Company: INSP
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001609550-25-000011
Chunk: 115

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 8
Chunk 115
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 operating loss tax credit carryforwards and the net temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.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 $88.1 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 2024, we finalized a detailed analysis to determine whether an ownership change has occurred through December 31, 2023, 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. We are in the process of updating the analysis through December 31, 2024. Although unexpected, if we experienced an ownership change during 2024, the timing of our ability to utilize the tax attributes may be affected.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 offset by a valuation allowance, with the exception of less than $0.1 million in foreign deferred tax assets. The valuation allowance decreased by $9.9 million and increased by $12.9 million during the years ended December 31, 2024 and 2023, respectively.

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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)

The changes to