Inogen, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Summary of Significant Accounting Policies (Tables)

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2015

Summary of Fair Value Assets Measured on Recurring Basis

The following table summarizes fair value measurements by level for the assets measured at fair value on a recurring basis:

As of September 30, 2015	Level 1		Level 2		Level 3		Total
Money market accounts	$	6,849	$	—	$	—	$	6,849
Certificates of deposit		—		23,837		—		23,837
Total assets	$	6,849	$	23,837	$	—	$	30,686


As of December 31, 2014	Level 1		Level 2		Level 3		Total
Money market accounts	$	42,262	$	—	$	616	$	42,878
Certificates of deposit		—		11,633		80		11,713
Total assets	$	42,262	$	11,633	$	696	$	54,591

Summary of Cash, Cash Equivalents and Investments

Cash, cash equivalents and investments consist of the following:

	September 30,		December 31,
Cash and cash equivalents	2015		2014
Cash	$	43,432	$	2,941
Money market accounts		6,849		42,262
Certificates of deposit		4,809		11,633
Total cash and cash equivalents	$	55,090	$	56,836
Short-term investments
Certificates of deposit		19,028		—
Total short-term investments	$	19,028	$	—

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. Approximately 87% and 75% of the non-U.S. revenue for the three months and nine months ended September 30, 2015, respectively, was invoiced in Euros. The Company did not begin to invoice in Euros until the fourth quarter of 2014. A breakdown of the Company’s revenue from U.S. and non-U.S. sources for the three months and nine months ended September 30, 2015 and September 30, 2014 is as follows:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
U.S. revenue	$	32,907	$	22,572	$	91,719	$	65,996
Non-U.S. revenue		7,871		6,821		26,840		17,423
Total revenue	$	40,778	$	29,393	$	118,559	$	83,419

Schedule of Inventories

Inventories consist of the following:

	September 30,			December 31,
	2015			2014
Raw materials and work-in-progress	$	8,363		$	6,774
Finished goods		1,122			983
Less: reserves		(128	)		(141	)
Inventories	$	9,357		$	7,616

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 three months ended September 30, 2015 and September 30, 2014, respectively, and for the nine months ended September 30, 2015 and September 30, 2014, respectively.

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Rental equipment	$	3,029	$	2,752	$	8,929	$	7,512
Other property and equipment		510		396		1,475		1,142
Total depreciation and amortization	$	3,539	$	3,148	$	10,404	$	8,654

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

Property and equipment and rental equipment with associated accumulated depreciation is summarized below for September 30, 2015 and December 31, 2014, respectively.

	September 30,		December 31,
Property and equipment	2015		2014
Rental equipment, net of allowance	$	54,369	$	48,359
Other property and equipment		11,215		9,408
Property and equipment		65,584		57,767

Accumulated depreciation
Rental equipment		27,662		21,084
Other property and equipment		6,213		4,756
Accumulated depreciation		33,875		25,840

Net property and equipment
Rental equipment		26,707		27,275
Other property and equipment		5,002		4,652
Property and equipment, net	$	31,709	$	31,927

Computation of Earnings Per Share

The computation of EPS is as follows:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Numerator—basic:
Net income	$	2,696	$	2,133	$	7,727	$	5,307
Less deemed dividend on redeemable convertible preferred stock		—		—		—		(987	)
Net income before preferred rights dividend		2,696		2,133		7,727		4,320
Less: undistributed earnings to preferred stock - basic		—		—		—		(563	)
Net income attributable to common stockholders - basic	$	2,696	$	2,133	$	7,727	$	3,757

Numerator—diluted:
Net income	$	2,696	$	2,133	$	7,727	$	5,307
Less deemed dividend on redeemable convertible preferred stock		—		—		—		(987	)
Net income before preferred rights dividend		2,696		2,133		7,727		4,320
Less: undistributed earnings to preferred stock - diluted		—		—		—		(507	)
Net income attributable to common stockholders - diluted	$	2,696	$	2,133	$	7,727	$	3,813

Denominator:
Weighted-average common shares - basic common stock		19,428,653		18,286,208		19,303,057		15,340,877
Weighted-average common shares - diluted common stock		20,783,550		20,213,102		20,690,499		17,293,833

Net income per share - basic common stock	$	0.14	$	0.12	$	0.40	$	0.24
Net income per share - diluted common stock	$	0.13	$	0.11	$	0.37	$	0.22
Shares excluded from diluted net income:
Stock options		627,688		630,055		629,136		630,055
Shares excluded from diluted net income		627,688		630,055		629,136		630,055
Denominator calculation from basic to diluted:
Weighted-average common shares - basic common stock		19,428,653		18,286,208		19,303,057		15,340,877
Warrants		15,122		154,227		15,102		161,743
Stock options		1,339,775		1,772,667		1,372,340		1,791,213
Weighted-average common shares - diluted common stock		20,783,550		20,213,102		20,690,499		17,293,833