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, 2023

Sales Revenue Disaggregated by Sales Channel and Geographic Region

The following table sets forth the Company’s sales revenue disaggregated by sales channel and geographic region:


	Years ended December 31,
Revenue by region and category	2023		2022		2021
Business-to-business domestic sales	$	66,196	$	86,049	$	91,371
Business-to-business international sales		89,401		101,163		79,460
Direct-to-consumer domestic sales		96,010		133,337		140,899
Total sales revenue	$	251,607	$	320,549	$	311,730

Summary of Fair Value Assets Measured on Recurring Basis for Cash, Cash Equivalents and Marketable Securities

The following table summarizes fair value measurements by level for the assets measured at fair value on a recurring basis for cash, cash equivalents and marketable securities:


	As of December 31, 2023
			Gross				Cash
	Adjusted		unrealized				and cash		Marketable
	cost		gains		Fair value		equivalents		securities
Cash	$	12,611	$	—	$	12,611	$	12,611	$	—
Level 1:
Money market accounts		72,368		—		72,368		72,368		—

Level 2:
Corporate bonds		2,979		—		2,979		—		2,979
U.S. Treasury securities		19,252		136		19,388		19,388		—
Institutional Insured Liquidity Deposit Savings		21,125		—		21,125		21,125		—
Total	$	128,335	$	136	$	128,471	$	125,492	$	2,979

	As of December 31, 2022
			Gross				Cash
	Adjusted		unrealized				and cash
	cost		gains		Fair value		equivalents
Cash	$	27,970	$	—	$	27,970	$	27,970
Level 1:
Money market accounts		113,534		—		113,534		113,534

Level 2:
Corporate bonds		6,474		—		6,474		6,474
U.S. Treasury securities		18,913		26		18,939		18,939
Institutional Insured Liquidity Deposit Savings		20,097		—		20,097		20,097
Total	$	186,988	$	26	$	187,014	$	187,014

Summary of Components of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) were as follows:


	As of December 31, 2023
	Foreign			Unrealized		Unrealized			Accumulated
	currency			gains		gains (losses)			other
	translation			on marketable		on cash			comprehensive
	adjustments			securities		flow hedges			income (loss)
Balance as of December 31, 2022	$	(269	)	$	26	$	—		$	(243	)
Other comprehensive income		1,358			110		—			1,468
Balance as of December 31, 2023	$	1,089		$	136	$	—		$	1,225

	As of December 31, 2022
	Foreign			Unrealized		Unrealized			Accumulated
	currency			gains		gains (losses)			other
	translation			on marketable		on cash			comprehensive
	adjustments			securities		flow hedges			income (loss)
Balance as of December 31, 2021	$	328		$	1	$	1,140		$	1,469
Other comprehensive income (loss)		(597	)		25		(1,140	)		(1,712	)
Balance as of December 31, 2022	$	(269	)	$	26	$	—		$	(243	)

Summary of Reconciliation of Earnout Liability Measured and Carried Fair Value on a Recurring Basis

The reconciliation of the earnout liabilities measured and carried at fair value on a recurring basis is as follows:


Balance as of December 31, 2021	$	16,016
Change in fair value		(16,016	)
Balance as of December 31, 2022	$	—
Addition for acquisition		3,178
Change in fair value		6,822
Balance as of December 31, 2023	$	10,000

Schedule of Net Accounts Receivable Balance Concentrations by Major Category

Net accounts receivable (gross accounts receivable, net of allowances) balance concentrations by major category as of December 31, 2023 and December 31, 2022 were as follows:


	As of					As of
	December 31, 2023					December 31, 2022
Net accounts receivable	$		%			$		%
Rental (1)	$	6,401		15.2	%	$	5,246		8.4	%
Business-to-business and other receivables (2)		35,840		84.8	%		57,479		91.6	%
Total net accounts receivable	$	42,241		100.0	%	$	62,725		100.0	%

(1)

Rental includes Medicare, Medicaid/other government, private insurance and patient pay.

(2)

Business-to business receivables included extended terms for two customers: 1) one customer had a net accounts receivable balance of $8,639 and $22,641 as of December 31, 2023 and December 31, 2022, respectively; and 2) one customer had a net accounts receivable balance of $4,994 and $9,861 as of December 31, 2023 and December 31, 2022, respectively. Each customer received extended payment terms through a direct financing plan offered.

Schedule of Percentage Breakdown of Net Accounts Receivable by Aging Category by Invoice Due Date

The following table sets forth the percentage breakdown of the Company’s net accounts receivable by aging category and invoice due date as of December 31, 2023 and December 31, 2022.


	As of					As of
	December 31, 2023					December 31, 2022
Net accounts receivable by aging category	$		%			$		%
Held and Unbilled	$	1,388		3.3	%	$	303		0.5	%
Aged 0-90 days		32,020		75.8	%		61,556		98.1	%
Aged 91-180 days		8,222		19.5	%		565		0.9	%
Aged 181-365 days		574		1.4	%		287		0.5	%
Aged over 365 days		37		0.0	%		14		0.0	%
Total net accounts receivable	$	42,241		100.0	%	$	62,725		100.0	%

Schedule of Allowances for Accounts Receivable

The following table sets forth the accounts receivable allowances as of December 31, 2023 and December 31, 2022:


	As of					As of
	December 31, 2023					December 31, 2022
Allowances - accounts receivable	$		%			$		%
Doubtful accounts	$	2,341		5.2	%	$	77		0.1	%
Sales returns		479		1.1	%		483		0.8	%
Total allowances - accounts receivable	$	2,820		6.3	%	$	560		0.9	%

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 77.7%, 70.9% and 74.1% of the non-U.S. revenue for the years ended December 31, 2023, 2022 and 2021, respectively, were invoiced in Euros. A breakdown of the Company’s revenue from U.S. and non-U.S. sources for the years ended December 31, 2023, 2022 and 2021, respectively, is as follows:


	Years ended December 31,
	2023		2022		2021
U.S. revenue	$	226,259	$	276,078	$	278,543
Non-U.S. revenue		89,401		101,163		79,460
Total revenue	$	315,660	$	377,241	$	358,003

Schedule of Inventories

Inventories that are considered current consist of the following:


	December 31,
	2023			2022
Raw materials and work-in-progress	$	18,036		$	26,496
Finished goods		6,871			9,324
Less: reserves		(3,067	)		(1,727	)
Inventories, net	$	21,840		$	34,093

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		1.5-8 years
Manufacturing equipment and tooling		3-5 years
Computer equipment and software		2-3 years
Furniture and equipment		3-5 years
Leasehold improvements		Lesser of estimated useful life or remaining lease term

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

Depreciation and amortization expense related to rental equipment and other property and equipment are summarized below for the years ended December 31, 2023, 2022 and 2021, respectively.


	Years ended December 31,
	2023		2022		2021
Rental equipment	$	12,893	$	11,103	$	8,860
Other property and equipment		4,057		3,942		3,993
Total depreciation and amortization	$	16,950	$	15,045	$	12,853

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 as of December 31, 2023 and 2022, respectively.


	December 31,
Property and equipment	2023		2022
Rental equipment, net of allowances of $2,606 and $2,255, respectively	$	67,804	$	61,679
Other property and equipment		30,357		33,434
Property and equipment	$	98,161	$	95,113

Accumulated depreciation
Rental equipment	$	31,023	$	31,320
Other property and equipment		16,822		20,524
Accumulated depreciation	$	47,845	$	51,844

Property and equipment, net
Rental equipment, net of allowances of $2,606 and $2,255, respectively	$	36,781	$	30,359
Other property and equipment		13,535		12,910
Property and equipment, net	$	50,316	$	43,269

Computation of Earnings Per Share

The computation of EPS is as follows:


	Years ended December 31,
	2023			2022			2021
Numerator—basic and diluted:
Net loss	$	(102,449	)	$	(83,772	)	$	(6,333	)

Denominator:
Weighted average common shares - basic common stock (1)		23,176,098			22,852,571			22,490,027
Weighted average common shares - diluted common stock		23,176,098			22,852,571			22,490,027

Net loss per share - basic common stock	$	(4.42	)	$	(3.67	)	$	(0.28	)
Net loss per share - diluted common stock (2)	$	(4.42	)	$	(3.67	)	$	(0.28	)

Denominator calculation from basic to diluted:
Weighted average common shares - basic common stock (1)		23,176,098			22,852,571			22,490,027
Stock options and other dilutive awards		160,682			115,155			166,258
Weighted average common shares - diluted common stock		23,336,780			22,967,726			22,656,285

Shares excluded from diluted weighted-average shares:
Stock options		104,681			329,586			151,344
Restricted stock units and restricted stock awards		926,859			528,398			167,237
Shares excluded from diluted weighted average shares		1,031,540			857,984			318,581

(1)

Unvested restricted stock units and restricted stock awards are not included as shares outstanding in the calculation of basic earnings per share. Vested restricted stock units and restricted stock awards are included in basic earnings per share if all vesting and performance criteria have been met. Performance-based restricted stock units and restricted stock awards are included in the number of shares used to calculate diluted earnings per share as long as all applicable performance criteria are met, and their effect is dilutive. Restricted stock awards are eligible to receive all dividends declared on the Company’s common shares during the vesting period; however, such dividends are not paid until the restrictions lapse.

(2)

Due to net losses for the years ended December 31, 2023, 2022 and 2021, diluted loss per share is the same as basic.