Company: INSP
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001609550-25-000020
Chunk: 37

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 1
Chunk 37
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 to our cumulative net loss position. We recorded income tax expense of $1.2 million and $0.7 million for the three months ended March 31, 2025 and 2024, respectively. The income tax expense reflects state and foreign income tax expense in both of the three months ended March 31, 2025 and March 31, 2024.As of December 31, 2024, we had gross federal net operating loss carryforwards, which are no longer subject to expiration, of $51.2 million. In addition, we had net operating loss carryforwards for state income tax purposes of $88.0 million which will begin to expire in 2025. We also have gross R&D credit carryforwards of $13.4 million as of December 31, 2024, which will expire at various dates beginning in 2034.Utilization of the net operating loss carryforwards and R&D credit carryforwards may be subject to an annual limitation due to the ownership change limitations provided by Section 382 and Section 383 of the Code and similar state provisions. During 2025, we finalized an updated analysis to determine whether an ownership change has occurred through December 31, 2024, and if a limitation exists. It was determined that December 11, 2018 was the only date that we experienced an ownership change. The study concluded that none of the $126.5 million of federal net operating losses nor the $1.7 million of federal R&D credits that were accumulated on December 11, 2018 will expire unused solely due to the limitations under Sections 382 and 383 of the Code. Realization of the deferred tax assets is dependent upon the generation of future book income, if any, the amount and timing of which are uncertain. Based on available objective evidence and cumulative losses, we believe it is more likely than not that the deferred tax assets are not recognizable and will not be recognizable until we have sufficient book income. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. We had $0.1 million of tax payable on unrecognized tax positions as of both March 31, 2025 and December 31, 2024. 

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

We file income tax returns in the applicable jurisdictions. The