What changed in this filing

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Item 1A. Risk Factors

2026-02-13 compared with 2025-02-10 · 293 added, 229 removed, 822 unchanged (39% of the section changed)

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Risks Related to Our Business

We have historically incurred significant operating losses, we may incur operating losses in the future, and we may not be able to sustain profitability.

The year ended December 31, 2024, was the first year we recorded net income, which was $53.5 million.

Our revenue is primarily generated from sales of our Inspire system and we are, therefore, highly dependent on it for our success.

We began selling our Inspire system in 2011 in certain European countries, in 2014 in the U.S., and in 2021 in certain Asia Pacific regions.

Sales of our Inspire system accounted for primarily all of our revenue for the years ended December 31, 2025, 2024, and 2023.

We expect that sales of our Inspire system will continue to account for the substantial majority of our revenue going forward.

Our ability to execute our growth strategy and remain profitable will therefore depend upon the adoption by patients, physicians, and sleep centers, among others, of our Inspire therapy to treat moderate to severe OSA in patients who are unable to use or get consistent benefit from CPAP.

We cannot ensure that our Inspire therapy will achieve or maintain broad market acceptance among physicians and patients.

As a single-product company, any failure of the Inspire system to satisfy physician or patient demand or to achieve meaningful market acceptance will harm our business and future prospects.

Our financial results and the market price of our common stock may fluctuate significantly and may not fully reflect the underlying performance of our business.

The market price of our common stock and our quarterly and annual results of operations have in the past and may in the future vary significantly and future period-to-period comparisons of our operating results may not be meaningful.

Accordingly, the results of any one quarter or period should not be relied upon as an indication of future performance.

The market price of our common stock and our quarterly and annual financial results may fluctuate as a result of a variety of factors, many of which are outside our control and, as a result, may not fully reflect the underlying performance of our business.

Such factors may include, for example, seasonal variations in our sales or required postponements of elective surgical procedures effected during a health crisis, as was the

case with COVID-19.

We generally experience and may in the future experience higher sales in the U.S.

during the fourth quarter as a result of patients having paid their annual insurance deductibles in full, thereby reducing their out-of-pocket costs.

Alternatively, in the first quarter, many U.S.

patients' insurance deductibles reset, requiring more out-of-pocket costs, which negatively impacts our sales during this period.

Other factors that may cause the market price of our common stock to be highly volatile and fluctuations in our quarterly and annual results include, but are not limited to:

• changes in coverage policies by third-party payors that affect the reimbursement of procedures using our products (as well as confusion about potential changes to reimbursement even where no formal change occurs and including any indirect impacts from any changes to provider and patient behavior);

• challenges experienced by patients in obtaining positive coverage and reimbursement decisions from payers, including necessary prior authorization approvals in advance of treatment;

• timing of new product offerings, acquisitions, licenses or other significant events by us or our competitors;

• disputes or other developments with respect to our or others' intellectual property rights;

• patients opting to delay implants of our devices in advance of the commercial launch of new products or product generations;

• unanticipated pricing pressure;

• the hiring, retention, and continued productivity of our sales representatives;

• our ability to expand the geographic reach of our sales and marketing efforts;

• our ability to obtain regulatory clearance, approval, or certification for any products in development or for our current products for additional indications or in additional countries outside the U.S.;

• results of clinical research and studies on our existing products and products in development;

• product liability claims or other litigation;

• changes in earnings estimates or recommendations by securities analysts;

• changes in government regulations;

• delays in receipt of anticipated purchase orders;

• positive or negative coverage in the media or clinical publications of our products or products of our competitors or our industry;

• general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.

Because our quarterly and annual results may fluctuate, period-to-period comparisons may not be the best indication of the underlying results of our business and should only be relied upon as one factor in determining how our business is performing.

These fluctuations may also increase the likelihood that we will not meet our forecasted performance, which could negatively affect the market price for our common stock.

In recent years, the stock markets generally have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.

Broad market and industry factors may significantly affect the market price of our common stock, regardless of our actual operating performance.

In addition, in the past, class action litigation has often been instituted against companies whose

securities have experienced periods of volatility in market price.

Securities litigation brought against us following volatility in our stock price (including pending litigation, regardless of the merit or ultimate results of such litigation, could result in substantial costs, which would hurt our financial condition and operating results and divert management's attention and resources from our business.

We may not be able to sustain profitability, we have historically incurred significant operating losses, and we may incur operating losses in the future.

The year ended December 31, 2024 was the first year we recorded net income.

For the years ended December 31, 2025 and 2024, we recorded net income of $145.4 million and $53.5 million, respectively.

Prior to this and since inception, we incurred net losses.

For the years ended December 31, 2023 and 2022, we had net losses of $21.2 million and $44.9 million, respectively.

As of December 31, 2024, we had an accumulated deficit of

$291.9 million.

To date, we have financed our operations primarily through sales of our Inspire system, private placements of our convertible preferred securities, amounts borrowed under our credit facility, the initial public offering of our common stock that closed in May 2018 ("IPO"), and the three follow-on offerings of our common stock that closed in December 2018, April 2020, and August 2022.

For the year ended December 31, 2023, we recorded a net loss of $21.2 million.

As of December 31, 2025, we had an accumulated deficit of $146.5 million.

To date, we have financed our operations primarily through sales of our Inspire system, private placements of our convertible preferred securities, amounts borrowed under our credit facility, the initial public offering of our common stock that closed in May 2018, and the three follow-on offerings of our common stock that closed in December 2018, April 2020, and August 2022.

We have devoted significant resources to research and development activities related to our Inspire system, including clinical and regulatory initiatives to obtain marketing approval, and sales and marketing activities.

Since 2011, our revenue has been derived, and we expect it to continue to be derived, primarily from sales of our Inspire system.

Because of its recent commercial introduction, in particular in Hong Kong, our Inspire system has limited product and brand recognition, particularly in new markets.

Because of its recent commercial introduction, in particular in Thailand and other new markets, our Inspire system has limited product and brand recognition.

In addition, demand for our Inspire system may decline or may not increase as quickly as we expect.

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We expect that our operating expenses will continue to increase as we continue to build our commercial infrastructure, invest in research and development, and develop, enhance, and commercialize new products.

As a result, even though we achieved profitability for the year ended December 31, 2024, we may not be able to sustain or increase profitability on an ongoing basis.

As a result, even though we achieved profitability in recent years , we may not be able to sustain or increase profitability on an ongoing basis.

If we do not sustain profitability, it will be more difficult for us to finance our business and accomplish our strategic objectives, either of which would have a material adverse effect on our business, financial condition, results of operations, and cause the market price of our common stock to decline.

In addition, failure of our Inspire system to significantly penetrate existing or new markets would negatively affect our business, financial condition, and results of operations.

Our revenue is primarily generated from sales of our Inspire system and we are, therefore, highly dependent on it for our success.

We began selling our Inspire system in 2011 in certain European countries, in 2014 in the U.S., and in 2021 in certain Asia Pacific regions.

Sales of our Inspire system accounted for primarily all of our revenue for the years ended December 31, 2024, 2023, and 2022.

We expect that sales of our Inspire system will continue to account for the substantial majority of our revenue going forward.

We cannot ensure that our Inspire therapy will achieve or maintain broad market acceptance among physicians and patients.

Any failure of the Inspire system to satisfy physician or patient demand or to achieve meaningful market acceptance will harm our business and future prospects.

If patients or physicians are not willing to change current practices to adopt our Inspire therapy to treat moderate to severe OSA, our Inspire therapy may fail to gain increased market acceptance, and our business will be adversely affected.

If patients or physicians are not willing to change practices to adopt our Inspire therapy to treat moderate to severe OSA, our Inspire therapy may fail to gain increased market acceptance, and our business will be adversely affected.

Our primary strategy to grow our revenue is to drive an increase in the adoption of our Inspire therapy to treat patients with moderate to severe OSA who are unable to use or get consistent benefit from CPAP.

While the number of physicians prescribing our Inspire therapy has increased, there is a significant group of physicians who have not yet adopted our Inspire therapy, and additional physicians may choose not to adopt our Inspire therapy for a number of reasons, including, for example:

• lack of availability of adequate third-party payor coverage or reimbursement;

• lack of availability of adequate or clear third-party payor coverage or reimbursement;

• lack of experience with our products and with upper airway neurostimulation as a treatment alternative;

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In addition, patients may not be able to adopt or may choose not to adopt our Inspire therapy if, among other potential reasons, their airway anatomy would not allow for effective treatment with Inspire therapy, they are reluctant to receive an implantable device as opposed to an alternative, non-implantable treatment, they are worried about potential adverse effects of our Inspire system, such as infection, discomfort from the stimulation or tongue soreness or weakness, or they are unable to obtain adequate third-party coverage or reimbursement.

If we are unable to achieve and maintain adequate levels of coverage or reimbursement for our Inspire system, or any future products we may seek to commercialize, our commercial success may be severely hindered.

If we are unable to achieve and maintain adequate levels of coverage or reimbursement for our Inspire system, or any future products we may seek to commercialize, our business, financial condition or results of operations may be adversely affected.

We currently derive all of our revenue from sales of our Inspire system and expect this to continue for the foreseeable future.

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Some of our target customers may be unwilling to adopt our products in light of the additional associated cost.

Further, any decline in the amount payors are willing to reimburse our customers could make it difficult for existing customers to continue using or to adopt our products and could create additional pricing pressure for us.

Further, any decline in the amount payors are willing to reimburse our customers - whether resulting from payor decisions, changes in billing codes, or other factors could make it difficult for existing customers to continue using or to adopt our products and could create additional pricing pressure for us.

If we are forced to lower the price we charge for our products, our gross margins will decrease, which could have a material adverse effect on our business, financial condition, and results of operations, and impair our ability to grow our business.

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government contract for patients who are treated by the Veterans Health Administration.

Customers who perform the procedure may be subject to reimbursement claim denials upon submission of the claim.

Despite prior authorization approvals, it is possible that certain customers who perform the procedure may be subject to reimbursement claim denials upon submission of the claim.

Customers may also be subject to recovery of overpayments if a payor makes payment for the claim and subsequently determines that the payor’s coding, billing or coverage policies were not followed.

Our customers typically must directly bill patients enrolled with these third-party payors for the costs and fees associated with the procedures in which our products are used.

Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs.

In addition, no uniform policy of coverage and

reimbursement for procedures using our products exists among third-party payors.

In addition, no uniform policy of coverage and reimbursement for procedures using our products exists among third-party payors.

Therefore, coverage and reimbursement for procedures using our products can differ significantly from payor to payor.

Payors continually review new and existing technologies for possible coverage and can, without notice, deny or reverse coverage for new or existing products and procedures.

There can be no assurance that third-party payor policies will provide coverage for procedures in which our products are used.

Payors continually review new and existing technologies for possible coverage and can, without notice, deny or reverse coverage for

new or existing products and procedures.

There can be no assurance that third-party payor policies will provide full or meaningful coverage for procedures in which our products are used.

If we are not successful in reversing existing non-coverage policies, or if third-party payors that currently cover or reimburse our products and related procedures reverse or limit their coverage in the future, or if other third-party payors issue similar policies, this could have a material adverse effect on our business.

Overall, new products and changes in the industry can drive changes to (or a lack of clarity for) reimbursement.

Our own products have been billed under different codes and reimbursement approaches throughout our history.

Most recently, since the rollout of Inspire V in 2025, there has been confusion and changes (from both government healthcare programs and other payors and parties involved in setting reimbursement and coding) around the appropriate reimbursement and coding for our products that has the potential to adversely impact our revenues, business, financial condition and results of operations.

For additional information, see Part I.

"Business - Third-Party Reimbursement - Coding and Payment" and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview.”

Further, we believe that future coverage and reimbursement may be subject to increased restrictions, such as additional prior authorization requirements, both in the U.S.

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Additionally, we compete with various other second-line therapies to treat OSA, including invasive surgical treatment options such as UPPP, MMA, robotic tongue reduction surgery, and, to a lesser extent, oral appliances, which are primarily used in the treatment of mild to moderate OSA.

Pharmaceutical therapies to treat OSA are also emerging.

Though we are currently the only neurostimulation technology designed to treat OSA that is approved for commercialization in the U.S.

by the FDA, we currently compete outside the U.S.

with LivaNova, which markets an open-loop neurostimulation device, recently announced completion of clinical trials of its device in the U.S.

We currently compete in the U.S.

and certain countries outside of the U.S.

with Nyxoah, which markets an open-loop bilateral hypoglossal nerve stimulation device.

We also compete outside the U.S.

with Nyxoah, which markets an open-loop bilateral hypoglossal nerve stimulation device in certain countries outside the U.S., and is seeking FDA approval in the U.S.

In 2023 and 2024, glucagon-like peptide 1 ("GLP-1s"), a class of drug indicated for diabetes and obesity, continued to gain popularity as a weight-loss drug.

with LivaNova, which markets an open-loop neurostimulation device and recently announced completion of clinical trials of its device in the U.S.

Pharmaceutical therapies to treat OSA are also emerging.

Glucagon-like peptide 1 ("GLP-1s"), a class of drug indicated for diabetes and obesity, has continued to gain popularity as a weight-loss drug.

In December 2024, the FDA approved the GLP-1 drug Zepbound (tirzepatide) for the treatment of moderate to severe OSA in adults with obesity, and other GLP-1s are currently being clinically evaluated as a potential treatment for OSA.

If GLP-1s are successful in treating OSA in an indication for which Inspire therapy is approved, demand for our Inspire system for patients with that indication could be reduced.

Although we believe that there could be a benefit to our business as a result of GLP-1s reducing the BMI of our prospective patients and increasing the number of eligible patients for our Inspire therapy, there can be no assurance of such benefit.

Although we believe that there could be a benefit to our business as a result of GLP-1s

reducing the BMI of our prospective patients and increasing the number of eligible patients for our Inspire therapy, there can be no assurance of such benefit.

In addition, a drug candidate produced by Apnimed is undergoing a Phase 3 clinical trial to assess the viability of its pharmaceutical to treat OSA.

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In general, claims made by or against us in disputes and other legal or regulatory proceedings can be expensive and time-consuming to bring or defend against, requiring us to expend significant resources and divert the efforts and attention of our management and other personnel from our business operations.

These potential claims may include but are not limited to personal injury and class action lawsuits, intellectual property claims and regulatory investigations relating to the advertising and promotional claims about our products and services and employee claims against us based on, among other things, discrimination, harassment or wrongful termination.

Any one of these claims, even those without merit, may divert our financial and management resources that would otherwise be used to benefit the future performance of our operations.

Any adverse determination against us in these proceedings, or even the allegations contained in the claims, regardless of whether they are ultimately found to be

without merit, may also result in settlements, injunctions or damages that could have a material adverse effect on our business, financial condition and results of operations.

These potential claims may include but are not limited to personal injury and class action lawsuits, data privacy, intellectual property claims and regulatory investigations relating to the advertising and promotional claims about our products and services and employee claims against us based on, among other things, discrimination, harassment or wrongful

Any one of these claims may divert our financial and management resources that would otherwise be used to benefit the future performance of our operations.

Any adverse determination against us in these proceedings, or even the allegations contained in the claims, regardless of whether they are ultimately found to be without merit, may also result in settlements, injunctions or damages that could have a material adverse effect on our business, financial condition and results of operations.

Additionally, securities class action litigations are often brought against companies following periods of volatility in the overall market and in the market price of a company’s securities.

We have experienced these in the past, have such cases pending now and may have such cases in the future.

On November 6, 2025, the City of Pontiac Reestablished General Employees’ Retirement System, on behalf of itself and other similarly situated investors, filed a putative securities class action in the United States District Court for the District of Minnesota against the Company and certain of its executive officers, captioned City of Pontiac Reestablished General Employees’ Retirement System v.

Inspire Medical Systems, Inc., et al.

0:25‑cv‑04247‑PJS‑ECW (D.

Minn.) (the “ City of Pontiac Lawsuit ”).

The complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and Rule 10b‑5 promulgated thereunder, based on purportedly materially false and misleading statements made between August 6, 2024, and August 4, 2025, regarding the launch of the Company’s Inspire V neurostimulator.

The complaint further alleged that when subsequent disclosures were made concerning issues with the Inspire V launch and the Company announced its third‑quarter fiscal 2025 results, the Company’s stock price declined, purportedly causing investor losses.

On December 23, 2025, the plaintiff filed a Notice of Voluntary Dismissal.

On December 29, 2025, the case was administratively closed without prejudice.

On December 22, 2025, the Indiana Public Retirement System, on behalf of itself and other similarly situated investors, filed a putative securities class action in the United States District Court for the Southern District of New York against the Company and certain of its executive officers, captioned Indiana Public Retirement System v.

Inspire Medical Systems, Inc., et al.

1:25‑cv‑10620 (S.D.N.Y.) (the “ Indiana PRS Lawsuit ”).

The Indiana PRS Lawsuit arises from the same underlying subject matter as the City of Pontiac Lawsuit.

It alleges the same violations of law and is based on the same or similar purportedly materially false and misleading statements made during the same class period, all of which relate to the launch of the Company’s Inspire V neurostimulator.

The plaintiffs seek, among other relief, unquantified compensatory damages, together with attorneys’ fees and costs.

On January 22, 2026, the Company and the individual defendants moved to transfer the case to the United States District Court for the District of Minnesota.

That motion remains pending.

The Company and the individual defendants intend to vigorously defend against the action.

No accrual for loss has been accrued or recorded in the Company’s financial statements as of, or for the period ended, December 31, 2025 since the Company is unable to determine whether any loss ultimately will occur or to estimate the range of such loss.

On January 27, 2026, a stockholder derivative lawsuit was filed in the United States District Court for the Southern District of New York, purportedly on behalf of Inspire against certain of our present and former executive officers and against all current members of the Board of Directors and Inspire (as a nominal defendant), captioned Korte v.

Herbert., et al.

1:26‑cv‑680 (S.D.N.Y.).

The lawsuit arises out of the same subject matter as the Indiana PRS Lawsuit described above and alleges the following claims:

(1) Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder;

(2) Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder;

(3) Section 20(a) of the Exchange Act;

(4) a common-law claim for breach of fiduciary duty;

(5) common-law aiding and abetting;

(6) unjust enrichment;

and (7) waste of corporate assets.

The lawsuit seeks unspecified damages.

The Company and the individual defendants intend to vigorously defend against the action.

On January 17, 2025, we received a civil investigative demand (“CID”) from the Department of Justice U.S.

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No assurance can be given as to the timing or outcome of the government’s investigation.

Additionally, securities class action litigations are often brought against companies following periods of volatility in the overall market and in the market price of a company’s securities.

On December 22, 2023, we and certain of our executive officers were named in a putative class action lawsuit.

The plaintiff filed an amended complaint on April 19, 2024, which alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5, which alleged violations relate to certain prior disclosures of Inspire about the effectiveness of a program intended to help certain customers establish independence in seeking prior authorization from payors for our Inspire therapy.

The plaintiff seeks to represent a class of shareholders who purchased or otherwise acquired Inspire common stock between May 3, 2023 and November 7, 2023.

The plaintiff seeks damages and other relief, including attorneys' fees and costs.

The defendants are vigorously defending this lawsuit.

On June 28, 2024, the defendants moved to dismiss the amended complaint in its entirety.

The motion was argued in November 2024.

On July 16, 2024, a stockholder derivative lawsuit was filed in the United States District Court for the District of Minnesota, purportedly on behalf of Inspire against certain of our present and former officers and directors and Inspire (as a nominal defendant), captioned Lawrence Hollin v.

Herbert, et al., Court File No.

0:24-cv-02716 (the “Hollin Lawsuit”).

The Hollin Lawsuit arose out of the same subject matter as the City of Hollywood Lawsuit and alleged the following claims under common law and the Exchange Act:

(1) breach of fiduciary duty;

(2) unjust enrichment;

(3) waste of corporate assets;

and (4) as against the officer defendants, contribution under Sections 10(b) and 21D of the Exchange Act.

The lawsuit sought unspecified damages.

On September 5, 2024, counsel for Mr.

Hollin filed a motion for voluntary dismissal of the Hollin Lawsuit, which motion remains pending.

For additional information, see Note 11, Commitments and Contingencies to the consolidated financial statements included elsewhere in this Form 10-K.

In addition, we are currently a party to multiple adversarial proceedings with Nyxoah regarding our patent portfolio and the patents of third parties.

For additional information, see Note 11, Commitments and Contingencies to the

consolidated financial statements included elsewhere in this Form 10-K.

These lawsuits and any future lawsuits to which we may become a party are subject to inherent uncertainties and could result in very substantial costs, divert our management’s attention and resources and materially harm our business, operating results and financial condition.

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• provide adequate training to potential users of our products;

• receive adequate coverage and reimbursement for procedures performed with our products;

• develop an effective and dedicated sales and marketing team.

• receive adequate and clear coverage and reimbursement for procedures performed with our products;

• develop and maintain effective and dedicated sales and marketing team.

If we are not successful in expanding our indications and developing and commercializing new products and product enhancements, our ability to increase our revenue may be impaired, which could have a material adverse effect on our business, financial condition, and results of operations.

Our financial results may fluctuate significantly and may not fully reflect the underlying performance of our business.

Our quarterly and annual results of operations have in the past and may in the future vary significantly and future period-to-period comparisons of our operating results may not be meaningful.

Accordingly, the results of any one quarter or period should not be relied upon as an indication of future performance.

Our quarterly and annual financial results may fluctuate as a result of a variety of factors, many of which are outside our control and, as a result, may not fully reflect the underlying performance of our business.

Such factors may include, for example, seasonal variations in our sales or required postponements of elective surgical procedures effected during a health crisis, as was the case with COVID-19.

We generally experience and may in the future experience higher sales in the U.S.

during the fourth quarter as a result of patients having paid their annual insurance deductibles in full, thereby reducing their out-of-pocket costs.

Alternatively, in the first quarter, many U.S.

patients' insurance deductibles reset, requiring more out-of-pocket costs, which negatively impacts our sales during this period.

Other factors that may cause fluctuations in our quarterly and annual results include, but are not limited to:

• changes in coverage policies by third-party payors that affect the reimbursement of procedures using our products;

• challenges experienced by patients in obtaining positive coverage and reimbursement decisions from payers, including necessary prior authorization approvals in advance of treatment;

• timing of new product offerings, acquisitions, licenses or other significant events by us or our competitors;

• patients opting to delay implants of our devices in advance of the commercial launch of new products or product generations;

• unanticipated pricing pressure;

• the hiring, retention, and continued productivity of our sales representatives;

• our ability to expand the geographic reach of our sales and marketing efforts;

• results of clinical research and studies on our existing products and products in development;

• delays in receipt of anticipated purchase orders;

• positive or negative coverage in the media or clinical publications of our products or products of our competitors or our industry.

These fluctuations may also increase the likelihood that we will not meet our forecasted performance, which could negatively affect the market price for our common stock.

Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our Inspire system and manage our inventory.

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Conversely, if we underestimate customer demand for our Inspire system, our third-party contract manufacturers may not be able to deliver products to meet our requirements, and this could result in damage to our reputation and customer relationships.

In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, or suppliers or our third-party manufacturers may not be able to allocate sufficient capacity in order to meet our increased requirements, which could have an adverse effect on our ability to meet customer demand for our Inspire system and our results of operations.

to allocate sufficient capacity in order to meet our increased requirements, which could have an adverse effect on our ability to meet customer demand for our Inspire system and our results of operations.

We seek to maintain sufficient levels of inventory in order to protect ourselves from supply interruptions.

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We cannot guarantee that our suppliers and contract manufacturers will continue to meet our demand for their products and services on a timely basis or prevent delays in the delivery of their products, which could be adversely affected due to, for example, natural and man-made disasters, public health emergencies, product quality issues, other catastrophic events, the macroeconomic environment including supply chain constraints, higher inflation and interest rates, the nature of our agreements with our contract manufacturers, our relative importance to such manufacturers as a customer or a contract manufacturer's decision to discontinue or reduce the level of business they conduct with us.

we may lose sales, experience manufacturing or other delays, incur increased costs or otherwise experience impairment to our customer relationships.

If we are required to change contract manufacturers due to any change in or termination of our relationships with these third parties, or if our manufacturers are unable to obtain the materials they need to produce our products at consistent prices or at all, we may lose sales, experience manufacturing or other delays, incur increased costs or otherwise experience impairment to our customer relationships.

We cannot guarantee that we will be able to establish alternative relationships on similar terms, without delay or at all.

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We expect that market demand, government regulation, third-party coverage, and reimbursement policies and societal pressures will continue to change the healthcare industry worldwide, resulting in further business consolidations and alliances among our customers, which may exert further downward pressure on the prices of our products.

If we are unable to expand, manage and maintain our direct sales and marketing organization we may not be able to generate revenue growth.

If we are unable to effectively size, manage and maintain our direct sales and marketing organization we may not be able to generate revenue growth.

We currently sell our Inspire system through a direct sales force that targets ENT physicians and sleep centers in the U.S., Europe, and Japan, and also utilize various direct-to-consumer marketing initiatives, including paid online search, radio, television, social media, and online videos.

In certain Asia Pacific markets, we sell our products through distributors.

As of December 31, 2024, our direct sales and marketing organization, including reimbursement personnel, consisted of 896 employees, having increased from 129 employees as of

December 31, 2018 .

As of December 31, 2025, our direct sales and marketing organization, including reimbursement personnel, consisted of 954 employees, having increased from 186 employees as of December 31, 2019 .

Our operating results are directly dependent upon the efforts of these employees.

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This growth may require us to split or adjust existing sales territories, which may adversely affect our ability to retain customers in those territories.

For example, we recently reorganized our sales organization.

Additionally, our future success will depend largely on our ability to continue to hire, train, retain, and motivate skilled sales and reimbursement personnel with significant industry experience and technical knowledge of implantable devices and related products.

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accounted for approximately 4.4%, 4.0%, and 3.0% of our revenue for the years ended December 31, 2025, 2024, and 2023, respectively.

Our strategy is to increase our international presence in Europe, including Germany and the Netherlands, as well as other international markets, such as Japan, Singapore, and Hong Kong.

Our strategy is to increase our international presence in Europe, including Germany and the Netherlands, as well as other international markets, such as Japan, Singapore, Hong Kong, and Thailand.

This strategy is subject to a number of risks, including:

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• trade export restrictions, trade regulations, and foreign tax laws;

• changing tariffs and trade barriers, including potential changes in tariffs that may be proposed by the Trump administration and any retaliatory tariffs by other countries;

• changing tariffs and trade barriers, including recent and proposed changes in tariffs imposed by the current U.S.

presidential administration and any retaliatory tariffs by other countries;

• fluctuations in currency exchange rates;

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• the burdens of complying with a wide variety of foreign laws and different legal standards;

• unforeseen cultural attitudes that result in fewer potential patients having interest in surgery or a medical device such as our Inspire therapy;

• increased financial accounting and reporting burdens and complexities.

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Our Inspire system is designed to affect, and any future products will be designed to affect, important bodily functions and processes.

Any side effects, manufacturing defects, misuse or abuse associated with our Inspire system could result in patient injury or death.

Any side effects, design defects, manufacturing defects, misuse or abuse associated with our Inspire system could result in patient injury or death.

The medical device industry has historically been subject to extensive litigation over product liability claims, and we cannot offer any assurance that we will not face product liability suits.

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We can provide no assurance that we will be successful in initiating appropriate market recall or market withdrawal efforts that may be required in the future or that these efforts will have the intended effect of preventing product malfunctions and the accompanying product liability that may result.

Such recalls and withdrawals may also be used by our competitors to harm our reputation for safety or be perceived by patients as a safety risk

when considering the use of our products, either of which could have a material adverse effect on our business, financial condition and results of operations.

Such recalls and withdrawals may also be used by our competitors to harm our reputation for safety or be perceived by patients as a safety risk when considering the use of our products, either of which could have a material adverse effect on our business, financial condition and results of operations.

Although we have product liability and clinical study liability insurance, this insurance is subject to deductibles and coverage limitations.

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In the course of conducting our business, we must adequately address quality issues that may arise with our Inspire system, including defects in third-party components included in our Inspire system.

There can be no assurance that we will be able to eliminate or mitigate occurrences of quality issues and associated liabilities.

There can be no

assurance that we will be able to eliminate or mitigate occurrences of quality issues and associated liabilities.

In addition, even in the absence of quality issues, we may be subject to claims and liability if the performance of our Inspire system does not live up to the expectations of physicians or patients as a result of the patient’s use of the product.

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

Factors such as geopolitical events (including the ongoing wars in Ukraine and Israel), inflationary pressures, public health crises, and U.S.

Factors such as geopolitical events (including global events like the ongoing wars in Ukraine and Israel), inflationary pressures, public health crises, and U.S.

election cycles have caused extreme volatility and disruptions in the capital and credit markets in recent years.

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A weak or declining economy has strained in the past and may in the future strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services.

Further, the Trump administration has proposed or enacted tariffs and substantial changes to trade policies, which could adversely affect our business.

For example, the Trump administration has imposed tariffs on certain foreign products, including most recently from Canada, Mexico and China, that in the past have resulted in and may

result in future retaliatory tariffs on U.S.

Further, the current U.S.

presidential administration has proposed or enacted tariffs and substantial changes to trade policies, which could adversely affect our business.

For example, the current U.S.

presidential administration has imposed tariffs on certain foreign products, including most recently from Canada, Mexico and China, that in the past have resulted in and may result in future retaliatory tariffs on U.S.

goods and products.

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Failure of a key information technology system, process or site, cyberattacks, or other deficiencies in our cybersecurity could have an adverse effect on our business and operations.

We rely extensively on information technology systems to conduct our business and collect, store and transmit confidential information, including personal information of customers and our employees and contractors.

These systems affect, among other things, ordering and managing materials from suppliers, shipping products to customers, processing transactions, summarizing and reporting results of operations, patient marketing, complying with regulatory, legal or tax requirements, data security and other processes necessary to manage our business.

Our information technology systems and those of our third-party service providers, vendors, strategic partners and other contractors or consultants are vulnerable to damage or interruption from computer viruses and malware (e.g.

ransomware), natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, malicious code, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.

We rely extensively on information technology systems to conduct our business and collect, store, process and transmit confidential and sensitive information, including personal information of (or relating to) customers, patients and our employees and contractors.

These systems support, among other things, manufacturing and distribution, supply chain management, order processing, financial reporting, patients, regulatory and legal compliance and other critical business functions.

Our information technology systems, operational technology environments, and those of our third-party service providers, vendors, contract manufacturers, strategic partners and other contractors or consultants are vulnerable to evolving cybersecurity threats.

These threats include, but

are not limited to, damage or interruption from computer viruses and malware (e.g.

ransomware), misconfigurations, “bugs” or other vulnerabilities, malicious code, terrorism, telecommunication and electrical failures, hacking, cyberattacks, phishing and other social engineering attacks, denial of service attacks, insider threats, human error, fraud, unauthorized access, and attacks by sophisticated nation-state and nation-state-supported actors.

We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our confidential information.

There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our information technology systems and information.

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Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

If we or our third-party vendors were to experience a significant cybersecurity breach of our or their information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counter-parties and data subjects could be material.

In addition, our remediation efforts may not be successful.

If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology and cybersecurity infrastructure, we could suffer significant business disruption, including transaction errors, supply chain or manufacturing interruptions, processing inefficiencies, data loss or the loss of or damage to intellectual property or other proprietary information.

We may experience security breaches that may remain undetected for an extended period.

Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques, including artificial intelligence, that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

Our third-party service providers and partners are also subject to these heightened risks.

If our systems are damaged or cease to function properly due to any number of causes, ranging from catastrophic events to power outages to security breaches, and our business continuity plans do not effectively compensate on a timely basis, we may experience interruptions in our operations, which could have an adverse effect on our business and financial condition.

Because we depend on third-party software components, open-source code, cloud service providers and contract manufacturers to develop, produce and support our products, a cybersecurity incident or vulnerability could introduce security flaws into our products, disrupt manufacturing operations, delay shipments or compromise sensitive data.

Overall, if our systems are damaged or cease to function properly due to any number of causes, ranging from catastrophic events to power outages to security breaches we may experience interruptions in our operations, which could have an adverse effect on our business and financial condition.

We and certain of our service providers are from time to time subject to cyberattacks and security incidents.

We sell our products to hospitals and healthcare providers, and our devices and monitoring systems may interface with hospital networks and systems that we do not control.

Healthcare institutions are frequent targets of cyberattacks, and such an event could impair device connectivity, disrupt patient monitoring, delay therapy delivery or otherwise negatively affect patient care, our customers and our overall reputation.

While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur, it could lead to unauthorized access, disclosure and use of confidential information, including personal information from our ADHERE patient registry or other patient information we create, receive, maintain or transmit, including with respect to our Inspire Cloud, SleepSync™ platform, or the Inspire Sleep app, which may be governed by HIPAA and other laws.

These mobile applications and cloud-based platforms may be vulnerable to exploitation, authentication failures, data manipulation or unauthorized access.

If a security breach or other incident were to result in the unauthorized access to or unauthorized use, disclosure, release or other processing of personal information, it may be necessary to notify individuals, governmental authorities, supervisory bodies, the media and other parties pursuant to privacy and security laws.

Any such access, disclosure, or other loss of information could result in regulatory action or investigation, legal claims or proceedings, liability under laws that protect the privacy of personal information, and damage to our reputation, which could materially and adversely affect our business, results of operations or financial condition.

In addition, we accept payments for our sales through credit and debit card transactions, which are handled through a third-party payment processor.

As a result, we are subject to a number of risks related to credit and debit card payments.

As a result of these transactions, we pay interchange and other fees, which may increase over time and could require us to either increase the prices we charge for our Inspire system or experience an

increase in our costs and expenses.

As a result of these transactions, we pay interchange and other fees, which may increase

over time and could require us to either increase the prices we charge for our Inspire system or experience an increase in our costs and expenses.

In addition, as part of the payment processing process, we transmit our customers’ credit and debit card information to our third-party payment processor.

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If we or our third-party credit card payment processor fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our customers, and there may be an adverse effect on our business.

Further, our insurance coverage may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.

Our cybersecurity and other insurance coverage involves exclusions and coverage limitations and may not be sufficient to cover the financial, legal, business or reputational losses that may result from a cybersecurity incident or an interruption or breach of our systems.

If our facilities are damaged or become inoperable, we may be unable to continue to research, develop, and supply our Inspire system and, as a result, there could be an adverse effect on our business until we are able to secure a new facility and rebuild our inventory.

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We perform substantially all of our research and development and back-office activity at two locations in Golden Valley, Minnesota.

The majority of our finished goods inventory is maintained at a third-party location in Tennessee.

The majority of our finished goods inventory is maintained at third-party locations in California and North Carolina.

Our facility, equipment and inventory would be costly to replace and could require substantial lead time to repair or replace.

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During the year ended December 31, 2025, approximately 4.4% of our total sales were made in EU member states and certain Asia Pacific regions.

Departments of Justice, Commerce, State and Treasury

and other federal agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of economic sanctions laws, export control laws, the U.S.

Departments of Justice, Commerce, State and Treasury and other federal agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of economic sanctions laws, export control laws, the U.S.

Foreign Corrupt Practices Act ("FCPA") and other federal statutes and regulations, including those established by the Office of Foreign Assets Control ("OFAC").

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We bear the risk of warranty claims on our Inspire system.

We bear the risk of warranty claims on our Inspire system, which can include defects arising from the design of our products and/or any third-party components.

We may not be successful in claiming recovery under any warranty or indemnity provided to us by our suppliers or vendors in the event of a successful warranty claim against us by a customer or that any recovery from such vendor or supplier would be adequate.

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We may need substantial additional funding beyond our existing cash resources and may be unable to raise capital when needed, which could force us to delay or reduce our commercialization efforts or product development programs.

Our existing cash, cash equivalents, short-term investments and revenue will be sufficient to meet our capital requirements and fund our operations for at least 12 months.

However, we have based these estimates on assumptions that may prove to be incorrect, and we could spend our available financial resources much faster than we currently expect.

Our estimates and assumptions that support the view that our existing cash, cash equivalents, short-term investments and revenue will be sufficient to meet our capital requirements and fund our operations for at least 12 months may prove to be incorrect, and we could spend our available financial resources much faster than we currently expect.

Any future funding requirements will depend on many factors, including:

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The study concluded that none of the federal net operating losses nor the federal R&D credits that were accumulated on December 11, 2018 will expire unused solely due to the limitations under Sections 382 and 383 of the Code.

We are in the process of updating the analysis through December 31, 2024.

Although unexpected, if we experienced an ownership change during 2024, the timing of our ability to utilize the tax attributes may be affected.

As of December 31, 2024, our gross federal NOL carryforward was $51.2 million.

In addition, our ability to deduct net interest expense may be limited if we have insufficient taxable income for the year during which the interest is incurred, and any carryovers of such disallowed interest would be subject to the limitation rules similar to those applicable to NOLs and other attributes.

As of December 31, 2025, our gross federal NOL carryforward was fully

utilized and our federal R&D credit carryover was $10.1 million.

Future changes in our stock ownership, some of which might be beyond our control, could result in an ownership change under Section 382 of the Code.

For these reasons, in the event we experience a change of ownership within the definition of Section 382 of the Code, we may not be able to utilize a material portion of the NOLs, research and development credit carryforwards or disallowed interest expense carryovers, even if we sustain profitability.

For these reasons, in the event we experience a change of ownership within the definition of Section 382 of the Code, we may not be able to utilize a material portion of the remaining R&D credit carryforwards, even if we sustain profitability.

Fluctuations in our tax obligations and effective tax rate and realization of our net deferred tax assets may result in volatility of our operating results and materially impact our financial condition or financial results.

We are subject to taxes by the U.S.

federal, state, and local tax authorities.

We record income tax expense based on our estimates of future payments, which may include the recording of, or adjustments to, liabilities for uncertain tax positions, and changes in the valuation allowance related to our net deferred tax assets.

In addition, at any one time multiple tax years may be subject to audit by various tax authorities.

The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues and impact our results of operations.

We expect that during fiscal year 2026 and beyond there could be ongoing variability in our effective tax rate as events occur and exposures are evaluated.

The volatility of our future effective tax rate could be materially impacted by a number of factors, including:

• changes in the valuation of our deferred tax assets and liabilities;

• the tax impact of stock-based compensation awards;

• expected timing and amount of the release of any valuation allowance on our deferred tax assets;

• changes in U.S.

federal, state and local tax rates, tax laws, regulations, or interpretations thereof.

In addition, our effective tax rate in a given financial statement period may be materially impacted by a variety of factors including, but not limited to, changes in the mix and level of earnings, deductible expenses and availability of NOLs in the different states in which we operate, fluctuations in the valuation allowance on our deferred tax assets, or by changes to existing accounting rules or regulations.

Further, tax legislation may be enacted or amended, as applicable, in the future which could materially impact our current or future tax structure and effective tax rates.

We may be subject to audits of our income, sales, and other transaction taxes by U.S.

federal, state, and local taxing authorities.

Outcomes from these audits could have a material effect on our financial condition or financial results.

If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations.

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However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations.

The increasing and evolving focus on sustainability and environmental, social, and governance initiatives from regulators and stakeholders could increase our costs, expose us to new risks, harm our reputation and adversely impact our financial results.

There has been increasing and evolving public focus by investors, customers, environmental and social activists, the media, politicians, governmental and nongovernmental organizations and other stakeholders on a variety of environmental, social, and governance (“ESG”) matters.

We experience pressure to make commitments relating to ESG matters that affect us, including the design and implementation of specific risk mitigation strategic initiatives relating to ESG.

The evolving focus on sustainability and environmental, social, and governance initiatives from regulators and stakeholders could increase our costs, expose us to new risks, harm our reputation and adversely impact our financial results.

There has been evolving public focus by investors, customers, activists, the media, politicians, governmental and nongovernmental organizations and other stakeholders on a variety of environmental, social, and governance (“ESG”) matters.

We may experience pressure to make commitments relating to ESG matters that affect us, including the design and implementation of specific risk mitigation strategic initiatives relating to ESG.

If we are not effective in addressing ESG matters relevant to business, including meeting stakeholder expectations regarding relevant ESG goals, practices, initiatives, commitments, performance and/or public disclosures, our reputation and financial results may suffer.

We may experience increased costs in order to execute upon our ESG goals, initiatives, and commitments and measure achievement of those goals, initiatives, and commitments which could have an adverse impact on our business and financial condition.

Moreover, the increasing attention to corporate ESG initiatives could also result in reduced demand for products, reduced profits, and increased investigations and litigation.

Moreover, the evolving attention to corporate ESG initiatives could also result in reduced demand for products, reduced profits, and increased investigations and litigation.

In addition, both advocates for and opponents of ESG matters are increasingly resorting to a range of activism forms, including media campaigns, shareholder proposals, and litigation, to advance their perspectives.

There has similarly been an increase in activism, litigation and government enforcement alleging that corporate diversity, equity and inclusion programs may discriminate against certain groups.

There has similarly been an increase in activism, litigation and government enforcement in opposition to certain ESG or human capital management initiatives, such as alleging that corporate diversity, equity and inclusion programs may discriminate against certain groups.

To the extent we are subject to such activism or enforcement, it may require us to incur costs or otherwise adversely impact our business.

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This emphasis on ESG matters has resulted and may result in the adoption of new and varied laws and regulations, including reporting requirements.

For example, the SEC previously enacted and then stayed rules that, among other matters, would establish a framework for reporting climate-related risks.

Additionally, the State of California adopted broad climate reporting laws that require certain businesses to report on information including greenhouse gas emissions and climate-related financial risk.

To the extent the SEC rules are enacted, or we become subject to these or similar federal, state, or local rules, we could face increased costs.

As we continue to focus on our ESG goals, initiatives, commitments, performance, and disclosures, and as ESG-related laws, regulations, and voluntary and required disclosure standards and frameworks continue to evolve, we

have expanded our public disclosures in these areas.

For example, the State of California adopted broad climate reporting laws that may require certain businesses to report on information including greenhouse gas emissions and climate-related financial risk, which are subject to legal challenges.

To the extent the California rules are upheld, or we become subject to these or similar federal, state, or local rules, we could face increased costs.

Such disclosures may reflect goals, aspirations, commitments, and other expectations and assumptions, which are necessarily uncertain and may not be realized.

If we fail to comply with new laws or regulations or accurately disclose against voluntary or required reporting standards or frameworks, our reputation and business could be adversely impacted.

Climate-related events and other events could harm our business.

Climate-related events, geopolitical and global events, and other events could harm our business.

Natural disasters, disease outbreaks and pandemics, power shortages, terrorism, political unrest, telecommunications failure, vandalism, geopolitical instability, war, climate-related events, and other events beyond our control could negatively impact our operations or otherwise harm our business.

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Our facilities and offices may be adversely impacted by natural disasters, including those intensified by climate change.

Our locations, and those of our customers and suppliers, can be disrupted by droughts, extreme temperatures, fires, flooding and other climate change-related risks, as well as earthquakes, actions by utility providers, and other catastrophic events such as an actual or threatened public health emergency.

Our locations, and those of our customers and suppliers, can be disrupted by droughts, extreme

temperatures, fires, flooding and other climate change-related risks, as well as earthquakes, actions by utility providers, and other catastrophic events such as an actual or threatened public health emergency.

If a catastrophic event occurs at or near any of our offices, or utility providers or public health officials take certain actions (e.g., shut off power to our facilities), our operations may be interrupted, which could adversely impact our business and results of operations.

If a catastrophic event impacts a significant number of our suppliers or customers, or our customers' ability to perform DISE procedures, implant our Inspire system, or perform related procedures, our business and results of operations could be adversely impacted.

For example, in the wake of recent hurricanes, our customers experienced delays and shortages of certain products that were necessary to complete DISE procedures and the implant procedure for our Inspire system.

For example, in the wake of hurricanes during September and October 2024, our customers experienced delays and shortages of certain products that were necessary to complete DISE procedures and the implant procedure for our Inspire system.

These disruptions caused some customers to limit or postpone surgical procedures or elective procedures performed at their facilities, including DISE procedures and implantations of our Inspire system.

Our customers have experienced similar disruptions as result of the recent wildfires in California.

Our customers have experienced similar disruptions as result of the wildfires in California.

These disruptions have caused some customers to limit or postpone surgical procedures or elective procedures at their facilities, including DISE procedures and implantations of our Inspire system.

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The aforementioned EU rules are generally applicable in the EEA, and non-compliance with the above requirements would also prevent us from selling our products in these three countries.

Modifications to our products may require us to obtain new PMAs or approvals of a PMA supplement or certification, and if we market modified products without obtaining necessary approvals or certifications, we may be required to cease marketing or recall the modified products until required approvals are obtained.

Certain modifications to a PMA-approved device may require approval of a new PMA or a PMA supplement, or alternatively a notification or other submission to the FDA.

Modifications to our products or manufacturing processes may require us to obtain new PMAs or approvals of a PMA supplement or certification, and if we market modified products without obtaining necessary approvals or certifications, we may be required to cease marketing or recall the modified products until required approvals are obtained.

Certain modifications to a PMA-approved device, or its manufacturing process, may require approval of a new PMA or a PMA supplement, or alternatively a notification or other submission to the FDA.

The FDA may not agree with our decisions regarding whether a new PMA or PMA supplement is necessary.

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Any delay or failure in obtaining required approvals or certifications would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our future growth.

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

In particular,

no substantial change must be made to the device as such a modification would trigger the obligation to obtain a new certification under the EU Medical Devices Regulation and therefore to have a notified body conducting a new conformity assessment of the devices.

Once devices are certified under the EU Medical Devices Regulation, we must inform the notified body that carried out the conformity assessment of the medical devices that we market or sell in the EU and the EEA of any planned substantial changes to our quality system or substantial changes to our medical devices that could affect compliance with the general safety and performance requirements laid down in Annex I to the EU Medical Devices Regulation or cause a substantial change to the intended use for which the device has been CE marked.

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The notified body may disagree with our proposed changes or take more time than anticipated to review and assess applications resulting in regulatory delays.

For example, we experienced this between 2021 and 2024 with regard to our application for certification of silicone-based leads under the relevant EU Medical Devices Regulation.

See Part I., "Item 1A.

Risk Factors — Risks Related to Government Regulation”.

For example, we applied for certification of silicone-based leads under the EU Medical Devices Regulation in December 2021 in order to replace the polyurethane-based leads, two components of the Inspire system currently used only in the European market.

However, designated notified bodies currently have severe capacity constraints, and review times have lengthened significantly, including for our certification application.

We only received EU Medical Devices Regulation certification of our silicone leads in July 2024.

As a result of these delays, we have experienced inventory shortages and related adverse impacts on our results of operations in 2023 and early 2024, most of which we believe was recovered during the first half of 2024.

Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market.

Even though we have obtained approval for the Inspire system, we are subject to ongoing and pervasive regulatory requirements governing, among other things, the manufacture, marketing, advertising, medical device reporting, sale, promotion, registration, and listing of devices.

For example, we must submit periodic reports to the FDA as a condition of PMA.

For example, we must submit periodic reports to the

FDA as a condition of PMA.

These reports include safety and effectiveness information about the device after its approval.

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Our products must be manufactured in accordance with foreign, federal and state regulations, and we or any of our suppliers or third-party manufacturers could be forced to recall our installed systems or terminate production if we fail to comply with these regulations.

The methods used in, and the facilities used for, the manufacture of our products must comply with the FDA’s Quality System Regulation ("QSR") which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of medical devices.

The methods used in, and the facilities used for, the manufacture of our products must comply with the FDA’s Quality Management System Regulation ("QSMR") which directly incorporates ISO 13485 by reference to cover procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of medical devices.

Furthermore, we are required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements.

The FDA enforces the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors.

The FDA enforces the QSMR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of

subcontractors.

Our products are also subject to similar state regulations and various laws and regulations of foreign countries governing manufacturing.

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There may be increased risk of injury to patients if physicians attempt to use our Inspire system off-label.

Furthermore, the use of our Inspire system for indications other than those approved by the FDA, approved by any foreign regulatory

authority or certified by a notified body, may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients.

Furthermore, the use of our Inspire system for indications other than those approved by the FDA, approved by any foreign regulatory authority or certified by a notified body, may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients.

If the FDA or any foreign regulatory authority determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter, which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties.

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The discovery of serious safety issues with our products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental authority, could have a negative impact on us.

We are subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA and foreign regulatory authorities when we receive or become aware of information that reasonably suggests that one or more of our products may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur, it could cause or contribute to a death or serious injury.

We are subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA and foreign regulatory authorities.

In the U.S., information that reasonably suggests that one or more of our products may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur, it could cause or contribute to a death or serious injury must be reported to the FDA.

The timing of our obligation to report is triggered by the date we become aware of the adverse event as well as the nature of the event.

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The FDA and foreign regulatory bodies have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health.

The FDA’s and foreign regulatory bodies' authority to require a recall must be based on a finding that there is reasonable probability that the device could cause serious injury or death.

The FDA’s and foreign regulatory bodies' authority to require a recall must be based on a finding that there is reasonable probability that the device could cause serious adverse health consequences or death.

We may also choose to voluntarily recall a product if any material deficiency is found.

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

Moreover, if we do not adequately address problems associated with our

devices, we may face additional regulatory enforcement action, including FDA or foreign regulatory authority warning letters, product seizure, injunctions, administrative penalties or civil or criminal fines.

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

Companies are required to maintain certain records of recalls and corrections, even if they are not reportable to the FDA or foreign regulatory authorities.

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While the regulations of some countries may not impose barriers to marketing and selling our products or only require notification, others require that we obtain the approval of or certification by a specified body (e.g., notified bodies in Europe).

Complying with foreign regulatory requirements, including obtaining registrations, approvals or certifications, can be expensive and time-consuming, and we may not receive regulatory approvals or certifications in each country in which we plan to market our products or we may be unable to do so on a timely basis.

in which we plan to market our products or we may be unable to do so on a timely basis.

The time required to obtain registrations, approvals or certifications, if required by other countries, may be longer than that required for FDA approval, and requirements for such registrations, clearances, approvals or certifications may significantly differ from FDA requirements.

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We develop and offer certain software applications in connection with our business, including our SleepSync™ cloud-based patient management platform, which is designed to function as a medical device data system (“MDDS”).

For its part, the FDA may regulate medical or health-related software, including machine learning functionality and predictive algorithms, if such software falls within the definition of a “medical device” under the FDCA.

For its part, the FDA may regulate medical or health-related software, including clinical decision support software, machine learning functionality and predictive algorithms, if such software falls within the definition of a “medical device” under the FDCA.

However, historically, the FDA has exercised enforcement discretion for certain low-risk software functions, and has issued several guidance documents that establish enforcement discretion policies and/or otherwise outline the FDA’s approach to the regulation of software as a medical device.

For example, in September 2022 the FDA issued a guidance entitled:

“Medical Device Data Systems, Medical Image Storage Devices, and Medical Image Communications Devices,” which among other things, announced the FDA’s intent not to enforce compliance with certain FDCA requirements with respect to medical device MDDS functions, including those requirements relating to registration and listing, premarket review, post-market reporting and compliance with the QSR.

In addition, the 21st Century Cures Act ("Cures Act”) amended the FDCA to exclude from the definition of “medical device” certain medical-related software, including certain software used for administrative support functions at a healthcare facility, software intended for maintaining or encouraging a healthy lifestyle, software designed to store electronic health records, certain clinical decision support software, and software for transferring, storing, or displaying medical device data or in vitro diagnostic data, including certain MDDS functionality.

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In addition, as we continue to update and improve our SleepSync™ platform, we are also continuing to integrate certain software functions we utilize for compliance, quality oversight and product surveillance into the SleepSync™ platform.

As such, any enforcement action with respect to our SleepSync™ software platform, or any requirements for us to obtain clearances or approvals for our software applications would also affect the speed at which we could update and modify these systems, and in any case, would entail significant cost and could harm our reputation, business, financial condition, and results of operations.

any case, would entail significant cost and could harm our reputation, business, financial condition, and results of operations.

Legislative or regulatory reforms in the U.S.

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or additional record keeping.

For example, in February 2024, the FDA issued a final rule to amend and replace the Quality System Regulation, or QSR, which sets forth the FDA’s current good manufacturing practice requirements for medical devices, to align more closely with the International Organization for Standardization standards.

Specifically, this final rule, which the FDA expects to go into effect on February 2, 2026, establishes the “Quality Management System Regulation,” or QMSR, which among other things, incorporates by reference the quality management system requirements of ISO 13485:2016.

Although the FDA has stated that the standards contained in ISO 13485:2016 are substantially similar to those set forth in the QSR, and although our quality system is currently designed to comply with ISO standards in connection with our device certifications outside the United States, it is unclear the extent to which this final rule, once effective, could impose additional or different regulatory requirements on us that could increase the costs of compliance or otherwise negatively affect our business.

If we are unable to comply with QMSR, once effective, or with any other changes in the laws or regulations enforced by FDA or comparable regulatory authorities, we may be subject to enforcement action, which could have an adverse effect on our business, financial condition and results of operations.

For example, on February 2, 2026, the FDA's final rule implementing the FDA's QMSR became effective.

The WMSR, which replaced the FDA's former Quality System Regulation, sets forth the FDA's requirements for medical devices, and among other things, incorporates by reference certain elements of the quality management system requirements of ISO 13485:2016.

Although the FDA has stated that the standards contained in ISO 13485:2016 are substantially similar to those set forth in the QMSR, and although our quality management system is designed to comply with ISO 13485, the FDA has indicated that ISO:13485 certification alone will not ensure compliance under the QMSR, nor will ISO certification exempt manufacturers from FDA inspection.

The QMSR also includes certain compliance obligations, such as those relating to unique device identification, product traceability, and maintenance of complaint and service records, that align more closely with the FDA’s existing medical device requirements than with ISO standards.

Accordingly, it remains unclear the extent to which the QMSR may impose additional or different regulatory requirements on us that could increase the costs of compliance or otherwise negatively affect our business.

If we are unable to comply with QMSR or with any other changes in the laws or regulations enforced by FDA or comparable regulatory authorities, we may be subject to enforcement action, which could have an adverse effect on our business, financial condition and results of operations.

Similarly, the EU landscape concerning medical devices recently evolved, and continues to undergo legislative changes.

On May 25, 2017, the EU Medical Devices Regulation entered into force, which repeals and replaces

the EU Medical Devices Directive and the AIMDD.

On May 25, 2017, the EU Medical Devices Regulation entered into force, which repeals and replaces the EU Medical Devices Directive and the AIMDD.

See Part I, Item I, “Business – Government Regulation” for additional information on these reforms.

These requirements are in active implementation and may change as the European Commission adopts additional implementing acts and considers targeted revisions to related medical device rules.

In addition, on December 16, 2025, the European Commission published a targeted revision proposal of the MDR to address structural issues, certification delays, and burdens on small and medium-sized enterprises.

The proposal will enter the ordinary legislative procedure and is not expected to be adopted before 2027.

These modifications are likely to have an effect on the way we conduct our business in the EEA.

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The healthcare laws and regulations that may affect our ability to operate include, but are not limited to:

the federal Anti-Kickback Statute, the federal civil and criminal false claims laws and civil monetary penalties laws, including the federal civil False Claims Act, the federal Civil Monetary Penalties Law, federal criminal fraud and abuse laws under HIPAA, analogous state and foreign law equivalents of each of the foregoing.

the federal Anti-Kickback Statute, the federal civil and criminal false claims laws and civil monetary penalties laws, including the federal civil False Claims Act, the federal Civil

Monetary Penalties Law, federal criminal fraud and abuse laws under HIPAA, analogous state and foreign law equivalents of each of the foregoing.

See Part I, Item 1.

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federal government, various states, and foreign governments have adopted or proposed laws, regulations, guidelines and rules for the collection, distribution, use and storage of personal information of individuals.

For example, HIPAA,

as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations implemented thereunder (collectively "HIPAA"), imposes privacy, security and breach notification obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information for or on behalf of such covered entities, and their covered subcontractors.

For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations implemented thereunder (collectively "HIPAA"), imposes privacy, security and breach notification obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information for or on behalf of such covered entities, and their covered subcontractors.

HIPAA requires covered entities and business associates to develop and maintain policies with respect to the protection of, use and disclosure of protected health information ("PHI"), including the adoption of administrative, physical and technical safeguards to protect such information, and certain notification requirements in the event of a breach of unsecured PHI.

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Courts may award damages, costs and attorneys’ fees related to violations of HIPAA in such cases.

While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.

While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards

have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.

Further, the Federal Trade Commission (the "FTC") and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive.

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Other states, including Connecticut and Nevada, have also passed consumer health data laws, and given the increased focus on the use of health data by entities that are not subject to HIPAA, additional states are expected to pass consumer health privacy laws.

In the event that we

are subject to or affected by new and/or existing privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

In the event that we are subject to or affected by new and/or existing privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

We are also or may become subject to rapidly evolving data protection laws, rules and regulations in foreign jurisdictions.

For example, in Europe, we are subject to the requirements of the General Data Protection Regulation ("GDPR") (and national laws implementing the GDPR) because we are “established” in certain EU countries and we are processing personal data of individuals located in the EU and EEA in the context of these establishments, as well as offering of goods to, and/or monitoring the behavior of, individuals in the EU and EEA in connection with our clinical investigations.

The GDPR, which went into effect in May 2018, imposes strict requirements for processing the personal data subject to the GDPR.

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violations of such laws could result in regulatory investigations, fines, orders to cease/ change our use of such technologies, as well as civil claims including class actions, and reputational damage.

Any actual or perceived failure by us, our employees or contractors, our partners, our service providers, or the third parties with whom we work, to comply with privacy or security laws, policies, legal obligations or industry standards, or any security incident that results in the unauthorized release or transfer of personal information, may

result in governmental enforcement actions and investigations including by EU regulators and U.S.

Our efforts to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations may be unsuccessful.

Further, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply.

federal and state regulatory authorities as well as fines and penalties, litigation, including by consumer advocacy groups, and/or adverse publicity and could cause our customers, their patients and other healthcare professionals to lose trust in us, which could harm our reputation and have a material adverse effect on our business, financial condition and results of operations.

Healthcare policy changes, including recently enacted legislation reforming the U.S.

healthcare system, could harm our business, financial condition and results of operations.

In the U.S., there have been and continue to be a number of legislative initiatives to contain healthcare costs.

Our business may be affected by the evolving regulatory framework for AI Technologies.

The regulatory framework for artificial intelligence (“AI”), machine learning, and automated decision-making technologies (collectively, “AI Technologies”) is rapidly evolving as many federal, state, and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations.

Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of our AI Technologies.

It is possible that new laws and regulations will be adopted in the United States and in other non-U.S.

jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Technologies.

We may need to expend resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions.

Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Technologies).

Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could adversely affect our business, financial condition and results of operations.

Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us to commercialize our products and could harm our business, financial condition and results of operations.

In the U.S., there have been and continue to be a number of legislative initiatives to contain healthcare costs, and there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we may receive for our product.

New and changing laws and regulations may also create uncertainty about how such laws and regulations will be interpreted and applied.

If we are found to have violated laws and regulations, it could materially adversely affect our business, results of operations and financial condition.

In 2010, the Affordable Care Act (the "ACA") was enacted in the U.S., which made a number of substantial changes in the way healthcare is financed by both governmental and private insurers.

Among other ways in which it may affect our business, the ACA:

• established a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research;

• implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models;

Among the provisions of the ACA of importance to our business are the following:

• a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research;

• payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models;

• expanded the eligibility criteria for Medicaid programs.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted, such as the Budget Control Act of 2011, the American Taxpayer Relief Act of 2012, and the Medicare Access and CHIP Reauthorization Act of 2015, among others.

See Part I, Item 1.

“Business — Government Regulation.” The expansion in the government’s role in the U.S.

The expansion in the government’s role in the U.S.

healthcare industry may result in decreased profits to us, lower reimbursement by payors for our Inspire system, and/or reduced medical procedure volumes, all of which may have a material adverse effect on our business, financial condition and results of operations.

A recent example is the WISeR Model initiated by CMS.

See Part I, Item 1.

“Business — Government Regulation.”

The One Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program.

Such reductions are expected to decrease the number of persons enrolled in Medicaid and reduce the services covered by Medicaid, which could adversely affect sales of our Inspire system.

We expect additional state, federal, and foreign healthcare policies and reform measures to be adopted in the future, any of which could limit reimbursement for healthcare products and services or otherwise result in reduced demand for our Inspire system or additional pricing pressure and have a material adverse effect on our industry generally and on our customers.

Any changes of, or uncertainty with respect to, future coverage or reimbursement rates could affect demand for our Inspire system, which in turn could impact our ability to successfully commercialize our Inspire system and could have a material adverse effect on our business, financial condition and results of operations.

Any changes of, or uncertainty with respect to, future coverage or reimbursement rates could affect demand for our Inspire system, which in turn could impact our ability to successfully

commercialize our Inspire system and could have a material adverse effect on our business, financial condition and results of operations.

Our business involves the use of hazardous materials and our third-party manufacturers must comply with environmental laws and regulations, which may be expensive and restrict how we do business.

Our third-party manufacturers’ activities may involve the controlled storage, use and disposal of hazardous materials.

Our third-party manufacturers’ activities may involve the controlled storage, use and disposal of hazardous materials, including for example batteries.

Our manufacturers are subject to federal, state, local, and foreign laws and regulations governing the use, generation, manufacture, storage, handling and disposal of these hazardous materials.

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• we might have to suspend or terminate clinical studies for various reasons, including a finding that the subjects are being exposed to unacceptable health risks;

• patients may be harmed in the course of the clinical study negatively impacting Inspire’s brand, reputation, and business;

• we may have to amend clinical study protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB or other review bodies and/or regulatory authorities for re-examination;

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For example, patients may be discouraged from enrolling in our clinical studies if the study protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and efficacy of a product candidate, or they may be persuaded to participate in contemporaneous clinical studies of a competitor’s product candidate.

In addition, patients participating in our clinical studies may drop out before completion of the study or experience adverse medical events unrelated to our products.

patients participating in our clinical studies may drop out before completion of the study or experience adverse medical events unrelated to our products.

Delays in patient enrollment or failure of patients to continue to participate in a clinical study may delay commencement or completion of the clinical study, cause an increase in the costs of the clinical study and delays, or result in the failure of the clinical study.

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Failure can occur at any stage of clinical testing.

Our clinical studies may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and non-clinical testing in

addition to those we have planned.

Our clinical studies may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and non-clinical testing in addition to those we have planned.

Our failure to adequately demonstrate the safety and efficacy of our system or any product we may develop in the future would prevent receipt of regulatory clearance, approval or certification and, ultimately, the commercialization of that product or indication for use.

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Any of these occurrences could have an adverse effect on our business, financial condition and results of operations.

Disruptions at the FDA, other government agencies or notified bodies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.

Disruptions at the FDA, other government agencies or notified bodies caused by funding shortages, staffing limitations, or policy changes could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.

The ability of the FDA, foreign regulatory authorities and notified bodies to review and approve or certify new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.

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Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly fund our business.

In addition, the current U.S.

Presidential administration has issued certain policies and Executive Orders directed towards reducing the

employee headcount and costs associated with U.S.

administrative agencies, including the FDA, and it remains unclear the degree to which these efforts may limit or otherwise adversely affect such agencies’ ability to conduct routine activities.

In the EU, notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation.

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If we do not adequately protect our intellectual property and proprietary technology, competitors may be able to use our technologies or the goodwill we have acquired in the marketplace and erode or negate any competitive advantage we may have, which could harm our business and ability to sustain profitability.

Some of our intellectual property rights depend on a licensing agreement with a third party, and our patent coverage includes protection provided by licensed patents.

Many of these licensed patents are over ten years old and the standard life of a patent is 20 years from its initial filing date.

If in the future we no longer have rights to one or more of these licensed patents, our patent coverage may be compromised, which in turn could affect our ability to protect our Inspire system or defend against competitors.

We own numerous issued patents and pending patent applications that relate to our system.

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Litigation or other proceedings or third-party claims of intellectual property infringement could require us to spend significant time and money and could prevent us from selling our products or affect our stock price.

Our commercial success will depend in part on not infringing the patents or violating the other proprietary rights of others.

Our commercial success may depend in part on allegations from third parties alleging that we are infringing their patents or violating their other proprietary rights.

Significant litigation regarding patent rights occurs in our industry.

Our competitors in both the U.S.

and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our products.

We do not always conduct independent reviews of patents issued to third parties.

In addition, patent applications in the U.S.

and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may

in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our products.

We may not always be aware of all patents and published applications, and patent applications in the U.S.

and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived, so there may be applications of others now pending or recently revived patents of which we are unaware.

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Moreover, we may become party to future adversarial proceedings regarding our patent portfolio or the patents of third parties.

Such proceedings could include supplemental examination or contested post-grant proceedings such as review, reexamination, inter partes review, interference or derivation proceedings before the USPTO and

challenges in U.S.

District Court.

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We cannot be certain that any particular challenge will be successful in limiting or eliminating the challenged patent rights of the third party.

In May 2025, we filed a lawsuit against Nyxoah in the United States District Court for the District of Delaware, alleging that Nyxoah's Genio product infringes on certain of our U.S.

patents related to neurostimulation therapy for obstructive sleep apnea.

We are seeking a judgment of patent infringement and relief for such infringement, including monetary damages such as lost profits.

Nyxoah has denied infringement and has asserted counterclaims seeking declaratory judgments of invalidity and non‑infringement.

Nyxoah subsequently filed a lawsuit in September 2025 against us in the United States District Court for the District of Delaware alleging that our Inspire IV and Inspire V implantable neurostimulators infringe certain of Nyxoah’s patents.

Additionally, in December 2025, Nyxoah brought suit against us and our wholly-owned subsidiary, Inspire Medical Systems Europe GmbH in the Unified Patent Court, Munich Division, alleging that the Inspire IV implantable neurostimulator infringes a patent owned by Nyxoah.

Also in December 2025, Nyxoah filed three (3) petitions with the United States Patent Trial and Appeal Board seeking inter partes review (IPR) of the three patents asserted by Inspire in the lawsuit.

Any lawsuits resulting from such allegations could subject us to significant liability for damages and invalidate our proprietary rights.

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• pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing;

• redesign those products that contain the allegedly infringing intellectual property, which could be costly, disruptive and infeasible;

• redesign those products that contain the allegedly infringing intellectual property, which could be costly, disruptive or infeasible;

• attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all, or from third parties who may attempt to license rights that they do not have.

Any litigation or claim against us, even those without merit, may cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business and harm our reputation.

If we are found to infringe the intellectual property rights of third parties, we could be required to pay substantial damages (which may be increased up to three times of awarded damages) and/or substantial royalties and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement.

Any litigation or claim against us may cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business and harm our reputation.

If we are found to infringe the intellectual property rights of third parties, we could be required to pay substantial damages (which a court may, in its discretion, enhance awarded damages up to three times in cases of willful infringement) and/or substantial royalties and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement.

Any such license may not be available on reasonable terms, if at all, and there can be no assurance that we would be able to redesign our products in a way that would not infringe the intellectual property rights of others.

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In addition to patent protection for our issued patents and pending patent applications related to our system, we also rely upon copyright and trade secret protection for our Inspire therapy, as well as non-disclosure agreements and invention assignment agreements with our employees, consultants and third parties, to protect our confidential and proprietary information.

In addition to contractual measures, we try to protect the confidential nature of our proprietary information using commonly accepted physical and technological security measures.

In addition to contractual measures, we seek to protect the confidential nature of our proprietary information using commonly accepted physical and technological security measures.

Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate protection for our proprietary information.

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For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties.

In addition, some countries limit the enforceability of patents against third parties, including government agencies or government contractors.

In addition, some countries limit the enforceability of patents against third parties, including government agencies or government

In these countries, patents may provide limited or no benefit.

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We employ individuals who previously worked with other companies, including our competitors or potential competitors.

Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property or personal information, including trade secrets or other proprietary information, of a former employer or other third party.

Although we seek to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property or personal information, including trade secrets or other proprietary information, of a former employer or other third party.

Litigation may be necessary to defend against these claims.

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patent claims.

The availability of the PTAB as a lower-cost, faster and potentially more potent tribunal for challenging patents could increase the likelihood that our own patents will be challenged, thereby increasing the uncertainties and costs of maintaining and enforcing them.

The availability of the PTAB as a lower-cost, faster and potentially more potent

tribunal for challenging patents could increase the likelihood that our own patents will be challenged, thereby increasing the uncertainties and costs of maintaining and enforcing them.

In addition, implementation of the European Patent Package, or EU Patent Package, occurred on June 1, 2023.

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Risks Related to Our Common Stock

The market price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock.

The market price of our common stock is likely to be highly volatile and may fluctuate substantially due to many factors, including, for example:

• the volume and timing of sales of our products;

• the introduction of new products or product enhancements by us or others in our industry;

• disputes or other developments with respect to our or others' intellectual property rights;

• our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced products on a timely basis;

• regulatory actions with respect to our therapy or those of our competitors or companies perceived to be similar to ours;

• product liability claims or other litigation;

• changes in physician, hospital, healthcare provider practices;

• quarterly variations in our results of operations or those of others in our industry;

• media exposure of our products or of those of others in our industry;

• changes in governmental regulations

• changes in the structure of healthcare payment systems;

• changes in earnings estimates or recommendations by securities analysts;

• general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.

In recent years, the stock markets generally have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.

Broad market and industry factors may significantly affect the market price of our common stock, regardless of our actual operating performance.

In addition, in the past, class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price.

Securities litigation brought against us following volatility in our stock price, regardless of the merit or ultimate results of such litigation, could result in substantial costs, which would hurt our financial condition and operating results and divert management's attention and resources from our business.

Provisions in our governing documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management.

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These provisions provide, among other things, that:

removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

• our board of directors has the exclusive right to expand the size of our board of directors and to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

• our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;

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However, this provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.

Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation

to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.

Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

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Changes in tax laws in one or more jurisdictions, as well as other factors, could cause us to experience fluctuations in our tax obligations and effective tax rates in the future and otherwise adversely affect our tax positions and/or our tax liabilities.

In particular in the United States, the Trump administration has proposed a number of changes to the U.S.

Many aspects of these proposals are unclear or undeveloped, and we are unable to predict which, if any, U.S.

tax reform proposals will be enacted into law, and what effects any enacted legislation might have on our tax liabilities.

In addition, the Trump administration has indicated that the United States may impose retaliatory measures with respect to jurisdictions that have, or are likely to, put in place tax rules that are extraterritorial or disproportionately affect U.S.

We are unable to predict which, if any, U.S.

tax reform proposals will be

enacted into law, and what effects any enacted legislation might have on our tax liabilities.

On July 4, 2025, the enactment of the One Big Beautiful Bill Act ("OBBBA") into law, marked a significant legislative development, resulting in substantial modifications to the U.S.

The OBBBA influences multiple facets of taxation, including, but not limited to, bonus depreciation, the current-year expensing of research and development costs, and international tax regulations.

The impacts to our future financial results from the OBBBA are uncertain.

In addition, the current U.S.

presidential administration has indicated that the United States may impose retaliatory measures with respect to jurisdictions that have, or are likely to, put in place tax rules that are extraterritorial or disproportionately affect U.S.

The likelihood of these changes being enacted or implemented is unclear.

We are currently unable to predict what changes will occur and, if so, the ultimate impact on our business.

We are currently unable to predict what other changes will occur and, if so, the ultimate impact on our business.

To the extent that such changes have a negative impact on us or our consumers, including as a result of related uncertainty, these changes may materially and adversely impact our business, financial condition, results of operations and cash flow.

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We do not control these analysts.

If any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price

could decline.

If any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline.

If one or more of the analysts covering our business downgrade our stock or change their opinion of our stock, our stock price would likely decline.

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

What changed 10-K

Item 1A. Risk Factors