IMPINJ INC [PI] Filings

Large accelerated filer

Accelerated filer

Non-accelerated filer

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Emerging growth company

10-Q 1 pi-20220930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2022

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

Commission File Number: 001-37824

IMPINJ, INC.

(Exact name of registrant as specified in its charter)


Delaware		91-2041398
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
400 Fairview Avenue North, Suite 1200, Seattle, Washington		98109
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (206) 517-5300

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	PI	The Nasdaq Global Select Market

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.

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 October 14, 2022, 25,914,998 shares of common stock were outstanding.

Table of Contents

IMPINJ, INC.

QUARTERLY REPORT ON FORM 10-Q

Table of Contents


		Page
	Risk Factor Summary	3

	PART I. — FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Loss	6
	Condensed Consolidated Statements of Cash Flows	7
	Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
	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	56
Item 3.	Defaults Upon Senior Securities	57
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	58
	Signatures	59

Table of Contents

Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this report captioned “Risk

Factors.” These risks include the following:

•

if RAIN market adoption does not continue to develop, or develops slower than we expect, or if RAIN adoption by retailers and supply chain and logistics companies does not continue at the rate we expect, our business will suffer;

•

our market is very competitive, and if we fail to compete successfully, our business and operating results will suffer;

•

an inability or limited ability of enterprise systems to exploit RAIN information may adversely affect the market for our products;

•

if end users or our direct customers fail to design our products into their products and systems, our operating results and prospects will be adversely affected;

•

alternative technologies or standards, or changes in existing technologies or standards, may adversely affect RAIN market growth and our business;

•

we obtain products we sell through third parties who operate outside of United States and with whom we do not have long-term supply contracts, and if we are unable to effectively manage our relationships with suppliers our operating results and financial condition would be adversely affected;

•

we are vulnerable to silicon wafer shortages, which has and may continue to adversely affect our ability to meet demand for our products;

•

our products must meet demanding technical and quality specifications and failure of our products to operate as expected could have an adverse effect on our operating results;

•

Covid-19 has adversely affected our business, and the magnitude and duration of future Covid-19 effects on our business are uncertain;

•

we rely on a small number of customers for a large share of our revenues;

•

because we sell and fulfill through channel partners, our ability to affect or determine end-user demand is limited;

•

our growth strategy depends in part on the success of strategic relationships with third parties and their continued performance and alignment;

•

if we are unable to protect our intellectual property, then our business could be adversely affected;

•

we are and may become party to additional intellectual property disputes, which could be time consuming, costly to prosecute, defend or settle, result in the loss of significant rights, and adversely affect RAIN adoption generally;

•

we have a history of losses and have only achieved profitability intermittently, and we cannot be certain that we will attain or sustain profitability in the future;

•

we have a history of significant fluctuations in our quarterly and annual operating results;

•

servicing $287.5 million aggregate principal amount 1.125% convertible senior notes due 2027, or the 2021 Notes, may require a significant amount of cash, and we may not have sufficient cash flow or the ability to raise the funds necessary to satisfy our obligations under the 2021 Notes, in which case our indebtedness may limit our operating flexibility or otherwise affect our business; and

•

our executive officers, directors, principal stockholders, together with their affiliates, beneficially owned approximately 24.8% of our outstanding common stock as of September 30, 2022, and as a result are able to exercise significant influence over matters subject to stockholder approval.

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

IMPINJ, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value, unaudited)


	September 30, 2022			December 31, 2021
Assets:
Current assets:
Cash and cash equivalents	$	39,310		$	123,903
Short-term investments		142,541			69,443
Accounts receivable, net		40,667			35,449
Inventory		31,925			21,958
Prepaid expenses and other current assets		5,507			5,049
Total current assets		259,950			255,802
Long-term investments		19,200			14,225
Property and equipment, net		31,121			27,500
Operating lease right-of-use assets		11,414			11,667
Other non-current assets		2,223			2,462
Goodwill		3,881			3,881
Total assets	$	327,789		$	315,537
Liabilities and stockholders' equity (deficit):
Current liabilities:
Accounts payable	$	13,249		$	11,732
Accrued compensation and employee related benefits		7,936			6,365
Accrued and other current liabilities		6,080			2,481
Current portion of operating lease liabilities		3,460			4,143
Restructuring liabilities		102			591
Current portion of long-term debt		—			9,633
Current portion of deferred revenue		2,808			558
Total current liabilities		33,635			35,503
Long-term debt, net of current portion		279,846			278,661
Operating lease liabilities, net of current portion		11,790			11,934
Other long-term liabilities		113			279
Deferred revenue, net of current portion		344			236
Total liabilities		325,728			326,613
Commitments and contingencies (Note 5)
Stockholders' equity (deficit):
Preferred stock, $0.001 par value — 5,000 shares authorized, no shares issued and outstanding at September 30, 2022 and December 31, 2021		—			—
Common stock, $0.001 par value — 495,000 shares authorized, 25,876 and 24,737 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		26			25
Additional paid-in capital		390,432			351,422
Accumulated other comprehensive loss		(1,730	)		(39	)
Accumulated deficit		(386,667	)		(362,484	)
Total stockholders' equity (deficit)		2,061			(11,076	)
Total liabilities and stockholders' equity (deficit)	$	327,789		$	315,537

See accompanying notes to condensed consolidated financial statements.

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IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenue	$	68,270		$	45,193		$	181,210		$	137,709
Cost of revenue		30,835			22,180			83,494			67,938
Gross profit		37,435			23,013			97,716			69,771
Operating expenses:
Research and development		18,766			16,789			55,124			46,480
Sales and marketing		9,326			8,736			28,239			24,577
General and administrative		11,087			9,860			33,888			27,012
Restructuring costs		—			—			—			1,263
Total operating expenses		39,179			35,385			117,251			99,332
Loss from operations		(1,744	)		(12,372	)		(19,535	)		(29,561	)
Other income, net		774			2			1,367			21
Induced conversion expense		—			—			(2,232	)		—
Interest expense		(1,205	)		(526	)		(3,716	)		(1,576	)
Loss before income taxes		(2,175	)		(12,896	)		(24,116	)		(31,116	)
Income tax expense		(24	)		(28	)		(67	)		(130	)
Net loss	$	(2,199	)	$	(12,924	)	$	(24,183	)	$	(31,246	)

Net loss per share — basic and diluted	$	(0.09	)	$	(0.53	)	$	(0.95	)	$	(1.30	)
Weighted-average shares outstanding — basic and diluted		25,743			24,330			25,384			24,040

See accompanying notes to condensed consolidated financial statements.

Table of Contents

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net loss	$	(2,199	)	$	(12,924	)	$	(24,183	)	$	(31,246	)
Other comprehensive loss, net of tax:
Unrealized loss on investments		(504	)		(7	)		(1,691	)		(6	)
Total other comprehensive loss		(504	)		(7	)		(1,691	)		(6	)
Comprehensive loss	$	(2,703	)	$	(12,931	)	$	(25,874	)	$	(31,252	)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)


	Nine Months Ended September 30,
	2022			2021
Operating activities:
Net loss	$	(24,183	)	$	(31,246	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		4,456			3,171
Stock-based compensation		32,230			28,951
Accretion of discount or amortization of premium on investments		301			694
Amortization of debt issuance costs		1,203			283
Induced conversion expense related to convertible notes		2,232			—
Changes in operating assets and liabilities:
Accounts receivable		(5,218	)		(2,042	)
Inventory		(9,967	)		17,895
Prepaid expenses and other assets		45			(758	)
Accounts payable		1,107			(1,831	)
Accrued compensation and employee related benefits		1,571			754
Accrued and other liabilities		1,741			1,063
Operating lease right-of-use assets		2,490			2,218
Operating lease liabilities		(3,064	)		(2,772	)
Restructuring liabilities		(489	)		133
Deferred revenue		2,358			(6,106	)
Net cash provided by operating activities		6,813			10,407
Investing activities:
Purchases of investments		(159,837	)		(36,431	)
Proceeds from maturities of investments		79,508			70,000
Purchases of property and equipment		(5,975	)		(14,181	)
Net cash provided by (used in) investing activities		(86,304	)		19,388
Financing activities:
Principal payments on finance lease obligations		—			(2	)
Proceeds from exercise of stock options and employee stock purchase plan		12,462			11,761
Payment of 2019 Notes		(17,564	)		—
Net cash provided by (used in) financing activities		(5,102	)		11,759
Net increase (decrease) in cash and cash equivalents		(84,593	)		41,554
Cash and cash equivalents
Beginning of period		123,903			23,636
End of period	$	39,310		$	65,190

Supplemental disclosure of cashflow information:
Cash paid for interest	$	1,803		$	863
Purchases of property and equipment not yet paid		2,519			2,173

See accompanying notes to condensed consolidated financial statements.

Table of Contents

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, unaudited)


											Accumulated
					Additional						Other			Total
	Common Stock				Paid-in			Accumulated			Comprehensive			Stockholders'
	Shares		Amount		Capital			Deficit			Income (Loss)			Equity (Deficit)
Balance at December 31, 2021		24,737	$	25	$	351,422		$	(362,484	)	$	(39	)	$	(11,076	)
Issuance of common stock		483		—		4,611			—			—			4,611
Stock-based compensation		—		—		11,314			—			—			11,314
Net loss		—		—		—			(10,461	)		—			(10,461	)
Other comprehensive loss		—		—		—			—			(677	)		(677	)
Balance at March 31, 2022		25,220	$	25	$	367,347		$	(372,945	)	$	(716	)	$	(6,289	)
Issuance of common stock		327		1		1,884			—			—			1,885
Stock-based compensation		—		—		10,859			—			—			10,859
Net loss		—		—		—			(11,523	)		—			(11,523	)
Other comprehensive loss		—		—		—			—			(510	)		(510	)
Induced conversion on 2019 Notes		—		—		(5,681	)		—			—			(5,681	)
Balance at June 30, 2022		25,547		26		374,409			(384,468	)		(1,226	)

IMPINJ INC [PI] Filings
10-Q	[2022-10-26]
10-Q	[2022-07-27]
10-Q	[2022-04-27]
10-K	[2022-02-14]
10-Q	[2021-10-27]
10-Q	[2021-07-28]
10-Q	[2021-04-28]
10-K	[2021-02-17]
10-Q	[2020-10-28]
10-Q	[2020-07-29]
10-Q	[2020-04-27]
10-K	[2020-03-02]
10-Q	[2019-11-04]
10-Q	[2019-07-29]
10-Q	[2019-04-29]
10-K	[2019-02-28]
10-Q	[2018-10-29]
10-Q	[2018-09-12]
10-Q	[2018-05-08]
10-K	[2018-03-15]
10-Q	[2017-11-09]
10-Q	[2017-08-14]
10-Q	[2017-05-11]
10-K	[2017-03-03]
S-1	[2016-11-17]
10-Q	[2016-11-07]
10-Q	[2016-09-02]
S-1	[2016-06-02]