Company: INGN
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029993
Chunk: 235

Company: Inogen Inc
Filing Date: 2025-02-28
Form: 10-K
Item: Item 16
Chunk 235
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 changes in equity. Except for net income (loss) and unrealized gains and losses on cash flow hedges, the Company does not have any transactions or other economic events that qualify as comprehensive income (loss).Fair value of earnout liabilityThe earnout liability will be adjusted to fair value at each reporting date until settled. At the end of each reporting period after the acquisition date, the arrangement is remeasured at its fair value, with changes in fair value recorded in earnings. Changes in fair value will be recognized in general and administrative expense.The Company has obligations to pay up to $13,000 and $31,400 in earnout payments for the Physio-Assist acquisition and the New Aera acquisition, respectively, in cash if certain future financial and regulatory results are met. The earnout liabilities were valued using Level 3 inputs. 

 F-14

The fair value of the New Aera earnout was determined historically by employing a Monte Carlo simulation in a risk-neutral framework. The underlying simulated variable includes recognized revenue. The recognized revenue volatility estimate was based on a study of historical asset volatility for a set of comparable public companies. The model included other assumptions including the market price of risk, which was calculated as the weighted average cost of capital less the long-term risk-free rate. The earnout period for recognized revenue is each calendar year beginning with calendar year 2019 and ending on the calendar year in which the earnout consideration equals the earnout cap. As a result of the earnout requirements not expected to be met for New Aera due to the asset disposal, the Company considered the fair value measurement of the earnout liability to be $0 as of December 31, 2024 and 2023. Additional information on the loss on disposal of intangible asset contained later in this Note in Long-lived assets. The fair value of the Physio-Assist earnout was valued using a probability weighted expected return methodology and was discounted using a rate and probability that appropriately captures the risk associated with the achievement of one of two milestones related to FDA De Novo authorization or 510(k) clearance for the Simeox Airway Clearance System within four years of the date of the closing of the transaction. Significant increases or decreases in these inputs could result in a significant impact on our fair value measurement. In December 2024, the Company received FDA 510(k) clearance of its Simeox 200 device. Upon clearance, the Company became obligated to make the $13,000 cash earnout milestone payment. The