4 unchanged sentences
Stock performance graph
−Removed: This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of ours under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
+Added: This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of ours under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
The following graph compares the performance of our common stock for the periods indicated with the performance of the S&P Healthcare and Supplies Index, the Russell 2000 Index, and the Nasdaq Composite Index from December 31, 2019 to December 31, 2024.
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Among Inogen, Inc., the S&P Healthcare Equipment and Supplies Index, the Russell 2000 Index and the Nasdaq Composite Index
−Removed: S & P Healthcare Equipment & Supplies^
−Removed: Russell 2000^
−Removed: NASDAQ Composite^
+Added: S&P Healthcare Equipment & Supplies (1)
+Added: Russell 2000 (2)
+Added: Nasdaq Composite (3)
(1) The S&P Healthcare Equipment and Supplies Index is a capitalization weighted-average index compiled of healthcare companies in the S&P 500 Index.
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Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K.
−Removed: The purpose of Management's Discussion and Analysis (MD&A) is to provide an understanding of Inogen’s financial condition, results of operations and cash flows by focusing on changes in certain key measures from year-to-year.
+Added: The purpose of Management's Discussion and Analysis, or MD&A, is to provide an understanding of Inogen’s financial condition, results of operations and cash flows by focusing on changes in certain key measures from year-to-year.
The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and accompanying notes.
3 unchanged sentences
• Macroeconomic environment
−Removed: • Basis of presentation
• Results of operations
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• acquisitions and related acquired intangible assets and goodwill.
−Removed: • long-lived asset impairment.
Revenue recognition
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For a fixed price, we also offer a lifetime warranty for direct-to-consumer sales for our oxygen concentrators.
−Removed: The revenue is allocated to the distinct lifetime warranty performance obligation based on a relative stand-alone selling price (SSP) method.
+Added: The revenue is allocated to the distinct lifetime warranty performance obligation based on a relative stand-alone selling price, or SSP, method.
We have vendor-specific objective evidence of the selling price for our equipment.
12 unchanged sentences
The contract with the customer states the final terms of the sale, including the description, quantity, and price of each product or service purchase.
−Removed: We elected to apply the practical expedient in accordance with Accounting Standards Codification (ASC) 606— Revenue Recognition and did not evaluate contracts of one year or less for the existence of a significant financing component.
+Added: We elected to apply the practical expedient in accordance with Accounting Standards Codification, or ASC, 606— Revenue Recognition and did not evaluate contracts of one year or less for the existence of a significant financing component.
We do not expect any revenue to be recognized over a multi-year period with the exception of revenue related to lifetime warranties.
34 unchanged sentences
We used a discounted cash flow analysis based on Level 3 inputs and determined that the goodwill carrying amount exceeded its fair value and, as such, an impairment charge of $32.9 million was incurred in the quarter ended September 30, 2023.
−Removed: Total accumulated impairment losses were $32.9 million as of December 31, 2023.
−Removed: As a result of the TAV technology intangible asset disposal in 2022, a quantitative analysis was required to be performed as of December 31, 2022 and concluded that there was no impairment.
+Added: Total accumulated impairment losses were $32.9 million as of December 31, 2023 and 2024.
+Added: As a result of the Tidal Assist ® Ventilator technology intangible asset disposal in 2022, a quantitative analysis was required to be performed as of December 31, 2022 and concluded that there was no impairment.
Finite-lived intangible assets are amortized over their useful lives and are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Technology and customer relationship intangibles are amortized using the straight-line method.
−Removed: Long-lived asset impairment
−Removed: Long-lived assets are reviewed for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
−Removed: The evaluation is performed at the lowest level of identifiable cash flows, which is at the individual asset level or the asset group level.
−Removed: The undiscounted cash flows expected to be generated by the related assets are estimated over their useful life based on updated projections.
−Removed: If the evaluation indicates that the carrying amount of the assets may not be recoverable, any potential impairment is measured based upon the fair value of the related assets or asset group as determined by an appropriate market appraisal or other valuation technique.
−Removed: Assets classified as held for sale, if any, are recorded at the lower of carrying amount or fair value less costs to sell.
−Removed: During the year ended December 31, 2023, we determined that an impairment indicator was present related to negative cash flows and a decrease in our public stock price that caused our market capitalization to fall below its carrying amount (stockholders' equity).
−Removed: The relevant long-lived asset grouping was evaluated for impairment.
−Removed: An undiscounted cash flow analysis demonstrated sufficient undiscounted cash flows in excess of the asset group’s carrying value.
−Removed: Estimates and significant assumptions included in the long-lived asset impairment analysis included identification of the asset group and undiscounted cash flow projections.
−Removed: We concluded that our definite-lived intangible assets and long-lived assets were not impaired based on the results of the quantitative analyses performed.
−Removed: 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).
−Removed: Prior to December 19, 2022, the TAV intangible asset was held and used, including ongoing research and development and no significant revenue.
−Removed: We made the Disposal Determination based on our assessment that continued development of the assets would not be economically feasible.
−Removed: 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 coding 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.
−Removed: There had been no significant revenue associated with the sale of products developed from the technology intangible asset acquired from New Aera to date and we do not expect any revenue from such products going forward.
−Removed: Upon abandonment, we recognized a loss on disposal of $52.2 million in our consolidated statements of comprehensive loss for the year ended December 31, 2022 related to intangible assets, inventories, fixed assets, and construction in process associated with the TAV technology.
−Removed: As a result of no future sales, the change in fair value of the earnout liability related to the acquisition of the TAV technology resulted in a benefit of $13.7 million to general and administrative expense during the fourth quarter of 2022.
−Removed: During the year ended December 31, 2021, we determined that an impairment indicator was present related to TAV developments as a result of the court order to dismiss our preliminary injunction related to the Department of Health and Human Services and the Centers for Medicare and Medicaid Services lawsuit.
−Removed: The relevant long-lived asset grouping was evaluated for impairment.
−Removed: An undiscounted cash flow analysis demonstrated sufficient undiscounted cash flows in excess of the asset group’s carrying value.
−Removed: Estimates and significant assumptions included in the long-lived asset impairment analysis included identification of the asset group and undiscounted cash flow projections.
−Removed: We concluded that our definite-lived intangible assets and long-lived assets were not impaired based on the results of the quantitative analyses performed.
Recent accounting pronouncements
−Removed: Refer to Note 2 – Summary of significant accounting policies in the notes to the consolidated financial statements included in Part IV, Item 16, "Form 10-K Summary" in this Annual Report on Form 10-K for further discussion.
+Added: Refer to Note 2 – Summary of significant accounting policies in the notes to the consolidated financial statements included in Part IV, Item 15 in this Annual Report on Form 10-K for further discussion.
Macroeconomic environment
−Removed: The global economy is experiencing increased inflationary pressures.
−Removed: The macroeconomic environment has had significant and potentially will continue to have unexpected adverse effects on businesses and healthcare institutions around the world and has and may continue to negatively impact our consolidated operating results.
−Removed: Higher interest rates and capital costs and increased shipping costs are expected to impact demand for our products while the potential for continued supply chain disruptions and inflationary impact on material, labor and logistics could increase our cost of operations.
−Removed: We continued to see inflated costs related to the acquisition of semiconductor chips negatively impact our cost of sales revenue throughout 2023, and we expect this to continue to impact our cost of sales revenue into the first half of 2024 due to lower than expected sales versus the comparative period in 2023.
−Removed: We incurred significant costs associated with acquiring chips on the open market and a portion of these costs increased our inventory given that these components were not yet in finished products that were sold during the period.
−Removed: Additionally, we are seeing cost inflation for other components used in our products.
−Removed: We also have experienced, along with most other companies across many industries, the macroeconomic impact of a challenging employment environment related to hiring and retaining employees and wage inflation.
−Removed: We expect that these hiring, retention, and wage inflation challenges, as well as challenges related to maintaining our current workforce, will continue through 2024.
−Removed: These challenges may negatively affect our ability to grow our business and keep our best employees or increase our cost of operations.
−Removed: In response we have implemented more flexible workplace requirements for certain roles, including remote workplace opportunities, but we still expect to be challenged by the macroeconomic employment environment.
+Added: While we have worked to improve our global supply chain, challenges and potential disruptions still exist.
+Added: We have experienced, and may continue to experience, increases in cost and limited availability of certain raw materials, components, and other inputs necessary to manufacture and distribute our products due to constraints and inflation within the global supply chain, as well as increases in wage costs and the cost and time to distribute our products.
+Added: Uncertainty around inflationary pressures, interest rates, monetary policy, and changes in tariffs and tax laws could potentially cause new, or exacerbate existing, economic challenges that we may face, including the impact of foreign currency fluctuations on our results of operations, or result in an economic downturn or recession, which could negatively impact our business operations and results.
+Added: Existing and future potential geopolitical dynamics may create economic, supply chain, energy, and other challenges, including disruptions to business operations, which has impacted, and may in the future negatively impact our business.
+Added: In particular, international conflicts could create instability, have and may further result in sanctions, tariffs, and other measures that restrict international trade and may negatively affect our business operations and results.
For additional information on risk factors that could impact our results, please refer to the sections entitled “Risk Factors” in this Annual Report on Form 10-K.
−Removed: We are a medical technology company that primarily develops, manufactures, and markets innovative portable oxygen therapy solutions for patients with chronic respiratory conditions.
−Removed: Our leading portfolio of innovative portable oxygen concentrators (POCs) is optimized to deliver high output ratio-to-weight, meaningful sound suppression and among the longest run times in the industry so that we can meet the needs of patients across a variety of disease states.
−Removed: As of December 31, 2023, we had thirty-three pending patent applications and eighty-seven issued patents relating to the design and construction of our respiratory devices.
+Added: We are a medical technology company that primarily develops, manufactures, and markets innovative respiratory market products, including our portable oxygen therapy solutions for patients with chronic respiratory conditions as well as our Simeox product for airway clearance treatment.
+Added: Our leading portfolio of innovative POCs is designed to deliver high output ratio-to-weight, meaningful sound suppression and has among the longest run times in the industry so that we can meet the needs of patients across a variety of disease states.
We are positioned in the market as both a medical technology company and as a home medical equipment provider that is accredited in all 50 states in the United States with a significant patient, prescriber and provider reach.
−Removed: Our products are sold internationally through distributors and medical equipment companies outside of the United States and through direct patient and prescriber sales, as well as resellers and home medical equipment companies in the United States.
−Removed: We derive the majority of our revenue from the sale and rental of our Inogen One and Rove systems and related accessories to patients, insurance carriers, home healthcare providers, resellers, and distributors, including our private label partner.
+Added: Our products are sold in the United States through direct patient and prescriber sales, as well as resellers and home medical equipment companies, and internationally through distributors and medical equipment companies.
+Added: We derive the majority of our revenue from the sale and rental of our Inogen One and Rove systems and related accessories to patients, insurance carriers, home healthcare providers, resellers, and distributors, including our private label collaborator.
We sell multiple configurations of our Inogen One ® , Rove and Inogen At Home systems with various batteries, accessories, warranties, power cords, and language settings.
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To accomplish this goal, we intend to:
−Removed: • Optimize our domestic direct-to-consumer sales and prescriber sales teams and increase productivity.
−Removed: We have a continued focus on the prescriber sales force initiative, which markets directly to physicians, gaining the prescription at initiation and maximizing the number of months of billing for long-term oxygen treatment.
−Removed: Also, as part of our growth plans, we expect to continue to expand sales capacity by focusing on increased productivity driven by improved sales management discipline, insights-informed tools, and optimized patient lead generation.
−Removed: • Expand our rental revenues.
−Removed: We are evolving our operating model to focus the enhanced prescriber and direct-to-consumer sales teams to drive increased rental revenue by establishing relationships with the prescriber through a consistent cadence of contact.
• Expand our domestic HME provider and reseller network.
−Removed: We have continued focus on our domestic business-to-business partnerships, including relationships with distributors, key accounts, resellers, our private label partner, and traditional HME providers.
+Added: We remain focused on our domestic business-to-business partnerships, including relationships with distributors, key accounts, resellers, our private label collaborator, and traditional HME providers.
We offer patient-preferred, low total cost of ownership products to help providers convert their businesses to a non-delivery POC business model.
+Added: market represents a main opportunity for growth as we believe that the POC adoption is still in a low penetration rate.
• Increase international business-to-business adoption.
−Removed: Although our main growth opportunity remains POC adoption in the United States given what we still believe is a relatively low penetration rate, we believe there is a sizable international market opportunity, particularly in Europe where there is existing oxygen reimbursement for respiratory conditions.
−Removed: In order to take advantage of these international markets, we have partnered with distributors who serve those markets and key customers in them.
−Removed: We additionally have an Inogen base of operations for sales and customer service in the Netherlands, and use a contract manufacturer, Foxconn, located in the Czech Republic to support the majority of our European sales volumes.
−Removed: • Invest in our oxygen product offerings to develop innovative products and expand clinical evidence .
−Removed: We incurred $20.8 million, $21.9 million and $16.6 million in 2023, 2022 and 2021, respectively, in research and development expenses, and we intend to continue to make such investments in the foreseeable future.
−Removed: We launched the Inogen ® Rove 6 TM , our latest portable oxygen concentrator, in December 2022 in the EU and UK.
−Removed: We have also received U.S.
−Removed: Food and Drug Administration (FDA) 510(k) clearance for the Inogen ® Rove 4 TM that will be launched in 2024.
−Removed: The Inogen Rove 6 weighs 4.8 pounds and produces 1,260 ml per minute of oxygen output with very quiet operations at 37 dBA and long battery life at 6 hours and 15 minutes for a single battery and up to 12 hours and 45 minutes for a double battery, as well as improvements to provide ease-of-use and improvements to design in compliance to European Union medical device regulation (MDR) standards.
−Removed: The FDA clearance of Inogen Rove 6 was received June 30, 2023 and launched in the U.S.
−Removed: market in July 2023.
−Removed: The Inogen Rove 6 is the first portable oxygen concentrator with an 8-year expected service life.
−Removed: The 8-year expected service life also extends to the Inogen One G5 ® portable oxygen concentrators.
+Added: We continue to believe there is a sizable international market opportunity, particularly in Europe where there is existing oxygen reimbursement for respiratory conditions.
+Added: In order to take advantage of these international markets, we have partnered with distributors who serve key customers in those markets.
+Added: We additionally have an Inogen base of operations for sales and customer service in the Netherlands along with sales representatives based in focus European countries, and use a contract manufacturer, Foxconn, located in the Czech Republic to support the majority of our European sales volumes.
+Added: We are also focused on expanding in the Asia-Pacific region and Latin America where we have added sales representatives to set up new distributors in promising markets.
+Added: • Improve our domestic direct-to-consumer sales and prescriber sales teams and increase productivity.
+Added: We are continuing to focus on the patient first initiative, which involves cross-training of sales representatives to execute cash sales and insurance rental.
+Added: Additionally, we expect to continue to focus on increased productivity driven by improved sales management discipline, insights-informed tools, and optimized patient lead generation with a downsized direct-to-consumer sales team.
+Added: • Optimize our rental revenues.
+Added: We continue to evolve our operating model to focus the enhanced sales teams to drive increased rental revenue by establishing relationships with the prescriber through a consistent cadence of contact.
+Added: We continue to evaluate our hospital pilot program, which targets hospitals and practitioners to access patients earlier in their care pathway.
+Added: • Invest in our product offerings to develop innovative products and expand clinical evidence .
+Added: We incurred $21.6 million, $20.8 million and $21.9 million in 2024, 2023 and 2022, respectively, in research and development expenses, and we intend to continue to make similar investments in the foreseeable future.
+Added: We launched the Inogen ® Rove 4 , our latest portable oxygen concentrator, in the U.S.
+Added: and EU markets in October 2024, as well as in the UK in December 2024.
+Added: The Inogen Rove 4 weighs 2.9 pounds and produces 840 ml per minute of oxygen output with quiet operations at 39 dBA and long battery life at 3 hours for a single battery, 4 hours and 15 minutes on our new intermediate battery, and up to 5 hours and 45 minutes for a double battery, as well as improvements to provide ease-of-use and improvements to design in compliance with MDR standards.
+Added: The Inogen Rove 4 is our first POC to launch with three battery options.
+Added: The Inogen Rove 4 has an 8-year expected service life.
+Added: The 8-year expected service life also extends to the Inogen One G5 ® and Inogen ® Rove 6 portable oxygen concentrators.
We launched the Inogen One G5 in 2019.
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We estimate that the Inogen Rove 6 and Inogen One G5 are each suitable for over 90% of ambulatory long-term oxygen therapy patients based on our analysis of the patients who have contacted us and their clinical needs.
−Removed: Inogen Connect, our connectivity platform on our Inogen One G4 ® and Inogen One G5, and Inogen Rove 6 products in the United States and Canada, is compatible with Apple and Android platforms and includes patient features such as purity status, battery life, product support functions, notification alerts, and remote software updates.
−Removed: We plan to also invest in clinical studies to evaluate expected improvements in clinical, economic and patient reported outcomes associated with the use of our products as part of our efforts to drive payor and prescriber advocacy for our products.
+Added: Inogen Connect, our connectivity platform is available on our Inogen Rove 4, Inogen One G4 ® , Inogen One G5, and Inogen Rove 6 products in the United States and Canada, is compatible with Apple and Android platforms and includes patient features such as purity status, battery life, product support functions, notification alerts, and remote software updates.
+Added: We plan to also continue to invest in clinical studies to evaluate expected improvements in clinical, economic and patient reported outcomes associated with the use of our products as part of our efforts to drive payor and prescriber advocacy for our products.
• Expand our product offerings and indications for use.
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These products would include innovations that strengthen our offerings in COPD, as well as future innovations that differentiate beyond devices to allow patients and clinicians to better manage respiratory disease with advanced portable oxygen concentrators with digital health value added services, expansion of use to hypercapnia, shortness-of-breath, and to other related disease indications.
−Removed: On September 14, 2023, we completed the acquisition of all of the issued and outstanding capital stock of Physio-Assist SAS (Physio-Assist) and its wholly-owned subsidiary PhysioAssist GmbH.
−Removed: Simeox, from Physio-Assist, is a technology-enabled airway clearance and mucus management device predominantly aimed at treating bronchiectasis which is a condition that presents as the lung’s bronchi are damaged and widened, in patients with cystic fibrosis or chronic obstructive pulmonary disease.
+Added: Our Simeox product is a technology-enabled airway clearance and mucus management device predominantly aimed at serving patients with bronchiectasis which is a condition that presents as the lung’s bronchi are damaged and widened in patients with cystic fibrosis or COPD.
Simeox is used in pulmonary rehabilitation centers as well as at home.
−Removed: Simeox has been cleared under CE mark in the EU and is currently being sold in Europe, Asia, and the Middle East.
−Removed: Inogen will leverage its commercial infrastructure and capabilities to continue marketing the device in these geographies while pursuing U.S.
−Removed: regulatory approvals.
−Removed: We have been developing and refining the manufacturing of our Inogen One systems since 2004.
−Removed: While nearly all of our manufacturing and assembly processes were originally outsourced, assembly of the compressors, sieve beds, concentrators and certain manifolds were brought in-house in order to improve quality control and reduce cost.
−Removed: In support of our European sales, we use a contract manufacturer located in the Czech Republic to manufacture high volume products and perform product repairs to improve delivery to our European accounts.
−Removed: We also use lean manufacturing practices to maximize manufacturing efficiency.
−Removed: We rely on third-party manufacturers to supply several components of our products.
−Removed: We have elected to source certain key components from single sources of supply, including our batteries, motors, valves, columns, and some molded plastic components.
−Removed: In some cases, maintaining a single source of supply can allow us to control production costs and inventory levels and to manage component quality, but also may lead to supply availability risks, and means our ability to maintain production is dependent on these single source suppliers, which may put us at an increased risk of supply disruption, as we have seen from the production halt we implemented in early January 2022 through early February 2022.
−Removed: In order to help mitigate against the risks related to a single source of supply, for certain components we qualify alternative suppliers and develop contingency plans for responding to disruptions.
−Removed: However, a continued reduction or halt in supply from one of these single-source suppliers, any dual-sourced suppliers or any other limited source suppliers with similar sub-component suppliers could limit or prevent our ability to manufacture our products or devices until one or more sufficient replacement suppliers is found and qualified.
−Removed: For additional discussion of potential risks related to our manufacturing and raw materials, please see the risk factor entitled “ We obtain some of the components, subassemblies and completed products included in our products from a single source or a limited group of manufacturers or suppliers, and in some cases those components are available in only limited supplies from limited manufacturers or suppliers, and the partial or complete loss of one or more of these manufacturers or suppliers could cause significant production delays or stoppages, an inability to meet customer demand, substantial loss in revenue, and an adverse effect on our financial condition and results of operations.
−Removed: Historically, we have generated a majority of our revenue from sales and rentals to customers in the United States.
−Removed: In the years ended December 31, 2023, 2022 and 2021, approximately 28.3%, 26.8% and 22.2%, respectively, of our total revenue was from sales to customers outside the United States, primarily in Europe.
−Removed: Approximately 77.7%, 70.9% and 74.1% of the non-U.S.
−Removed: revenue for the years ended December 31, 2023, 2022 and 2021, respectively, were invoiced in Euros with the remainder invoiced in United States dollars.
−Removed: We have sold our products in a total of 62 international countries and overseas regions outside the United States through our wholly-owned subsidiaries, distributors or directly to large “house” accounts, which include gas companies, HME oxygen providers, and resellers.
−Removed: In those instances, we sell to and bill the distributor or “house” accounts directly, leaving responsibility for the patient billing, support and clinical setup to the local provider.
−Removed: Cost reduction initiatives
−Removed: During 2023, we implemented certain operational efficiency and cost-savings initiatives intended to align our resources with our product strategy, reduce our operating expense, and manage our cash flows.
−Removed: These cost efficiency initiatives include targeted workforce reductions, centralizing manufacturing activities, and outsourcing certain back-office activities.
−Removed: The efficiency and cost-savings initiatives were designed to reduce cost of revenue and operating expense and enable us to efficiently align our resources in areas providing the greatest benefit.
−Removed: Sales revenue
−Removed: Our future financial performance will be driven in part by the growth in sales of our portable oxygen concentrators, Simeox airway clearance, and, to a lesser extent, sales of batteries, other accessories, and our Inogen At Home stationary oxygen concentrators.
−Removed: We plan to grow our system sales in the coming years through multiple strategies including:
−Removed: improving sales force productivity, hiring additional sales representatives directly, investing in consumer and physician awareness and advocacy through increased sales and marketing efforts, expanding our clinical evidence, expanding our sales infrastructure and efforts outside of the United States, expanding our business-to-business sales through key strategic partnerships, and enhancing our product offerings through additional product launches.
−Removed: While we believe HME providers are still in the process of converting their business model to a non-delivery model through the purchase of POCs, growth has been challenged due to HME restructuring efforts, lack of access to available credit, provider capital expenditure constraints, and risk of potential changes in reimbursement rates.
−Removed: Our direct-to-consumer sales processes involve numerous interactions with the individual patient, their physician and the physician’s staff, and includes an in-depth analysis and review of our product, the patient’s diagnosis and prescribed oxygen therapy, including procuring an oxygen prescription.
−Removed: The patient may consider whether to finance the product through an Inogen-approved third party or purchase the equipment.
−Removed: Product is not deployed until both the prescription and payment are secured.
−Removed: Once a full system is deployed, the patient has 30 calendar days to return the product, subject to the payment of a processing and handling fee.
−Removed: Approximately 6-11% of consumers who purchase a system return the system during this 30-day return period.
−Removed: Our business-to-business efforts are focused on selling to distributors, HME oxygen providers, our private label partner, and resellers who are based inside and outside of the United States.
−Removed: This process involves interactions with various key customer stakeholders including sales, purchasing, product testing, and clinical personnel.
−Removed: Businesses that have patient demand that can be met with our products place purchase orders to secure product deployment.
−Removed: This may be influenced based on outside factors, including the result of tender offerings, changes in insurance plan coverage or reimbursement rates, business restructuring activities toward a non-delivery model, capital constraints, mergers and acquisitions, and overall changes in the net oxygen therapy patient populations.
−Removed: As a result of these factors, product purchases can be subject to changes in demand by customers.
−Removed: We sold approximately 130,500 systems in 2023, 170,500 systems in 2022 and 175,800 systems in 2021.
−Removed: The decline in the current period was caused primarily by lower direct-to-consumer sales driven by fewer inside sales representatives as well as lower sales in the domestic and international business-to-business channels.
−Removed: We continue to focus on optimizing profitability in our direct-to-consumer channel, driving sales productivity with an efficiently scaled sales organization.
−Removed: Rental revenue
−Removed: Our rental process involves numerous interactions with the individual patient, their physician and the physician’s staff.
−Removed: The process includes an in-depth analysis and review of our product, the patient’s diagnosis and prescribed oxygen therapy, and their medical history to confirm the appropriateness of our product for the patient’s oxygen therapy and compliance with Medicare and private payor billing requirements, which often necessitates additional physician evaluation and/or testing for oxygen.
−Removed: Once the product is deployed, the patient receives instruction on product use and may receive a clinical titration from our licensed staff to confirm the product meets the patient’s medical oxygen needs prior to billing.
−Removed: As a result, the period of time from initial contact with a patient to billing can vary significantly and be up to one month or longer.
−Removed: CMS adopted additional changes to the administrative requirements to dispense and bill for oxygen therapy which may have reduced the administrative burden and increased patient access to our products.
−Removed: Rental revenue increased in 2023 compared to 2022, primarily due to a greater number of patients on service and higher Medicare reimbursement rates.
−Removed: Medicare reimbursement rates for oxygen therapy have increased annually each January as they are subject to Consumer Price Index adjustments.
−Removed: We plan to add new rental patients on service in future periods through multiple strategies, including expanding our prescriber sales teams, expanding our direct-to-consumer marketing efforts, investing in patient and physician awareness and advocacy, expanding clinical evidence, and securing additional insurance contracts.
−Removed: A portion of rental patient population operates in a capped rental period during which no additional reimbursement is allowed unless additional criteria are met.
−Removed: This capped period begins after month 36 and continues until month 60.
−Removed: The ratio of billable patients to total patients on service is critical to maintaining rental revenue growth as patients on service increase.
−Removed: Medicare has noted a certain percentage of beneficiaries, approximately 25%, based on their review of Medicare claims, reach the 36 th month of eligible reimbursement and enter the post-36 month capped rental period.
−Removed: 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.
−Removed: We had approximately 51,900, 45,600 and 42,900 oxygen rental patients as of December 31, 2023, 2022 and 2021, respectively.
−Removed: Management focuses on patients on service as a leading indicator of likely future rental revenue;
−Removed: however, actual rental revenue recognized is subject to a variety of other factors, including billable patients as a percentage of patients on service, reimbursement levels by payor, patient location, the number of capped patients, write-offs for uncollectible balances, and rental revenue adjustments.
−Removed: Reimbursement
−Removed: We rely significantly on reimbursement from Medicare and private payors, including Medicare Advantage plans and Medicaid, for our rental revenue.
−Removed: For the years ended December 31, 2023, 2022 and 2021, approximately 67.7%, 77.0% and 81.9%, respectively, of our rental revenue was derived from Medicare’s traditional fee-for-service reimbursement programs.
−Removed: A discussion of third-party reimbursement is contained in Item 1, Third-party reimbursement in this Annual Report on Form 10-K.
−Removed: We believe our sales may be impacted by seasonal factors.
−Removed: For example, we typically experience higher total sales in the second and third quarters, as a result of consumers traveling and vacationing during warmer weather in the spring and summer months, but this may vary year-over-year.
−Removed: As more home medical equipment (HME) providers adopt portable oxygen concentrators in their businesses, we expect our historical seasonality in the domestic business-to-business channel could change as well, which was previously influenced mainly by consumer buying patterns.
−Removed: Direct-to-consumer sales seasonality may also be impacted by the number of sales representatives and the amount of marketing spend in each quarter.
−Removed: Basis of presentation
−Removed: The following describes the line items set forth in our consolidated statements of comprehensive loss.
−Removed: We classify our revenue in two main categories:
−Removed: sales revenue and rental revenue.
−Removed: There will be fluctuations in mix between business-to-business sales, direct-to-consumer sales, and rental revenue from period-to-period.
−Removed: Product selling prices and gross margins may fluctuate based on revenue channel mix, as we introduce new products, our product costs change, we have changes in purchase volumes, and as currency variations occur.
−Removed: For example, the higher costs for semiconductor chips had a negative impact on our gross margin, and we expect that will continue through the first half of 2024.
−Removed: Additionally, fluctuations in the channel mix could cause variability in our gross margins, as direct-to-consumer sales and rental revenue have higher margins than the business-to-business channels.
−Removed: Quarter-over-quarter results may vary due to seasonality in both the international and domestic markets, as discussed in Item 1.
−Removed: Seasonality and elsewhere in this Annual Report on Form 10-K.
−Removed: Sales revenue
−Removed: Our sales revenue is primarily derived from the sale of our Rove, Inogen One, and Inogen At Home systems in addition to our related accessories to individual consumers, our private label partner, HME providers, distributors, and resellers.
−Removed: Sales revenue is classified into two areas:
−Removed: business-to-business sales and direct-to-consumer sales.
−Removed: Generally, our direct-to-consumer sales have higher gross margins than our business-to-business sales.
−Removed: Rental revenue
−Removed: Our rental revenue is primarily derived from the rental of our Inogen One and Inogen At Home systems to patients through reimbursement from Medicare, private payors and Medicaid, which typically also includes a patient responsibility component for patient co-insurance and deductibles.
−Removed: Rental revenue increased in 2023, primarily due to higher patients on service and higher Medicare reimbursement rates.
−Removed: We expect that our rental revenue will be impacted by the number of our sales representatives, reimbursement rate changes, the level of and response from potential customers to direct-to-consumer marketing spend, product launches, the number of billable patients and denial rates, and other uncontrollable factors such as changes in the market and competition.
−Removed: Cost of revenue
−Removed: Cost of sales revenue
−Removed: Cost of sales revenue consists primarily of costs incurred in the production process, including component materials, assembly labor and overhead, warranty expense, provisions for slow-moving and obsolete inventory, rework and delivery costs for items sold.
−Removed: Labor and overhead expenses consist primarily of personnel-related expenses, including wages, bonuses, benefits, and stock-based compensation for manufacturing, logistics, repair, manufacturing engineering, and quality assurance employees and temporary labor.
−Removed: Cost of sales revenue also includes manufacturing freight in, depreciation expense, facilities costs, and materials.
−Removed: Provisions for warranty obligations are included in cost of sales revenue and are provided for at the time of revenue recognition.
−Removed: The impact of supply chain disruptions began negatively impacting our cost of sales revenue starting in the third quarter of 2021 and is expected to continue to do so through the first half of 2024.
−Removed: The supply chain constraints are primarily associated with semiconductor chips used in our batteries and printed circuit boards which are components of our POCs.
−Removed: For these reasons, we expect sales gross margin percentage to fluctuate over time based on the sales channel mix, product mix, and changes in average selling prices and manufacturing cost per unit.
−Removed: Cost of rental revenue
−Removed: Cost of rental revenue consists primarily of depreciation expense, consumable disposables, logistics costs, and service costs for rental patients, including rework costs, material, labor, and freight.
−Removed: Rental gross margin percentage could fluctuate due to changes in depreciation expense, cost to service and maintain the rental fleet as well as the percentage of billable patients as a percentage of patients on service.
−Removed: Operating expense
−Removed: Research and development
−Removed: Our research and development expense consists primarily of personnel-related expenses, including wages, bonuses, benefits, and stock-based compensation for research and development, engineering, and medical affairs employees.
−Removed: It also includes facility costs, laboratory supplies, product development materials, consulting fees, clinical studies costs, and testing costs for new product launches as well as enhancements to existing products.
−Removed: We have made substantial investments in research and development since our inception.
−Removed: Our research and development efforts have focused primarily on development and commercialization of new and existing products.
−Removed: We plan to continue to invest in research and development activities to stay at the forefront of patient preference in oxygen therapy, including significant investments in clinical research.
−Removed: We continue to invest in our engineering and technology teams to support our new and enhanced product research and development efforts and manufacturing improvements.
−Removed: We will also focus research and development efforts on broadening our product portfolio.
−Removed: Sales and marketing
−Removed: Our sales and marketing expense primarily supports our direct-to-consumer sales and rental strategy and consists mainly of personnel-related expenses, including wages, bonuses, commissions, benefits, and stock-based compensation for sales, marketing, customer service, rental intake, and clinical service employees.
−Removed: It also includes expenses for media and advertising, printing, informational kits, dues and fees, credit card fees, recruiting, training, sales promotional activities, travel and entertainment expenses as well as allocated facilities costs.
−Removed: Going forward, our plan is to optimize our sales capacity while focusing on increased productivity, improved sales personnel and lead distribution systems, and improved training.
−Removed: We expect to continue to invest in sales and marketing by focusing on increased productivity driven by improved sales management discipline, insights-informed tools, and optimized patient lead generation as well as increasing our rental patient support infrastructure as our patient and customer base increases.
−Removed: General and administrative
−Removed: Our general and administrative expense consists primarily of personnel-related expenses, including wages, bonuses, benefits, and stock-based compensation for employees in our compliance, finance, medical billing, order intake, regulatory, legal, human resources, and information technology departments as well as facilities costs, and board of directors’ expenses, including stock-based compensation.
−Removed: In addition, general and administrative expense includes professional services, such as legal, patent registration and defense costs, insurance, consulting and accounting services, including audit and tax services, and travel and entertainment expenses.
−Removed: General and administrative expense also includes one-time costs, such as restructuring, acquisition expenses, or changes in the fair value of the earnout liability.
−Removed: We expect general and administrative expense to increase in future periods as the number of administrative personnel grows and we continue to introduce new products, broaden our customer base and grow our business.
−Removed: General and administrative expense will increase in absolute dollars as we continue to invest in corporate infrastructure to support our growth including personnel-related expenses, professional services fees, and compliance costs associated with operating as a public company.
−Removed: Loss on disposal of intangible asset
−Removed: Our loss on disposal of intangible asset consists of the disposal of intangible assets, fixed assets, construction in process and inventories in accordance with ASC 360-10 — Long-lived assets.
−Removed: Impairment charges
−Removed: Our long-lived assets, including intangible assets and goodwill are required to be tested for impairment if an event occurs or circumstances change that indicate that the fair value of the entity may be below its carrying amount (a triggering event).
−Removed: We consider relevant events and circumstances that affect its fair value or carrying amount.
−Removed: Other income (expense), net
−Removed: Our other income (expense), net consists primarily of foreign currency gains and (losses), sublease income, and interest income earned on cash equivalents and marketable securities.
−Removed: We account for income taxes in accordance with ASC 740— Income Taxes .
−Removed: Under ASC 740, income taxes are recognized for the amount of taxes payable or refundable for the current period and deferred tax liabilities and assets are recognized for the future tax consequences of transactions that have been recognized in our consolidated financial statements or tax returns.
−Removed: A valuation allowance is provided when it is more likely than not that some portion, or all, of the deferred tax asset will not be realized.
−Removed: We account for uncertainties in income tax in accordance with ASC 740-10— Accounting for Uncertainty in Income Taxes .
−Removed: ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
−Removed: This accounting standard also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
−Removed: The accounting for stock-based compensation will increase or decrease our effective tax rate based upon the difference between our stock-based compensation expense and the deductions taken on our U.S.
−Removed: tax return, which depends upon the stock price at the time of employee option exercise or award vesting.
−Removed: We recognize excess tax benefits or deficiencies on a discrete basis, and we anticipate our effective tax rate will vary from year-to-year depending on our stock price in each period.
+Added: Simeox has been cleared under CE mark in the EU and is currently being sold in Europe and several other markets.
+Added: In addition, we obtained 510(k) clearance for Simeox in December 2024 and plan to leverage our commercial infrastructure and capabilities to market the device in the United States, while continuing to market it in the other geographies.
+Added: We intend to commercialize Simeox through the purchase of the product initially, followed by recurring sales of device disposables.
+Added: We will begin efforts to obtain reimbursement coverage in the first quarter of 2025 for the Simeox product in the U.S.
Results of operations
2 unchanged sentences
Change 2024 vs.
−Removed: (amounts in thousands)
+Added: (dollar amounts in thousands)
Sales revenue
1 unchanged sentence
Total revenue
−Removed: Sales revenue decreased $68.9 million for the year ended December 31, 2023 from the year ended December 31, 2022, a decrease of 21.5% from the comparable year.
−Removed: The decrease was primarily attributable to a decrease in domestic direct-to-consumer sales as well as lower domestic and international business-to-business sales.
−Removed: We sold approximately 130,500 oxygen systems during the year ended December 31, 2023 compared to approximately 170,500 oxygen systems sold during the year ended December 31, 2022, a decrease of 23.5%.
−Removed: Rental revenue increased $7.4 million for the year ended December 31, 2023 from the year ended December 31, 2022, or an increase of 13.0% from the comparable year.
−Removed: The increase in rental revenue was primarily related to higher rental patients on service and higher Medicare reimbursement rates, partially offset by increased rental revenue adjustments.
−Removed: (amounts in thousands)
−Removed: Years ended December 31,
+Added: Sales revenue increased $27.1 million for the year ended December 31, 2024 from the year ended December 31, 2023, an increase of 10.8% from the prior year.
+Added: The increase was primarily attributable to higher international and domestic business-to-business sales.
+Added: We sold approximately 157,500 oxygen systems during the year ended December 31, 2024 compared to approximately 130,500 oxygen systems sold during the year ended December 31, 2023, an increase of 20.7%.
+Added: Rental revenue decreased $7.1 million for the year ended December 31, 2024 from the year ended December 31, 2023, or a decrease of 11.1% from the prior year.
+Added: The decrease in rental revenue was primarily related to a higher mix of lower private-payor reimbursement rates.
+Added: (dollar amounts in thousands)
Change 2024 vs.
5 unchanged sentences
Total revenue
−Removed: Domestic business-to-business sales decreased 23.1% for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to our key customers facing challenges related to capital deployment and cost of borrowing as well as competitive pricing activities.
−Removed: International business-to-business sales decreased 11.6% for the year ended December 31, 2023 compared to the year ended December 31, 2022, mostly driven by intentional focus in the comparative period in 2022 on fulfilling European orders in our international business-to-business sales channel prior to the EU MDD certificate expiration.
−Removed: In the year ended December 31, 2023, sales in Europe as a percentage of total international sales revenue decreased to 85.3% versus 86.9% in the comparative period in 2022.
−Removed: Domestic direct-to-consumer sales decreased 28.0% for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by lower volume due to lower sales representative headcount and lower marketing spend, partially offset by increased average selling prices versus the comparative period in the prior year.
−Removed: Domestic direct-to-consumer rentals increased 13.0% for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to an increase in rental patients on service and increased Medicare reimbursement rates due to the inflation adjustment effective January 1, 2023, partially offset by increased rental revenue adjustments.
+Added: Domestic business-to-business sales increased 26.2% for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to the result of increased demand from new customers and resellers.
+Added: International business-to-business sales increased 31.1% for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to an increase in demand from our partners in Europe and new customers.
+Added: In the year ended December 31, 2024, sales in Europe as a percentage of total international sales revenue slightly decreased to 85.0% versus 85.3% in 2023.
+Added: Domestic direct-to-consumer sales decreased 18.8% for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by lower volume due to lower sales representative headcount, partially offset by increased average selling prices versus the prior year.
+Added: Domestic direct-to-consumer rentals decreased 11.1% for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily related to a higher mix of lower private-payor reimbursement rates.
Cost of revenue and gross profit
1 unchanged sentence
Change 2024 vs.
−Removed: (amounts in thousands)
+Added: (dollar amounts in thousands)
Cost of sales revenue
7 unchanged sentences
Total gross margin percentage
−Removed: Cost of sales revenue decreased $39.2 million for the year ended December 31, 2023 from the year ended December 31, 2022, a decrease of 19.8% from the comparable year, due primarily to lower sales volumes, lower premiums paid for components and lower labor and overhead costs.
+Added: Cost of sales revenue decreased $10.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, a decrease of 6.3%, due primarily to lower premiums paid for raw material components, partially offset by an increase in the numbers of systems sold.
The year ended December 31, 2024 included $0.2 million of material cost premiums associated with open-market purchases of semiconductor chips used in our batteries and POCs compared to $14.2 million in the year ended December 31, 2023.
−Removed: Cost of rental revenue increased $4.4 million for the year ended December 31, 2023 from the year ended December 31, 2022, an increase of 17.1% from the comparable year.
−Removed: The increase in cost of rental revenue was primarily attributable to an increase in total patients on service, which led to increased rental asset depreciation and service costs.
+Added: Cost of rental revenue increased $2.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, an increase of 6.5%.
+Added: The increase in cost of rental revenue was primarily attributable to an increase in service costs.
Cost of rental revenue included $12.6 million of rental asset depreciation for the year ended December 31, 2024 compared to $12.9 million for the year ended December 31, 2023.
−Removed: Gross margin on sales revenue decreased to 37.0% for the year ended December 31, 2023 from 38.3% for the year ended December 31, 2022.
−Removed: The decrease was primarily due to a shift in channel mix, with a higher percentage of units sold through the business-to-business channels versus the direct-to-consumer channel.
−Removed: The decrease was partially offset by lower premiums paid for components and labor and overhead costs.
+Added: Gross margin on sales revenue increased to 46.7% for the year ended December 31, 2024 from 37.0% for the year ended December 31, 2023.
+Added: The increase was primarily due to lower material cost premiums associated with open-market purchases of semiconductor chips used in our POCs and operational efficiencies, partially offset by a change in sales mix towards increased business-to-business sales.
Total worldwide business-to-business sales revenue accounted for 72.0% of total sales revenue in the year ended December 31, 2024 versus 61.8% in the year ended December 31, 2023.
−Removed: Gross margin on rental revenue decreased to 52.7% for the year ended December 31, 2023 from 54.3% for the year ended December 31, 2022, primarily due to higher rental asset depreciation expense and servicing costs per patient on service, partially offset by higher Medicare reimbursement rates.
+Added: Gross margin on rental revenue decreased to 43.3% for the year ended December 31, 2024 from 52.7% for the year ended December 31, 2023, primarily due to a higher mix shift of private-payor reimbursement, lower net revenue per rental patient as a result of a decrease in the percentage of patients billed compared to total patients on service, and higher service costs.
Research and development expense
1 unchanged sentence
Change 2024 vs.
−Removed: (amounts in thousands)
+Added: (dollar amounts in thousands)
Research and development expense
−Removed: Research and development expense decreased $1.1 million for the year ended December 31, 2023 from the year ended December 31, 2022, representing a decrease of 5.0% from the comparable period.
−Removed: This was due primarily to a $6.8 million decrease in amortization costs of intangible assets, partially offset by an increase of $3.5 million in product development expenses and $1.4 million of personnel-related expenses.
+Added: Research and development expense increased $0.8 million for the year ended December 31, 2024 from the year ended December 31, 2023, representing an increase of 3.7%.
+Added: This was due primarily to a $2.3 million increase in amortization costs of intangible assets related to the Physio-Assist acquisition, partially offset by a $1.6 million decrease in product development costs.
Sales and marketing expense
1 unchanged sentence
Change 2024 vs.
−Removed: (amounts in thousands)
+Added: (dollar amounts in thousands)
Sales and marketing expense
−Removed: Sales and marketing expense decreased $13.7 million for the year ended December 31, 2023 from the year ended December 31, 2022, a decrease of 11.3% from the comparable period.
−Removed: This was primarily due to decreases of $9.5 million in personnel-related expenses, $6.1 million in media and advertising costs, and $2.1 million in credit card and financing fees, partially offset by an increase of $3.4 million in consulting fees.
−Removed: In the year ended December 31, 2023, we spent $27.1 million in media and advertising costs versus $33.3 million in the comparative period in 2022.
+Added: Sales and marketing expense decreased $4.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, a decrease of 3.8%.
+Added: This was primarily due to decreases of $8.5 million in consulting fees, $1.9 million in dues, fees and licenses, and $1.6 million in credit card and financing fees, partially offset by an increase of $5.1 million in media and advertising costs, $1.5 million in personnel-related expenses, and $0.9 million in travel costs.
+Added: In the year ended December 31, 2024, we spent $32.2 million in media and advertising costs versus $27.1 million in 2023.
General and administrative expense
1 unchanged sentence
Change 2024 vs.
−Removed: (amounts in thousands)
+Added: (dollar amounts in thousands)
General and administrative expense
−Removed: General and administrative expense increased $31.4 million for the year ended December 31, 2023 from the year ended December 31, 2022, an increase of 71.4% from the comparable period.
−Removed: The increase was primarily attributable to increases of $22.2 million related to the change in fair value of the earnout liabilities, $3.4 million in restructuring and severance costs, $3.4 million for CEO transition costs, $2.9 million of consulting fees, $2.2 million in bad debt expense, $1.7 million in acquisition-related expenses incurred as part of business development activities, and $1.1 million in dues, fees and licenses.
−Removed: This was partially offset by a decrease of $4.1 million in personnel-related expenses.
−Removed: In the year ended December 31, 2023, we had an expense of $6.8 million from the change in fair value of the earnout liability versus a benefit of $15.4 million in the comparative period in 2022.
−Removed: Loss on disposal of intangible asset
−Removed: Years ended December 31,
−Removed: Change 2023 vs.
−Removed: (amounts in thousands)
−Removed: Loss on disposal of intangible asset
−Removed: Loss on disposal of intangible asset decreased $52.2 million for the year ended December 31, 2023 from the year ended December 31, 2022, a decrease of 100.0% from the comparable period.
−Removed: On December 19, 2022, we disposed of the technology intangible asset previously acquired from New Aera related to the TAV technology by ceasing development of such asset and abandoning the asset.
+Added: General and administrative expense decreased $2.7 million for the year ended December 31, 2024, from the year ended December 31, 2023, a decrease of 3.6%, primarily due to decreases of $3.8 million in the change in fair value of the earnout liability, $3.4 million in restructuring-related costs, $2.5 million in chief executive officer transition costs and $1.6 million in acquisition-related expenses.
+Added: These decreases were partially offset by increases of $6.9 million in personnel-related expenses and $1.1 million in dues, fees and licenses.
Impairment charges
1 unchanged sentence
Change 2024 vs.
−Removed: (amounts in thousands)
+Added: (dollar amounts in thousands)
Goodwill impairment
−Removed: Impairment charges for the year ended December 31, 2023 resulted from a drop in our public stock price and resulted in impairment charges to goodwill.
−Removed: Other income (expense)
+Added: There were no impairment charges for the year ended December 31, 2024.
+Added: Impairment charges for the year ended December 31, 2023 resulted from a drop in our public stock price, which resulted in impairment charges to goodwill.
+Added: Other income, net
Years ended December 31,
Change 2024 vs.
−Removed: (amounts in thousands)
−Removed: Interest income
−Removed: Other income (expense)
+Added: (dollar amounts in thousands)
+Added: Interest income, net
+Added: Other income, net
Total other income, net
−Removed: Total other income, net increased $5.1 million for the year ended December 31, 2023 from the year ended December 31, 2022, an increase of 256.6% from the comparable period.
−Removed: The increase was primarily attributable to an increase of $3.7 million in interest income due to the higher interest rate environment and an increase of $1.0 million in net foreign currency impact.
−Removed: Income tax expense
+Added: Total other income, net decreased $1.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, a decrease of 14.2%.
+Added: The decrease was primarily attributable to a decrease of $1.4 million in interest income due to the lower interest rate environment.
+Added: Income tax expense (benefit)
Years ended December 31,
Change 2024 vs.
−Removed: (amounts in thousands)
−Removed: Income tax expense
+Added: (dollar amounts in thousands)
+Added: Income tax expense (benefit)
Effective income tax rate
−Removed: Income tax expense decreased $0.4 million for the year ended December 31, 2023 from the year ended December 31, 2022.
+Added: Income tax expense (benefit) decreased $0.7 million for the year ended December 31, 2024 from the year ended December 31, 2023.
We continued to record a valuation allowance on the use of deferred tax assets in the current and prior periods.
−Removed: Income taxes in the current and prior period were attributable to foreign taxes and minimum state taxes.
−Removed: Our effective tax rate for the year ended December 31, 2023 increased compared to the year ended December 31, 2022, primarily due to lower foreign taxes and minimum state taxes.
+Added: The decrease was attributable to foreign taxes.
+Added: Our effective tax rate for the year ended December 31, 2024 increased compared to the year ended December 31, 2023, primarily due to foreign taxes.
Years ended December 31,
Change 2024 vs.
−Removed: (amounts in thousands)
−Removed: Net loss increased $18.7 million for the year ended December 31, 2023 from the year ended December 31, 2022, or an increase of 22.3% from the comparable period.
−Removed: The increase in net loss was primarily related to the goodwill impairment, a reduction in sales revenue and gross profit, and the change in fair value of the earnout liabilities, partially offset by the $52.2 million loss on disposal of an intangible asset in 2022.
+Added: (dollar amounts in thousands)
+Added: Net loss decreased $66.6 million for the year ended December 31, 2024 from the year ended December 31, 2023, or a decrease of 65.0%.
+Added: The decrease in net loss was primarily related to lower goodwill impairment, material cost reductions and higher sales revenue.
Comparison of years ended December 31, 2023 and 2022
A discussion of changes in our results of operations during the year ended December 31, 2023 compared to the year ended December 31, 2022 has been omitted from this Annual Report on Form 10-K but may be found in “Item 7.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 24, 2023, which discussion is incorporated herein by reference and which is available free of charge on the SECs website at www.sec.gov .
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 1, 2024, which discussion is incorporated herein by reference and which is available free of charge on the SECs website at www.sec.gov .
Liquidity and capital resources
As of December 31, 2024, we had cash and cash equivalents of $113.8 million, which consisted of highly liquid investments with a maturity of three months or less.
−Removed: In addition, we held marketable securities of $3.0 million, which had maturities of greater than three months.
−Removed: For the years ended December 31, 2023, 2022 and 2021, we received $1.5 million and $1.7 million and $15.6 million, respectively, in proceeds related to stock option exercises and our employee stock purchase plan.
−Removed: Our principal uses of cash for liquidity and capital resources in the year ended December 31, 2023 consisted of operating activities of $3.2 million as well as cash used in investing activities of $29.6 million for the Physio-Assist acquisition, net of cash acquired, capital expenditures of $27.0 million for additional rental equipment, other property, plant and equipment, intangible assets, and $2.9 million for net purchases of marketable securities.
−Removed: We believe that our current cash, cash equivalents and marketable securities and the cash to be generated from expected product sales and rentals will be sufficient to meet our projected operating and investing requirements for at least the next twelve months.
+Added: For the years ended December 31, 2024, 2023 and 2022, we received $0.8 million, $1.5 million and $1.7 million, respectively, in proceeds related to stock option exercises and our employee stock purchase plan.
+Added: As of December 31, 2024, we had a financing receivable of $6.5 million, which consisted of $1.8 million in current assets and $4.7 million in noncurrent assets.
+Added: Our credit terms are predominately short term in nature;
+Added: however, in certain circumstances, we offer extended payment terms to customers who have not met the payment terms of their original contract.
+Added: Our principal use of our funds for liquidity and capital resources in the year ended December 31, 2024 consisted of cash used in investing activities of $17.1 million for additional rental equipment, other property, plant and equipment and intangible assets, partially offset by cash provided by operating activities of $5.9 million and $2.8 million for net maturities of marketable securities.
+Added: We believe that our current cash, cash equivalents and marketable securities and the cash to be generated from expected product sales and rentals will be sufficient to meet our projected operating and investing requirements for at least the next 12 months.
However, our liquidity assumptions may prove to be incorrect, and we could utilize our available financial resources sooner than we currently expect.
24 unchanged sentences
Effect of exchange rates on cash
−Removed: Net increase (decrease) in cash and cash equivalents
+Added: Net decrease in cash and cash equivalents
(amounts in thousands)
6 unchanged sentences
These cash flows received are partially offset by our use of cash for operating expenses to support the growth of our business.
+Added: Net cash provided by operating activities for the year ended December 31, 2024 consisted primarily of non-cash adjustment items such as depreciation of equipment and leasehold improvements and amortization of intangibles of $21.0 million, provision for sales returns and doubtful accounts of $10.9 million, stock-based compensation expense of $7.4 million, net loss on disposal of rental assets and other assets of $4.5 million, and change in fair value of earnout liability of $3.0 million.
+Added: These adjustment items were partially offset by our net loss of $35.9 million, and an increase in deferred tax assets of $1.2 million.
+Added: The net changes in operating assets and liabilities resulted in a net use of cash of $4.4 million.
Net cash used in operating activities for the year ended December 31, 2023 consisted primarily of our net loss of $102.4 million, partially offset by non-cash adjustment items such as impairment charges of $32.9 million, depreciation of equipment and leasehold improvements and amortization of intangibles of $18.2 million, provision for sales returns and doubtful accounts of $10.7 million, stock-based compensation expense of $7.4 million, change in fair value of earnout liability of $6.8 million, net loss on disposal of rental assets and other assets of $4.5 million, provision for inventory obsolescence and other inventory losses of $2.7 million, and loss on purchase commitments of $2.1 million.
2 unchanged sentences
The net changes in operating assets and liabilities resulted in a net use of cash of $44.7 million.
−Removed: Net cash provided by operating activities for the year ended December 31, 2021 consisted primarily of our non-cash expense items such as depreciation of equipment and leasehold improvements and amortization of our intangibles of $21.6 million, a decrease in deferred tax assets of $14.4 million, provision for sales returns and doubtful accounts of $11.1 million, stock-based compensation expense of $10.9 million, provision for inventory obsolescence and other inventory losses of $2.1 million, and net loss on disposal of rental equipment and other fixed assets of $1.5 million;
−Removed: partially offset by the change in fair value of earnout liability of $11.6 million and our net loss of $6.3 million.
−Removed: The net changes in operating assets and liabilities resulted in a net use of cash of $20.1 million.
Investing activities
−Removed: Net cash used in investing activities generally includes the production and purchase of rental assets, property, plant and equipment, and intangibles to support our expanding business as well as maturities or purchases of marketable securities.
+Added: Net cash used in investing activities generally includes the production and purchase of rental assets, property, plant and equipment, acquisitions, and intangibles to support our expanding business as well as maturities (purchases) of marketable securities.
+Added: For the year ended December 31, 2024, we invested $32.7 million in the purchase of marketable securities, $15.0 million in the production and purchase of rental assets and other property and equipment, and $2.1 million in intangible assets, partially offset by $35.5 million we received from maturities of marketable securities.
For the year ended December 31, 2023, we invested $29.6 million in the Physio-Assist acquisition, net of cash acquired, $26.9 million in purchase of marketable securities, $26.5 million in the production and purchase of rental assets and other property and equipment, and $0.5 million in intangible assets, partially offset by $24.0 million we received in maturities of marketable securities.
For the year ended December 31, 2022, we invested $21.2 million in the production and purchase of rental assets and other property and equipment, partially offset by $10.0 million we received in maturities of marketable securities.
−Removed: For the year ended December 31, 2021, we invested $23.9 million in the production and purchase of rental assets and other property, equipment, and intangible assets as well as $10.0 million in corporate bonds with maturities greater than three months that were classified as marketable securities, partially offset by $19.3 million in maturities of marketable securities.
−Removed: We expend significant manufacturing and production expense in connection with the development and production of our oxygen concentrator products and, in connection with our rental business, we incur expense in the deployment and maintenance of rental equipment to our patients.
+Added: We expend significant manufacturing and production expense in connection with the development and production of our oxygen concentrator and other respiratory care products and, in connection with our rental business, we incur expense in the deployment and maintenance of rental equipment to our patients.
Investments will continue to be required in order to grow our sales and rental revenue and continue to supply and replace rental equipment to our rental patients on service.
1 unchanged sentence
Historically, we have funded our operations through our sales and rental revenue and the issuance of preferred and common stock.
−Removed: For the year ended December 31, 2023, net cash provided by financing activities consisted of $1.5 million from the proceeds received from stock options that were exercised and purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock awards and restricted stock units of $0.5 million.
+Added: For the year ended December 31, 2024, net cash provided by financing activities consisted of $0.8 million from the proceeds received from purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock units of $0.5 million.
For the year ended December 31, 2023, net cash provided by financing activities consisted of $1.5 million from the proceeds received from stock options that were exercised and purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock awards and restricted stock units of $0.5 million.
1 unchanged sentence
Sources of funds
−Removed: Our net cash used in operating activities in the year ended December 31, 2023 was $3.2 million compared to net cash used in operating activities of $37.5 million in the year ended December 31, 2022.
−Removed: As of December 31, 2023, we had cash and cash equivalents of $125.5 million and marketable securities of $3.0 million.
+Added: Our net cash provided by operating activities in the year ended December 31, 2024 was $5.9 million compared to net cash used in operating activities of $3.2 million in the year ended December 31, 2023.
+Added: As of December 31, 2024, we had cash and cash equivalents of $113.8 million.
+Added: On January 25, 2025, we entered into a securities purchase agreement with Yuwell (Hong Kong) Holdings Limited, an affiliate of Jiangsu Yuyue Medical Equipment & Supply Co., Ltd.
+Added: Pursuant to the securities purchase agreement, Yuwell (Hong Kong) Holdings Limited has agreed to purchase 2,626,425 shares of the Company's common stock at a price per share of $10.36, for an aggregate purchase price of approximately $27.2 million.
+Added: The transaction closed on February 21, 2025.
Our principal uses of cash are funding our new rental asset deployments and other capital purchases, operations, and other working capital requirements and, from time-to-time, the acquisition of businesses.
−Removed: Over the past several years our cash flows from customer collections have remained consistent and our annual cash provided by operating activities has generally been a significant source of capital to the business, which we expect to continue in the future.
−Removed: We may need to raise additional funds to support our investing operations, and such funding may not be available to us on acceptable terms, or at all.
−Removed: If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected.
−Removed: We may seek to raise additional funds through equity, equity-linked or debt financings.
−Removed: If we raise additional funds through the incurrence of indebtedness, such indebtedness would have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations.
−Removed: Any additional equity financing may be dilutive to our stockholders.
+Added: Over the past several years our cash flows from customer collections have remained consistent and our annual cash provided by operating activities has generally been a significant source of capital to the business.
+Added: Contractual obligations
+Added: The following table reflects a summary of our contractual obligations as of December 31, 2024.
+Added: Payments due by period
+Added: (amounts in thousands)
+Added: Contractual Obligations
+Added: Operating leases - properties and other (1)
+Added: Purchase obligations (2)
+Added: (1) We lease manufacturing and office space in Plano, TX, Goleta, CA, Smyrna, TN, Huntsville, AL, Aurora, CO, Beverly, MA, De Meern, Netherlands and Montpellier, France with terms that expire between 2025 and 2031 and miscellaneous office and processing equipment in Texas and California with terms expiring between 2025 and 2028.
+Added: Included in these amounts are the lease payments assumed by a third party, referred to as the Assignee, based on an Assignment and Assumption of Lease Agreement in which the Assignee assumed the rights, title, and interest in the lease.
+Added: Commencing February 1, 2024 and ending May 31, 2031, the Assignee assumed responsibility for the monthly lease payments, and we remain the primary obligor under the lease to the landlord.
+Added: (2) We obtain individual components for our products from a wide variety of individual suppliers.
+Added: Consistent with industry practice, we acquire components through a combination of purchase orders, supplier contracts, and open orders based on projected demand information.
+Added: Where appropriate, the purchases are applied to inventory component prepayments that are outstanding with the respective supplier.
+Added: For additional description of contractual obligations and commitments, see the section titled “Commitments and Contingencies” in the notes to consolidated financial statements included in this Annual Report on Form 10-K.
+Added: Contingent consideration
+Added: In connection with our acquisition of New Aera and Physio-Assist, we have contingent obligations to pay up to $31.4 million and $13.0 million, respectively, in earnout payments in cash if certain future financial results are met.
+Added: See the section titled “Fair Value of Earnout Liability” in the notes to consolidated financial statements included in this Annual Report on Form 10-K for further discussion.
Non-GAAP financial measures
16 unchanged sentences
• Adjusted EBITDA does not include acquisition-related expenses, whether the acquisition was consummated or not pursued;
−Removed: • Adjusted EBITDA does not include charges represent the costs associated with workforce reductions and associated costs and other restructuring-related activities;
+Added: • Adjusted EBITDA does not include costs associated with workforce reductions and associated costs and other restructuring-related activities;
• goodwill impairment;
12 unchanged sentences
Interest income, net
−Removed: Provision for income taxes
+Added: Provision (benefit) for income taxes
Depreciation and amortization
7 unchanged sentences
Adjusted EBITDA (non-GAAP)
−Removed: Contractual obligations
−Removed: The following table reflects a summary of our contractual obligations as of December 31, 2023.
−Removed: Payments due by period
−Removed: (amounts in thousands)
−Removed: Contractual Obligations
−Removed: Operating leases - properties and other (1)
−Removed: Purchase obligations (2)
−Removed: (1) We lease manufacturing and office space in Plano, TX, Goleta, CA, Smyrna, TN, Huntsville, AL, Aurora, CO, Cleveland, OH, De Meern, Netherlands and Montpellier, France with terms that expire between 2024 and 2031 and miscellaneous office and processing equipment in Texas, California and Ohio with terms expiring between 2024 and 2028.
−Removed: Included in these amounts are the lease payments assumed by a third party (Assignee) based on an Assignment and Assumption of Lease Agreement (Agreement) in which the Assignee assumed the rights, title, and interest in the lease.
−Removed: Commencing February 1, 2024 and ending May 31, 2031, the Assignee assumes responsibility for the monthly lease payments, and we remain the primary obligor under the lease to the landlord.
−Removed: (2) We obtain individual components for our products from a wide variety of individual suppliers.
−Removed: Consistent with industry practice, we acquire components through a combination of purchase orders, supplier contracts, and open orders based on projected demand information.
−Removed: Where appropriate, the purchases are applied to inventory component prepayments that are outstanding with the respective supplier.
−Removed: For additional description of contractual obligations and commitments, see the section titled “Commitments and Contingencies” in the notes to consolidated financial statements included in this Annual Report on Form 10-K.
−Removed: Contingent consideration
−Removed: In connection with our acquisition of New Aera and Physio-Assist, we have contingent obligations to pay up to $31.4 million and $13.0 million, respectively, in earnout payments in cash if certain future financial results are met.
−Removed: See the section titled “Fair Value of Earnout Liability” in the notes to consolidated financial statements included in this Annual Report on Form 10-K for further discussion.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.