What changed in this filing

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Item 1. Business

2024-02-09 compared with 2023-02-10 · 158 added, 159 removed, 630 unchanged (33% of the section changed)

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As of December 31, 2023, we had 287 sales territories in the U.S.

and 12 in Europe.

and 19 outside of the U.S.

Our direct sales force engages in sales efforts and promotional activities focused on ENT physicians, and sleep centers.

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Reimbursement in other countries can often be established through a combination of private (commercial insurance) and public funding sources, or at the hospital level through innovation budgets.

We generated revenue of $407.9 million, with a gross margin of 83.8% and a net loss of $44.9 million, for the fiscal year ended December 31, 2022, compared to revenue of $233.4 million, with a gross margin of 85.7% and a net loss of $42.0 million, for the fiscal year ended December 31, 2021, and revenue of $115.4 million, with a gross margin of 84.7% and a net loss of $57.2 million, for the fiscal year ended December 31, 2020.

Our accumulated deficit as of December 31, 2022 was $324.3 million.

Our Competitive Strengths

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• Strong research and development capabilities and comprehensive intellectual property portfolio.

Our commitment to driving innovation has allowed us to achieve continuous, significant improvements of

our Inspire therapy.

For example, in 2022, we received FDA approval for additional magnetic resonance imaging ("MRI") scan conditions for use with Inspire therapy.

Our commitment to driving innovation has allowed us to achieve continuous, significant improvements of our Inspire therapy.

For example, in 2023, we submitted a premarket approval ("PMA") supplement to the FDA for our next generation Inspire system.

Also in 2023, we received approval from the FDA on an expanded indication which includes an increase on the upper limit of the AHI to 100 events per hour from 65, and raises the Body Mass Index ("BMI") warning in the labeling to 40 from 32.

We also received FDA approval of our new physician programmer, called the SleepSync™ programmer, which we expect to formally launch in the U.S.

in 2024, and we received FDA approval to offer Inspire therapy to certain

pediatric patients with Down syndrome.

In 2022, we received FDA approval for additional magnetic resonance imaging ("MRI") scan conditions for use with Inspire therapy.

This full-body MRI approval expanded the Inspire use labeling that previously allowed only head, neck, and extremity MRI scans.

Also in 2022, the FDA approved new silicone-based stimulation and sensing leads, which provides improved manufacturability, easier system implantation, increased long-term performance, and enhanced reliability.

In 2021, we received FDA approvals for our Bluetooth-enabled patient remote control, a new Inspire physician programmer platform, and an improved two-incision surgical implant procedure that eliminates one incision with a revised placement of the pressure sensing lead.

We received European Conformity Marking ("CE mark") in Europe for the two-incision implant procedure in 2021.

We have a comprehensive patent portfolio to protect our intellectual property and technology, with rights as of December 31, 2023 to 80 issued U.S.

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Our team of Sleep Support Specialists educate and oversee local sleep lab titrations.

These teams are critical to ensuring that outcomes continue to improve even as implant volumes increase around the world.

We believe these teams are critical to ensuring that outcomes continue to improve even as implant volumes increase around the world.

• Improve the customer experience.

We believe that by enhancing interconnectivity, simplifying the care pathway, and closely tracking outcomes, we can optimize the customer experience and improve therapy adherence.

We have invested in initiatives that we believe will drive higher quality patient flow to reduce time to treatment and increase the capacity of providers to treat and manage more patients.

We expect that this will allow patients and health care providers to more efficiently realize the proven benefits of Inspire therapy.

We also continue to invest in our SleepSync™ platform, a cloud-based patient management system which allows patients and physicians alike to remotely monitor key compliance and outcomes measures for connected and coordinated care management, thereby optimizing therapy.

• Promote awareness among patients, ENT physicians, sleep centers, and referring physicians.

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• Expand our sales and marketing organization to facilitate adoption of our Inspire therapy.

We plan to expand our sales and marketing organization and seek to recruit and train exceptionally talented sales representatives in existing and new markets in the U.S.

We plan to continue to expand our sales and marketing organization and seek to recruit and train exceptionally talented sales representatives in existing and new markets in the U.S.

and in Europe to help facilitate further adoption and broaden awareness of our Inspire therapy.

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Our foundational commitment to driving innovation and improving patient lives fuels our desire for continuous product development.

We intend to invest in existing and next generation technologies to further improve our products and clinical outcomes, optimize patient acceptance and comfort, and broaden the patient population that can benefit from our Inspire therapy.

Recent examples of our product innovation include the next generation of the Inspire neurostimulator, which is in development, and an active project to improve the physician programmer.

We have launched a cloud-based patient management system called SleepSync™ (formerly referred to as Inspire Cloud), which allows physicians to monitor patient compliance and more efficiently coordinate patient care, and in 2020, we launched the Inspire Sleep app

for patients' smartphones.

We intend to invest in existing and next generation technologies to further improve our

products and clinical outcomes, optimize patient acceptance and comfort, and broaden the patient population that can benefit from our Inspire therapy.

Recent examples of our product innovation include the next generation of the Inspire system, which was submitted to the FDA for approval in June 2023, and FDA approval of our SleepSync™ programmer as discussed above.

We have launched a cloud-based patient management system called the SleepSync™ platform (formerly referred to as Inspire Cloud), which allows physicians to monitor patient compliance and more efficiently coordinate patient care, and in 2020, we launched the Inspire Sleep app for patients' smartphones.

In 2021, the FDA approved our new patient remote control which is Bluetooth® enabled.

An example of our efforts to expand our label indications for the Inspire system include an application to seek FDA authorization to provide therapy to the pediatric population with Down’s Syndrome, which we submitted in August 2022.

Additionally, in July 2022, the Inspire system received Breakthrough Device Designation from the FDA for application to increase the upper limit of AHI to up to 100 events per hour from the original 65 events per hour, and to raise the Body Mass Index ("BMI") warning for patients with a BMI of up to 40 from the previous limit of 32.

A recent example of our efforts to expand our label indications for the Inspire system include obtaining FDA approval to offer Inspire therapy to certain pediatric patients with Down syndrome in 2023, which was approved in 2023.

Additionally in 2023, we received approval from the FDA on an expanded indication which includes an increase on the upper limit of the AHI to 100 events per hour from 65, and raises the BMI warning in the labeling to 40 from 32.

• Further penetrate and expand into existing and new international markets.

We plan to establish and strengthen our presence internationally.

Our goal is to further increase sales of our Inspire therapy in existing international markets in Europe, including Germany and the Netherlands, and in the Asia Pacific region, including Japan and Singapore.

We plan to expand our reach to markets in new regions, such as Australia, Hong Kong, South Korea, and China.

We plan to continue to establish and strengthen our presence internationally.

We plan to expand our reach to markets in new regions, such as Australia, South Korea, and China.

We plan to strategically invest in new markets based on our assessment of market size and opportunity and prospects for compelling reimbursement coding and coverage.

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We obtained PMA for our Inspire system in 2014.

Additionally, we received a certificate of conformity for commercialization of our Inspire system in Europe in 2010 which allowed us to affix the CE mark on our device.

Additionally, we received a certificate of conformity for commercialization of our Inspire system in the European Union ("EU") in 2010 which allowed us to affix the CE mark on our device.

Japan's MLHW approved Inspire therapy to treat moderate to severe OSA in 2018 and was formally added to the Japan National Health Insurance Payment Listing in 2021.

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In 2020, the Australian Therapeutic Goods Administration approved Inspire therapy to treat moderate to severe OSA, and we are currently seeking reimbursement coverage in Australia.

To commercialize our Inspire system, both in the U.S.

and Europe, we focus on physician and patient awareness and adoption of our Inspire therapy.

To commercialize our Inspire system, in the U.S., Europe, and Japan, we focus on physician and patient awareness and adoption of our Inspire therapy.

To achieve this, our commercialization strategy primarily consists of our direct sales force engaging in sales efforts and promotional activities focused on ENT physicians and sleep centers and highlighting our compelling clinical data and value proposition.

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sales representatives and continuing our direct-to-consumer marketing efforts in existing and new markets throughout the U.S.

In Japan and Singapore, our commercialization approach is through exclusive distribution partners, who are responsible for local sales and promotional activities focused on ENT physicians, sleep centers, and community awareness.

In Singapore and Hong Kong, our commercialization approach is through exclusive distribution partners, who are responsible for local sales and promotional activities focused on ENT physicians, sleep centers, and community awareness.

We work closely with the distributors to ensure a globally consistent approach and effective employee and customer training are in place.

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insurers now cover Inspire therapy.

For those payors that do not have a positive policy, Inspire provides robust prior authorization support to our customers.

For those payors that do not have a positive policy, Inspire provides assistance to patients and physicians in obtaining appropriate prior authorization approvals in advance of treatment.

Medicare also has positive coverage for all states, and we have a U.S.

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With the exception of pulse strength, the factory default settings are used in the majority of patients.

The pulse strength is initially adjusted to the lowest level required to move the tongue forward without causing discomfort.

The pulse strength is initially adjusted to the lowest level required to move the tongue forward.

Patients receive a remote control that they use to turn their Inspire system on when they plan to go to sleep and to turn it off when they awaken.

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It then delivers mild stimulation to the hypoglossal nerve, causing the tongue to move as the patient is inhaling.

The remote enables patients to adjust the strength of the stimulation to

optimize their therapy and comfort.

The remote enables patients to adjust the strength of the stimulation to optimize their therapy and comfort.

The range of control given to patients is limited to avoid setting the strength of the stimulation to an ineffective or excessively high level.

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(1) Median results

(2) Mean results

(2) Thomas Jefferson University Hospital ("TJUH") and University of Pittsburgh Medical Center ("UPMC").

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Data gathered on the first 1,963 patients published in the Journal of Clinical Sleep Medicine in 2022 showed that patients used Inspire therapy an average of 5.7 hours per night when measured an average of 12 months after implantation.

Mean AHI was reduced from 33.0 events per hour to 10.2 events per hour and mean ESS score improved from 11 to 6 over the same period.

Median AHI was reduced from 33.0 events per hour to 10.2 events per hour and median ESS score improved from 11 to 6 over the same period.

Overall satisfaction with Inspire therapy was reported by patients to be 90%, with 92% of patients reporting that they would choose the procedure again.

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Inspire Therapy Improves Patient Symptoms Similarly as CPAP

In 2021, the Cleveland Clinic published on the first comparison of patient-reported outcomes between Inspire therapy and CPAP.

In 2021, the Cleveland Clinic published the first comparison of patient-reported outcomes between Inspire therapy and CPAP.

These results showed that Inspire therapy and CPAP had a similar improvement in patient symptoms of sleepiness, daytime energy, depression, and insomnia.

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We believe these observed improvements could translate to better disease alleviation in patients unable to tolerate CPAP.

Large-scale Insights of Over Three Million Patient Nights from Inspire SleepSync™ Patient Database Showing Real-World Results

Inspire SleepSync™ patient management system helps physicians track therapy usage and outcomes, and the results of the first three million patient nights of data were presented by Dr.

Large-scale Insights of Over Three Million Patient Nights from Inspire's SleepSync™ Patient Database Showing Real-World Results

Inspire's SleepSync™ patient management system helps physicians track therapy usage and outcomes, and the results of the first three million patient nights of data were presented by Dr.

Jordan Weiner at the 2022 American Academy of Otolaryngology conference and Dr.

Deborah Goss at the 2022 American Association of Sleep Medicine meeting.

These data, the largest to date evaluating outcomes from Inspire therapy, show the results of

3.7 million patient-nights in 12,017 patients across 491 practices.

These data, the largest to date evaluating outcomes from Inspire therapy, show the results of 3.7 million patient-nights in 12,017 patients across 491 practices.

These data showed that, in real-world use, Inspire therapy continued to show highly effective outcomes similar to the early clinical trials.

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Linda Magaña, presented at the 2022 meeting of the American Academy of Otolaryngology, examined the differences between Hispanic / Latino and non-Hispanic / non-Latino patients, and found that it demonstrated comparable outcomes.

While there is an opportunity to continue to improve the adoption of Inspire therapy in minority populations, given the higher incident rates and under diagnosis in these groups, we believe these two analyses provide additional evidence that Inspire therapy is equally effective across race and ethnicity.

While there is an opportunity to continue to improve the adoption of Inspire therapy in minority populations, given the higher

incident rates and under diagnosis in these groups, we believe these two analyses provide additional evidence that Inspire therapy is equally effective across race and ethnicity.

Comparison of Sleep Surgery Complication Rates versus Inspire Therapy

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Taken together, we believe these data suggest that Inspire therapy should be considered first prior to any traditional airway surgery.

Long-term Therapy Efficacy and Reliability Data

In 2023, two new findings were published showing the positive long-term effects of Inspire therapy.

The first publication titled, “Long-Term Generator Replacement Experience in Hypoglossal Nerve Stimulator Therapy Recipients With CPAP-Intolerant Obstructive Sleep Apnea” was published in the Otolaryngology–Head and Neck Surgery journal in October 2023.

In this paper, a team led by Dr.

Linda Magana at the University of Pittsburgh followed the initial patients from the STAR trial for approximately eight years after initial implant, making it the longest follow-up to date of Inspire therapy.

The findings reflect that these patients showed stable AHI outcomes consistent with the initial one-year outcomes, and high therapy usage of 7.2 hours per night.

Additionally, an abstract demonstrating the real-world evaluation of Inspire therapy system survival was presented at the SLEEP 2023 meeting in Indianapolis by Dr.

Colin Huntley from Thomas Jefferson University.

It showed that under real-world conditions, in over 20,000 device implants since January 2018, device explant and revision rates remained low and improved over time, despite increasing utilization.

Furthermore, the abstract suggested that these survival rates were reported to be at least similar to, if not slightly better than other implantable active medical devices.

Sales and Marketing

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patients, physicians, and sleep centers.

We sell our Inspire system through a direct sales force that primarily targets ENT physicians and sleep centers in the U.S.

and Europe, and through distributors in Japan and Singapore.

We sell our Inspire system through a direct sales force that primarily targets ENT physicians and sleep centers in the U.S., Europe, and Japan, and through distributors in Singapore and Hong Kong.

The implant procedure for our Inspire therapy is typically performed by an ENT physician or in some cases by a neurosurgeon.

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We have 287 sales territories in the U.S.

and 12 in Europe.

and 19 outside of the U.S.

We seek to recruit sales representatives with strong sales backgrounds, direct experience developing markets with new technologies, and core knowledge of medical device coding, reimbursement, and the prior authorization process.

In our Asian markets, we rely on our distribution partner for local sales and promotional activities.

In certain Asian markets, we rely on our distribution partners for local sales and promotional activities.

We also utilize direct communication channels to inform and educate patients about Inspire therapy and to enable them to connect with active clinical sites that offer our Inspire systems.

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We believe our patient outreach efforts have been effective in bringing potential patients to our website and facilitating contact with our clinical sites.

During 2022, we had over 13.8 million visits to our website, which generated more than 78,000 contacts with physicians throughout the year.

In 2020, we launched the Inspire Sleep app for patients' smart phones.

This app is an educational tool for patients and also interfaces with SleepSync TM to allow physicians to collect clinical data from patients directly.

During 2023, we had nearly 13.4 million visits to our website, which generated approximately 65,000 contacts with physicians throughout the year.

In 2020, we launched the Inspire Sleep app for patients' smartphones.

This app is an educational tool for patients and also interfaces with our SleepSync TM platform to allow physicians to collect clinical data from patients directly.

We continue to enhance the functionality of this app as part of our overall digital platform development.

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Our general practice is to limit commercial investments in countries until such time as there is a determined reimbursement pathway.

We have 12 sales territories in Europe and we sell our products through a distributor in Japan and Singapore.

We provide consistent training in Europe, Japan, and Singapore as is conducted in the U.S.

and have established a support team in Europe for patient outreach and education, implant support, and device programming.

In our Asian markets we assist our distribution partner with patient outreach and education initiatives.

We have 19 sales territories in Europe and Japan, and we sell our products through distributors in Singapore and Hong Kong.

We provide consistent training in geographies outside of the U.S.

as is conducted in the U.S.

and have established a support team in Europe and Japan for patient outreach and education, implant support, and device programming.

In Singapore and Hong Kong, we assist our distribution partners with patient outreach and education initiatives.

We expect to continue to scale our commercial activities in Europe as we continue to develop country-wide reimbursement in additional markets.

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These customers in turn bill various third-party payors, such as commercial payors and Medicare, for the cost required to treat each patient.

Third-party payors require physicians and hospitals to identify the service for which they are seeking reimbursement by using CPT codes, which are created and maintained by the AMA.

Third-party payors require physicians and hospitals to identify the service for which they are seeking reimbursement by using Current Procedural Terminology (“CPT") codes, which are created and maintained by the American Medical Association.

The procedures performed to implant, revise, or explant our device are described for billing purposes using Category I CPT codes (64582, 64583, and 64584, respectively) to identify hypoglossal nerve stimulator services.

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Medicare provides reimbursement to our hospital customers under the hospital outpatient prospective payment system ("OPPS") which provides bundled amounts generally intended to reimburse the hospital for all facility costs related to procedures performed in the hospital outpatient setting.

Under OPPS, the 2023 national average Medicare payment to the hospital for this procedure is $29,358, which is intended to cover the hospitals’ costs for the device and facilities and resources required for the implantation procedure.

The 2023 Medicare national average ASC reimbursement rate is $25,180.

The physician’s professional services are reimbursed separately under the Medicare Physician Fee Schedule.

The 2023 Medicare national average physician fee for the implant is $873.

The 2023 Medicare national average reimbursement rate for the DISE procedures is $97.

Reimbursement rates from commercial payors vary depending on the procedure performed, the commercial payor, contract terms, and other factors.

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We have been successful in obtaining prior authorization approvals from most commercial payors for the Inspire device and procedure.

Historically, commercial payors cover approximately 70% of Inspire implants in the U.S.

Historically, commercial payors cover approximately 65% to 70% of Inspire implants in the U.S.

We estimate that the majority of patients who meet the FDA indication for Inspire therapy are covered by commercial insurance companies and we have secured coverage policies with virtually all major national commercial payors.

All seven MACs provide coverage of Inspire therapy when certain coverage criteria are met.

Medicare beneficiaries have historically accounted for approximately 25% of all Inspire system implantations in the U.S.

Medicare beneficiaries have historically accounted for approximately 25% to 30% of all Inspire system implantations in the U.S.

In addition, we have a contract with the U.S.

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We believe our market access team is highly effective in working with patients and physicians to obtain prior authorizations for our Inspire system, including assisting with the appeals process.

Additionally, in late 2023, we engaged a third-party vendor to assist our internal team with prior authorization submissions in order to increase our capacity to meet patient demand.

We have received hundreds of prior authorization approvals from all of the largest commercial payors, for example Anthem, Cigna, Blue Cross Blue Shield, United Healthcare, and Humana.

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Reimbursement Outside of the U.S.

Outside the U.S., reimbursement levels vary significantly by country and by region within some countries.

Outside the U.S., reimbursement levels vary by country and by region within some countries.

Reimbursement is obtained from a variety of sources, including government-sponsored and private health insurance plans, and combinations of both.

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As in the U.S., reimbursement decisions can change, resulting in the elimination or reduction of reimbursement payments, which could adversely affect our financial results and our ability to invest in and grow our business.

We currently have country wide reimbursement in Germany, the Netherlands, Switzerland, and Japan.

We are in the final process to have the Inspire IV system included in the French Haute Autorité De Santé listing of products and services qualifying for reimbursement (LPPR) of approved technologies for reimbursement across the French health system.

We are similarly awaiting publication of a nationwide positive national health reimbursement

decision in Belgium.

We continue to pursue permanent reimbursement in target markets across the Asia Pacific, including Australia, and Europe, including Spain, the United Kingdom, and the Nordic region.

We currently have country wide reimbursement in Germany, the Netherlands, Switzerland, Belgium, the United Kingdom, and Japan.

We are in the final process to have the Inspire system included in the French Haute Autorité De Santé listing of products and services qualifying for reimbursement (LPPR) of approved technologies for reimbursement across the French health system.

We continue to pursue permanent reimbursement in target markets across the Asia Pacific and Europe, including Spain and the Nordic region.

Research and Development

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The STAR trial was completed and published in the New England Journal of Medicine in 2014 and we received PMA in 2014.

Additionally, the device was CE marked for commercialization in Europe in 2010.

Additionally, the device was CE marked for commercialization in the EU in 2010.

We continue to invest in advancing our Inspire system with the goal of providing patients more effective and less invasive therapy for OSA.

In 2017, we released the Inspire IV neurostimulator, which is 40% smaller than the previous version while maintaining approximately 11 years of battery life.

Patients with this version of the Inspire system are now able to undergo an MRI scan of the head or extremities.

The Inspire IV device was launched in the U.S.

in 2017, and in Europe in 2018.

Our newly designed respiratory sensing lead was developed in 2017 and was approved by the FDA in 2019.

This lead was introduced in Europe in 2018 and in the U.S.

The lead has a significantly smaller profile, including a reduction in diameter of 49 percent as compared to the prior design.

This smaller profile is intended to simplify surgical placement along with several other features to enable easier implanting, and potentially reduce surgical time for an ENT surgeon.

Our next generation of the Inspire neurostimulator is in development, and we also have an active project to improve the physician programmer.

Our Bluetooth®-enabled patient remote control was approved by the FDA in December 2021 and the initial commercial launch occurred in 2022.

We have launched a cloud-based patient management system called SleepSync™, which allows physicians to monitor patient compliance and more efficiently coordinate patient care.

In 2020, we launched the Inspire Sleep app for patients' smart phones.

Our next generation of the Inspire neurostimulator was submitted to the FDA for approval in June 2023, and our SleepSync™ programmer was approved by the FDA in 2023.

Our Bluetooth®-enabled patient remote control was approved by the FDA in 2021 and the initial commercial launch occurred in 2022.

We have launched a cloud-based patient management system called the SleepSync™ platform, which allows physicians to monitor patient

compliance and more efficiently coordinate patient care.

In 2020, we launched the Inspire Sleep app for patients' smartphones.

The first version of the app was an educational tool, and the second version interfaces with the Inspire Cloud and allows physicians to collect clinical data from patients directly.

We continue to enhance the functionality of this app as part of our overall digital platform development.

SleepSync™ and our app are initial steps in establishing interconnectivity between the patient and their healthcare provider with a long-term plan to improve outcomes by tracking patient activity and adherence, and monitoring for any issues with device use.

The SleepSync™ platform and our app are initial steps in establishing interconnectivity between the patient and their healthcare provider with a long-term plan to improve outcomes by tracking patient activity and adherence, and monitoring for any issues with device use.

Additional Indications

We have sought and continue to seek to expand the approved indications for our Inspire therapy.

For instance, in 2020, we received FDA approval for an expanded age-range of patients who can be treated with Inspire therapy, which now includes 18 to 21-year old patients.

In August 2022, we submitted an application to seek FDA authorization to provide therapy to the pediatric population with Down’s Syndrome.

Additionally, in July 2022, the Inspire system received Breakthrough Device Designation from the FDA for application to increase the upper limit of AHI to up to 100 events per hour from the original 65 events per hour, and to raise the BMI warning for patients with a BMI of up to 40 from the previous limit of 32.

Our research and development team focuses on the products currently under development, including our clinical studies that include efforts to improve patient selection, expand indications, and simplify patient management, as well as feasibility studies in which we are evaluating new ways to deliver neuromodulation for OSA therapy and different design configurations to enhance product functionality for future generations of the Inspire system.

One example is our PREDICTOR study, which completed enrollment of 300 patients in 2022, which aims to remove the DISE requirement for patients less likely to have concentric collapse.

For instance, in 2023, we received FDA authorization to provide Inspire therapy to the pediatric population with Down syndrome.

Also in 2023, the FDA approved an indication expansion to increase the upper limit of AHI to up to 100 events per hour from the original 65 events per hour, and to raise the BMI warning for patients with a BMI of up to 40 from the previous limit of 32.

Our research and development team focuses on our products currently under development, including our clinical studies involving efforts to improve patient selection, expand indications, and simplify patient management, as well as feasibility studies in which we are evaluating new ways to deliver neuromodulation for OSA therapy and different design configurations to enhance product functionality for future generations of the Inspire system.

One example is our PREDICTOR study, which completed enrollment of 600 patients in early 2024, and which aims to remove the DISE requirement for patients less likely to have concentric collapse.

Our industry is subject to rapid change from the introduction of new products and technologies and other activities of industry participants.

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and is conducting its first pivotal trial as it seeks FDA approval in the U.S.

A dug candidate produced by Apnimed is entering a Phase 3 clinical trial to assess the viability of its pharmaceutical to treat OSA.

A drug candidate produced by Apnimed is entering a Phase 3 clinical trial to assess the viability of its pharmaceutical to treat OSA.

We believe other emerging businesses are in the early stages of developing neurostimulation devices or early-stage pharmaceutical approaches.

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Some other OSA treatments against which we compete, such as oral appliances, MMA, and UPPP, have a greater penetration into the OSA treatment market.

Oral appliances and some other surgical treatments are better

known to ENT physicians, sleep centers and the other physicians on whom we rely for referrals, but we believe physician awareness of our Inspire therapy is increasing.

Oral appliances and some other surgical treatments are better known to ENT physicians, sleep centers and the other physicians on whom we rely for referrals, but we believe physician awareness of our Inspire therapy is increasing.

We also compete with other medical technology companies to recruit and retain qualified personnel.

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We share co-exclusive rights with Medtronic under this license;

however, Medtronic may not exercise its rights unless we make an assignment for the benefit of our creditors, file or have filed against us a bankruptcy petition or go into receivership.

however, Medtronic may not exercise

its rights unless we make an assignment for the benefit of our creditors, file or have filed against us a bankruptcy petition or go into receivership.

We also granted to Medtronic certain worldwide, royalty-free, exclusive licenses to the patents Medtronic assigned to us, as well as other intellectual property (including but not limited to Technical Information (as defined in the Assignment and License Agreement)) that applies to a device and methods with certain specifications for use in the Field, to make, use, import and sell products, and to practice methods outside of the Field.

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Additionally, outsourcing provides expertise and capacity necessary to scale up or down based on demand for our Inspire system.

We select our suppliers to ensure that our Inspire system and its components are safe and effective, adhere to all applicable regulations, are of the highest quality, and meet our supply needs.

We employ a rigorous supplier assessment, qualification, and selection process targeted to suppliers that meet the requirements of the FDA and the International Organization for Standardization and quality standards supported by internal policies

and procedures.

Our quality assurance process monitors and maintains supplier performance through qualification and periodic supplier reviews and audits.

We select our suppliers to help ensure that our Inspire system and its components are safe and effective, adhere to all applicable regulations, are of the highest quality, and meet our supply needs.

We employ a rigorous supplier assessment, qualification, and selection process with the goal of selecting and retaining suppliers that meet the requirements of the FDA and the International Organization for Standardization and quality standards based on our internal policies and procedures.

Our quality assurance process seeks to monitor and maintain supplier performance through qualification and periodic supplier reviews and audits.

Certain components used in our Inspire system are supplied by single-source suppliers.

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We intend to maintain sufficient levels of inventory to enable us to continue our operations while we obtain another supplier in the event that one or more of our single-source suppliers were to encounter a delay in supply or end supply.

We have experienced and continue to experience supply disruptions which began during the COVID pandemic, but have managed to avoid any significant supply and inventory issues or delay in implant procedures due to those issues, although there can be no assurance that we will avoid significant supply disruptions in the future.

We have experienced and continue to experience supply disruptions that began during the COVID-19 pandemic, but to date we have managed to avoid major delays in implant procedures due to those issues.

During the third quarter of 2023, we began experiencing an inventory supply issue related to our polyurethane-based stimulation leads, one component of the Inspire system currently used only in the European market.

We continue to expect delays to implant procedures.

These delays have impacted, and are expected to continue to impact our revenue, however, to a lesser extent than in prior year periods as a result of the derogations received thus far, and we believe would be further improved if we receive certification under the EU MDR.

See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” for additional information.

Government Regulation

Our products and our operations are subject to extensive regulation by the FDA and other federal and state authorities in the U.S., as well as comparable authorities in the European Economic Area ("EEA") and Japan, and in Australia (where our products are approved for sale but where we have not yet commercialized them).

Our products and our operations are subject to extensive regulation by the FDA and other federal and state authorities in the U.S., as well as comparable authorities in the European Economic Area ("EEA"), Japan, and in Australia (where our products are approved for sale but where we have not yet commercialized them).

In the U.S., our products are subject to regulation as medical devices under the Federal Food, Drug, and Cosmetic Act ("FDCA") as implemented and enforced by the FDA.

The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, import, export, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices to ensure that medical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA.

The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, import, export, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices to help ensure that medical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA.

In addition to U.S.

regulations, we are subject to a variety of regulations in the EEA governing clinical trials and the commercial sales and distribution of our products.

Whether or not we have or are required to obtain FDA clearance or approval for a product, we will be required to obtain authorization before commencing clinical studies and to obtain marketing authorization or approval of our products under the comparable regulatory authorities of countries outside of the U.S.

before we can commence clinical studies or commercialize our products in those countries.

The approval process varies from country to country and the time may be longer or shorter than that required for FDA clearance or approval.

regulations, we are subject to a variety of regulations in the EEA governing clinical studies and the commercial sales and distribution of our products.

Whether or not we have or are required to obtain FDA clearance or approval for a product, we will be required to obtain authorization before commencing clinical studies and to obtain marketing authorization, approval or certification of our products under the comparable regulatory authorities of countries outside of the U.S.

or notified bodies before we can commercialize our products in those countries.

The approval/certification process varies from country to country and the time may be longer or shorter than that required for FDA clearance or approval.

FDA Premarket Clearance and Approval Requirements

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The FDA may approve a PMA with post-approval conditions intended to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution, and collection of long-term follow-up data from patients in the clinical study that supported PMA or requirements to conduct additional clinical studies post-approval.

The FDA may condition PMA on some form of post-market surveillance when deemed necessary to protect the public health or to provide additional safety and efficacy data for the device in a larger population or for a longer period of use.

The FDA may condition PMA on some form of post-market surveillance when deemed necessary to protect public health or to provide additional safety and efficacy data for the device in a larger population or for a longer period of use.

In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic reports to the FDA on the clinical status of those patients.

Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the approval.

Certain changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the design performance specifications, which affect the safety or effectiveness of the device, require submission of a PMA supplement.

device, require submission of a PMA supplement.

PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel.

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A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject.

An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is

scientifically sound.

An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound.

The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation may not begin.

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Following passage of the 21st Century Cures Act, the FDA implemented the Breakthrough Devices Program, which is a voluntary program offered to manufacturers of certain medical devices and device-led combination products, including ours, that may provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions.

The goal of the program is to provide patients and health care providers with more timely access to qualifying devices by expediting their development, assessment and review, while preserving the statutory standards for FDA marketing authorization.

The goal of the program is to provide patients and health care providers with more timely access to qualifying devices by expediting their development, assessment and review,

while preserving the statutory standards for FDA marketing authorization.

The program is available to medical devices that meet certain eligibility criteria, including that the device provides more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions, and that the device meets one of the following criteria:

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• correction, removal, and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health;

• complying with the new federal law and regulations requiring Unique Device Identifiers (UDI) on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database (GUDID);

• complying with the laws and regulations requiring Unique Device Identifiers (UDI) on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database (GUDID);

• the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations;

• post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.

• post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect public health or to provide additional safety and effectiveness data for the device.

Our manufacturing processes are required to comply with the applicable portions of the QSR, which cover the methods and the facilities, controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation, and servicing of finished devices intended for human use.

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As a manufacturer, our facilities, records, and manufacturing processes are subject to periodic scheduled or unscheduled inspections by the FDA.

Our failure to maintain compliance with the QSR or other applicable regulatory requirements could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure of our products.

Our failure to maintain compliance with the QSR or other

applicable regulatory requirements could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure of our products.

The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.

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However, as of May 26, 2021, some of the EU Medical Devices Regulation requirements apply in place of the corresponding requirements of the EU Medical Devices Directive and the AIMDD with regard to registration of economic operators and of devices, post-market surveillance and vigilance requirements.

Pursuing marketing of medical devices in the EU will notably require that our devices be certified under the new regime set forth in the EU Medical Devices Regulation when our current certificates expire.

Pursuing marketing of medical devices in the EU will notably require that our devices be certified under the new regime set forth in the EU Medical Devices Regulation.

Medical Devices Directive

In the EU, there is currently no premarket government review of medical devices.

However, all medical devices placed on the EU market must meet the essential requirements, including the requirement that a medical device must be designed and manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety and health of users and others .

patients, or the safety and health of users and others .

In addition, the device must achieve the performance intended by the manufacturer and be designed, manufactured, and packaged in a suitable manner.

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Notified bodies are independent organizations designated by EU member states to assess the conformity of devices before being placed on the market.

A notified body would typically audit and examine a product’s technical dossiers and the manufacturers’ quality system.

A notified body would typically audit and examine a product’s technical dossiers and the manufacturer’s quality system.

If satisfied that the relevant product conforms to the relevant essential requirements, the notified body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity.

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This aims at increasing harmonization across the EU.

Devices lawfully placed on the market pursuant to the EU Medical Devices Directive or the AIMDD prior to May 26, 2021 may generally continue to be made available on the market or put into service until May 26, 2025, provided that the requirements of the transitional provisions are fulfilled.

In particular, the certificate in question must still be valid.

The EU Medical Devices Regulation became effective on May 26, 2021.

In accordance with its recently extended transitional provisions, both (i) devices lawfully placed on the market pursuant to the EU Medical Devices Directive or the AIMDD prior to May 26, 2021 and (ii) legacy devices lawfully placed on the EU market after May 26, 2021 in accordance with the EU Medical Devices Regulation transitional provisions may generally continue to be made available on the market or put into service, provided that the requirements of the transitional provisions are fulfilled.

However, even in this case, manufacturers must comply with a number of new or reinforced requirements set forth in the EU Medical Devices Regulation, in particular the obligations described below.

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All manufacturers placing medical devices into the market in the EU must comply with the EU medical device vigilance system.

Under this system, serious incidents and Field Safety Corrective Actions (“FSCAs”) must be reported to the relevant authorities of the EU member states.

Under this system, serious incidents and Field Safety Corrective Actions (“FSCAs”) must be

reported to the relevant authorities of the EU member states.

Manufacturers are required to take FSCAs defined as any corrective action for technical or medical reasons to prevent or reduce a risk of a serious incident associated with the use of a medical device that is made available on the market.

An FSCA may include the recall, modification, exchange, destruction or retrofitting of the device.

The aforementioned EU rules are generally applicable in the European Economic Area (“EEA”) which consists of the 27 EU member states plus Norway, Liechtenstein, and Iceland.

The aforementioned EU rules are generally applicable in the EEA which consists of the 27 EU member states plus Norway, Liechtenstein, and Iceland.

Since January 1, 2021, the Medicines and Healthcare Products Regulatory Agency (“MHRA”) has become the sovereign regulatory authority responsible for Great Britain (i.e.

England, Wales and Scotland) medical device market according to the requirements provided in the Medical Devices Regulations 2002 (SI 2002 No 618, as amended) that sought to give effect to EU Medical Devices Directive and AIMDD whereas Northern Ireland continues to be governed by EU rules according to the Northern Ireland Protocol.

Following the end of the Brexit transitional period on January 1, 2021, new regulations require medical devices to be registered with the MHRA before being placed on Great Britain market.

The MHRA only registers devices where the manufacturer or their United Kingdom (“UK”) Responsible Person has a registered place of business in the UK.

Manufacturers based outside the UK need to appoint a UK Responsible Person that has a registered place of business in the UK to register devices with the MHRA.

Following the end of the Brexit transitional period on January 1, 2021, new regulations require medical devices to be registered with the MHRA before being placed on the Great Britain market.

Manufacturers based outside the United Kingdom ("UK") need to appoint a UK Responsible Person that has a registered place of business in the UK to register devices with the MHRA.

On June 26, 2022, the MHRA published its response to a 10-week consultation on the post-Brexit regulatory framework for medical devices and diagnostics.

MHRA seeks to amend the UK Medical Devices Regulations 2002 (which are based on EU legislation, primarily the EU Medical Devices Directive and the EU In Vitro Diagnostic Medical Devices Directive 98/79/EC), in particular to create new access pathways to support innovation, create an innovative framework for regulating software and artificial intelligence as medical devices, reform IVD regulation, and foster sustainability through the reuse and remanufacture of medical devices.

Regulations implementing the new regime were originally scheduled to come into force in July 2023, but have recently been postponed to July 2024.

Regulations implementing the new regime were originally scheduled to come into force in July 2023, but the MHRA has confirmed that the core aspects of the new regime are expected to apply by July 1, 2025.

Devices bearing CE marks issued by EU notified bodies under the EU Medical Devices Regulation, the EU Medical Devices Directive or AIMDD are now subject to transitional arrangements.

In its consultation response, the MHRA indicated that the future UK regulations will allow devices certified under the EU Medical Devices Regulation to be placed on the market in Great Britain under the CE mark until either the certificate expires or for five years after the new regulations take effect, whichever is sooner.

Devices certified under the EU Medical Devices Directive or AIMDD could continue to be placed on the market until either the certificate expires or for three years after the new regulations take effect, whichever is sooner.

The MHRA has introduced legislation which provides that CE marked medical devices may be placed on the Great Britain market along following timelines:

• general medical devices compliant with the EU Medical Devices Directive or (EU) AIMDD with a valid declaration and CE marking can be placed on the Great Britain market up until the sooner of the expiration of the certificate or June 30, 2028;

• general medical devices, including custom-made devices, compliant with the EU Medical Devices Regulation can be placed on the Great Britain market up until June 30, 2030.

Following these transitional periods, it is expected that all medical devices will require a UK Conformity Assessed ("UKCA") mark.

Manufacturers may choose to use the UKCA mark on a voluntary basis until June 30, 2023.

Manufacturers may choose to use the UKCA mark on a voluntary basis prior to the mandatory deadlines.

However, UKCA marking will not be recognized in the EU.

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Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct

per se illegal under the federal Anti-Kickback Statute.

Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances.

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These laws, which vary between jurisdictions (thus making compliance more complex), may limit or restrict the advertising and promotion of our products to the general public and may impose limitations on our promotional activities with healthcare professionals.

Many EU member states have adopted specific anti-gift statutes that further limit commercial practices for our products, in particular vis-à-vis healthcare professionals and organizations.

Many EU member states have adopted

specific anti-gift statutes that further limit commercial practices for our products, in particular vis-à-vis healthcare professionals and organizations.

Additionally, there has been a recent trend of increased regulation of payments and transfers of value provided to healthcare professionals or entities and many EU member states have adopted national “Sunshine Acts” which impose reporting and transparency requirements (often on an annual basis), similar to the requirements in the United States, on medical device manufacturers.

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

reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if the entity becomes subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of operations.

Violation of any of the federal and state healthcare laws described above or any other governmental regulations that apply to device manufacturers may result in significant penalties, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if the entity becomes subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of operations.

Data Privacy and Security Laws

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Supreme Court dismissed the most recent judicial challenge to the ACA without specifically ruling on the constitutionality of the ACA.

Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

For example, the Budget Control Act of 2011, among other things, included reductions to Medicare payments to providers, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect into 2032, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken.

Additionally, the American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to

In addition, the Medicare Access and CHIP Reauthorization Act of 2015 enacted on April 16, 2015, repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments began in 2019 that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations.

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Human Capital

We pride ourselves on our innovative and collaborative work environment, which we believe has driven our success and which we seek to uphold through a diverse workforce, generous compensation and benefits, open communication, a focus on employee health, wellbeing and engagement, and robust training and development programs.

As of December 31, 2022, we had 755 employees, of which 722 are in the U.S., 32 are in Europe and one is in Japan.

We pride ourselves on our innovative and collaborative work environment, which we believe has driven our success and which we seek to uphold by fostering an inclusive workforce, generous compensation and benefits, open communication, a focus on employee health, wellbeing and engagement, and robust training and development programs.

As of December 31, 2023, we had 1,011 employees, of which 960 are in the U.S., 45 are in Europe and six are in Japan.

We increased the number of employees by 34% during 2023 to support the rapid growth of our business.

None of our employees is subject to a collective bargaining agreement or represented by a trade or labor union.

None of our employees are currently subject to a collective bargaining agreement or represented by a trade or labor union.

We consider our relationship with our employees to be good.

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Inspire is committed to conducting business in accordance with the highest ethical standards and applicable laws.

We maintain, and all of our employees are expected to adhere to our Code of Business Conduct and Ethics (the “Code of Conduct”), which serves as the foundation of Inspire’s core values that drive our company’s culture.

employees must certify they understand and comply with the expectations contained in the Code of Conduct.

We maintain, and all of our employees are expected to adhere to our Code of Business Conduct and Ethics (the “Code of Conduct”), which serves as the foundation of our company’s culture.

All employees must certify they understand and comply with the expectations contained in the Code of Conduct.

We also maintain an anonymous hotline for employees to report concerns regarding violations of the Code of Conduct.

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Compensation and Benefits

Our human capital strategies, initiatives, and outcomes are reviewed on a regular basis with our Board’s Organization and Compensation Committee to help align with the company’s overall business strategies.

In 2022, the Committee engaged an independent consulting firm to assess the market competitiveness of our compensation programs and offerings.

Our human capital strategies, initiatives, and outcomes are reviewed on a regular basis with our Board’s Organization and Compensation Committee to provide alignment with the company’s overall business strategies.

The Committee has engaged an independent consulting firm to assess the market competitiveness of our compensation programs and offerings.

We believe strongly in providing employees with the opportunity to participate as owners of the company.

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Additionally, beginning in 2022, we incorporated a 401(k)-employer match for all U.S.-based employees.

We typically complete a pay equity analysis every other year at the request of the Organization and Compensation Committee.

The Committee reviews the detailed analysis with an outside consulting firm and reports the results to the full Board.

Based on the results of the 2021 analysis, we believe our compensation programs are fair and equitable.

The next analysis is expected to be completed in 2023.

Talent Management

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Inspire’s growth has required several strategies to attract talent and meet our headcount plans.

We have a strong internal referral network in which between 50% to 60% of all hires have been from internal referrals.

This is supplemented with search partners, who meet with our talent acquisition team on a quarterly basis to review and provide the most up-to-date public information so that potential candidates can fully understand the potential that employment with Inspire can offer.

Our search firms’ partners include U.S.

veteran, women-owned, and minority-owned organizations.

Even with aggressive headcount growth, our global attrition rate has been less than 11%.

We have a strong internal referral network in which between 50-60% of all hires have been from internal referrals.

This is supplemented with search partners, who meet with our talent acquisition team on a quarterly basis to review and provide the most up-to-date public information to ensure potential candidates fully understand the potential Inspire can offer.

We seek to foster a culture where learning is continuous.

We believe in our people and their ability to accept new responsibilities and challenges, and to grow with us to contribute to our success.

We look to foster growth through professional development and learning programs, as well as practical experience leading projects or teams.

To support newly promoted leaders, we have implemented a leadership program entitled, “Boss to Coach,” which is specially designed to help them succeed in their expanded roles.

Additionally, we provide leadership coaching opportunities through external partners.

Our leadership team participates in a talent review and succession planning exercise typically annually in order to identify organizational needs, development opportunities, and potential future leaders.

This has enabled us to identify the resources and skill sets needed to meet our growth objectives.

Growth is fostered through professional development and learning programs, as well as practical experience leading projects or teams.

Over 50% of our leadership promotions have been from within.

In 2022, we launched tools that support individual managers as they seek to enhance their leadership skills and deepen their team’s engagement.

To support newly promoted leaders, we have a leadership program entitled, “Boss to Coach,” which is specially designed to help them succeed in their expanded roles.

Additionally, we provide leadership coaching opportunities through external partners.

On an annual basis, our leadership team participates in a talent review and succession planning exercise to identify organizational needs, development opportunities, and potential future leaders.

This enables us to identify the resources and skill sets needed to meet our growth objectives.

To encourage further professional development of our employees, in 2022 we introduced a tuition reimbursement program for those pursuing an advanced degree.

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In 2020, we created an engaging training initiative for all employees which encourages awareness of unconscious bias and microaggressions.

Building on our 2020 program, during 2021, we implemented sessions specifically for Inspire leaders to create respectful culture within their teams.

The goals of these programs are to encourage broad and

diverse viewpoints to achieve the best outcomes for our patients, customers, and employees, and to build awareness of how our own behaviors impact our colleagues.

In addition to new employee training focused on creating a harassment-free work environment, managers participate in facilitator-led training focused on the importance of inclusivity and diversity of thought.

Leaders are provided information and tools that help them, with the assistance of our Human Resources team, to investigate and address issues.

The program, entitled “Humanity is our Superpower,” was launched in 2022.

The goals of these programs are to encourage broad and diverse viewpoints to achieve the best outcomes for our patients, customers, and employees, and to build awareness of how our own behaviors impact our colleagues.

Since then, we have developed our programs to provide engaging, virtual harassment and bias re-training to all global employees.

In addition to new employee training focused on creating a harassment-free work environment, leaders are provided information and tools annually to allow them, with the assistance of our Human Resources team, to investigate and address issues.

The program, entitled “Humanity is our Superpower,” continued to expand in 2023.

Following the program, leaders meet as a team and review ideas for creating an environment where inclusion prospers.

During talent acquisition, our recruiting team reinforces with hiring managers the importance of seeking and engaging with diverse candidates.

In order to develop a more diverse talent pool, we actively seek diverse candidates to participate in our Internship Program and routinely host activation events at college campus career fairs.

We also partner with four external agencies, including veteran and women-owned organizations, to supplement field hiring with a focus on diverse candidate slates.

As of December 31, 2022, 46% of our workforce was female, and 14% identified as a member of minority racial group.

During talent acquisition, our recruiting team reinforces with hiring managers the importance of seeking and engaging with candidates from all backgrounds.

We actively seek diverse candidates to participate in our Internship Program and routinely host recruiting events at college campus career fairs.

As of December 31, 2023, 48% of our workforce identified as female, and 15% identified as a member of minority racial group.

Charitable Giving

Our employees are passionate about improving the lives of others.

This passion is at the core of our various philanthropic initiatives that our company and employees support, through which, we have had significant positive impact on our community over the years.

As our business continues to grow and expand geographically, we intend to build upon that impact by expanding these initiatives in ways that are aligned with our community giving goals.

As a medical technology company, we are committed to enhancing the lives of patients through innovation.

In 2023, we launched InspireGives, Inspire’s community outreach program aimed at serving the communities in which we live and operate through financial donations and volunteerism.

Our contributions seeks to provide crucial assistance to charitable organizations striving to treat critical illnesses, combat poverty and homelessness, ease hardship for people affected by disasters, eliminate barriers to equal opportunity, and support underserved communities to address inequities in health outcomes.

Our employees are passionate about improving the lives of others so we provide channels for our team members to identify opportunities to engage with new charitable organizations and events in our communities.

In 2023, we contributed nearly $85,000 to 15 local and national charitable organizations including healthcare charities and charitable organizations addressing other related causes.

Environmental, Social, and Governance

As our business continues to grow and develop, we recognize the importance of making responsible business decisions for the benefit of all of our stakeholders, including our stockholders, customers, employees, partners, the communities in which we work and live, as well as the planet.

To that end, we are in the process of designing, evaluating, and implementing a corporate Environmental, Social and Governance ("ESG") program and engaged an outside consultant to help us conduct a materiality assessment and develop a strategy, including short, intermediate and long-term objectives.

We published our inaugural ESG Report in December 2022, which is available on our website, and expect to continue reporting on our progress to our various stakeholders annually.

As our business continues to grow and develop, we recognize the importance of making responsible business decisions for the benefit of our stakeholders, including our stockholders, customers, employees, partners, the communities in which we work and live, as well as the planet.

To that end, we have implemented a corporate Environmental, Social and Governance ("ESG") program and set short, intermediate and long-term ESG objectives.

We published our second ESG Report in December 2023, which is available on our website, and expect to continue reporting on our progress to our various stakeholders annually.

Available Information

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Our Corporate Governance Guidelines, Code of Business Conduct and Ethics, ESG Report, and the charters for the committees of our Board of Directors are also available free of charge at https://investors.inspiresleep.com.

Information on our website, including our Corporate Governance Guidelines, Code of Business Conduct and Ethics, ESG Report, and committee charters, is not part of this or any other report we file with, or furnish to, the SEC.

Information on our

website, including our Corporate Governance Guidelines, Code of Business Conduct and Ethics, ESG Report, and committee charters, is not part of this or any other report we file with, or furnish to, the SEC.

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