What changed in this filing

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Item 1A. Risk Factors

2025-02-28 compared with 2024-03-01 · 277 added, 403 removed, 801 unchanged (46% of the section changed)

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• our reliance on a single source or a limited group of manufacturers or suppliers;

• the lack of long-term supply contracts with many of our third-party suppliers;

• the need to continue to enhance our existing products and develop and market new products;

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• public health threats and epidemics;

• the lack of long-term supply contracts with many of our third-party suppliers;

• the competitive bidding process or other reimbursement policy changes under Medicare or other third-party payors, including recently enacted and potential future changes in the reimbursement rates or payment methodologies under Medicare, Medicaid and other government programs;

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• potential failure to maintain or obtain new private payor contracts and future reductions in reimbursement rates from private payors;

• our ability to manage our anticipated growth effectively;

• the possibility of non-payment of our HME providers, distributors, private label partners and resellers;

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• the market opportunities for our products;

• our ability to maintain effective internal controls.

Risks related to the regulatory environment:

• extensive federal, state, and international regulations related to our business by numerous government agencies, including the U.S.

Food and Drug Administration, or FDA and the European Medical Devices regulation;

• extensive federal, state, and international regulations related to our business by numerous government agencies, including the FDA and the MDR;

• the potential need to seek additional clearances or approvals for our products;

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• patent and other intellectual property litigation if our products infringe or appear to infringe the intellectual property rights of others.

Risks related to being a public company:

• increased costs as a result of operating as a public company and the substantial time our management will be required to devote to compliance initiatives and corporate governance practices;

• our ability to maintain effective internal controls.

Risks related to our common stock:

• the volatility of the trading price of our common stock;

• the publication of research reports by securities or industry analysts;

• potential sales of a large number of shares of our common stock;

• anti-takeover provisions in our charter documents and under Delaware law.

• our intention not to pay dividends for the foreseeable future.

Risks related to our business and strategy

We face intense international, national, regional and local competition and if we are unable to compete successfully, it could have an adverse effect on our revenue, revenue growth rate, if any, and market share.

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

We compete with a number of manufacturers and distributors of portable oxygen concentrators (POCs), as well as providers of other long-term oxygen therapy solutions such as home delivery of oxygen tanks or cylinders, stationary concentrators, transfilling concentrators, and liquid oxygen.

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.

Respironics, which announced in early 2024 that it would be leaving the U.S.

portable oxygen concentrator market until further regulatory assessments but continues to have product in the market.

We operate in a highly competitive industry and we may be unable to compete effectively.

The respiratory market, including long-term oxygen therapy market, is highly competitive.

We compete with a number of manufacturers and distributors of POCs, as well as providers of other long-term oxygen therapy solutions such as home delivery of oxygen tanks or cylinders, stationary concentrators, transfilling concentrators, and liquid oxygen.

The market is subject to rapid change resulting from technological advances, innovations and scientific discoveries.

In the product lines in which we compete, we face a range of competitors from large companies with multiple business lines to small, specialized manufacturers that offer a limited selection of niche products.

Development by other companies of new or improved products, processes, technologies, or the introduction of reprocessed products or low-cost versions of products similar to ours may make our existing or planned products less competitive.

In addition, we face competition from providers of alternative medical therapies, such as pharmaceutical companies.

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.

For example, some major competitors have implemented direct-to-consumer sales models, which may increase their competitiveness and sales to patients, and we have recently seen the cost per generated lead trend higher than historical averages that may in part be due to increased competition.

However, the strategies of these major competitors are currently limited to direct-to-consumer sales and do not include direct-to-consumer rentals where they would be responsible to meet national accreditation and state-by-state licensing requirements and secure Medicare billing privileges.

For example, some of our major competitors have implemented direct-to-consumer sales models, which may increase their competitiveness and sales to patients, and we have recently seen the cost per generated lead trend higher than historical averages that may in part be due to increased competition.

However, the strategies of our major competitors are currently limited to direct-to-consumer sales and do not include direct-to-consumer rentals where they would be responsible to meet national accreditation and state-by-state licensing requirements and secure Medicare billing privileges.

Manufacturing companies compete for sales to providers primarily on the basis of price, quality/reliability, financing, bundling, product features, and service.

For many years, Lincare, Inc.

(a subsidiary of the Linde Group), Apria Healthcare, Inc., AdaptHealth Corp., Rotech Healthcare, Inc., and Viemed Healthcare, Inc.

have been among the market leaders in providing respiratory therapy products, while the remaining market is serviced by local providers.

Because of reimbursement reductions, we expect more industry consolidation and volatility in ordering patterns based on how providers are restructuring their businesses and their access to capital.

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

We depend on a limited number of customers for a significant portion of our sales revenue and the loss of, or a significant shortfall in demand from, these customers could have a material adverse effect on our financial condition and operating results.

We receive a significant amount of our sales revenue from a limited number of customers, including distributors, HME providers, our private label partner, resellers, and charitable organizations.

We depend on a limited number of customers for a significant portion of our sales revenue.

We receive a significant amount of our sales revenue from a limited number of customers, including distributors, HME providers, our private label partner, resellers, and charitable organizations and the loss of, or a significant shortfall in demand from, these customers could have a material adverse effect on our financial condition and operating results.

For the years ended December 31, 2024, 2023, and 2022, sales revenue to our top 10 customers accounted for approximately 33.3%, 25.2% and 30.5%, respectively, of our total revenue.

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However, we can provide no assurance that any of these customers or any of our other customers will continue to purchase our products at current levels, pricing, or at all, and our revenue could fluctuate significantly due to changes in customer order levels, economic conditions, the adoption of competitive products, or the loss of, reduction of business with, or less favorable terms with any of our largest customers.

For example, we have previously experienced a decline in sales to one large national homecare provider who purchased through our private label partner.

For example, we have previously experienced a decline in sales to one large national homecare provider who purchased through our private label collaborator.

We have also experienced a decline in sales from other HME providers and these providers have communicated to us that they continue to be subject to capital constraints.

If we were to lose one of our key customers or have a key customer significantly reduce its volume of business with us, such as we previously experienced with the large national homecare provider, our revenue may be materially reduced and there would be an adverse effect on our business, financial condition and results of operations.

We obtain some of the components, subassemblies and completed products included in our products from a single source or a limited group of manufacturers or suppliers, and in some cases components required to manufacture and assemble our products are available in only limited supplies from limited manufacturers or suppliers, and the partial or complete loss of one or more of these manufacturers or suppliers or limitation on availability could cause significant production delays or stoppages, an inability to meet customer demand, substantial loss in revenue, and an adverse effect on our financial condition and results of operations.

We utilize single-source suppliers for some of the components and subassemblies we use in our Inogen One systems and our Inogen At Home systems.

For example, we have elected to source certain key components from single sources of supply, including our batteries, motors, valves, and some molded plastic components.

Reduction or interruption in our supply of components and products may adversely affect our manufacturing operations and related product sales.

We obtain some components, subassemblies and completed products included in our products from single source suppliers or from a limited group of manufacturers or suppliers.

In some cases, components required to manufacture and assemble our products are available in only limited supplies from limited manufacturers or suppliers, and the partial or complete loss of one or more of these manufacturers or suppliers or limitation on availability could cause significant production delays or stoppages, an inability to meet customer demand, substantial loss in revenue, and have an adverse effect on our financial condition and results of operations.

We utilize single-source suppliers for some of the components and subassemblies we use in our oxygen concentrator systems and our Simeox product.

Many of our products also utilize components that are available from a limited number of suppliers.

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However, we recognize that there could be supply shortages for other components used in our products.

While we have taken steps to attempt to mitigate the impact of potential supply shortages, the previously experience shortages have had and any future shortage may have a negative impact on our ability to manufacture products (including with respect to the production halt discussed below) as these chips are used across all of our portable oxygen concentrators in our batteries and printed circuit boards.

The inflated costs related to the supply shortage negatively impacted our cost of goods sold throughout 2022 and 2023 associated with these chips, most of these costs increased our prepaid expense and inventory given that these components were either not yet delivered or not yet sold in finished products during the period.

In addition, we may be deemed to manufacture or contract to manufacture products that contain certain minerals that have been designated as “conflict minerals” under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

As a result, we may be required to perform due diligence to determine the origin of such minerals and disclose and report whether such minerals originated in the Democratic Republic of the Congo or adjoining countries.

The implementation of these requirements could adversely affect the sourcing, availability, and pricing of minerals used in the manufacture of our products.

In addition, we have incurred additional costs to comply with the disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in our products.

If any of these risks materialize, costs could significantly increase and our ability to meet demand for our products could be impacted.

If we fail to comply with the applicable regulations, we could be required to pay civil penalties, face criminal prosecution and, in some cases, be prohibited from distributing our products in commerce until the products or component substances are brought into compliance.

If we are unable to satisfy commercial demand for our products in a timely manner, our ability to generate revenue would be impaired, market acceptance of our products could be adversely affected, and customers may instead purchase or use alternative products.

In addition, we could be forced to secure new or alternative components and subassemblies through a replacement supplier.

Finding alternative sources for these components and subassemblies could be difficult in certain cases and may entail a significant amount of time and disruption.

In some cases, we would need to change the components or subassemblies if we sourced them from an alternative supplier.

This, in turn, could constitute a material modification or require a redesign of our products and, potentially, require additional FDA clearance or approval before we could use any materially modified or redesigned product with new components or subassemblies, thereby causing further costs and delays that could adversely affect our business, financial condition and results of operations.

While we have taken steps to attempt to mitigate the impact of potential supply shortages, the previously experienced shortages have had, and any future shortage may have, a negative impact on our ability to manufacture products as these chips are used across all of our portable oxygen concentrators in our batteries and printed circuit boards.

In addition, we purchase components and subassemblies from third-party suppliers, including some of our single-source suppliers, through purchase orders and do not have long-term supply contracts with all of our third-party suppliers.

These third-party suppliers, therefore, are not obligated to perform services or supply products to us for any specific period, in any specific quantity or at any specific price, except as may be provided in a particular purchase order.

We do not maintain large volumes of inventory from most of these suppliers and could be at risk if we are such suppliers are unwilling or unable to supply us or if these suppliers demand significant price increases.

If we are unable to continue to enhance our existing products, develop or acquire and market our products that respond to customer needs and preferences and achieve market acceptance, we may experience a decrease in demand for our products and our business could suffer.

We may not be able to compete as effectively with our competitors and ultimately satisfy the needs and preferences of our customers unless we can continue to enhance existing products, acquire companies with new or different products, sell our existing products, and develop new innovative products ourselves.

Product development requires significant financial, technological and other resources.

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As a result, our business, financial condition and results of operations could be materially harmed.

We may expand through acquisitions of, or investments in, other companies, each of which may divert our management’s attention, result in additional dilution to our stockholders, increase expenses, disrupt our operations, and harm our results of operations.

Our business strategy may, from time-to-time, include acquiring or investing in complementary services, technologies or businesses, such as our acquisition of Physio-Assist in 2023.

We do not have an extensive history of acquiring other companies and cannot assure you that we will successfully identify suitable acquisition candidates, integrate or manage disparate technologies, lines of business, personnel and corporate cultures, realize our business strategy or the expected return on our investment, or manage a geographically dispersed company.

Any such acquisition or investment could materially and adversely affect our financial condition and results of operations.

We may issue equity securities which could dilute current stockholders’ ownership, incur debt, assume contingent or other liabilities and expend cash in acquisitions, which could negatively impact our financial condition, stockholder equity, and stock price.

The acquisition and integration process is complex, expensive and time-consuming, and may cause an interruption of, or loss of momentum in, product development and sales activities and operations of both companies, and we may incur substantial cost and expense, as well as divert the attention of management.

Acquisitions and other strategic investments involve significant risks and uncertainties, including:

• the potential failure to achieve the expected benefits of the combination or acquisition;

We may expand through acquisitions of, collaborations with, or investments in, other companies, each of which may divert our management’s attention, result in additional dilution to our stockholders, increase expenses, disrupt our operations, and harm our results of operations.

As part of our business strategy, we regularly explore potential acquisitions of, collaborations with, or investments in complementary products, technologies or businesses.

We do not have an extensive history of acquiring or entering into collaborations with other companies and cannot assure you that we will successfully identify suitable acquisition candidates or collaboration partners, integrate or manage disparate technologies, lines of business, personnel and corporate cultures, realize our business strategy or the expected return on our investment, or manage a geographically dispersed company.

Any such acquisition, collaboration or investment could materially and adversely affect our financial condition and results of operations.

We may issue equity securities which could dilute current stockholders’ ownership, incur debt, assume contingent or other liabilities and expend cash in acquisitions, collaborations or investments, which could negatively impact our financial condition, stockholder equity, and stock price.

The acquisition, collaboration and integration process is complex, expensive and time-consuming, and may cause an interruption of, or loss of momentum in, product development and sales activities and operations of both companies, and we may incur substantial cost and expense, as well as divert the attention of management.

Acquisitions, collaborations and other strategic investments involve significant risks and uncertainties, including:

• the potential failure to achieve the expected benefits of the combination, acquisition or collaboration;

• the potential failure to successfully develop or commercialize the acquired products or technology;

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• difficulties in maintaining customer relations;

• the potential loss of key employees of the acquired businesses;

• the potential loss of key employees of any acquired businesses;

• the diversion of the attention of our senior management from the operation of our daily business;

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• the potential of amortization expenses related to intangible assets;

• the potential failure to achieve anticipated reimbursement classifications for acquired products;

• the potential to become involved in intellectual property litigation related to such acquisitions or strategic investments;

• the potential failure to achieve anticipated reimbursement classifications for any acquired products;

• the potential to become involved in intellectual property litigation related to such acquisitions, collaborations or strategic investments;

• the inability to maintain uniform standards, controls, policies, and procedures.

Any acquisition or investment could expose us to unknown liabilities.

Moreover, we cannot assure you that we will realize the anticipated benefits of any acquisition or investment.

Any acquisition, collaboration or investment could expose us to unknown liabilities.

Moreover, we cannot assure you that we will realize the anticipated benefits of any acquisition, collaboration or investment.

In addition, our inability to successfully operate and integrate newly acquired businesses appropriately, effectively, and in a timely manner could impair our ability to take advantage of future growth opportunities and other advances in technology, as well as on our revenues, gross margins, and expenses.

For example, as part of our ongoing efforts to advance patient preference and maintain our technology leadership position, we acquired New Aera in 2019.

We made certain assumptions relating to the New Aera acquisition, which assumptions have proven to be inaccurate, including the failure to realize the expected benefits of the acquisition, failure to realize expected revenue, higher than expected operating costs, and general economic and business conditions that adversely affected the combined company following the acquisition.

On December 19, 2022, we determined to dispose of the technology intangible assets previously acquired from New Aera related to the Tidal Assist ® Ventilator (TAV ® ) technology by ceasing development of such assets and abandoning the TAV program (the “Disposal Determination”).

We made the Disposal Determination based on our assessment that continued development of the assets would not be economically feasible.

The assessment considered many factors, including 1) the lack of compatibility and functionality of the technology intangible asset within our existing product portfolio, 2) the lack of commercial potential of such products that were not approved for ventilation Medicare reimbursement and a negative litigation outcome that occurred subsequent to the approved Healthcare Common Procedure Coding System (HCPCS) code process, and 3) the substantial additional investment that would be required in order to attempt to achieve any commercial potential with substantial risk that no benefit would ever be achievable.

In addition, we may be required to take charges or write-downs in connection with acquisitions.

In particular, acquisitions of businesses engaged in the development of new products may give rise to developed technology and/or in-process research and development assets.

To the extent that the value of these assets decline, we may be required to write down the value of the assets.

Also, in connection with certain asset acquisitions, we may be required to take an immediate charge related to acquired in-process research and development assets.

Any of these events could result in charges, which could be substantial and which could adversely affect our results of operations.

We depend upon reimbursement from Medicare, private payors, Medicaid and payments from patients for a significant portion of our revenue, and if we fail to manage the complex and lengthy reimbursement process, our business and operating results could be adversely affected.

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We cannot ensure that we will be able to continue to effectively manage the process which would adversely affect our business, financial condition and results of operations.

In addition, we are subject to complex billing and record-keeping requirements in order to substantiate our claims for payment under federal, state and commercial healthcare reimbursement programs.

Our records also are subject to routine and other reviews by third-party payors, which can result in delays in payments or refunds of paid claims.

We could experience a significant increase in pre-payment reviews of our claims by the Durable Medical Equipment Medicare Administrative Contractors, a private insurance company that processes Medicare claims for durable medical equipment, which could cause substantial delays in the collection of our Medicare accounts receivable as well as related amounts due under supplemental insurance plans.

The government has significant resources to audit and ensure oversight of suppliers who care for patients covered by various government healthcare programs.

Healthcare providers and suppliers of certain durable medical equipment product categories may be subjected to increased scrutiny from these audit programs.

If a government auditor ascribes a high billing error rate to one or more of our locations, it would result in protracted pre-payment claims review, payment delays, refunds and other payments to the government and/or our need to request more documentation from providers than has historically been required.

It may also result in additional audit activity in other company locations or Durable Medical Equipment Medicare Administrative Contractors jurisdiction.

We cannot currently predict the adverse impact that these audits, methodologies and interpretations might have on our business, financial condition or results of operations, but such impact could be material.

Increases in our operating costs could have a material adverse effect on our business, financial condition and results of operations.

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Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.

Our general business strategy may be adversely affected by any such economic downturn, volatile business environment, higher inflation, bank failures, or continued unpredictable and unstable market conditions.

Global economic conditions, geopolitical instability, and other macroeconomic factors, including inflation, supply chain disruptions, interest rate and foreign currency rate fluctuations, and volatility in the capital markets could negatively impact our business, financial condition, and results of operations.

The health of our business and the demand for our products are affected by changes in the overall global economy.

Our general business strategy may be adversely affected by unfavorable economic events or unstable market conditions.

Unfavorable economic conditions may lead customers and consumers to delay or reduce purchases of our products and/or strain our suppliers.

Consumer demand for our products may not reach our targets, or may decline, when there is an economic downturn or economic uncertainty in our key markets and our customers could be delayed in making payments for our products.

Consumer demand for our products may not reach our targets, or may decline, when there is an economic downturn or uncertainty in our key markets and our customers could be delayed in making payments for our products.

Our sensitivity to economic cycles and any related fluctuation in customer and consumer demand could have a material adverse effect on our business, financial condition, and results of operations.

We are subject to risks associated with public health threats and epidemics, including the COVID-19 pandemic and related public health emergency (PHE).

Public health outbreaks, epidemics, pandemics of contagious or infectious diseases, such as COVID-19, may significantly disrupt our business.

Macroeconomic conditions may also impact our global supply chain, primarily through constraints on raw materials and electronic components.

These constraints on raw materials and electronic components may also impact companies outside of our direct industry, which could result in a competitive supply environment causing higher costs, requiring us to commit to minimum purchase obligations as well as make upfront payments to our suppliers.

These disruptions may impact our ability to produce and supply products in quantities necessary to satisfy customer demand, which could negatively impact our results of operations.

Highly competitive and constrained supply chain conditions may increase our cost of sales, which may adversely impact our operations.

Public health crises have had, and may continue to have, an adverse effect on certain aspects of our business, results of operations, financial condition, and cash flows.

The nature and extent of future impacts are highly uncertain and unpredictable.

Public health outbreaks, epidemics, pandemics of contagious or infectious diseases may significantly disrupt our business.

Such outbreaks pose the risk that we or our employees, contractors, suppliers, or other partners may be prevented from conducting business activities for an indefinite period of time due to spread of the disease, or due to shutdowns that may be requested or mandated by federal, state and local governmental authorities.

Business disruptions could include disruptions or restrictions on our ability to travel, as well as temporary closures of our facilities or the facilities of our contractors, suppliers, and other partners.

For example, we previously experienced declines in total demand during portions of the COVID-19 pandemic and related PHE, which we believe were due to these factors and other factors related to the COVID-19 pandemic and related PHE.

In addition, while we and our contract manufacturer were able to keep our manufacturing facilities open during the COVID-19 pandemic and related PHE, there can be no assurance that we would be able to keep such facilities open indefinitely during a future public health emergency.

We do not have long-term supply contracts with many of our third-party suppliers.

We purchase components and subassemblies from third-party suppliers, including some of our single-source suppliers, through purchase orders and do not have long-term supply contracts with many of these third-party suppliers.

Many of our third-party suppliers, therefore, are not obligated to perform services or supply products to us for any specific period, in any specific quantity or at any specific price, except as may be provided in a particular purchase order.

We do not maintain large volumes of inventory from most of these suppliers.

For example, our batteries and motherboards are sourced from a single source supplier, and sub-components of the battery are also sourced from single source suppliers.

For additional discussion of potential risks related to our inability to source components of our products, 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.

A significant majority of our rental patients who use our product have health coverage under the Medicare program, and recently enacted and future changes in the reimbursement rates or payment methodologies under Medicare, Medicaid and other government programs have affected and could continue to materially and adversely affect our business and operating results.

For example, we previously experienced declines in total demand during portions of the COVID-19 pandemic and the related public health emergency, which we believe were due to these and related factors.

In addition, while we and our contract manufacturer were able to keep our manufacturing facilities open during the COVID-19 pandemic, there can be no assurance that we would be able to keep such facilities open indefinitely during a future public health emergency.

Changes to reimbursement rates, payment methodologies, or coverage policies for our products by government or commercial payors may adversely affect our business and operating results.

As a provider of oxygen equipment rentals, we depend heavily on Medicare reimbursement as a result of the higher proportion of elderly persons suffering from chronic long-term respiratory conditions.

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There are increasing pressures on Medicare to control healthcare costs and to reduce or limit reimbursement rates for home medical products.

Legislation, including the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the Deficit Reduction Act of 2005, the Medicare Improvements for Patients and Providers Act of 2008, and the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, contain provisions that directly impact reimbursement for the durable medical equipment products provided by us:

• The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 significantly reduced reimbursement for inhalation drug therapies beginning in 2005, reduced payment amounts for certain durable medical equipment, including oxygen, beginning in 2005, froze payment amounts for other covered HME items through 2008, established a competitive bidding program for home medical equipment and implemented quality standards and accreditation requirements for durable medical equipment suppliers.

• The Deficit Reduction Act of 2005 limited the total number of continuous rental months for which Medicare will pay for oxygen equipment to 36 months, after which time there is generally no additional reimbursement to the supplier (other than for periodic, in-home maintenance and servicing).

The Deficit Reduction Act of 2005 also provided that title of the equipment would transfer to the beneficiary, which was later repealed by the Medicare Improvements for Patients and Providers Act of 2008.

For purposes of the rental cap, the Deficit Reduction Act of 2005 provided for a new 36-month rental period that began January 1, 2006 for all oxygen equipment.

After the 36th continuous month during which payment is made for the oxygen equipment, the supplier is generally required to continue to furnish the equipment during the period of medical need for the remainder of the useful lifetime of the equipment, provided there are no breaks in service due to medical necessity that exceed 60 days.

The reasonable useful lifetime for our portable oxygen equipment is 60 months.

After 60 months, if the patient requests, and the patient meets Medicare coverage criteria, the rental cycle starts over and a new 36-month rental period begins.

There are no limits on the number of 60-month cycles over which a Medicare patient may receive benefits and an oxygen therapy provider may receive reimbursement, so long as such equipment continues to be medically necessary for the patient.

We anticipate that the Deficit Reduction Act of 2005 oxygen payment rules will continue to negatively affect our net revenue on an ongoing basis, as each month additional customers reach the capped rental period in month thirty-seven, resulting in potentially two or more years without rental income from these customers while we continue to incur customer service and maintenance costs.

Our capped patients as a percentage of total patients on service was approximately 13.1% as of December 31, 2023 and 9.2% as of December 31, 2022.

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

We cannot predict the potential impact to rental revenues in future periods associated with patients in the capped rental period.

• The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, included, among other things, face-to-face physician encounter requirements for certain durable medical equipment and home health services, and a requirement that by 2016, the competitive bidding process be nationalized or prices in non-competitive bidding areas be adjusted to match competitive bidding prices.

On December 29, 2022, the Consolidated Appropriations Act of 2023 (Pub.

117-328) was signed into law.

Included in this law was a provision deferring for two years, until January 1, 2025, the Statutory Pay-as-You-Go, or PAYGO, Medicare payment reductions.

This law also extended the DME 75/25 blended rates in non-competitive bidding areas and extended the COVID-19 public health emergency, or PHE, telehealth waivers until the end of 2024.

We cannot currently determine if, or to what extent, our business, results of operations, financial condition or liquidity will ultimately be impacted by mandated sequestration triggers under the PAYGO Act, or if or when the mandated sequestration will occur.

Medicare’s service reimbursement programs accounted for 56.3%, 67.7% and 77.0% of rental revenue for the years ended December 31, 2024, 2023 and 2022, respectively, and based on total revenue were 9.5%, 13.7% and 11.6% for the years ended December 31, 2024, 2023 and 2022, respectively.

Government and other third-party payors are increasingly attempting to contain health care costs by limiting both coverage and the level of reimbursement for medical products and services.

Reimbursement levels may be decreased in the future.

Additionally, future legislation, regulation, or reimbursement policies of third-party payors may otherwise adversely our ability to operate our rental business in a profitable manner and affect the demand for and price levels of our products.

Various pieces of legislation contain provisions that directly impact reimbursement for the durable medical equipment products provided by us:

• There were significant U.S.

reimbursement and policy changes associated with the COVID-19 PHE that impacted oxygen therapy and other durable medical equipment.

The CARES Act allowed the U.S.

Department of Health and Human Services (HHS) to waive certain Medicare telehealth payment requirements during the COVID-19 PHE declared by HHS on January 31, 2020 to allow beneficiaries in all areas to receive telehealth services, including at their home, starting March 6, 2020.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, allowed the U.S.

Department of Health and Human Services, or HHS, to waive certain Medicare telehealth payment requirements during the COVID-19 PHE declared by HHS on January 31, 2020 to allow beneficiaries in all areas to receive telehealth services, including at their home, starting March 6, 2020.

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

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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, passed on March 27, 2020, included the extension of the 50/50 blended rate for HME in rural and non-contiguous, non-competitively bid areas and established a new 75/25 blended rate for all other non-competitively bid areas through the duration of the COVID-19 PHE.

The CARES Act, signed into law on March 27, 2020, included the extension of the 50/50 blended rate for HME in rural and non-contiguous, non-competitively bid areas and established a new 75/25 blended rate for all other non-competitively bid areas through the duration of the COVID-19 PHE.

The 75/25 blended rate was retroactive to March 6, 2020.

The COVID-19 PHE expired on May 11, 2023.

The Coronavirus Preparedness and Response Supplemental Appropriations Act extended the 75/25 blended rates for all other non-competitively bid areas until December 31, 2023.

• In May 2020, Congress eliminated the 2% Medicare sequestration payment reduction that applies to all Medicare providers and suppliers, due to the COVID-19 PHE, and Congress extended it until March 31, 2022.

• Congress suspended the 2% Medicare sequestration payment reduction that applies to all Medicare providers and suppliers due to the COVID-19 PHE beginning May 1, 2020.

Congress extended the suspension through March 31, 2022.

The sequestration payment reduction resumed with a 1% reduction to rates from April 1, 2022 until June 30, 2022, and the full 2% Medicare sequestration resumed on July 1, 2022.

• The CARES Act established a provider relief fund of $100 billion for Medicare providers and suppliers to prevent, prepare for, and respond to the COVID-19 PHE, and as a Medicare supplier we also received funds of $6.2 million in the second quarter of 2020.

• The CARES Act established a provider relief fund of $100 billion for providers and suppliers to prevent, prepare for, and respond to the COVID-19 PHE.

As a Medicare supplier, we also received funds of $6.2 million in the second quarter of 2020.

The Paycheck Protection Program and Heath Care Enhancement Act was also signed into law on April 24, 2020 and provided additional funding of $484 billion to programs enacted under the CARES Act.

Of the $484 billion, $75 billion was additional funding for healthcare providers to reimburse healthcare related expenses and lost revenues attributable to COVID-19 PHE, which was in addition to the $100 billion approved in the CARES Act.

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

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, were waived.

• The Trump administration also issued a number of regulatory waivers to increase the flexibility in durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) suppliers’ ability to service patients quickly and without the normal requirements.

For example, the patient signature for proof of delivery for DMEPOS was waived when signatures could not be collected during the COVID-19 PHE for dates of services within the PHE.

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

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.

Of the $484 billion, $75 billion was additional funding for healthcare providers to reimburse healthcare related expenses and lost revenues attributable to COVID-19 PHE.

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

This IFR included that for the duration of the COVID-19 PHE, CMS waived the face-to-face requirements and stated it would not enforce clinical indications for home oxygen, among other respiratory products.

• The first Trump administration also issued a number of regulatory waivers to increase the flexibility in durable medical equipment, prosthetics, orthotics and supplies, or DMEPOS, suppliers’ ability to service patients quickly and without the normal requirements.

For example, the patient signature for proof of delivery for DMEPOS was waived when signatures could not be collected during the COVID-19 PHE.

In addition, CMS increased Medicare contractors’ ability to waive replacement product requirements, automatically extended expiring accreditations for a 90-day time period, granted contractors flexibility regarding appeals, and suspended most medical reviews of claims.

Both the IFR and temporary regulatory changes show significant flexibility from CMS to improve access for oxygen and other DMEPOS items during the COVID-19 PHE.

These changes were retroactive to early March 2020.

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

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

In August 2020, CMS resumed the prior authorization program for certain DMEPOS.

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

• CMS established three different fee schedule adjustment methodologies for non-CBAs after the termination of the COVID-19 PHE:

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Payment methodologies (1) and (2) contemplate utilizing the 50/50 blended rates as a permanent construct, but payment methodology (3) contemplates setting the fee schedule amounts to 100% of the Medicare rates that are based upon (former) competitive bid rates.

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 reimbursement rate.

This reduced Medicare rates following the PHE in the current areas that are considered non-rural but not covered by a former CBA, as those areas previously received a 75/25 blended reimbursement rate.

• In January 2021, CMS announced, for informational purposes only, the payment amounts that would have been effective for the competitive bidding round 2021 as part of its effort to increase transparency into the DMEPOS Competitive Bidding Program.

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CMS delayed the implementation date for the revised national coverage determination until January 3, 2023.

• On March 11, 2021, the American Rescue Plan Act of 2021 (ARP) became federal law.

• On March 11, 2021, the American Rescue Plan Act of 2021, or ARP, became federal law.

The ARP, among other things, increased spending without offsets to other federal programs.

The Statutory Pay-as-You-Go (PAYGO) Act of 2010 requires deficit neutrality overall in the laws enacted by Congress and imposes automatic spending reductions at the end of the year if such laws increase the deficit when they are added together.

The Statutory PAYGO Act of 2010 requires deficit neutrality overall in the laws enacted by Congress and imposes automatic spending reductions at the end of the year if such laws increase the deficit when they are added together.

Any legislation enacted after February 12, 2010, that affects direct spending and/or revenues is subject to Statutory PAYGO.

The Congressional Budget Office previously estimated that a Statutory PAYGO sequester in fiscal year 2022 resulting from the ARP passage would cause a 4% reduction in Medicare spending.

• On December 29, 2022, the Consolidated Appropriations Act of 2023 (Pub.

117-328) was signed into law.

Included in this law was a provision deferring for two years, until January 1, 2025, the Statutory PAYGO Medicare payment reductions.

This law also extended the DME 75/25 blended rates in non-competitive bidding areas and extended the COVID-19 PHE telehealth waivers until the end of 2024.

Medicare’s service reimbursement programs accounted for 67.7%, 77.0% and 81.9% of rental revenue for the years ended December 31, 2023, 2022 and 2021, respectively, and based on total revenue were 13.7%, 11.6% and 10.6% for the years ended December 31, 2023, 2022 and 2021, respectively.

These legislative provisions have had and may continue to have a material and/or adverse effect on our business, financial condition and results of operations.

The HHS Office of Inspector General (OIG) has recommended that states review Medicaid reimbursement for durable medical equipment (DME) and supplies.

The OIG has recommended that states review Medicaid reimbursement for durable medical equipment, or DME, and supplies.

The OIG cites an earlier report estimating that four states (California, Minnesota, New York, and Ohio) could have saved more than $18.1 million on selected DME items if their Medicaid prices were comparable to those under round one of the Medicare competitive bidding program.

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This was effective beginning January 1, 2018.

Due to budgetary shortfalls, many states are considering, or have enacted, cuts to their Medicaid programs.

In addition, due to budgetary shortfalls, many states are considering, or have enacted, cuts to their Medicaid programs.

In addition, many private payors reimburse at a percentage of the Medicare rates.

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For the year ended December 31, 2024, approximately 56.3% of our rental revenue was derived from Medicare’s traditional fee-for-service reimbursement programs.

Under Medicare reimbursement programs, there are three general categories relevant to our products, including (1) former competitive bidding areas, or CBAs, (2) rural areas, and (3) non-former CBAs in non-rural areas.

list price for our stationary oxygen rentals (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 six 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) and sequestration adjustments but can also be subject to adjustments during the year due to legislative rulings.

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

The average Medicare reimbursement rates in former CBAs in the prior six years are outlined in the table below for E1390 and E1392 using a simple average of rates in each CBA, 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, or CPI, and sequestration adjustments but can also be 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 related PHE.

however, in a proposed rule published November 4, 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 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

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As of January 1, 2023

As of January 1, 2022

As of April 1, 2021

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As of January 1, 2018

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

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

CMS established three different fee schedule adjustment methodologies for non-CBAs after the termination of the COVID-19 PHE:

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

In January 2021, CMS announced what would have been the payment amounts 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 payment amounts for these regions for this code was $122.61, or an average increase of 65.7%.

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

Medicare payment rates are based upon whether the beneficiary resides in a (former) CBA, or in a rural or non-rural non-CBA, 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 based on a higher 50-50 blended rate, to account for higher servicing costs in those areas.

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.

In rural areas and non-contiguous states, payment rates are based on a higher 50-50 blended rate, to account for higher rates based on the geographic locations of our current patient population.

Effective March 1, 2021, CMS announced that the rates as of January 1, 2021 were incorrectly calculated, and retroactively adjusted the rates, which are reflected in the table below.

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As of January 1, 2023

As of January 1, 2022

As of April 1, 2021

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As of January 1, 2018

Non-former CBAs in non-rural areas:

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

See the table below for average Medicare rates in these non-former CBAs, non-rural areas, using a simple average of rates in each state.

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

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

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As of January 1, 2023

As of January 1, 2022

As of April 1, 2021

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

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.

Effective January 1, 2017, 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.

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

As of July 2018, we currently operate 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 subsequent rounds of competitive bidding.

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CMS 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, CMS will reimburse for repair costs.

The supplier is required to keep the equipment provided in working order.

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.

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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.

Our obligations to service Medicare patients over the rental period include supplying working equipment that meets each patient’s oxygen needs pursuant to his or her doctor’s prescription and supplying all disposables required for the patient to operate the equipment, including cannulas, filters, replacement batteries, carts and carry bags, as needed.

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 oxygen therapy one year after the patient first receives oxygen therapy and one year after each new 36-month reimbursement period begins.

We must also confirm the continued medical necessity of the item at least annually by procuring an updated prescription from the physician.

We must also confirm the patient’s continued use of the oxygen through direct confirmation with our patients.

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.

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This in turn has resulted in greater pricing pressures, including pressure to offer customers more competitive pricing terms, exclusion of products from or unfavorable position on provider formularies and the exclusion of certain suppliers from important market segments as group purchasing organizations, independent delivery networks and large single accounts continue to consolidate purchasing decisions for some of our customers.

Further consolidation could result in a loss of customers, increased collectability risks, or increased competitive pricing pressures.

Healthcare reform measures may have a material adverse effect on our business and results of operations.

With this consolidation, competition to provide goods and services to industry participants may become more intense.

These industry participants may try to use their market power to negotiate price concession for our products.

These factors could force us to reduce our prices or could result in a loss of customers.

Healthcare reform measures may have a material adverse effect on our business and results of operations.

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We cannot predict what other healthcare programs and regulations will ultimately be implemented at the federal or state level or the effect of any future legislation or regulation in the United States may have on our business.

Failure to maintain or obtain new private payor contracts and future reductions in reimbursement rates from private payors could have a material adverse effect on our financial condition and results of operations.

A portion of our rental revenue is derived from private payors.

Based on our patient population, we estimate that approximately 51.8% of our potential customers have non-Medicare insurance coverage (including Medicare Advantage plans).

Failing to maintain and obtain private payor contracts from private insurance companies and employers and secure in-network provider status could have a material adverse effect on our financial condition and results of operations.

In addition, private payors are under pressure to increase profitability and reduce costs.

In response, certain private payors are limiting coverage or reducing reimbursement rates for the products we provide.

We believe that private payor reimbursement levels will generally be reset in accordance with the Medicare reimbursement amounts determined by competitive bidding.

We cannot predict the extent to which reimbursement for our products will be affected by initiatives to reduce costs for private payors.

Failure to maintain or obtain new private payor contracts or the unavailability of third-party coverage or inadequacy of reimbursement for our products would adversely affect our business, financial condition and results of operations.

If our manufacturing facilities become unavailable or inoperable, we could be unable to continue manufacturing our products and, as a result, our business, financial condition and results of operations could be adversely affected until we are able to secure a new facility.

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We rely upon a third-party contract manufacturer for certain manufacturing operations and our business and results of operations may be adversely affected by risks associated with their business, financial condition and the geography in which they operate.

We utilize a third-party contract manufacturer located in the Czech Republic for production of a portion of our Inogen One G3 and Inogen One G5 concentrators and for repair services for these products.

We utilize a third-party contract manufacturer located in the Czech Republic for production of a portion of our concentrators and for repair services for these products.

Since 2018, our contract manufacturer has produced the vast majority of the concentrators required to support our European demand.

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The process of qualifying a new contract manufacturer and commencing volume production is expensive and time-consuming, and if we are required to change or qualify a new contract manufacturer, we would likely lose sales revenue and damage our existing customer relationships.

A portion of our rental revenue is derived from private payors.

Based on our patient population, we estimate approximately 41% of potential customers have non-Medicare insurance coverage (including Medicare Advantage plans).

In addition, private payors are under pressure to increase profitability and reduce costs.

In response, certain private payors are limiting coverage or reducing reimbursement rates for the products we provide.

We believe that private payor reimbursement levels will generally be reset in accordance with the Medicare reimbursement amounts determined by competitive bidding.

We cannot predict the extent to which reimbursement for our products will be affected by competitive bidding or by initiatives to reduce costs for private payors.

If we are unable to manage our anticipated growth effectively, our business could be harmed.

We have previously experienced periods of rapid growth in short periods of time.

These periods of rapid growth of our business have placed a significant strain on our managerial and operational resources and systems.

For example, as our business has grown, we have seen the cost per generated lead trend higher than historical averages.

To continue to grow our business, we must attract and retain capable personnel and manage and train them effectively, particularly related to sales representatives and supporting sales personnel.

We must also upgrade our internal business processes and capabilities to create the scalability that a growing business demands.

While we believe we are making the necessary changes to improve sales management infrastructure to support sales representative training and onboarding, it will take more time to evaluate whether these changes are effective in the long term, and to the extent they are not effective, it may negatively affect our financial condition and results of operations.

We are exposed to the credit and non-payment risk of our HME providers, distributors, private label partners and resellers, especially during times of economic uncertainty and tight credit markets, which could result in material losses.

We sell our products to certain HME providers, distributors, private label partner and resellers on unsecured credit, with terms that vary depending upon the customer’s credit history, solvency, cash flow, credit limits and sales history, as well as prevailing terms with similarly situated customers and whether sufficient credit insurance can be obtained.

In particular, two single customers each represented more than 10% of our net accounts receivable balance with accounts receivable balances of $8.6 million and $5.0 million, respectively, as of December 31, 2023, and $22.6 million and $9.9 million, respectively, as of December 31, 2022.

Challenging economic conditions, including those associated with the recent recessionary effects and inflationary pressure, may impair the ability of our customers to pay for products they have purchased, and as a result, our reserve for doubtful accounts could increase and, even if increased, may turn out to be insufficient.

We are exposed to the credit and non-payment risk of our HME providers, distributors, private label collaborators and resellers, especially during times of economic uncertainty and tight credit markets, which could result in material losses.

We sell our products to certain HME providers, distributors, private label collaborator and resellers on unsecured credit, with terms that vary depending upon the customer’s credit history, solvency, cash flow, credit limits and sales history, as well as prevailing terms with similarly situated customers and whether sufficient credit insurance can be obtained.

In particular, one customer represented more than 10% of our net accounts receivable balance with a net accounts receivable balance of $3.3 million as of December 31, 2024.

One customer represented more than 10% of our financing receivable balance with a balance of $6.5 million as of December 31, 2024.

Two customers each represented more than 10% of our net accounts receivable balance with net accounts receivable balances of $8.6 million and $5.0 million, respectively, as of December 31, 2023.

Challenging economic conditions may impair the ability of our customers to pay for products they have purchased, and as a result, our reserve for doubtful accounts could increase and, even if increased, may turn out to be insufficient.

Moreover, even in cases where we have insolvency risk insurance to protect against a customer’s bankruptcy, insolvency or liquidation, this insurance typically contains a significant deductible and co-payment obligation and does not cover all instances of non-payment.

Our exposure to credit risks of our business partners may increase if our business partners and their end customers are adversely affected by potential worsening global economic conditions or the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, the COVID-19 pandemic and related PHE, the conflict between Israel and Hamas and the war in Ukraine, potential uncertainty related to Taiwan and its relationship with China or other events affecting the United States or global economy.

One or more of these business partners could delay payments or default on credit extended to them, either of which could adversely affect our business, financial condition and results of operations.

Our exposure to credit risks of our business collaborators may increase if our business collaborators and their end customers are adversely affected by potential worsening global economic conditions or disruptions to, and volatility in, the credit and financial markets in the United States and worldwide.

One or more of these business collaborators could delay payments or default on credit extended to them, either of which could adversely affect our business, financial condition and results of operations.

We generate a substantial portion of our revenue internationally and are subject to various risks relating to such international activities, which could adversely affect our operating results.

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Foreign Corrupt Practices Act and U.K.

Bribery Act, data privacy and data protection regulations, such as the European Union General Data Protection Regulation (GDPR), labor laws, and anti-competition regulations;

Bribery Act, data privacy and data protection regulations, such as the European Union General Data Protection Regulation, or GDPR, labor laws, and anti-competition regulations;

• export or import delays and restrictions;

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• potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements, and other trade barriers;

• any other government actions, by the United States, China or other countries, that impose barriers or restrictions that would impact our ability to sell or ship products to customers;

• any other government actions, by the United States, China or other countries, that impose tariffs, barriers or restrictions that would impact our ability to sell or ship products to customers;

• difficulties protecting or procuring intellectual property rights.

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A portion of our international product sales are currently denominated in U.S.

dollars and fluctuations in the value of the U.S.

Fluctuations in the value of the U.S.

dollar relative to foreign currencies could decrease demand for our products and adversely impact our financial performance.

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We have experienced and will continue to experience fluctuations in our net income or loss as a result of transaction gains or losses related to revaluing certain current asset and current liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded.

For example, for the year ended December 31, 2023, we experienced a net foreign currency gain of $0.2 million, and for the years ended December 31, 2022 and 2021, we experienced net foreign currency losses of $0.8 million and $0.7 million, respectively.

For example, for the year ended December 31, 2024, we experienced a net foreign currency loss of $0.2 million, and for the years ended December 31, 2023 and 2022, we experienced a net foreign currency gain of $0.2 million and a loss of $0.8 million, respectively.

Fluctuations in currency exchange rates could have an adverse impact on our financial results in the future.

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Quantitative and Qualitative Disclosures about Market Risk in this Annual Report on Form 10-K for the year ended December 31, 2024.

Additional information on our hedging arrangements is also contained in Note 3 – Fair value measurements and Item 3 – Quantitative and Qualitative Disclosures About Market Risk in the notes to our consolidated financial statements in this Annual Report on Form 10-K.

Additional information on our hedging arrangements is also contained in Note 2 – Fair value measurements in the notes to our consolidated financial statements in this Annual Report on Form 10-K.

We rely on shipping providers to deliver products to our customers globally.

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Failure to comply with anti-bribery, and anti-corruption, including the U.S.

Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, and similar laws associated with our activities outside of the United States and anti-money-laundering laws could subject us to penalties and other adverse consequences.

We are subject to the FCPA, the U.S.

Foreign Corrupt Practices Act of 1977, as amended, and similar laws associated with our activities outside of the United States and anti-money-laundering laws could subject us to penalties and other adverse consequences.

We are subject to the U.S.

Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S.

domestic bribery statute contained in 18 U.S.C.

§ 201, the U.S.

Travel Act, the USA PATRIOT Act, the United Kingdom Bribery Act of 2010 and possibly other anti-corruption, anti-bribery and anti-money laundering laws in the more than sixty-two countries around the world where we have conducted activities and have sold our products.

Travel Act, the USA PATRIOT Act, the United Kingdom Bribery Act of 2010 and possibly other anti-corruption, anti-bribery and anti-money laundering laws in the more than sixty-five countries around the world where we have conducted activities and have sold our products.

We face significant risks and liability if we fail to comply with the FCPA and other anti-corruption and anti-bribery laws that prohibit companies and their employees, agents, representatives, business partners, and third-party intermediaries, such as distributors or resellers, from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector.

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If we fail to comply with U.S.

export control and economic sanctions or fail to expand and maintain an effective sales force or successfully develop our international distribution network, our business, financial condition and results of operations may be adversely affected.

and applicable foreign export control and economic sanctions or fail to expand and maintain an effective sales force or successfully develop our international distribution network, our business, financial condition and results of operations may be adversely affected.

We currently derive the majority of our revenue from rentals or sales generated from our own direct sales force.

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We cannot assure you that we will be able to successfully retain or develop our relationships with third-party distributors internationally.

In addition, we are subject to United States export control and economic sanctions laws relating to the sale of our products, the violation of which could result in substantial penalties being imposed against us.

In particular, we have secured annual export licenses from the U.S.

Treasury Department’s Office of Foreign Assets Control to sell our products to a distributor and hospital and clinic end-users in Iran.

The use of this license requires us to observe strict conditions with respect to products sold, end-user limitations and payment requirements.

Although we believe we have maintained compliance with license requirements, there can be no assurance that the license will not be revoked, be renewed in the future or that we will remain in compliance.

More broadly, if we fail to comply with export control laws or successfully develop our relationship with international distributors, our sales could fail to grow or could decline, and our ability to grow our business could be adversely affected.

In addition, we are subject to United States and European Union export control and economic sanctions laws relating to the sale of our products, the violation of which could result in substantial penalties being imposed against us.

If we fail to comply with export control laws or successfully develop our relationship with international distributors, our sales could fail to grow or could decline, and our ability to grow our business could be adversely affected.

Distributors that are in the business of selling other medical products may not devote a sufficient level of resources and support required to generate awareness of our products and grow or maintain product sales.

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As manufacturers of medical devices, we may be subject to substantial warranty or product liability claims or other litigation in the ordinary course of business that may require us to make significant expenditures to defend these claims or pay damage awards.

For example, our Inogen One systems contain lithium ion batteries, which, under certain circumstances, can be a fire hazard.

For example, our POCs contain lithium ion batteries, which, under certain circumstances, can be a fire hazard.

We, as well as our key suppliers, maintain product liability insurance, but this insurance is limited in amount and subject to significant deductibles.

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We may also be subject to other types of claims arising from our normal business activities.

These may include claims, suits, and proceedings involving labor and employment, wage and hour, commercial, alleged securities laws violations or other investor claims, patent defense and other matters.

These may include claims, lawsuits, and proceedings involving labor and employment, wage and hour, commercial, alleged securities laws violations or other investor claims, patent defense and other matters.

The outcome of any litigation, regardless of its merits, is inherently uncertain.

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We have experienced, and may continue to experience, turn-over in our senior executives and other key technical personnel.

If experienced employees leave, we could experience inefficiencies or a lack of business continuity due to loss of historical knowledge and a lack of familiarity of the new employees with business processes, operating requirements, policies and procedures.

For example, our executive team underwent significant transition in 2024.

If we are unable to continue to successfully navigate this transition, we may be unable to achieve our strategic priorities.

In addition, if experienced employees leave, we could experience inefficiencies or a lack of business continuity due to loss of historical knowledge and a lack of familiarity of the new employees with business processes, operating requirements, policies and procedures.

If we are not able to find a qualified permanent replacement for these positions, it could have a material adverse effect on our ability to effectively pursue our business strategy.

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The loss of any member of our executive management team could harm our ability to implement our business strategy and respond to the market conditions in which we operate.

We and our vendors and service providers rely on information technology networks and systems, and if we are unable to protect against service interruptions, data corruption, cybersecurity risks, data security incidents and/or network security breaches, our operations could be disrupted, and our business could be negatively affected.

We rely on information technology networks and systems, certain of which are operated by third parties on which we rely, to process, transmit and store electronic, customer, operational, compliance, and financial information;

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These information technology networks and systems may be susceptible to damage, disruptions or shutdowns, hardware or software failures, power outages, computer viruses, ransomware, and other malware, cybersecurity risks, data security incidents, telecommunication failures, user errors or catastrophic events.

Like other companies, we have experienced data security incidents before.

We have incurred remedial, legal and other costs in connection with this incident.

Like other companies, we have experienced data security incidents before and have incurred remedial, legal and other costs in connection with these incidents.

We have insurance coverage in place for certain potential liabilities and costs relating to service interruptions, data corruption, cybersecurity risks, data security incidents and/or network security breaches, but this insurance is limited in amount, subject to a deductible, and may not be adequate to cover us for all costs arising from these incidents.

If our information technology networks and systems or those provided by our third-party service providers and vendors suffer unauthorized access, severe damage, disruption or shutdown, and our business does not effectively identify or resolve the issues in a timely manner, our operations could be disrupted, we could be subject to regulatory and consumer lawsuits and other proceedings and our business could be negatively affected.

For example, Change Healthcare, a division of UnitedHealthcare, experienced a cyberattack in late February 2024 that caused connection issues with our third-party service provider and a delay in rental revenue collections.

In addition, cybersecurity risks and data security incidents could lead to potential unauthorized access to or acquisition of confidential information (including personally identifiable information and protected health information), and data loss, corruption, unavailability, or other unauthorized processing.

There is no assurance that we will not experience service interruptions, security breaches, cybersecurity risks and data security incidents, or other information technology failures, whether suffered by us or third parties on which we rely, in the future.

Due to the COVID-19 pandemic and related PHE, we allowed an increased number of employees to work remotely, and we continue to do so and expect that this hybrid model of work will continue.

We receive, collect, process, use and store a large amount of information from our customers, our patients and our own employees, including personal information, intellectual property, protected health and other sensitive and confidential information.

This data is often accessed by us through transmissions over public and private networks, including the internet.

The secure transmission of such information over the Internet and other mechanisms is essential to maintain confidence in our information technology systems yet is vulnerable to unauthorized access and disclosure.

We have implemented security measures, technical controls and contractual precautions designed to identify, detect and prevent unauthorized access, alteration, use or disclosure of our customers’, patients’ and employees’ data.

The techniques used in these attacks change frequently and may be difficult to detect for periods of time and we may face difficulties in anticipating and implementing adequate preventative measures.

Due to the COVID-19 pandemic and related public health emergency, we allowed an increased number of employees to work remotely, and we continue to do so and expect that this hybrid model of work will continue.

As a result, we may have increased cybersecurity or data security risks, due to increased use of home wi-fi networks and virtual private networks, as well as increased disbursement of physical machines.

While we implement IT controls to reduce the risk of a cybersecurity and data security breach, there is no guarantee that these measures will be adequate to safeguard all systems with an increased number of employees working remotely.

While we implement information technology controls to reduce the risk of a cybersecurity and data security breach, there is no guarantee that these measures will be adequate to safeguard all systems with an increased number of employees working remotely.

The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are constantly evolving and may be difficult to anticipate or to detect for long periods of time.

Cyberattacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information.

A material cyberattack or security incident could cause interruptions in our operations and could result in a material disruption of our business operations, damage to our reputation, financial condition, results of operations, cash flows and prospects.

As a result of these types of risks and attacks, we have implemented and periodically review and update systems, processes, and procedures to protect against unauthorized access to or use of data and to prevent data loss.

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The costs to remediate breaches and similar system compromises that do occur could adversely affect our results of operations.

We also face risks associated with security breaches affecting third party vendors or customers and others who interact with our data.

While we maintain insurance that covers certain security incidents, we may not carry enough insurance or maintain sufficient coverage to compensate for all potential liability.

Any new laws, regulations, other legal obligations or industry standards, or any changed interpretation of existing laws, regulations or other standards may require us to incur additional costs and restrict our business operations.

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We must comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the U.S., Europe and elsewhere.

For example, the European Union adopted the General Data Protection Regulation (GDPR), which became effective on May 25, 2018.

The GDPR imposes additional obligations on companies regarding the processing of personal data and provides certain individual privacy rights to natural persons whose data is stored.

Compliance with existing, proposed and recently enacted laws (including implementation of the privacy and process enhancements called for under the GDPR) and regulations can be costly and any failure to comply with these regulatory standards could subject us to legal and reputational risks.

In addition, we are required under the GDPR to respond to customers' Subject Access Reports (SARs) within a certain time period, which entails determining what personal data is being processed, the purpose of any such data processing, to whom such personal data has been disclosed and whether personal data is being disclosed for the purpose of making automated decisions relating to that customer.

We may dedicate significant resources to responding to our customers' SARs, which could adversely affect our business, financial condition and results of operations.

Complying with these numerous and complex regulations is expensive and difficult, and failure to comply could result in regulatory scrutiny, fines, civil liability or damage to our reputation.

For example, the European Union adopted the GDPR which imposes obligations on companies regarding the processing of personal data and provides certain individual privacy rights to natural persons whose data is stored.

Compliance with existing, proposed and recently enacted laws and regulations can be costly and any failure to comply with these regulatory standards could subject us to legal and reputational risks.

Misuse of or failure to secure or properly process personal information could also result in violation of data privacy laws and regulations, and any such event, or the perception it has occurred, may result in claims and litigation by private parties, investigations and other proceedings against us by governmental entities or others, damage to our reputation and credibility and could have a negative impact on revenues and profits.

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companies similar to the requirements reflected in the GDPR.

For example, California has passed the California Consumer Privacy Act (CCPA), which went into effect on January 1, 2020, and among other things, requires new disclosures to California consumers and affords such consumers new abilities to opt out of certain sales of personal information.

For example, California has passed the California Consumer Privacy Act, or CCPA, which went into effect on January 1, 2020, and among other things, requires new disclosures to California consumers and affords such consumers new abilities to opt out of certain sales of personal information.

The CCPA provides civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.

In addition, California voters recently passed the California Privacy Rights Act (CPRA), which modified the CCPA significantly as of January 1, 2023, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.

In addition, California voters recently passed the California Privacy Rights Act, or CPRA, which modified the CCPA significantly as of January 1, 2023, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.

It is possible that these laws and regulations may be interpreted and applied in a manner that is inconsistent with our practices.

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changes or updates to generally accepted accounting principles;

additional legal costs associated with pending legal matters;

additional legal costs associated with legal matters;

and fluctuations in foreign currency exchange rates.

The foregoing factors are difficult to forecast, and these, as well as other factors, could materially and adversely affect our quarterly and annual results of operations.

We have experienced significant revenue growth in the past, but we may not achieve similar growth rates, profit margins and/or net income (loss) in future periods.

You should not rely on our operating results for any prior quarterly or annual period as an indication of our future operating performance.

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If the market opportunities for our products are smaller than we believe they are, our revenues may be adversely affected, and our business may suffer.

Our projections regarding (i) the size of the oxygen therapy market, both in the United States and internationally, (ii) the size and percentage of the long-term oxygen therapy market that is subject to competitive bidding in the United States, (iii) the number of oxygen therapy patients, (iv) the number of patients requiring ambulatory and stationary oxygen, (v) the number of patients who rely on the delivery model, (vi) the percentage of the long-term oxygen therapy market serviced by Medicare, Medicare Advantage, and other third party-payors, (vii) the size of the retail long-term oxygen therapy market and how the opportunity may change as POC penetration increases, (viii) the share of POCs as a percentage of the total oxygen therapy spend, and (ix) the impact of the COVID-19 pandemic and related PHE on our business and our markets generally are based on estimates that we believe are reliable.

Our projections regarding (i) the size of the oxygen therapy market, both in the United States and internationally, (ii) the size and percentage of the long-term oxygen therapy market that is subject to competitive bidding in the United States, (iii) the number of oxygen therapy patients, (iv) the number of patients requiring ambulatory and stationary oxygen, (v) the number of patients who rely on the delivery model, (vi) the percentage of the long-term oxygen therapy market serviced by Medicare, Medicare Advantage, and other third party-payors, (vii) the size of the retail long-term oxygen therapy market and how the opportunity may change as POC penetration increases, and (viii) the share of POCs as a percentage of the total oxygen therapy spend are based on estimates that we believe are reliable.

These estimates may prove to be incorrect, new data or studies may change the estimated incidence or prevalence of patients requiring long-term oxygen therapy, or the type of long-term oxygen therapy patients.

The COVID-19 pandemic and related PHE may also reduce the number of oxygen therapy patients worldwide due to the higher risk of mortality of elderly patients with existing respiratory diseases if they are exposed to the virus.

The number of patients in the United States and internationally may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products, or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business.

An adverse outcome of a sales and use tax audit or change in U.S.

tax laws could have a material adverse effect on our results of operations and financial condition.

The adoption and interpretation of new tax legislation, tax rulings, or exposure to additional tax liabilities, could materially affect our financial condition, results of operations, and cash flows.

We are subject to income and other taxes in the U.S.

and other foreign jurisdictions in which we do business.

As a result, our provision for income taxes is derived from a combination of applicable tax rates in the various places we operate.

Significant judgment is required for calculating our income tax provision.

Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change.

Changes in tax law or tax rulings, or changes in interpretations of existing law, could adversely affect our financial condition and results of operations.

For example, the Tax Cuts & Jobs Act of 2017 eliminated the option to deduct research and development expenditures currently and instead required taxpayers to capitalize and amortize them over five or fifteen years beginning in 2022.

The Inflation Reduction Act of 2022 imposed a 1% excise tax on certain repurchases of stock.

Such changes may have a significant impact on our deferred tax assets, income tax provision and effective tax rate.

Proposed legislation before the Administration and Congress may make further changes to the U.S.

In addition, many countries in Europe, as well as a number of other countries and organizations, have recently proposed or recommended changes to existing tax laws or have enacted new laws that could significantly increase our tax obligations in many countries where we do business or require us to change the manner in which we operate our business.

Changes to existing tax law in the U.S.

or other foreign jurisdictions could adversely affect our financial condition and results of operations.

We operate in multiple taxing jurisdictions and certain revenue streams may be subject to sales and use tax.

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If the matter were to be resolved in a manner adverse to us, it could have a material adverse effect on our results of operations and financial condition.

Changes in accounting principles, or interpretations thereof, could have a significant effect on our financial condition and results of operations.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S.

These principles are subject to interpretation by the Securities and Exchange Commission (SEC) and various bodies formed to interpret and create appropriate accounting principles.

A change in these principles can have a significant effect on our reported results and may even retroactively affect previously reported transactions.

Additionally, the adoption of new or revised accounting principles may require that we make significant changes to our systems, processes and controls.

For example, the U.S.-based Financial Accounting Standards Board (FASB) is currently working together with the International Accounting Standards Board (IASB) on several projects to further align accounting principles and facilitate more comparable financial reporting between companies who are required to follow U.S.

GAAP under SEC regulations and those who are required to follow International Financial Reporting Standards outside of the United States.

These efforts by the FASB and IASB may result in different accounting principles under U.S.

GAAP that may result in materially different financial results for us in areas including, but not limited to, principles for recognizing revenue and lease accounting.

Additionally, significant changes to U.S.

GAAP resulting from the FASB’s and IASB’s efforts may require that we change how we process, analyze and report financial information and that we change financial reporting controls.

It is not clear if or when these potential changes in accounting principles may become effective, whether we have the proper systems and controls in place to accommodate such changes and the impact that any such changes may have on our financial condition and results of operations.

Our ability to recognize the benefits of deferred tax assets is dependent on future cash flows and taxable income.

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See Note 7 – Income taxes in the notes to our consolidated financial statements in this Annual Report on Form 10-K for additional information and factors that could impact our ability to realize the deferred tax assets.

The adoption and interpretation of new tax legislation, tax rulings, or exposure to additional tax liabilities, could materially affect our financial condition, results of operations, and cash flows.

We are subject to income and other taxes in the U.S.

and other foreign jurisdictions in which we do business.

As a result, our provision for income taxes is derived from a combination of applicable tax rates in the various places we operate.

Significant judgment is required for calculating our income tax provision.

Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change.

Changes in tax law or tax rulings, or changes in interpretations of existing law, could adversely affect our financial condition and results of operations.

The Inflation Reduction Act of 2022 imposed a 1% excise tax on certain repurchases of stock.

Such changes may have a significant impact on our deferred tax assets, income tax provision and effective tax rate.

Proposed legislation before the Administration and Congress may make further changes to the U.S.

Changes to existing tax law in the U.S.

or other foreign jurisdictions could adversely affect our financial condition and results of operations.

The Medicare Fee-For-Service (FFS) sequestration reduction has and may continue to negatively affect our revenue and profits.

Medicare FFS claims with dates of service on or after April 1, 2013 are subject to a 2% sequestration reduction in Medicare payments, including claims for DMEPOS, including in competitive bidding areas.

The claims payment adjustment is applied to all claims after determining co-insurance, any applicable deductible, and any applicable Medicare secondary payment adjustments.

These reductions are included in rental revenue adjustments.

This sequestration reduction was scheduled to continue until further notice.

However, a provision in the CARES Act temporarily paused the 2% Medicare sequestration reduction for claims dated from May 1, 2020 through December 31, 2020 and the CARES Act also extended the end date of the Medicare sequestration reduction by one year, through 2030, in order to offset the 2020 suspension.

The Consolidated Appropriations Act of 2021 was signed into law on December 27, 2020 and extended the suspension period to March 31, 2021.

House of Representatives bill H.R.

1868 was signed into law on April 14, 2021 and extended the suspension period to December 31, 2021, but increased the fiscal year 2030 sequestration cuts.

In December 2021 through the Protecting Medicare and American Farmers from Sequester Cuts Act, the 2% Medicare sequestration benefit that was set to expire December 31, 2021 was extended through March 31, 2022.

The sequestration then resumed with a 1% reduction to rates from April 1, 2022 until June 30, 2022, with the full 2% Medicare sequestration then resumed effective July 1, 2022.

The implementation of prior authorization rules for DMEPOS under Medicare could negatively affect our business and financial condition.

CMS has issued a final rule to require Medicare prior authorization (PA) for certain DMEPOS that the agency characterizes as “frequently subject to unnecessary utilization” and that have an average purchase fee of $1,000 or greater, or an average rental fee schedule of $100 or greater.

The final rule was published on December 30, 2015 and specified an initial master list of 135 items that could potentially be subject to PA.

Initially stationary oxygen (code E1390) was included on the master list but was later removed.

On April 22, 2019, stationary oxygen (E1390) was again added to the list of potential codes that could be subject to PA.

On November 8, 2019, CMS revised the criteria for inclusion on the master list and added 212 DMEPOS items, including portable oxygen concentrators (E1392), to the master list.

The master list is updated annually and published in the Federal Register.

The presence of an item on the master list does not automatically mean that a PA is required.

CMS selects a subset of these master list items for its “Required Prior Authorization List.” There will be a notice period of at least 60 days prior to implementation.

The ruling does not create any new clinical documentation requirements, instead the same information necessary to support Medicare payment will be required prior to the item being furnished to the beneficiary.

CMS has proposed that reasonable efforts are made to provide a PA decision within 10 days of receipt of all applicable information, unless this timeline could seriously jeopardize the life or health of the beneficiary or the beneficiary’s ability to regain maximum function, in which case the proposed PA decision would be 2 business days.

CMS will issue additional sub-regulatory guidance on these timelines in the future.

If our products become subject to prior authorization, it could reduce the number of patients qualified to come on service using their Medicare benefits, it could delay the start of those patients while we wait for the prior authorization to be received, and/or it could decrease sales productivity.

As a result, this could adversely affect our business, financial conditions and results of operations.

Failure to maintain effective internal controls could cause our investors to lose confidence in us and adversely affect the market price of our common stock.

If our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud.

Section 404 of the Sarbanes-Oxley Act, or Section 404, requires that we maintain internal control over financial reporting that meets applicable standards.

We may err in the design, operation or documentation of our controls, and all internal control systems, no matter how well designed and operated, can provide only reasonable assurance that the objectives of the control system are met.

Because there are inherent limitations in all control systems, there can be no absolute assurance that all control issues have been or will be detected.

If we are unable, or are perceived as unable, to produce reliable financial reports due to internal control deficiencies, investors could lose confidence in our reported financial information and operating results, which could result in a negative market reaction.

We are required to disclose significant changes made in our internal controls and procedures on a quarterly basis.

Our independent registered public accounting firm is also required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404.

Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

Our remediation efforts may not enable us to avoid a material weakness in the future.

Additionally, to comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff or consultants, which may adversely affect our results of operations and financial condition.

Although prior material weaknesses have been remediated, we cannot assure you that our internal controls will continue to operate properly or that our financial statements will be free from error.

There may be undetected material weaknesses in our internal control over financial reporting, as a result of which we may not detect financial statement errors on a timely basis.

Moreover, in the future we may implement new offerings and engage in business transactions, such as acquisitions, reorganizations or implementation of new information systems that could require us to develop and implement new controls and could negatively affect our internal control over financial reporting and result in material weaknesses.

If we identify new material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner, if we are unable to assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, we may be late with the filing of our periodic reports, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected.

As a result of such failures, we could also become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation, financial condition or divert financial and management resources from our core business.

Risks related to the regulatory environment

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There have been and will continue to be regulatory initiatives affecting our business and we cannot predict the extent to which future legislation and regulatory changes could have a material adverse effect on our business.

We are subject to significant regulation by numerous government agencies, including the U.S.

Food and Drug Administration, or FDA.

We are subject to significant regulation by numerous government agencies, including the FDA.

We cannot market or commercially distribute our products without obtaining and maintaining necessary regulatory clearances or approvals and such approvals may be revoked or revised if an agency like the FDA believes it necessary.

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• recalls and field safety corrective actions;

• post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury;

• post-market safety reporting, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, would be likely to lead to death or serious injury;

• post-market approval studies;

• product import and export.

Before we can market or sell a medical device in the United States, we must obtain either 510(k) clearance, clearance under the de novo process or approval of a pre-market approval application from the FDA, unless an exemption applies.

In the 510(k) clearance process, the FDA must determine that a proposed device is “substantially equivalent” to a device legally on the market, known as a “predicate” device, with respect to intended use, technology and safety and effectiveness, in order to clear the proposed device for marketing.

Before we can market or sell a medical device in the United States, we must obtain 510(k) clearance, authorization under the De Novo process or approval of a pre-market approval application from the FDA, unless an exemption applies.

In the 510(k) clearance process, the FDA must determine that a proposed device is “substantially equivalent” to a legally marketed predicate device in order to clear the proposed device for marketing.

Our commercial products have received 510(k) clearance by the FDA.

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In addition, if the FDA disagrees with our determination that a product we currently market is subject to an exemption from pre-market review, the FDA may require us to submit a 510(k), De Novo application or pre-market approval application in order to continue marketing the product.

Further, even with respect to those future products where a pre-market approval is not required, we cannot assure you that we will be able to obtain the 510(k) clearances with respect to those products or do so in a timely fashion.

The FDA can delay, limit or deny clearance or approval of a device for many reasons, including:

Further, even with respect to those future products where a pre-market approval is not required, we cannot assure you that we will be able to obtain the 510(k) clearances or De Novo authorizations with respect to those products or do so in a timely fashion.

The FDA can delay, limit or deny clearance, authorization, or approval of a device for many reasons, including:

• we may not be able to demonstrate to the FDA’s satisfaction that our products are safe and effective for their intended uses;

• the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required;

• the manufacturing process or facilities we use may not meet applicable Quality System Regulations.

• the manufacturing process or facilities we use may not comply with applicable quality system regulations.

Medical devices may only be promoted and sold for the indications for which they are approved or cleared.

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Regulatory enforcement or inquiries, or other increased scrutiny on us, could affect the perceived safety and performance of our products and dissuade our customers from using our products.

If we modify our FDA cleared devices, we may need to seek additional clearances or approvals, which, if not granted, would prevent us from selling such modified products.

Any modification we make to our products that could significantly affect their safety or effectiveness, or would constitute a material change in intended use, manufacture, design, materials, labeling, or technology requires the submission and clearance of a new 510(k) pre-market notification, a de novo application or, possibly, pre-market approval.

If we modify our FDA cleared devices, we may need to seek additional clearances, authorizations, or approvals, which, if not granted, would prevent us from selling such modified products.

Any modification we make to our 510(k)-cleared products that could significantly affect their safety or effectiveness, or would constitute a major change in intended use requires the submission and clearance of a new 510(k) pre-market notification, authorization of a De Novo application or, possibly, approval of a pre-market approval application.

The FDA requires every manufacturer to make this determination in the first instance, but the FDA may review and disagree with any manufacturer’s decision.

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We have modified some of our 510(k) cleared products and have determined that in certain instances new 510(k) clearances or pre-market approval are not required.

We plan to make similar determinations regarding modifications to our 510(k) products, which may include the redesign of the Inogen One G5 system motherboard pending validation testing.

If the FDA disagrees with our determinations and requires us to submit new 510(k) notifications or pre-market approval for modifications to our previously cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory penalties or fines.

The FDA issued a new Final Guidance titled Enforcement Policy for Ventilators and Accessories and Other Respiratory Devices During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency (PHE) in March 2020.

The intent of the guidance is to help address the urgent COVID-19 PHE.

It may expand the availability of devices that support patients with respiratory insufficiency due to COVID-19.

The guidance allows certain modifications to applicable FDA-cleared respiratory devices without requiring compliance with the pre-market requirements such as submitting a new 510(k).

Manufacturers must ensure the device is safe and effective prior to placing the modified device on the market.

This guidance and any future guidance or enforcement policy be the FDA may introduce new competitive products that could compete with our products with an easier regulatory pathway which could harm our business, financial condition and results of operations.

If Inogen uses this guidance to commercialize devices that do not have the FDA clearance, these products will have to go through FDA 510(k) clearance in the future, and may not be granted such clearance, which would mean we would have to withdraw these products from the market when the FDA terminates or revokes such guidance or enforcement policy, which could harm our business, financial condition and results of operations.

In December 2021, the FDA issued the draft Transition Plan for Medical Devices That Fall Within Enforcement Policies Issued During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency (the “Transition Plan”) for public comment which, among other things, proposes a 180-day transition period for manufacturers to submit permanent marketing applications (e.g., 510(k) clearance, de novo classification or PMA) prior to the date that an enforcement discretion policy terminates.

After the 180 days, a manufacturer may continue to market its device while the application is pending, provided that the FDA has accepted the application for substantive review prior to the end of the 180-day period.

Manufacturers will be expected to comply with all regulatory requirements at the end of the 180-day period, even if their marketing applications are still pending.

The final Transition Plan ultimately published by the FDA may deviate, potentially significantly, from the draft Transition Plan and it is therefore impossible to know exactly how the final Transition Plan will impact our business and regulatory compliance requirements.

We may make similar determinations regarding modifications to our 510(k) products in the future.

If the FDA disagrees with our determinations and requires us to submit new 510(k) pre-market notifications or pre-market approval for modifications to our previously cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing and/or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory penalties or fines.

If we fail to comply with FDA or state regulatory requirements, we can be subject to enforcement action.

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• adverse publicity, warning letters, fines, injunctions, consent decrees and civil penalties;

• recalls, termination of distribution, or seizure of our products;

• recalls, import detentions, termination of distribution, or seizure of our products;

• operating restrictions or partial suspension or total shutdown of production;

• delays in the introduction of products into the market;

• refusal to grant our requests for future 510(k) clearances or approvals of new products, new intended uses, or modifications to exiting products;

• refusal to grant our requests for future 510(k) clearances or approvals of new products, new intended uses, or modifications to existing products;

• withdrawals or suspensions of current 510(k) clearances or approvals, resulting in prohibitions on sales of our products;

• criminal prosecution.

For example, our devices are labeled with a 5 or 8-year product life duration and we and our distributors, in some instances, have provided serviced devices after their useful life duration to rental patients in the United States and internationally, or conducted repairs on such devices for the patients who have purchased them.

We have taken measures to confirm that continued use of such units was not reported to have created an undue safety risk to patients and is not associated with increased product quality concerns, but there can be no assurance that the risk profile of the devices will not change or that governmental regulatory authorities could not view the practice as a violation of applicable regulations under certain circumstances resulting in adverse regulatory or enforcement action, exposing us to potential fines and other penalties or litigation related to government insurance reimbursement, or warranty or product liability, claims.

In such event, our ability to effectively manufacture, market and sell our products could be impaired.

Any of these sanctions could result in higher than anticipated costs or lower than anticipated sales and have a material adverse effect on our reputation, business, results of operations and financial condition.

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Seeking such approvals or clearances may delay our ability to replace the recalled devices in a timely manner.

Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement action, including adverse publicity, FDA warning letters, product seizure, injunctions, administrative penalties, or civil or criminal fines.

Moreover, if we do not adequately address problems associated with our devices, FDA could take additional actions, such as adverse publicity, or enforcement action, including issuance of warning letters, product seizure, injunctions, administrative penalties, or civil or criminal fines.

We may also be required to bear other costs or take other actions that may have a negative impact on our sales as well as face significant adverse publicity or regulatory consequences, which could harm our business, including our ability to market our products in the future.

Any adverse event involving our products, whether in the United States or abroad, could result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection, mandatory recall or other enforcement action.

Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and results of operations.

If we, our contract manufacturer, or our component manufacturers fail to comply with the FDA’s Quality System Regulation, our manufacturing operations could be interrupted, and our product sales and operating results could suffer.

We, our contract manufacturer, and our component manufacturers are required to comply with the FDA’s Quality System Regulation, or QSR, which covers the procedures and documentation of the design, calibration, testing, production, control, quality assurance, labeling, packaging, storage and shipping of our devices.

The FDA audits compliance with the QSR through periodic announced and unannounced inspections of manufacturing and other facilities.

We and our component manufacturers have been, and anticipate in the future being, subject to such inspections.

Although we believe our manufacturing facilities and those of our component manufacturers are in compliance with the QSR, we cannot provide assurance that any future inspection will not result in adverse findings.

If we fail to implement timely and appropriate corrective actions that are acceptable to the FDA or if our other manufacturing facilities or those of any of our component manufacturers, contract manufacturers, or suppliers are found to be in violation of applicable laws and regulations, or we or our manufacturers or suppliers fail to take prompt and satisfactory corrective action in response to an adverse inspection, the FDA could take enforcement action, including any of the following sanctions:

• adverse publicity, untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

Any corrective action, whether voluntary or involuntary, as well as defending ourselves in any subsequent lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and results of operations.

If we or our contract manufacturers fail to comply with the FDA’s Quality System Regulation, our manufacturing operations could be interrupted, and our product sales and operating results could suffer.

We and our contract manufacturers are required to comply with the FDA’s Quality System Regulation, or QSR, which governs the design, manufacture, packaging, labeling, storage, repair and servicing of our devices.

The FDA inspects entities for compliance with the QSR through periodic announced and unannounced inspections of manufacturing facilities.

We and our contract manufacturers have been, and anticipate in the future being, subject to such inspections.

Although we believe our manufacturing facilities and those of our contract manufacturers are in compliance with the QSR, we cannot provide assurance that any future inspection will not result in adverse findings.

If we fail to implement timely and appropriate corrective actions that are acceptable to the FDA or if our other manufacturing facilities or those of any of our contract manufacturers are found to be in violation of applicable laws and regulations, or we or our contract manufacturers fail to take prompt and satisfactory corrective action in response to an adverse inspection, the FDA could take enforcement action, including, among others, the following sanctions:

• adverse publicity, untitled letters, warning letters, import detentions, fines, injunctions, consent decrees and civil penalties;

• customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;

• operating restrictions or partial suspension or total shutdown of production;

• refusing or delaying our requests for 510(k) clearance or pre-market approval of new products or modified products;

• withdrawing 510(k) clearances or pre-market approvals that have already been granted;

• refusing or delaying our requests for pre-market approval of new products or modified products;

• withdrawing 510(k) clearances or other pre-market approvals that have already been granted;

• refusal to grant export approval for our products;

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Any such action may harm our reputation and could have an adverse effect on our business, results of operations and financial condition.

The primary regulatory body in Europe is the European Commission, which includes most of the major countries in Europe.

The European Commission has adopted numerous directives and standards regulating the design, manufacture, clinical trial, labeling and adverse event reporting for medical devices and assesses whether devices can be commercially distributed throughout Europe based on the class of the product, and typically, a combination of self-assessment by the manufacturer and a third-party assessment by a “Notified Body.” An assessment by a Notified Body of one country within the European Union is required in order for a manufacturer to commercially distribute the product throughout the European Union.

The EU MDR does not apply in Great Britain (England, Scotland and Wales) and the commercialization of medical devices in that territory must comply with rules set out in domestic legislation including the UK Medical Devices Regulations 2002.

Devices that are validly CE marked under the EU regime or UK Conformity Assessed (UKCA) marked under the UK Medical Devices Regulations 2002 may be placed on the market or put into service in Great Britain.

Devices such as portable oxygen concentrators require third-party assessment by a UK approved body, which is an independent organization designated by the UK Medicines and Healthcare products Regulatory Agency (MHRA) to conduct the conformity assessment.

In the European Union, medical devices are regulated by the MDR.

The MDR is applicable in all European Union Member States and in the additional Member States of the European Economic Area and therefore applies in most of the major countries in Europe.

The MDR and its associated guidance documents and harmonized standards regulate the design, manufacture, clinical trial, labeling and adverse event reporting for medical devices.

Devices must comply with the MDR before they can be commercially distributed throughout the EEA.

The method of assessing conformity under the MDR varies based on the class of the product, and typically requires a combination of self-assessment by the manufacturer and a third-party assessment by a “notified body.” The EU MDR does not apply in Great Britain (England, Scotland and Wales) and the commercialization of medical devices in that territory must comply with rules set out in domestic legislation including the UK Medical Devices Regulations 2002.

Devices that are validly CE marked under the EU MDR or UKCA marked under the UK Medical Devices Regulations 2002 may be placed on the market or put into service in Great Britain.

The commercialization of medical devices in the UK are also subject to additional national requirements (e.g., registration and where the manufacturer is not established in the UK, the appointment of a UK Responsible Person).

If we fail to obtain and maintain regulatory approval in foreign jurisdictions, our market opportunities will be limited.

Approximately 28.3%, 26.8% and 22.2% of our total revenue was from sales outside of the United States for the years ended December 31, 2023, 2022, and 2021, respectively.

We have sold our products in multiple international countries and overseas regions outside of the United States through our wholly-owned subsidiaries, distributors and directly to large “house” accounts.

We sell our products in multiple international countries and overseas regions outside of the United States through our wholly-owned subsidiaries, distributors and directly to large “house” accounts.

In order to market our products in the European Union or other foreign jurisdictions, we are required to obtain and maintain separate regulatory approvals and comply with numerous and varying regulatory requirements.

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The time required to obtain approval abroad may be longer than the time required to obtain FDA clearance.

For example, the European Union requires that manufacturers of medical devices obtain the right to bear the “CE” conformity marking which designates compliance with existing directives and standards regulating the design, manufacture and distribution of medical devices in member countries of the European Union.

In 2017, the European Union adopted the European Medical Device Regulation (Council Regulations 2017/745) which imposes stricter requirements for the marketing and sale of medical devices, including new clinical evaluation, quality system, and post-market surveillance requirements.

The regulation had a three-year implementation period, with full application of the regulation occurring in May 2021 and replacing the pre-existing directives on medical devices in the European Union.

Since May 2021, devices must be validly CE marked in accordance with the European Medical Device Regulation (MDR) or, if validly CE marked under the Medical Device Directive (MDD) (or AIMDD), meet the requirements of the MDR's transitional arrangements in order to be placed on the market.

Devices that do not satisfy either of these requirements cannot be placed on the market or put into service in the EU or EEA, subject to limited exceptions.

The conformity assessment certificate under the MDD for Inogen's devices expired on May 18, 2022.

The conformity assessment certification under the EU Medical Devices Regulation was issued by our notified body for our Inogen One G4 and Rove 6, the updated version of its Inogen One G5 portable oxygen concentrators, on December 12, 2022.

We have authorization to affix the CE Mark to our oxygen therapy products and to commercialize our devices in the EU and EEA.

Inogen obtained its United Kingdom Conformity Assessed (UKCA) certificate covering the Inogen One G4, Inogen One G5 and Inogen at Home oxygen concentrators on April 27, 2022, which allowed Inogen to affix a UKCA mark to these devices and market them in Great Britain.

Devices that do not satisfy these requirements cannot be placed on the market or put into service in the relevant jurisdictions, subject to limited exceptions.

The foreign regulatory approval process, including with respect to MDR and other jurisdictions, includes many of the risks associated with obtaining FDA clearance and we may not obtain foreign regulatory approvals on a timely basis, if at all.

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We gather and analyze certain de-identified retrospective patient data as part of our product development and improvement.

We believe that these data collection methods do not constitute clinical trials and, therefore, typically do not pursue or obtain regulatory permission from the FDA or institutional review boards (IRBs) before collecting or analyzing such data.

If the FDA disagrees with our interpretation, we may be subject to regulatory enforcement including warning letters, fines, injunctions, consent decrees and civil penalties.

We believe that these data collection methods do not constitute clinical trials and, therefore, typically do not pursue or obtain regulatory permission from the FDA or IRBs before collecting or analyzing such data.

If the FDA disagrees with our interpretation, we may be subject to regulatory enforcement including, among others, warning letters, fines, injunctions, consent decrees and civil penalties.

In addition, we may be required to collect these types of data under the clinical trial regulatory framework.

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• delays or failure in obtaining approval of our clinical trial protocols from the FDA, other regulatory authorities, or IRBs;

• we, the applicable IRBs, the Data Safety Monitoring Board for such trial, or the FDA or other applicable regulatory authorities may require that we or our investigators suspend or terminate our data collection for various reasons, including, among others (i) failure to conduct the clinical trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice (GCP), regulations, or our clinical protocols, (ii) by the FDA or other applicable regulatory authority resulting in the imposition of a clinical hold, or (iii) lack of adequate patient informed consent;

• we, the applicable IRB(s), or the FDA or other applicable regulatory authorities may require that we or our investigators suspend or terminate our data collection for various reasons, including, among others (i) failure to conduct the clinical trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice, regulations, or our clinical protocols, or (ii) lack of adequate patient informed consent;

• delays if the FDA concludes that our financial relationships with our data collection partners result in a perceived or actual conflict of interest that may have affected the interpretation or integrity of the data collected.

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Any of these occurrences may significantly harm our business, financial condition, results of operations and prospects.

We are subject to complex billing and record-keeping requirements in order to substantiate our claims for payment under federal, state and commercial healthcare reimbursement programs, and our failure to comply with existing requirements, or changes in those requirements or interpretations thereof, could adversely affect our business, financial condition and results of operations.

We are subject to complex billing and record-keeping requirements in order to substantiate our claims for payment under federal, state and commercial healthcare reimbursement programs.

Our records also are subject to routine and other reviews by third-party payors, which can result in delays in payments or refunds of paid claims.

We could experience a significant increase in pre-payment reviews of our claims by the Durable Medical Equipment Medicare Administrative Contractors, which could cause substantial delays in the collection of our Medicare accounts receivable as well as related amounts due under supplemental insurance plans.

Current law provides for a significant expansion of the government’s auditing and oversight of suppliers who care for patients covered by various government healthcare programs.

Examples of this expansion include audit programs being implemented by the Durable Medical Equipment Medicare Administrative Contractors, the Unified Program Integrity Contractors, the Recovery Audit Contractors, and the Comprehensive Error Rate Testing contractors, operating under the direction of CMS, and the various state Medicaid Fraud Control Units.

We have been informed by these auditors that healthcare providers and suppliers of certain durable medical equipment product categories are expected to experience further increased scrutiny from these audit programs.

When a government auditor ascribes a high billing error rate to one or more of our locations, it generally results in protracted pre-payment claims review, payment delays, refunds and other payments to the government and/or our need to request more documentation from providers than has historically been required.

It may also result in additional audit activity in other company locations or Durable Medical Equipment Medicare Administrative Contractors jurisdiction.

We may be subject to fines, penalties or injunctions if we are determined to be promoting the use of our products for unapproved or “off-label” uses, resulting in damage to our reputation and business.

Our promotional materials and training methods are required to comply with the FDA and other applicable laws and regulations, including the prohibition of the promotion of a medical device for a use that has not been cleared or approved by the FDA.

Our promotional materials and training methods are required to comply with the FDA’s requirements and other applicable laws and regulations, including the prohibition against the promotion of a medical device for a use that has not been cleared or approved by the FDA.

Physicians may use our products off-label, as the FDA does not restrict or regulate a physician’s choice of treatment within the practice of medicine.

If the FDA determines that our promotional materials or training constitutes promotion of an off-label use that is either false or misleading, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, which could have an adverse effect on our reputation and results of operations.

Failure to comply with the Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, and implementing regulations could result in significant penalties.

Numerous federal and state laws and regulations, including HIPAA and the HITECH Act, govern the collection, dissemination, security, use and confidentiality of patient-identifiable health information.

If the FDA determines that our promotional materials or training constitutes promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, which could have an adverse effect on our reputation and results of operations.

Failure to comply with the Federal Health Insurance Portability and Accountability Act of 1996, the Health Information Technology for Economic and Clinical Health Act, and implementing regulations could result in significant penalties.

Numerous federal and state laws and regulations, including the Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, and the Health Information Technology for Economic and Clinical Health Act, or the HITECH Act, govern the collection, dissemination, security, use and confidentiality of patient-identifiable health information.

HIPAA and the HITECH Act require us to comply with standards for the use and disclosure of protected health information within our company and with third parties.

The Privacy Standards and Security Standards under HIPAA establish a set of basic national privacy and security standards for the protection of individually identifiable health information by health plans, healthcare clearinghouses and certain healthcare providers, referred to as covered entities, and the business associates with whom such covered entities contract for services.

Notably, whereas HIPAA previously directly regulated only these covered entities, the HITECH Act, which was signed into law in 2009, makes certain of HIPAA’s privacy and security standards directly applicable to covered entities’ business associates.

Both covered entities and business associates are subject to significant civil and criminal penalties for failure to comply with the Privacy Standards and Security Standards under HIPAA.

Under the HITECH Act, both covered entities and business associates are subject to significant civil and criminal penalties for failure to comply with the Privacy Standards and Security Standards under HIPAA.

HIPAA requires healthcare providers like us to develop and maintain policies and procedures with respect to protected health information that is used or disclosed, including the adoption of administrative, physical and technical safeguards to protect such information from unauthorized disclosure.

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New health information standards, whether implemented pursuant to HIPAA, the HITECH Act, congressional action or otherwise, could have a significant effect on the manner in which we handle healthcare related data and communicate with payors, and the cost of complying with these standards could be significant.

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

Any liability from a failure to comply with the requirements of HIPAA or the HITECH Act could adversely affect our results of operations and financial condition.

The costs of complying with privacy and security related legal and regulatory requirements are burdensome and could have a material adverse effect on our results of operations.

Regulations requiring the use of “standard transactions” for healthcare services issued under HIPAA may negatively affect our profitability and cash flows.

Pursuant to HIPAA, final regulations have been implemented to improve the efficiency and effectiveness of the healthcare system by facilitating the electronic exchange of information in certain financial and administrative transactions while protecting the privacy and security of the information exchanged.

The HIPAA transaction standards are complex, and subject to differences in interpretation by third-party payors.

For instance, some third-party payors may interpret the standards to require us to provide certain types of information, including demographic information not usually provided to us by physicians.

As a result of inconsistent application of transaction standards by third-party payors or our inability to obtain certain billing information not usually provided to us by physicians, we could face increased costs and complexity, a temporary disruption in accounts receivable and ongoing reductions in reimbursements and net revenue.

Changes and updates to HIPAA transaction standards could prove technically difficult, time-consuming or expensive to implement, all of which could harm our business.

If we fail to comply with state and federal fraud and abuse laws, including anti-kickback, Physician Self-Referral Law, false claims and anti-inducement laws, we could face substantial penalties and our business, results of operations and financial condition could be adversely affected.

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The Physician Self-Referral Law, commonly known as the “Stark Law,” 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 (DHS) 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 exclusion from Medicare, Medicaid or other federal healthcare programs.

Although we believe that we have structured our provider arrangements to comply with current Stark Law requirements, regulatory authorities may determine otherwise.

The Federal False Claims Act prohibits any person from knowingly presenting or causing to be presented a false claim for payment to the federal government, or knowingly making or causing to be made a false statement to get a false claim paid.

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Additionally, the Substance Use-Disorder Prevention that Promoted Opioid Recovery and Treatment for Patients and Communities Act enacted in 2018, extends the reporting and transparency requirements for physicians 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 the required information under the federal Physician Payment Sunshine Act may result in civil monetary penalties of up to an aggregate of $0.2 million per year (and up to an aggregate of $1.363 million per year for “knowing failures”), subject to an annual adjustment for inflation.

Failure to submit the required information under the federal Physician Payment Sunshine Act may result in civil monetary penalties of up to an aggregate of $150,000 per year (and up to an aggregate of $1.0 million per year for “knowing failures”), subject to an annual adjustment for inflation.

In addition, there has been a recent trend of increased federal and state regulation of payments and other transfers of value made to applicable recipients, including physicians.

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The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with different compliance and/or reporting requirements in multiple jurisdictions increase the possibility that a healthcare company may violate one or more of the requirements.

The Federal Civil Monetary Penalties Law grants authority to the HHS Office of Inspector General (OIG) to seek civil monetary penalties (CMPs) against an individual or entity based on a wide variety of conduct including violations of the Anti-Kickback Statute, Stark Law, and False Claims Act.

The Federal Civil Monetary Penalties Law grants authority to the OIG to seek CMPs against an individual or entity based on a wide variety of conduct including violations of the Anti-Kickback Statute, Stark Law, and False Claims Act.

An entity that offers to or transfers remuneration to any individual eligible for benefits under Medicare or Medicaid that such entity knows or should know is likely to influence such individual to order or receive from a particular provider, practitioner, or supplier any Medicare or Medicaid payable item or service may be liable for CMPs.

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While we have processes in place to manage our discount and incentive programs, including the safe harbor regulation for discounts, 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 $0.121 million (subject to annual adjustment for inflation) for each wrongful act, assessment of three times the amount claimed for each item or service and exclusion from the federal or state healthcare programs.

If we are found to be in non-compliance, we could be subject to CMPs of up to $50,000 (subject to annual adjustment for inflation) for each wrongful act and exclusion from the federal or state healthcare programs.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.

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HHS makes annual inflation-related increases to the civil monetary penalties in its regulations pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

The HHS Annual Civil Monetary Penalties Inflation Adjustment Final Rule issued on October 6, 2023, sets forth adjusted civil monetary penalty amounts that apply to penalties assessed on or after October 6, 2023, if the violation occurred on or after November 2, 2015.

The HHS Annual Civil Monetary Penalties Inflation Adjustment Final Rule issued on August 8, 2024, sets forth adjusted civil monetary penalty amounts that apply to penalties assessed on or after August 8, 2024, if the violation occurred on or after November 2, 2015.

We are also exposed to the risks of fraud, misconduct, or other illegal activity by our employees and third parties who act for us or on our behalf, such as our independent contractors, consultants, commercial partners, and vendors.

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Foreign governments tend to impose strict price controls, which may adversely affect our future profitability.

We have sold our products in a total of 62 international countries or overseas regions outside the United States through our wholly-owned subsidiary, distributors or directly to large “house” accounts.

We sell our products in countries and regions outside the United States through our wholly-owned subsidiaries, distributors or directly to large “house” accounts.

In some foreign countries, particularly in the European Union, the pricing of medical devices is subject to governmental control.

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In the event of an accident or failure to comply with environmental laws, we could be held liable for resulting damages, and any such liability could exceed our insurance coverage and adversely affect our financial condition and results of operations.

Regulatory requirements under Proposition 65 could adversely affect our business.

We are subject to California’s Proposition 65 which requires a specific warning on any product that contains a substance listed by the State of California as having been found to cause cancer or birth defects, unless the level of such substance in the product is below a safe harbor level.

Proposition 65 required that all businesses must be in compliance by August 30, 2018 with new regulations that require modifications to product warnings and for businesses to coordinate with upstream vendors or downstream customers for the 800+ regulated chemicals in consumer products and assess whether new occupational exposure warnings need to be posited in California facilities.

We have taken steps to add warning labels to our products packaged in California and manufactured after August 30, 2018.

Although we cannot predict the ultimate impact of these requirements, they could reduce overall consumption of our products or leave consumers with the perception (whether or not valid) that our products do not meet their health and wellness needs, all of which could adversely affect our business, financial condition and results of operations.

The implementation of prior authorization rules for DMEPOS under Medicare could negatively affect our business and financial condition.

CMS has issued a final rule to require Medicare prior authorization for certain DMEPOS that the agency characterizes as “frequently subject to unnecessary utilization” and that have an average purchase fee of $1,000 or greater, or an average rental fee schedule of $100 or greater.

The final rule was published on December 30, 2015 and specified an initial master list of 135 items that could potentially be subject to PA.

Initially stationary oxygen (code E1390) was included on the master list but was later removed.

On April 22, 2019, stationary oxygen (E1390) was again added to the list of potential codes that could be subject to PA.

On November 8, 2019, CMS revised the criteria for inclusion on the master list and added 212 DMEPOS items, including portable oxygen concentrators (E1392), to the master list.

The master list is updated annually and published in the Federal Register.

The presence of an item on the master list does not automatically mean that a prior authorization is required.

CMS selects a subset of these master list items for its “Required Prior Authorization List.” There will be a notice period of at least 60 days prior to implementation.

CMS has proposed that reasonable efforts are made to provide a prior authorization decision within 10 days of receipt of all applicable information, unless this timeline could seriously jeopardize the life or health of the beneficiary or the beneficiary’s ability to regain maximum function, in which case the proposed prior authorization decision would be two business days.

CMS will issue additional sub-regulatory guidance on these timelines in the future.

As a result, this could adversely affect our business, financial conditions and results of operations.

Risks related to our intellectual property

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• permit us to gain or maintain a competitive advantage.

Our patents may not adequately protect our products from third party competitors

We rely on patents and other intellectual property to protect the design and construction of our products from direct competitors.

However, we cannot specify whether our patents individually or as a group will permit us to gain or maintain a competitive advantage.

Any of our patents may be challenged, invalidated, circumvented or rendered unenforceable.

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If our patent claims are rendered invalid or unenforceable, or narrowed in scope, the patent coverage afforded our products could be impaired, which could make our products less competitive.

As of December 31, 2023, we have thirty-three pending U.S.

and international patent applications, fifty-five issued U.S.

patents, and thirty-two issued foreign patents relating to the design and construction of our oxygen concentrators and our intelligent delivery technology.

We cannot specify which of these patents individually or as a group will permit us to gain or maintain a competitive advantage.

Patents may be subject to reexamination, inter partes review, post-grant review, and derivation proceedings in the U.S.

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In addition, our pending patent applications and those we may file in the future may have claims narrowed during prosecution or may not result in patents being issued.

Even if any of our pending or future applications are issued, they may not provide us with any competitive advantage or adequate protection from allegations of infringement, whether valid or frivolous, which may result in the incurrence of material defense costs.

Even if any of our pending or future applications are issued, they may not provide us with any competitive advantage.

Our patents and patent applications are directed to particular aspects of our products.

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In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States, particularly in the field of medical products and procedures.

Also, monitoring unauthorized use of our intellectual property is difficult and costly.

Unauthorized use of our intellectual property may have occurred or may occur in the future.

Although we have taken steps to minimize the risk of this occurring, any such failure to identify unauthorized use and otherwise adequately protect our intellectual property would adversely affect our business.

Moreover, if we are required to commence litigation, whether as a plaintiff or defendant, not only will this be time-consuming, but we will also be forced to incur significant costs and divert our attention and efforts of our employees, which could, in turn, result in lower revenue and higher expenses.

Our products could infringe or appear to infringe the intellectual property rights of others, which may lead to patent and other intellectual property litigation that could itself be costly, could result in the payment of substantial damages or royalties, prevent us from using technology that is essential to our products, and/or force us to discontinue selling our products.

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An adverse determination or protracted defense costs of such lawsuits could have a material effect on our business and operating results.

An adverse decision in any other legal action could limit our ability to assert our intellectual property rights, limit the value of our technology or otherwise negatively affect our business, financial condition and results of operations.

Monitoring unauthorized use of our intellectual property is difficult and costly.

Unauthorized use of our intellectual property may have occurred or may occur in the future.

We cannot provide assurance that our products or methods do not infringe or appear to not infringe the patents or other intellectual property rights of third parties and if our business is successful, the possibility may increase that others will assert infringement claims against us whether valid or frivolous.

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As a result, other parties may be able to use our proprietary technology or information, and our ability to compete in the market would be harmed.

“Inogen,” “Inogen One,” “Inogen One G3,” “G4,” “G5,”,” “Oxygen.Anytime.Anywhere,” “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 pending applications for the marks “Rove,” “Inogen Rove,” “Inogen Rove 4,” and “Inogen Rove 6” 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, 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 pending application for the mark “Inogen” in the Dominican Republic.

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.

We own trademark registrations for the marks “Inogen Rove 4” and “Inogen Rove 6” in Europe (European Union Registration) and the United Kingdom.

We own pending applications for the marks “Inogen Rove” and “Rove” in Canada, Europe (the European Union), and the United Kingdom.

We own pending applications for the marks “Inogen Rove 4” and “Inogen Rove 6” in Canada.

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 pending application for the Inogen One G5 design in Brazil.

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

“PHYSIO-ASSIST,” “PHYSIOASSIST,” the Physio-Assist logo, “SIMEOX,” “SIMEOX PRO,” “SIMESOFT,” “PHYSIOWEB,” “PHYSIODATA,” “PHYSIOSERVICES,” and the Pissenlit logo are registered trademarks of Inogen’s wholly-owned subsidiary Physio-Assist.

Physio-Assist owns trademark registrations for the mark “PHYSIO-ASSIST” in European Union, France, Japan, United Kingdom, and USA.

Physio-Assist owns trademark registrations for the Physio-Assist logo in China, European Union, France, Japan, South Korea, United Kingdom, and USA.

Physio-Assist owns trademark registrations for the mark SIMEOX in European Union, France, Japan, Russia, United Kingdom, and USA.

Physio-Assist owns trademark registrations in France for the mark “PHYSIOASSIST,” “SIMESOFT,” “SIMEOX PRO,” “PHYSIOWEB,” “PHYSIODATA,” “PHYSIOSERVICES,” and the Pissenlit logo.

We may be subject to damages resulting from claims that our employees, agents or we have wrongfully used or disclosed alleged trade secrets of other companies.

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As a public company, we will continue to incur significant legal, accounting and other expenses.

In addition, the Sarbanes-Oxley Act of 2002 and rules enforced by the Public Companies Oversight Board (PCAOB) subsequently implemented by the SEC and the NASDAQ Global Select Market impose numerous requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

In addition, the Sarbanes-Oxley Act of 2002 and rules enforced by the Public Companies Oversight Board, or PCAOB, subsequently implemented by the SEC and the Nasdaq Global Select Market impose numerous requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

Also, the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.

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If we are unable to implement these requirements effectively or efficiently, it could harm our operations, financial reporting, or financial results and could result in an adverse opinion on our internal controls from our independent registered public accounting firm.