Identiv(INVE) - 2024 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2024, net revenue was $9.045 million, a decrease of 55.1$20.114 million for the same period in 2023[25]. - Gross profit for the three months ended September 30, 2024, was $3.835 million, down 64.1$10.622 million in the prior year[25]. - Operating expenses increased to $8.171 million for the three months ended September 30, 2024, compared to$6.962 million in the same period of 2023, representing a 17.3% increase[25]. - The Company reported a net loss of $4.268 million for the three months ended September 30, 2024, compared to a net income of$3.638 million for the same period in 2023[25]. - The net loss from continuing operations for the three months ended September 30, 2024, was $9.3 million, compared to a loss of$3.7 million for the same period in 2023[64]. - For the three months ended September 30, 2024, total net revenue was $6,532,000, a decrease of 44$11,732,000 for the same period in 2023[68]. Discontinued Operations - The Company has classified the results of the Physical Security Business as discontinued operations in its financial statements[24]. - The gain on the sale of the Physical Security Business, net of taxes, was $99.546 million, subject to adjustments based on tax analysis[23]. - Basic net income per common share for discontinued operations was$4.03 for the three months ended September 30, 2024, compared to $0.16 for the same period in 2023[64]. - The Company completed the sale of its Physical Security Business for approximately$144.3 million in cash on September 6, 2024[21]. - The Company completed the sale of its Physical Security Business in Q3 2024, resulting in a single reportable segment: the IoT Business segment[67]. Cash and Investments - The company reported cash equivalents of $60.0 million and treasury bills of$65.0 million as of September 30, 2024, both classified as Level 1 fair value measurements[37]. - The company had $348,000 of privately-held investments measured at fair value on a nonrecurring basis as of September 30, 2024, classified as Level 3 assets[38]. - The company had no outstanding amounts under the Loan Agreement as of September 30, 2024, with$20.0 million available[45]. Inventory and Assets - As of September 30, 2024, the company's total inventories decreased to $10.71 million from$13.56 million as of December 31, 2023, representing a decline of approximately 21.0%[40]. - The company’s total property and equipment, net, was $8.203 million as of September 30, 2024, a slight decrease from$8.472 million as of December 31, 2023[42]. - As of September 30, 2024, there are 444,460 stock options outstanding with a weighted average exercise price of $4.36 and an aggregate intrinsic value of$0[53][55]. Stock-Based Compensation - The Company recognized $0.2 million in stock-based compensation related to the modification of stock options for the former CEO in Q3 2024[55]. - The Company recognized$3.8 million in stock-based compensation expense in Q3 2024 due to the vesting of RSUs held by employees who transitioned to the Buyer following the Asset Sale[57]. - Total stock-based compensation expense for continuing operations was $2.6 million for the nine months ended September 30, 2024, compared to$1.5 million for the same period in 2023[61]. - The Company granted 477,500 Performance Stock Units (PSUs) during the nine months ended September 30, 2024, with an unrecognized compensation expense of $1.8 million related to unvested PSUs[59][60]. Research and Development - Research and development expenses for the three months ended September 30, 2024, were$2.311 million, an increase of 21.8% from $1.897 million in the same period of 2023[25]. Lease Obligations - The company reported total minimum lease payments of$2,359,000 for the remaining years, with long-term operating lease liabilities of $1,251,000[74]. - Cash paid for operating lease liabilities was$0.3 million for Q3 2024, unchanged from Q3 2023[75]. - The weighted average remaining lease term for operating leases was 2.5 years, with a discount rate of 7.6%[74]. Other Financial Metrics - The company’s accrued professional fees increased to $594,000 as of September 30, 2024, compared to$404,000 as of December 31, 2023, an increase of approximately 47.0%[43]. - The balance of Series B convertible preferred stock increased to $27.271 million as of September 30, 2024, from$26.270 million as of September 30, 2023, reflecting an increase of approximately 3.8%[49]. - The company’s financial liabilities, net of debt issuance costs, were $9.949 million as of December 31, 2023, with no liabilities reported as of September 30, 2024[44].