Identiv(US:INVE)2024-08-08 23:51Discontinued Operations - In Q2 2024, the Company entered into a Purchase Agreement to sell its Physical Security Business for $145.0 million in cash consideration[22] - The net revenue from discontinued operations for Q2 2024 was $17.592 million, a decrease of 2.7% compared to $18.079 million in Q2 2023[23] - The gross profit from discontinued operations for Q2 2024 was $7.904 million, down from $9.216 million in Q2 2023, reflecting a gross margin decrease[23] - Total operating expenses for discontinued operations in Q2 2024 were $7.148 million, compared to $6.919 million in Q2 2023, indicating a 3.3% increase[23] - The Company reported a net income of $707,000 from discontinued operations in Q2 2024, a significant decrease from $2.307 million in Q2 2023[23] - The Company anticipates closing the transaction for the sale of the Physical Security Business in Q3 2024, pending regulatory approvals[22] - The transition service agreement for the sale will provide support for 12 to 18 months post-transaction[22] - The Company performed its annual goodwill impairment analysis and found no impairment indicators related to the goodwill of its Physical Security Business[23] Financial Performance - Total net revenue for the three months ended June 30, 2024, was $6,741,000, compared to $11,476,000 for the same period in 2023, representing a decrease of approximately 41.5%[32] - Revenue from the Americas for the three months ended June 30, 2024, was $3,386,000, down from $7,948,000 in 2023, a decline of about 57.4%[32] - The Company reported total revenue of $13,399,000 for the six months ended June 30, 2024, compared to $20,365,000 for the same period in 2023, indicating a decrease of approximately 34.2%[33] - Geographic net revenue for the Americas was $6,344,000 for the six months ended June 30, 2024, down from $14,336,000 in the same period in 2023, representing a decline of approximately 56%[66] - The company reported a net loss from continuing operations of $12,305,000 for the six months ended June 30, 2024, compared to a loss of $6,890,000 for the same period in 2023[61] - The company’s net loss per common share for the six months ended June 30, 2024, was $(0.48), compared to $(0.20) for the same period in 2023[61] Assets and Liabilities - As of June 30, 2024, total current assets held-for-sale amounted to $33.600 million, slightly up from $32.916 million as of December 31, 2023[25] - The carrying value of goodwill related to the discontinued operations was $10.180 million as of June 30, 2024, compared to $10.218 million at the end of 2023[25] - As of June 30, 2024, the Company had $348,000 of privately-held investments measured at fair value on a nonrecurring basis, classified as Level 3 assets[36] - The Company’s total inventories decreased from $13,560,000 as of December 31, 2023, to $11,267,000 as of June 30, 2024, a reduction of approximately 16.9%[39] - Financial liabilities, net of debt issuance costs, decreased from $9,949,000 as of December 31, 2023, to $7,905,000 as of June 30, 2024, a decline of about 20.6%[42] - Total property and equipment, net decreased from $8,472,000 as of December 31, 2023, to $7,669,000 as of June 30, 2024, a decline of approximately 9.5%[67] - Total operating lease right-of-use assets decreased from $2,289,000 as of December 31, 2023, to $2,228,000 as of June 30, 2024, a decline of approximately 2.7%[67] Stock and Compensation - Common stock reserved for future issuance as of June 30, 2024, totaled 10,811,851 shares, including 7,541,449 shares issuable upon conversion of Series B convertible preferred stock[49] - The balance of Series B convertible preferred stock increased from $25,951,000 as of June 30, 2023, to $27,070,000 as of June 30, 2024, reflecting an increase of approximately 4.3%[47] - The company granted 658,015 restricted stock units (RSUs) during the six months ended June 30, 2024, with an unvested balance of 1,099,948 RSUs as of the same date[54][56] - The total stock-based compensation expense for the six months ended June 30, 2024, was $2,494,000, compared to $1,984,000 for the same period in 2023[57] - As of June 30, 2024, there was $7.7 million of unrecognized compensation expense related to unvested RSUs expected to be recognized over a weighted average period of 2.5 years[56] Compliance and Commitments - The Company was not in compliance with a financial covenant under the Loan Agreement as of June 30, 2024, which was subsequently waived by East West Bank on August 5, 2024[43] - The company has total contractual commitments of $7,253,000 as of June 30, 2024, including purchase commitments of $7,021,000[72] Other Financial Metrics - The company recorded depreciation expense of $0.4 million for the three months ended June 30, 2024, compared to $0.3 million for the same period in 2023, representing a 33.3% increase[40] - Cash paid for operating lease liabilities was $0.5 million for the six months ended June 30, 2024, compared to $0.2 million for the same period in 2023, representing a 150% increase[71] - The total minimum lease payments as of June 30, 2024, amounted to $2,488,000, with long-term operating lease liabilities of $1,393,000[70] - Warranty accrual balance at the end of the three months ended June 30, 2024, was $128,000, down from $197,000 for the same period in 2023[74] - A hypothetical 10% movement in foreign currency exchange rates would result in increased foreign currency gains or losses of $0.4 million as of June 30, 2024[128] - The weighted average remaining lease term for the company's operating leases was 2.7 years as of June 30, 2024[70] Restructuring - The company incurred restructuring expenses of $45,000 and $46,000 for the three and six months ended June 30, 2023, respectively[68]