Inogen, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Summary of Significant Accounting Policies (Tables)

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Fair Value Liabilities Measured on Recurring Basis

The following table summarizes fair value measurements by level at December 31, 2013 for the liabilities measured at fair value on a recurring basis:

	Level 1		Level 2		Level 3		Total

Preferred stock warrant liability	$	—	$	—	$	260	$	260
Total liabilities	$	—	$	—	$	260	$	260

Summary of Fair Value Measurements using Significant Level 3 Inputs

The following table summarizes the fair value measurements using significant Level 3 inputs, and changes therein, for the years ended December 31, 2014 and 2013:

	Warrant liability
Balance as of December 31, 2012	$	164
Fair value of preferred stock warrants exercised		(166	)
Change in fair value		262
Balance as of December 31, 2013		260
Fair value of preferred stock warrants exercised		(148	)
Change in fair value		(36	)
Reclassification of liability to additional paid in capital		(76	)
Balance as of December 31, 2014	$	—

Breakdown of Company's Revenue from U.S. and Non-U.S. Sources

A portion of revenue is earned from sales outside the United States. Non-U.S. revenue is denominated in U.S. dollars. A breakdown of the Company’s revenue from U.S. and non-U.S. sources for the years ended December 31, 2014, 2013 and 2012 is as follows:

	Years ended December 31,
	2014		2013		2012
U.S. revenue	$	88,094	$	58,677	$	35,538
Non-U.S. revenue		24,443		16,766		13,038
Total revenue	$	112,537	$	75,443	$	48,576

Schedule of Inventories

Inventories consist of the following:

	December 31,
	2014			2013
Raw materials and work-in-progress	$	6,774		$	3,783
Finished goods		983			565
Less: reserves		(141	)		(100	)
Inventories	$	7,616		$	4,248

Computation of Depreciation and Amortization using Straight Line Method Over Estimated Useful Lives of Assets

Property and equipment are stated at cost. Depreciation and amortization are calculated using the straight-line method over the assets estimated useful lives as follows:

Rental equipment		1.5-5 years
Manufacturing equipment and tooling		5 years
Computer equipment and software		3 years
Furniture and equipment		3-5 years
Leasehold improvements		Shorter of 3-10 years or life of underlying lease

Summary of Depreciation and Amortization Expense of Property and Equipment and Rental Equipment

Depreciation and amortization expense related to property and equipment and rental equipment is summarized below for the years ended December 31, 2014, 2013 and 2012, respectively.

	Years ended December 31,
	2014		2013		2012
Rental equipment	$	10,339	$	7,132	$	4,056
Other property and equipment		1,591		1,209		630
Total depreciation and amortization	$	11,930	$	8,341	$	4,686

Summary of Property Plant and Equipment and Rental Equipment with Related Accumulated Depreciation

Accumulated depreciation related to property and equipment and rental equipment is summarized below for the years ended December 31, 2014 and 2013, respectively.

	Years ended December 31,
Property and equipment	2014		2013
Rental equipment, net of allowance	$	48,359	$	37,573
Other property and equipment		9,408		8,105
Property and equipment		57,767		45,678

Accumulated depreciation
Rental equipment		21,084		12,545
Other property and equipment		4,756		3,411
Accumulated depreciation		25,840		15,956

Net property and equipment
Rental equipment		27,275		25,028
Other property and equipment		4,652		4,694
Property and equipment, net	$	31,927	$	29,722

Computation of Earnings Per Share

The computation of EPS is as follows:

	Years ended December 31,
	2014			2013			2012
Numerator—basic:
Net income	$	6,826		$	25,435		$	564
Less deemed dividend on redeemable convertible preferred stock		(987	)		(7,278	)		(5,781	)
Net income (loss) before preferred rights dividend		5,839			18,157			(5,217	)
Less preferred rights dividend		—			(7,165	)		—
Less: undistributed earnings to preferred stock - basic		(567	)		(10,781	)		—
Net income (loss) attributable to common stockholders - basic	$	5,272		$	211		$	(5,217	)

Numerator—diluted:
Net income	$	6,826		$	25,435		$	564
Less deemed dividend on redeemable convertible preferred stock		(987	)		(7,278	)		(5,781	)
Net income (loss) before preferred rights dividend		5,839			18,157			(5,217	)
Less preferred rights dividend		—			(7,165	)		—
Less undistributed earnings to preferred stock - diluted		(514	)		(9,625	)		—
Net income (loss) attributable to common stockholders - diluted	$	5,325		$	1,367		$	(5,217	)

Denominator:
Weighted-average common shares - basic common stock		16,182,569			276,535			261,268
Weighted-average common shares - diluted common stock		18,037,498			2,008,156			261,268

Net income (loss) per share - basic common stock	$	0.33		$	0.76		$	(19.97	)
Net income (loss) per share - diluted common stock	$	0.30		$	0.68		$	(19.97	)
Shares excluded from diluted income (loss)
Warrants		—			—			233,611
Preferred convertible stock		—			—			14,057,509
Stock options		546,142			—			1,646,223
Shares excluded from diluted net income (loss)		546,142			—			15,937,343
Denominator calculation from basic to diluted:
Weighted-average common shares - basic common stock		16,182,569			276,535			261,268
Warrants		128,016			219,766			—
Stock Options		1,726,913			1,511,855			—
Weighted-average common shares - diluted common stock		18,037,498			2,008,156			261,268

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

+ References + Details