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)

6 Months Ended

Jun. 30, 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 as of ended June 30, 2014 and December 31, 2013, respectively.


	Warrant liability
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 June 30, 2014	$	—

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

A breakdown of the Company’s revenue from U.S. and non-U.S. sources for the three months and six months ended June 30, 2014 and June 30, 2013 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
U.S. revenue	$	24,237	$	15,051	$	43,424	$	27,574
Non-U.S. revenue		6,156		5,106		10,602		8,330
Total revenue	$	30,393	$	20,157	$	54,026	$	35,904

Schedule of Inventories

Inventories consist of the following:

	June 30,			December 31,
	2014			2013
Raw materials and work-in-progress	$	5,437		$	3,783
Finished goods		816			565
Less: reserves		(152	)		(100	)
Inventories	$	6,101		$	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 three months ended June 30, 2014 and June 30, 2013, respectively, and the six months ended June 30, 2014 and June 30, 2013, respectively.

	Three Months Ended June 30,				Six Months Ended June 30,
Depreciation and amortization	2014		2013		2014		2013
Rental equipment	$	2,503	$	1,624	$	4,760	$	2,966
Other property and equipment		384		301		746		552
Total depreciation and amortization	$	2,887	$	1,925	$	5,506	$	3,518

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

Property and equipment and rental equipment with associated accumulated depreciation is summarized below for June 30, 2014 and December 31, 2013, respectively.

	June 30,		December 31,
	2014		2013
Property and equipment
Rental equipment, net of allowance	$	42,859	$	37,573
Other property and equipment		8,708		8,105
Property and equipment		51,567		45,678

Accumulated depreciation
Rental equipment		16,760		12,545
Other property and equipment		4,157		3,411
Accumulated depreciation		20,917		15,956

Net property and equipment
Rental equipment		26,099		25,028
Other property and equipment		4,551		4,694
Property and equipment, net	$	30,650	$	29,722

Computation of Earnings Per Share

The computation of EPS is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014			2013
Numerator—basic:
Net income	$	2,286	$	1,960		$	3,174		$	2,690
Less deemed dividend on redeemable convertible preferred stock		-		(1,785	)		(987	)		(3,508	)
Net income (loss) before preferred rights dividend		2,286		175			2,187			(818	)
Less preferred rights dividend		-		(175	)		-			-
Less: undistributed earnings to preferred stock		-		-			(438	)		-
Net income (loss) attributable to common stockholders - basic	$	2,286	$	-		$	1,749		$	(818	)

Numerator—diluted:
Net income	$	2,286	$	1,960		$	3,174		$	2,690
Less deemed dividend on redeemable convertible preferred stock		-		(1,785	)		(987	)		(3,508	)
Net income (loss) before preferred rights dividend		2,286		175			2,187			(818	)
Less preferred rights dividend		-		(175	)		-			-
Less undistributed earnings to preferred stock		-		-			(393	)		-
Net income (loss) attributable to common stockholders - diluted	$	2,286	$	-		$	1,794		$	(818	)

Denominator:
Weighted-average common shares - basic common stock		18,201,661		274,487			13,843,803			274,396
Weighted-average common shares - diluted common stock		20,146,915		274,487			15,826,754			274,396

Net income (loss) per share - basic common stock	$	0.13	$	-		$	0.13		$	(2.98	)
Net income (loss) per share - diluted common stock	$	0.11	$	-		$	0.11		$	(2.98	)

- 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