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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______ to ______

 

Commission File Number: 000-29440

 

IDENTIV, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

77-0444317

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

2201 Walnut Avenue, Suite 100

Fremont, California

94538

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (949) 250-8888

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of exchange on which registered

 

Common Stock, $0.001 par value per share

 

INVE

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

  

Accelerated filer

Non-accelerated filer

  

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of November 2, 2022, the registrant had 22,513,129 shares of common stock outstanding.

 

 


 

TABLE OF CONTENTS

 

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

Item 1.

 

Financial Statements (Unaudited)

3

 

 

Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021

3

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2022 and 2021

4

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021

5

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021

7

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

33

Item 4.

 

Controls and Procedures

33

 

 

PART II. OTHER INFORMATION

 

Item 1.

 

Legal Proceedings

35

Item 1A.

 

Risk Factors

35

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 6.

 

Exhibits

37

 

 

 

 

SIGNATURES

38

 

 

 

 

2


 

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

IDENTIV, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except par value)

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

21,202

 

 

$

28,553

 

Restricted cash

 

 

698

 

 

 

1,254

 

Accounts receivable, net of allowances of $2,666 and $2,745 as of September 30, 2022

   and December 31, 2021, respectively

 

 

23,588

 

 

 

19,963

 

Inventories

 

 

25,060

 

 

 

19,924

 

Prepaid expenses and other current assets

 

 

3,908

 

 

 

3,032

 

Total current assets

 

 

74,456

 

 

 

72,726

 

Property and equipment, net

 

 

6,189

 

 

 

4,066

 

Operating lease right-of-use assets

 

 

3,997

 

 

 

2,088

 

Intangible assets, net

 

 

5,533

 

 

 

6,445

 

Goodwill

 

 

10,179

 

 

 

10,268

 

Other assets

 

 

1,046

 

 

 

1,070

 

Total assets

 

$

101,400

 

 

$

96,663

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

15,074

 

 

$

10,502

 

Operating lease liabilities

 

 

941

 

 

 

1,269

 

Deferred revenue

 

 

2,072

 

 

 

2,153

 

Accrued compensation and related benefits

 

 

2,753

 

 

 

3,150

 

Other accrued expenses and liabilities

 

 

2,917

 

 

 

3,774

 

Total current liabilities

 

 

23,757

 

 

 

20,848

 

Long-term operating lease liabilities

 

 

3,185

 

 

 

938

 

Long-term deferred revenue

 

 

474

 

 

 

280

 

Other long-term liabilities

 

 

24

 

 

 

85

 

Total liabilities

 

 

27,440

 

 

 

22,151

 

Commitments and contingencies (see Note 15)

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value: 10,000 shares authorized; 5,000 shares

   issued and outstanding as of September 30, 2022 and December 31, 2021

 

 

5

 

 

 

5

 

Common stock, $0.001 par value: 50,000 shares authorized; 24,021 and 23,707 shares

   issued and 22,490 and 22,230 shares outstanding as of September 30, 2022 and

   December 31, 2021, respectively

 

 

24

 

 

 

24

 

Additional paid-in capital

 

 

495,222

 

 

 

492,657

 

Treasury stock, 1,531 and 1,477 shares as of September 30, 2022 and December 31, 2021,

   respectively

 

 

(12,030

)

 

 

(11,134

)

Accumulated deficit

 

 

(409,720

)

 

 

(408,989

)

Accumulated other comprehensive income

 

 

459

 

 

 

1,949

 

Total stockholders' equity

 

 

73,960

 

 

 

74,512

 

Total liabilities and stockholders' equity

 

$

101,400

 

 

$

96,663

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

3


 

IDENTIV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands, except per share data)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net revenue

 

$

30,996

 

 

$

29,097

 

 

$

83,914

 

 

$

75,252

 

Cost of revenue

 

 

19,808

 

 

 

17,979

 

 

 

53,550

 

 

 

47,602

 

Gross profit

 

 

11,188

 

 

 

11,118

 

 

 

30,364

 

 

 

27,650

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

2,625

 

 

 

2,088

 

 

 

7,633

 

 

 

6,556

 

Selling and marketing

 

 

5,326

 

 

 

4,471

 

 

 

15,709

 

 

 

12,682

 

General and administrative

 

 

2,639

 

 

 

2,400

 

 

 

7,623

 

 

 

7,120

 

Restructuring and severance

 

 

49

 

 

 

99

 

 

 

132

 

 

 

761

 

Total operating expenses

 

 

10,639

 

 

 

9,058

 

 

 

31,097

 

 

 

27,119

 

Income (loss) from operations

 

 

549

 

 

 

2,060

 

 

 

(733

)

 

 

531

 

Non-operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(39

)

 

 

(62

)

 

 

(101

)

 

 

(451

)

Gain on forgiveness of Paycheck Protection Program note

 

 

 

 

 

 

 

 

 

 

 

2,946

 

Gain on investment

 

 

 

 

 

611

 

 

 

30

 

 

 

611

 

Foreign currency gains (losses), net

 

 

(3

)

 

 

(48

)

 

 

111

 

 

 

(2

)

Income (loss) before income tax benefit (provision)

 

 

507

 

 

 

2,561

 

 

 

(693

)

 

 

3,635

 

Income tax benefit (provision)

 

 

12

 

 

 

(21

)

 

 

(38

)

 

 

(94

)

Net income (loss)

 

 

519

 

 

 

2,540

 

 

 

(731

)

 

 

3,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(644

)

 

 

(229

)

 

 

(1,490

)

 

 

(449

)

Comprehensive income (loss)

 

$

(125

)

 

$

2,311

 

 

$

(2,221

)

 

$

3,092

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

`

 

 

 

 

 

Basic

 

$

0.01

 

 

$

0.10

 

 

$

(0.07

)

 

$

0.13

 

Diluted

 

$

0.01

 

 

$

0.09

 

 

$

(0.07

)

 

$

0.12

 

Weighted average shares used in computing net

   income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

22,682

 

 

 

22,448

 

 

 

22,632

 

 

 

20,948

 

Diluted

 

 

23,315

 

 

 

29,330

 

 

 

22,632

 

 

 

21,861

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

4


 

IDENTIV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands)

 

 

 

Three Months Ended September 30, 2022

 

 

 

Series B

Convertible Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Treasury

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stock

 

 

Deficit

 

 

Income

 

 

Equity

 

Balances, June 30, 2022

 

 

5,000

 

 

$

5

 

 

 

22,444

 

 

$

24

 

 

$

494,370

 

 

$

(11,757

)

 

$

(410,239

)

 

$

1,103

 

 

 

73,506

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

519

 

 

 

 

 

 

519

 

Unrealized loss from foreign

   currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(644

)

 

 

(644

)

Issuance of common stock in connection

   with vesting of stock awards

 

 

 

 

 

 

 

 

64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

852

 

 

 

 

 

 

 

 

 

 

 

 

852

 

Shares withheld in payment of taxes in

   connection with net share settlement of

   restricted stock units

 

 

 

 

 

 

 

 

(18

)

 

 

 

 

 

 

 

 

(273

)

 

 

 

 

 

 

 

 

(273

)

Balances, September 30, 2022

 

 

5,000

 

 

$

5

 

 

 

22,490

 

 

$

24

 

 

$

495,222

 

 

$

(12,030

)

 

$

(409,720

)

 

$

459

 

 

$

73,960

 

 

 

 

Nine Months Ended September 30, 2022

 

 

 

Series B

Convertible Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Treasury

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stock

 

 

Deficit

 

 

Income

 

 

Equity

 

Balances, December 31, 2021

 

 

5,000

 

 

$

5

 

 

 

22,230

 

 

$

24

 

 

$

492,657

 

 

$

(11,134

)

 

$

(408,989

)

 

$

1,949

 

 

 

74,512

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(731

)

 

 

 

 

 

(731

)

Unrealized loss from foreign

   currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,490

)

 

 

(1,490

)

Issuance of common stock in connection

   with vesting of stock awards

 

 

 

 

 

 

 

 

314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,565

 

 

 

 

 

 

 

 

 

 

 

 

2,565

 

Shares withheld in payment of taxes in

   connection with net share settlement of

   restricted stock units

 

 

 

 

 

 

 

 

(54

)

 

 

 

 

 

 

 

 

(896

)

 

 

 

 

 

 

 

 

(896

)

Balances, September 30, 2022

 

 

5,000

 

 

$

5

 

 

 

22,490

 

 

$

24

 

 

$

495,222

 

 

$

(12,030

)

 

$

(409,720

)

 

$

459

 

 

$

73,960

 

 

 

 

Three Months Ended September 30, 2021

 

 

 

Series B

Convertible Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Treasury

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stock

 

 

Deficit

 

 

Income

 

 

Equity

 

Balances, June 30, 2021

 

 

5,000

 

 

$

5

 

 

 

22,123

 

 

$

23

 

 

$

491,431

 

 

$

(10,519

)

 

$

(409,608

)

 

$

2,358

 

 

 

73,690

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,540

 

 

 

 

 

 

2,540

 

Unrealized income from foreign

   currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(229

)

 

 

(229

)

Issuance of common stock in connection

   with vesting of stock awards

 

 

 

 

 

 

 

 

73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

572

 

 

 

 

 

 

 

 

 

 

 

 

572

 

Shares withheld in payment of taxes in

   connection with net share settlement of

   restricted stock units

 

 

 

 

 

 

 

 

(20

)

 

 

 

 

 

 

 

 

(334

)

 

 

 

 

 

 

 

 

(334

)

Proceeds from exercise of

   stock options

 

 

 

 

 

 

 

 

2

 

 

 

1