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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission file number: 001-36309

INOGEN, INC.

(Exact name of registrant as specified in its charter)

Delaware

33-0989359

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

859 Ward Drive

Goleta, CA

93111

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (805) 562-0500

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.001 par value

 

INGN

 

The NASDAQ Stock Market LLC

(NASDAQ Global Select Market)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

As of November 3, 2023, the registrant had 23,307,814 shares of common stock, par value $0.001, outstanding.

 

 


 

TABLE OF CONTENTS

 

 

 

Part I – Financial Information

 

Page

Item 1.

 

Financial Statements

3

 

 

Consolidated Balance Sheets (unaudited) as of September 30, 2023 and December 31, 2022

3

 

 

Consolidated Statements of Comprehensive Loss (unaudited) for the Three and Nine Months Ended September 30, 2023 and September 30, 2022

 

4

 

 

Consolidated Statements of Stockholders’ Equity (unaudited) for the Three and Nine Months Ended September 30, 2023 and September 30, 2022

 

5

 

 

Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2023 and September 30, 2022

 

6

 

 

Condensed Notes to the Consolidated Financial Statements (unaudited)

 

8

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

23

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

41

Item 4.

 

Controls and Procedures

 

42

 

 

Part II – Other Information

 

 

Item 1.

 

Legal Proceedings

 

43

Item 1A.

 

Risk Factors

 

44

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

46

Item 3.

 

Defaults Upon Senior Securities

 

46

Item 4.

 

Mine Safety Disclosures

 

46

Item 5.

 

Other Information

 

46

Item 6.

 

Exhibits

 

47

SIGNATURES

 

48

 

 

 

 

2


 

 

INOGEN, INC.

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Inogen, Inc.

Consolidated Balance Sheets

(unaudited)

(amounts in thousands, except share and per share amounts)

 

September 30,
2023

 

 

December 31,
2022

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

$

124,608

 

 

$

187,014

 

Marketable securities

 

13,432

 

 

 

 

Accounts receivable, net

 

48,380

 

 

 

62,725

 

Inventories, net

 

24,015

 

 

 

34,093

 

Income tax receivable

 

470

 

 

 

1,626

 

Prepaid expenses and other current assets

 

14,363

 

 

 

19,187

 

Total current assets

 

225,268

 

 

 

304,645

 

Property and equipment, net

 

49,525

 

 

 

43,269

 

Goodwill

 

9,869

 

 

 

32,852

 

Intangible assets, net

 

34,067

 

 

 

177

 

Operating lease right-of-use asset

 

21,184

 

 

 

21,653

 

Other assets

 

3,783

 

 

 

2,445

 

Total assets

$

343,696

 

 

$

405,041

 

 

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued expenses

$

30,413

 

 

$

33,974

 

Accrued payroll

 

8,369

 

 

 

11,190

 

Warranty reserve - current

 

9,027

 

 

 

7,790

 

Operating lease liability - current

 

3,894

 

 

 

3,515

 

Deferred revenue - current

 

8,479

 

 

 

8,880

 

Income tax payable

 

200

 

 

 

 

Total current liabilities

 

60,382

 

 

 

65,349

 

Long-term liabilities

 

 

 

 

 

Warranty reserve - noncurrent

 

13,329

 

 

 

12,123

 

Operating lease liability - noncurrent

 

18,873

 

 

 

19,764

 

Earnout liability

 

3,178

 

 

 

 

Deferred revenue - noncurrent

 

8,883

 

 

 

10,399

 

Deferred tax liability

 

8,421

 

 

 

 

Total liabilities

 

113,066

 

 

 

107,635

 

Commitments and contingencies (Note 10)

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

Common stock, $0.001 par value per share; 200,000,000 authorized; 23,306,825 and 22,941,643
   shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

23

 

 

 

23

 

Additional paid-in capital

 

321,584

 

 

 

312,126

 

Accumulated deficit

 

(90,394

)

 

 

(14,500

)

Accumulated other comprehensive loss

 

(583

)

 

 

(243

)

Total stockholders' equity

 

230,630

 

 

 

297,406

 

Total liabilities and stockholders' equity

$

343,696

 

 

$

405,041

 

 

 

See accompanying condensed notes to the consolidated financial statements.

 

 

 

 

 

3


 

Inogen, Inc.

Consolidated Statements of Comprehensive Loss

(unaudited)

(amounts in thousands, except share and per share amounts)

 

Three months ended
September 30,

 

 

Nine months ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Sales revenue

$

67,973

 

 

$

90,672

 

 

$

192,203

 

 

$

247,365

 

Rental revenue

 

15,994

 

 

 

14,717

 

 

 

47,561

 

 

 

41,785

 

Total revenue

 

83,967

 

 

 

105,389

 

 

 

239,764

 

 

 

289,150

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Cost of sales revenue

 

42,708

 

 

 

55,891

 

 

 

118,700

 

 

 

146,052

 

Cost of rental revenue, including depreciation of $3,364 and $2,795, for the three months ended and $9,680 and $8,153 for the nine months ended, respectively

 

7,495

 

 

 

6,700

 

 

 

22,523

 

 

 

19,036

 

Total cost of revenue

 

50,203

 

 

 

62,591

 

 

 

141,223

 

 

 

165,088

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

Gross profit-sales revenue

 

25,265

 

 

 

34,781

 

 

 

73,503

 

 

 

101,313

 

Gross profit-rental revenue

 

8,499

 

 

 

8,017

 

 

 

25,038

 

 

 

22,749

 

Total gross profit

 

33,764

 

 

 

42,798

 

 

 

98,541

 

 

 

124,062

 

Operating expense

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

4,489

 

 

 

4,581

 

 

 

14,126

 

 

 

16,009

 

Sales and marketing

 

26,091

 

 

 

33,734

 

 

 

81,438

 

 

 

92,161

 

General and administrative

 

17,011

 

 

 

14,775

 

 

 

50,487

 

 

 

42,646

 

Impairment charges

 

32,894

 

 

 

 

 

 

32,894

 

 

 

 

Total operating expense

 

80,485

 

 

 

53,090

 

 

 

178,945

 

 

 

150,816

 

Loss from operations

 

(46,721

)

 

 

(10,292

)

 

 

(80,404

)

 

 

(26,754

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

1,801

 

 

 

868

 

 

 

4,972

 

 

 

1,122

 

Other (expense) income

 

(398

)

 

 

(12

)

 

 

176

 

 

 

(1,167

)

Total other income (expense), net

 

1,403

 

 

 

856

 

 

 

5,148

 

 

 

(45

)

Loss before provision for income taxes

 

(45,318

)

 

 

(9,436

)

 

 

(75,256

)

 

 

(26,799

)

Provision for income taxes

 

401

 

 

 

70

 

 

 

638

 

 

 

363

 

Net loss

 

(45,719

)

 

 

(9,506

)

 

 

(75,894

)

 

 

(27,162

)

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

Change in foreign currency translation adjustment

 

(752

)

 

 

(616

)

 

 

(575

)

 

 

(1,453

)

Change in net unrealized gains (losses) on foreign currency hedging

 

33

 

 

 

209

 

 

 

40

 

 

 

(1,669

)

Less: reclassification adjustment for net losses included in net loss

 

13

 

 

 

 

 

 

13

 

 

 

1,206

 

Total net change in unrealized gains (losses) on foreign currency hedging

 

46

 

 

 

209

 

 

 

53

 

 

 

(463

)

Change in net unrealized gains on marketable securities

 

49

 

 

 

17

 

 

 

182

 

 

 

16

 

Total other comprehensive loss, net of tax

 

(657

)

 

 

(390

)

 

 

(340

)

 

 

(1,900

)

Comprehensive loss

$

(46,376

)

 

$

(9,896

)

 

$

(76,234

)

 

$

(29,062

)

 

 

 

 

 

 

 

 

 

 

 

 

Basic net loss per share attributable to common stockholders (Note 7)

$

(1.97

)

 

$

(0.42

)

 

$

(3.28

)

 

$

(1.19

)

Diluted net loss per share attributable to common stockholders (Note 7)

$

(1.97

)

 

$

(0.42

)

 

$

(3.28

)

 

$

(1.19

)

Weighted average number of shares used in calculating net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

Basic common shares

 

23,231,217

 

 

 

22,882,333

 

 

 

23,129,795

 

 

 

22,827,733

 

Diluted common shares

 

23,231,217

 

 

 

22,882,333

 

 

 

23,129,795

 

 

 

22,827,733

 

 

 

See accompanying condensed notes to the consolidated financial statements.

4


 

Inogen, Inc.

Consolidated Statements of Stockholders’ Equity

(unaudited)

(amounts in thousands, except share amounts)

 

Three months ended September 30, 2023 and September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

Retained

 

 

Accumulated

 

 

 

 

 

 

 

 

Additional

 

 

earnings

 

 

other

 

 

Total

 

 

Common stock

 

 

paid-in

 

 

(accumulated

 

 

comprehensive

 

 

stockholders'

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit)

 

 

income (loss)

 

 

equity

 

Balance, June 30, 2022

 

22,865,715

 

 

$

23

 

 

$

304,939

 

 

$

51,616

 

 

$

(41

)

 

$

356,537

 

Stock-based compensation

 

 

 

 

 

 

 

3,500

 

 

 

 

 

 

 

 

 

3,500

 

Employee stock purchases

 

31,770

 

 

 

 

 

 

776

 

 

 

 

 

 

 

 

 

776

 

Restricted stock awards issued, net of forfeitures

 

(123

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

22,536

 

 

 

 

 

 

(72

)

 

 

 

 

 

 

 

 

(72

)

Shares withheld related to net restricted stock settlement

 

(117

)

 

 

 

 

 

(3

)

 

 

 

 

 

 

 

 

(3

)

Net loss

 

 

 

 

 

 

 

 

 

 

(9,506

)

 

 

 

 

 

(9,506

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(390

)

 

 

(390

)

Balance, September 30, 2022

 

22,919,781

 

 

$

23

 

 

$

309,140

 

 

$

42,110

 

 

$

(431

)

 

$

350,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2023

 

23,194,034

 

 

$

23

 

 

$

319,357

 

 

$

(44,675

)

 

$

74

 

 

$

274,779

 

Stock-based compensation

 

 

 

 

 

 

 

1,779

 

 

 

 

 

 

 

 

 

1,779

 

Employee stock purchases

 

88,356

 

 

 

 

 

 

464

 

 

 

 

 

 

 

 

 

464

 

Vesting of restricted stock units

 

24,435

 

 

 

 

 

 

(16

)

 

 

 

 

 

 

 

 

(16

)

Net loss

 

 

 

 

 

 

 

 

 

 

(45,719

)

 

 

 

 

 

(45,719

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(657

)

 

 

(657

)

Balance, September 30, 2023

 

23,306,825

 

 

$

23

 

 

$

321,584

 

 

$

(90,394

)

 

$

(583

)

 

$

230,630

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2023 and September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

Retained

 

 

Accumulated

 

 

 

 

 

 

 

 

Additional

 

 

earnings

 

 

other

 

 

Total

 

 

Common stock

 

 

paid-in

 

 

(accumulated

 

 

comprehensive

 

 

stockholders'

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit)

 

 

income (loss)

 

 

equity

 

Balance, December 31, 2021

 

22,731,586

 

 

$

23

 

 

$

299,463

 

 

$

69,272

 

 

$

1,469

 

 

$

370,227

 

Stock-based compensation

 

 

 

 

 

 

 

9,185

 

 

 

 

 

 

 

 

 

9,185

 

Employee stock purchases

 

62,328

 

 

 

 

 

 

1,691

 

 

 

 

 

 

 

 

 

1,691

 

Restricted stock awards issued, net of forfeitures

 

(5,134

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

125,252

 

 

 

 

 

 

(1,134

)

 

 

 

 

 

 

 

 

(1,134

)

Shares withheld related to net restricted stock settlement

 

(2,900

)

 

 

 

 

 

(100

)

 

 

 

 

 

 

 

 

(100

)

Stock options exercised

 

8,649

 

 

 

 

 

 

35

 

 

 

 

 

 

 

 

 

35

 

Net loss

 

 

 

 

 

 

 

 

 

 

(27,162

)

 

 

 

 

 

(27,162

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,900

)

 

 

(1,900

)

Balance, September 30, 2022

 

22,919,781

 

 

$

23

 

 

$

309,140

 

 

$

42,110

 

 

$

(431

)

 

$

350,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2022

 

22,941,643

 

 

$

23

 

 

$

312,126

 

 

$

(14,500

)

 

$

(243

)

 

$

297,406

 

Stock-based compensation

 

 

 

 

 

 

 

8,484

 

 

 

 

 

 

 

 

 

8,484

 

Employee stock purchases

 

136,032

 

 

 

 

 

 

1,094

 

 

 

 

 

 

 

 

 

1,094

 

Vesting of restricted stock units

 

175,213

 

 

 

 

 

 

(503

)

 

 

 

 

 

 

 

 

(503

)

Shares withheld related to net restricted stock settlement

 

(495

)

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

(1

)

Stock options exercised

 

54,432

 

 

 

 

 

 

384

 

 

 

 

 

 

 

 

 

384

 

Net loss

 

 

 

 

 

 

 

 

 

 

(75,894

)

 

 

 

 

 

(75,894

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(340

)

 

 

(340

)

Balance, September 30, 2023

 

23,306,825

 

 

$

23

 

 

$

321,584

 

 

$

(90,394

)

 

$

(583

)

 

$

230,630

 

 

 

See accompanying condensed notes to the consolidated financial statements.

5


 

Inogen, Inc.

Consolidated Statements of Cash Flows

(unaudited)

(amounts in thousands)

 

Nine months ended September 30,

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

Net loss

$

(75,894

)

 

$

(27,162

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Depreciation and amortization

 

13,008

 

 

 

17,536

 

Loss on rental units and other assets

 

3,377

 

 

 

2,488

 

Gain on sale of former rental assets

 

(58

)

 

 

(93

)