What changed in this filing

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Item 1A. Risk Factors

2026-02-27 compared with 2025-02-28 · 128 added, 105 removed, 973 unchanged (19% of the section changed)

9 unchanged sentences

• the intense international, national, regional and local competition we face in our industry;

• our dependence on a limited number of customers for a significant portion of our sales revenue;

• our dependence on a limited number of customers for a significant portion of our sales revenue both domestically and internationally;

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

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

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

• potential acquisitions of, or investments in, other companies;

• the complex and lengthy reimbursement process we depend upon for a significant portion of our revenue;

2 unchanged sentences

• public health threats and epidemics;

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

• changes in Medicare, Medicaid, and other third party payor reimbursement policies, including the competitive bidding and coverage determinations including recently enacted and potential future changes in the reimbursement rates or payment methodologies under Medicare, Medicaid and other government programs;

• consolidation in the healthcare industry;

• healthcare reform measures;

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

• the possibility our manufacturing facilities could become unavailable or inoperable and other potential manufacturing problems or delays;

• our reliance upon a third-party contract manufacturer for certain manufacturing and repair operations;

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

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

• our international sales and manufacturing activities;

• our ability to comply with anti-bribery, anti-corruption, and similar laws associated with our activities outside of the U.S., and anti-money laundering laws;

• ability to comply with U.S.

and applicable foreign export controls and economic sanctions, maintain an effective sales force or successfully develop our international distribution network;

• warranty or product liability claims or other litigation;

• our dependence on the services of our senior executives and other key technical personnel;

• our ability to protect against service interruptions, data corruption, cybersecurity risks, data security incidents and/or network security breaches;

• data privacy and data protection regulations;

• variance in our financial condition and results of operations;

2 unchanged sentences

Risks related to the regulatory environment:

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

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

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

6 unchanged sentences

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

• the limitation on our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders, or employees;

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

• our directors, executive officers and principal stockholders could limit your ability to influence the outcome of key transactions, including changes of control;

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

12 unchanged sentences

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.

In addition, providers may reduce or eliminate purchases from us due to our increased focus on building out a prescriber sales team and pursuing rentals directly, which could be in competition with our providers in the United States.

In addition, providers may reduce or eliminate purchases from us due to our focus on maintaining a prescriber sales team and pursuing rentals directly, which could be in competition with other providers in the United States.

Respiratory therapy providers compete primarily on the basis of product features and service, rather than price, since reimbursement levels are established by Medicare and Medicaid, or by the individual determinations of private payors.

17 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023, sales revenue to our top 10 customers accounted for approximately 38.9%, 33.3% and 25.2%, respectively, of our total revenue.

Medicare's service reimbursement programs represented more than 10% of our total revenue for the years ended December 31, 2023 and 2022.

Medicare's service reimbursement programs represented more than 10% of our total revenue for the year ended December 31, 2023.

We expect that sales to relatively few customers will continue to account for a significant percentage of our total revenue in future periods.

3 unchanged sentences

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.

If we were to lose one of our key customers or have a key customer significantly reduce its volume of business with us, 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.

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

12 unchanged sentences

• we or our suppliers may not be able to respond to unanticipated changes in customer orders, and if orders do not match forecasts, we or our suppliers may have excess or inadequate inventory of materials and components;

• we may be subject to price fluctuations due to a lack of long-term supply arrangements for key components or changes in import tariffs, trade restrictions or barriers or other government actions that impact our ability to obtain such components;

• we or our suppliers may lose access to critical services, tools, moldings, and components, resulting in an interruption in the manufacture, assembly and shipment of our systems;

• we may be subject to price fluctuations due to a lack of long-term supply arrangements for key components or changes in import tariffs, trade restrictions or barriers, or other government actions that impact our ability or the costs to obtain such components;

• we or our suppliers may lose access to critical services, tools, moldings, and components, resulting in an interruption in the manufacture, assembly, and shipment of components or products;

• our suppliers may be subject to allegations by other parties of misappropriation of proprietary information in connection with their supply of products to us, which could inhibit their ability to fulfill our orders and meet our requirements;

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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 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.

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 our portable oxygen concentrators in our batteries and printed circuit boards.

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 and innovative products ourselves.

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

Tariffs, trade restrictions and Section 232 investigations could increase our costs and disrupt our supply chain.

Our business is also subject to risks associated with U.S.

and foreign legislation, regulations and trade agreements relating to the materials we import, including quotas, duties, tariffs or taxes, and other charges or restrictions on imports, which could adversely affect our operations and our ability to import materials used in our products at current or increased levels, if at all.

New or increased quotas, duties or tariffs, or threats or changes in policy with respect to such trade restrictions, may have a material adverse effect on our business, financial condition, results of operations or cash flows.

For example, in April 2025, the U.S.

announced significant tariffs on imports from multiple trading partners, leading to increasing trade and political tensions.

In response to tariffs, other countries have implemented retaliatory tariffs on U.S.

In September 2025, the U.S.

Department of Commerce, Bureau of Industry and Security initiated a national security investigation under Section 232 of the Trade Expansion Act of 1962 into imports of

personal protective equipment, medical consumables and medical equipment, including medical devices such as oxygen concentrators.

The scope, timing and outcome of this investigation are uncertain.

Depending on its outcome, the investigation could result in the imposition of additional tariffs or other trade restrictions, the modification or elimination of existing tariff exemptions, or the implementation of other measures affecting the importation of products or components relevant to our business.

Any such actions could increase our costs, disrupt our supply chain, require operational or sourcing adjustments, and adversely affect our margins, results of operations and financial condition.

In addition, these actions could prompt retaliatory measures by foreign governments, further increasing uncertainty and potential adverse impacts on our business.

The current tariff environment evolves continuously and is uncertain.

Furthermore, certain of our competitors may be better positioned than us to withstand or react to border taxes, tariffs or other restrictions on global trade and, as a result, we may lose market share to such competitors.

Finally, certain governmental and private purchasers may restrict the purchase of products from certain countries (including the U.S.) in favor of “buying local,” resulting in the additional possibility that local manufacturers, brands, and other competitors may engage in aggressive competitive pricing to take advantage of the uncertain global trade environment and transition customers away from global manufacturers, all of which may impact our business and operations.

We cannot control the duration or depth of any of the above such actions which may increase our product costs, reduce our margins, potentially decrease the competitiveness of our products, or result in loss of certain contracts.

These actions could have a negative effect on our business, results of operations, or financial condition.

If we are unable to continue to enhance our existing products, develop or acquire and market 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 continue to enhance existing products, acquire companies with new or different products, sell our existing products, and develop innovative products ourselves.

Product development requires significant financial, technological and other resources.

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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.

In addition, we are subject to complex billing and record-keeping requirements 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.

We could experience a significant increase in pre-payment reviews of our claims by the Durable Medical Equipment Medicare Administrative Contractors, private insurance companies 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.

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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.

Reimbursement levels may decrease in the future.

Additionally, future legislation, regulation, or reimbursement policies of third-party payors may otherwise adversely affect 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:

63 unchanged sentences

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.

Former CBAs :

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

10 unchanged sentences

As of January 1, 2023

As of January 1, 2022

As of April 1, 2021

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

Rural Areas :

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.

10 unchanged sentences

As of January 1, 2023

As of January 1, 2022

As of April 1, 2021

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As of January 1, 2024, the rates in former non-CBAs were reduced to the former CBA rates listed in the table above.

Rates in rural areas continue to be based upon a 50/50 blended rates, consistent with CMS' December 2021 final rule described above.

Rates in rural areas continue to be based upon a 50/50 blended rates, consistent with CMS’s December 2021 final rule described above.

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

3 unchanged sentences

As of January 1, 2023

As of January 1, 2022

As of April 1, 2021

27 unchanged sentences

Numerous initiatives and reforms instituted by legislators, regulators and third-party payors to reduce home medical equipment costs have caused pricing pressures which have resulted in a consolidation trend in the home medical equipment industry as well as among our customers, including home healthcare providers.

In the past, some of our competitors, which may include distributors, have been lowering the purchase prices of their products in an effort to attract customers.

In the past, some of our competitors, which may include distributors, have been lowering the prices of their products in an effort to attract customers.

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.

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

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

1 unchanged sentence

In the United States, the legislative landscape, particularly as it relates to healthcare regulation and reimbursement coverage, continues to evolve.

In March 2010, the Patient Protection and Affordable Care Act was passed, which has substantially changed healthcare financing by both governmental and private insurers, and significantly impacts the U.S.

medical device industry.

In addition, other legislative changes have been proposed and adopted in the United States since the Patient Protection and Affordable Care Act was enacted.

2 unchanged sentences

This includes aggregate reductions of Medicare reimbursements to providers up to 2% per fiscal year, which went into effect on April 1, 2013, and will remain in effect through 2030 unless additional Congressional action is taken.

For example, a provision in the CARES Act and subsequent federal laws had paused the 2% Medicare sequestration reduction for claims dated from May 1, 2020 through March 31, 2022.

Starting April 1, 2022, and through June 30, 2022, there was a 1% sequestration reduction, and the full 2% sequestration reduction resumed on July 1, 2022.

We expect that additional state and federal healthcare policy measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressures.

In addition to the legislative changes discussed above, the Patient Protection and Affordable Care Act requires healthcare providers to voluntarily report and return an identified overpayment within 60 days after identifying the overpayment.

Failure to repay the overpayment within 60 days will result in the claim being considered a “false claim” and the healthcare provider will be subject to False Claims Act liability.

State legislative bodies also have the right to enact legislation that would impact requirements of home medical equipment providers, including oxygen therapy providers.

We regularly monitor developments in state requirements applicable to our business and their impact on our operations, products and access to patients.

Some states have already enacted legislation that regulate in-state facilities.

To the extent such legislation is enacted, it could result in increased administrative costs or otherwise exclude us from doing business in a particular state, which would adversely impact our business, financial condition and results of operations.

State legislative bodies may also enact laws that affect the requirements applicable to home medical equipment providers, including oxygen therapy providers.

We monitor developments in state laws and regulations applicable to our business and assess their potential impact on our operations, products, and access to patients.

Certain states have already enacted legislation regulating in-state facilities.

To the extent additional legislation is adopted, it could increase our administrative costs or restrict our ability to operate in particular states, which could adversely affect our business, financial condition, and results of operations.

We face uncertainties that might result from modification or repeal of any of the provisions of the Patient Protection and Affordable Care Act, including as a result of current and future executive orders, legislative actions and judicial decisions.

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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.

We assemble our products at our facility in Plano, Texas and through our contract manufacturer in the Czech Republic.

We assemble our oxygen concentrator products at our facility in Plano, Texas and through our contract manufacturer in the Czech Republic, and our Simeox product at our facility in Montpelier, France.

No other manufacturing facilities are currently available to us, particularly facilities of the size and scope of our Texas facility.

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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.

In particular, no customer represented more than 10% of our net accounts receivable balance as of December 31, 2025.

One customer represented more than 10% of our net accounts receivable balance with a net account 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.

Challenging economic conditions may impair the ability of our customers to pay for products they have purchased, and as a result, our reserve for credit losses 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.

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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, 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.

For example, for the year ended December 31, 2025, we experienced a net foreign currency gain of $1.3 million, and for the years ended December 31, 2024 and 2023, we experienced a net foreign currency loss of $0.2 million and a gain of $0.2 million, respectively.

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

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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, 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.

Foreign Corrupt Practices Act 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.

2 unchanged sentences

§ 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-five 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 other anti-corruption, anti-bribery, and anti-money laundering laws in the more than 70 countries around the world where we have conducted activities and have sold our products.

While we maintain policies and procedures designed to promote compliance with these laws, we cannot assure that such controls will prevent or detect improper conduct by our employees or by third parties acting on our behalf.

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.

1 unchanged sentence

We, our employees, agents, representatives, business partners, and third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities (such as in the context of obtaining government approvals, registrations, or licenses) and may be held liable for the corrupt or other illegal activities of these employees, agents, representatives, business partners, and third-party intermediaries, even if we do not explicitly authorize such activities.

In many foreign countries, particularly in countries with developing economies, it may be a local custom that businesses engage in practices that are prohibited by the FCPA or other applicable laws and regulations.

We cannot assure you that all of our employees, agents, representatives, business partners, or third-party intermediaries will not take actions in violation of our policies and applicable law, for which we have to defend ourselves and may be ultimately held responsible.

1 unchanged sentence

While we have policies and procedures to address compliance with such laws, and while we provide training to all employees, including management, to ensure compliance with the FCPA and other applicable anti-bribery and anti-corruption laws, we cannot assure you that none of our employees, agents, representatives, business partners, or third-party intermediaries will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.

Any violation of the FCPA, other applicable anti-bribery, anti-corruption laws, and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, settlements, prosecutions, enforcement action, fines, damages, loss of export privileges and suspension or debarment from government contracts, which could have a material and adverse effect on our reputation, business, operating results and prospects.

Any violation of the FCPA, other applicable anti-bribery, anti-corruption laws, and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, settlements, prosecutions, enforcement action, fines, damages, and suspension or debarment from government contracts, which could have a material and adverse effect on our reputation, business, operating results, and prospects.

In addition, responding to any allegation, enforcement action or related investigation may result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.

1 unchanged sentence

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.

Failure to maintain or expand our direct sales force could adversely affect our financial condition and results of operations.

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

Failure to maintain or expand our sales force could adversely affect our financial condition and results of operations.

Additionally, we use international distributors to augment our sales efforts, certain of which are exclusive distributors in certain foreign countries.

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Our success depends upon the skills, experience, and efforts of our senior executives and other key technical personnel, including certain members of our engineering, accounting, and compliance staff as well as our sales and marketing personnel.

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

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

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

1 unchanged sentence

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.

If we are unable 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.

Executive leadership and key technical personnel transitions can be difficult to manage and could cause disruption to our business.

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Competition for our highly skilled employees is intense and we cannot prevent the resignation of any employee.

We may need to increase employee wages and benefits in order to attract and retain the personnel necessary to achieve our goals, and our business, operations, and financial results may suffer if we are unable to do so.

We may need to increase employee wages and benefits to attract and retain the personnel necessary to achieve our goals, and our business, operations, and financial results may suffer if we are unable to do so.

In addition, the value to employees of equity awards that vest over time may be significantly affected by decreases in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.

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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.

We have insurance coverage in place for certain potential liabilities and costs relating to service interruptions, data corruption, cybersecurity risks, data security incidents, and network security breaches, but this insurance is limited in amount, subject to deductibles and exclusions, 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.

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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.

During and following the COVID-19 pandemic and related public health emergency, we have increased the number of employees working remotely.

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

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.

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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.

For example, we have increased the security of our systems by requiring all email users to change their passwords following our recent data security incident and sooner than they would have otherwise been required to.

We also implemented multi-factor authentication for remote email access and have taken additional steps to further limit access to our systems.

For example, we have implemented multi-factor authentication for remote email access and have taken additional steps to further limit access to our systems.

However, the ever-evolving threats mean we and our third-party service providers and vendors must continually evaluate and adapt our respective systems and processes and overall security environment.

1 unchanged sentence

The compromise of our technology systems resulting in the loss, disclosure, misappropriation of, or access to, customers’, employees’ or business partners’ information or failure to comply with regulatory or contractual obligations with respect to such information, or the perception that any of these has occurred, could result in legal claims and proceedings, initiated by private parties, investigations or other proceedings by regulatory authorities, and liability or regulatory penalties, disruption to our operations and damage to our reputation, any or all of which could adversely affect our business.

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

The costs of remediating breaches and similar system compromises 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.

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For example, many jurisdictions have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data.

These mandatory disclosures regarding a security breach could result in negative publicity to us, which may cause our customers to lose confidence in the effectiveness of our data security measures which could adversely affect our business, financial condition and results of operations.

These mandatory disclosures regarding a security breach could result in negative publicity for us, which may cause our customers to lose confidence in the effectiveness of our data security measures which could adversely affect our business, financial condition, and results of operations.

Increasing data privacy and data protection regulations could impact our business and expose us to increased liability.

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As the regulatory environment related to information security, data collection and use, and privacy and data protection becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could continue to result in significant costs.

Following the GDPR, a number of states in the U.S.

In addition, a number of states in the U.S.

have introduced, and in certain cases enacted, privacy legislation imposing operational requirements on U.S.

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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, 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.

In addition, California voters 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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Their effects potentially are far-reaching and may restrict our ability to use personal information in connection with our business operations, require us to modify our data processing practices and policies and incur substantial compliance-related costs and expenses.

Congress also is debating federal privacy legislation, which if passed, may restrict our business operations and require us to incur additional costs for compliance.

Congress could also pass federal privacy legislation, which may restrict our business operations and require us to incur additional costs for compliance.

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

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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.

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

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

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Any recall would divert management attention and financial resources, could cause the price of our stock to decline and expose us to product liability or other claims and harm our reputation with customers.

A recall involving our Inogen concentrators could be particularly harmful to our business, financial condition and results of operations.

A recall involving our Inogen POCs could be particularly harmful to our business, financial condition, and results of operations.

We are required to timely report to the FDA any incident in which our product may have caused or contributed to a death or serious injury or in which our product malfunctioned and, if the malfunction were to recur, would likely cause or contribute to death or serious injury.

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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.

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 applies in Northern Ireland but 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.

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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.

The foreign regulatory approval process, including with respect to MDR and other jurisdictions outside the EEA, 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.

FDA clearance does not ensure approval by regulatory authorities in other countries, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries.

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Completion of clinical trials may take several years or more.

We may experience numerous unforeseen events in relation to a clinical trial process that could delay or prevent us from receiving regulatory clearance or approval for new products or modifications of existing products, including new indications for existing products, including:

We may experience numerous unforeseen events in relation to a clinical trial process that could delay or prevent us from receiving regulatory clearance or approval or reimbursement from payors for new products or modifications of existing products, including new indications for existing products, including:

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

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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.

Complying with privacy and security related legal and regulatory requirements is burdensome and costly and could have a material adverse effect on our results of operations.

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.

The Federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce the referral of an individual to a person for the furnishing of, or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid, or other federal healthcare programs.

Although there are a number of statutory exceptions and regulatory safe harbors protecting certain common financial arrangements from prosecution, the exceptions and safe harbors are drawn narrowly, and any remuneration to or from a prescriber or purchaser of healthcare products or services may be subject to scrutiny if it does not qualify for an exception or safe harbor.

Our practices may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability.

Failure to meet all requirements of a safe harbor is not determinative of a kickback issue but could subject the practice to increased scrutiny by the government.

The Federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or reward referrals of individuals to a person for the furnishing of, or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any healthcare item or service reimbursable under Medicare, Medicaid, or other federal healthcare programs.

Courts have interpreted the statute to be violated if one purpose of the remuneration is to induce such referrals, even if there are other legitimate purposes.

Failure to meet all requirements of a safe harbor does not, by itself, render an arrangement unlawful;

however, arrangements that do not qualify for an exception or safe harbor may be subject to increased scrutiny and enforcement action by the government.

Our practices may not in all cases meet all of the criteria for safe harbor protection.

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.

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.

The Federal False Claims Act allows any person to bring suit in the name of the government alleging false and fraudulent claims presented to or paid by the government (or other violations of the statute) and to share in any amounts paid by the entity to the government in fines or settlement.

Such suits, known as qui tam actions, have increased significantly in the healthcare industry in recent years.

Sanctions under this federal law may include civil monetary penalties, exclusion from federal and state healthcare programs, criminal fines and imprisonment.

In addition, the Patient Protection and Affordable Care Act, among other things, amends the intent requirement of the federal anti-kickback and criminal healthcare fraud statutes to clarify that a person or entity does not need to have actual knowledge of the statute or specific intent to violate it.

In addition, the Patient Protection and Affordable Care Act provides that the government may assert that a claim that items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the false claims statutes.

Because of the breadth of these laws and the narrowness of the safe harbors and exceptions, it is possible that some of our business activities could be subject to challenge under one or more of such laws.

Such a challenge, regardless of the outcome, could have a material adverse effect on our business, business relationships, reputation, financial condition and results of operations.

The majority of states also have statutes or regulations similar to the federal anti-kickback, physician self-referral, and false claims laws, which apply to items or services, reimbursed under Medicaid and other state programs, or in several states, apply regardless of payor.

Penalties under these state laws can be comparable to those under their federal equivalents.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, also created the federal Physician Payments Sunshine Act, which requires applicable manufacturers of drugs, devices, biologicals, and medical supplies covered under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS, information related to payments or other transfers of value made to physicians, as defined, and teaching hospitals, as well as ownership and investment interests in such manufacturer held by physicians and their immediate family members.

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 $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.

Certain states mandate implementation of compliance programs and/or the tracking and annual reporting of gifts, compensation and other remuneration to physicians and other applicable recipients.

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 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.

This is commonly known as a beneficiary inducement.

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

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 $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.

If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restriction of our operations or exclusion from participation in the federal healthcare programs.

Any penalties, damages, fines, curtailment or restructuring or our operations could harm our ability to operate our business and our results of operations.

Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from operation of our business.

Moreover, achieving and sustaining compliance with applicable federal and state fraud laws may prove costly.

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 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.

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

The Federal False Claims Act permits private individuals, known as “relators,” to bring actions on behalf of the government, referred to as qui tam actions, and to share in any recovery.

Such actions have increased significantly in the healthcare industry in recent years.

Violations of the Federal False Claims Act may result in substantial civil monetary penalties, treble damages, and exclusion from participation in federal and state healthcare programs, and related conduct may also give rise to criminal penalties under other federal laws.

In addition, the Patient Protection and Affordable Care Act amended the intent requirements of the federal Anti-Kickback Statute and certain federal healthcare fraud statutes to clarify that a person or entity need not have actual knowledge of the statute or specific intent to violate it.

The Patient Protection and Affordable Care Act also provides that claims for items or services resulting from a violation of the federal Anti-Kickback Statute may constitute false or fraudulent claims for purposes of the federal false claims statutes.

Because of the breadth of these laws and the narrowness of the available exceptions and safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of such laws.

Any such challenge, regardless of its outcome, could have a material adverse effect on our business, business relationships, reputation, financial condition, and results of operations.

In addition, many states have statutes or regulations similar to the federal anti-kickback, physician self-referral, and false claims laws, which apply to items or services reimbursed under Medicaid or other state programs, and in some states may apply regardless of payor.

Penalties under these state laws can be comparable to those under their federal counterparts.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, also created the federal Physician Payments Sunshine Act, or Sunshine Act, which requires applicable manufacturers of drugs, devices, biologicals, and medical supplies reimbursed by Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS information regarding payments or other transfers of value made to physicians and teaching hospitals, as well as ownership or investment interests held by physicians and their immediate family members.

Additionally, the Substance Use-Disorder Prevention that Promoted Opioid Recovery and Treatment for Patients and Communities Act, enacted in 2018, expanded the Sunshine Act’s reporting requirements to include physician assistants, nurse practitioners, and certain other mid-level practitioners, with reporting requirements becoming effective in 2022 for payments made in 2021.

Failure to timely, accurately, or completely submit required information under the Sunshine Act may result in civil monetary penalties of up to an aggregate of $150,000 per year, and up to approximately $1.0 million per year for knowing failures, in each case as adjusted annually for inflation.

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

Certain states mandate implementation of compliance programs and/or the tracking and reporting of gifts, compensation, and other remuneration.

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 risk that a healthcare company may inadvertently fail to comply with one or more applicable laws or reporting obligations.

The Federal Civil Monetary Penalties Law authorizes the OIG to impose CMPs against individuals or entities for a wide range of conduct, including conduct related to violations of the federal Anti-Kickback Statute, Stark Law, and other federal healthcare fraud and abuse laws.

Under this statute, an entity that offers or transfers remuneration to any individual eligible for benefits under Medicare or Medicaid that such entity knows or should know is likely to influence the individual to order or receive items or services reimbursable by Medicare or Medicaid from a particular provider, practitioner, or supplier may be liable for CMPs.

This prohibition is commonly referred to as the beneficiary inducement provision.

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

Although we maintain policies, procedures, and controls designed to structure these arrangements to comply with applicable laws, including available statutory exceptions and regulatory safe harbors, there can be no assurance that governmental authorities will not conclude that one or more of our arrangements fail to meet applicable requirements.

If we are found to be non-compliant, we could be subject to significant CMPs and exclusion from participation in federal or state healthcare programs.

The scope, interpretation, and enforcement of federal and state healthcare fraud and abuse laws are complex, evolving, and subject to change, including through legislative action, regulatory guidance, and enforcement priorities.

If our operations are found to be in violation of any of these laws or other applicable government regulations, we could be subject to a range of penalties, including civil and criminal penalties, damages, fines, restrictions or curtailment of our operations, or exclusion from participation in the federal or state healthcare programs.

Any such penalties or restrictions, could adversely affect our business, financial condition, results of operations, and ability to operate effectively.

In addition, any governmental investigation or enforcement action, even if we successfully defend against it, could result in significant legal and administrative costs, reputational harm, and diversion of management attention.

Moreover, achieving and sustaining compliance with applicable federal and state fraud and abuse laws is costly and resource intensive, and civil monetary penalties under certain of these laws are subject to periodic inflation-based increases.

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, including independent contractors, consultants, commercial partners, and vendors.

It is not always possible to identify and deter misconduct by employees and third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with federal and state healthcare fraud and abuse laws.

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If we violate these laws, we could be subject to significant fines, liabilities or other adverse consequences.

Our research and development programs as well as our manufacturing operations involve the controlled use of hazardous materials.

Accordingly, we are subject to international, federal, state and local laws governing the use, handling and disposal of these materials.

Although we believe that our safety procedures for handling and disposing of these materials comply in all material respects with the standards prescribed by state and federal regulations of each country in which we conduct business, we cannot completely eliminate the risk of accidental contamination or injury from these materials.

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.

Our research and development and manufacturing activities involve the controlled use of hazardous materials, including flammable, toxic, and corrosive substances, and generate hazardous chemical waste.

We seek to comply with applicable environmental, health, and safety laws and regulations governing the handling, storage, and disposal of these materials.

Based on the limited quantities used or generated at our facilities, we do not currently expect compliance with such requirements to have a material effect on our capital expenditures, earnings, or competitive position.

Nevertheless, we cannot eliminate the risk of accidental contamination, release, or exposure.

We do not maintain separate environmental liability insurance coverage, and any such incident could result in significant costs, including remediation expenses, penalties, damages, or suspension of operations.

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

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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.

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

Our management and other personnel will need to devote a substantial amount of time to compliance with these laws and regulations.

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The strategic migration of our data centers and infrastructure to secure cloud environments, coupled with the implementation of targeted technical cybersecurity measures, underscores our dedication to establishing foundational security across our users, applications, data, systems, and networks.

We have established a comprehensive incident response plan to swiftly address and recover from cybersecurity incidents, minimizing operational impact.

We have established a comprehensive incident response plan, designed for timely detection, containment, remediation, and post-incident review.

The plan includes defined escalation thresholds requiring timely notification to senior management and the Audit Committee, including processes for evaluating whether an incident may be material.

We conduct regular trainings and simulations to enhance our team's awareness and preparedness against cyber threats.

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Our Chief Data and Information Officer, or CDIO, is responsible for our day-to-day assessment and management of cybersecurity risks.

Our Enterprise Enablement function facilitates a cross-departmental approach, ensuring the executive leadership team receives quarterly updates on cybersecurity from various teams.

Our Information Technology and Cybersecurity function has extensive experience in overseeing cybersecurity programs, managing information security operations, and facilitates a cross-departmental approach, ensuring the executive leadership team receives quarterly updates on cybersecurity from various teams.

This strategy promotes a comprehensive stakeholder engagement and enhances management oversight on cybersecurity.

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

What changed 10-K

Item 1A. Risk Factors