Company: INSP
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001609550-25-000032
Chunk: 84

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-08-04
Form: 10-Q
Item: Part I, Item 8
Chunk 84
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 yield0.0%Expected Term — Due to our limited amount of historical exercise, forfeiture, and expiration activity, we have opted to use the "simplified method" for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting terms and the original contractual term of the option. We will continue to analyze our expected term assumption as more historical data becomes available.Expected Volatility — Beginning in 2024, we based expected volatility on the historic volatility of our common stock. Prior to 2024, due to our limited company specific historical and implied volatility data, we incorporated our historical stock trading volatility with those of a group of similar companies that are publicly traded for the calculation of volatility. When selecting this peer group, we generally selected companies with comparable characteristics, including enterprise value, stages of clinical development, risk profiles, position within the industry, and those with historical share price information sufficient to meet the expected life of the stock-based awards.Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S. government Treasury instruments with maturities similar to the expected term of our stock options.Expected Dividend Yield — The expected dividend assumption is based on our history of not paying dividends and our expectation that we will not declare dividends for the foreseeable future.

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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)

Stock Option ActivityOptionsWeighted AverageExercise PriceWeighted AverageRemainingContractual Term(years)Aggregate IntrinsicValue (in thousands)Outstanding at December 31, 20242,160,149 $168.33 6.4$89,052Granted— $— Exercised(118,184)$73.96 $12,133Forfeited/expired(53,993)$228.35 Outstanding at June 30, 20251,987,972 $172.27 6.0$41,804Exercisable at June 30, 20251,611,351 $160.35 5.6$41,804The aggregate intrinsic value of options exercised is the difference between the estimated fair market value of our common stock at the date of exercise and the exercise price for those options. The aggregate intrinsic value of outstanding options is the difference between the closing price as of the date outstanding and the exercise price of the underlying stock options. As of June 30,