Company: INSP
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001609550-25-000011
Chunk: 109

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 8
Chunk 109
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 the average share price of $190.29.

7.  Stock-Based Compensation

As of December 31, 2024, there were 4,521,922 shares reserved for issuance under our equity incentive plan, of which 1,374,651 shares were available for issuance. Stock-based compensation expense is recognized on a straight-line basis over the vesting term for stock options and RSUs, and over the performance period based on the probability of achieving the performance objectives for PSUs, and is reduced by actual forfeitures as they occur. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase, or cancel any remaining unearned stock compensation expense. Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that we grant additional stock-based awards.Stock OptionsStock options are granted to employees at the exercise price, which is equal to the closing price of our stock on the date of grant. The stock options include a four-year service period and 25% vest after the first year of service and the remainder vest in equal monthly installments over the next 36 months of service. Options are forfeitable in the event of termination other than for death, disability, or qualifying retirement. Upon death or disability, all outstanding and unvested options accelerate and become fully vested. Upon qualifying retirement, all outstanding and unvested options accelerate, become fully vested, and become exercisable in accordance with the original grant terms. The stock options have a contractual life of ten years.The fair value per share of options is estimated on the date of grant using the Black-Scholes option pricing model. 

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Table of ContentsInspire Medical Systems, Inc.Notes to Consolidated Financial Statements(Table amounts in thousands, except share and per share amounts)

Option Value and AssumptionsYear Ended December 31,202420232022Weighted average fair value$113.56$149.70$121.43Assumptions:Expected term (years)6.256.255.50 - 6.25Expected volatility58.6% - 61.0%56.4% - 58.2%56.2% - 57.0%Risk-free interest rate3.67% - 4.71%3.49% - 4.89%1.75% - 4.18%Expected dividend yield—%—%—%Expected Term — Due to our limited amount of historical