(k) clearances with respect to those products or do so in a timely fashion.
Further, even with respect to those future products where a pre-market approval is not required, we cannot assure you that we will be able to obtain the 510(k) clearances or De Novo authorizations with respect to those products or do so in a timely fashion.
We have analyzed the potential impact to revenue associated with patients in the capped rental period and have deferred $0 associated with the capped rental period as of December 31, 2023 and December 31, 2022.
We have analyzed the potential impact to revenue associated with patients in the capped rental period and have deferred $0 associated with the capped rental period as of December 31, 2024 and December 31, 2023.
Both covered entities and business associates are subject to significant civil and criminal penalties for failure to comply with the Privacy Standards and Security Standards under HIPAA.
Under the HITECH Act, both covered entities and business associates are subject to significant civil and criminal penalties for failure to comply with the Privacy Standards and Security Standards under HIPAA.
Our promotional materials and training methods are required to comply with the FDA and other applicable laws and regulations, including the prohibition of the promotion of a medical device for a use that has not been cleared or approved by the FDA.
Our promotional materials and training methods are required to comply with the FDA’s requirements and other applicable laws and regulations, including the prohibition against the promotion of a medical device for a use that has not been cleared or approved by the FDA.
The FDA and other U.S. and foreign governmental agencies regulate, among other things, with respect to medical devices: • design, development and manufacturing; • testing, labeling, content and language of instructions for use and storage; • clinical trials; • product safety; • marketing, sales and distribution; • pre-market clearance and approval; • record keeping; • advertising and promotion; • recalls and field safety corrective actions; • post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; • post-market approval studies; and • product import and export.
The FDA and other U.S. and foreign governmental agencies regulate, among other things, with respect to medical devices: • design, development and manufacturing; • testing, labeling, content and language of instructions for use and storage; • clinical trials; • product safety; • marketing, sales and distribution; 42 • pre-market clearance and approval; • record keeping; • advertising and promotion; • recalls and field safety corrective actions; • post-market safety reporting, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, would be likely to lead to death or serious injury; • post-market approval studies; and • product import and export.
The Statutory Pay-as-You-Go (PAYGO) Act of 2010 requires deficit neutrality overall in the laws enacted by Congress and imposes automatic spending reductions at the end of the year if such laws increase the deficit when they are added together. Any legislation enacted after February 12, 2010, that affects direct spending and/or revenues is subject to Statutory PAYGO.
The Statutory PAYGO Act of 2010 requires deficit neutrality overall in the laws enacted by Congress and imposes automatic spending reductions at the end of the year if such laws increase the deficit when they are added together. Any legislation enacted after February 12, 2010, that affects direct spending and/or revenues is subject to Statutory PAYGO.
Based on our patient population, we estimate approximately 41% of potential customers have non-Medicare insurance coverage (including Medicare Advantage plans). Failing to maintain and obtain private payor contracts from private insurance companies and employers and secure in-network provider status could have a material adverse effect on our financial condition and results of operations.
Based on our patient population, we estimate that approximately 51.8% of our potential customers have non-Medicare insurance coverage (including Medicare Advantage plans). Failing to maintain and obtain private payor contracts from private insurance companies and employers and secure in-network provider status could have a material adverse effect on our financial condition and results of operations.
The CARES Act, passed on March 27, 2020, included the extension of the 50/50 blended rate for HME in rural and non-contiguous, non-competitively bid areas and established a new 75/25 blended rate for all other non-competitively bid areas through the duration of the COVID-19 PHE. The 75/25 blended rate was retroactive to March 6, 2020.
The CARES Act, signed into law on March 27, 2020, included the extension of the 50/50 blended rate for HME in rural and non-contiguous, non-competitively bid areas and established a new 75/25 blended rate for all other non-competitively bid areas through the duration of the COVID-19 PHE. The 75/25 blended rate was retroactive to March 6, 2020.
We believe that these data collection methods do not constitute clinical trials and, therefore, typically do not pursue or obtain regulatory permission from the FDA or institutional review boards (IRBs) before collecting or analyzing such data. If the FDA disagrees with our interpretation, we may be subject to regulatory enforcement including warning letters, fines, injunctions, consent decrees and civil penalties.
We believe that these data collection methods do not constitute clinical trials and, therefore, typically do not pursue or obtain regulatory permission from the FDA or IRBs before collecting or analyzing such data. If the FDA disagrees with our interpretation, we may be subject to regulatory enforcement including, among others, warning letters, fines, injunctions, consent decrees and civil penalties.
Risk factors include, but are not limited to, statements concerning the following: Risks related to our business and strategy: • the intense international, national, regional and local competition we face in our industry; • our dependence on a limited number of customers for a significant portion of our sales revenue; • our reliance on a single source or a limited group of manufacturers or suppliers; • the need to continue to enhance our existing products and develop and market new products; • potential acquisitions of, or investments in, other companies; • the complex and lengthy reimbursement process we depend upon for a significant portion of our revenue; • increases in our operating costs; • economic impacts that affect customer and consumer spending as well as demand for our products; • public health threats and epidemics; • the lack of long-term supply contracts with many of our third-party suppliers; • the competitive bidding process or other reimbursement policy changes under Medicare or other third-party payors, including recently enacted and potential future changes in the reimbursement rates or payment methodologies under Medicare, Medicaid and other government programs; • consolidation in the healthcare industry; • healthcare reform measures; • the possibility our manufacturing facilities could become unavailable or inoperable and other potential manufacturing problems or delays; • our reliance upon a third-party contract manufacturer for certain manufacturing and repair operations; • potential failure to maintain or obtain new private payor contracts and future reductions in reimbursement rates from private payors; • our ability to manage our anticipated growth effectively; • the possibility of non-payment of our HME providers, distributors, private label partners and resellers; • our international sales and manufacturing activities; • warranty or product liability claims or other litigation; • our dependence on the services of our senior executives and other key technical personnel; • variance in our financial condition and results of operations; and • the market opportunities for our products. 21 Risks related to the regulatory environment: • extensive federal, state, and international regulations related to our business by numerous government agencies, including the U.S.
Risk factors include, but are not limited to, statements concerning the following: Risks related to our business and strategy: • the intense international, national, regional and local competition we face in our industry; • our dependence on a limited number of customers for a significant portion of our sales revenue; • our reliance on a single source or a limited group of manufacturers or suppliers; • the lack of long-term supply contracts with many of our third-party suppliers; • the need to continue to enhance our existing products and develop and market new products; • potential acquisitions of, or investments in, other companies; • the complex and lengthy reimbursement process we depend upon for a significant portion of our revenue; • increases in our operating costs; • economic impacts that affect customer and consumer spending as well as demand for our products; • public health threats and epidemics; • the competitive bidding process or other reimbursement policy changes under Medicare or other third-party payors, including recently enacted and potential future changes in the reimbursement rates or payment methodologies under Medicare, Medicaid and other government programs; • consolidation in the healthcare industry; • healthcare reform measures; • the possibility our manufacturing facilities could become unavailable or inoperable and other potential manufacturing problems or delays; • our reliance upon a third-party contract manufacturer for certain manufacturing and repair operations; • potential failure to maintain or obtain new private payor contracts and future reductions in reimbursement rates from private payors; • the possibility of non-payment of our HME providers, distributors, private label partners and resellers; • our international sales and manufacturing activities; • warranty or product liability claims or other litigation; • our dependence on the services of our senior executives and other key technical personnel; • variance in our financial condition and results of operations; • the market opportunities for our products; and • our ability to maintain effective internal controls. 21 Risks related to the regulatory environment: • extensive federal, state, and international regulations related to our business by numerous government agencies, including the FDA and the MDR; • the potential need to seek additional clearances or approvals for our products; and • potential FDA, state, or international regulatory enforcement action and other penalties.
Failure to submit the required information under the federal Physician Payment Sunshine Act may result in civil monetary penalties of up to an aggregate of $0.2 million per year (and up to an aggregate of $1.363 million per year for “knowing failures”), subject to an annual adjustment for inflation.
Failure to submit the required information under the federal Physician Payment Sunshine Act may result in civil monetary penalties of up to an aggregate of $150,000 per year (and up to an aggregate of $1.0 million per year for “knowing failures”), subject to an annual adjustment for inflation.
Monitoring unauthorized use of our intellectual property is difficult and costly. Unauthorized use of our intellectual property may have occurred or may occur in the future. Although we have taken steps to minimize the risk of this occurring, any such failure to identify unauthorized use and otherwise adequately protect our intellectual property would adversely affect our business.
Unauthorized use of our intellectual property may have occurred or may occur in the future. Although we have taken steps to minimize the risk of this occurring, any such failure to identify unauthorized use and otherwise adequately protect our intellectual property would adversely affect our business.
We utilize a third-party contract manufacturer located in the Czech Republic for production of a portion of our Inogen One G3 and Inogen One G5 concentrators and for repair services for these products. Since 2018, our contract manufacturer has produced the vast majority of the concentrators required to support our European demand.
We utilize a third-party contract manufacturer located in the Czech Republic for production of a portion of our concentrators and for repair services for these products. Since 2018, our contract manufacturer has produced the vast majority of the concentrators required to support our European demand.
Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and results of operations. 46 If we, our contract manufacturer, or our component manufacturers fail to comply with the FDA’s Quality System Regulation, our manufacturing operations could be interrupted, and our product sales and operating results could suffer.
Any corrective action, whether voluntary or involuntary, as well as defending ourselves in any subsequent lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and results of operations. 44 If we or our contract manufacturers fail to comply with the FDA’s Quality System Regulation, our manufacturing operations could be interrupted, and our product sales and operating results could suffer.
CMS has proposed that reasonable efforts are made to provide a PA decision within 10 days of receipt of all applicable information, unless this timeline could seriously jeopardize the life or health of the beneficiary or the beneficiary’s ability to regain maximum function, in which case the proposed PA decision would be 2 business days.
CMS has proposed that reasonable efforts are made to provide a prior authorization decision within 10 days of receipt of all applicable information, unless this timeline could seriously jeopardize the life or health of the beneficiary or the beneficiary’s ability to regain maximum function, in which case the proposed prior authorization decision would be two business days.
In addition, any disruption or delay in the shipping of our products, whether domestically or internationally, may have an adverse effect on our financial condition and results of operations. During the years ended December 31, 2023, 2022 and 2021, approximately 28.3%, 26.8% and 22.2%, respectively, of our total revenue was generated from customers located outside of the United States.
In addition, any disruption or delay in the shipping of our products, whether domestically or internationally, may have an adverse effect on our financial condition and results of operations. During the years ended December 31, 2024, 2023 and 2022, approximately 34.9%, 28.3% and 26.8%, respectively, of our total revenue was generated from customers located outside of the United States.
The foregoing shall not apply to any claims under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the Securities Act of 1933, as amended (the “Securities Act”). 58 Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all Securities Act actions.
The foregoing shall not apply to any claims under the Securities Exchange Act of 1934, as amended, or the Exchange Act, or the Securities Act of 1933, as amended, or the Securities Act. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all Securities Act actions.
These legislative provisions have had and may continue to have a material and/or adverse effect on our business, financial condition and results of operations. The HHS Office of Inspector General (OIG) has recommended that states review Medicaid reimbursement for durable medical equipment (DME) and supplies.
These legislative provisions have had and may continue to have a material and/or adverse effect on our business, financial condition and results of operations. 29 The OIG has recommended that states review Medicaid reimbursement for durable medical equipment, or DME, and supplies.
We do not have an extensive history of acquiring other companies and cannot assure you that we will successfully identify suitable acquisition candidates, integrate or manage disparate technologies, lines of business, personnel and corporate cultures, realize our business strategy or the expected return on our investment, or manage a geographically dispersed company.
We do not have an extensive history of acquiring or entering into collaborations with other companies and cannot assure you that we will successfully identify suitable acquisition candidates or collaboration partners, integrate or manage disparate technologies, lines of business, personnel and corporate cultures, realize our business strategy or the expected return on our investment, or manage a geographically dispersed company.
If the FDA determines that our promotional materials or training constitutes promotion of an off-label use that is either false or misleading, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, which could have an adverse effect on our reputation and results of operations. 49 Failure to comply with the Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, and implementing regulations could result in significant penalties.
If the FDA determines that our promotional materials or training constitutes promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, which could have an adverse effect on our reputation and results of operations. 46 Failure to comply with the Federal Health Insurance Portability and Accountability Act of 1996, the Health Information Technology for Economic and Clinical Health Act, and implementing regulations could result in significant penalties.
Medicare revenue, including patient co-insurance and deductible obligations, represented 13.7% of our total revenue in the year ended December 31, 2023 and 15.0% in the year ended December 31, 2022. Medicare reimbursement for oxygen rental equipment is limited to a maximum of 36 months within a 60-month service period, and the equipment remains the property of the home oxygen supplier.
Medicare revenue, including patient co-insurance and deductible obligations, represented 9.5% of our total revenue in the year ended December 31, 2024 and 13.7% in the year ended December 31, 2023. 31 Medicare reimbursement for oxygen rental equipment is limited to a maximum of 36 months within a 60-month service period, and the equipment remains the property of the home oxygen supplier.
Our obligations to service Medicare patients over the rental period include supplying working equipment that meets each patient’s oxygen needs pursuant to his/her doctor’s prescription and supplying all disposables required for the patient to operate the equipment, including cannulas, filters, replacement batteries, carts and carry bags, as needed. If the equipment malfunctions, we must repair or replace the equipment.
Our obligations to service Medicare patients over the rental period include supplying working equipment that meets each patient’s oxygen needs pursuant to his or her doctor’s prescription and supplying all disposables required for the patient to operate the equipment, including cannulas, filters, replacement batteries, carts and carry bags, as needed.
Our projections regarding (i) the size of the oxygen therapy market, both in the United States and internationally, (ii) the size and percentage of the long-term oxygen therapy market that is subject to competitive bidding in the United States, (iii) the number of oxygen therapy patients, (iv) the number of patients requiring ambulatory and stationary oxygen, (v) the number of patients who rely on the delivery model, (vi) the percentage of the long-term oxygen therapy market serviced by Medicare, Medicare Advantage, and other third party-payors, (vii) the size of the retail long-term oxygen therapy market and how the opportunity may change as POC penetration increases, (viii) the share of POCs as a percentage of the total oxygen therapy spend, and (ix) the impact of the COVID-19 pandemic and related PHE on our business and our markets generally are based on estimates that we believe are reliable.
Our projections regarding (i) the size of the oxygen therapy market, both in the United States and internationally, (ii) the size and percentage of the long-term oxygen therapy market that is subject to competitive bidding in the United States, (iii) the number of oxygen therapy patients, (iv) the number of patients requiring ambulatory and stationary oxygen, (v) the number of patients who rely on the delivery model, (vi) the percentage of the long-term oxygen therapy market serviced by Medicare, Medicare Advantage, and other third party-payors, (vii) the size of the retail long-term oxygen therapy market and how the opportunity may change as POC penetration increases, and (viii) the share of POCs as a percentage of the total oxygen therapy spend are based on estimates that we believe are reliable.
Due to the COVID-19 pandemic and related PHE, we allowed an increased number of employees to work remotely, and we continue to do so and expect that this hybrid model of work will continue.
Due to the COVID-19 pandemic and related public health emergency, we allowed an increased number of employees to work remotely, and we continue to do so and expect that this hybrid model of work will continue.
Devices that are validly CE marked under the EU regime or UK Conformity Assessed (UKCA) marked under the UK Medical Devices Regulations 2002 may be placed on the market or put into service in Great Britain.
Devices that are validly CE marked under the EU MDR or UKCA marked under the UK Medical Devices Regulations 2002 may be placed on the market or put into service in Great Britain.
The CARES Act allowed the U.S. Department of Health and Human Services (HHS) to waive certain Medicare telehealth payment requirements during the COVID-19 PHE declared by HHS on January 31, 2020 to allow beneficiaries in all areas to receive telehealth services, including at their home, starting March 6, 2020.
Department of Health and Human Services, or HHS, to waive certain Medicare telehealth payment requirements during the COVID-19 PHE declared by HHS on January 31, 2020 to allow beneficiaries in all areas to receive telehealth services, including at their home, starting March 6, 2020.
When a government auditor ascribes a high billing error rate to one or more of our locations, it generally results in protracted pre-payment claims review, payment delays, refunds and other payments to the government and/or our need to request more documentation from providers than has historically been required.
If a government auditor ascribes a high billing error rate to one or more of our locations, it would result in protracted pre-payment claims review, payment delays, refunds and other payments to the government and/or our need to request more documentation from providers than has historically been required.
If the FDA disagrees with our determinations and requires us to submit new 510(k) notifications or pre-market approval for modifications to our previously cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory penalties or fines.
If the FDA disagrees with our determinations and requires us to submit new 510(k) pre-market notifications or pre-market approval for modifications to our previously cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing and/or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory penalties or fines. 43 If we fail to comply with FDA or state regulatory requirements, we can be subject to enforcement action.
We may experience numerous unforeseen events in relation to a clinical trial process that could delay or prevent us from receiving regulatory clearance or approval for new products or modifications of existing products, including new indications for existing products, including: • delays or failure in obtaining approval of our clinical trial protocols from the FDA, other regulatory authorities, or IRBs; • we, the applicable IRBs, the Data Safety Monitoring Board for such trial, or the FDA or other applicable regulatory authorities may require that we or our investigators suspend or terminate our data collection for various reasons, including, among others (i) failure to conduct the clinical trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice (GCP), regulations, or our clinical protocols, (ii) by the FDA or other applicable regulatory authority resulting in the imposition of a clinical hold, or (iii) lack of adequate patient informed consent; and 48 • delays if the FDA concludes that our financial relationships with our data collection partners result in a perceived or actual conflict of interest that may have affected the interpretation or integrity of the data collected.
We may experience numerous unforeseen events in relation to a clinical trial process that could delay or prevent us from receiving regulatory clearance or approval for new products or modifications of existing products, including new indications for existing products, including: • delays or failure in obtaining approval of our clinical trial protocols from the FDA, other regulatory authorities, or IRBs; • we, the applicable IRB(s), or the FDA or other applicable regulatory authorities may require that we or our investigators suspend or terminate our data collection for various reasons, including, among others (i) failure to conduct the clinical trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice, regulations, or our clinical protocols, or (ii) lack of adequate patient informed consent; and • delays if the FDA concludes that our financial relationships with our data collection partners result in a perceived or actual conflict of interest that may have affected the interpretation or integrity of the data collected.
Of the $484 billion, $75 billion was additional funding for healthcare providers to reimburse healthcare related expenses and lost revenues attributable to COVID-19 PHE, which was in addition to the $100 billion approved in the CARES Act. • On April 6, 2020, CMS issued an Interim Final Rule (IFR) in the Federal Register for policy and regulatory revisions in response to the COVID-19 PHE.
Of the $484 billion, $75 billion was additional funding for healthcare providers to reimburse healthcare related expenses and lost revenues attributable to COVID-19 PHE. • On April 6, 2020, CMS issued an Interim Final Rule, or IFR, in the Federal Register for policy and regulatory revisions in response to the COVID-19 PHE.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeUse of Consultants and Advisors: We engage various third-party cybersecurity service providers to assess and enhance our cybersecurity practices and assist with protection and monitoring of our systems and information, including with respect to, network monitoring, endpoint protection, vulnerability assessments and penetration testing.
Biggest changeWe have insurance coverage in place for certain potential liabilities and costs relating to cybersecurity risks, data security incidents and/or network security breaches, but this insurance is limited in amount, subject to a deductible, and may not be adequate to cover us for all costs arising from these incidents. 56 Use of Consultants and Advisors: We engage various third-party cybersecurity service providers to assess and enhance our cybersecurity practices and assist with protection and monitoring of our systems and information, including with respect to, network monitoring, endpoint protection, vulnerability assessments and penetration testing.
In the ordinary course of our business, we collect and store certain confidential information such as information about our employees, contractors, vendors, suppliers, patients and customers. We remain committed to implementing robust security measures to protect against potential cyber threats and vulnerabilities that are constantly evolving across the globe.
In the ordinary course of our business, we collect and store certain confidential information such as information about our employees, contractors, vendors, suppliers, patients and customers. We are committed to implementing robust security measures to protect against potential cyber threats and vulnerabilities that are constantly evolving across the globe.
National Institute of Standards and Technology (NIST) guidelines. We take a risk-based approach to cybersecurity, which begins with the identification and evaluation of cybersecurity risks or threats that could affect our operations, finances, legal or regulatory compliance, or reputation.
National Institute of Standards and Technology guidelines. We take a risk-based approach to cybersecurity, which begins with the identification and evaluation of cybersecurity risks or threats that could affect our operations, finances, legal or regulatory compliance, or reputation.
Board Oversight and Management’s Role: The Board of Directors, both directly and through the delegation of responsibilities to the Audit Committee oversees the proper functioning of our cybersecurity risk management program to ensures strategic alignment and governance of our cybersecurity efforts at the highest level.
Board Oversight and Management’s Role: The Board of Directors, both directly and through the delegation of responsibilities to the Audit Committee oversees the proper functioning of our cybersecurity risk management program to ensures strategic alignment and governance of our cybersecurity efforts at the highest level. All of the Audit Committee members are independent directors.
In particular, the Audit Committee assists the Board in its oversight of management’s responsibility to assess, manage and mitigate risks associated with our business and operational activities, to administer our various compliance programs, in each case including cybersecurity concerns, and to oversee our information technology systems, processes and data. 61 Management has implemented risk management structures, policies and procedures, and Management is responsible for our day-to-day cybersecurity risk management.
In particular, the Audit Committee assists the Board in its oversight of management’s responsibility to assess, manage and mitigate risks associated with our business and operational activities, to administer our various compliance programs, in each case including cybersecurity concerns, and to oversee our information technology systems, processes and data.
The updates cover progress on ongoing cybersecurity initiatives, insights from any potential threats or incidents, outputs and action plans from external vulnerability and penetration tests, and key performance metrics in line with industry standards.
This strategy promotes a comprehensive stakeholder engagement and enhances management oversight on cybersecurity. The updates cover progress on ongoing cybersecurity initiatives, insights from any potential threats or incidents, outputs and action plans from external vulnerability and penetration tests, and key performance metrics in line with industry standards.
Our Chief Data and Information Officer (CDIO) is responsible for our day-to-day assessment and management of cybersecurity risks. Our Enterprise Enablement function facilitates a cross-departmental approach, ensuring the executive leadership team receives quarterly updates on cybersecurity from various teams. This strategy promotes a comprehensive stakeholder engagement and enhances management oversight on cybersecurity.
Management has implemented risk management structures, policies and procedures, and Management is responsible for our day-to-day cybersecurity risk management. Our Chief Data and Information Officer, or CDIO, is responsible for our day-to-day assessment and management of cybersecurity risks. Our Enterprise Enablement function facilitates a cross-departmental approach, ensuring the executive leadership team receives quarterly updates on cybersecurity from various teams.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we lease approximately 4,000 square feet of office space in Smyrna, Tennessee; Huntsville, Alabama; and Aurora, Colorado with lease terms of 3 years; De Meern in the Netherlands with a lease term of 5 years; and approximately 4,300 square feet of office and warehouse space in Montpellier, France under leases that expire in June 2029 and October 2032.
Biggest changeIn addition, we lease approximately 1,900 square feet of office space in Huntsville, Alabama and Aurora, Colorado with lease terms of three years; approximately 3,700 square feet of office space in De Meern in the Netherlands with a lease term of five years; approximately 3,600 square feet of office and warehouse space in Montpellier, France under leases that expire in June 2029 and October 2032; and approximately 6,000 square feet of office space in Beverly, Massachusetts with a lease term of three years.
We lease approximately 51,000 square feet of manufacturing and office space in Goleta, California under a lease that expires in March 2030. In July 2023, we entered into an Assignment and Assumption of Lease Agreement in which a third party (Assignee) assumed the rights, title, and interest in the lease, including assumption of lease payments.
We lease approximately 51,000 square feet of manufacturing and office space in Goleta, California under a lease that expires in March 2030. In July 2023, we entered into an Assignment and Assumption of Lease Agreement in which a third party, the Assignee, assumed the rights, title, and interest in the lease, including assumption of lease payments.
Commencing February 1, 2024 and ending May 31, 2031, the Assignee assumes responsibility for the monthly lease payments. Notwithstanding the Assignee's assumption of lease payments, we remain the primary obligor under the lease to the landlord.
Commencing February 1, 2024 and ending May 31, 2031, the Assignee assumed responsibility for the monthly lease payments. Notwithstanding the Assignee's assumption of lease payments, we remain the primary obligor under the lease to the landlord. 57
PROPERTIES As of December 31, 2023, we lease approximately 18,000 square feet of office space at our corporate headquarters in Goleta, California under a lease that expires in January 2028; approximately 154,000 square feet of manufacturing and office space in Plano, Texas under a lease that expires in April 2031; and approximately 94,000 square feet of office space in Cleveland, Ohio under a lease that expires in September 2024.
ITEM 2. PROPERTIES As of December 31, 2024, we lease approximately 18,000 square feet of office space at our corporate headquarters in Goleta, California under a lease that expires in January 2028 and approximately 154,000 square feet of manufacturing and office space in Plano, Texas under a lease that expires in April 2031.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSTOCKHOLDER RETURN PERFORMANCE GRAPH COMPARISON OF THE 5 YEAR CUMULATIVE TOTAL RETURN Among Inogen, Inc., the S & P Healthcare Equipment and Supplies Index, the Russell 2000 Index and the NASDAQ Composite Index 63 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Inogen, Inc. $ 100.00 $ 84.25 $ 54.60 $ 41.47 $ 24.47 $ 6.82 S & P Healthcare Equipment & Supplies^ (1) $ 100.00 $ 121.65 $ 161.92 $ 168.83 $ 128.29 $ 120.25 Russell 2000^ (2) $ 100.00 $ 123.40 $ 146.82 $ 166.75 $ 130.60 $ 150.31 NASDAQ Composite^ (3) $ 100.00 $ 134.82 $ 193.96 $ 237.24 $ 157.74 $ 226.24 (1) The S&P Healthcare Equipment and Supplies Index is a capitalization weighted-average index compiled of healthcare companies in the S&P 500 Index.
Biggest changeSTOCKHOLDER RETURN PERFORMANCE GRAPH COMPARISON OF THE 5 YEAR CUMULATIVE TOTAL RETURN Among Inogen, Inc., the S&P Healthcare Equipment and Supplies Index, the Russell 2000 Index and the Nasdaq Composite Index 59 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Inogen, Inc. $ 100.00 $ 65.39 $ 49.76 $ 28.85 $ 8.03 $ 13.42 S&P Healthcare Equipment & Supplies (1) 100.00 132.91 136.96 104.99 98.45 103.45 Russell 2000 (2) 100.00 119.96 137.74 109.59 128.14 142.93 Nasdaq Composite (3) $ 100.00 $ 143.64 $ 174.36 $ 116.65 $ 167.30 $ 215.22 (1) The S&P Healthcare Equipment and Supplies Index is a capitalization weighted-average index compiled of healthcare companies in the S&P 500 Index.
Stock performance graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of ours under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Stock performance graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of ours under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
This graph assumes an investment of $100 on December 31, 2018 in each of our common stock, the NASDAQ Composite Index, the S & P Healthcare Equipment and Supplies Index, the Russell 2000 Index and assumes reinvestment of dividends, if any. The stock price performance shown on the graph below is not necessarily indicative of future stock price performance.
This graph assumes an investment of $100 on December 31, 2019 in each of our common stock, the Nasdaq Composite Index, the S & P Healthcare Equipment and Supplies Index, the Russell 2000 Index and assumes reinvestment of dividends, if any. The stock price performance shown on the graph below is not necessarily indicative of future stock price performance.
Securities authorized for issuance under equity compensation plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in PART III Item 12 of this Annual Report on Form 10-K. Unregistered sales of equity securities None. Issuer purchases of equity securities None. ITEM 6. [RESE RVED] 64
Securities authorized for issuance under equity compensation plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 of this Annual Report on Form 10-K. Unregistered sales of equity securities None. Issuer purchases of equity securities None. ITEM 6. [RESE RVED] 60
The following graph compares the performance of our common stock for the periods indicated with the performance of the S&P Healthcare and Supplies Index, the Russell 2000 Index, and the NASDAQ Composite Index from December 31, 2018 to December 31, 2023.
The following graph compares the performance of our common stock for the periods indicated with the performance of the S&P Healthcare and Supplies Index, the Russell 2000 Index, and the Nasdaq Composite Index from December 31, 2019 to December 31, 2024.
(2) The Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index. (3) The NASDAQ Composite is a market-value weighted index of all common stocks listed on the NASDAQ. Stockholders As of February 23, 2024, there were 9 registered stockholders of record for our common stock.
(2) The Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index. (3) The Nasdaq Composite is a market-value weighted index of all common stocks listed on the Nasdaq. Stockholders As of February 21, 2025, there were 8 registered stockholders of record for our common stock.

Item 7. Management's Discussion & Analysis

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

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Biggest changeDomestic direct-to-consumer rentals increased 13.0% for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to an increase in rental patients on service and increased Medicare reimbursement rates due to the inflation adjustment effective January 1, 2023, partially offset by increased rental revenue adjustments. 75 Cost of revenue and gross profit Years ended December 31, Change 2023 vs. 2022 % of Revenue (amounts in thousands) 2023 2022 $ % 2023 2022 Cost of sales revenue $ 158,636 $ 197,805 $ (39,169 ) -19.8 % 50.3 % 52.5 % Cost of rental revenue 30,325 25,903 4,422 17.1 % 9.6 % 6.8 % Total cost of revenue $ 188,961 $ 223,708 $ (34,747 ) -15.5 % 59.9 % 59.3 % Gross profit - sales revenue $ 92,971 $ 122,744 $ (29,773 ) -24.3 % 29.4 % 32.5 % Gross profit - rental revenue 33,728 30,789 2,939 9.5 % 10.7 % 8.2 % Total gross profit $ 126,699 $ 153,533 $ (26,834 ) -17.5 % 40.1 % 40.7 % Gross margin percentage - sales revenue 37.0 % 38.3 % Gross margin percentage - rental revenue 52.7 % 54.3 % Total gross margin percentage 40.1 % 40.7 % Cost of sales revenue decreased $39.2 million for the year ended December 31, 2023 from the year ended December 31, 2022, a decrease of 19.8% from the comparable year, due primarily to lower sales volumes, lower premiums paid for components and lower labor and overhead costs.
Biggest changeDomestic direct-to-consumer rentals decreased 11.1% for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily related to a higher mix of lower private-payor reimbursement rates. 66 Cost of revenue and gross profit Years ended December 31, Change 2024 vs. 2023 % of Revenue (dollar amounts in thousands) 2024 2023 $ % 2024 2023 Cost of sales revenue $ 148,655 $ 158,636 $ (9,981 ) -6.3 % 44.3 % 50.3 % Cost of rental revenue 32,309 30,325 1,984 6.5 % 9.6 % 9.6 % Total cost of revenue $ 180,964 $ 188,961 $ (7,997 ) -4.2 % 53.9 % 59.9 % Gross profit - sales revenue $ 130,101 $ 92,971 $ 37,130 39.9 % 38.8 % 29.4 % Gross profit - rental revenue 24,640 33,728 (9,088 ) -26.9 % 7.3 % 10.7 % Total gross profit $ 154,741 $ 126,699 $ 28,042 22.1 % 46.1 % 40.1 % Gross margin percentage - sales revenue 46.7 % 37.0 % Gross margin percentage - rental revenue 43.3 % 52.7 % Total gross margin percentage 46.1 % 40.1 % Cost of sales revenue decreased $10.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, a decrease of 6.3%, due primarily to lower premiums paid for raw material components, partially offset by an increase in the numbers of systems sold.
We elected to apply the practical expedient in accordance with Accounting Standards Codification (ASC) 606— Revenue Recognition and did not evaluate contracts of one year or less for the existence of a significant financing component. We do not expect any revenue to be recognized over a multi-year period with the exception of revenue related to lifetime warranties.
We elected to apply the practical expedient in accordance with Accounting Standards Codification, or ASC, 606— Revenue Recognition and did not evaluate contracts of one year or less for the existence of a significant financing component. We do not expect any revenue to be recognized over a multi-year period with the exception of revenue related to lifetime warranties.
We used a discounted cash flow analysis based on Level 3 inputs and determined that the goodwill carrying amount exceeded its fair value and, as such, an impairment charge of $32.9 million was incurred in the quarter ended September 30, 2023. Total accumulated impairment losses were $32.9 million as of December 31, 2023.
We used a discounted cash flow analysis based on Level 3 inputs and determined that the goodwill carrying amount exceeded its fair value and, as such, an impairment charge of $32.9 million was incurred in the quarter ended September 30, 2023. Total accumulated impairment losses were $32.9 million as of December 31, 2023 and 2024.
The purpose of Management's Discussion and Analysis (MD&A) is to provide an understanding of Inogen’s financial condition, results of operations and cash flows by focusing on changes in certain key measures from year-to-year. The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and accompanying notes.
The purpose of Management's Discussion and Analysis, or MD&A, is to provide an understanding of Inogen’s financial condition, results of operations and cash flows by focusing on changes in certain key measures from year-to-year. The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and accompanying notes.
Our future capital requirements will also depend on many additional factors, including those set forth in the section of this Annual Report on Form 10-K entitled “Risk Factors.” If we require additional funds in the future, we may not be able to obtain such funds on acceptable terms, or at all.
Our future capital requirements will also depend on many additional factors, including those set forth in the section of this Annual Report on Form 10-K entitled “Risk Factors.” 69 If we require additional funds in the future, we may not be able to obtain such funds on acceptable terms, or at all.
For a fixed price, we also offer a lifetime warranty for direct-to-consumer sales for our oxygen concentrators. The revenue is allocated to the distinct lifetime warranty performance obligation based on a relative stand-alone selling price (SSP) method. We have vendor-specific objective evidence of the selling price for our equipment.
For a fixed price, we also offer a lifetime warranty for direct-to-consumer sales for our oxygen concentrators. The revenue is allocated to the distinct lifetime warranty performance obligation based on a relative stand-alone selling price, or SSP, method. We have vendor-specific objective evidence of the selling price for our equipment.
We plan to also invest in clinical studies to evaluate expected improvements in clinical, economic and patient reported outcomes associated with the use of our products as part of our efforts to drive payor and prescriber advocacy for our products. • Expand our product offerings and indications for use.
We plan to also continue to invest in clinical studies to evaluate expected improvements in clinical, economic and patient reported outcomes associated with the use of our products as part of our efforts to drive payor and prescriber advocacy for our products. • Expand our product offerings and indications for use.
The MD&A is organized in the following sections: • Critical accounting policies and estimates • Recent accounting pronouncements • Macroeconomic environment • Overview • Basis of presentation • Results of operations • Liquidity and capital resources • Sources of funds • Use of funds • Non-GAAP financial measures Critical accounting policies and estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S.
The MD&A is organized in the following sections: • Critical accounting policies and estimates • Recent accounting pronouncements • Macroeconomic environment • Overview • Results of operations • Liquidity and capital resources • Sources of funds • Use of funds • Non-GAAP financial measures Critical accounting policies and estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S.
Revenue from product sales is generally recognized upon shipment of the product but is deferred for certain transactions when control has not yet transferred to the customer. 65 Our product is generally sold with a right of return and we may provide other incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize.
Revenue from product sales is generally recognized upon shipment of the product but is deferred for certain transactions when control has not yet transferred to the customer. 61 Our product is generally sold with a right of return and we may provide other incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize.
Inogen Connect, our connectivity platform on our Inogen One G4 ® and Inogen One G5, and Inogen Rove 6 products in the United States and Canada, is compatible with Apple and Android platforms and includes patient features such as purity status, battery life, product support functions, notification alerts, and remote software updates.
Inogen Connect, our connectivity platform is available on our Inogen Rove 4, Inogen One G4 ® , Inogen One G5, and Inogen Rove 6 products in the United States and Canada, is compatible with Apple and Android platforms and includes patient features such as purity status, battery life, product support functions, notification alerts, and remote software updates.
Amounts related to the capped rental period have not been material in the periods presented. 66 The lease term begins on the date products are shipped to patients and are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including Medicare, private payors, and Medicaid.
Amounts related to the capped rental period have not been material in the periods presented. 62 The lease term begins on the date products are shipped to patients and are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including Medicare, private payors, and Medicaid.
Comparison of years ended December 31, 2022 and 2021 A discussion of changes in our results of operations during the year ended December 31, 2022 compared to the year ended December 31, 2021 has been omitted from this Annual Report on Form 10-K but may be found in “Item 7.
Comparison of years ended December 31, 2023 and 2022 A discussion of changes in our results of operations during the year ended December 31, 2023 compared to the year ended December 31, 2022 has been omitted from this Annual Report on Form 10-K but may be found in “Item 7.
Commencing February 1, 2024 and ending May 31, 2031, the Assignee assumes responsibility for the monthly lease payments, and we remain the primary obligor under the lease to the landlord. (2) We obtain individual components for our products from a wide variety of individual suppliers.
Commencing February 1, 2024 and ending May 31, 2031, the Assignee assumed responsibility for the monthly lease payments, and we remain the primary obligor under the lease to the landlord. (2) We obtain individual components for our products from a wide variety of individual suppliers.
We derive the majority of our revenue from the sale and rental of our Inogen One and Rove systems and related accessories to patients, insurance carriers, home healthcare providers, resellers, and distributors, including our private label partner.
We derive the majority of our revenue from the sale and rental of our Inogen One and Rove systems and related accessories to patients, insurance carriers, home healthcare providers, resellers, and distributors, including our private label collaborator.
The net changes in operating assets and liabilities resulted in net cash provided of $14.3 million. 79 Net cash used in operating activities for the year ended December 31, 2022 consisted primarily of our net loss of $83.8 million and the non-cash add back for change in fair value of the earnout liability of $15.4 million, partially offset by non-cash adjustment items such as loss on disposal of intangible asset of $52.2 million, depreciation of equipment and leasehold improvements and amortization of intangibles of $23.5 million, provision for sales returns and doubtful accounts of $13.0 million, stock-based compensation expense of $12.3 million, net loss on disposal of rental equipment and other fixed assets of $3.1 million, and provision for inventory obsolescence and other inventory losses of $2.4 million.
Net cash used in operating activities for the year ended December 31, 2022 consisted primarily of our net loss of $83.8 million and the non-cash add back for change in fair value of the earnout liability of $15.4 million, partially offset by non-cash adjustment items such as loss on disposal of intangible asset of $52.2 million, depreciation of equipment and leasehold improvements and amortization of intangibles of $23.5 million, provision for sales returns and doubtful accounts of $13.0 million, stock-based compensation expense of $12.3 million, net loss on disposal of rental equipment and other fixed assets of $3.1 million, and provision for inventory obsolescence and other inventory losses of $2.4 million.
Our products are sold internationally through distributors and medical equipment companies outside of the United States and through direct patient and prescriber sales, as well as resellers and home medical equipment companies in the United States.
Our products are sold in the United States through direct patient and prescriber sales, as well as resellers and home medical equipment companies, and internationally through distributors and medical equipment companies.
In order to take advantage of these international markets, we have partnered with distributors who serve those markets and key customers in them.
In order to take advantage of these international markets, we have partnered with distributors who serve key customers in those markets.
Included in these amounts are the lease payments assumed by a third party (Assignee) based on an Assignment and Assumption of Lease Agreement (Agreement) in which the Assignee assumed the rights, title, and interest in the lease.
Included in these amounts are the lease payments assumed by a third party, referred to as the Assignee, based on an Assignment and Assumption of Lease Agreement in which the Assignee assumed the rights, title, and interest in the lease.
We expend significant manufacturing and production expense in connection with the development and production of our oxygen concentrator products and, in connection with our rental business, we incur expense in the deployment and maintenance of rental equipment to our patients.
We expend significant manufacturing and production expense in connection with the development and production of our oxygen concentrator and other respiratory care products and, in connection with our rental business, we incur expense in the deployment and maintenance of rental equipment to our patients.
Our critical accounting policies and estimates include those related to: • revenue recognition; • acquisitions and related acquired intangible assets and goodwill; and • long-lived asset impairment. Revenue recognition We generate revenue primarily from sales and rentals of our products. Our products consist of our proprietary line of oxygen concentrators and related accessories.
Our critical accounting policies and estimates include those related to: • revenue recognition; and • acquisitions and related acquired intangible assets and goodwill. Revenue recognition We generate revenue primarily from sales and rentals of our products. Our products consist of our proprietary line of oxygen concentrators and related accessories.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 24, 2023, which discussion is incorporated herein by reference and which is available free of charge on the SECs website at www.sec.gov .
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 1, 2024, which discussion is incorporated herein by reference and which is available free of charge on the SECs website at www.sec.gov .
We estimate that the Inogen Rove 6 and Inogen One G5 are each suitable for over 90% of ambulatory long-term oxygen therapy patients based on our analysis of the patients who have contacted us and their clinical needs.
The Inogen One G5 is similar to the product specifications of the Inogen Rove 6. We estimate that the Inogen Rove 6 and Inogen One G5 are each suitable for over 90% of ambulatory long-term oxygen therapy patients based on our analysis of the patients who have contacted us and their clinical needs.
As a result of the TAV technology intangible asset disposal in 2022, a quantitative analysis was required to be performed as of December 31, 2022 and concluded that there was no impairment.
As a result of the Tidal Assist ® Ventilator technology intangible asset disposal in 2022, a quantitative analysis was required to be performed as of December 31, 2022 and concluded that there was no impairment.
Some of these limitations are: • EBITDA and Adjusted EBITDA do not reflect our cash expenditures for capital equipment or other contractual commitments; • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect capital expenditure requirements for such replacements; • EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA does not include changes in fair value of earnout liability related to our acquisitions; • Adjusted EBITDA does not include acquisition-related expenses, whether the acquisition was consummated or not pursued; • Adjusted EBITDA does not include charges represent the costs associated with workforce reductions and associated costs and other restructuring-related activities; • goodwill impairment; and • other companies, including companies in our industry, may calculate EBITDA and Adjusted EBITDA measures differently, which reduces their usefulness as a comparative measure. 81 In evaluating EBITDA and Adjusted EBITDA, we anticipate that in the future we will incur expenses within these categories similar to this presentation.
Some of these limitations are: • EBITDA and Adjusted EBITDA do not reflect our cash expenditures for capital equipment or other contractual commitments; • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect capital expenditure requirements for such replacements; • EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA does not include changes in fair value of earnout liability related to our acquisitions; • Adjusted EBITDA does not include acquisition-related expenses, whether the acquisition was consummated or not pursued; • Adjusted EBITDA does not include costs associated with workforce reductions and associated costs and other restructuring-related activities; • goodwill impairment; and • other companies, including companies in our industry, may calculate EBITDA and Adjusted EBITDA measures differently, which reduces their usefulness as a comparative measure.
Our leading portfolio of innovative portable oxygen concentrators (POCs) is optimized to deliver high output ratio-to-weight, meaningful sound suppression and among the longest run times in the industry so that we can meet the needs of patients across a variety of disease states.
Our leading portfolio of innovative POCs is designed to deliver high output ratio-to-weight, meaningful sound suppression and has among the longest run times in the industry so that we can meet the needs of patients across a variety of disease states.
The year ended December 31, 2023 included $14.2 million of material cost premiums associated with open-market purchases of semiconductor chips used in our batteries and POCs compared to $23.8 million in the year ended December 31, 2022.
The year ended December 31, 2024 included $0.2 million of material cost premiums associated with open-market purchases of semiconductor chips used in our batteries and POCs compared to $14.2 million in the year ended December 31, 2023.
We sell multiple configurations of our Inogen One, Rove and Inogen At Home systems with various batteries, accessories, warranties, power cords, and language settings. Our goal is to design, build, and market oxygen solutions that redefine how long-term oxygen therapy is delivered.
We sell multiple configurations of our Inogen One ® , Rove and Inogen At Home systems with various batteries, accessories, warranties, power cords, and language settings. Our goal is to design, build, and market oxygen solutions that redefine how long-term oxygen therapy is delivered. To accomplish this goal, we intend to: • Expand our domestic HME provider and reseller network.
We have continued focus on our domestic business-to-business partnerships, including relationships with distributors, key accounts, resellers, our private label partner, and traditional HME providers. We offer patient-preferred, low total cost of ownership products to help providers convert their businesses to a non-delivery POC business model. • Increase international business-to-business adoption.
We remain focused on our domestic business-to-business partnerships, including relationships with distributors, key accounts, resellers, our private label collaborator, and traditional HME providers. We offer patient-preferred, low total cost of ownership products to help providers convert their businesses to a non-delivery POC business model.
This was primarily due to decreases of $9.5 million in personnel-related expenses, $6.1 million in media and advertising costs, and $2.1 million in credit card and financing fees, partially offset by an increase of $3.4 million in consulting fees.
This was primarily due to decreases of $8.5 million in consulting fees, $1.9 million in dues, fees and licenses, and $1.6 million in credit card and financing fees, partially offset by an increase of $5.1 million in media and advertising costs, $1.5 million in personnel-related expenses, and $0.9 million in travel costs.
Finite-lived intangible assets are amortized over their useful lives and are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Technology and customer relationship intangibles are amortized using the straight-line method.
Finite-lived intangible assets are amortized over their useful lives and are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Simeox, from Physio-Assist, is a technology-enabled airway clearance and mucus management device predominantly aimed at treating bronchiectasis which is a condition that presents as the lung’s bronchi are damaged and widened, in patients with cystic fibrosis or chronic obstructive pulmonary disease. Simeox is used in pulmonary rehabilitation centers as well as at home.
Our Simeox product is a technology-enabled airway clearance and mucus management device predominantly aimed at serving patients with bronchiectasis which is a condition that presents as the lung’s bronchi are damaged and widened in patients with cystic fibrosis or COPD. Simeox is used in pulmonary rehabilitation centers as well as at home.
Total worldwide business-to-business sales revenue accounted for 61.8% of total sales revenue in the year ended December 31, 2023 versus 58.4% in the year ended December 31, 2022.
Total worldwide business-to-business sales revenue accounted for 72.0% of total sales revenue in the year ended December 31, 2024 versus 61.8% in the year ended December 31, 2023.
For the year ended December 31, 2021, net cash provided by financing activities consisted of $15.6 million from the proceeds received from stock options that were exercised and purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock awards and restricted stock units of $0.6 million.
For the year ended December 31, 2024, net cash provided by financing activities consisted of $0.8 million from the proceeds received from purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock units of $0.5 million.
Non-GAAP financial measures EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with U.S. GAAP. We define EBITDA as net loss excluding interest income, interest expense, taxes and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation, change in fair value of earnout liability, acquisition-related expenses, and restructuring-related and other charges.
We define EBITDA as net loss excluding interest income, interest expense, taxes and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation, change in fair value of earnout liability, acquisition-related expenses, and restructuring-related and other charges.
In the year ended December 31, 2023, sales in Europe as a percentage of total international sales revenue decreased to 85.3% versus 86.9% in the comparative period in 2022.
In the year ended December 31, 2024, sales in Europe as a percentage of total international sales revenue slightly decreased to 85.0% versus 85.3% in 2023.
Net cash provided by operating activities for the year ended December 31, 2021 consisted primarily of our non-cash expense items such as depreciation of equipment and leasehold improvements and amortization of our intangibles of $21.6 million, a decrease in deferred tax assets of $14.4 million, provision for sales returns and doubtful accounts of $11.1 million, stock-based compensation expense of $10.9 million, provision for inventory obsolescence and other inventory losses of $2.1 million, and net loss on disposal of rental equipment and other fixed assets of $1.5 million; partially offset by the change in fair value of earnout liability of $11.6 million and our net loss of $6.3 million.
Net cash provided by operating activities for the year ended December 31, 2024 consisted primarily of non-cash adjustment items such as depreciation of equipment and leasehold improvements and amortization of intangibles of $21.0 million, provision for sales returns and doubtful accounts of $10.9 million, stock-based compensation expense of $7.4 million, net loss on disposal of rental assets and other assets of $4.5 million, and change in fair value of earnout liability of $3.0 million.
The following tables show a summary of our cash flows and working capital for the periods and as of the dates indicated: (amounts in thousands) Years ended December 31, Summary of consolidated cash flows 2023 2022 2021 Cash provided by (used in) operating activities $ (3,234 ) $ (37,532 ) $ 23,633 Cash used in investing activities (59,315 ) (10,877 ) (14,645 ) Cash provided by financing activities 960 380 15,000 Effect of exchange rates on cash 67 (481 ) (426 ) Net increase (decrease) in cash and cash equivalents $ (61,522 ) $ (48,510 ) $ 23,562 (amounts in thousands) December 31, Summary of working capital 2023 2022 Total current assets $ 207,067 $ 304,645 Total current liabilities 72,496 65,349 Net working capital $ 134,571 $ 239,296 Operating activities Historically, we derive operating cash flows from cash collected from the sales and rental of our products and services.
The following tables show a summary of our cash flows and working capital for the periods and as of the dates indicated: (amounts in thousands) Years ended December 31, Summary of consolidated cash flows 2024 2023 2022 Cash provided by (used in) operating activities $ 5,914 $ (3,234 ) $ (37,532 ) Cash used in investing activities (13,975 ) (59,315 ) (10,877 ) Cash provided by financing activities 265 960 380 Effect of exchange rates on cash (281 ) 67 (481 ) Net decrease in cash and cash equivalents $ (8,077 ) $ (61,522 ) $ (48,510 ) (amounts in thousands) December 31, Summary of working capital 2024 2023 Total current assets $ 185,451 $ 207,067 Total current liabilities 76,686 72,496 Net working capital $ 108,765 $ 134,571 Operating activities Historically, we derive operating cash flows from cash collected from the sales and rental of our products and services.
Domestic direct-to-consumer sales decreased 28.0% for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by lower volume due to lower sales representative headcount and lower marketing spend, partially offset by increased average selling prices versus the comparative period in the prior year.
Domestic direct-to-consumer sales decreased 18.8% for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by lower volume due to lower sales representative headcount, partially offset by increased average selling prices versus the prior year.
Cost of rental revenue included $12.9 million of rental asset depreciation for the year ended December 31, 2023 compared to $11.1 million for the year ended December 31, 2022. Gross margin on sales revenue decreased to 37.0% for the year ended December 31, 2023 from 38.3% for the year ended December 31, 2022.
Cost of rental revenue included $12.6 million of rental asset depreciation for the year ended December 31, 2024 compared to $12.9 million for the year ended December 31, 2023. Gross margin on sales revenue increased to 46.7% for the year ended December 31, 2024 from 37.0% for the year ended December 31, 2023.
GAAP measure, for each of the periods indicated: (amounts in thousands) Years ended December 31, Non-GAAP EBITDA and Adjusted EBITDA 2023 2022 2021 Net loss (GAAP) $ (102,449 ) $ (83,772 ) $ (6,333 ) Non-GAAP adjustments: Interest income, net (6,574 ) (2,837 ) (129 ) Provision for income taxes 105 504 14,992 Depreciation and amortization 18,152 23,514 21,628 EBITDA (non-GAAP) (90,766 ) (62,591 ) 30,158 Stock-based compensation 7,427 12,283 10,943 Acquisition-related expenses 2,413 — — Restructuring-related and other charges 3,426 — — Impairment charges 32,894 — — Change in fair value of earnout liability 6,822 (15,386 ) (11,596 ) Loss on disposal of intangible asset — 52,161 — Adjusted EBITDA (non-GAAP) $ (37,784 ) $ (13,533 ) $ 29,505 82 Contractual obligations The following table reflects a summary of our contractual obligations as of December 31, 2023.
GAAP measure, for each of the periods indicated: (amounts in thousands) Years ended December 31, Non-GAAP EBITDA and Adjusted EBITDA 2024 2023 2022 Net loss (GAAP) $ (35,888 ) $ (102,449 ) $ (83,772 ) Non-GAAP adjustments: Interest income, net (5,190 ) (6,574 ) (2,837 ) Provision (benefit) for income taxes (588 ) 105 504 Depreciation and amortization 21,004 18,152 23,514 EBITDA (non-GAAP) (20,662 ) (90,766 ) (62,591 ) Stock-based compensation 7,397 7,427 12,283 Acquisition-related expenses 784 2,413 — Restructuring-related and other charges — 3,426 — Impairment charges — 32,894 — Change in fair value of earnout liability 3,000 6,822 (15,386 ) Loss on disposal of intangible asset — — 52,161 Adjusted EBITDA (non-GAAP) $ (9,481 ) $ (37,784 ) $ (13,533 ) 73
Overview We are a medical technology company that primarily develops, manufactures, and markets innovative portable oxygen therapy solutions for patients with chronic respiratory conditions.
Overview We are a medical technology company that primarily develops, manufactures, and markets innovative respiratory market products, including our portable oxygen therapy solutions for patients with chronic respiratory conditions as well as our Simeox product for airway clearance treatment.
In the year ended December 31, 2023, we spent $27.1 million in media and advertising costs versus $33.3 million in the comparative period in 2022.
In the year ended December 31, 2024, we spent $32.2 million in media and advertising costs versus $27.1 million in 2023.
This was due primarily to a $6.8 million decrease in amortization costs of intangible assets, partially offset by an increase of $3.5 million in product development expenses and $1.4 million of personnel-related expenses. 76 Sales and marketing expense Years ended December 31, Change 2023 vs. 2022 % of Revenue (amounts in thousands) 2023 2022 $ % 2023 2022 Sales and marketing expense $ 107,091 $ 120,767 $ (13,676 ) -11.3 % 33.9 % 32.0 % Sales and marketing expense decreased $13.7 million for the year ended December 31, 2023 from the year ended December 31, 2022, a decrease of 11.3% from the comparable period.
This was due primarily to a $2.3 million increase in amortization costs of intangible assets related to the Physio-Assist acquisition, partially offset by a $1.6 million decrease in product development costs. 67 Sales and marketing expense Years ended December 31, Change 2024 vs. 2023 % of Revenue (dollar amounts in thousands) 2024 2023 $ % 2024 2023 Sales and marketing expense $ 103,069 $ 107,091 $ (4,022 ) -3.8 % 30.7 % 33.9 % Sales and marketing expense decreased $4.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, a decrease of 3.8%.
Payments due by period (amounts in thousands) Less than 1-3 3-5 More than Contractual Obligations Total 1 year years years 5 years Operating leases - properties and other (1) $ 23,812 $ 4,162 $ 6,561 $ 6,266 $ 6,823 Purchase obligations (2) 83,000 83,000 — — — Total $ 106,812 $ 87,162 $ 6,561 $ 6,266 $ 6,823 (1) We lease manufacturing and office space in Plano, TX, Goleta, CA, Smyrna, TN, Huntsville, AL, Aurora, CO, Cleveland, OH, De Meern, Netherlands and Montpellier, France with terms that expire between 2024 and 2031 and miscellaneous office and processing equipment in Texas, California and Ohio with terms expiring between 2024 and 2028.
Payments due by period (amounts in thousands) Less than 1-3 3-5 More than Contractual Obligations Total 1 year years years 5 years Operating leases - properties and other (1) $ 21,126 $ 3,336 $ 7,255 $ 6,271 $ 4,264 Purchase obligations (2) 58,400 58,400 — — — Total $ 79,526 $ 61,736 $ 7,255 $ 6,271 $ 4,264 (1) We lease manufacturing and office space in Plano, TX, Goleta, CA, Smyrna, TN, Huntsville, AL, Aurora, CO, Beverly, MA, De Meern, Netherlands and Montpellier, France with terms that expire between 2025 and 2031 and miscellaneous office and processing equipment in Texas and California with terms expiring between 2025 and 2028.
The Inogen Rove 6 weighs 4.8 pounds and produces 1,260 ml per minute of oxygen output with very quiet operations at 37 dBA and long battery life at 6 hours and 15 minutes for a single battery and up to 12 hours and 45 minutes for a double battery, as well as improvements to provide ease-of-use and improvements to design in compliance to European Union medical device regulation (MDR) standards.
The Inogen Rove 4 weighs 2.9 pounds and produces 840 ml per minute of oxygen output with quiet operations at 39 dBA and long battery life at 3 hours for a single battery, 4 hours and 15 minutes on our new intermediate battery, and up to 5 hours and 45 minutes for a double battery, as well as improvements to provide ease-of-use and improvements to design in compliance with MDR standards.
We are evolving our operating model to focus the enhanced prescriber and direct-to-consumer sales teams to drive increased rental revenue by establishing relationships with the prescriber through a consistent cadence of contact. • Expand our domestic HME provider and reseller network.
We continue to evolve our operating model to focus the enhanced sales teams to drive increased rental revenue by establishing relationships with the prescriber through a consistent cadence of contact.
We additionally have an Inogen base of operations for sales and customer service in the Netherlands, and use a contract manufacturer, Foxconn, located in the Czech Republic to support the majority of our European sales volumes. • Invest in our oxygen product offerings to develop innovative products and expand clinical evidence .
We additionally have an Inogen base of operations for sales and customer service in the Netherlands along with sales representatives based in focus European countries, and use a contract manufacturer, Foxconn, located in the Czech Republic to support the majority of our European sales volumes.
See the section titled “Fair Value of Earnout Liability” in the notes to consolidated financial statements included in this Annual Report on Form 10-K for further discussion.
See the section titled “Fair Value of Earnout Liability” in the notes to consolidated financial statements included in this Annual Report on Form 10-K for further discussion. Non-GAAP financial measures EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with U.S. GAAP.
Sources of funds Our net cash used in operating activities in the year ended December 31, 2023 was $3.2 million compared to net cash used in operating activities of $37.5 million in the year ended December 31, 2022.
Sources of funds Our net cash provided by operating activities in the year ended December 31, 2024 was $5.9 million compared to net cash used in operating activities of $3.2 million in the year ended December 31, 2023. As of December 31, 2024, we had cash and cash equivalents of $113.8 million.
Over the past several years our cash flows from customer collections have remained consistent and our annual cash provided by operating activities has generally been a significant source of capital to the business, which we expect to continue in the future.
Over the past several years our cash flows from customer collections have remained consistent and our annual cash provided by operating activities has generally been a significant source of capital to the business. 71 Contractual obligations The following table reflects a summary of our contractual obligations as of December 31, 2024.
As of December 31, 2023, we had cash and cash equivalents of $125.5 million and marketable securities of $3.0 million. 80 Use of funds Our principal uses of cash are funding our new rental asset deployments and other capital purchases, operations, and other working capital requirements and, from time-to-time, the acquisition of businesses.
Use of funds Our principal uses of cash are funding our new rental asset deployments and other capital purchases, operations, and other working capital requirements and, from time-to-time, the acquisition of businesses.
In addition, we believe EBITDA and Adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities.
In addition, we believe EBITDA and Adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities. 72 Our uses of EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S.
Although our main growth opportunity remains POC adoption in the United States given what we still believe is a relatively low penetration rate, we believe there is a sizable international market opportunity, particularly in Europe where there is existing oxygen reimbursement for respiratory conditions.
The U.S. market represents a main opportunity for growth as we believe that the POC adoption is still in a low penetration rate. • Increase international business-to-business adoption. We continue to believe there is a sizable international market opportunity, particularly in Europe where there is existing oxygen reimbursement for respiratory conditions.
For the years ended December 31, 2023, 2022 and 2021, we received $1.5 million and $1.7 million and $15.6 million, respectively, in proceeds related to stock option exercises and our employee stock purchase plan.
For the years ended December 31, 2024, 2023 and 2022, we received $0.8 million, $1.5 million and $1.7 million, respectively, in proceeds related to stock option exercises and our employee stock purchase plan. As of December 31, 2024, we had a financing receivable of $6.5 million, which consisted of $1.8 million in current assets and $4.7 million in noncurrent assets.
Liquidity and capital resources As of December 31, 2023, we had cash and cash equivalents of $125.5 million, which consisted of highly liquid investments with a maturity of three months or less. In addition, we held marketable securities of $3.0 million, which had maturities of greater than three months.
Liquidity and capital resources As of December 31, 2024, we had cash and cash equivalents of $113.8 million, which consisted of highly liquid investments with a maturity of three months or less.
Research and development expense Years ended December 31, Change 2023 vs. 2022 % of Revenue (amounts in thousands) 2023 2022 $ % 2023 2022 Research and development expense $ 20,840 $ 21,943 $ (1,103 ) -5.0 % 6.6 % 5.8 % Research and development expense decreased $1.1 million for the year ended December 31, 2023 from the year ended December 31, 2022, representing a decrease of 5.0% from the comparable period.
Research and development expense Years ended December 31, Change 2024 vs. 2023 % of Revenue (dollar amounts in thousands) 2024 2023 $ % 2024 2023 Research and development expense $ 21,610 $ 20,840 $ 770 3.7 % 6.4 % 6.6 % Research and development expense increased $0.8 million for the year ended December 31, 2024 from the year ended December 31, 2023, representing an increase of 3.7%.
The following table presents a reconciliation of EBITDA and Adjusted EBITDA to our net loss, the most comparable U.S.
When evaluating our financial results, EBITDA and Adjusted EBITDA should be considered alongside other financial performance measures, including U.S. GAAP results. The following table presents a reconciliation of EBITDA and Adjusted EBITDA to our net loss, the most comparable U.S.
Recent accounting pronouncements Refer to Note 2 – Summary of significant accounting policies in the notes to the consolidated financial statements included in Part IV, Item 16, "Form 10-K Summary" in this Annual Report on Form 10-K for further discussion. Macroeconomic environment The global economy is experiencing increased inflationary pressures.
Technology and customer relationship intangibles are amortized using the straight-line method. 63 Recent accounting pronouncements Refer to Note 2 – Summary of significant accounting policies in the notes to the consolidated financial statements included in Part IV, Item 15 in this Annual Report on Form 10-K for further discussion.
Income tax expense Years ended December 31, Change 2023 vs. 2022 % of Revenue (amounts in thousands) 2023 2022 $ % 2023 2022 Income tax expense $ 105 $ 504 $ (399 ) -79.2 % 0.0 % 0.1 % Effective income tax rate -0.1% -0.6% Income tax expense decreased $0.4 million for the year ended December 31, 2023 from the year ended December 31, 2022.
The decrease was primarily attributable to a decrease of $1.4 million in interest income due to the lower interest rate environment. 68 Income tax expense (benefit) Years ended December 31, Change 2024 vs. 2023 % of Revenue (dollar amounts in thousands) 2024 2023 $ % 2024 2023 Income tax expense (benefit) $ (588 ) $ 105 $ (693 ) -660.0 % -0.2 % 0.0 % Effective income tax rate 1.6 % -0.1 % Income tax expense (benefit) decreased $0.7 million for the year ended December 31, 2024 from the year ended December 31, 2023.
The decrease was primarily attributable to a decrease in domestic direct-to-consumer sales as well as lower domestic and international business-to-business sales. We sold approximately 130,500 oxygen systems during the year ended December 31, 2023 compared to approximately 170,500 oxygen systems sold during the year ended December 31, 2022, a decrease of 23.5%.
The increase was primarily attributable to higher international and domestic business-to-business sales. We sold approximately 157,500 oxygen systems during the year ended December 31, 2024 compared to approximately 130,500 oxygen systems sold during the year ended December 31, 2023, an increase of 20.7%.
Cost of rental revenue increased $4.4 million for the year ended December 31, 2023 from the year ended December 31, 2022, an increase of 17.1% from the comparable year. The increase in cost of rental revenue was primarily attributable to an increase in total patients on service, which led to increased rental asset depreciation and service costs.
Cost of rental revenue increased $2.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, an increase of 6.5%. The increase in cost of rental revenue was primarily attributable to an increase in service costs.
We incurred $20.8 million, $21.9 million and $16.6 million in 2023, 2022 and 2021, respectively, in research and development expenses, and we intend to continue to make such investments in the foreseeable future. We launched the Inogen ® Rove 6 TM , our latest portable oxygen concentrator, in December 2022 in the EU and UK. We have also received U.S.
We incurred $21.6 million, $20.8 million and $21.9 million in 2024, 2023 and 2022, respectively, in research and development expenses, and we intend to continue to make similar investments in the foreseeable future.
We continued to record a valuation allowance on the use of deferred tax assets in the current and prior periods. Income taxes in the current and prior period were attributable to foreign taxes and minimum state taxes.
We continued to record a valuation allowance on the use of deferred tax assets in the current and prior periods. The decrease was attributable to foreign taxes. Our effective tax rate for the year ended December 31, 2024 increased compared to the year ended December 31, 2023, primarily due to foreign taxes.
The FDA clearance of Inogen Rove 6 was received June 30, 2023 and launched in the U.S. market in July 2023. 69 The Inogen Rove 6 is the first portable oxygen concentrator with an 8-year expected service life. The 8-year expected service life also extends to the Inogen One G5 ® portable oxygen concentrators.
The Inogen Rove 4 is our first POC to launch with three battery options. The Inogen Rove 4 has an 8-year expected service life. The 8-year expected service life also extends to the Inogen One G5 ® and Inogen ® Rove 6 ™ portable oxygen concentrators. We launched the Inogen One G5 in 2019.
The net changes in operating assets and liabilities resulted in a net use of cash of $20.1 million. Investing activities Net cash used in investing activities generally includes the production and purchase of rental assets, property, plant and equipment, and intangibles to support our expanding business as well as maturities or purchases of marketable securities.
Investing activities Net cash used in investing activities generally includes the production and purchase of rental assets, property, plant and equipment, acquisitions, and intangibles to support our expanding business as well as maturities (purchases) of marketable securities. 70 For the year ended December 31, 2024, we invested $32.7 million in the purchase of marketable securities, $15.0 million in the production and purchase of rental assets and other property and equipment, and $2.1 million in intangible assets, partially offset by $35.5 million we received from maturities of marketable securities.
Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by certain expenses. When evaluating our financial results, EBITDA and Adjusted EBITDA should be considered alongside other financial performance measures, including U.S. GAAP results.
In evaluating EBITDA and Adjusted EBITDA, we anticipate that in the future we will incur expenses within these categories similar to this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by certain expenses.
Net loss Years ended December 31, Change 2023 vs. 2022 % of Revenue (amounts in thousands) 2023 2022 $ % 2023 2022 Net loss $ (102,449 ) $ (83,772 ) $ (18,677 ) -22.3 % -32.5 % -22.2 % Net loss increased $18.7 million for the year ended December 31, 2023 from the year ended December 31, 2022, or an increase of 22.3% from the comparable period.
Net loss Years ended December 31, Change 2024 vs. 2023 % of Revenue (dollar amounts in thousands) 2024 2023 $ % 2024 2023 Net loss $ (35,888 ) $ (102,449 ) $ 66,561 65.0 % -10.7 % -32.5 % Net loss decreased $66.6 million for the year ended December 31, 2024 from the year ended December 31, 2023, or a decrease of 65.0%.
Gross margin on rental revenue decreased to 52.7% for the year ended December 31, 2023 from 54.3% for the year ended December 31, 2022, primarily due to higher rental asset depreciation expense and servicing costs per patient on service, partially offset by higher Medicare reimbursement rates.
Gross margin on rental revenue decreased to 43.3% for the year ended December 31, 2024 from 52.7% for the year ended December 31, 2023, primarily due to a higher mix shift of private-payor reimbursement, lower net revenue per rental patient as a result of a decrease in the percentage of patients billed compared to total patients on service, and higher service costs.
(amounts in thousands) Years ended December 31, Change 2023 vs. 2022 % of Revenue Revenue by region and category 2023 2022 $ % 2023 2022 Business-to-business domestic sales $ 66,196 $ 86,049 $ (19,853 ) -23.1 % 21.0 % 22.8 % Business-to-business international sales 89,401 101,163 (11,762 ) -11.6 % 28.3 % 26.8 % Direct-to-consumer domestic sales 96,010 133,337 (37,327 ) -28.0 % 30.4 % 35.4 % Direct-to-consumer domestic rentals 64,053 56,692 7,361 13.0 % 20.3 % 15.0 % Total revenue $ 315,660 $ 377,241 $ (61,581 ) -16.3 % 100.0 % 100.0 % Domestic business-to-business sales decreased 23.1% for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to our key customers facing challenges related to capital deployment and cost of borrowing as well as competitive pricing activities.
Years ended (dollar amounts in thousands) December 31, Change 2024 vs. 2023 % of Revenue Revenue by region and category 2024 2023 $ % 2024 2023 Business-to-business domestic sales $ 83,555 $ 66,196 $ 17,359 26.2 % 24.9 % 21.0 % Business-to-business international sales 117,207 89,401 27,806 31.1 % 34.9 % 28.3 % Direct-to-consumer domestic sales 77,994 96,010 (18,016 ) -18.8 % 23.2 % 30.4 % Direct-to-consumer domestic rentals 56,949 64,053 (7,104 ) -11.1 % 17.0 % 20.3 % Total revenue $ 335,705 $ 315,660 $ 20,045 6.4 % 100.0 % 100.0 % Domestic business-to-business sales increased 26.2% for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to the result of increased demand from new customers and resellers.
Also, as part of our growth plans, we expect to continue to expand sales capacity by focusing on increased productivity driven by improved sales management discipline, insights-informed tools, and optimized patient lead generation. • Expand our rental revenues.
We are continuing to focus on the patient first initiative, which involves cross-training of sales representatives to execute cash sales and insurance rental. Additionally, we expect to continue to focus on increased productivity driven by improved sales management discipline, insights-informed tools, and optimized patient lead generation with a downsized direct-to-consumer sales team. • Optimize our rental revenues.
Rental revenue increased $7.4 million for the year ended December 31, 2023 from the year ended December 31, 2022, or an increase of 13.0% from the comparable year. The increase in rental revenue was primarily related to higher rental patients on service and higher Medicare reimbursement rates, partially offset by increased rental revenue adjustments.
Rental revenue decreased $7.1 million for the year ended December 31, 2024 from the year ended December 31, 2023, or a decrease of 11.1% from the prior year. The decrease in rental revenue was primarily related to a higher mix of lower private-payor reimbursement rates.
Our principal uses of cash for liquidity and capital resources in the year ended December 31, 2023 consisted of operating activities of $3.2 million as well as cash used in investing activities of $29.6 million for the Physio-Assist acquisition, net of cash acquired, capital expenditures of $27.0 million for additional rental equipment, other property, plant and equipment, intangible assets, and $2.9 million for net purchases of marketable securities. 78 We believe that our current cash, cash equivalents and marketable securities and the cash to be generated from expected product sales and rentals will be sufficient to meet our projected operating and investing requirements for at least the next twelve months.
We believe that our current cash, cash equivalents and marketable securities and the cash to be generated from expected product sales and rentals will be sufficient to meet our projected operating and investing requirements for at least the next 12 months.
Impairment charges Years ended December 31, Change 2023 vs. 2022 % of Revenue (amounts in thousands) 2023 2022 $ % 2023 2022 Goodwill impairment $ 32,894 $ — $ 32,894 100.0 % 10.4 % 0.0 % Impairment charges for the year ended December 31, 2023 resulted from a drop in our public stock price and resulted in impairment charges to goodwill. 77 Other income (expense) Years ended December 31, Change 2023 vs. 2022 % of Revenue (amounts in thousands) 2023 2022 $ % 2023 2022 Interest income $ 6,574 $ 2,837 $ 3,737 131.7 % 2.1 % 0.7 % Other income (expense) 468 (862 ) 1,330 154.3 % 0.1 % -0.2 % Total other income, net $ 7,042 $ 1,975 $ 5,067 256.6 % 2.2 % 0.5 % Total other income, net increased $5.1 million for the year ended December 31, 2023 from the year ended December 31, 2022, an increase of 256.6% from the comparable period.
Other income, net Years ended December 31, Change 2024 vs. 2023 % of Revenue (dollar amounts in thousands) 2024 2023 $ % 2024 2023 Interest income, net $ 5,190 $ 6,574 $ (1,384 ) -21.1 % 1.5 % 2.1 % Other income, net 850 468 382 81.6 % 0.3 % 0.1 % Total other income, net $ 6,040 $ 7,042 $ (1,002 ) -14.2 % 1.8 % 2.2 % Total other income, net decreased $1.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, a decrease of 14.2%.
Simeox has been cleared under CE mark in the EU and is currently being sold in Europe, Asia, and the Middle East. Inogen will leverage its commercial infrastructure and capabilities to continue marketing the device in these geographies while pursuing U.S. regulatory approvals. We have been developing and refining the manufacturing of our Inogen One systems since 2004.
Simeox has been cleared under CE mark in the EU and is currently being sold in Europe and several other markets. In addition, we obtained 510(k) clearance for Simeox in December 2024 and plan to leverage our commercial infrastructure and capabilities to market the device in the United States, while continuing to market it in the other geographies.
General and administrative expense Years ended December 31, Change 2023 vs. 2022 % of Revenue (amounts in thousands) 2023 2022 $ % 2023 2022 General and administrative expense $ 75,260 $ 43,905 $ 31,355 71.4 % 23.8 % 11.6 % General and administrative expense increased $31.4 million for the year ended December 31, 2023 from the year ended December 31, 2022, an increase of 71.4% from the comparable period.
General and administrative expense Years ended December 31, Change 2024 vs. 2023 % of Revenue (dollar amounts in thousands) 2024 2023 $ % 2024 2023 General and administrative expense $ 72,578 $ 75,260 $ (2,682 ) -3.6 % 21.6 % 23.8 % General and administrative expense decreased $2.7 million for the year ended December 31, 2024, from the year ended December 31, 2023, a decrease of 3.6%, primarily due to decreases of $3.8 million in the change in fair value of the earnout liability, $3.4 million in restructuring-related costs, $2.5 million in chief executive officer transition costs and $1.6 million in acquisition-related expenses.
Our effective tax rate for the year ended December 31, 2023 increased compared to the year ended December 31, 2022, primarily due to lower foreign taxes and minimum state taxes.
International business-to-business sales increased 31.1% for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to an increase in demand from our partners in Europe and new customers.
In response we have implemented more flexible workplace requirements for certain roles, including remote workplace opportunities, but we still expect to be challenged by the macroeconomic employment environment. 68 For additional information on risk factors that could impact our results, please refer to the sections entitled "Risk Factors" in this Annual Report on Form 10-K.
In particular, international conflicts could create instability, have and may further result in sanctions, tariffs, and other measures that restrict international trade and may negatively affect our business operations and results. For additional information on risk factors that could impact our results, please refer to the sections entitled “Risk Factors” in this Annual Report on Form 10-K.
Loss on disposal of intangible asset Years ended December 31, Change 2023 vs. 2022 % of Revenue (amounts in thousands) 2023 2022 $ % 2023 2022 Loss on disposal of intangible asset $ — $ 52,161 $ (52,161 ) -100.0 % 0.0 % 13.8 % Loss on disposal of intangible asset decreased $52.2 million for the year ended December 31, 2023 from the year ended December 31, 2022, a decrease of 100.0% from the comparable period.
Impairment charges Years ended December 31, Change 2024 vs. 2023 % of Revenue (dollar amounts in thousands) 2024 2023 $ % 2024 2023 Goodwill impairment $ — $ 32,894 $ (32,894 ) -100.0 % 0.0 % 10.4 % There were no impairment charges for the year ended December 31, 2024.
Removed
Long-lived asset impairment Long-lived assets are reviewed for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows, which is at the individual asset level or the asset group level.
Added
Macroeconomic environment While we have worked to improve our global supply chain, challenges and potential disruptions still exist.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+1 added−1 removed6 unchanged
Biggest changeThese hedging contracts reduce, but will not entirely eliminate, the impact of adverse currency exchange rate movements on revenue, cash, receivables and payables. We performed a sensitivity analysis assuming a hypothetical 10% adverse movement in foreign exchange rates to the hedging contracts and the underlying exposures described above.
Biggest changeWe began entering into foreign exchange forward contracts to protect our forecasted U.S. dollar-equivalent earnings from adverse changes in foreign currency exchange rates. These hedging contracts reduce, but will not entirely eliminate, the impact of adverse currency exchange rate movements on revenue, cash, receivables and payables.
The effect of a 10% adverse change in exchange rates on foreign denominated cash, receivables and payables as of December 31, 2023 would not have had a material effect on our financial position, results of operations or cash flows.
The effect of a 10% adverse change in exchange rates on foreign denominated cash, receivables and payables as of December 31, 2024 would not have had a material effect on our financial position, results of operations or cash flows.
If overall interest rates had increased or decreased by 1.00% (100 basis points), our interest income would not have been materially affected during the years ended December 31, 2023 or December 31, 2022. ITEM 8.
If overall interest rates had increased or decreased by 1.00% (100 basis points), our interest income would not have been materially affected during the years ended December 31, 2024 or December 31, 2023. ITEM 8.
FINANCIAL STATEMENTS AN D SUPPLEMENTARY DATA The financial statements and supplementary data required by this item are included in Part IV, Item 15 of this Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 84
FINANCIAL STATEMENTS AN D SUPPLEMENTARY DATA The financial statements and supplementary data required by this item are included in Part IV, Item 15 of this Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 74
A hypothetical 1.00% (100 basis points) increase in interest rates would not have materially impacted the fair value of our marketable securities as of December 31, 2023 and December 31, 2022.
A hypothetical 1.00% (100 basis points) increase in interest rates would not have materially impacted the fair value of our marketable securities as of December 31, 2024 and December 31, 2023.
We estimate prior to any hedging activity that a 10% adverse change in exchange rates on our foreign denominated sales would have resulted in a $6.9 million decline in revenue for the year ended December 31, 2023. We designate these forward contracts as cash flow hedges for accounting purposes.
We estimate prior to any hedging activity that a 10% adverse change in exchange rates on our foreign denominated sales would have resulted in a $9.0 million decline in revenue for the year ended December 31, 2024. We designate these forward contracts as cash flow hedges for accounting purposes.
We do not enter into investments for trading or speculative purposes. We believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash and cash equivalents. Declines in interest rates, however, would reduce future investment income.
We believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash and cash equivalents. Declines in interest rates, however, would reduce our future investment income.
As our operations in countries outside of the United States grow, our results of operations and cash flows will be subject to fluctuations due to changes in foreign currency exchange rates, which could harm our business in the future. 83 We began entering into foreign exchange forward contracts to protect our forecasted U.S. dollar-equivalent earnings from adverse changes in foreign currency exchange rates.
As our operations in countries outside of the United States grow, our results of operations and cash flows will be subject to fluctuations due to changes in foreign currency exchange rates, which could harm our business in the future.
As of December 31, 2023, the analysis indicated that these hypothetical market movements would not have a material effect on our financial position, results of operations or cash flows.
We performed a sensitivity analysis assuming a hypothetical 10% adverse movement in foreign exchange rates to the hedging contracts and the underlying exposures described above. As of December 31, 2024, the analysis indicated that these hypothetical market movements would not have a material effect on our financial position, results of operations or cash flows.
Changes in the intrinsic value are recorded as a component of accumulated other comprehensive loss and subsequently reclassified into revenue to offset the hedged exposures as they occur.
Changes in the intrinsic value are recorded as a component of accumulated other comprehensive loss and subsequently reclassified into revenue to offset the hedged exposures as they occur. Interest rate fluctuation risk We had cash and cash equivalents of $113.8 million as of December 31, 2024, which consisted of highly liquid investments with a maturity of three months or less.
Removed
Interest rate fluctuation risk We had cash and cash equivalents of $125.5 million as of December 31, 2023, which consisted of highly liquid investments with a maturity of three months or less, and $3.0 million of marketable securities with maturity dates of greater than three months. The primary goals of our investment policy are liquidity and capital preservation.
Added
The primary goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes.

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