What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-24 compared with 2022-02-24 · 278 added, 401 removed, 374 unchanged (64% of the section changed)

Inogen is a medical technology company whose purpose is improving lives through respiratory care.

We are a global leader in portable oxygen therapy solutions for patients with chronic respiratory conditions.

Our leading portfolio of innovative POCs are 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.

As of December 31, 2022, we had twenty-four pending patent applications and seventy-two issued patents relating to the design and construction of our respiratory devices.

We are positioned in the market as both a medical technology company and as a home medical equipment provider that is accredited in all 50 states in the United States with a significant patient, prescriber and provider reach.

Our products have been sold in 59 countries around the world through distributors and 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.

We employed 1,026 people as of December 31, 2022 and had total revenue of $377.2 million for the period ended December 31, 2022.

Corporate history

We were incorporated in Delaware on November 27, 2001.

We are a medical technology company that primarily develops, manufactures and markets innovative portable oxygen concentrators (POCs) used to deliver supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions.

Traditionally, these patients have relied on stationary oxygen concentrator systems for use in the home and oxygen tanks or cylinders for mobile use, which we call the delivery model.

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.

Our proprietary Inogen One ® systems concentrate the air around the patient to offer a single source of supplemental oxygen anytime, anywhere with a single battery and can be plugged into a power outlet as needed.

We believe our Inogen One systems reduce the patient’s reliance on stationary concentrators and scheduled deliveries of tanks with a finite supply of oxygen, thereby improving patient quality of life and fostering mobility.

Portable oxygen concentrators represented the fastest-growing segment of the Medicare oxygen therapy market between 2012 and 2020.

Based on 2020 traditional fee-for-service Medicare data, we estimate the number of patients using portable oxygen concentrators represents approximately 21% of the total long-term oxygen therapy market (and approximately 26% of the total ambulatory long-term oxygen therapy market) in the United States, although the traditional fee-for-service Medicare data does not account for private insurance, Medicare Advantage, Medicaid and cash-pay patients in the market.

We believe we were the first oxygen therapy manufacturer to employ a direct-to-consumer marketing strategy, meaning we advertise directly to patients, process their physician paperwork, and provide clinical support as needed.

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.

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.

Since adopting our direct-to-consumer rental strategy in 2009, we have directly sold or rented more than 1,166,000 of our Inogen oxygen concentrators as of December 31, 2021.

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.

8 unchanged sentences

We completed the acquisition of New Aera, Inc (New Aera) on August 9, 2019.

We consider our market to include patients that use traditional fee-for-service Medicare, commercial payors, retail sales and Veterans Administration population.

While growth rates are subject to change over time, we believe that reduced reimbursement rates in connection with competitive bidding, and the enhanced Medicare billing requirements might have further contributed to growth opportunities for POCs that exceed the long-term oxygen therapy market growth rate.

Since utilization of long-term oxygen therapy is strongly linked to developed nations with established government reimbursement, western Europe represents our second largest market today behind the United States.

Long-term oxygen therapy has been shown to be a cost-efficient and clinically effective means to treat hypoxemia, a condition in which patients have insufficient oxygen in the blood.

Hypoxemic patients are unable to convert oxygen found in the air into the bloodstream in an efficient manner, causing organ damage and poor health.

Chronic obstructive pulmonary disease, or COPD, is a leading cause of hypoxemia.

Between 60% to 65% of our patient population has been diagnosed with COPD, and as COPD progresses, patients may need long-term oxygen therapy as part of their treatment.

Industry sources estimate that approximately 16 million people in the United States have been diagnosed with COPD, with millions more who are unaware they have COPD.

COPD is the third leading cause of death in the United States and one of the leading causes of death globally.

There are an estimated 251 million individuals worldwide who have COPD, with an estimated 100 million individuals located in China.

Smoking is the leading cause of COPD.

However, the European Respiratory Journal published a study in July 2019 that concluded ambient air pollution was associated with lower lung function and increased COPD prevalence, based on over 300,000 individuals aged 40 to 69 years.

According to our analysis of 20 20 traditional fee-for-service Medicare data, approximately 8 0 % of U.S.

long-term oxygen therapy users utilized ambulatory oxygen and the remaining approximately 2 0 % were considered stationary, and either required oxygen twenty-four hours a day, seven days a week, or 24/7, but were not ambulatory, or did not require oxygen 24/7 and only needed nocturnal oxygen.

Clinical data has shown that ambulatory patients who use oxygen therapy 24/7 , regardless of modality , have approximately two times the survival rate and spend at least 60% fewer days annually in the hospital than non-ambulatory 24/7 oxygen therapy patients.

The cost of one year of long-term oxygen therapy is less than the cost of one day in the hospital.

In addition, a report from the Centers for Medicare and Medicaid Services ( CMS ) in 2019 concluded that utilizers of oxygen therapy have lower deaths, hospitalizations, and days in the hospital than those who have a health condition that would support oxygen but do not use it.

Based on 2020 traditional fee-for-service Medicare data, we estimate that approximately 63% of the ambulatory patients rely upon the delivery model, which has the following disadvantages:

limited flexibility outside the home, dictated by the finite oxygen supply provided by tanks and cylinders and dependence on delivery schedules;

restricted mobility and inconvenience within the home, as patients must attach long, cumbersome tubing to a noisy stationary concentrator to move within their homes;

products are not cleared for use on commercial aircraft and cannot plug into a vehicle outlet for extended use;

high costs driven by the infrastructure necessary to establish a geographically diverse distribution network to serve patients locally, as well as personnel, fuel and other costs, which have limited economies of scale and generally increase over time.

Portable oxygen concentrators were developed in response to many of the limitations associated with traditional oxygen therapy and the delivery model.

Portable oxygen concentrators are designed to offer a self-replenishing, unlimited supply of oxygen that is concentrated from the surrounding air and to operate without the need for oxygen tanks or regular oxygen deliveries, enhancing patient freedom and independence.

Additionally, because portable oxygen concentrators do not require the physical infrastructure and service intensity of the delivery model, we believe portable oxygen concentrators can provide long-term oxygen therapy with a lower cost structure.

Chronic obstructive pulmonary disease

We are focused on oxygen therapy and 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.

The main cause of COPD is smoking, but other factors like air pollution, secondhand smoke and dust, as well as fumes and chemicals can cause COPD.

There is currently no cure for COPD, and it is a progressive and debilitating disease that is characterized by a gradual loss of lung function and airflow limitation that is not fully reversible.

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.

In the United States, a 2022 publication stated that COPD is the sixth leading cause of death.

The Centers for Disease Control (CDC) and Prevention in the United States estimates that prevalence of COPD amongst adults 18 years or older was around 5.2% to 6.2% based on CDC data of age-adjusted prevalence of COPD from 2011 to 2020.

In terms of economic impact, the total economic cost from COPD in the United States was approximately $50 billion in 2020 with close to 1.6 million COPD emergency department visits in 2019.

A peer-reviewed publication 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.

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.

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.

Oxygen therapy

Traditionally, oxygen patients have relied on stationary oxygen concentrator systems for use in the home and oxygen tanks or cylinders for mobile use, which we refer to as the delivery model.

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.

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.

Between 2012 and 2021, portable oxygen concentrators represented the fastest-growing segment of the Medicare oxygen therapy market.

However, based on 2021 traditional fee-for-service Medicare data, we estimate the portable oxygen concentrators still only represents approximately 22% of the total long-term oxygen therapy market in the United States.

The traditional fee-for-service Medicare data does not include data from private insurance, Medicare Advantage, Medicaid and cash-pay patients in the market.

We believe the following have hindered the market acceptance of portable oxygen concentrators:

1 unchanged sentence

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;

relatively low patient and physician awareness of the existence and benefits of portable oxygen concentrators as an oxygen solution instead of the traditional delivery model;

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;

constrained manufacturing costs of conventional portable oxygen concentrators, driven by home medical equipment provider preference for products that have lower upfront equipment cost.

Our Inogen One systems provide patients who require long-term oxygen therapy with a reliable, lightweight single solution product that we believe improves quality-of-life, fosters mobility and eliminates dependence on both oxygen tanks and cylinders as well as stationary concentrators.

We believe our direct-to-consumer marketing strategy increases our ability to effectively develop, design and market our Inogen One solutions, as it allows us to:

drive patient awareness of our portable oxygen concentrators through direct marketing, thereby supporting our direct-to-consumer sales channel and creating pull through for our business-to-business channel;

capture the manufacturer and home medical equipment provider margins on a portion of our revenue , allowing us to focus on the total cost of the solution and to invest in the development of product features instead of being constrained by the price required to attract representation from a distribution channel.

For example, we have invested in features that improve patient satisfaction, product durability, reliability and longevity, which increase the cost of our hardware, but reduce the total cost of our solution by reducing our maintenance and repair cost;

utilize patient insights to inform our research and development efforts, allowing us to innovate based on this feedback and stay at the forefront of patient and prescriber preference.

We believe the combination of our direct-to-consumer marketing strategy with our focus on designing and developing oxygen concentrator technology has created a best-in-class portfolio of portable oxygen concentrators.

Our two most recently released portable product offerings, the Inogen One G5 and the Inogen One G4, at 4.7 and 2.8 pounds with a single battery, respectively, are among the lightest portable oxygen concentrators on the market and offer among the highest oxygen flow capacity per pound.

We believe our Inogen One solutions offer the following benefits:

Single solution for home, ambulatory, travel (including on commercial aircraft) and nocturnal treatment .

We market our Inogen One solutions as single solutions, by which we mean a patient can use our Inogen One systems as their only supplemental oxygen source with no need to also use a stationary concentrator regularly.

Our compressors are specifically designed to enable our patients to run our portable oxygen concentrators 24/7, whether powered by battery or plugged into a power outlet at home or in a car while the battery is recharging.

Reliability .

We have an integrated engineering structure to ensure design and manufacturing engineers operate as a single team to improve product reliability throughout the product lifecycle.

Additionally, with the launch of our Inogen Connect system we can address certain types of reliability issues and provide functionality improvements through our software update capabilities.

Effective for nocturnal use .

Our Intelligent Delivery Technology ® enables our portable oxygen concentrators to provide consistent levels of oxygen during sleep despite decreased respiratory rates.

As a result, patients can rely on our Inogen One portable oxygen concentrators overnight while sleeping.

Unparalleled flow capacity .

Our 2.8 pound Inogen One G4 has higher flow capacity than other sub-3 pound portable oxygen concentrators and our Inogen One G5 has higher flow capacity than other sub-5 pound portable oxygen concentrators.

User friendly features .

Our systems are designed with multiple user-friendly features, including long battery life and low noise levels in their respective weight categories.

Our Inogen One systems and Inogen At Home system

We believe that Inogen has an opportunity to grow and further develop the market for portable oxygen concentrator utilization, particularly for patients with chronic respiratory conditions.

Our transformation

Over the last year we have been strategically focused on evolving Inogen from a home medical equipment provider with product development capabilities, to a medical device company in respiratory care with home medical equipment operations in the United States.

As such, we have the capability to service patients and prescribers directly, as well as other home medical equipment providers and distributors.

As a part of this strategic focus we have been transforming the commercial organization to grow our business with a higher level of productivity and efficiency in our direct-to-consumer efforts.

We have also made organizational changes to focus on a prescriber sales team.

We believe this is complementary to our direct-to-consumer channel and provides the opportunity to work directly with prescribers and obtain prescriber referrals at the point of a patient’s diagnosis and prescription.

In addition, we have piloted projects with the intent to drive efficiency and productivity for our commercial organization in the United States.

These projects include streamlining and digitizing back-office processes in order to remove redundancies, improve process, and also scale back-office activities through digitization.

Business strategy

We believe there is an opportunity to grow portable oxygen therapy usage and develop the market further to help patients with chronic conditions breathe better and help providers improve patient outcomes.

Our strategy for expanding our business and growing the market consists of the following four key elements:

Grow our core business.

We believe we have an opportunity to drive penetration of POC-based oxygen therapy versus other oxygen therapy modalities.

Enhance our business.

We are committed to the ongoing innovation of our products to meet the needs of patients and providers to manage lower blood oxygen and shortness-of-breath associated with COPD and other disease indications.

Accelerate our business .

We believe that we can develop the market and expand growth opportunities by generating clinical evidence.

Our clinical approach involves engaging with Key Opinion Leaders (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.

Accelerate growth through strategic transactions.

We selectively evaluate potential strategic transactions to grow our portfolio or capabilities to serve the respiratory care market.

Our Inogen One 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.

We have created a market leading portfolio of portable oxygen concentrators.

POC product features

We market our current portable product offerings, the Inogen One G5 and the Inogen One G4, as single solutions for long-term oxygen therapy.

2 unchanged sentences

Our Inogen One portable oxygen concentrators can operate reliably and cost-effectively over the long period of time needed to service long-term oxygen therapy patients without supplemental use of a stationary concentrator or a replacement portable oxygen concentrator.

We launched a new product in Europe in December 2022, Rove 6.

Rove 6 offers more flexibility for patients with six oxygen flow settings.

The following table summarizes our key product features:

5 unchanged sentences

4.7 (single battery)

2.8 (single battery)

5.8 (double battery)

5.7 (double battery)

3.3 (double battery)

Battery run-time

1 unchanged sentence

Up to 6.5 hours

Up to 2.6 hours

(single battery)

Up to 12.75 hours

Up to 13 hours

Up to 5 hours

(double battery)

Technology effective for overnight use

We have focused our research and development efforts on creating solutions that we believe have overcome the reputation of portable oxygen concentrators as being limited in durability and reliability as well as unsuitable for nighttime or 24/7 use.

We specifically designed our compressors for 24/7 use.

All of our Inogen One systems are equipped with Intelligent Delivery Technology, a form of pulse-dose technology from which the patient receives a bolus of oxygen upon inhalation.

All of our portable oxygen systems are equipped with Intelligent Delivery Technology, a form of pulse-dose technology from which the patient receives a bolus of oxygen upon inhalation.

Pulse-dose technology was developed to extend the number of hours an oxygen tank would last and is generally used on all ambulatory long-term oxygen therapy devices.

1 unchanged sentence

During periods of sleep, respiratory rates typically decrease.

Our Inogen One systems actively respond to this changing physiology through the use of proprietary technology that increases bolus size.

Our systems actively respond to this changing physiology through the use of proprietary technology that increases bolus size.

Our Intelligent Delivery Technology is designed to provide effective levels of blood oxygen saturation during sleep and all other periods of rest and activity that are substantially equivalent to continuous flow systems.

We have also launched Inogen Connect, a wireless connectivity platform for the Inogen One G4 and Inogen One G5 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 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.

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.

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.

The Inogen One G5, our latest portable oxygen concentrator released to market in April 2019, is among the lightest products on the market and has higher oxygen production capabilities than the other sub-5 pound portable oxygen concentrators on the market.

The performance parameters around our Inogen One 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 At Home stationary oxygen concentrator allows us to access the non-ambulatory long-term oxygen therapy patient market and serves as a backup to our Inogen One system for ambulatory patients on our rental service.

At approximately 18 pounds, we believe the Inogen At Home concentrator is the lightest five liter per minute continuous flow oxygen concentrator on the market today.

Additionally, the Inogen At Home product has low power consumption with worldwide electrical compatibility, which should reduce the cost of electricity for oxygen therapy patients and reduce environmental impact of the product, as well as reduce manufacturing and distribution complexities.

While the Inogen One product line is clinically validated for 24/7 use, the Inogen At Home product represents a compelling solution for stationary long-term oxygen therapy patients that do not require a portable solution, which are estimated to represent approximately 20% of total long-term oxygen therapy patients in the United States based on 2020 traditional fee-for-service Medicare data.

Our direct-to-consumer business model has enabled us to design and commercialize portable oxygen concentrators that address the full suite of features and benefits critical to patient preference and retention.

Our products prevent patients from having to choose between lightweight size, suitability for 24/7 use, reliability, and key features such as battery life, flow and reduced noise levels.

In Europe, we released our latest portable oxygen concentrator, Rove 6, in December 2022.

Inogen One G5 portable oxygen concentrator was released to market in April 2019 and is among the lightest products on the market and has among the highest oxygen production capabilities of the other sub-5 pound portable oxygen concentrators on the market.

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.

Domestic sales and marketing

1 unchanged sentence

Of the $276.1 million of our 2022 revenue derived from the United States, approximately 48.3% represented direct-to-consumer sales, 31.2% represented sales to traditional home medical equipment providers, distributors (including our private label partner) and resellers, and 20.5% represented direct-to-consumer rentals.

As of December 31, 2021, we employed a marketing team of 5 people, an in-house sales team of 326 people (including 292 inside sales representatives), a field-based prescriber sales team of 41 people (including 35 prescriber sales representatives), and a business-to-business sales and global support team of 25 people.

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.

Our direct-to-consumer sales and marketing efforts are focused on generating awareness and demand for our Inogen One systems and Inogen At Home systems among patients, physicians and other clinicians, and third-party payors.

Our direct-to-consumer rental selling efforts are focused on selling to prescribers in order to serve patients earlier at the point of diagnosis and prescription while capturing a higher proportion of the life-time value of prescribed oxygen therapy.

In March 2022, we embarked on an initiative to enhance and reorganize a prescriber sales team to accelerate our rental sales growth and build relationships with prescribers.

We believe that these efforts are complementary with our focus on generating clinical evidence in the future and will increase our ability to further expand and develop the market.

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 , prefer our Inogen One G4 and Inogen One G5 product s that are not currently available for rent, prefer to own the equipment, prefer new equipment, or have an immediate need for our product that cannot be processed in time by their primary insurance carrier (e.g., an upcoming trip) .

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.

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.

1 unchanged sentence

After a patient contacts us, we guide them through product selection and insurance eligibility, and, if they choose to move forward, process the necessary reimbursement and physician paperwork on their behalf as well as coordinate the shipping, instruction, and clinical setup process.

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.

The chart below describes our United States direct-to-consumer sales and rental process.

We engage in a number of other initiatives to increase awareness, demand, and orders for Inogen One systems and Inogen At Home systems.

These include attendance at oxygen therapy support groups, guest speaking arrangements at trade shows, and product demonstrations, as requested.

Additionally, we are 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 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.

We believe this will result in both increased conversion of our initial leads, as well as direct referrals from insurance companies in some cases.

To supplement the direct-to-consumer marketing model, we are also utilizing a physician referral model as a complementary sales method.

Under this model, our prescriber sales organization works with physicians in the representative’s territory to help physicians understand our products and the value these products provide for patients.

We believe that by educating physicians on our products, we can cost-effectively supplement our direct-to-consumer sales and rentals and capture a greater number of patients earlier in the course of their oxygen therapy.

Our direct-to-consumer marketing strategies also create demand for our products among other homecare equipment providers and business partners.

We also create demand for our products among other homecare equipment providers and business partners.

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.

2 unchanged sentences

We believe that in addition to the marketing efforts employed by our business customers, our own direct-to-consumer marketing efforts in the United States result in patient interest that our business customers field.

Traditional h omecare providers that employ the standard delivery model with oxygen tanks need to replace the oxygen tanks on a regular basis by picking up the empty oxygen tanks and delivering full oxygen tanks for the patient.

The delivery model has historically necessitated that a homecare provider has a facility near the oxygen patients that it serves and that the provider has invested in personnel, trucks, etc.

to facilitate routine deliveries.

The cost to deliver the oxygen tanks to patients is significant for many providers in the standard delivery model.

Homecare providers that have adopted Inogen products should be able to reduce the costly deliveries associated with oxygen tanks since our products generate their own oxygen and do n o t need to be refilled.

Our business-to-business sales and marketing strategy for these customers is to raise awareness of our solutions and educate homecare providers on how our products may be able to reduce their total cost of ownership of servicing oxygen patients.

As a homecare provider ourselves, we are able to help our business customers adopt a non-delivery long-term oxygen therapy model utilizing patient preferred portable oxygen concentrators.

We also private label our product with a business partner that sells to traditional homecare providers.

Our private label partner employs field sales representatives who call on homecare providers to showcase the benefits of our products.

As of December 31, 2022, we employed 491 people in our Sales and Marketing organization.

Concentration of customers

1 unchanged sentence

We also sell our products direct-to-consumers on a primarily prepayment basis.

For the year ended December 31, 2021, Medicare’s service reimbursement programs represented more than 10% of our total revenue.

For the year ended December 31, 2020, one single customer represented more than 10% of our total revenue, OxyGo HQ Florida, our private label distribution partner.

For the year ended December 31, 2019, no single customer represented more than 10% of our total revenue.

As of December 31, 2021, one single customer and Medicare each represented more than 10% of our net accounts receivable with accounts receivable balances of $5.9 million and $2.7 million, respectively.

As of December 31, 2020, two customers each represented more than 10% of our net accounts receivable balance with accounts receivable balances of $8.4 million and $7.0 million.

We rent products directly to consumers for insurance reimbursement, which resulted in a customer concentration relating to Medicare’s service reimbursement programs.

Medicare’s service reimbursement programs accounted for 81.9%, 81.5% and 81.1% of rental revenue in 2021, 2020 and 2019, respectively, and based on total revenue were 10.6%, 7.5% and 4.8% for 2021, 2020 and 2019, respectively.

Accounts receivable balances relating to Medicare’s service reimbursement programs (including held and unbilled receivables, net of allowances) amounted to $2.7 million or 11.0% of total net accounts receivable as of December 31, 2021 and $1.9 million or 6.3% of total accounts receivable as of December 31, 2020.

Medicare’s service reimbursement programs represented more than 10% of our total revenue for the years ended December 31, 2022 and 2021.

One single customer represented more than 10% of our total revenue for the year ended December 31, 2020.

Two customers each represented more than 10% of our net accounts receivable balance with accounts receivable balances of $22.6 million and $9.9 million, respectively, as of December 31, 2022.

One single customer and Medicare each represented more than 10% of our net accounts receivable balance with accounts receivable balances of $5.9 million and $2.7 million, respectively, as of December 31, 2021.

We rent products directly to consumers for insurance reimbursement, which resulted in a customer concentration relating to Medicare’s service reimbursement programs.

Medicare’s service reimbursement programs accounted for 77.0%, 81.9% and 81.5% of

rental revenue in 2022, 2021 and 2020, respectively, and based on total revenue were 11.6%, 10.6% and 7.5% for 2022, 2021 and 2020, respectively.

Accounts receivable balances relating to Medicare’s service reimbursement programs (including held and unbilled receivables, net of allowances) amounted to $2.1 million or 3.4% of total net accounts receivable as of December 31, 2022 compared to $2.7 million or 11.0% of total accounts receivable as of December 31, 2021.

International

1 unchanged sentence

We sell through distributors, resellers, and home medical equipment providers in certain markets within Canada, Europe, the Asia-Pacific region, Latin America, the Middle East, and Africa.

To date, we have sold our products in a total of 59 countries outside the United States through distributors or directly to large “house” accounts, which include gas companies and home oxygen providers.

To date, we have sold our products in a total of 59 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.

1 unchanged sentence

No single international customer and no single foreign country represented more than 10% of our total revenue in 2022, 2021 or 2020.

We believe that the international oxygen therapy market is attractive for the following reasons:

more favorable reimbursement rates in certain countries, including France and the United Kingdom, where portable oxygen concentrators receive higher reimbursement rates than in the United States;

less developed oxygen delivery infrastructure in some countries.

We believe that some countries outside the United States have less developed oxygen delivery infrastructure than in the United States.

As a result, portable oxygen concentrators enable providers to reach and service patients they cannot economically reach with the delivery model;

an absence of reimbursement for any ambulatory long-term oxygen therapy modalities in some countries, resulting in patients bearing all of the cost of ambulatory long-term oxygen therapy and therefore becoming more involved in the selection of the modality.

In Australia, for example, patients shoulder the burden of all costs associated with ambulatory long-term oxygen therapy.

In these cases, they tend to choose products like portable oxygen concentrators that provide a higher level of personal freedom.

In 201 7 , we added a European customer support site in the Netherlands after acquiring a previous distributor, MedSupport , now operating under Inogen Europe B.V .

Th is site offer s multi-lingual customer service and sales support to improv e our European customer support at lower cost.

Also in support of our European operations, we produc e our Inogen One G3 and Inogen One G5 concentrator s and perform related repair activities using a contract manufacturer, Foxconn, located in the Czech Republic to improve our ability to service our European customers.

Order fulfillment and customer support

Our procedures are designed to enable us to package and ship a system directly to the patient in the patient’s preferred configuration and we aim to do so the same day the order is received in most cases.

This enables us to minimize the amount of finished goods inventory we keep on hand.

Our primary logistics partner for shipments originating in the U.S.

is UPS, which also provides additional services that support our direct-to-consumer oxygen therapy program.

The UPS pick up service is used to retrieve products requiring repair and systems that are no longer needed by our rental patients.

When necessary, we utilize a courier for white-glove service whereby the courier goes into a patient’s home to remove a replacement product from the box, package the failed device and return it to us.

In this manner, we are able to operate as a remote provider while maintaining the level of customer service of a local oxygen therapy provider.

Our fully-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.

Also in support of our European operations, we produce our Inogen One G3 and Inogen One G5 concentrators and perform related repair activities using a contract manufacturer, Foxconn, located in the Czech Republic to improve our ability to service our European customers.

Customer support

We believe it is important to provide patients with quality customer support to achieve satisfaction with our products and optimal outcomes.

As of December 31, 2021, we had a dedicated customer service team of 61 people who were trained on our products, a clinical support team of 23 people who were licensed nurses or respiratory therapists, a patient intake team of 36 people, a rental billing intake team of 31 people, and a dedicated billing services team of 68 people.

We provide our patients with a dedicated 24/7 hotline.

Via the hotline, 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 either the patient or the customer service representative deems appropriate.

As of December 31, 2022, 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.

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.

Our rental intake staff supports patients who wish to use their rental insurance benefits to receive our products and services.

Our dedicated billing services team is available to answer patient questions regarding invoicing, reimbursement, and account status during normal business hours.

We receive no additional reimbursement for patient support, but we provide high-quality customer service to enhance patient comfort, satisfaction, compliance, and safety with our products.

We receive no additional reimbursement for patient support, but we provide high-quality customer service to enhance patient comfort, satisfaction, and safety with our products.

Third-party reimbursement

Medicare and private insurance rentals represented 12.9% of our total revenue in 2021, up from 9.2% of our total revenue in 2020.

The increased rental revenue as a percentage of total revenue was primarily due to increased rental patients on service, and increased reimbursement rates.

As a provider of home oxygen Inogen participates in the Medicare Part B, Supplementary Medical Insurance Program, which was established by the Social Security Act of 1965.

For our rental revenue, we rely significantly on reimbursement from Medicare and private payors.

Medicare reimbursement has historically been based on fixed fee schedules.

In cases where we rent our long-term oxygen therapy solutions directly to patients, we bill third-party payors, such as Medicare or private insurance, for monthly rentals on behalf of our patients.

We process and coordinate all physician paperwork necessary for reimbursement of our solutions.

A common medical criterion for long-term oxygen therapy reimbursement is insufficient blood oxygen saturation level.

Our team in sales and rental intake are trained on how to verify benefits, review medical records and process physician paperwork.

Our sales and rental intake teams are trained on how to verify benefits, review medical records and process physician paperwork.

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 rely significantly on reimbursement from Medicare and private payors, including Medicare Advantage plans, Medicaid and patients for our rental revenue.

For the year ended December 31, 2021, approximately 81.9% of our rental revenue was derived from Medicare’s traditional fee-for-service reimbursement programs.

list price for our stationary oxygen rentals Healthcare Common Procedure Coding System (HCPCS E1390) is $260 per month and the U.S.

list price for our oxygen generating portable equipment (OGPE) rentals (HCPCS E1392) is $70 per month.

The average Medicare reimbursement rates in former competitive bidding areas (CBAs) in the prior five years are outlined in the table below for E1390 and E1392, which are the two primary codes that we bill to Medicare and other payors for our oxygen product rentals.

These rates are typically updated annually each January as they are subject to Consumer Price Index (CPI), sequestration and budget neutrality adjustments but are also subject to adjustments during the year due to legislative rulings.

Competitive bidding contracts were scheduled to go into effect on January 1, 2021;

however, on October 27, 2020, CMS announced that competitive bidding contracts would not be awarded for most product categories, including oxygen, due to the payment amounts not achieving the expected savings and the current COVID-19 pandemic and the related PHE.

Effective April 1, 2021, rates were adjusted to remove a percentage reduction that was put in place to meet the budget neutrality requirement previously mandated by section 1834(a)(9)(D)(ii) of the Social Security Act.

See the table below for average Medicare rates in former CBAs, using a simple average of rates in each CBA.

Average Medicare reimbursement rates in former CBAs

As of January 1, 2022

As of April 1, 2021

As of January 1, 2021

As of January 1, 2020

As of January 1, 2019

As of January 1, 2018

Medicare payment rates are based upon whether the beneficiary resides in former or current CBAs, or in rural or non-rural non-CBAs, or in non-contiguous states.

Non-CBA payment rates are based on regional pricing, that are derived from (former) competitive bidding payment rates.

In rural areas and non-contiguous states, payment rates are higher, to account for higher servicing costs in those areas.

The Medicare reimbursement rates in rural areas is outlined in the table below, and include areas that are considered non-contiguous (Alaska, Hawaii, Puerto Rico, and the Virgin Islands).

We estimate that approximately 18% of our patients are eligible to receive the higher reimbursement rates based on the geographic locations of our current patient population.

These rates are typically updated annually each January as they are subject to the CPI, sequestration and budget neutrality adjustments, but are also subject to adjustments during the year due to legislative rulings.

Therefore, Medicare payment rates are no longer affected by a budget neutrality adjustment, as of April 1, 2021.

See the table below for average Medicare rates in rural areas, using a simple average of rates in each state.

Average Medicare reimbursement rates in rural areas

As of January 1, 2022

As of April 1, 2021

As of January 1, 2021

As of January 1, 2020

As of January 1, 2019

As of January 1, 2018

Rates in non-former CBAs that are not defined as rural are set based on the rates in former CBAs.

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, sequestration and budget neutrality adjustments but are also subject to adjustments during the year due to legislative rulings.

Note that the 2022 rates listed below include Coronavirus Aid, Relief, and Economic Security (CARES Act) increased rates due to the COVID-19 PHE, which may not be in place for all of 2022.

If the COVID-19 PHE is declared over, the rates in these non-former CBAs, non-rural areas are expected to adjust down to the former CBA rates listed in the table above.

Average Medicare reimbursement rates in non-former CBAs, non-rural areas

As of January 1, 2022

As of April 1, 2021

As of January 1, 2021 (retroactively revised March 1, 2021)

As of January 1, 2020

As of January 1, 2019

As of January 1, 2018

There have been significant U.S.

reimbursement and policy changes that impact oxygen therapy associated with the COVID-19 PHE declared by the U.S.

Department of Health and Human Services (HHS) on January 31, 2020.

The CARES Act allows HHS to waive certain Medicare telehealth payment requirements during the COVID-19 PHE to allow beneficiaries in all areas to receive telehealth services, including at their home, starting March 6, 2020.

The Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R.

6074) also granted HHS the authority to waive certain requirements with respect to telehealth services.

Under this authority, CMS clarified that HHS would not conduct audits to determine whether there was a prior physician-patient relationship for telehealth claims submitted during the COVID-19 PHE.

The CARES Act included the extension of the 50/50 blended rate for home medical equipment (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.

While the duration of the current emergency is impossible to predict, the Zika virus PHE lasted approximately 360 days, and the H1N1 flu PHE lasted approximately 450 days.

The 2% Medicare sequestration benefit that has been in place since May 2020 due to the COVID-19 PHE that was set to expire December 31, 2021 has been extended by Congress until March 31, 2022.

The sequestration then resumes with a 1% reduction to rates from April 1, 2022 until June 30, 2022, with the full 2% Medicare sequestration resuming starting July 1, 2022 and continuing through September 30, 2030.

On April 6, 2020, CMS published an Interim Final Rule (IFR) in the Federal Register for policy and regulatory revisions in response to the COVID-19 PHE.

This IFR included that for the duration of the COVID-19 PHE, the face-to-face requirements and clinical indications of coverage for home oxygen, among other respiratory products, are waived.

In addition, the Administration has issued a number of regulatory waivers to increase the flexibility in DMEPOS suppliers’ ability to service patients quickly and without the normal requirements.

For example, the patient’s signature for proof of delivery has been waived when signatures cannot be collected during the COVID-19 PHE.

In addition, CMS increased Medicare contractors’ ability to waive replacement product requirements, paused the national prior authorization program for certain DMEPOS, automatically extended expiring accreditations, granted contractors the flexibility to grant appeals extensions, and medical review suspension.

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.

In August 2020, CMS resumed medical review of claims and the prior authorization program for certain DMEPOS.

CMS also issued a final rule in December 2021 (CMS-1738-P) to establish payment amounts that will be effective after the COVID-19 PHE for DMEPOS products and services covered under Medicare.

We believe that Medicare rates will not change for the length of the COVID-19 PHE, except for any net change for inflation and sequestration adjustments, as outlined above.

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.

The final payment methodology sets the fee schedule amounts to 100% of the Medicare (competitive bid derived) rates in all non-rural areas.

This will reduce Medicare rates after the PHE is over in the current areas that are considered non-rural but not covered by a former CBA, as those areas are currently receiving a 75/25 blended payment rate.

The final payment methodology establishes the fee schedule amounts to a 50/50 blended payment rate, which is the same rate that is currently applicable in these areas.

In January 2021, CMS announced what the pivotal bid amounts would have been for the competitive bidding round 2021.

As a reminder, the bids for oxygen were based on the HCPCS code E1390, which is for stationary oxygen, and there were 130 regions bid.

The simple average of the 2018 single payment amounts for these regions for this code was $73.98.

The simple average of the pivotal bid amounts for these regions for this code was $122.61, or an average increase of 65.7%.

If CMS would have implemented these rate changes, the simple average payment amounts in these regions for POCs (codes E1390 and E1392) would have been $157.60, which is significantly higher than the simple average payment amounts of $110.07 and $121.07 per month being paid as of January 1, 2021 and April 1, 2021 for these regions.

CMS is required to propose future rounds of competitive bidding, which could change reimbursement rates, negatively impact the premium for POCs over other oxygen modalities, or limit beneficiary access to our technologies.

At this point, CMS has not yet announced when a new round of competitive bidding will occur.

Cumulatively in previous rounds of competitive bidding, we were offered contracts for a substantial majority of the CBAs and product categories for which we submitted bids.

As of January 1, 2017 (when the last round of competitive bidding was in effect), we believe we had access to over 90% of the Medicare oxygen therapy market based on our analysis of the 103 CBAs that we won out of the 130 total CBAs.

These 130 CBAs represented approximately 36% of the Medicare market with the remaining approximately 64% of the market not subject to competitive bidding per Medicare’s data on 2018 traditional Medicare fee-for-service beneficiaries in CBAs compared to the total Medicare fee-for-service beneficiaries.

As of January 1, 2019, we can choose to accept Medicare oxygen patients throughout the United States.

As of July 2018, we are operating in all 50 states in the U.S.

We did not sell or rent to patients in Hawaii due to the licensure requirements from inception to June 2018.

We cannot guarantee that we will be offered contracts in any subsequent rounds of competitive bidding.

In all five rounds of competitive bidding in which we have participated, we have gained access to certain CBAs and been excluded from other CBAs.

In September 2021, CMS published a Decision Memo which revised the Home Use of Oxygen national coverage determination and removed the national coverage determination for Home Oxygen Use to Treat Cluster Headaches.

This allows the Medicare Administrative Contractors to make coverage determinations regarding the use of home oxygen and oxygen equipment for cluster headaches.

CMS also expanded patient access to oxygen and oxygen equipment in the home by allowing oxygen use for acute or short-term needs instead of limiting coverage to chronic hypoxemia, removed the requirement for alternative treatment measures before dispensing of oxygen therapy, and removed the limited list of conditions for which oxygen may be covered to respiratory-related diseases, to allow the physician flexibility to make that determination.

In addition, CMS defined exercise more broadly to

include functional performance of the patient and allow more flexibility on pulse oximetry readings to account for differences in skin pigmentation.

Lastly, CMS reduced provider burden by removing the oxygen certificate of medical necessity requirement.

We believe these changes will expand coverage for patients who would benefit from oxygen therapy, reduce administrative burdens, and give more decision-making authority on proper patient care to the physicians.

CMS issued guidance on February 10, 2022 to the Medicare Administrative Contractors detailing that the implementation date of the revised national coverage policy will be June 14, 2022.

However, we do not yet have visibility on the details of how the Medicare Administrative Contractors will change their coverage determinations or the effective date of the new national coverage determinations .

Medicare revenue, including patient co-insurance and deductible obligations, represented 10.6% of our total revenue in the year ended December 31, 2021 and 7.5% in the year ended December 31, 2020.

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.

The supplier that billed Medicare for the 36th month of service continues to be responsible for the patient’s oxygen therapy needs for months 37 through 60, and there is generally no additional reimbursement for OGPE for these later months.

Medicare does not separately reimburse suppliers for oxygen tubing, cannulas and supplies that may be required for the patient.

The supplier is required to keep the equipment provided in working order and in some cases, Medicare will reimburse for repair costs.

At the end of the five-year useful life of the equipment, the patient may request replacement equipment and, if he or she can be re-qualified for the Medicare benefit, a new maximum 36-month payment cycle out of the next 60 months of service would begin.

The supplier may not arbitrarily issue new equipment.

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 for the years ended December 31, 2021 and December 31, 2020.

Our capped patients as a percentage of total patients on service was approximately 8.0% as of December 31, 2021 and 11.7% as of December 31, 2020.

The decrease in percentage of capped patients in the comparative periods was primarily due to the significant increase in new patients coming on service, which substantially exceeded the number of patients that entered the capped period.

The percentage of capped patients may fluctuate over time as new patients come on service, patients come off of service before and during the capped rental period, and existing patients enter the capped rental period.

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.

We determine what equipment the patient receives, and we can deploy used assets in working order as long as the prescription requirements are met.

We must also procure a renewal from the patient’s doctor to confirm the patient’s need for continued oxygen therapy one year after the patient first receives oxygen therapy and one year after each new 36-month reimbursement period begins.

The patient can choose to receive oxygen supplies and services from another supplier at any time, but the supplier may only transition the patient to another supplier in certain circumstances.

We have contracts with Medicaid, Medicare Advantage, government and private payors that qualify us as an in-network provider for these payors.

3 unchanged sentences

We anticipate that private payor reimbursement levels will generally be reset in accordance with Medicare payment amounts.

We believe that we are well positioned to respond to the changing reimbursement environment because our product offerings are innovative, patient-focused and cost-effective.

We have historically been able to reduce our costs through scalable manufacturing, better sourcing, continuous innovation, and reliability improvements, as well as innovations that reduce our product service costs by minimizing exchanges.

As a result of design changes, supplier negotiations, bringing manufacturing and assembly largely in-house and our commitment to driving efficient manufacturing processes, we have historically reduced our overall POC system cost and intend to continue to seek ways to reduce our cost of revenue through manufacturing and design improvements.

For additional discussion of the impact of the recent Medicare reimbursement proposals, see “Risk Factors” herein.

Medicare and private insurance rentals represented 15.0% of our total revenue in 2022, up from 12.9% of our total revenue in 2021.

The increased rental revenue as a percentage of total revenue was primarily due to increased rental patients on service and increased reimbursement rates.

We rely significantly on reimbursement from Medicare and private payors, including Medicare Advantage plans, Medicaid and patients for our rental revenue.

For the year ended December 31, 2022, approximately 77.0% of our rental revenue was derived from Medicare’s traditional fee-for-service reimbursement programs.

Medicare revenue, including patient co-insurance and deductible obligations, represented 11.6% of our total revenue in the year ended December 31, 2022 and 10.6% in the year ended December 31, 2021.

For additional discussion of the impact of the recent Medicare reimbursement proposals, see “Risk Factors”

Manufacturing and raw materials

We have been developing and refining the manufacturing of our Inogen One systems since 2004.

While nearly all of our manufacturing and assembly processes were originally outsourced, assembly of the compressors, sieve beds, concentrators and certain manifolds were brought in-house in order to improve quality control and reduce cost.

We assemble the compressors, sieve beds, concentrators and certain manifolds in-house in order to improve quality control and reduce cost.

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 for these components that specify quantity and quality requirements and delivery terms.

In certain cases, these agreements can be terminated by either party upon relatively short notice.

We expect to maintain our assembly operations for our products at our facilities in Texas and California.

In 2022, we are focused on securing supply for components to make our products in spite of the higher costs of semiconductor chips, reducing the cost of our Inogen One G5 product (excluding the impact of the semiconductor chip price increases), and increasing the robustness of our supply chain as part of our efforts to reduce potential component constraints as we grow our business.

In 2022, we were focused on securing supply for components to make our products which included higher costs of semiconductor chips, reducing the cost of our Inogen One G5 product (excluding semiconductor chips), and increasing the robustness of our supply chain to reduce potential component constraints as we grow our business.

We also use lean manufacturing practices to maximize manufacturing efficiency.

We rely on third-party manufacturers to supply several components of our products.

We typically enter into master service agreements for these components that specify quantity and quality requirements and delivery terms.

In certain cases, these agreements can be terminated by either party upon relatively short notice.

We have elected to source certain key components from single sources of supply, including our batteries, motors, valves, TAV-compatible stationary concentrators, columns, and some molded plastic components.

We have elected to source certain key components from single sources of supply, including our batteries, motors, valves, stationary concentrators, columns, and some molded plastic components.

In some cases, maintaining a single source of supply can allow us to control production costs and inventory levels and to manage component quality, but also may lead to supply availability risks and means our ability to maintain production is dependent on these single source suppliers, which may put us at an increased risk of supply disruption, as we have seen from the production halt we implemented in early January 2022 through early February 2022.

In order to help mitigate against the risks related to a single source of supply, for certain components we qualify alternative suppliers and develop contingency plans for responding to disruptions.

However, a continued reduction or halt in supply from one of these single-source suppliers any dual-sourced suppliers or any other limited-source suppliers with similar sub-component suppliers could limit or prevent our ability to manufacture our products or devices until one or more sufficient replacement supplier s is found and qualified.

For additional discussion of potential risks related to our manufacturing and raw materials, please see the risk factor entitled “ 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 those components 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 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.

However, a continued reduction or halt in supply from one of these single-source suppliers, any dual-sourced suppliers or any other limited-source suppliers with similar sub-component suppliers could limit or prevent our ability to manufacture our products or devices until one or more sufficient replacement suppliers is found and qualified.

For additional discussion of potential risks related to our manufacturing and raw materials, please see the risk factor entitled “

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 those components 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 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.

We currently manufacture in two leased buildings in Plano, Texas and Goleta, California, that we have registered with the Food and Drug Administration (FDA) and maintain a Quality Management system for which we have obtained International Standards Organization (ISO) 13485 certification.

4 unchanged sentences

Our Quality Management system has been certified to ISO 13485:2016 by BSI, a Notified Body.

In 2019, 2020 and 2021, our contract manufacturer produced the vast majority of the Inogen One G3 concentrators required to support our European demand and we expect this to continue in 2022.

Our contract manufacturer also began manufacturing the Inogen One G5 in January 2020 and produced the vast majority of the Inogen One G5 concentrators required to support our European demand in 2021, which we expect to continue in 2022.

In 2020 and 2021, our contract manufacturer produced the vast majority of the Inogen One G3 concentrators required to support our European demand.

Lastly, our contract manufacturer began repair services for the Inogen One product line in 2020 and repaired the majority of the Inogen One concentrators for our European customers.

4 unchanged sentences

Research and development

We are committed to ongoing research and development to stay at the forefront of patient preference in the oxygen concentrator and non-invasive ventilation field.

We are committed to ongoing research and development to stay at the forefront of patient preference in the oxygen concentrator field.

We use a combination of research and development staff along with third party resources to develop our products.

As of December 31, 2022, 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, non-invasive ventilation and manufacturing automation.

Our current research and development efforts are focused primarily on increasing functionality, improving design for ease-of-use, and reducing production costs of our Inogen One systems and Inogen At Home systems, as well as developing our next-generation oxygen concentrators and non-invasive ventilators.

We have leveraged our sixty-six issued patents while also have historically reduced our overall POC system cost and intend to continue to seek ways to reduce our cost of revenue through manufacturing and design improvements.

We have released six products since 2004, including our Inogen One G1 in October 2004, our Inogen One G2 in March 2010, our Inogen One G3 in September 2012, our Inogen At Home system in October 2014, our Inogen One G4 in May 2016, and our Inogen One G5 in April 2019.

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.

We have leveraged our seventy-two issued patents while also have historically reduced our overall POC system cost and intend to continue to seek ways to reduce our cost of revenue through manufacturing and design improvements.

We have released seven products since 2004, including our Inogen One G1 in October 2004, our Inogen One G2 in March 2010, our Inogen One G3 in September 2012, our Inogen At Home system in October 2014, our Inogen One G4 in May 2016, and our Inogen One G5 in April 2019.

In December 2022, we launched the Rove 6 in Europe, a new product that is not yet launched in the United States.

We also launched the Inogen Connect platform in December 2018 in our direct-to-consumer channel and in February 2019 in our domestic business-to-business channel.

We launched our TAV in December 2019.

Our dedication to continuous improvement has also resulted in five mid-cycle product updates and numerous incremental improvements.

Development projects utilize a combination of rapid prototyping and accelerated life testing methods to ensure products are taken from concept to commercialization in a fast and capital efficient manner.

We leverage our direct patient expertise to rapidly gain insight from end users and to identify areas of innovation that we believe will lead to higher-quality products and lower total cost of ownership for our products.

W e continue to focus our efforts on design and functionality improvements that enhance patient quality of life and reduce service costs .

Our pipeline and future innovation are informed by our Scientific Advisory Board and engagement with KOLs.

We continue to focus our efforts on design and functionality improvements that enhance patient quality of life and reduce service costs.

The long-term oxygen therapy market is a highly competitive industry.

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.

Our significant manufacturing competitors are Respironics (a subsidiary of Koninklijke Philips N.V.), Invacare Corporation, Caire Medical (subsidiary of NGK Spark Plug), DeVilbiss Healthcare (a subsidiary of Drive Medical), O2 Concepts, Precision Medical, Resmed, Gas Control Equipment (subsidiary of Colfax), Nidek Medical, 3B Medical, SysMed, and Belluscura.

Some of our competitors are large, well-capitalized companies with greater resources and other advantages than we have.

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.

This is not an exhaustive list of competitors.

Given the relatively straightforward regulatory path in the oxygen therapy device manufacturing market, we expect that the industry will become increasingly competitive in the future.

8 unchanged sentences

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.

Consequently, they are able to spend more aggressively on product development, marketing, sales and other product initiatives than we can.

Some of these competitors have:

significantly greater name recognition;

established relationships with healthcare professionals, customers and third-party payors;

established distribution networks;

additional lines of products, and the ability to offer rebates or bundle products to offer higher discounts, lower pricing, longer warranties, financing or extended terms, other incentives to gain a competitive advantage;

greater history in conducting research and development, manufacturing, marketing and obtaining regulatory approval for respiratory device products;

greater financial and human resources for product development, sales and marketing, and patent litigation.

As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standard regulatory and reimbursement development and customer requirements or changing or uncertain business conditions or macroeconomic trends.

In light of these advantages that our competitors maintain, even if our technology and direct-to-consumer distribution strategy is more effective than the technology and distribution strategy of our competitors, including those who have adopted or may in the future adopt direct-to-consumer sales models, current or potential customers might accept competitor products and services in lieu of purchasing our products.

We anticipate that we will face increased competition in the future as existing companies and competitors develop new or improved products and distribution strategies and as new companies enter the market with new technologies and distribution strategies.

We may not be able to compete effectively against these organizations.

Our ability to compete successfully and to increase our market share is dependent upon our reputation for providing responsive, professional and high-quality products and services and achieving strong customer satisfaction.

Increased competition in the future could adversely affect our revenue, revenue growth rate, margins and market share.

Government regulation

Inogen One systems, Inogen At Home systems, TAV 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.

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.

The FDA regulations govern the following activities that we perform, or that are performed on our behalf, to ensure that medical products distributed domestically or exported internationally are safe and effective for their intended uses:

product design and development, pre-clinical and clinical testing, manufacturing, labeling, storage, pre-market clearance or approval, record keeping, product marketing, advertising and promotion, sales and distribution, and post-marketing surveillance.

FDA’s pre-market clearance and approval requirements

Unless an exemption applies, each medical device we seek to commercially distribute in the United States will require either a prior Section 510(k) of the Food, Drug and Cosmetic Act, or 510(k) clearance, a De Novo authorization, or a pre-market approval from the FDA.

Medical devices are classified into one of three classes—Class I, Class II or Class III—depending on the degree of risk associated with each medical device and the extent of control needed to ensure safety and effectiveness.

Devices deemed to pose lower risks are placed in either Class I or II, which requires the manufacturer to submit to the FDA a premarket notification requesting permission to commercially distribute the device.

3 unchanged sentences

510(k) clearance pathway

When a 510(k) clearance is required, we must submit a premarket notification to the FDA demonstrating that our proposed device is substantially equivalent to a “predicate device” which can be a previously cleared and legally marketed 510(k) device or a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for the submission of a pre-market approval application.

The performance goal for FDA to make a decision is within 90 FDA Days (calculated as the number of calendar days between the date the 510(k) was “accepted” by the FDA for substantive review and date of a decision, excluding the days the submission was on hold for an Additional Information request).

When a 510(k) clearance is required, we must submit a premarket notification to the FDA demonstrating that our proposed device is substantially equivalent to a “predicate device”

which can be a previously cleared and legally marketed 510(k) device or a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for the submission of a pre-market approval application.

The performance goal for FDA to make a decision is within 90 FDA Days (calculated as the number of calendar days between the date the 510(k) was “accepted”

by the FDA for substantive review and date of a decision, excluding the days the submission was on hold for an Additional Information request).

As a practical matter, clearance often takes significantly longer.

The FDA must “accept” the submission for substantive review and may require further information, including clinical data, to make a determination regarding substantial equivalence.

The FDA must “accept”

the submission for substantive review and may require further information, including clinical data, to make a determination regarding substantial equivalence.

If the FDA determines that the device, or its intended use, is not substantially equivalent to a previously cleared device or use, the FDA will either allow the submission of a De Novo application, or place the device, or the particular use, into Class III.

2 unchanged sentences

We obtained 510(k) clearance for the Inogen At Home system on June 20, 2014.

New Aera obtained 510(k) clearance for the TAV on December 2, 2016.

We obtained 510(k) clearance for the Rove 4 system on December 9, 2022.

De Novo authorization pathway

The De Novo authorization pathway is a request to the FDA to classify novel devices of low to moderate risk that had automatically been placed in Class III either by virtue of receiving a “not substantially equivalent” (NSE) determination in response to a 510(k) notification or because there is no available predicate to which to claim substantial equivalence.

These types of applications are referred to as “Evaluation of Automatic Class III Designation” or “De Novo.” FDA review of a De Novo application may lead the FDA to authorize marketing of the device and classify it as either a Class I or II device, the latter of which can serve as a predicate device for other 510(k) premarket notification submissions.

(NSE) determination in response to a 510(k) notification or because there is no available predicate to which to claim substantial equivalence.

These types of applications are referred to as “Evaluation of Automatic Class III Designation”

or “De Novo.”

FDA review of a De Novo application may lead the FDA to authorize marketing of the device and classify it as either a Class I or II device, the latter of which can serve as a predicate device for other 510(k) premarket notification submissions.

Pre-market approval pathway

1 unchanged sentence

The pre-market approval application process is much more demanding than the 510(k) premarket notification process.

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.

After a pre-market approval application is submitted and the FDA determines that the application is sufficiently complete to permit a substantive review, the FDA will accept the application for review.

The FDA has 180 days to review an “accepted” pre-market approval application, although the review of an application generally occurs over a significantly longer period of time and can take up to several years.

The FDA has 180 days to review an “accepted”

pre-market approval application, although the review of an application generally occurs over a significantly longer period of time and can take up to several years.

During this review period, the FDA may request additional information or clarification of the information already provided.

14 unchanged sentences

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;

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;

2 unchanged sentences

After a device receives 510(k) clearance, de novo clearance or a pre-market approval, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, will require a new clearance or approval.

The FDA requires each manufacturer to make this determination initially, but the FDA can review any such decision and can disagree with a manufacturer’s determination.

We have modified various aspects of our Inogen One systems since receiving regulatory clearance, but we believe that new 510(k) clearances are not required for these modifications.

4 unchanged sentences

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.

As a medical device manufacturer, our manufacturing facilities are subject to periodic inspection by the FDA and certain corresponding regulatory agencies and authorities.

We have been periodically audited by the FDA and found to be in substantial compliance with Good Manufacturing Practices (GMP).

We have also completed surveillance and recertification audits by our notified body and found to be in substantial compliance with GMP.

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.

We have been periodically audited by these organizations and none have identified any major observations with our manufacturing facilities or Good Manufacturing Policies (GMP).

International sales of medical devices are subject to foreign government regulations and registration, which may vary substantially from country to country.

1 unchanged sentence

There is a trend towards harmonization of quality system standards among the European Union, United States, Canada and various other industrialized countries.

Licensure , r egistrations, and a ccreditation

Licensure, registrations, and accreditation

In April 2009, we became an accredited Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Medicare supplier by the Accreditation Commission for Health Care for our Goleta, California facility for Home/Durable Medical Equipment Services for oxygen equipment and supplies.

4 unchanged sentences

Most of our state licenses are renewed on an annual or bi-annual basis.

Although we believe we are in compliance with all applicable state regulations regarding licensure requirements, if we were found to be non-compliant, we could lose our licensure in that state, which could prohibit us from selling our current or future products to patients in that state.

If we were found not to be in compliance with applicable state regulations regarding licensure requirements, we could lose our licensure in that state, which could prohibit us from selling our current or future products to patients in that state.

Loss of any state licensure or operating without a required state license may also impact our Medicare enrollment, which requires us to be properly licensed in every state where we bill for Medicare reimbursement.

10 unchanged sentences

Non-compliance with the Federal Anti-Kickback Statute can result in cancellation of our provider numbers and exclusion from Medicare, Medicaid or other federal healthcare programs, restrictions on our ability to operate in certain jurisdictions, as well as civil and criminal penalties, any of which could have an adverse effect on our business and results of operations.

Federal law also includes the Physician Self-Referral Law, commonly known as the “Stark Law,” which prohibits a physician from referring a patient to an entity with which the physician (or an immediate family member of the physician) has a financial relationship, for the furnishing of certain designated health services for which payment may be made by Medicare or Medicaid, unless an exception applies.

Federal law also includes the Physician Self-Referral Law, commonly known as the “Stark Law,”

which prohibits a physician from referring a patient to an entity with which the physician (or an immediate family member of the physician) has a financial relationship, for the furnishing of certain designated health services for which payment may be made by Medicare or Medicaid, unless an exception applies.

Violation of the Stark Law could result in denial of payment, disgorgement of reimbursements received under a non-compliant arrangement, civil penalties and fees, and exclusion from Medicare, Medicaid or other federal healthcare programs.

3 unchanged sentences

Federal False Claims Act

The Federal False Claims Act provides, in part, that the federal government may bring a lawsuit against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent request for payment to the federal government, or who has made a false statement or used a false record to get a claim approved.

In addition, amendments in 1986 to the Federal False Claims Act have made it easier for private parties to bring “qui tam” or whistleblower lawsuits against companies.

Although we believe that we are in compliance with the federal government’s laws and regulations, if we are found in violation of these laws, penalties of up to $0.024 million for each false claim, plus three times the amount of damages that the federal government sustained because of the act, can be assessed.

The Federal False Claims Act (as amended) provides that the federal government, and under certain circumstances a private party or whistleblower, may bring claims against a person who knowingly presents or causes to be presented a false or fraudulent request for payment to the federal government or uses a false statement or false record to get a claim approved.

Violations of the False

Claims Act can result in penalties up to $0.02 million for each claim, plus three times the amount of damages that the federal government sustained.

The Company is not aware of any pending claims against it under the False Claims Act.

Civil monetary penalties law

3 unchanged sentences

We sometimes offer customers various discounts and other financial incentives in connection with the sales of our products.

While it is our intent to comply with all applicable laws, the federal government may find that our marketing activities violate the law.

While we have processes in place to manage our discount and incentive programs, the federal government may find that our marketing activities violate the law.

If we are found to be in non-compliance, we could be subject to CMPs of up to $0.112 million for each wrongful act, assessment of three times the amount claimed for each item or service and exclusion from Medicare, Medicaid and other federal healthcare programs.

2 unchanged sentences

State fraud and abuse provisions

Many states have also adopted some form of anti-kickback and self-referral laws and false claims act that may apply to DMEPOS suppliers regardless of the payor source.

We believe that we are in compliance with such laws.

Nevertheless, a determination of liability under such laws could result in fines and penalties and restrictions on our ability to operate in these jurisdictions.

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:

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.

The Company is not aware of any pending claims against it under such state laws.

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.

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.

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.

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.

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.

2 unchanged sentences

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney fees and costs associated with pursuing federal civil actions.

The 2013 final HITECH omnibus rule modifies the breach reporting standard in a manner that will likely make more data security incidents qualify as reportable breaches.

The 2013 final HITECH omnibus rule modified the breach reporting standard in a manner that made more data security incidents qualify as reportable breaches.

In addition to federal regulations issued under HIPAA, some states have enacted privacy and security statutes or regulations that, in some cases, are more stringent than those issued under HIPAA.

6 unchanged sentences

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.

T he Substance Use-Disorder Prevention that Promoted 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.

Failure to submit required ownership and investment interest information may result in civil monetary penalties of up to an aggregate of $0.18 million per year (or up to an aggregate of $1.191 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.

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.

Certain states also mandate implementation of compliance programs, impose restrictions on device manufacturer marketing practices and/or require the tracking and reporting of gifts, compensation and other remuneration to physicians and other healthcare professionals.

The Patient Protection and Affordable Care Act also requires healthcare providers to voluntarily report and return an identified Medicare or Medicaid overpayment within 60 days after identifying the overpayment.

Failure to repay the overpayment within 60 days will result in the claim being considered a “false claim” and the healthcare provider will be subject to False Claims Act liability, and additional CMPs of $0.021 million for each item or service that is not reported and returned.

Failure to repay the overpayment within 60 days will result in the claim being considered a “false claim”

and the healthcare provider will be subject to False Claims Act liability, and additional CMPs of $0.022 million for each item or service that is not reported and returned.

International regulation

4 unchanged sentences

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.

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.

3 unchanged sentences

Our ISO 13485 certification was issued on April 21, 2005, and our EC-Certificate was issued on March 16, 2007.

The final form of the European Medical Device Regulation, which will replace Europe’s Medical Device Directive, entered into force on May 25, 2017 and its full application is expected to be on May 26, 2021.

The Medical Device Regulation will apply in parallel with the Medical Device Directive for a transition period of three years.

We received European Medical Device Regulation on December 12, 2022.

Inogen has sold products in Canada since 2006 when we obtained our Medical Device License after obtaining appropriate licensure, accreditation, and meeting ISO Standard 13485.

As of January 1, 2019, Health Canada implemented the Medical Device Single Audit Program (MDSAP) as the sole mechanism for manufacturers to demonstrate compliance with the quality management system requirements of the Medical Device Regulations, replacing the Canadian Medical Devices Conformity Assessment System (CMDCAS) program.

Inogen has been in compliance with the MDSAP since its implementation on January 1, 2019 and believes it is still in compliance with these regulations.

In Australia, we must appoint an agent sponsor who will interact on our behalf with the Therapeutics Goods Administration (TGA).

12 unchanged sentences

Despite any measures taken to protect our intellectual property, unauthorized parties may attempt to copy aspects of our Inogen One, Inogen At Home, or non-invasive ventilation systems, sell counterfeit versions of our products, or obtain and use information that we regard as proprietary.

As of December 31, 2021, we had twenty-seven pending patent applications and sixty-six issued patents relating to the design and construction of our respiratory devices.

As of December 31, 2022, we had twenty-four pending patent applications and seventy-two issued patents relating to the design and construction of our respiratory devices.

We anticipate it could take several years for the most recent of these patent applications to result in issued patents, if successful.

The 2019 acquisition of New Aera added a significant number of issued and pending patent applications to Inogen’s portfolio.

The additional patents and patent filings include U.S.

2 unchanged sentences

Our patent portfolio contains four principal categories of patents and patent applications.

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.

For example, U.S.

15 unchanged sentences

Patents and patent applications in this category and others may facilitate the design and development of future respiratory products that can serve patients in need of supplemental oxygen and or mechanical ventilation therapies.

The fourth category of patents and patent applications is directed to the TAV and related products.

For example, U.S.

patent 10,384,028 is directed to the nasal interface of the TAV.

Another example of a patent in this category is U.S.

patent D851,767 which is directed to the design of the TAV.

This category of patents expires in 2034 or later.

“Inogen,” “Inogen One,” “Inogen One G2,” “Inogen One G3,” “G4,” “G5,” “Live Life in Moments, not Minutes,” “Never Run Out of Oxygen,” “Oxygen Therapy on Your Terms,” “Oxygen.Anytime.Anywhere,” “Reclaim Your Independence,” “Intelligent Delivery Technology,” “Inogen At Home,” the Inogen design, “TIDAL ASSIST,” “TAV,” and “SIDEKICK” are registered trademarks with the United States Patent and Trademark Office of Inogen, Inc.

We own a pending application for “Inogen” with the United States Patent and Trademark Office.

We own trademark registrations for the mark “Inogen” in Argentina, Australia, Canada, Chile, China, Columbia, Ecuador, South Korea, Mexico, Europe (European Union registration), the United Kingdom, Iceland, India, Israel, Japan, Kuwait, New Zealand, Norway, Paraguay, Peru, Turkey, Singapore, Switzerland, and Uruguay.

We own pending applications for the mark “Inogen” in Brazil, India, Malaysia, and South Africa.

We own a trademark registration for the mark “イノジェン” in Japan.

We own trademark registrations for the marks “印诺真” and “艾诺根” in China.

We own trademark registrations for the mark “Inogen One” in Australia, Canada, China, South Korea, Mexico, Europe (European Union registration), and the United Kingdom.

We own a trademark registration for the mark “Satellite Conserver” in Canada.

We own a trademark registration for the mark “Inogen At Home” in Europe (European Union Registration) and the United Kingdom.

We own trademark registrations for the mark “G4” in Europe (European Union registration) and the United Kingdom.

We own trademark registrations for the mark “G5” in Europe (European Union Registration) and the United Kingdom.

“Inogen,”

“Inogen One,”

“Inogen One G3,”

“G4,”

“G5,”

“Live Life in Moments, not Minutes,”

“Never Run Out of Oxygen,”

“Oxygen Therapy on Your Terms,”

“Oxygen.Anytime.Anywhere,”

“Reclaim Your Independence,”

“Intelligent Delivery Technology,”

“Inogen At Home,”

the Inogen design, “TIDAL ASSIST,”

“TAV,”

and “SIDEKICK”

our registered trademarks with the United States Patent and Trademark Office.

We own pending trademark applications for the marks “INOGEN ROVE 4”

and “INOGEN ROVE 6”

in the United States.

We own trademark registrations for the mark “Inogen”

in Argentina, Australia, Canada, Chile, China, Columbia, Ecuador, South Korea, Malaysia, Mexico, Europe (European Union Registration), the United Kingdom, Iceland, India, Israel, Japan, Kuwait, New Zealand, Norway, Paraguay, Peru, Turkey, Singapore, South Africa, Switzerland, and Uruguay.

We own a trademark registration for the mark “イノジェン”

We own trademark registrations for the marks “印诺真”

and “艾诺根”

We own trademark registrations for the mark “Inogen One”

in Australia, Canada, China, South Korea, Mexico, Europe (European Union Registration), and the United Kingdom.

We own a trademark registration for the mark “Satellite Conserver”

We own a trademark registration for the mark “Inogen At Home”

in Europe (European Union Registration) and the United Kingdom.

We own trademark registrations for the mark “G4”

in Europe (European Union Registration) and the United Kingdom.

We own trademark registrations for the mark “G5”

in Europe (European Union Registration) and the United Kingdom.

We own a trademark application for the Inogen design in Bolivia.

We own a trademark registration for the Inogen design in China.

We own a trademark registration for the mark “إنوجن” in Saudi Arabia.

We own a trademark registration for the mark “إنوجن”

in Saudi Arabia.

Other service marks, trademarks, and trade names referred to in this Annual Report on Form 10-K are the property of their respective owners.

9 unchanged sentences

Employee culture

Inogen strives to instill a culture that values honesty and ethics, which is why integrity is one of Inogen’s five core values.

We expect our employees to honor commitments and take ownership of mistakes and we expect our employees to always do the right thing not the easy thing.

In addition, Inogen values self-responsibility, open communication, continuous improvement and service, which are all important components of our culture.

All of our directors, officers, and employees are guided by our Code of Ethics and Conduct, which is published on the Investor Relations section of Inogen's website at:

Inogen strives to instill a culture based on our foundational values of (1) We always do what's right, (2) Invest in people, and (3) Treat people right.

This is activated through our five cultural pillars which are (1) Create Trust, (2) Inspire Initiative, (3) Achieve Together, (4) Invite Diversity, and (5) Make a Difference.

Additionally, all of our directors, officers, and employees are guided by our Code of Ethics and Conduct, which is published on the Investor Relations section of Inogen's website at:

http://investor.inogen.com/ .

The Code of Ethics and Conduct summarizes the compliance and ethical standards we expect of our employees and directors, the procedures for a suspected breach, and the consequences of any substantiated breach.

The Code of Ethics and Conduct also constitutes Inogen’s Code of Ethics and Conduct under US law and the NASDAQ exchange’s listing standards.

It deals with conflicts of interest, confidential information, fair dealing with customers, suppliers, competitors, and healthcare professionals, and compliance with financial reporting, insider trading, and other financial market regulation.

In addition, we believe our commitment to environmental, social, and governance (ESG) initiatives is important to our customers, patients, employees, suppliers, and investors, and shows our commitment towards improved global health.

Our ESG strategy is grounded in business sustainability, our Code of Ethics and Conduct, and our core values.

Talent acquisition and development

Inogen employees have specific career and development pathways, which are designed in consultation with the employee’s operational management and human resources.

We encourage employees to take advantage of learning opportunities and we provide financial support through a tuition reimbursement program to help employees complete their college education and be prepared for higher level positions.

As part of our commitment to career development and learning, we perform an annual affirmative action review by job role, and we have a policy to address identified pay or promotion discrepancies that are not based on experience or skill.

Diversity , e quity and i nclusion

Diversity, equity and inclusion are essential elements of Inogen’s business practices.

We encourage Inogen employees to take advantage of learning opportunities and we provide financial support through a tuition reimbursement program to help employees complete their college education and be prepared for higher level positions.

We are actively working toward a formal career planning program and building out both associate and leader learning curriculums.

Diversity, equity, inclusion, belonging and accessibility (DEIBA)

Diversity, equity, inclusion, belonging and accessibility are essential elements of Inogen’s business practices.

We are committed to creating and maintaining a workplace in which all employees have an opportunity to participate and contribute to the success of the business and are valued for their skills, experience, and unique perspectives.

The collective sum of the individual differences, life experiences, knowledge, inventiveness, innovation, self-expression, unique capabilities and talent that employees invest in their work represents a significant part of our culture as well as our reputation and achievements.

We embrace employees’ diversity of background, experience, culture, and other characteristics that make employees unique.

We embrace employees’

diversity of background, experience, culture, and other characteristics that make employees unique.

All employees are expected to exhibit conduct that reflects inclusion during work, at work functions on or off the work site, and at all other company-sponsored and participative events.

Inogen is committed to compliance with all applicable federal and state laws prohibiting discrimination in employment and, therefore, does not discriminate against its employees or applicants based on any legally-recognized “protected class”.

Our DEIBA Taskforce and Inclusion Ambassador network help guide these efforts through programming and feedback to build a community of psychological safety and inclusion.

Internal communications and celebration are further proof points for our efforts as we routinely measure employee engagement in these categories.

We perform an annual affirmative action review by job role, and we have a process which identifies pay or promotion discrepancies and ensures that we are equitable in our actions and decisions.

Even in the case of reductions in force adverse impact analyses are completed to objectively test and inform our decisions.

Consistent with the Americans with Disabilities Act and similar state and local laws, we work with qualified employees and applicants with disabilities in order to identify and provide reasonable accommodations that can enable them to perform their jobs.

Inogen’s equal employment opportunity philosophy applies to all aspects of employment with Inogen including recruiting, hiring, job assignment, training, promotion, job benefits, compensation, discipline, and dismissal.

Inogen has implemented policies, procedures, and trainings to ensure that any reports of potential discrimination or harassment are appropriately investigated and corrected.

2 unchanged sentences

Inogen also has a corporate wellness program to promote improved physical and emotional wellbeing.

In response to the COVID-19 pandemic and related PHE and as part of our commitment to work to ensure the safety and well-being of our employees, our employees who are able and choose to work from home have done so since mid-March 2020.

For employees returning to the workplace and the field, we have also taken additional safety measures, including implementing occupancy limits, restricting business travel, providing and requiring the use of personal protective equipment, temperature screening and COVID-19 testing or vaccination records to access our workplaces.

Environmental matters

6 unchanged sentences

Climate Change

As a global respiratory therapy and medical device company, Inogen recognizes that greenhouse gas (GHG) emissions affect our climate and pose a serious challenge to the environment—and ultimately to the global economy.

We believe that everyone shares responsibility to improve energy efficiency and to reduce GHG emissions in the atmosphere.

10 unchanged sentences

Our long-term GHG reduction strategy is to optimize the processes that consume non-renewable resources within this network.

We also recognize that, as a critical component of our customers’ supply chains, Inogen plays an important role in helping them operate in a more environmentally sustainable way.

We also recognize that, as a critical component of our customers’

supply chains, Inogen plays an important role in helping them operate in a more environmentally sustainable way.

We run our operations on a just-in-time basis;

7 unchanged sentences

For example, we typically experience higher total sales in the second and third quarters, as a result of consumers traveling and vacationing during warmer weather in the spring and summer months, but this may vary year-over-year.

In particular, due to the COVID-19 pandemic and related PHE, we have seen and expect to continue to see a disruption in our normal seasonal trends due to the mandates and behaviors emanating from the COVID-19 pandemic and related PHE, including shelter-in-place orders, reduced travel, and lower consumer confidence, and we did not see the typical seasonal increases in direct-to-consumer sales in 2020 that we have seen in prior years, although a partial return to normal seasonal trends was seen in 2021.

Additionally, a s more home medical equipment (HME) providers adopt portable oxygen concentrators in their businesses, we expect our historical seasonality in the domestic business-to-business channel could change as well, which was previously influenced mainly by consumer buying patterns.

Additionally, as more home medical equipment (HME) providers adopt portable oxygen concentrators in their businesses, we expect our historical seasonality in the domestic business-to-business channel could change as well, which was previously influenced mainly by consumer buying patterns.

Direct-to-consumer sales seasonality may also be impacted by the number of sales representatives and the amount of marketing spend in each quarter.

16 unchanged sentences

The contents of our website are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our website are intended to be inactive textual references only.

Information about our e xecutive o fficers

Information about our executive officers

The following table identifies certain information about our executive officers as of February 23, 2023.

1 unchanged sentence

Chief Executive Officer, President, and Director

Michael Sergesketter

Executive Vice President, Finance, Chief Financial Officer, and Corporate Treasurer

Executive Vice President, Operations

Kristin Caltrider

Executive Vice President, Chief Financial Officer and Corporate Treasurer

Executive Vice President, Chief Commercial Officer

Stanislav Glezer

Executive Vice President, Chief Technology Officer

Executive Vice President, Chief Commercial Officer

Executive Vice President, General Counsel and Corporate Secretary

Bart Sanford (1)

Executive Vice President, Operations

(1) As disclosed in the Current Report on Form 8-K we filed with the SEC on February 10, 2023, Mr.

Sanford will be separating from the Company on or before March 1, 2023.

Nabil Shabshab has served as our President, Chief Executive Officer, and as a director since February 2021.

12 unchanged sentences

The board of directors believes that Mr.

Shabshab’s extensive industry experience qualifies him to serve on our board of directors.

Michael Sergesketter has served as our Executive Vice President, Chief Financial Officer since December 2021.

Sergesketter most recently served as CFO of Kimball Electronics, Inc.

Sergesketter brings over forty years of finance experience in the manufacturing services industry.

He brings expertise working across business functions, including with the CEO and Board of Directors, Audit Committee and Compensation and Governance Committee.

As part of his role as the CFO of Kimball Electronics, Inc.

following its spin-off in 2014 and through June 2021, Mr.

Sergesketter led the transformation of the finance and reporting functions to support the newly formed public company, helping to formulate and execute on the strategy that led to global expansion.

During his tenure at Kimball Electronics and its predecessors, Mr.

Sergesketter had the responsibility for a number of critical finance functions, including SEC reporting, Treasury, Investor Relations, Tax, Financial Planning & Analysis, Internal Audit while playing a leading role in various M&A transactions in the U.S.

Bart Sanford has served as our Executive Vice President, Operations since September 2018.

From April 2017 to September 2018, Mr.

Sanford was Senior Vice President, Operations, at Cepheid Inc., a molecular diagnostics company.

From October 2010 to March 2017, Mr.

Sanford was Vice President, Global Operations, at Molecular Devices, LLC, a life sciences company.

From January 2009 to September 2010, Mr.

Sanford was a Corporate Director at Danaher Corporation, a medical device company.

From March 2000 to December 2008, Mr.

Sanford held various positions at Fluke Corporation, an industrial test product company, including plant manager, manufacturing manager and materials manager.

Sanford received an MBA from Central Michigan University and a Bachelor of Arts degree in Logistics, Materials and Supply Chain Management from Michigan State University.

Stanislav Glezer has served as our Executive Vice President, Chief Technology Officer since October 2021, responsible for R&D and Engineering, Medical Affairs, and Regulatory Affairs.

Glezer has also served as our Executive Vice President and Chief Medical Officer from June 2021 to October 2021.

Previously, Dr.

Glezer was with Becton, Dickinson and Company, a global medical technology company where he served as the Worldwide Vice President of Medical Affairs for Diabetes Care since September 2018 with Business Development responsibilities added under him since January 2021.

Prior to joining Becton Dickinson, Dr.

Glezer served as the Chief Medical Officer at Adocia S.A.

a biotechnology company, from 2017 to 2018.

From 2016 to 2017, Dr.

Glezer served as Vice President of Global Medical Affairs at Novo Nordisk, Inc., a healthcare company.

Glezer served in a number of roles of progressively increasing seniority, including, Global Project Head for the largest late-stage pipeline asset, Vice President of Evidence and Value & Access, Vice President of Medical Affairs, and Senior Director of Medical Strategy & Operations, for Sanofi S.A., a multinational pharmaceutical company, from 2001 to 2015.

Dr Glezer holds a doctor of medicine from Moscow State University of Medicine and Dentistry and a MBA from California Coast University.

Shabshab’s extensive industry experience qualifies him to serve on our board of directors.

Kristin Caltrider has served as our Executive Vice President, Chief Financial Officer, and Corporate Treasurer since March 2022.

Caltrider previously served as the Vice President of Finance at Quidel Corporation, a manufacturer of medical diagnostic products, since June 2014.

Prior to her time as Vice President of Finance, Ms.

Caltrider held various other roles at Quidel Corporation from May 2007 to June 2014, including Vice President of Financial Planning and Analysis, Senior Director of Financial Planning and Analysis, and Director of Financial Planning and Analysis.

Prior to Quidel, Ms.

Caltrider served as a Director of Finance at Life Technologies Corporation, a biotechnology company, from September 2003 to May 2007.

Caltrider holds an MBA from the University of San Diego and a B.A.

in Business Administration from California Lutheran University.

George Parr has served as our Executive Vice President and Chief Commercial Officer since April 2021.

9 unchanged sentences

in Accounting from LaSalle University.

Stanislav Glezer has served as our Executive Vice President, Chief Technology Officer since October 2021, responsible for R&D and Engineering, Medical Affairs, and Regulatory Affairs.

Glezer has also served as our Executive Vice President and Chief Medical Officer from June 2021 to October 2021.

Previously, Dr.

Prior to joining Becton Dickinson, Dr.

Glezer served as the Chief Medical Officer at Adocia S.A.

a biotechnology company, from 2017 to 2018.

From 2016 to 2017, Dr.

Glezer served as Vice President of Global Medical Affairs at Novo Nordisk, Inc., a healthcare company.

Dr Glezer holds a doctor of medicine from Moscow State University of Medicine and Dentistry and a MBA from California Coast University.

Jason Somer has served as our Executive Vice President and General Counsel and Secretary since July 2021.

13 unchanged sentences

from the University of Western Ontario in Biology/Pharmacology.

Bart Sanford has served as our Executive Vice President, Operations since September 2018.

From April 2017 to September 2018, Mr.

Sanford was Senior Vice President, Operations, at Cepheid Inc., a molecular diagnostics company.

From October 2010 to March 2017, Mr.

Sanford was Vice President, Global Operations, at Molecular Devices, LLC, a life sciences company.

From January 2009 to September 2010, Mr.

Sanford was a Corporate Director at Danaher Corporation, a medical device company.

From March 2000 to December 2008, Mr.

Sanford held various positions at Fluke Corporation, an industrial test product company, including plant manager, manufacturing manager and materials manager.

Sanford received an MBA from Central Michigan University and a Bachelor of Arts degree in Logistics, Materials and Supply Chain Management from Michigan State University.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business