What changed in this filing

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Item 1. Business

2022-02-24 compared with 2021-02-24 · 201 added, 196 removed, 574 unchanged (41% of the section changed)

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Additionally, patients must attach long, cumbersome tubing to their stationary concentrators simply to enable mobility within their homes.

Our proprietary Inogen One ® systems concentrate the air around the patient to offer a single source of supplemental oxygen anytime, anywhere with a single battery and can be plugged into an outlet when at home, in a car, or in a public place with outlets available.

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

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is the remaining legal entity.

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

We estimate approximately 3 million patients in the United States used long-term oxygen therapy in 2019 based on 2019 traditional fee-for-service Medicare data, commercial payor data and our estimate of the size of additional patient populations, such as the retail sales and Veterans Administration (VA) population.

While there is no up-to-date single source of long-term oxygen therapy market data, our current estimate of the market size is based on a recent analysis we conducted with the assistance of a third party and certain internal estimates.

We believe that the estimate provided herein approximates the number of oxygen therapy patients in the United States as of 2019.

However, while growth rates are subject to change over time, we believe that reduced reimbursement rates in connection with competitive bidding, enhanced Medicare billing requirements, and the conversion from tank deliveries to portable oxygen concentrators (POCs) will help contribute to growth opportunities for POCs that exceed the long-term oxygen therapy market growth rate.

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

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

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

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

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

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

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

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

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

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

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

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

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home medical equipment providers cannot easily convert their businesses to non-delivery models in oxygen due to low total reimbursement for oxygen therapy, capital expenditure constraints, investments that are spread across multiple product lines, and uncertainty around reimbursement rate changes;

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

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

lack of access to switch from oxygen tank or liquid deliveries to a portable oxygen concentrator using their insurance benefits due to the nature of the capped reimbursement structure;

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

limitations of conventional portable oxygen concentrators, including bulkiness, poor reliability and lack of suitability beyond intermittent or travel use.

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

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

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

Other manufacturers mainly rely upon selling to homecare businesses, many of whom are incentivized to continue to service oxygen patients through the delivery model;

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

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

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

access and utilize direct patient feedback in our research and development efforts, allowing us to innovate based on this feedback and stay at the forefront of patient preference.

For example, certain specifications of the Inogen One G5 ® and the Inogen One G4 ® and their accessories and the Inogen Connect platform were created based on direct patient feedback.

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

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

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

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

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

Reliability .

Our direct relationship to our end customers facilitates product feedback and improvements.

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

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Our Inogen One systems and Inogen At Home system

We market our current portable product offerings, the Inogen One G5, Inogen One G4 and the Inogen One G3 ® , as single solutions for long-term oxygen therapy.

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

This means our solutions can operate on a 24/7 basis for at least 60 months without a stationary concentrator, with minimal servicing of sieve beds, filters, and accessories.

We believe the technology in our Inogen One systems is effective for nocturnal use.

The technology in our Inogen One systems is effective for nocturnal use.

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

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Inogen One G4

Inogen One G3

Capacity (ml/min)

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2.8 (single battery)

4.8 (single battery)

5.7 (double battery)

3.3 (double battery)

5.8 (double battery)

Battery run-time

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Up to 2.6 hours

Up to 4.7 hours

(single battery)

Up to 13 hours

Up to 5 hours

Up to 10 hours

(double battery)

Technology effective for overnight use

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

We believe the performance parameters around our Inogen One systems allow us to serve approximately 90% of the ambulatory long-term oxygen patients based on our analysis of the patients who have contacted us and their clinical needs.

The performance parameters around our Inogen One systems allow us to serve ambulatory long-term oxygen patients based on their clinical needs.

Our products enable us to address a patient’s particular clinical needs, as well as lifestyle and performance preferences.

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

Our direct-to-consumer business model has enabled us to receive direct patient feedback, and we have used this feedback to create portable oxygen concentrators that address the full suite of features and benefits critical to patient preference and retention.

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

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

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In the United States, we market and distribute our products directly to consumers through a wide variety of direct-to-consumer sales and marketing strategies including consumer advertising, an inside sales staff, and a physician referral model.

We initially planned for sales and marketing expansion in 2020, but this expansion was negatively impacted due to the COVID-19 pandemic and related PHE, which we believe reduced the close rates on patients who contacted us in 2020, led to less efficient marketing spend, caused a reduction in the number of oxygen therapy patients who responded to our marketing campaigns, and had a negative impact on the timing of a pricing trial, all of which resulted in leading us to stall the planned sales and marketing expansion, and as a result of which we also hired fewer sales representatives than initially planned.

Of the $278.5 million of our 2021 revenue derived from the United States, approximately 50.6% represented direct-to-consumer sales, 32.8% represented sales to traditional home medical equipment providers, distributors (including our private label partner) and resellers, and 16.6% represented direct-to-consumer rentals.

As of December 31, 2020, we employed a marketing team of 7 people, an in-house sales team of 349 people (including 300 inside sales representatives), a field-based sales team of 29 people (including 24 physician sales representatives), and a business-to-business sales and support team of 14 people.

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

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

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

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

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

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

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We also sell to resellers and traditional homecare providers in the United States, Canada, Europe, the Asia-Pacific region, Latin America, the Middle East and Africa that choose to deploy our products to long-term oxygen therapy patients either through insurance reimbursement or retail.

These customers market the benefits of our products to oxygen therapy patients through consumer advertising and/or retail locations or to physicians through field-based sales representatives.

These customers market the benefits of our products to oxygen therapy patients through consumer advertising and/or retail locations or to physicians through field-based prescriber sales representatives.

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

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Concentration of Customers

We primarily sell our products to traditional home medical equipment providers, distributors, and resellers in the United States and in foreign countries primarily on a credit basis.

We primarily sell our products to traditional home medical equipment providers, distributors, and resellers in the United States and in foreign countries on a credit basis.

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

For the year ended December 31, 2020, one single customer represented more than 10% of our total revenue, OxyGo HQ Florida (previously named Applied Home Healthcare Equipment), our private label distribution partner.

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

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

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

For the year ended December 31, 2018, one single customer, OxyGo HQ Florida, represented more than 10% of our total revenue.

As of December 31, 2020 and December 31, 2019, two customers each represented more than 10% of our net accounts receivable balance with accounts receivable balances of $8.4 million and $7.0 million, respectively, and accounts receivable balances of $10.7 million and $5.2 million, respectively.

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

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

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

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

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

International

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

We sell our products in 58 countries outside the United States through distributors or directly to large “house” accounts, which include gas companies and home oxygen providers.

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

In this case, we sell to and bill the distributor or house accounts directly, leaving the patient billing, support, and clinical setup to the local provider.

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

We will continue to focus on building out our international sales efforts.

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

This site offers multi-lingual customer service and sales support to improve our European customer support at lower cost.

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

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

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

Order fulfillment and customer support

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

This enables us to minimize the amount of

finished goods inventory we keep on hand.

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

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

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

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

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

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

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

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

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

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

As of December 31, 2020, we had a dedicated customer service team of 41 people who were trained on our products, a clinical support team of 22 people who were licensed nurses or respiratory therapists, a rental intake team of 34 people, and a dedicated billing services team of 76 people.

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

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

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Third-party reimbursement

Medicare and private insurance rentals represented 9.2% of our total revenue in 2020, up from 5.9% of our total revenue in 2019, primarily due to decreased sales revenue and increased rental patients on service.

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

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

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

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

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

These rates were updated annually each January as they are subject to Consumer Price Index (CPI) and budget neutrality adjustments.

Competitive bidding contracts were scheduled to go into effect on January 1, 2021, however, on October 27, 2020, CMS announced that competitive bidding contracts would not be awarded for most product categories, including oxygen, due to the payment amounts not achieving the expected savings and the current COVID-19 pandemic and related PHE.

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

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

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

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

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

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

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As of January 1, 2022

As of April 1, 2021

As of January 1, 2021

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As of January 1, 2019

In addition to regional pricing, CMS imposed different pricing on “frontier states” and rural areas.

CMS defines frontier states as states where more than 50% of the counties in the state have a population density of 6 people or less per square mile and rural states are defined as states where more than 50% of the population lives in rural areas per census data.

Current frontier states include MT, ND, SD and WY;

rural states include ME, MS, VT and WV;

and non-contiguous United States areas include AK, HI, Guam and Puerto Rico.

Effective June 1, 2018 through December 31, 2020, for frontier and rural states, frontier and rural zip codes in non-frontier/rural states and non-contiguous United States areas, the single payment amount was 50/50 blended reimbursement rates based on an average of the pre-competitive bidding reimbursement rates and the current average reimbursement rates to account for higher servicing costs in these areas.

As of January 1, 2018

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

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

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

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

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

Note that the 2021 rates listed below include Coronavirus Aid, Relief, and Economic Security (CARES Act) increased rates due to the COVID-

19 PHE, which may not be in place for all of 2021.

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

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

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

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As of January 1, 2022

As of April 1, 2021

As of January 1, 2021

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As of January 1, 2019

As of January 1, 2018

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

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

Note that the 2021 rates listed below include CARES Act increased rates due to the COVID-19 PHE, which may not be in place for all of 2021.

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

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

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

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

As of January 1, 2022

As of April 1, 2021

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

As of January 1, 2020

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

The CARES Act also included a temporary elimination of the 2% percent Medicare sequestration reduction that went into effect in 2013.

The CARES Act implemented the relief effective May 1, 2020 through December 31, 2020.

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

The CARES Act also extended the end date of the Medicare sequestration reduction by one year, through 2030, in order to offset the 2020 suspension.

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

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

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

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

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

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

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

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These changes were retroactive to early March 2020.

However, in July 2020, CMS released a COVID-19 Provider Burden Relief FAQs document that stated that CMS would resume full operations for the prior authorization program for certain DMEPOS effective August 3, 2020.

CMS also issued a proposed rule on November 4, 2020 (CMS-1738-P) to establish payment amounts going forward for DMEPOS products and services covered under Medicare.

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

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

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

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

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

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

(1) for non-contiguous non-CBAs;

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and (3) for non-rural non-CBAs within the contiguous United States.

Proposed adjustment methodologies (1) and (2) contemplate utilizing the 50/50 blended rates as a permanent construct, but proposed adjustment methodology (3) contemplates setting the fee schedule amounts to 100% of the Medicare rates.

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

There was a 60-day comment

period on this proposed rule, and we expect this rule to be finalized in the first half of 2021.

In January 2021, CMS announced the pivotal bid amounts for the competitive bidding round 2021.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In addition, CMS defined exercise more broadly to

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

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

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

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

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

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

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

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

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

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

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

If the equipment malfunctions, we must repair or replace the equipment.

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

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

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

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

Average Medicare reimbursement rates for NIV HCPCS code E0466 are listed in the table below and were a monthly, non-capped rental .

These rates exclude Puerto Rico, where rates have ranged from $1,786.16 to $1,847.38 over the periods presented.

Average Medicare reimbursement rates for NIV (excludes Puerto Rico)

As of January 1, 2021

As of January 1, 2020

As of January 1, 2019

As of January 1, 2018

It is uncertain if the current Tidal Assist ® Ventilator (TAV ® ) product acquired from New Aera, will be reimbursable in its current configuration under HCPCS code E0466.

We requested confirmation on the assigned HCPCS codes for the TAV system from the Pricing, Data Analysis, and Coding (PDAC) Contractor in August 2019 following the closing of the New Aera transaction.

In August 2019, we received positive confirmation that this product was assigned HCPCS code E0466.

However, in September 2019, we received a revised communication that the product was assigned HCPCS code E1390 and E1352, which was then revoked at our request in December 2019.

In September 2019, we appealed to CMS, and in January 2020 our appeal was denied.

In September 2020, we filed a lawsuit against Palmetto GBA, LLC and Alex Azar and Seema Verma in their official capacities at the Department of Health and Human Services and the Centers for Medicare and Medicaid Services, respectively.

The lawsuit seeks to invalidate the retraction of a valid HCPCS code to Inogen’s TAV system and claims a violation of our procedural rights provided under the Social Security Act, the Administrative Procedure Act, and our due process rights due to CMS’ failure to provide notice and the opportunity to comment on a change in HCPCS code verification for the TAV product.

If we do not receive revised coding, it could limit this product’s adoption by HME providers and also our direct rentals.

In addition, the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC) had a meeting on July 22, 2020 to discuss home use of non-invasive positive pressure ventilation in patients with chronic respiratory failure consequent to chronic obstructive pulmonary disease (COPD).

CMS is seeking MEDCAC’s recommendations regarding the characteristics that define patient selection and usage criteria for these items.

This request could signal forthcoming changes in Medicare coverage of these items, and possibly changes in HCPCS codes, which could impact our NIV business and growth initiatives.

For a discussion of certain significant risks relating to the TAV reimbursement and the upcoming round of competitive bidding, see the risk factor entitled “ The competitive bidding process or other reimbursement policy changes under Medicare or other third-party payors could negatively affect our business and financial condition.”

As of December 31, 2020, we had 91 contracts with Medicaid, Medicare Advantage, government and private payors.

These contracts qualify us as an in-network provider for these payors.

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

As a result, patients can rent or purchase our systems at the same patient obligation as other in-network oxygen suppliers.

Based on our patient population, we believe at least 42% of all oxygen therapy patients are covered by Medicare Advantage, government, and other private payors.

Private payors typically provide reimbursement at a rate similar to what Medicare allows for in-network plans.

We had 92 contracts as of December 31, 2021.

Private payors typically provide reimbursement at a rate similar to Medicare allowables for in-network plans.

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

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

As a result of design changes, supplier negotiations, bringing manufacturing and assembly largely in-house and our commitment to driving efficient manufacturing processes, we have reduced our overall POC system cost by approximately 59% from 2009 to 2020.

We intend to continue to seek ways to reduce our cost of revenue through manufacturing and design improvements.

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

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

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

In 2021, we plan to focus on reducing the cost of our Inogen One G5 product, expanding manufacturing of the TAV product and our oxygen concentrator products, and increasing the robustness of our supply chain to reduce potential component constraints as we aim to grow our business.

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

We also use lean manufacturing practices to maximize manufacturing efficiency.

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

We believe that maintaining a single source of supply allows us to control production costs and inventory levels and to manage component quality.

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

However, any reduction or halt in supply from one of these single-source suppliers could limit our ability to manufacture our products or devices until a replacement supplier is found and qualified.

For additional discussion of potential risks related to our manufacturing and raw materials, please see the risk factor entitled “ We obtain some of the components, subassemblies and completed products included in our products from a single source or a limited group of manufacturers or suppliers, and the partial or complete loss of one or more of these manufacturers or suppliers could cause significant production delays, an inability to meet customer demand, substantial loss in revenue, and an adverse effect on our financial condition and results of operations.

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

We have leases commencing in 2021 for a new building in Goleta, California which we will have to register with the FDA and will replace our existing leased building in Goleta, California, and a new building in Plano, Texas which we will have to register with the FDA and will replace our existing leased building in Richardson, Texas.

We believe we and our manufacturing partner have sufficient capacity to meet anticipated demand.

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

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

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

For additional discussion of potential risks related to our manufacturing and raw materials, please see the risk factor entitled “ We obtain some of the components, subassemblies and completed products included in our products from a single source or a limited group of manufacturers or suppliers, and in some cases those components are available in only limited supplies from limited manufacturers or suppliers, and the partial or complete loss of one or more of these manufacturers or suppliers could cause significant production delays or stoppages , an inability to meet customer demand, substantial loss in revenue, and an adverse effect on our financial condition and results of operations.

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

Our entire organization is responsible for quality management.

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manufacturing activities to focus on growth in the U.S.

and on our latest products, the Inogen One G5 and the TAV.

and on our largest volume products, the Inogen One G5 and the Inogen One G4.

As of December 31, 2021, we had 280 employees in operations, manufacturing, quality assurance, manufacturing engineering and repair in the United States.

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

We have leveraged our fifty-nine issued patents while also reducing the overall POC system cost by approximately 59% from 2009 to 2020.

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

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

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

We leverage our direct patient expertise to rapidly gain insight from end

users and to identify areas of innovation that we believe will lead to higher-quality products and lower total cost of ownership for our products.

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

The long-term oxygen therapy market and the non-invasive ventilator market are highly competitive industries.

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

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

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

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

In the non-invasive ventilator market, we compete with manufacturers and distributors of other portable non-invasive ventilators, as well as HME providers that supply these products.

Our significant manufacturing competitors are Respironics (a subsidiary of Koninklijke Philips N.V.), Invacare Corporation, Caire Medical (subsidiary of NGK Spark Plug), DeVilbiss Healthcare (a subsidiary of Drive Medical), O2 Concepts, Precision Medical, Resmed, Gas Control Equipment (subsidiary of Colfax), Hill-Rom Holdings, Inc., Breas Medical, Ventec Life Systems, Medtronic, Nidek Medical, and 3B Medical.

Additional competitors have also pre-announced upcoming product launches of POCs including SysMed and Bellascura.

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

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

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

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

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

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

For many years, Lincare , Inc.

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

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

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

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

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

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.

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

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

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

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

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established distribution networks;

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

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

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

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

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

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

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

Our ability to compete successfully and to increase our market share is dependent upon our reputation for providing responsive, professional and

high-quality products and services and achieving strong customer satisfaction.

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

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

Government regulation

Inogen One systems, Inogen At Home systems, Inogen TAVs, and related accessories are medical devices subject to extensive and ongoing regulation by the FDA, as well as other federal and state regulatory bodies in the United States and comparable authorities in other countries.

Inogen One systems, Inogen At Home systems, TAV systems, and related accessories are medical devices subject to extensive and ongoing regulation by the FDA, as well as other federal and state regulatory bodies in the United States and comparable authorities in other countries.

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

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

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

take up to several years.

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

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

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

Licensure, registrations, and accreditation

Licensure , r egistrations, and a ccreditation

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

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

Loss of any state licensure or operating without a required state license may also impact our Medicare enrollment, which requires us to be properly licensed in every state where we are registered with Medicare to do business.

Loss or suspension of our Medicare enrollment may also affect any Medicare competitive bidding program contracts we may apply for in the future.

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Federal anti-kickback and self-referral laws

The Federal Anti-Kickback Statute prohibits the knowing and willful offer, payment, solicitation or receipt of any form of remuneration overtly or covertly, in cash or in kind, in return for, or to induce the:

The Federal Anti-Kickback Statute prohibits, among other things, the knowing and willful offer, payment, solicitation or receipt of any form of remuneration overtly or covertly, in cash or in kind, in return for, or to induce the:

referral of an individual to a person for the furnishing or arranging for the furnishing of items or services reimbursable under Medicare, Medicaid or other federal healthcare programs;

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

Additionally, as some of these laws are still evolving, we lack definitive guidance as to the application of certain key aspects of these laws.

We cannot predict the final form that these regulations will take or the effect that the final regulations will have on us.

As a result, our arrangements may ultimately be found to be not in compliance with applicable federal law.

Additionally, regulations issued for the Federal Anti-Kickback Statute and the Stark Law have undergone significant revisions, and it is reasonable to assume that revisions will occur in the future.

While we have attempted to operate in compliance with these laws and regulations, our arrangements may ultimately be found to be not in compliance with applicable federal law.

Federal False Claims Act

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

Although we believe that we are in compliance with the federal government’s laws and regulations, if we are found in violation of these laws,

penalties of up to $ 0 .0 2 3 million for each false claim, plus three times the amount of damages that the federal government sustained because of the act , can be assessed .

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

Civil monetary penalties law

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The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, among other things, imposed public reporting requirements on medical device manufacturers for payments or other transfers of value made by them to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

T he Substance Use-Disorder Prevention that Promoted Opioid Recovery and Treatment for Patients and Communities Act enacted in 2018, extends the reporting and transparency requirements under the Physician Payments Sunshine Act to physician assistants, nurse practitioners and other mid-level practitioners, with reporting requirements going into effect in 2022 for payments made in 2021.

Failure to submit required ownership and investment interest information may result in civil monetary penalties of up to an aggregate of $0.18 million per year (or up to an aggregate of $1.191 million per year for “knowing failures”), for all payments, transfers of value or ownership or investment interests that are not timely, accurately and completely reported in an annual submission.

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

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

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

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

As of December 31, 2020, we had twenty-nine pending patent applications and fifty-nine issued patents relating to the design and construction of our respiratory devices.

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

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

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patent 10,695,520 is directed to the design of the Inogen One G4, and U.S.

patents 9,283,346;

10,004,869 and 10,869,986 are directed towards the Inogen at Home stationary oxygen concentrator.

patents 9,283,346, 10,004,869 and 10,869,986 are directed towards the Inogen at Home stationary oxygen concentrator.

This category of patents expires in 2031 or later and may serve to deter competitors from reverse engineering or copying our design elements.

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

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

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

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

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

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

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

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

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

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

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

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

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

Diversity, equity and inclusion

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

Diversity , e quity and i nclusion

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

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

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

Environmental matters

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We do not currently maintain separate environmental liability coverage and any such contamination or discharge could result in significant cost to us in penalties, damages, and suspension of our operations.

Climate change

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

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

Inogen supports global and national efforts to mitigate the impact of climate change.

Inogen is committed to complying with all applicable laws and regulations that help reduce GHG and encouraging market adoption of low GHG emission technologies.

Our position on climate change policy is guided by five principles:

We believe that any global or national strategy to address climate change must be environmentally sustainable and economically viable.

We believe that any climate change policy should be technology-neutral and designed to encourage private sector innovation and investment so that emissions reductions can be achieved in the most efficient manner possible.

We believe that any global or national strategy to address climate change must be developed with input from stakeholder communication, including the public and private sectors, non-governmental organizations, academia, and investors.

We believe that any policy to regulate GHG emissions should provide a clear, stable framework that enables the private sector to invest accordingly, and that minimizes the market imbalances that can result from policies applied unequally within or among nations.

We believe that any policy to regulate GHG emissions should fairly account for companies that have already taken voluntary steps to reduce their GHG emissions.

Inogen is a responsible corporate citizen that has done business in 59 countries and territories around the world.

Our business success and our environmental stewardship both depend on the efficiency of our global distribution network.

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

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

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

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

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

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

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We were incorporated in Delaware in November 2001.

Our principal executive offices are located at 326 Bollay Drive, Goleta, California 93117.

Our principal executive offices are located at 301 Coromar Drive, Goleta, California 93117.

Our telephone number is (805) 562-0500.

Our website address is www.inogen.com .

We make available on our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any

amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission, or SEC.

We make available on our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission, or SEC.

Our SEC reports can be accessed through the investor relations page of our website located at http://investor.inogen.com .

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

Information about our executive officers

Information about our e xecutive o fficers

The following table identifies certain information about our executive officers as of February 18, 2022.

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Chief Executive Officer, President, and Director

Alison Bauerlein

Executive Vice President, Finance and Chief Financial

Officer, Corporate Secretary and Corporate Treasurer

Michael Sergesketter

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

Executive Vice President, Operations

Brenton Taylor

Executive Vice President, Engineering

Executive Vice President, Marketing

Arron Retterer

Executive Vice President, Sales

Stanislav Glezer

Executive Vice President, Chief Technology Officer

Executive Vice President, Chief Commercial Officer

Executive Vice President, General Counsel and Corporate Secretary

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

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Prior to that, Mr.

Shabshab served in various sales and marketing roles in pharmaceutical and consumer goods companies.

Shabshab served in various sales and marketing roles in consumer goods companies.

Shabshab holds an MBA from Northwestern University Kellogg School of Management and a B.S.

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The board of directors believes that Mr.

Shabshab’s extensive industry experience qualifies him to serve on the board.

Alison Bauerlein is a co-founder of Inogen and has served as our Chief Financial Officer since 2009 and Executive Vice President, Finance since March 2014.

Bauerlein has also served as Corporate Secretary and Corporate Treasurer since 2002.

Bauerlein previously served as our Vice President, Finance from 2008 until March 2014.

Prior to serving in these positions, Ms.

Bauerlein also served as Controller with our company from 2008 to 2009 and 2001 to 2004, and the Director of Financial Planning and Analysis from 2004 to 2008.

Bauerlein has over 19 years’ experience in treasury, finance, accounting, risk management as well as strategic and tactical cost analysis and forecasting.

Bauerlein received a Bachelor of Arts degree in Economics/Mathematics with high honors from the University of California, Santa Barbara.

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

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

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

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

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

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

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

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

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

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

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

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

Brenton Taylor is a co-founder of Inogen and has served as our Executive Vice President, Engineering since March 2014.

Prior to serving in this position, Mr.

Taylor served as our Vice President, Engineering from 2008 until March 2014 and as the Director of Technology with our company from 2003 to 2008.

Taylor is listed as an inventor on 33 of the Company’s issued patents related to

portable oxygen concentrator development.

Taylor received a Bachelor of Science degree in Microbiology from the University of California, Santa Barbara.

Byron Myers is a co-founder of Inogen and has served as our Executive Vice President, Marketing since August 2020.

Previously, Mr.

Myers served as our Executive Vice President, Sales and Marketing from January 1, 2017 until August 2020 and served as our Vice President, Marketing from 2011 to 2016.

In his current role, Mr.

Myers leads Inogen’s marketing, product management, and clinical operations.

Prior to serving in these positions, Mr.

Myers held various roles with our company, including:

Product Manager from 2002 to 2006, Director of Marketing from 2006 to 2007 and 2008 to 2011, International Product Manager during 2007, and Director of International Product Management from 2007 to 2008.

Myers received a Bachelor of Arts degree in Economics/Mathematics from the University of California, Santa Barbara and an MBA from the Rady School of Management at the University of California, San Diego.

Arron Retterer has served as our Executive Vice President, Sales since August 2020.

Retterer was the Global Platform Leader for V.

Mueller Surgical Instruments (Becton Dickinson) from June 2016 to October 2019.

From October 2010 to May 2016, Arron served as the National Vice President, Sales, for several medical device divisions of BD/Carefusion, including V.

Mueller/Snowden-Pencer Surgical Instruments, Airlife Respiratory and Inside Sales.

From August 2000 to September 2010 Arron served in various escalating sales roles with the V.

Mueller/Snowden-Pencer Surgical Instrument business.

Retterer received a Master of Science from University of Oregon and a Bachelor of Science from the University of Arizona.

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

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

Previously, Dr.

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

Prior to joining Becton Dickinson, Dr.

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

a biotechnology company, from 2017 to 2018.

From 2016 to 2017, Dr.

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

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

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

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

Most recently, Mr.

Parr served as Executive Vice President & Chief Marketing Officer at Becton Dickinson and Company, a leading medical technology company, from November 2017 through January 2020.

Previously, from 2014 to 2017, Mr.

Parr served as Senior Vice President & Chief Marketing Officer at SIRVA Worldwide Relocation & Moving, a moving industry company.

Prior to that, from 2006 to 2013, Mr.

Parr served at Diversey, Inc., a cleaning and hygiene solutions company, as Senior Vice President & Chief Marketing Officer from 2010 to 2013 and Worldwide General Manager, Kitchen Hygiene & Fabric Care from 2006 to 2010.

Prior to that, Mr.

Parr served in various managing roles in consumer goods companies.

Parr holds a MBA from DePaul University and a B.S.

in Accounting from LaSalle University.

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

Most recently, Mr.

Somer served as head Legal Counsel at Invoca, Inc., a SaaS analytics company.

Prior to his time at Invoca, Mr.

Somer served as Associate General Counsel at Sunniva, Inc., and as General Counsel and Corporate Secretary for Innova Gaming Group, a gaming company.

Prior to joining Innova, Mr.

Somer served as the Senior Vice President of Business Development and General Counsel at Sunora Energy Solutions, a solar energy development company.

Somer also previously served as the Vice President of Special Projects and the Senior Global Counsel at Suntech Power, a Shanghai-based solar energy technology company.

Prior to joining Suntech Power, Mr.

Somer served as Director of Legal Affairs & Business Development at Ironport Systems, Inc.

and as Associate General Counsel and a Business Development Director of Neoforma, Inc.

Somer joined Neoforma from Morrison & Foerster where he was a corporate/securities associate based in New York.

Somer holds a L.L.M.

from Boston University, a L.L.B from the University of British Columbia School of Law, and a B.Sc.

from the University of Western Ontario in Biology/Pharmacology.

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

What changed 10-K

Item 1. Business