Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled "Risk Factors" included elsewhere in this Annual Report on Form 10-K.

The purpose of Management's Discussion and Analysis, or MD&A, is to provide an understanding of Inogen's financial condition, results of operations and cash flows by focusing on changes in certain key measures from year-to-year. The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and accompanying notes. The MD&A is organized in the following sections:

Critical accounting policies and estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities, revenue and expenses at the date of the financial statements. Generally, we base our estimates on historical experience and on various other assumptions in accordance with U.S. GAAP that we believe to be reasonable under the circumstances. Actual results may differ from these estimates and such differences could be material to the financial position and results of operations.

Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies and estimates include those related to:

Revenue recognition

We generate revenue primarily from sales and rentals of our products. Our products consist of our proprietary line of oxygen concentrators and related accessories. Other revenue primarily comes from service contracts, replacement parts and freight revenue for product shipments.

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenue from product sales is generally recognized upon shipment of the product but is deferred for certain transactions when control has not yet transferred to the customer.

Our product is generally sold with a right of return and we may provide other incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and incentives are estimated at the time sales revenue is recognized. The provisions for estimated returns are made based on known claims and estimates of additional returns based on historical data and future expectations. Sales revenue incentives within our contracts are estimated based on the most likely amounts expected on the related sales transaction and recorded as a reduction to revenue at the time of sale in accordance with the terms of the contract. Accordingly, revenue is recognized net of allowances for estimated returns and incentives.

For a fixed price, we also offer a lifetime warranty for direct-to-consumer sales for our oxygen concentrators. The revenue is allocated to the distinct lifetime warranty performance obligation based on a relative stand-alone selling price, or SSP, method. We have vendor-specific objective evidence of the selling price for our equipment. To determine the selling price of the lifetime warranty, we use the best estimate of the SSP for the distinct performance obligation, as the lifetime warranty is neither separately priced nor is the selling price available through third-party evidence. To estimate the selling price associated with the lifetime warranties, management considers the profit margins of service revenue, the average estimated cost of lifetime warranties and the price of extended warranties. Revenue from the distinct lifetime warranty is deferred after the delivery of the equipment and recognized based on an estimated mortality rate over five years, which is the estimated performance period of the contract based on the average patient life expectancy.

Revenue from the sale of our repair services is recognized when the performance obligations are satisfied, and collection of the receivables is probable. Other revenue from the sale of replacement parts is generally recognized when product is shipped to customers.

Freight revenue consists of fees associated with the deployment of products internationally and domestically when expedited freight options are requested or when minimum order quantities are not met. Freight revenue is generally recognized upon shipment of the product but is deferred if control has not yet transferred to the customer. Shipping and handling costs for sold products and rental assets shipped to our customers are included on the consolidated statement of comprehensive income as part of cost of sales revenue and cost of rental revenue, respectively.

The payment terms and conditions of customer contracts vary by customer type and the products and services offered. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. The timing of sales revenue recognition, billing and cash collection results in billed accounts receivable and deferred revenue in the consolidated balance sheet.

Contract liabilities primarily consist of deferred revenue related to lifetime warranties on direct-to-consumer sales revenue when cash payments are received in advance of services performed under the contract. The contract with the customer states the final terms of the sale, including the description, quantity, and price of each product or service purchase.

We elected to apply the practical expedient in accordance with Accounting Standards Codification, or ASC, 606-Revenue Recognitionand did not evaluate contracts of one year or less for the existence of a significant financing component. We do not expect any revenue to be recognized over a multi-year period with the exception of revenue related to lifetime warranties.

We recognize equipment rental revenue over the non-cancelable lease term, which is one month, less estimated adjustments, per ASC 842-Leases. We have separate contracts with each patient that are not subject to a master lease agreement with any payor. We evaluate the individual lease contracts at lease inception and the start of each monthly renewal period to determine if there is reasonable assurance that the bargain renewal option associated with the potential capped free rental period would be exercised. Historically, the exercise of such bargain renewal option is not reasonably assured at lease inception and most subsequent monthly lease renewal periods. If we determine that the reasonable assurance threshold for an individual patient is met at lease inception or at a monthly lease renewal period, such determination would impact the bargain renewal period for an individual lease. We would first consider the lease classification (sales-type lease or operating lease) and then appropriately recognize or defer rental revenue over the lease term, which may include a portion of the capped rental period. To date, we have not deferred any amounts associated with the capped rental period. Amounts related to the capped rental period have not been material in the periods presented.

The lease term begins on the date products are shipped to patients and are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including Medicare, private payors, and Medicaid. Due to the nature of the industry and the reimbursement environment in which we operate, certain estimates are required to record net revenue and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application, claim denial or account review. Accounts receivables are reduced by an allowance for doubtful accounts which provides for those accounts from which payment is not expected to be received, although product was delivered and revenue was earned. Upon determination that an account is uncollectible, it is written-off and charged to the allowance. Amounts billed but not earned due to the timing of the billing cycle are deferred and recognized in revenue on a straight-line basis over the monthly billing period. For example, if the first day of the billing period does not fall on the first of the month, then a portion of the monthly billing period will fall in the subsequent month and the related revenue and cost would be deferred based on the service days in the following month.

Rental revenue is recognized as earned, less estimated adjustments. Revenue not billed at the end of the period is reviewed for the likelihood of collections and accrued. The rental revenue stream is not guaranteed, and payment will cease if the patient no longer needs oxygen or returns the equipment. Revenue recognized is at full estimated allowable reimbursement rates. Rental revenue is earned for that month if the patient is on service on the first day of the 30-day period commencing on the recurring date of service for a particular claim regardless of whether there is a change in condition or death after that date. In the event that a third-party payor does not accept the claim for payment, the consumer is ultimately responsible for payment for the products and services. We have determined that the balances are collectable at the time of revenue recognition because the patient signs a notice of financial responsibility outlining their obligations.

Included in rental revenue are unbilled amounts that were earned but not able to be billed for various reasons. The criteria for recognizing revenue had been met as of period-end, but there were specific reasons why we were unable to bill Medicare and private insurance for these amounts. As a result, we create an unbilled rental revenue accrual based on these earned revenues not billed based on a percentage of unbilled amounts and historical trends and estimates of future collectability.

Acquisitions and related acquired intangible assets and goodwill

The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. We may adjust the preliminary purchase price allocation, as necessary, for up to one year after the acquisition closing date if we obtain more information regarding asset valuations and liabilities assumed.

Goodwill is tested for impairment on an annual basis as of October 1. Interim testing of goodwill for impairment is also required whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or asset below its carrying amount. As a result of a decrease in our public stock price that caused our market capitalization to fall below its carrying amount (stockholders' equity) during July 2023 and was noted by management to be more than temporary as the quarter progressed, a quantitative analysis was required to be performed during the quarter ended September 30, 2023. We used a discounted cash flow analysis based on Level 3 inputs and determined that the goodwill carrying amount exceeded its fair value and, as such, an impairment charge of $32.9 million was incurred in the quarter ended September 30, 2023. Total accumulated impairment losses were $32.9 million as of December 31, 2024 and 2025.

Finite-lived intangible assets are amortized over their useful lives and are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Technology and customer relationship intangibles are amortized using the straight-line method.

Recent accounting pronouncements

Refer to Note 2 - Summary of significant accounting policies in the notes to the consolidated financial statements included in Part IV, Item 15 in this Annual Report on Form 10-K for further discussion.

Macroeconomic environment

While we have worked to improve our global supply chain, challenges and potential disruptions still exist. We have experienced, and may continue to experience, increases in cost and limited availability of certain raw materials, components, and other inputs necessary to manufacture and distribute our products due to constraints and inflation within the global supply chain, as well as increases in wage costs and the cost and time to distribute our products. Uncertainty around inflationary pressures, interest rates, monetary policy, and changes in tariffs and tax laws could potentially cause new, or exacerbate existing, economic challenges that we may face, including the impact of foreign currency fluctuations on our results of operations, or result in an economic downturn or recession, which could negatively impact our business operations and results. Existing and future potential geopolitical dynamics may create economic, supply chain, energy, and other challenges, including disruptions to business operations, which has impacted, and may in the future negatively impact our business. In particular, international conflicts could create instability, have and may further result in sanctions, tariffs, and other measures that restrict international trade and may negatively affect our business operations and results.

We continue to monitor the tariffs announced by the U.S. government, as well as the potential for additional or modified tariffs, and the imposition of tariffs or export controls by other countries. We do not currently expect a material impact to our business from the tariffs in the forms in which they are currently proposed.

For additional information on risk factors that could impact our results, please refer to the sections entitled "Risk Factors" in this Annual Report on Form 10-K.

Overview

We are a medical technology company that primarily develops, manufactures, and markets innovative respiratory market products, including our portable and stationary oxygen therapy solutions for patients with chronic respiratory conditions as well as our Simeox product for airway clearance treatment and Aurora masks for CPAP therapy. Our leading portfolio of innovative POCs is designed to deliver high output ratio-to-weight, meaningful sound suppression and has among the longest run times in the industry so that we can meet the needs of patients across a variety of disease states. We are positioned in the market as both a medical technology company and as a home medical equipment provider that is accredited in all 50 states in the United States with a significant patient, prescriber and provider reach. Our products are sold in the United States through direct patient and prescriber sales, as well as resellers and home medical equipment companies, and internationally through distributors and medical equipment companies.

We derive the majority of our revenue from the sale and rental of our portable oxygen concentrator systems and related accessories to patients, insurance carriers, home healthcare providers, resellers, and distributors, including our private label collaborator. We sell multiple configurations of our Inogen One®, Rove, and At Home, and Voxi®5 oxygen concentrator systems, as well as our Simeox airway clearance system and Aurora CPAP masks, with various accessories, warranties, power cords, and language settings. Our goal is to design, build, and market respiratory therapy solutions that redefine how home respiratory care is delivered.

To accomplish this goal, we intend to:

We plan to also continue to invest in clinical studies to evaluate expected improvements in clinical, economic and patient reported outcomes associated with the use of our products as part of our efforts to drive payor and prescriber advocacy for our products.

Our Simeox product is a technology-enabled airway clearance and mucus management device predominantly aimed at serving patients requiring airway clearance, such as those with bronchiectasis - a condition characterized by damaged and widened bronchi that can occur in patients with cystic fibrosis, COPD, or other respiratory conditions. Simeox is used in pulmonary rehabilitation centers as well as at home. Simeox has been cleared under CE mark in the European Union and through a 510(k) in the U.S. Simeox is being sold in Europe and several other markets. In 2025, we initiated efforts to obtain market feedback, as well as to initialize the work towards reimbursement coverage for Simeox in the U.S. We intend to leverage our infrastructure and capabilities to commercialize Simeox through the sale or rental of the product initially, followed by recurring sales of device disposables.

Through the Collaboration Agreement with Yuwell that we entered in January 2025, we have broadened our product portfolio. In particular, we have commenced distribution of the Inogen branded Voxi 5 stationary oxygen concentrators and Aurora CPAP masks in the U.S. The Aurora CPAP masks are high-performing masks designed for patients with OSA. A more extensive launch of these products is planned in 2026 as we focus on market development. We are also continuing that collaboration to enhance our innovation pipeline and is working to accelerate the entry of our brand into the Chinese market, where we continue to work through the registration process for our products.

Results of operations

Comparison of years ended December 31, 2025 and 2024

Revenue

Sales revenue increased $16.5 million, or 5.9%, for the year ended December 31, 2025 from the year ended December 31, 2024. The increase was primarily attributable to higher demand in international sales. We sold approximately 189,400 oxygen systems during the year ended December 31, 2025 compared to approximately 157,500 oxygen systems sold during the year ended December 31, 2024, an increase of 20.3%.

Rental revenue decreased $3.6 million, or 6.3%, for the year ended December 31, 2025 from the year ended December 31, 2024. The decrease in rental revenue was primarily related to a higher mix of lower private-payor reimbursement rates and fewer patients on service.

U.S. sales decreased 3.1% for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to channel mix versus the comparable period in 2024.

International sales increased 18.4% for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to an increase in demand from our partners in Europe and new customers. In the year ended December 31, 2025, sales in Europe as a percentage of total international sales revenue remained unchanged at 85.0% compared to the year ended December 31, 2024.

U.S. rentals decreased 6.3% for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily related to a higher mix of lower private-payor reimbursement rates and fewer patients on service.

Cost of revenue and gross profit

Cost of sales revenue increased $15.2 million, or 10.2%, for the year ended December 31, 2025 from the year ended December 31, 2024 due primarily to an increase in the number of systems sold.

Cost of rental revenue decreased $1.7 million, or 5.4%, for the year ended December 31, 2025 from the year ended December 31, 2024. The decrease in cost of rental revenue was primarily attributable to a decrease in logistics costs and depreciation. Cost of rental revenue included $11.8 million of rental asset depreciation for the year ended December 31, 2025 compared to $12.6 million for the year ended December 31, 2024.

Gross margin on sales revenue decreased to 44.5% for the year ended December 31, 2025 from 46.7% for the year ended December 31, 2024. The decrease was driven by customer mix and higher cost premiums associated with open-market purchases of semiconductor chips used in our POCs, partially offset by lower warranty expense.

Gross margin on rental revenue decreased to 42.7% for the year ended December 31, 2025 from 43.3% for the year ended December 31, 2024, primarily due to a higher mix shift of private-payor reimbursement and lower net revenue per rental patient as a result of a decrease in total patients on service.

Research and development expense

Research and development expense decreased $2.2 million, or 10.2%, for the year ended December 31, 2025 from the year ended December 31, 2024. This decrease was due primarily to a $2.2 million decrease in consulting expense.

Sales and marketing expense

Sales and marketing expense decreased $5.4 million, or 5.2%, for the year ended December 31, 2025 from the year ended December 31, 2024. This decrease was primarily due to decreases of $3.0 million in media and advertising costs, $1.2 million in consulting fees, $0.8 million in credit card and financing fees, and $0.7 million in dues, fees and licenses. In the year ended December 31, 2025, we spent $29.1 million in media and advertising costs versus $32.2 million in 2024.

General and administrative expense

General and administrative expense decreased $5.2 million, or 7.2%, for the year ended December 31, 2025, from the year ended December 31, 2024, primarily due to decreases of $3.0 million in the change in fair value of the earnout liability, $2.0 million in bad debt expense, and $0.8 million in acquisition-related expenses, respectively. These decreases were partially offset by an increase of $1.8 million in legal settlement costs.

Other income, net

Total other income, net increased $0.8 million, or 13.0%, for the year ended December 31, 2025 from the year ended December 31, 2024 primarily due to net foreign currency gains.

Income tax benefit

Income tax benefit increased less than $0.1 million, or 7.5%, for the year ended December 31, 2025 from the year ended December 31, 2024. We continued to record a valuation allowance on the use of deferred tax assets in the current and prior periods. The decrease was attributable to lower foreign and state taxes.

Our effective tax rate for the year ended December 31, 2025 increased compared to the year ended December 31, 2024, primarily due to a lower net loss and foreign and state taxes.

On July 4, 2025, the One Big Beautiful Bill Act,or OBBBA, was enacted into law. The OBBBA provides for significant U.S. tax law changes and modifications. The impacts of the new legislation did not have a material impact on our consolidated financial statements as of and for the year ended December 31, 2025.

Net loss

Net loss decreased $13.1 million, or 36.6%, for the year ended December 31, 2025 from the year ended December 31, 2024. The decrease in net loss was primarily related to an increase in sales revenue and lower operating expense.

Comparison of years ended December 31, 2024 and 2023

A discussion of changes in our results of operations during the year ended December 31, 2024 compared to the year ended December 31, 2023 has been omitted from this Annual Report on Form 10-K but may be found in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025, which discussion is incorporated herein by reference and which is available free of charge on the SEC's website at www.sec.gov.

Liquidity and capital resources

As of December 31, 2025, we had cash and cash equivalents of $103.7 million, which consisted of highly liquid investments with a maturity of three months or less. For the year ended December 31, 2025, we received $27.2 million from Yuwell and $1.0 million in proceeds related to our 2014 Employee Stock Purchase Plan, or ESPP, partially offset by the payment of the earnout liability of $13.0 million and $2.4 million in legal and settlement expenses. For the years ended December 31, 2024 and 2023, we received $0.8 million and $1.5 million, respectively, in proceeds related to our ESPP and stock option exercises.

As of December 31, 2025, we had a financing receivable of $4.7 million, which consisted of $1.4 million in current assets and $3.3 million in noncurrent assets. Our credit terms are predominately short term in nature; however, in certain circumstances, we offer extended payment terms to customers who have not met the payment terms of their original contract.

Our principal use of our funds for liquidity and capital resources in the year ended December 31, 2025 consisted of cash used in investing activities of $29.8 million for the purchase of marketable securities, $10.4 million in the production and purchase of rental assets and other property and equipment and cash used in operating activities of $11.2 million.

We believe that our current cash, cash equivalents, and marketable securities and the cash to be generated from expected product sales and rentals will be sufficient to meet our projected operating and investing requirements for at least the next 12 months. However, our liquidity assumptions may prove to be incorrect, and we could utilize our available financial resources sooner than we currently expect. Our future funding requirements will depend on many factors, including market acceptance of our products; the cost of our research and development activities; payments from customers; the cost, timing, and outcome of litigation or disputes involving intellectual property rights, our products, employee relations, cyber security incidents, or otherwise; the cost and timing of acquisitions and integration thereof; the cost and timing of regulatory clearances or approvals; the cost and timing of establishing additional sales, marketing, and distribution capabilities; and the effect of competing technological and market developments. In the future, we may acquire businesses or technologies from third parties, and we may decide to raise additional capital through debt or equity financing to the extent we believe this is necessary to successfully complete these acquisitions. Our future capital requirements will also depend on many additional factors, including those set forth in the section of this Annual Report on Form 10-K entitled "Risk Factors."

If we require additional funds in the future, we may not be able to obtain such funds on acceptable terms, or at all. In the future, we may also attempt to raise additional capital through the sale of equity securities or through equity-linked or debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of indebtedness, we will be subject to increased fixed payment obligations and could also be subject to restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we incur may result in terms that could be unfavorable to equity investors. There can be no assurances that we will be able to raise additional capital, which would adversely affect our ability to achieve our business objectives. In addition, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected.

The following tables show a summary of our cash flows and working capital for the periods and as of the dates indicated:

Operating activities

Historically, we derive operating cash flows from cash collected from the sales and rental of our products and services. These cash flows received are partially offset by our use of cash for operating expenses to support the growth of our business.

Net cash used in operating activities for the year ended December 31, 2025 consisted primarily of our net loss of $22.7 million, partially offset by non-cash adjustment items of depreciation of equipment and leasehold improvements and amortization of intangibles of $20.7 million, stock-based compensation expense of $8.0 million, provision for sales returns and credit losses of $6.4 million, and net loss on disposal of rental assets and other assets of $3.2 million. The net changes in operating assets and liabilities resulted in net cash used of $26.9 million, which included the payment of the earnout liability of $9.8 million and $2.4 million in legal and settlement expenses.

Net cash provided by operating activities for the year ended December 31, 2024 consisted primarily of non-cash adjustment items such as depreciation of equipment and leasehold improvements and amortization of intangibles of $21.0 million, provision for sales returns and credit losses of $10.9 million, stock-based compensation expense of $7.4 million, net loss on disposal of rental assets and other assets of $4.5 million, and change in fair value of earnout liability of $3.0 million. These adjustment items were partially offset by our net loss of $35.9 million, and an increase in deferred tax assets of $1.2 million. The net changes in operating assets and liabilities resulted in a net use of cash of $4.4 million.

Net cash used in operating activities for the year ended December 31, 2023 consisted primarily of our net loss of $102.4 million, partially offset by non-cash adjustment items such as impairment charges of $32.9 million, depreciation of equipment and leasehold improvements and amortization of intangibles of $18.2 million, provision for sales returns and credit losses of $10.7 million, stock-based compensation expense of $7.4 million, change in fair value of earnout liability of $6.8 million, net loss on disposal of rental assets and other assets of $4.5 million, provision for inventory obsolescence and other inventory losses of $2.7 million, and loss on purchase commitments of $2.1 million. The net changes in operating assets and liabilities resulted in net cash provided of $14.3 million.

Investing activities

Net cash used in investing activities generally includes the production and purchase of rental assets, property, plant and equipment, acquisitions, and intangibles to support our expanding business as well as maturities (purchases) of marketable securities.

For the year ended December 31, 2025, we invested $29.8 million in the purchase of marketable securities and $10.4 million in the production and purchase of rental assets and other property and equipment, partially offset by $14.0 million we received from maturities of marketable securities.

For the year ended December 31, 2024, we invested $32.7 million in the purchase of marketable securities, $15.0 million in the production and purchase of rental assets and other property and equipment, and $2.1 million in intangible assets, partially offset by $35.5 million we received from maturities of marketable securities.

For the year ended December 31, 2023, we invested $29.6 million in the Physio-Assist acquisition, net of cash acquired, $26.9 million in purchase of marketable securities, $26.5 million in the production and purchase of rental assets and other property and equipment, and $0.5 million in intangible assets, partially offset by $24.0 million we received in maturities of marketable securities.

We expend significant manufacturing and production expense in connection with the development and production of our oxygen concentrator and other respiratory care products and, in connection with our rental business, we incur expense in the deployment and maintenance of rental equipment to our patients. Investments will continue to be required in order to grow our sales and rental revenue and continue to supply and replace rental equipment to our rental patients on service.

Financing activities

Historically, we have funded our operations through our sales and rental revenue and the issuance of preferred and common stock.

For the year ended December 31, 2025, net cash provided by financing activities consisted of $27.2 million of proceeds from issuance of common stock pursuant to the securities purchase agreement with Yuwell, $1.0 million of proceeds received from purchases under our ESPP, partially offset by the payment of the earnout liability of $3.2 million and employment taxes related to the vesting of RSUs of $0.8 million.

For the year ended December 31, 2024, net cash provided by financing activities consisted of $0.8 million from the proceeds received from purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock units of $0.5 million.

For the year ended December 31, 2023, net cash provided by financing activities consisted of $1.5 million from the proceeds received from stock options that were exercised and purchases under our employee stock purchase program, partially offset by the payment of employment taxes related to the vesting of restricted stock awards and restricted stock units of $0.5 million.

Sources of funds

During the year ended December 31, 2025, our primary source of cash related to $27.2 million of proceeds from issuance of common stock pursuant to the Purchase Agreement. Our net cash used in operating activities in the year ended December 31, 2025 was $11.2 million compared to net cash provided by $5.9 million in the year ended December 31, 2024. As of December 31, 2025, we had cash and cash equivalents of $103.7 million.

On January 25, 2025, we entered into a securities purchase agreement with Yuwell (Hong Kong) Holdings Limited, an affiliate of Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. Pursuant to the securities purchase agreement, Yuwell (Hong Kong) Holdings Limited has agreed to purchase 2,626,425 shares of the Company's common stock at a price per share of $10.36, for an aggregate purchase price of approximately $27.2 million. The transaction closed on February 21, 2025.

Use of funds

Our principal uses of cash are funding our new rental asset deployments and other capital purchases, operations, and other working capital requirements and, from time-to-time, the acquisition of businesses and the payment of the earnout liability. Over the past several years our cash flows from customer collections have remained consistent and our annual cash provided by operating activities has generally been a significant source of capital to the business.

Contractual obligations

The following table reflects a summary of our contractual obligations as of December 31, 2025.

For additional description of contractual obligations and commitments, see the section titled "Commitments and Contingencies" in the notes to consolidated financial statements included in this Annual Report on Form 10-K.

Non-GAAP financial measures

EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with U.S. GAAP. We define EBITDA as net loss excluding interest income, interest expense, taxes and depreciation and amortization. Adjusted EBITDA also excludes stock-based compensation, change in fair value of earnout liability, acquisition-related expenses, and restructuring-related and other charges. Below, we have provided a reconciliation of EBITDA and Adjusted EBITDA to our net loss, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA should not be considered alternatives to a net loss, or any other measure of financial performance calculated and presented in accordance with U.S. GAAP. Our EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other organizations because other organizations may not calculate EBITDA and Adjusted EBITDA in the same manner as we calculate these measures.

We include EBITDA and Adjusted EBITDA in this Annual Report on Form 10-K because they are important measures upon which our management assesses our operating performance. We use EBITDA and Adjusted EBITDA as key performance measures because we believe they facilitate operating performance comparisons from period-to-period by excluding potential differences primarily caused by variations in capital structures, tax positions, the impact of depreciation and amortization expense on our fixed assets and intangible assets, the impact of stock-based compensation expense, the impact of the change in fair value of the earnout liability, the impact of acquisition-related expenses, the impact of restructuring-related costs, and impairment charges. Because EBITDA and Adjusted EBITDA facilitate internal comparisons of our historical operating performance on a more consistent basis, we also use EBITDA and Adjusted EBITDA for business planning purposes, to incentivize and compensate our management personnel, and in evaluating acquisition opportunities. In addition, we believe EBITDA and Adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities.

Our uses of EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

In evaluating EBITDA and Adjusted EBITDA, we anticipate that in the future we will incur expenses within these categories similar to this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by certain expenses. When evaluating our financial results, EBITDA and Adjusted EBITDA should be considered alongside other financial performance measures, including U.S. GAAP results.

The following table presents a reconciliation of EBITDA and Adjusted EBITDA to our net loss, the most comparable U.S. GAAP measure, for each of the periods indicated: