Inogen(INGN) - 2024 Q2 - Quarterly Report

Part I – Financial Information Item 1. Financial Statements This section presents Inogen, Inc.'s unaudited consolidated financial statements and condensed notes for the specified reporting periods Consolidated Balance Sheets (unaudited) This section presents Inogen, Inc.'s unaudited consolidated balance sheets, showing financial position at June 30, 2024, and December 31, 2023 Consolidated Balance Sheets (in thousands) | Assets/Liabilities & Equity | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :--------------------------- | :------------------------------- | | Assets | | | | Total current assets | $194,791 | $207,067 | | Total assets | $308,919 | $326,194 | | Liabilities | | | | Total current liabilities | $72,185 | $72,496 | | Total liabilities | $121,324 | $121,382 | | Stockholders' Equity | | | | Total stockholders' equity | $187,595 | $204,812 | Consolidated Statements of Comprehensive Loss (unaudited) This section presents Inogen, Inc.'s unaudited consolidated statements of comprehensive loss for the three and six months ended June 30, 2024 and 2023 Consolidated Statements of Comprehensive Loss (in thousands) | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $88,765 | $83,635 | $166,790 | $155,797 | | Total gross profit | $42,737 | $34,044 | $77,108 | $64,777 | | Loss from operations | $(7,064) | $(11,768) | $(23,338) | $(33,683) | | Net loss | $(5,590) | $(9,826) | $(20,168) | $(30,175) | | Comprehensive loss | $(5,916) | $(9,748) | $(21,531) | $(29,858) | | Basic net loss per share | $(0.24) | $(0.42) | $(0.86) | $(1.31) | Consolidated Statements of Stockholders' Equity (unaudited) This section presents Inogen, Inc.'s unaudited consolidated statements of stockholders' equity, detailing changes from December 31, 2023, to June 30, 2024 Consolidated Statements of Stockholders' Equity (in thousands) | Item (in thousands) | Balance, December 31, 2023 | Stock-based compensation | Stock issued | Tax withholding | Net loss | Other comprehensive loss | Balance, June 30, 2024 | | :------------------ | :------------------------- | :----------------------- | :----------- | :-------------- | :------- | :----------------------- | :--------------------- | | Common stock | $23 | — | $1 | — | — | — | $24 | | Additional paid-in capital | $320,513 | $4,230 | $369 | $(286) | — | — | $324,826 | | Accumulated deficit | $(116,949) | — | — | — | $(20,168) | — | $(137,117) | | AOCI | $1,225 | — | — | — | — | $(1,363) | $(138) | | Total equity | $204,812 | $4,230 | $370 | $(286) | $(20,168) | $(1,363) | $187,595 | Consolidated Statements of Cash Flows (unaudited) This section presents Inogen, Inc.'s unaudited consolidated statements of cash flows for the six months ended June 30, 2024, and 2023 Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $1,940 | $(2,271) | | Net cash used in investing activities | $(25,820) | $(17,650) | | Net cash provided by financing activities | $84 | $526 | | Effect of exchange rates on cash | $(217) | $68 | | Net decrease in cash, cash equivalents and restricted cash | $(24,013) | $(19,327) | | Cash, cash equivalents and restricted cash, end of period | $101,479 | $167,687 | Condensed Notes to the Consolidated Financial Statements (unaudited) This section provides condensed notes to Inogen, Inc.'s unaudited consolidated financial statements, detailing accounting policies and financial components 1. Business overview This section provides an overview of Inogen, Inc.'s business, focusing on its medical technology products and strategic acquisitions - Inogen, Inc. is a medical technology company specializing in portable oxygen concentrators (POCs) for chronic respiratory conditions, aiming to improve patient mobility and quality of life by reducing reliance on traditional oxygen delivery models[12] - The company expanded its operations through acquisitions, including MedSupport Systems B.V. (now Inogen Europe B.V.) in 2017, New Aera, Inc. in 2019, and Physio-Assist SAS in 2023, enhancing its product portfolio in bronchial decongestion[12] 2. Basis of presentation and summary of significant accounting policies This section outlines the basis of presentation for Inogen, Inc.'s financial statements and summarizes its significant accounting policies - The consolidated financial statements are prepared in accordance with U.S. GAAP, reflecting all necessary recurring adjustments for a fair presentation of the company's financial position, results of operations, cash flows, and stockholders' equity[13] - Key accounting estimates involve revenue recognition, warranty reserves, rental asset valuations, accounts receivable allowances, goodwill and long-lived asset impairment, stock-based compensation, income taxes, and fair value of acquired intangibles and earnout liabilities[15] - Cash equivalents are short-term, highly liquid investments with maturities of three months or less, while marketable securities have maturities greater than three months but less than one year, both reported at fair value[16] 3. Acquisitions This section details Inogen, Inc.'s recent acquisitions, including purchase price allocation and pro forma financial information - On September 14, 2023, Inogen acquired Physio-Assist SAS for $32.25 million in cash and a potential earnout of $3.178 million, contingent on FDA clearance for the Simeox Airway Clearance System[17] - The preliminary purchase price allocation for Physio-Assist included $34.1 million in intangible assets and $9.755 million in goodwill, reflecting expected synergies and future cash flows[18] Pro Forma Information (in thousands) | Pro Forma Information (in thousands) | Three months ended June 30, 2023 | Six months ended June 30, 2023 | | :----------------------------------- | :------------------------------- | :----------------------------- | | Total revenue | $84,366 | $157,374 | | Net loss | $(10,081) | $(30,770) | 4. Fair value measurements This section discusses Inogen, Inc.'s fair value measurements for financial instruments and liabilities, including changes in earnout liability Fair Value Category (in thousands) | Fair Value Category (in thousands) | June 30, 2024 (Fair Value) | December 31, 2023 (Fair Value) | | :--------------------------------- | :------------------------- | :----------------------------- | | Cash and cash equivalents | $97,920 | $125,492 | | Marketable securities | $19,767 | $2,979 | | Restricted cash | $3,559 | — | | Total | $121,246 | $128,471 | - The earnout liability for the Physio-Assist acquisition, valued using Level 3 inputs, increased from $10.0 million as of December 31, 2023, to $11.18 million as of June 30, 2024, due to a change in fair value[24] - Accumulated other comprehensive income (loss) shifted from a gain of $1.225 million as of December 31, 2023, to a loss of $(0.138) million as of June 30, 2024, primarily due to foreign currency translation adjustments[23] 5. Balance sheet components This section provides detailed information on various balance sheet components, including accounts receivable, inventories, and revenue by region Accounts Receivable (in thousands) | Accounts Receivable (in thousands) | June 30, 2024 | December 31, 2023 | | :--------------------------------- | :------------ | :---------------- | | Net accounts receivable | $36,037 | $42,241 | | Allowances - accounts receivable | $4,046 | $2,820 | - Medicare's service reimbursement programs accounted for 10.1% of total revenue for the six months ended June 30, 2024, a decrease from 14.6% in the prior year, and 57.7% of rental revenue (down from 72.1%)[28] Revenue by Region (in thousands) | Revenue by Region (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | U.S. revenue | $58,234 | $60,343 | $110,224 | $113,533 | | Non-U.S. revenue | $30,531 | $23,292 | $56,566 | $42,264 | | Total revenue | $88,765 | $83,635 | $166,790 | $155,797 | - Inventories, net, increased to $24.048 million as of June 30, 2024, from $21.840 million as of December 31, 2023, with raw materials and work-in-progress being the largest component[31] Depreciation & Amortization (in thousands) | Depreciation & Amortization (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rental equipment | $3,128 | $3,238 | $6,307 | $6,316 | | Other property and equipment | $1,029 | $1,017 | $2,183 | $1,999 | | Total | $4,157 | $4,255 | $8,490 | $8,315 | Goodwill and other identifiable intangible assets This section details Inogen, Inc.'s goodwill and other identifiable intangible assets, including changes and estimated amortization expenses Goodwill (in thousands) | Goodwill (in thousands) | Amount | | :---------------------- | :----- | | Balance as of Dec 31, 2023 | $10,057 | | Translation adjustment | $(293) | | Balance as of Jun 30, 2024 | $9,764 | Intangible Assets (in thousands) | Intangible Assets (in thousands) | June 30, 2024 (Net Amount) | December 31, 2023 (Net Amount) | | :------------------------------- | :------------------------- | :----------------------------- | | Developed technology | $29,772 | $32,332 | | Customer relationships | $1,475 | $1,602 | | Internally developed software | $1,829 | — | | Total | $33,585 | $34,591 | - Estimated annual amortization expense for intangible assets is projected to be $2.303 million for the remaining six months of 2024, $4.564 million in 2025, and $4.432 million in 2026[39] Current liabilities This section provides a breakdown of Inogen, Inc.'s current liabilities, including accounts payable, accrued expenses, and accrued payroll Accounts Payable & Accrued Expenses (in thousands) | Accounts Payable & Accrued Expenses (in thousands) | June 30, 2024 | December 31, 2023 | | :------------------------------------------------- | :------------ | :---------------- | | Accounts payable | $14,995 | $13,454 | | Accrued inventory and trade payables | $7,022 | $10,054 | | Total accounts payable and accrued expenses | $26,783 | $30,142 | Accrued Payroll (in thousands) | Accrued Payroll (in thousands) | June 30, 2024 | December 31, 2023 | | :----------------------------- | :------------ | :---------------- | | Accrued bonuses | $3,362 | $1,110 | | Accrued wages and other payroll related items | $4,526 | $4,170 | | Total accrued payroll | $13,746 | $11,066 | 6. Leases This section details Inogen, Inc.'s lease information, including rent expense, cash paid for lease liabilities, and weighted average terms - Rent expense for operating leases increased to $1.136 million for the three months ended June 30, 2024, from $0.964 million in the prior year, and to $2.210 million for the six months ended June 30, 2024, from $1.936 million in the prior year[42] Lease Information | Lease Information | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :---------------- | :----------------------------- | :----------------------------- | | Cash paid for operating lease liabilities | $2,290 | $1,986 | | Weighted average remaining lease term | 2.7 years | 2.0 years | | Weighted average discount rate | 4.9% | 3.0% | | Total lease liabilities | $21,438 | N/A | 7. Loss per share This section presents Inogen, Inc.'s basic and diluted loss per share for the three and six months ended June 30, 2024 and 2023 EPS Metric | EPS Metric | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(5,590) | $(9,826) | $(20,168) | $(30,175) | | Basic net loss per share | $(0.24) | $(0.42) | $(0.86) | $(1.31) | | Diluted net loss per share | $(0.24) | $(0.42) | $(0.86) | $(1.31) | - Due to net losses in both periods, diluted loss per share is the same as basic loss per share, as potential common stock equivalents would be anti-dilutive[47] 8. Income taxes This section outlines Inogen, Inc.'s accounting for income taxes, including deferred tax assets and the application of valuation allowances - The Company accounts for income taxes under ASC 740, recognizing deferred tax liabilities and assets for future tax consequences and providing a valuation allowance when realization of deferred tax assets is not more likely than not[48] - As of June 30, 2024, the Company continued to record a full valuation allowance against its domestic deferred tax assets, similar to December 31, 2023[48] 9. Stockholders' equity This section details Inogen, Inc.'s stockholders' equity, including equity incentive plans, restricted stock units, and stock-based compensation expense - The 2023 Equity Incentive Plan, approved on June 5, 2024, reserved 1.6 million shares plus up to 2.95 million shares from the terminated 2014 Plan for various equity awards[50] - As of June 30, 2024, 2.103 million unvested restricted stock units were outstanding, with an unrecognized compensation cost of $12.192 million expected to be recognized over a weighted average period of 1.9 years[53][54] Stock-based Compensation Expense (in thousands) | Stock-based Compensation Expense (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Restricted stock units and awards | $1,696 | $3,177 | $4,005 | $6,482 | | Employee stock purchase plan | $118 | $86 | $225 | $223 | | Total stock-based compensation expense | $1,814 | $3,263 | $4,230 | $6,705 | 10. Commitments and contingencies This section outlines Inogen, Inc.'s commitments and contingencies, including outstanding purchase orders and product warranty liabilities - As of June 30, 2024, the Company had approximately $69.1 million in outstanding purchase orders due within one year, with $1.989 million accrued for estimated losses on firm commitment contractual obligations[58] Product Warranty Liability (in thousands) | Product Warranty Liability (in thousands) | June 30, 2024 | December 31, 2023 | | :---------------------------------------- | :------------ | :---------------- | | Beginning of period | $23,478 | $19,913 | | Accruals for warranties issued | $5,601 | $9,843 | | Adjustments related to preexisting warranties | $1,469 | $5,014 | | Settlements made | $(4,892) | $(11,292) | | End of period | $25,656 | $23,478 | - Deferred revenue related to lifetime warranties decreased to $11.621 million as of June 30, 2024, from $13.315 million as of December 31, 2023, primarily due to revenue recognition[60] 11. Foreign currency exchange contracts and hedging This section discusses Inogen, Inc.'s foreign currency exchange contracts and hedging activities, including notional amounts of derivative contracts - As of June 30, 2024, the Company had total non-designated and designated derivative contracts with notional amounts of approximately $38.804 million, compared to $31.178 million as of June 30, 2023[63] - During the six months ended June 30, 2024, there were no ineffective portions relating to these hedges, and the hedges remained effective through their respective settlement dates[63] Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of Inogen's financial condition, results of operations, and cash flows for the periods ended June 30, 2024, and 2023 Forward-Looking Statements This section highlights forward-looking statements within the report, noting inherent risks and uncertainties that could impact actual results - The report contains forward-looking statements regarding future cash flows, revenue, operating expenses, supply chain, reimbursement rates, product development, regulatory approvals, market share, and business strategies[65] - These statements involve known and unknown risks and uncertainties that could cause actual results to differ materially, as detailed in the 'Risk Factors' sections of the company's SEC filings[66] Critical accounting policies and estimates This section discusses Inogen, Inc.'s critical accounting policies and estimates, emphasizing areas requiring significant management judgment - Critical accounting policies include revenue recognition, acquisitions and related acquired intangible assets and goodwill, and long-lived asset impairment, which require significant management estimates and judgments[67] - There have been no material changes in critical accounting policies and estimates for the three and six months ended June 30, 2024, compared to the prior annual report[67] Macroeconomic environment This section assesses the impact of the macroeconomic environment on Inogen, Inc., including inflationary pressures and challenges in employee retention - The global economy's inflationary pressures are expected to have minimal impact on semiconductor chip costs for sales revenue in 2024, a significant improvement from prior periods[69] - The company anticipates continued challenges in hiring, retaining employees, and wage inflation through 2024, which may affect business growth and operational costs[70] Overview This section provides an overview of Inogen, Inc.'s business, strategic goals, and recent product launches in the medical technology sector - Inogen is a medical technology company focused on portable oxygen concentrators (POCs) for chronic respiratory conditions, aiming to redefine long-term oxygen therapy delivery[71] - Strategic goals include optimizing domestic direct-to-consumer and prescriber sales, expanding the domestic HME provider network, increasing international business-to-business adoption, and investing in product offerings and clinical evidence[72][75] - The company launched the Inogen Rove 6 in the EU/UK in December 2022 and in the U.S. in July 2023, with an 8-year expected service life, also extended to Inogen One G5 systems[73][74] Sales revenue This section analyzes Inogen, Inc.'s sales revenue, focusing on growth drivers, sales strategies, and oxygen system unit sales - Future financial performance is primarily driven by growth in sales of POCs and Simeox airway clearance systems, with strategies including improved sales force productivity, increased marketing, and expanded international sales[76] - The company sold approximately 41,300 oxygen systems in Q2 2024, a 21.7% increase from 34,100 systems in Q2 2023, primarily due to increased demand from resellers[76] Rental revenue This section analyzes Inogen, Inc.'s rental revenue, discussing factors like reimbursement rates and the number of oxygen rental patients - Rental revenue decreased in Q2 2024 compared to Q2 2023, primarily due to a higher mix of lower private-payor reimbursement rates, despite Medicare reimbursement rates increasing annually[77] - The number of oxygen rental patients increased to approximately 51,900 as of June 30, 2024, from 48,900 as of June 30, 2023[77] Reimbursement This section details the composition of Inogen, Inc.'s rental revenue by payor type, highlighting the shift in Medicare's contribution - Medicare's traditional fee-for-service reimbursement programs accounted for 57.0% of rental revenue in Q2 2024, a decrease from 70.2% in Q2 2023, indicating a shift towards private payors[78] Basis of presentation This section explains Inogen, Inc.'s revenue classification, cost of sales, and operating expense categories for financial reporting - Revenue is classified into sales revenue (business-to-business and direct-to-consumer) and rental revenue, with direct-to-consumer sales and rental revenue generally having higher gross margins[79] - Cost of sales revenue includes production costs, warranty expense, inventory provisions, and delivery costs, while cost of rental revenue primarily consists of depreciation, disposables, logistics, and service costs for rental equipment[81][82] - Operating expenses include R&D (focused on new products and clinical research), sales and marketing (supporting direct-to-consumer and rental strategies), and general and administrative (corporate infrastructure and compliance costs)[83][84][86] Results of operations This section provides a detailed analysis of Inogen, Inc.'s results of operations, comparing financial performance across reporting periods Comparison of three months ended June 30, 2024 and 2023 This section compares Inogen, Inc.'s financial performance for the three months ended June 30, 2024, against the same period in 2023 Revenue (in thousands) | Revenue (in thousands) | Q2 2024 | Q2 2023 | Change ($) | Change (%) | | :--------------------- | :------ | :------ | :--------- | :--------- | | Sales revenue | $74,425 | $68,343 | $6,082 | 8.9% | | Rental revenue | $14,340 | $15,292 | $(952) | -6.2% | | Total revenue | $88,765 | $83,635 | $5,130 | 6.1% | Revenue by Category (in thousands) | Revenue by Category (in thousands) | Q2 2024 | Q2 2023 | Change ($) | Change (%) | | :--------------------------------- | :------ | :------ | :--------- | :--------- | | Business-to-business domestic sales | $21,287 | $18,272 | $3,015 | 16.5% | | Business-to-business international sales | $30,531 | $23,292 | $7,239 | 31.1% | | Direct-to-consumer domestic sales | $22,607 | $26,779 | $(4,172) | -15.6% | | Direct-to-consumer domestic rentals | $14,340 | $15,292 | $(952) | -6.2% | Gross Profit (in thousands) | Gross Profit (in thousands) | Q2 2024 | Q2 2023 | Change ($) | Change (%) | | :-------------------------- | :------ | :------ | :--------- | :--------- | | Gross profit - sales revenue | $36,105 | $26,315 | $9,790 | 37.2% | | Gross profit - rental revenue | $6,632 | $7,729 | $(1,097) | -14.2% | | Total gross profit | $42,737 | $34,044 | $8,693 | 25.5% | | Gross margin % - sales revenue | 48.5% | 38.5% | | | | Gross margin % - rental revenue | 46.2% | 50.5% | | | Operating Expenses (in thousands) | Operating Expenses (in thousands) | Q2 2024 | Q2 2023 | Change ($) | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | :--------- | | Research and development | $5,616 | $4,293 | $1,323 | 30.8% | | Sales and marketing | $25,617 | $26,906 | $(1,289) | -4.8% | | General and administrative | $18,568 | $14,613 | $3,955 | 27.1% | - Net loss decreased by $4.2 million (43.1%) to $(5.590) million in Q2 2024, primarily due to increased sales revenue and lower material cost premiums[97] Comparison of six months ended June 30, 2024 and 2023 This section compares Inogen, Inc.'s financial performance for the six months ended June 30, 2024, against the same period in 2023 Revenue (in thousands) | Revenue (in thousands) | H1 2024 | H1 2023 | Change ($) | Change (%) | | :--------------------- | :------ | :------ | :--------- | :--------- | | Sales revenue | $137,520 | $124,230 | $13,290 | 10.7% | | Rental revenue | $29,270 | $31,567 | $(2,297) | -7.3% | | Total revenue | $166,790 | $155,797 | $10,993 | 7.1% | Revenue by Category (in thousands) | Revenue by Category (in thousands) | H1 2024 | H1 2023 | Change ($) | Change (%) | | :--------------------------------- | :------ | :------ | :--------- | :--------- | | Business-to-business domestic sales | $37,806 | $30,857 | $6,949 | 22.5% | | Business-to-business international sales | $56,566 | $42,264 | $14,302 | 33.8% | | Direct-to-consumer domestic sales | $43,148 | $51,109 | $(7,961) | -15.6% | | Direct-to-consumer domestic rentals | $29,270 | $31,567 | $(2,297) | -7.3% | Gross Profit (in thousands) | Gross Profit (in thousands) | H1 2024 | H1 2023 | Change ($) | Change (%) | | :-------------------------- | :------ | :------ | :--------- | :--------- | | Gross profit - sales revenue | $63,956 | $48,238 | $15,718 | 32.6% | | Gross profit - rental revenue | $13,152 | $16,539 | $(3,387) | -20.5% | | Total gross profit | $77,108 | $64,777 | $12,331 | 19.0% | | Gross margin % - sales revenue | 46.5% | 38.8% | | | | Gross margin % - rental revenue | 44.9% | 52.4% | | | Operating Expenses (in thousands) | Operating Expenses (in thousands) | H1 2024 | H1 2023 | Change ($) | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | :--------- | | Research and development | $12,194 | $9,637 | $2,557 | 26.5% | | Sales and marketing | $52,553 | $55,347 | $(2,794) | -5.0% | | General and administrative | $35,699 | $33,476 | $2,223 | 6.6% | - Net loss decreased by $10.0 million (33.2%) to $(20.168) million in H1 2024, driven by increased sales revenue and lower material cost premiums[104] Liquidity and capital resources This section discusses Inogen, Inc.'s liquidity and capital resources, including cash position, cash flow activities, and working capital - As of June 30, 2024, Inogen had $97.9 million in cash and cash equivalents and $19.8 million in marketable securities, which are believed to be sufficient to meet projected operating and investing requirements for at least the next twelve months[105] Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | H1 2024 | H1 2023 | Change ($) | Change (%) | | :------------------------------- | :------ | :------ | :--------- | :--------- | | Cash provided by (used in) operating activities | $1,940 | $(2,271) | $4,211 | 185.4% | | Cash used in investing activities | $(25,820) | $(17,650) | $(8,170) | -46.3% | | Cash provided by financing activities | $84 | $526 | $(442) | -84.0% | Working Capital (in thousands) | Working Capital (in thousands) | June 30, 2024 | December 31, 2023 | | :----------------------------- | :------------ | :---------------- | | Total current assets | $194,791 | $207,067 | | Total current liabilities | $72,185 | $72,496 | | Net working capital | $122,606 | $134,571 | - Net cash provided by operating activities improved to $1.940 million in H1 2024 from net cash used of $(2.271) million in H1 2023, primarily due to a reduced net loss and non-cash adjustments[109] - Net cash used in investing activities increased to $(25.820) million in H1 2024, mainly due to higher purchases of marketable securities and investments in rental assets and intangible assets[111] Non-GAAP financial measures This section defines and reconciles Inogen, Inc.'s non-GAAP financial measures, EBITDA and Adjusted EBITDA, used for performance assessment - EBITDA and Adjusted EBITDA are non-GAAP measures used by management to assess operating performance by excluding interest, taxes, depreciation, amortization, stock-based compensation, earnout liability changes, acquisition-related expenses, and restructuring charges[115][116] Non-GAAP Measures (in thousands) | Non-GAAP Measures (in thousands) | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :------------------------------- | :------ | :------ | :------ | :------ | | Net loss (GAAP) | $(5,590) | $(9,826) | $(20,168) | $(30,175) | | EBITDA (non-GAAP) | $(1,585) | $(7,123) | $(12,451) | $(24,715) | | Adjusted EBITDA (non-GAAP) | $1,258 | $(3,192) | $(6,384) | $(14,979) | Item 3. Quantitative and Qualitative Disclosures about Market Risk This section discusses Inogen, Inc.'s exposure to market risks, primarily foreign currency exchange and interest rates, and mitigation strategies - The company is exposed to foreign currency exchange risk, as a majority of its European sales are denominated in Euros, leading to potential fluctuations in results of operations and cash flows[119] - Inogen uses foreign exchange forward contracts to hedge against adverse changes in foreign currency exchange rates, reducing but not eliminating the impact on revenue, cash, receivables, and payables[119] - The company's exposure to interest rate fluctuation risk is considered immaterial due to the short-term nature of its cash and cash equivalents, and a hypothetical 100 basis point interest rate change would not materially impact fair value or interest income[120] Item 4. Controls and Procedures This section details the evaluation of Inogen, Inc.'s disclosure controls and internal control over financial reporting, concluding on their effectiveness and inherent limitations - As of June 30, 2024, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[122] - There have been no material changes in internal control over financial reporting during the most recent fiscal quarter[123] - Management acknowledges that all control systems have inherent limitations and can only provide reasonable assurance of achieving control objectives, as misstatements due to error or fraud may occur and not be detected[124] Part II. OTHER INFORMATION Item 1. Legal Proceedings This section states Inogen, Inc. is involved in various legal proceedings in the normal course of business, not anticipating a material adverse effect - Inogen is party to various legal proceedings and investigations arising in the normal course of business[126] - The company carries insurance to protect against certain legal claims and does not anticipate any material adverse effect on its business from these proceedings[126] Item 1A. Risk Factors This section refers to significant risk factors detailed in previous SEC filings that could materially affect Inogen, Inc.'s business, confirming no material changes - Significant risk factors affecting the business are described in the 'Risk Factors' section of the Annual Report on Form 10-K for 2023 and the Quarterly Report on Form 10-Q for Q1 2024[127] - As of the date of this Quarterly Report on Form 10-Q, there have been no material changes from the previously disclosed risk factors[127] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section states there were no unregistered sales of equity securities or common stock repurchases by Inogen, Inc. during the three months ended June 30, 2024 - The company did not engage in any unregistered sales of equity securities during the period[128] - No shares of common stock were repurchased by the issuer during the three months ended June 30, 2024[128] Item 3. Defaults Upon Senior Securities This section indicates that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[128] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the company - Mine Safety Disclosures are not applicable to Inogen, Inc.[128] Item 5. Other Information This section indicates that there is no other information to report - No other information is reported in this section[128] Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including various agreements, equity incentive plans, and certifications - Exhibits include a Separation Agreement, Amended and Restated 2023 Equity Incentive Plan, forms of stock option and restricted stock unit agreements, and an Employment and Severance Agreement[129] - Certifications pursuant to the Sarbanes-Oxley Act of 2002 from the Chief Executive Officer and Chief Financial Officer are filed herewith[129] SIGNATURES This section contains the official signatures of Inogen, Inc.'s Chief Executive Officer and Chief Financial Officer, certifying the report filing - The report is duly signed on behalf of Inogen, Inc. by Kevin R.M. Smith, Chief Executive Officer, and Michael Bourque, Executive Vice President and Chief Financial Officer, on August 7, 2024[130]