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~~March 3031, ~~2024~~2025

☐ 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.)

1900-B Carnegie Avenue Santa Ana, California	92705
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (~~949~~657) ~~250~~356-~~8888~~8384

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~~May 4, ~~2024~~2025, the registrant had 23,~~885~~617,~~181~~379 shares of common stock outstanding.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Comprehensive Income (Loss)	4
	Condensed Consolidated Statements of Comprehensive Loss	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	76
	Notes to Unaudited Condensed Consolidated Financial Statements	87
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2218
Item 4.	Controls and Procedures	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	3126
Item 1A.	Risk Factors	3126
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3527
Item 5.	Other Information	3527
Item 6.	Exhibits	3628
SIGNATURES		3729

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

IDENTIV, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except par value)

	September 30,2024			December 31,2023
	March 31,2025			December 31,2024
ASSETS
Current assets:
Cash and cash equivalents	$	~~145~~132,~~361~~382		$	23135,~~312~~646
Restricted cash		~~384~~300			~~1,072~~300
Accounts receivable, net of allowances of $622 and $1,610 as of September 30, 2024 and December 31, 2023, respectively		4,848			7,404
Accounts receivable, net of allowances of $624 and $655 as of March 31, 2025 and December 31, 2024, respectively		3,622			4,214
Inventories		107,~~710~~760			137,~~560~~475
Prepaid expenses and other current assets		4,~~700~~643			15,~~222~~210
Current assets held-for-sale		—			32,916
Total current assets		148,707			152,845
Total current assets		166,003			79,486
Property and equipment, net		7,589			7,694
Property and equipment, net		8,203			8,472
Operating lease right-of-use assets		1,599			2,000
Operating lease right-of-use assets		2,110			2,289
Other assets		840			686
Other assets		713			678
Total assets	$	158,735		$	163,225
Non-current assets held-for-sale		—			18,798
Total assets	$	177,029		$	109,723
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	62,~~035~~701		$	42,~~652~~746
Financial liabilities, net of debt issuance costs of $0 and $51 as of September 30, 2024 and December 31, 2023, respectively		—			9,949
Operating lease liabilities		861			852
Operating lease liabilities		880			782
Accrued compensation and related benefits		695			862
Accrued compensation and related benefits		1,321			1,376
Accrued income taxes payable		1,146			1,173
Accrued income taxes payable		7,180			104
Other accrued expenses and liabilities		1,847			2,327
Other accrued expenses and liabilities		3,595			917
Total current liabilities		7,250			7,960
Current liabilities held-for-sale		—			13,002
Long-term operating lease liabilities		957			1,167
Total current liabilities		19,011			30,782
Other long-term liabilities		29			29
Long-term operating lease liabilities		1,251			1,507
Total liabilities		8,236			9,156
Other long-term liabilities		27			26
Commitments and contingencies (see Note 14)
Non-current liabilities held-for-sale		—			3,136
Total liabilities		20,289			35,451
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, 2024 and December 31, 2023		5			5
Series B convertible preferred stock, $0.001 par value: 5,000 shares authorized; 5,000 shares issued and outstanding as of March 31, 2025 and December 31, 2024		5			5
Common stock, $0.001 par value: 50,000 shares authorized; 25,941 and 24,902 shares issued and 23,873 and 23,247 shares outstanding as of September 30, 2024 and December 31, 2023, respectively		26			25
Common stock, $0.001 par value: 50,000 shares authorized; 26,111 and 25,974 shares issued and 23,521 and 23,431 shares outstanding as of March 31, 2025 and December 31, 2024, respectively		26			26
Additional paid-in capital		~~508~~510,~~606~~278			~~500~~509,~~752~~482
Treasury stock, 2,068 and 1,655 shares as of September 30, 2024 and December 31, 2023, respectively		(14,568	)		(12,969	)
Treasury stock, 2,591 and 2,543 shares as of March 31, 2025 and December 31, 2024, respectively		(16,659	)		(16,490	)
Accumulated deficit		(~~339~~344,~~695~~839	)		(~~414~~340,~~870~~050	)
Accumulated other comprehensive income		21,~~366~~688			1,~~329~~096
Total stockholders' equity		~~156~~150,~~740~~499			74154,~~272~~069
Total liabilities and stockholders' equity	$	~~177~~158,~~029~~735		$	~~109~~163,~~723~~225

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

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,
	Three Months Ended March 31,
	2024			2023			2024			2023
	2025			2024
Net revenue	$	65,~~532~~269		$	116,~~732~~658		$	~~19,931~~		$	~~32,097~~
Cost of revenue		65,~~294~~137			106,~~413~~175			~~18,596~~			~~27,928~~
Gross profit		~~238~~132			~~1,319~~483			~~1,335~~			~~4,169~~
Operating expenses:
Research and development		~~1,102~~787			~~1,019~~897			~~2,965~~			~~3,150~~
Selling and marketing		1,~~657~~407			1,~~404~~169			~~4,654~~			~~4,525~~
General and administrative		73,~~032~~146			23,~~215~~480			~~15,052~~			~~6,577~~
Restructuring and severance		—260			—			—			46
Total operating expenses		95,~~791~~600			45,~~638~~546			~~22,671~~			~~14,298~~
Loss from continuing operations		(95,~~553~~468	)		(35,~~319~~063	)		~~(21,336~~	)		~~(10,129~~	)
Non-operating income (expense):
Interest income (expense), net		~~244~~1,212			(~~211~~87	)		8			~~(351~~	)
Gain on investment		—			132			—			132
Foreign currency losses, net		(530	)		(226	)
Foreign currency gains (losses), net		340			(249	)		55			(187	)
Loss from continuing operations before income tax provision		(4,786	)		(5,376	)
Loss from continuing operations before income tax provision		(8,969	)		(3,647	)		(21,273	)		(10,535	)
Income tax provision		(3	)		(6	)
Income tax provision		(360	)		(13	)		(361	)		(15	)
Net loss from continuing operations		(4,789	)		(5,382	)
Net loss from continuing operations		(9,329	)		(3,660	)		(21,634	)		(10,550	)
Income from discontinued operations, net of tax		—			824
Income (loss) from discontinued operations, net of tax:
Net loss	$	(4,789	)	$	(4,558	)
Income (loss) from Physical Security Business, net of tax		(4,268	)		3,638			(2,737	)		6,665
Other comprehensive income (loss):
Gain on sale of Physical Security Business, net of tax		99,546			—			99,546			—
Foreign currency translation adjustment, net of tax		592			(290	)
Total income from discontinued operations, net of tax		95,278			3,638			96,809			6,665
Comprehensive loss	$	(4,197	)	$	(4,848	)
Net income (loss)		85,949			(22	)		75,175			(3,885	)
Net income (loss) per common share:
Other comprehensive income (loss):
Basic and diluted - continuing operations	$	(0.21	)	$	(0.24	)
Foreign currency translation adjustment, net of tax		1,431			(312	)		1,037			(211	)
Basic and diluted - discontinued operations	$	—		$	0.04
Comprehensive gain (loss)	$	87,380		$	(334	)	$	76,212		$	(4,096	)
Basic and diluted - net loss	$	(0.21	)	$	(0.21	)
Net income (loss) per common share:
Weighted average common shares outstanding:
Basic and diluted - continuing operations	$	(0.40	)	$	(0.17	)	$	(0.95	)	$	(0.50	)
Basic and diluted		23,599			23,368
Basic and diluted - discontinued operations	$	4.03		$	0.16		$	4.12		$	0.29
Basic and diluted - net income (loss)	$	3.62		$	(0.01	)	$	3.17		$	(0.21	)
Weighted average common shares outstanding:
Basic and diluted		23,660			23,174			23,496			23,008

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

IDENTIV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands)

	Three Months Ended September 30, 2024
	Three Months Ended March 31, 2025
	Series BConvertible Preferred Stock				Common Stock					AdditionalPaid-in		Treasury			Accumulated			AccumulatedOtherComprehensive			TotalStockholders'
	Shares		Amount		Shares			Amount		Capital		Stock			Deficit			Income			Equity
Balances, July 1, 2024		5,000	$	5		23,448		$	25	$	503,246	$	(13,510	)	$	(425,644	)	$	935		$	65,057
Balances, January 1, 2025		5,000	$	5		23,431		$	26	$	509,482	$	(16,490	)	$	(340,050	)	$	1,096		$	154,069
Net income		—		—		—			—		—		—			85,949			—			85,949
Net loss		—		—		—			—		—		—			(4,789	)		—			(4,789	)
Unrealized gain from foreign currency translation adjustments		—		—		—			—		—		—			—			~~1,431~~592			~~1,431~~592
Issuance of common stock in connection with vesting of stock awards		—		—		~~751~~138			1—		—		—			—			—			1—
Stock-based compensation		—		—		—			—		~~5,360~~796		—			—			—			~~5,360~~796
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units		—		—		(~~326~~48	)		—		—		(~~1,058~~169	)		—			—			(~~1,058~~169	)
Balances, September 30, 2024		5,000	$	5		23,873		$	26	$	508,606	$	(14,568	)	$	(339,695	)	$	2,366		$	156,740
Balances, March 31, 2025		5,000	$	5		23,521		$	26	$	510,278	$	(16,659	)	$	(344,839	)	$	1,688		$	150,499
	Nine Months Ended September 30, 2024
	Three Months Ended March 31, 2024
	Series BConvertible Preferred Stock				Common Stock					AdditionalPaid-in		Treasury			Accumulated			AccumulatedOtherComprehensive			TotalStockholders'
	Shares		Amount		Shares			Amount		Capital		Stock			Deficit			Income			Equity
Balances, January 1, 2024		5,000	$	5		23,247		$	25	$	500,752	$	(12,969	)	$	(414,870	)	$	1,329		$	74,272
Net income		—		—		—			—		—		—			75,175			—			75,175
Net loss		—		—		—			—		—		—			(4,558	)		—			(4,558	)
Unrealized gain from foreign currency translation adjustments		—		—		—			—		—		—			—			1,037			1,037
Unrealized loss from foreign currency translation adjustments		—		—		—			—		—		—			—			(290	)		(290	)
Issuance of common stock in connection with vesting of stock awards		—		—		~~1,039~~120			1—		—		—			—			—			1—
Stock-based compensation		—		—		—			—		71,~~854~~019		—			—			—			71,~~854~~019
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units		—		—		(~~413~~33	)		—		—		(~~1,599~~277	)		—			—			(~~1,599~~277	)
Balances, September 30, 2024		5,000	$	5		23,873		$	26	$	508,606	$	(14,568	)	$	(339,695	)	$	2,366		$	156,740
Balances, March 31, 2024		5,000	$	5		23,334		$	25	$	501,771	$	(13,246	)	$	(419,428	)	$	1,039		$	70,166

	Three Months Ended September 30, 2023
	Series BConvertible Preferred Stock				Common Stock					AdditionalPaid-in		Treasury			Accumulated			AccumulatedOtherComprehensive			TotalStockholders'
	Shares		Amount		Shares			Amount		Capital		Stock			Deficit			Income			Equity
Balances, July 1, 2023		5,000	$	5		23,112		$	24	$	498,765	$	(12,457	)	$	(413,244	)	$	1,202		$	74,295
Net loss		—		—		—			—		—		—			(22	)		—			(22	)
Unrealized loss from foreign currency translation adjustments		—		—		—			—		—		—			—			(312	)		(312	)
Issuance of common stock in connection with vesting of stock awards		—		—		54			—		—		—			—			—			—
Stock-based compensation		—		—		—			—		989		—			—			—			989
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units		—		—		(16	)		—		—		(131	)		—			—			(131	)
Balances, September 30, 2023		5,000	$	5		23,150		$	24	$	499,754	$	(12,588	)	$	(413,266	)	$	890		$	74,819
	Nine Months Ended September 30, 2023
	Series BConvertible Preferred Stock				Common Stock					AdditionalPaid-in		Treasury			Accumulated			AccumulatedOtherComprehensive			TotalStockholders'
	Shares		Amount		Shares			Amount		Capital		Stock			Deficit			Income			Equity
Balances, January 1, 2023		5,000	$	5		22,623		$	24	$	495,818	$	(12,173	)	$	(409,381	)	$	1,101		$	75,394
Net loss		—		—		—			—		—		—			(3,885	)		—			(3,885	)
Unrealized loss from foreign currency translation adjustments		—		—		—			—		—		—			—			(211	)		(211	)
Issuance of common stock in connection with vesting of stock awards		—		—		308			—		—		—			—			—			—
Stock-based compensation		—		—		—			—		2,973		—			—			—			2,973
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units		—		—		(56	)		—		—		(415	)		—			—			(415	)
Proceeds from exercise of warrants		—		—		275			—		963		—			—			—			963
Balances, September 30, 2023		5,000	$	5		23,150		$	24	$	499,754	$	(12,588	)	$	(413,266	)	$	890		$	74,819

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

IDENTIV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023
	2025			2024
Cash flows used in operating activities
Cash flows from operating activities:
Net income (loss)	$	75,175		$	(3,885	)
Net loss	$	(4,789	)	$	(4,558	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		~~2,176~~491			~~2,000~~785
Gain on sale of discontinued operations, net of taxes		(99,546	)		—
Amortization of operating lease right-of-use assets		162			458
Gain on investment		—			(132	)
Amortization of debt issuance costs		—			26
Amortization of debt issuance costs		113			28
Stock-based compensation expense		796			1,019
Stock-based compensation expense		7,854			2,973
Impairment of operating lease right-of-use asset		238			—
Loss on disposal of property and equipment		99			—
Changes in operating assets and liabilities:
Accounts receivable		~~5,500~~579			(14,~~006~~160	)
Inventories		~~2,005~~(254	)		~~(512~~234	)
Prepaid expenses and other assets		~~(2,130~~415	)		~~(1,206~~346	)
Accounts payable		(~~2,042~~41	)		(2,~~715~~684	)
Deferred revenue		~~311~~—			~~723~~(543	)
Accrued income taxes payable		(~~220~~27	)		4911
Accrued expenses and other liabilities		~~1,195~~(648	)		69(89	)
Net cash used in operating activities		(9,510	)		(3,614	)
Operating lease liabilities		(202	)		(466	)
Net cash used in operating activities		(3,280	)		(1,301	)
Cash flows from investing activities:
Capital expenditures		(~~873~~301	)		(~~3,139~~232	)
Proceeds from sale of discontinued operations, net of cash sold		143,394			—
Net cash used in investing activities		(301	)		(232	)
Proceeds from investment		—			132
Net cash provided by (used in) investing activities		142,521			(3,007	)
Cash flows from financing activities:
Borrowings under revolving loan facility, net of issuance costs		~~9,887~~—			185,~~911~~919
Repayments under revolving loan facility		~~(20,000~~—	)		(96,000	)
Taxes paid related to net share settlement of restricted stock units		(~~1,599~~169	)		(~~415~~277	)
Proceeds from exercise of warrants		—			963
Net cash used in financing activities		(169	)		(358	)
Net cash provided by (used in) financing activities		(11,712	)		10,459
Effect of exchange rates on cash, cash equivalents, and restricted cash		486			(59	)
Effect of exchange rates on cash, cash equivalents, and restricted cash		62			(47	)
Net decrease in cash, cash equivalents, and restricted cash		(3,264	)		(1,950	)
Net increase in cash, cash equivalents, and restricted cash		121,361			3,791
Cash, cash equivalents, and restricted cash at beginning of period		135,946			24,384
Cash, cash equivalents, and restricted cash at beginning of period		24,384			17,137
Cash, cash equivalents, and restricted cash at end of period	$	132,682		$	22,434
Cash, cash equivalents, and restricted cash at end of period	$	145,745		$	20,928
Supplemental disclosures of cash flow information:
Interest paid	$	~~324~~—		$	~~335~~94
Taxes paid, net	$	1,747		$	58
Taxes paid	$	62		$	24
Non-cash investing and financing activities:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	368		$	2,306
Conversion of convertible promissory note to privately-held investment	$	150		$	—

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

IDENTIV, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2024~~2025

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Identiv, Inc. and its wholly owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the fiscal 2024 condensed consolidated financial statements to conform with the fiscal 2025 presentation. The reclassifications had no impact on net loss, total assets, total liabilities, or stockholders' equity.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s unaudited condensed consolidated financial statements have been included. The results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2024~~2025 or any future period. The unaudited condensed consolidated balance sheet as of December 31, ~~2023~~2024 has been derived from audited consolidated financial statements at that date, but does not include all disclosures required by U.S. GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors,” and the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2023, as amended~~2024.

On September 6, 2024, the Company completed the sale of its physical security, access card, and identity reader operations and assets, including all outstanding shares of Identiv Private Limited, its wholly-owned subsidiary (the “Physical Security Business"), to Hawk Acquisition, Inc., a Delaware corporation (“Buyer”) and a wholly-owned subsidiary of Vitaprotech SAS, a French société par actions simplifiée and provider of security solutions. Due to the sale of its Physical Security Business in ~~the third quarter of~~ 2024, the Company has classified the results of the Physical Security Business as discontinued operations on its condensed consolidated statements of comprehensive ~~income (~~loss) for ~~all~~the ~~periods~~2024 period presented. See Note 3, Discontinued Operations for additional disclosure related to discontinued operations. The discussion in the notes to these condensed consolidated financial statements, unless otherwise noted, relates solely to the Company's continuing operations.

Note 2. Significant Accounting Policies and Recent Accounting Pronouncements

Significant Accounting Policies

No material changes have been made to the Company's significant accounting policies disclosed in Note 2, ~~Significant~~Summary ~~Accounting~~of ~~Policies~~Significant ~~and Recent~~ Accounting ~~Pronouncements~~Policies, in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2023, as amended~~2024.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its financial position or results of operations upon adoption.

In ~~November~~December 2023, the FASB ~~issued~~released Accounting Standards Update (“"ASU”") ~~No.~~ 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures, which ~~requires~~amends ~~disclosure~~income oftax ~~incremental~~disclosure ~~segment~~requirements ~~information~~to onenhance anthe ~~annual~~transparency and ~~interim~~decision ~~basis.~~usefulness ~~This ASU is effective~~ for ~~fiscal~~users ~~years~~of ~~beginning~~the ~~after~~consolidated ~~December~~financial ~~15,~~statements. ~~2023,~~The ~~and~~standard ~~interim~~is ~~periods~~effective ~~within~~for fiscal years beginning after December 1531, 2024~~, and requires retrospective application to all prior periods presented in the financial statements~~. ~~Early adoption is permitted.~~ The Company is currently evaluating ~~the~~any impact of ~~the~~this ~~new~~ standard on ~~the~~its ~~consolidated~~annual financial ~~statements~~statement ~~and related~~ disclosures.

In ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, Income ~~Taxes~~Statement - Reporting Comprehensive Income (Topic ~~740~~220): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures.~~Expenses ~~This~~ (“ASU is2024-03”), ~~intended~~which torequires ~~improve~~public ~~the~~entities ~~transparency~~to ofprovide ~~income~~disaggregated ~~tax~~ disclosures byof ~~requiring~~certain ~~(1)~~expense ~~consistent~~captions ~~categories~~presented ~~and~~on ~~greater~~the ~~disaggregation~~face of ~~information in~~ the ~~rate reconciliation and (2)~~ income ~~taxes~~statement ~~paid~~into ~~disaggregated~~specific bycategories ~~jurisdiction.~~within Itthe ~~also~~notes ~~includes certain other amendments~~ to ~~improve~~ the ~~effectiveness~~consolidated offinancial ~~income tax disclosures~~statements. ~~The~~ ASU’s ~~amendments~~2024-03 ~~are~~is effective for ~~public~~the ~~business~~Company’s ~~entities for~~ annual periods beginning after December 15, ~~2024.~~2026, ~~Entities~~and ~~are~~interim ~~permitted~~periods towithin ~~early~~fiscal ~~adopt~~years ~~the~~beginning ~~standard~~after ~~for~~December ~~“annual~~15, ~~financial~~2027, ~~statements~~with ~~that~~early ~~have~~adoption ~~not~~permitted. ~~yet~~The ~~been~~ASU ~~issued~~may orbe ~~made~~applied ~~available for issuance.” Adoption is~~ either ~~prospectively or retrospectively, the Company will adopt this ASU~~ on a prospective or retrospective basis. The Company is currently evaluating the impact of ~~the~~adoption ~~new~~of ~~standard~~ASU 2024-03 on ~~the~~its ~~consolidated~~ financial statements and related disclosures.

Note 3. Discontinued Operations

~~Sale~~On September 6, 2024, the Company completed the sale of its Physical Security Business to Buyer, and Buyer assumed certain of the Company’s liabilities related to the Physical Security Business (collectively, the “Asset Sale”) pursuant to that certain Stock and Asset Purchase Agreement, dated as of April 2, 2024, by and between the Company and Buyer. As consideration for the Asset Sale, the Company received approximately $143.9 million in cash.

OnIn ~~September~~connection 6,with ~~2024,~~the closing of the ~~Company~~Asset ~~completed~~Sale, the ~~sale~~Company ofand ~~its~~Buyer ~~Physical~~entered ~~Security~~into ~~Business~~a totransition ~~Buyer,~~services ~~and~~agreement ~~Buyer~~(the ~~assumed~~“Transition ~~certain~~Services ofAgreement”). ~~the~~The ~~Company’s~~Transition ~~liabilities~~Services ~~related~~Agreement tooutlines the ~~Physical~~information ~~Security~~technology, ~~Business (collectively~~people, and facility support the ~~“Asset~~Company ~~Sale”)~~will ~~pursuant~~provide to ~~that~~Buyer ~~certain~~for ~~Stock~~a ~~and~~period ~~Asset~~of ~~Purchase~~12 ~~Agreement,~~months ~~dated~~to as18 ofmonths ~~April~~after 2,the ~~2024~~transaction ~~(the~~closing ~~“Purchase~~date. ~~Agreement”),~~The byagreed ~~and~~upon ~~between~~charges for such services are intended to allow the Company and Buyer., Asrespectively, ~~consideration~~to ~~for~~recover ~~the~~all ~~Asset~~costs ~~Sale,~~and ~~the~~expenses ~~Company~~of ~~received~~providing ~~approximately~~such ~~$144~~services.3 ~~million~~Fees inearned ~~cash,~~and ~~subject~~incurred tounder ~~further~~the ~~customary~~Transition ~~adjustments~~Services asAgreement ~~set~~for ~~forth~~the inthree ~~the~~months ~~Purchase~~ended ~~Agreement~~March 31, 2025 were immaterial.

InAs ~~connection with~~ the ~~closing~~sale of the ~~Asset Sale, the~~ Company's ~~and~~Physical ~~Buyer~~Security ~~entered~~Business ~~into~~represented a ~~transition~~significant ~~services~~strategic ~~agreement~~shift ~~(the~~that ~~“Transition~~has ~~Services~~a ~~Agreement”).~~material ~~The~~effect ~~Transition~~on ~~Services Agreement outlines~~ the ~~information~~Company's ~~technology,~~operations ~~people,~~ and ~~facility~~financial ~~support~~results, the Company ~~will~~has ~~provide~~separately toreported ~~Buyer~~the ~~for~~results ~~a period~~ of 12its ~~months~~Physical toSecurity 18Business ~~months~~as ~~after~~discontinued ~~the~~operations ~~transaction~~in ~~closing date. The agreed upon charges for such services are intended to allow~~ the ~~Company~~condensed ~~and~~consolidated ~~Buyer,~~statement ~~respectively, to recover all costs and expenses~~ of ~~providing~~comprehensive ~~such~~loss ~~services. Fees earned and incurred under the Transition Services Agreement~~ for the ~~three months ended September 30,~~ 2024 ~~were~~period ~~immaterial~~presented.

The following summarizes the components of the gain on sale of the Physical Security Business, net of taxes (in thousands):

Cash proceeds	$	144,262
Assets sold:
Cash		868
Accounts receivable		11,610
Inventories		15,969
Prepaid expenses and other current assets		1,640
Property and equipment		861
Other assets		2,963
Total assets sold		33,911
Liabilities divested:
Accounts payable		4,179
Deferred revenue		3,579
Other accrued expenses and liabilities		718
Other liabilities		2,482
Total liabilities divested		10,958
Other:
Goodwill written off related to sale of Physical Security Business		(10,196	)
Intangible assets written off related to sale of Physical Security Business		(3,595	)
Transaction and other costs		(676	)
Total other		(14,467	)
Income tax provision		7,296
Gain on sale of Physical Security Business, net of taxes	$	99,546

The gain on sale of the Physical Security Business is subject to adjustment as the Company completes its tax analysis on the ability to utilize net operating loss and credit carryforwards to reduce the amount of income tax provision. Any adjustment to the income tax provision recorded in connection with the Sale of the Physical Security Business will be completed by December 31, 2024.

Discontinued Operations

As the sale of the Company's Physical Security Business represented a significant strategic shift that has a material effect on the Company's operations and financial results, the Company has separately reported the results of its Physical Security Business as discontinued operations in the condensed consolidated statements of comprehensive income (loss) for all periods presented.

The following presents the financial results of discontinued operations (in thousands):

		Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2024	~~2024~~			~~2023~~			~~2024~~			~~2023~~
Net revenue	$	$15,836	~~9,045~~		$	~~20,114~~		$	~~42,473~~		$	~~55,301~~
Cost of revenue		7,927	~~5,210~~			~~9,492~~			~~22,825~~			~~27,470~~
Gross profit		7,909	~~3,835~~			~~10,622~~			~~19,648~~			~~27,831~~
Operating expenses:
Research and development		2,114	~~2,311~~			~~1,897~~			~~6,514~~			~~5,488~~
Selling and marketing		4,133	~~3,620~~			~~4,237~~			~~11,960~~			~~13,092~~
General and administrative		772	~~2,240~~			~~724~~			~~3,741~~			~~2,213~~
Restructuring and severance		22	—			~~104~~			~~145~~			~~330~~
Total operating expenses		7,041	~~8,171~~			~~6,962~~			~~22,360~~			~~21,123~~
Income (loss) from operations			(4,336	)		3,660			(2,712	)		6,708
Income from operations		868
Non-operating income (expense):
Foreign currency gains (losses), net			20			(15	)		(25	)		3
Foreign currency losses, net		(30	)
Income (loss) before income tax benefit (provision)			(4,316	)		3,645			(2,737	)		6,711
Income before income tax provision		838
Income tax benefit (provision)			48			(7	)		—			(46	)
Income tax provision		(14	)
Net income (loss)		$	(4,268	)	$	3,638		$	(2,737	)	$	6,665
Income from discontinued operations	$	824

The cash flows related to the discontinued operations have not been segregated and are included in the condensed consolidated statements of cash flows. The following presents the significant non-cash items and capital expenditures related to discontinued operations (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31, 2024
	2024		2023		2024		2023
Depreciation and amortization	$	93
Depreciation and amortization	$	226	$	366	$	892	$	1,045
Capital expenditures		71
Capital expenditures		192		206		322		646
Stock-based compensation		500
Stock-based compensation		4,264		475		5,254		1,468

108

~~The~~Note ~~carrying~~4. ~~value~~Revenue ~~of the assets and liabilities of the discontinued operations on the condensed consolidated balance sheet as of September 30, 2024 and December 31, 2023 were as follows (in thousands):~~

	September 30,2024		December 31,2023
ASSETS
Accounts receivable, net	$	—	$	14,565
Inventories		—		15,152
Prepaid expenses and other current assets		—		3,199
Total current assets held-for-sale	$	—	$	32,916
Property and equipment, net	$	—	$	848
Operating lease right-of-use assets		—		2,925
Intangible assets, net		—		4,251
Goodwill		—		10,218
Other assets		—		556
Total long-term assets held-for-sale	$	—	$	18,798
LIABILITIES
Accounts payable	$	—	$	7,598
Operating lease liabilities		—		932
Deferred revenue		—		2,341
Accrued compensation and related benefits		—		958
Other accrued expenses and liabilities		—		1,173
Total current liabilities held-for-sale	$	—	$	13,002
Long-term operating lease liabilities	$	—	$	2,209
Long-term deferred revenue		—		927
Total long-term liabilities held-for-sale	$	—	$	3,136

Revenue Recognition

The Physical Security Business recognized revenue upon transfer of control of promised products or services to customers in an amount that reflected the consideration expected to be received in exchange for those products or services. The contracts entered into could have included various combinations of its products, software licenses, and services, which were generally capable of being distinct and accounted for as separate performance obligations. For contracts with multiple performance obligations, the transaction price was allocated to each performance obligation, generally on a relative basis using its standalone selling price. The stated contract value was generally the transaction price to be allocated to the separate performance obligations. Revenue was recognized net of any taxes collected from customers that were subsequently remitted to governmental authorities.

Timing of Revenue Recognition

Revenues are derived from sales of hardware products, software licenses, subscriptions, professional services, software maintenance and support, and extended hardware warranties.

PerformanceObligation	When Performance Obligation isTypically Satisfied	When Payment isTypically Due	How Standalone Selling Price isTypically Estimated
Hardware products	When customer obtains control of the product (point-in-time)	Within 30-60 days of shipment	Observable in transactions without multiple performance obligations
Software licenses	When license is delivered to customer or made available for download, and the applicable license period has begun (point-in-time)	Within 30-60 days of the beginning of license period	Established pricing practices for software licenses bundled with software maintenance, which are separately observable in renewal transactions
Subscriptions	Ratably over the course of the subscription term (over time)	In advance of subscription term	Contractually stated or list price
Professional services	As services are performed and/or when contract is fulfilled (point-in-time)	Within 30-60 days of delivery	Observable in transactions without multiple performance obligations
Software maintenance and support services	Ratably over the course of the support contract (over time)	Within 30-60 days of the beginning of the contract period	Observable in renewal transactions
Extended hardware warranties	Ratably over the course of the support contract (over time)	Within 30-60 days of the beginning of the contract period	Observable in renewal transactions

Significant Judgments

Contracts with customers often include promises to transfer multiple products and services to a customer. For such arrangements, the transaction price is allocated to each performance obligation based on its relative standalone selling price (“SSP”).

Judgment is required to determine the SSP for each distinct performance obligation in a contract. For the majority of items, the SSP is estimated using historical transaction data. In instances where SSP is not directly observable, such as when the product or service is not sold separately, the SSP is determined using information that may include market conditions and other observable inputs. The determination of SSP is an ongoing process and information is reviewed regularly in order to ensure SSPs reflect current information or trends.

4. Revenue

Revenue Recognition

Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation, generally on a relative basis using its standalone selling price. The stated contract value is generally the transaction price to be allocated to the separate performance obligations. Revenue is recognized net of any taxes collected from customers that are subsequently remitted to governmental authorities.

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers based on the shipping location of the customer. The geographic regions that are tracked are the Americas, Europe and the Middle East, and Asia-Pacific regions. See Note 1211, Segment Reporting, ~~Geographic Information, and Concentration of Credit Risk,~~ for net revenue based on the disaggregation criteria noted above. All revenues from continuing operations are recognized at a point -in -time following the transfer of control of the products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contract.

12Note 5. Fair Value Measurements

5The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. Under Accounting Standards Codification ("ASC") ASC 820, Fair Value ~~Measurements~~Measurement and Disclosures, the fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:

•

The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. Under ASC 820, Fair Value Measurement and Disclosures, the fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 – Quoted prices (unadjusted) for identical assets and liabilities in active markets;

•

Level 2 – Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly; and

•

Level 3 – Unobservable inputs.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of ~~September~~March 3031, 2025 and December 31, 2024, the only assets measured and recognized at fair value on a recurring basis were cash equivalents, which consisted of amounts held in money market accounts of $601.06 million and $31.6 million, respectively, and treasury bills of $65110.5 million and $83.0 million, respectively, with maturities less than 90 days (Level 1 fair value measurements). As of ~~December~~March 31, ~~2023,~~2025 ~~the only assets measured~~ and ~~recognized at fair value on a recurring basis were nominal cash equivalents. As of September 30, 2024 and~~ December 31, ~~2023~~2024, there were no liabilities measured and recognized at fair value on a recurring basis.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

Certain of the Company's assets are measured at fair value on a nonrecurring basis if impairment is indicated. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company had $348,000 and $498,000, respectively, of privately-held investments measured at fair value on a nonrecurring basis, which were classified as Level 3 assets due to the absence of quoted market prices and inherent lack of liquidity. The Company reviews its investments to identify and evaluate investments that have an indication of possible impairment. The Company adjusts the carrying value for its privately-held investments for any impairment if the fair value is less than the carrying value of the respective assets on an other-than-temporary basis. The amount of privately-held investments is included in other assets in the accompanying condensed consolidated balance sheets.

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, there were no liabilities that are measured and recognized at fair value on a non-recurring basis.

Assets and Liabilities Not Measured at Fair Value

The carrying amounts of the Company's accounts receivable, prepaid expenses and other current assets, accounts payable, and other accrued liabilities approximate fair value due to their short maturities. ~~The carrying value of the Company's financial liabilities approximates fair value based upon borrowing rates currently available to the Company for loans with similar terms.~~

~~6. Balance Sheet Components~~9

Note 6. Balance Sheet Components

The Company’s inventories are stated at the lower of cost or net realizable value. Inventories consist of (in thousands):

	September 30,2024		December 31,2023
	March 31,2025		December 31,2024
Raw materials	$	54,~~980~~517	$	83,~~191~~893
Work-in-progress		28—		5—
Finished goods		43,~~702~~243		53,~~364~~582
Total	$	107,~~710~~760	$	137,~~560~~475

Property and equipment, net consists of (in thousands):

	September 30,2024			December 31,2023
	March 31,2025			December 31,2024
Building and leasehold improvements	$	1,~~860~~538		$	1,~~392~~315
Furniture, fixtures and office equipment		~~237~~233			~~215~~221
Plant and machinery		1718,~~456~~154			17,~~528~~967
Purchased software		~~637~~733			~~296~~724
Total		20,~~190~~658			1920,~~431~~227
Accumulated depreciation		(1113,~~987~~069	)		(1012,~~959~~533	)
Property and equipment, net	$	87,~~203~~589		$	87,~~472~~694

The Company recorded depreciation expense of $0.45 million and $0.4 million during the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively,. ~~and~~Depreciation ~~$1.3~~expense ~~million~~included ~~and~~in discontinued operations was $1.0.1 million ~~during~~for the ~~nine~~three months ended ~~September~~March 3031, 2024 ~~and 2023, respectively~~.

Other accrued expenses and liabilities consist of (in thousands):

	September 30,2024		December 31,2023
	March 31,2025		December 31,2024
Accrued professional fees	$	~~594~~369	$	~~404~~526
Accrued warranties		~~100~~341		~~217~~214
Amounts payable under the Transition Services Agreement		~~2,344~~393		—354
Other accrued expenses		557		296
Amounts payable related to purchase price adjustment		—		474
Total	$	3,595	$	917
Other accrued expenses		744		759
Total	$	1,847	$	2,327

Note 7. ~~Financial~~Income ~~Liabilities~~ Taxes

The Company’s ~~financial~~conducts ~~liabilities~~business ~~consist~~globally ofand, (as a result, files federal, state and foreign tax returns. The Company strives to resolve open matters with each tax authority at the examination level and could reach agreements with a tax authority at any time. While the Company has accrued for amounts it believes are the probable outcomes, the final outcome with a tax authority may result in ~~thousands):~~a tax liability that is more or less than that reflected in the condensed consolidated financial statements. Furthermore, the Company may later decide to challenge any assessments, if made, and may exercise its right to appeal.

	September 30,		December 31,
	2024		2023
Revolving loan facility	$	—	$	10,000
Less: Unamortized debt issuance costs		—		(51	)
Financial liabilities, net of debt issuance costs	$	—	$	9,949

On February 8, 2017, the Company entered into a Loan and Security Agreement (as amended or amended and restated from time to time, the “Loan Agreement”) with East West Bank (“EWB”). Following subsequent amendments, on April 14, 2022, the Company and EWB amended the Loan Agreement replacing the $20.0 million revolving loan facility subject to a borrowing base with a non-formula revolving loan facility with no borrowing base requirement and a maturity date of February 8, 2023. In addition, the interest rate was lowered from prime to prime minus 0.25% (interest rate as of September 30, 2024 was 8.0%), and certain financial covenants were amended. On February 8, 2023, the Company entered into an amendment (the "Fourth Amendment") to the Loan

Agreement. The Fourth Amendment amends the Loan Agreement to, among other things, extend the maturity date to February 8, 2025, and amend certain financial covenants.

The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, limits or restrictions on the Company’s ability to incur liens, incur indebtedness, make certain restricted payments (including dividends), merge or consolidate and dispose of assets, as well as other financial covenants. The Company’s obligations under the Loan Agreement are collateralized by substantially all of its assets. As of September 30, 2024, there were no amounts outstanding under the Loan Agreement and $20.0 million is available.

8. Income Taxes

The Company conducts business globally and, as a result, files federal, state and foreign tax returns. The Company strives to resolve open matters with each tax authority at the examination level and could reach agreement with a tax authority at any time. While the Company has accrued for amounts it believes are the probable outcomes, the final outcome with a tax authority may result in a tax liability that is more or less than that reflected in the condensed consolidated financial statements. Furthermore, the Company may later decide to challenge any assessments, if made, and may exercise its right to appeal.

The Company applies the provisions of, and accounted for uncertain tax positions, in accordance with ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. It prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

The Company generally is no longer subject to tax examinations for years prior to ~~2018~~2020. However, if loss carryforwards of tax years prior to 2017 are utilized in the U.S., these tax years may become subject to investigation by the tax authorities. While timing of the resolution and/or finalization of tax audits is uncertain, the Company does not believe that its unrecognized tax benefits would materially change in the next 12 months.

~~9. Stockholders’ Equity~~10

~~Series~~Note B8. ~~Convertible~~Stockholders’ ~~Preferred Stock Dividend Accretion~~ Equity

~~The following table summarizes~~ Series B ~~convertible~~Convertible ~~preferred~~Preferred ~~stock~~Stock and ~~the~~Dividend ~~accretion~~Accretion ~~of dividend activity for the three and nine months ended September 30, 2024 and 2023 (in thousands):~~

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Series B Convertible Preferred Stock:
Balance at beginning of period	$	27,070	$	25,951	$	26,589	$	25,323
Cumulative dividends on Series B convertible preferred stock		201		319		682		947
Balance at end of period	$	27,271	$	26,270	$	27,271	$	26,270
Number of Common Shares Issuable Upon Conversion:
Number of shares at beginning of period		6,767		6,488		6,647		6,331
Cumulative dividends on Series B convertible preferred stock		50		80		170		237
Number of shares at end of period		6,817		6,568		6,817		6,568

The following table summarizes Series B convertible preferred stock and the accretion of dividend activity for the three months ended March 31, 2025 and 2024 (in thousands):

Based on the current conversion price, the outstanding shares, including the accretion of dividends, of Series B convertible preferred stock as of September 30, 2024 would be convertible into 6,817,737 shares of the Company’s common stock. However, the conversion rate will be subject to adjustment in certain instances, such as if the Company issues shares of its common stock at a price less than $4.00 per common share, subject to a minimum conversion price of $3.27 per share. As of September 30, 2024, none of the contingent conditions to adjust the conversion rate had been met.


	Three Months Ended March 31,
	2025		2024
Series B Convertible Preferred Stock:
Balance at beginning of period	$	27,472	$	26,589
Cumulative dividends on Series B convertible preferred stock		205		248
Balance at end of period	$	27,677	$	26,837
Number of Common Shares Issuable Upon Conversion:
Number of shares at beginning of period		6,868		6,647
Cumulative dividends on Series B convertible preferred stock		51		62
Number of shares at end of period		6,919		6,709

15Based on the current conversion price, the outstanding shares, including the accretion of dividends, of Series B convertible preferred stock as of March 31, 2025 would be convertible into 6,919,148 shares of the Company’s common stock. However, the conversion rate will be subject to adjustment in certain instances, such as if the Company issues shares of its common stock at a price less than $4.00 per common share, subject to a minimum conversion price of $3.27 per share. As of March 31, 2025, none of the contingent conditions to adjust the conversion rate had been met.

Each share of Series B convertible preferred stock is entitled to a cumulative annual dividend of 5% for the first six years following the issuance of such share and 3% for each year thereafter, with the Company retaining the option to settle each year’s dividend after the 10th year in cash. The dividends accrue and are payable in kind upon such time as the shares convert into the Company’s common stock. In general, the shares are not entitled to vote except in certain limited cases, including in change of control transactions where the expected price per share distributable to the Company’s stockholders is expected to be less than $4.00 per share. The Certificate of Designation with respect to the Series B convertible preferred stock further provides that in the event of, among other things, any change of control, liquidation or dissolution of the Company, the holders of the Series B convertible preferred stock will be entitled to receive, on a pari passu basis with the holders of the common stock, the same amount and form of consideration that the holders of the Company’s common stock receive (on an as-if-converted-to-common-stock basis and without regard to the Beneficial Ownership Limitation (as defined in the Certificate of Designation) applicable to the Series B convertible preferred stock).

Stock Repurchases

On November 7, 2024, the Company announced that its board of directors authorized a stock repurchase program (the “Stock Repurchase Program”), pursuant to which the Company may purchase up to $10,000,000 of its common stock. Under the Stock Repurchase Program, effective November 15, 2024, the Company may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions, or other means. The timing and amount of shares repurchased depends on a number of factors, including stock price, trading volume, general market and business conditions, liquidity and capital needs, and other factors. The Stock Repurchase Program does not obligate the Company to repurchase any specific dollar amount or acquire any specific number of shares of common stock. The Stock Repurchase Program has no expiration date and may be suspended or discontinued at any time without notice.

As of March 31, 2025, the Company repurchased a total of 463,779 shares of common stock under the Stock Repurchase Program for total consideration of approximately $1.9 million. During the quarter ended March 31, 2025, there were no repurchases of shares of common stock under the Stock Repurchase Program. Additionally, during the three months ended March 31, 2025, the Company repurchased 47,538 shares of our common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of restricted stock units ("RSUs") issued to employees.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of ~~September~~March 3031, ~~2024~~2025 was as follows:

Exercise of outstanding stock options, vesting of restricted stock units ("RSUs"), vesting of performance stock units ("PSUs") and issuance of RSUs vested but not released		1,972,044
	Number of Shares
Exercise of outstanding stock options, vesting of restricted stock units ("RSUs"), vesting of performance stock units ("PSUs") and issuance of RSUs vested but not released		1,761,377
Employee Stock Purchase Plan		293,888
Shares of common stock available for grant under the 2011 Plan		~~579~~679,~~575~~032
Shares of common stock issuable upon conversion of Series B convertible preferred stock		7,541,449
Total		10,~~386~~275,~~956~~746

10Note 9. Stock-Based Compensation

Stock Incentive Plan

The Company maintains a stock-based compensation plan, the 2011 Incentive Compensation Plan, as amended (the “2011 Plan”), to attract, motivate, retain and reward employees, directors and consultants by providing its Board or a committee of the Board the discretion to award equity incentives to these persons.

On June 6, 2011, the Company’s stockholders approved the 2011 Plan, which is administered by the Compensation Committee of the Board. The 2011 Plan provides that stock options, stock units, restricted shares, and stock appreciation rights may be granted to executive officers, directors, consultants, and other key employees. In aggregate, as of December 31, 2023, 374,710 shares were available for future grant under the 2011 Plan. At the Company's annual stockholder meeting held on June 28, 2024, the stockholders approved to increase the number of shares of common stock authorized for issuance under the 2011 Plan by an aggregate of 1,500,000 shares.

Stock Options

A summary of stock option activity for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 is as follows:

	Number Outstanding			Weighted Average ExercisePrice per Share		Weighted AverageRemainingContractual Term (Years)		AggregateIntrinsic Value
Balance as of January 1, 2024		494,960		$	4.99		2.23	$	1,725,985
Balance as of January 1, 2025		444,460		$	4.36		1.43	$	—
Granted		—			—
Cancelled or Expired		~~(50,500~~—	)		~~10.50~~—
Exercised		—			—
Balance as of September 30, 2024		444,460		$	4.36		1.68	$	—
Balance as of March 31, 2025		444,460		$	4.36		1.18	$	—
Vested or expected to vest as of September 30, 2024		444,460		$	4.36		1.68	$	—
Vested or expected to vest as of March 31, 2025		444,460		$	4.36		1.18	$	—
Exercisable as of September 30, 2024		444,460		$	4.36		1.68	$	—
Exercisable as of March 31, 2025		444,460		$	4.36		1.18	$	—

The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s common stock as of ~~September~~March 3031, ~~2024~~2025 and the exercise price of in-the-money stock options multiplied by the number of such stock options. As of March 31, 2025, there was no unrecognized stock-based compensation expense related to stock options.

The following table summarizes information about stock options outstanding as of September 30, 2024:

	Stock Options Outstanding						Stock Options Exercisable
Range of Exercise Prices	NumberOutstanding		WeightedAverageRemainingContractual Life(Years)		WeightedAverageExercisePrice		NumberExercisable		WeightedAverageExercisePrice
$4.36 - $4.36		444,460		1.68	$	4.36		444,460	$	4.36

On September 6, 2024, in connection with the closing of the Asset Sale and the departure of Steven Humphreys, the Company's former chief executive officer, the Company amended Mr. Humphreys' fully vested stock option award to purchase 444,460 shares of the Company's common stock at an exercise price of $4.36 per share by extending the period of time to exercise the stock option from three months to twelve months. In the third quarter of 2024, the Company recognized $0.2 million in stock-based compensation related to the modification of the contractual terms of Mr. Humphreys' stock option award. As of September 30, 2024, there was no unrecognized stock-based compensation expense related to stock options.

Restricted Stock Units

The following is a summary of RSU activity for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025:

	NumberOutstanding			Weighted AverageFair Value
Unvested as of January 1, 2024		730,062		$	11.17
Unvested as of January 1, 2025		806,985		$	6.31
Granted		1151,~~290,040~~500			43.3951
Vested		(154,~~046,602~~052	)		78.1214
Forfeited		(950,~~784~~410	)		127.4414
Unvested as of September 30, 2024		963,716		$	8.17
Unvested as of March 31, 2025		854,023		$	5.65
RSUs vested but not released		86130,~~368~~394		$	76.9464

The fair value of the Company’s RSUs is calculated based upon the fair market value of the Company’s common stock at the date of grant. As of ~~September~~March 3031, ~~2024~~2025, there was $53.17 million of unrecognized compensation expense related to unvested RSUs granted, which is expected to be recognized over a weighted average period of 2.417 years. No tax benefit was realized from RSUs for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025.

At the closing of the Asset Sale, unvested RSUs held by employees who became employed by the Buyer (or an affiliate of Buyer) became fully vested, resulting in the recognition of $3.8 million in stock-based compensation expense in the third quarter of 2024. RSUs held by the Company's remaining employees and its non-employee directors continue to vest according to their original terms.12

Performance Stock Units

The Company grants to certain key employees PSUs that are subject to the attainment of performance goals established by the Company’s Compensation Committee, the periods during which performance is to be measured, and other limitations and conditions. Performance goals are based on pre-established objectives that specify the manner of determining the number of PSUs that will vest if performance goals are attained. If an employee terminates employment, the non-vested portion of the PSUs will not vest and all rights to the non-vested portion terminate.

The following is a summary of PSU activity for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025:

	NumberOutstanding			Weighted AverageFair Value
Unvested as of January 1, 2024		—		$	—
Unvested as of January 1, 2025		417,500		$	4.07
Granted		~~477~~20,~~500~~000			43.0751
Vested		—(105,000	)		—4.07
Forfeited		—			—
Unvested as of September 30, 2024		477,500		$	4.07
Unvested as of March 31, 2025		332,500		$	4.04

17As of March 31, 2025, there was $1.1 million of unrecognized compensation expense related to unvested PSUs, which is expected to be recognized over a period of 0.75 years. No tax benefit was realized from PSUs for the three months ended March 31, 2025.

As of September 30, 2024, there was $1.8 million of unrecognized compensation expense related to unvested PSUs, which is expected to be recognized over a period of 1.25 years. No tax benefit was realized from PSUs for the nine months ended September 30, 2024.

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense related to stock options, RSUs and ~~RSUs~~PSUs included in the condensed consolidated statements of comprehensive income (loss) for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		2024		2023
	2025		2024
Cost of revenue	$	5	$	87	$	17	$	27
Research and development		6120		3734		~~138~~		74
Selling and marketing		~~182~~59		~~124~~118		~~743~~		~~365~~
General and administrative		~~848~~712		~~345~~360		~~1,702~~		~~1,039~~
Stock-based compensation expense - continuing operations		~~1,096~~796		~~514~~519		~~2,600~~		~~1,505~~
Stock-based compensation expense - discontinued operations		~~4,264~~—		~~475~~500		~~5,254~~		~~1,468~~
Total	$	~~5,360~~796	$	~~989~~1,019	$	~~7,854~~	$	~~2,973~~

Restricted Stock Unit Net Share Settlements

During the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company repurchased ~~412~~47,~~121~~538 and 5632,~~741~~608 shares, respectively, of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of RSUs issued to employees.

~~11. Net Income (Loss) per Common Share~~ 13

~~Basic~~Note net income (loss) per common share is computed by dividing net income (loss) available to common stockholders during the period by the weighted average number of common shares outstanding during that period10. ~~Diluted~~Net ~~net~~Loss ~~income (loss)~~ per ~~common~~Common ~~share~~Share is impacted by equity instruments considered to be potential common shares, if dilutive, computed using the treasury stock or the if-converted method of accounting. Dilutive potential common share equivalents are excluded from the computation of net income (loss) per share in loss periods, as their effect would be antidilutive.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net loss from continuing operations	$	(9,329	)	$	(3,660	)	$	(21,634	)	$	(10,550	)
Net income from discontinued operations, net of tax		95,278			3,638			96,809			6,665
Net income (loss)		85,949			(22	)		75,175			(3,885	)
Less: accretion of Series B convertible preferred stock dividends		(201	)		(319	)		(682	)		(947	)
Net income (loss) available to common stockholders	$	85,748		$	(341	)	$	74,493		$	(4,832	)
Weighted average common shares outstanding - basic		23,660			23,174			23,496			23,008
Effect of dilutive potential common shares		—			—			—			—
Weighted average common shares outstanding - diluted		23,660			23,174			23,496			23,008
Basic and diluted net income (loss) per common share:
Continuing operations	$	(0.40	)	$	(0.17	)	$	(0.95	)	$	(0.50	)
Discontinued operations, net of tax	$	4.03		$	0.16		$	4.12		$	0.29
Net income (loss) per common share	$	3.62		$	(0.01	)	$	3.17		$	(0.21	)

Basic net loss per common share is computed by dividing net loss available to common stockholders during the period by the weighted average number of common shares outstanding during that period. Diluted net loss per common share is impacted by equity instruments considered to be potential common shares, if dilutive, computed using the treasury stock or the if-converted method of accounting. Dilutive potential common share equivalents are excluded from the computation of net loss per share in loss periods, as their effect would be anti-dilutive.


	Three Months Ended March 31,
	2025			2024
Net loss from continuing operations	$	(4,789	)	$	(5,382	)
Net income from discontinued operations, net of tax		—			824
Net loss		(4,789	)		(4,558	)
Less: accretion of Series B convertible preferred stock dividends		(205	)		(248	)
Net loss available to common stockholders	$	(4,994	)	$	(4,806	)

Weighted average common shares outstanding - basic		23,599			23,368
Effect of dilutive potential common shares		—			—
Weighted average common shares outstanding - diluted		23,599			23,368

Basic and diluted net income (loss) per common share:
Continuing operations	$	(0.21	)	$	(0.24	)
Discontinued operations, net of tax	$	—		$	0.04
Net loss per common share	$	(0.21	)	$	(0.21	)

The following common stock equivalents have been excluded from diluted net income (loss) per share for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 because their inclusion would have been anti-dilutive (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2024

2023

2024

2023

2025

2024

Shares of common stock subject to outstanding RSUs

~~964~~862

~~863~~751

~~964~~

~~863~~

Shares of common stock subject to outstanding PSUs

~~478~~333

40—

~~478~~

Shares of common stock subject to outstanding stock options

444

~~495~~487

~~444~~

~~495~~

Shares of common stock issuable upon conversion of Series B convertible preferred stock

6,~~817~~919

6,~~568~~709

~~6,817~~

~~6,568~~

Total

8,~~703~~558

7,~~966~~947

~~8,703~~

~~7,966~~

12Note 11. Segment Reporting~~, Geographic Information, and Concentration of Credit Risk~~

Segment Reporting

Historically, the Company organized its operations into two reportable business segments: Identity and Premises. The Identity segment included products and solutions that enabled secure access to information serving the logical access and cyber-security market, and protected connected objects and information using radio-frequency identification ("RFID") embedded security. The Premises segment included the Company's solutions to address the premises security market for government and enterprise, including access control, video surveillance, analytics, audio, access readers and identities.

As disclosed in Note 1, Basis of Presentation and Note 3, Discontinued Operations, in the third quarter of 2024, the Company completed the sale of its Physical Security Business, which historically represented ~~primarily~~ the Company's Premises segment, as well as its access card and identity reader operations, which were historically part of its Identity segment. As a result, the Company has one reportable segment: the Internet of Things ("IoT") Business segment.

The IoT Business segment develops, manufactures, and supplies specialty Internet of Things ("IoT") solutions tailored for the healthcare industry and other high-value end markets. The Company's specialty RFID IoT devices are attached to or embedded into physical items, providing those items with a unique digital identity. The Company sells its products across multiple industries, focusing on pharmaceutical and medical devices, consumer electronics, mobile devices, wine and spirits, luxury goods, libraries, and logistics. 14

The chief operating decision maker ("CODM") assesses performance for the segment and decides how to allocate resources based on consolidated loss from continuing operations that also is reported on the condensed consolidated statements of comprehensive loss. The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets. Loss from continuing operations is used to monitor budget versus actual results. Monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation. The Company derives revenue primarily in the Americas, Europe and the Middle East, and Asia-Pacific regions and manages the business activities on a consolidated basis. The Company’s CODM is the chief executive officer.

Significant Segment Expenses

As the Company's CODM manages operations on a consolidated basis, consolidated net loss from continuing operations as reported in the Company's condensed consolidated statements of comprehensive loss is the U.S. GAAP measure that is used to make operating decisions and evaluate operating performance. The significant expense categories which are used to manage operations are those reflected in the Company's condensed consolidated statements of comprehensive loss.

Geographic Information

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			2024			2023
	2025			2024
Americas	$	2,~~751~~238		$	42,~~151~~958		$	~~9,095~~		$	~~18,487~~
Europe and the Middle East		1,~~641~~787			42,~~110~~538			~~6,247~~			~~6,351~~
Asia-Pacific		21,~~140~~244			31,~~471~~162			~~4,589~~			~~7,259~~
Total	$	65,~~532~~269		$	116,~~732~~658		$	~~19,931~~		$	~~32,097~~
As percentage of net revenue:
Americas		42	%		3544	%		46	%		58	%
Europe and the Middle East		2534	%		3538	%		31	%		20	%
Asia-Pacific		3324	%		3018	%		23	%		22	%
Total		100	%		100	%		~~100~~	%		~~100~~	%

Concentration of Credit Risk

One customer accounted for 16% ~~and 11%, respectively,~~ of net revenue for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025. One customer accounted for 2622% ~~and 31%, respectively,~~ of net revenue for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2023~~2024. One customer accounted for 1510% of net accounts receivable as of ~~September~~March 3031, ~~2024~~2025. Two customers accounted for 2916% and 1311%, respectively, of net accounts receivable as of December 31, ~~2023~~2024.

19Long-lived assets by geographic location as of March 31, 2025 and December 31, 2024 are as follows (in thousands):

Long-lived assets by geographic location as of September 30, 2024 and December 31, 2023 are as follows (in thousands):


	March 31, 2025		December 31, 2024
Property and equipment, net:
Americas	$	58	$	68
Europe and the Middle East		523		475
Asia-Pacific		7,008		7,151
Total property and equipment, net	$	7,589	$	7,694

Operating lease right-of-use assets:
Americas	$	—	$	—
Europe and the Middle East		309		335
Asia-Pacific		1,290		1,665
Total operating lease right-of-use assets	$	1,599	$	2,000

	September 30,2024		December 31,2023
Property and equipment, net:
Americas	$	82	$	65
Europe and the Middle East		217		355
Asia-Pacific		7,904		8,052
Total property and equipment, net	$	8,203	$	8,472
Operating lease right-of-use assets:
Americas	$	—	$	—
Europe and the Middle East		216		371
Asia-Pacific		1,894		1,918
Total operating lease right-of-use assets	$	2,110	$	2,289

13Note 12. Restructuring and Severance

During the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2025, restructuring expenses ~~consisted~~included the impairment of ~~severance~~an ~~related~~operating ~~costs~~lease right-of-use asset of $46238,000 associated with vacated production space at the Company's Singapore manufacturing facility, and the remaining restructuring expense related to severance costs.

14Note 13. Leases

The Company’s leases consist primarily of operating leases for administrative office space, research and development facilities, manufacturing facilities, and sales offices in various countries around the world. The Company determines if an arrangement is a lease at inception. Some lease agreements contain lease and non-lease components, which are accounted for as a single lease component. Total rent expense was $0.2 million and $0.73 million for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024,~~2025 ~~respectively,~~ and ~~$0.2 million and $0.5 million for the three and nine months ended September 30~~2024, ~~2023,~~ respectively.

Initial lease terms are determined at commencement and may include options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. Remaining lease terms range from one to ~~four~~three years, some of which include options to extend for up to five years. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets. As the Company’s leases do not provide an implicit rate, the present value of future lease payments is determined using the Company’s incremental borrowing rate based on information available at the lease commencement date.

The table below reconciles the undiscounted cash flows for the first five years and the total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of ~~September~~March 3031, ~~2024~~2025 (in thousands):

	September 30,2024
	March 31,2025
2024 (remaining three months)	$	268
2025 (remaining nine months)	$	759
2025		1,009
2026		803
2026		750
2027		367
2027		280
2028		49
2028		52
Total minimum lease payments		1,978
Total minimum lease payments		2,359
Less: amount of lease payments representing interest		(160	)
Less: amount of lease payments representing interest		(228	)
Present value of future minimum lease payments		1,818
Present value of future minimum lease payments		2,131
Less: current liabilities under operating leases		(861	)
Less: current liabilities under operating leases		(880	)
Long-term operating lease liabilities	$	957
Long-term operating lease liabilities	$	1,251

As of ~~September~~March 3031, ~~2024~~2025, the weighted average remaining lease term for the Company’s operating leases was 2.53 years, and the weighted average discount rate used to determine the present value of the Company’s operating leases was 7.67%.

~~Cash~~In ~~paid for amounts included in~~ the ~~measurement~~first quarter of ~~operating~~2025, ~~lease liabilities was $0.3 million and $0.7 million for~~ the ~~three~~Company ~~and~~recorded ~~nine~~an ~~months~~impairment ~~ended~~charge ~~September~~of 30$238,000 ~~2024,~~related ~~respectively,~~to ~~and~~an ~~$0.3~~operating ~~million~~lease ~~and~~right-of-use ~~$0.5~~asset ~~million~~associated ~~for~~with ~~the~~vacated ~~three~~production ~~and~~space ~~nine~~at ~~months~~its ~~ended~~Singapore ~~September~~manufacturing ~~30, 2023, respectively~~facility.

20Cash paid for amounts included in the measurement of operating lease liabilities was $0.3 million $0.2 million for the three months ended March 31, 2025 and 2024, respectively.

~~15. Commitments and Contingencies~~16

~~The~~Note ~~following~~14. ~~table~~Commitments ~~summarizes~~and ~~the Company’s principal contractual commitments, excluding operating leases, as of September 30, 2024 (in thousands):~~Contingencies

	PurchaseCommitments		OtherContractualCommitments		Total
2024 (remaining three months)	$	4,434	$	92	$	4,526
2025		—		16		16
2026		—		—		—
2027		—		—		—
Total	$	4,434	$	108	$	4,542

The following table summarizes the Company’s principal contractual commitments, excluding operating leases, as of March 31, 2025 (in thousands):


	Purchase Commitments		Other Contractual Commitments		Total
2025 (remaining nine months)	$	2,455	$	564	$	3,019
2026		—		—		—
2027		—		—		—
2028		—		—		—
2029		—		—		—
Total	$	2,455	$	564	$	3,019

Purchase commitments for inventories are highly dependent upon forecasts of customer demand. Due to the uncertainty in demand from its customers, the Company may have to change, reschedule, or cancel purchases or purchase orders from its suppliers. These changes may lead to vendor cancellation charges on these purchases or contractual commitments.

The following table summarizes the Company’s warranty accrual account activity during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024:

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			2024			2023
	2025			2024
Balance at beginning of period	$	~~128~~214		$	~~197~~217		$	~~217~~		$	~~188~~
Charged (credited) to costs and expenses		(12	)		21			(102	)		30
Charged (credited) to cost of revenue		127			(76	)
Cost of warranty claims		~~(16~~—	)		~~(15~~—	)		~~(15~~	)		~~(15~~	)
Balance at end of period	$	~~100~~341		$	~~203~~141		$	~~100~~		$	~~203~~

The Company provides warranties on certain product sales for aperiods ~~period~~ranging offrom 12 to 36 months, and allowances for estimated warranty costs are recorded during the period of sale. The determination of such allowances requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty. The Company currently establishes warranty reserves based on historical warranty costs for each product line combined with liability estimates based on the prior 12 months’ sales activities. If actual return rates and/or repair and replacement costs differ significantly from the Company’s estimates, adjustments to recognize additional cost of sales may be required in future periods. Historically, the warranty accrual and the expense amounts have been immaterial.

~~16. Subsequent Events~~17

The timing and amount of shares repurchased, if any, will depend on a number of factors, including stock price, trading volume, general market and business conditions, liquidity and capital needs, and other factors. The Stock Repurchase Program does not obligate the Company to repurchase any specific dollar amount or acquire any specific number of shares of common stock. The Stock Repurchase Program has no expiration date and may be suspended or discontinued at any time without notice.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and other parts of this Quarterly Report on Form 10-Q (“Quarterly Report”) contain forward-looking statements, within the meaning of the safe harbor provisions under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. Forward-looking statements reflect current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “will,” “believe,” “could,” “should,” “would,” “may,” “anticipate,” “intend,” “plan,” “estimate,” “expect,” “project” or the negative of these terms or other similar expressions. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part II, Item 1A of this Quarterly Report and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2023,~~2024 ~~as amended,~~ under the heading “Risk Factors,” The following discussion should be read in conjunction with the audited consolidated financial statements and notes thereto included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2023, as amended~~2024. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Each of the terms the “Company,” “Identiv,” “we,” “us” and “our” as used herein refers collectively to Identiv, Inc. and its wholly-owned subsidiaries, unless otherwise stated.

Overview

Historically, we organized our operations into two reportable business segments: Identity and Premises. Our Identity segment included products and solutions that enabled secure access to information serving the logical access and cyber-security market, and protected connected objects and information using radio-frequency identification ("RFID") embedded security. Our Premises segment included the Company's solutions to address the premises security market for government and enterprise, including access control, video surveillance, analytics, audio, access readers and identities.

AsOn ~~disclosed~~September in6, ~~Note 1~~2024, ~~Basis~~we completed the sale of ~~Presentation~~our ~~and~~Physical ~~Note~~Security 3,Business ~~Discontinued~~(as ~~Operations~~defined below), onwhich ~~September~~historically 6,represented ~~2024,~~our wePremises ~~completed~~segment, ~~the~~as ~~sale~~well ofas our ~~Physical~~access ~~Security~~card ~~Business~~and identity reader operations, which were historically ~~represented~~were ~~primarily~~part of our ~~Premises~~Identity segment. As a result, we currently have one reportable segment: the IoT Business segment.

The IoT Business segment develops, manufactures, and supplies specialty Internet of Things ("IoT") solutions tailored for the healthcare industry and other high-value end markets. Our ~~specialty~~strategy ~~radio-frequency~~is ~~identification~~focused (on developing highly engineered and specialized IoT inlays, tags, and labels for applications that provide significant value to our global customers. These specialty RFID) IoT devices, including near field communication ("NFC"), high frequency ("HF"), dual frequency ("DF"), ultra-high frequency ("UHF") and Bluetooth Low Energy ("BLE"), are attached to or embedded into physical items, such as syringes, pill containers, wine bottles, and sports jerseys, providing those items with a unique digital identity. These devices enable unique and secure digital interaction with the physical world while simultaneously capturing relevant data which can then be analyzed and managed by the end customer. We sell our products across multiple industries, focusing on pharmaceutical and medical devices, consumer electronics, mobile devices, wine and spirits, luxury goods, libraries, and logistics.

Recent Developments

Closing of Asset Sale

On September 6, 2024, ~~the~~we ~~Company~~ completed the sale of ~~its~~our physical security, access card, and identity reader operations and assets, including all outstanding shares of Identiv Private Limited, ~~its~~our wholly-owned subsidiary (the “Physical Security Business”) to Hawk Acquisition, Inc., a Delaware corporation (“Buyer”) and a wholly-owned subsidiary of Vitaprotech SAS, a French société par actions simplifiée and provider of security solutions, and Buyer assumed certain of ~~the~~our ~~Company’s~~ liabilities related to the Physical Security Business (collectively, the “Asset Sale”) pursuant to that certain Stock and Asset Purchase Agreement, dated as of April 2, 2024 ~~(the “Purchase Agreement”)~~, by and between the Company and Buyer. As consideration for the Asset Sale, ~~the~~we ~~Company~~ received approximately $~~144~~143.39 million in cash. In connection with the closing of the Asset Sale, ~~subject~~we entered into a transition services agreement (the “Transition Services Agreement”) with Buyer, which outlines the information technology, people, and facility support we will provide to ~~further~~Buyer ~~customary~~for ~~adjustments~~a asperiod ~~set~~of ~~forth~~12 inmonths to 18 months after the ~~Purchase~~transaction ~~Agreement~~closing date.

InFollowing ~~connection with~~ the ~~closing~~completion of the Asset Sale, ~~the~~we ~~Company~~continue ~~and~~to ~~Buyer~~be ~~entered into~~ a ~~transition~~public ~~services~~company ~~agreement~~operating (under the ~~“Transition~~name ~~Services~~Identiv, ~~Agreement”)~~Inc. ~~The~~and ~~Transition~~continue ~~Services~~to ~~Agreement~~own ~~outlines~~ the ~~information~~assets ~~technology,~~and ~~people,~~liabilities ~~and~~of ~~facility~~our ~~support~~business ~~the~~that ~~Company~~were ~~will~~not ~~provide~~sold to Buyer, ~~for~~which awe ~~period~~refer to herein as the “IoT Business”. The discussion in this Item 2, Management’s Discussion and Analysis of 12Financial ~~months~~Condition toand 18Results ~~months~~of ~~after~~Operations, ~~the~~unless ~~transaction~~otherwise ~~closing~~noted, ~~date~~relates solely to our continuing operations.

In addition, at the closing of the Asset Sale, unvested restricted stock units (“RSUs”) held by employees who became employed by the Buyer (or an affiliate of Buyer) became fully vested, while RSUs held by our remaining employees and non-employee directors continue to vest according to their terms. 18

Following the completion of the Asset Sale, we continue to be a public company operating under the name Identiv, Inc. and continue to own the assets and liabilities of our business that were not sold to Buyer, which we refer to herein as the “IoT Business”.

The discussion in this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, unless otherwise noted, relates solely to the Company’s continuing operations.

Factors Affecting Our Performance

Market Adoption

Our financial performance depends on the pace, scope and depth of end-user adoption of our RFID products in multiple industries. That pace, scope and depth has resulted in large fluctuations in our operating results. For example, ~~adoption of BLE devices, which accelerated in 2023, significantly declined to date in 2024, as~~ we have experienced lower unit sales of BLE transponder products to one of our customers undergoing a technology transition. We do not expect to resume shipments to this customer ~~for~~while atthey ~~least~~continue atheir ~~few~~technology ~~quarters~~transition. As a result, we have experienced a corresponding decrease in utilization in our production facilities in Southeast Asia.

We believe significant improvement in chip capabilities at lower costs has accelerated the opportunities for product engineers to integrate RFID into their products to create new and more engaging customer experiences, reduce counterfeiting, and ensure proper product use and adherence. Though we believe the number of opportunities for RFID-based solutions has increased, the evaluation period and customer adoption originally expected for certain applications has taken longer than we anticipated.

We believe the underlying, long-term trend is continued RFID adoption across multiple verticals, but regulated industries like healthcare take longer to optimize the technology and fully understand the benefits. We also believe that expanding use cases fosters adoption across verticals and into other markets.

If RFID market adoption, and adoption of our products specifically, does not meet our expectations then our growth prospects and operating results will be adversely affected. If we are unable to meet end-user or customer volume or performance expectations, then our business prospects may be adversely affected. In contrast, if our RFID sales exceed expectations, then our revenue and profitability may be positively affected.

Given the uncertainties of the specific timing of our new customer deployments, we cannot assure you that we have appropriate inventory and capacity levels or that we will not experience inventory shortfalls or overages in the future or acquire inventory at costs to maintain gross margins. We attempt to mitigate those risks by being deeply embedded in our customers’ design cycles, working with our chip partners on long lead time components, managing our limited capital equipment needs within a short cycle and future proofing our facilities to accommodate several scenarios for growth potential.

If end users with sizable projects change or delay them, we may experience significant fluctuation in revenue on a quarterly or annual basis, and we anticipate that uncertainty to continue to characterize our business for the foreseeable future.

RFID Device Production Transition

We are currently in the process of transitioning our RFID device production from our manufacturing facility in Singapore to our manufacturing facility in Thailand. The majority of RFID device production was transferred to Thailand in 2024. We expect to complete this transition in the third quarter of 2025. If the customers currently supported in Singapore do not transition their production to Thailand as expected, this could have a negative impact on our operating results. In addition, when all of our production has been transferred to Thailand, we will only be maintaining or producing products from one location.

Focus on High-Margin Opportunities

To strengthen and grow our core channel business, we are prioritizing higher margin opportunities with existing customers and channel partners. Higher margin opportunities often involve complex devices as compared to standard specification products, and require a certain amount of customization for the customer. Increasing technological complexity often necessitates more development resources and longer evaluation periods to ensure the product meets customer needs. In choosing to prioritize higher margin opportunities, we have, and may continue to, decide not to support low-margin projects that may generate revenue. This could result in a negative impact on our operating results.

Competitive Landscape

We have seen a large increase in global production capacity at several of our RFID competitors. This has resulted in competitive pricing pressure, and, in response, we ~~have~~continue ~~begun~~ to exit some of our lowest margin business. This has had, and we expect will continue to have, a negative impact on our operating results. ~~We have also publicly disclosed allegations of anti-competitive business practices by one of our RFID competitors.~~

Impacts of Macroeconomic Conditions and Other Factors on our Business

We conduct operations internationally with sales in the Americas, Europe and the Middle East, and Asia-Pacific regions. Our manufacturing operations and third-party contract manufacturers are ~~located~~ in China, Singapore, and Thailand~~/Southeast Asia~~. We purchase certain products and key components from a limited number of sources that depend on the supply chain, including freight, to receive components, transport finished goods and deliver our products across the world. In view of the rapidly changing business environment, we have experienced delays and reductions in customer orders, shifting supply chain availability, component shortages, and other production-related challenges. We are currently unable to determine if there will be any continued disruption and the extent to which this may have future impact on our business. We continue to monitor the global supply chain challenges and its effect on our financial position, results of operations, and cash flows.

More recently, we have also been impacted by other adverse macroeconomic conditions, including but not limited to, inflation, foreign currency fluctuations, and the slowdown of economic activity around the globe. These conditions have also impacted our suppliers, contract manufacturers, logistics providers, and distributors, causing increases in cost of materials and higher shipping and transportation rates, which then impacted the pricing of our products. Price increases may not successfully offset cost increases or may cause us to lose market share and, in turn, may adversely impact our financial position, results of operations, and cash flows.19

23transport finished goods and deliver our products across the world. In view of the rapidly changing business environment, we have experienced delays and reductions in customer orders, shifting supply chain availability, component shortages, and other production-related challenges. We continue to monitor the global supply chain and its effect on our financial position, results of operations, and cash flows.

~~Anticipated~~We ~~Effects~~have also recently been, and expect to continue to be, impacted by other adverse macroeconomic conditions, including but not limited to, inflation, foreign currency fluctuations, tariffs, global trade disruption, and the slowdown of ~~Asset~~economic ~~Sale~~activity around the globe. These conditions may also impact our customers, suppliers, contract manufacturers, logistics providers, and distributors, causing increases in cost of materials and higher shipping and transportation rates, which then impacts the pricing of our products. Price increases may not successfully offset cost increases or may cause us to lose market share and, in turn, may adversely impact our financial position, results of operations, and cash flows.

~~Our~~Effects ~~business~~of ~~has and will continue to be affected by the~~ Asset Sale. The Asset Sale included assets and operations that have historically represented the majority of our revenues, representing approximately 63% of our 2023 revenue, as well as a substantial portion of our assets, representing approximately 43% of our assets as of December 31, 2023. The gross margin profile of our continuing business has and will continue to be significantly lower than our historical total gross margins across a lower revenue base. As a result, our net loss has and we expect it will continue to increase substantially.

~~For~~Our ~~additional~~business ~~information~~has ~~regarding~~and will continue to be affected by the ~~risks~~Asset ~~related~~Sale. toThe Asset Sale included assets and operations that had historically represented the majority of our revenues, representing approximately 63% of our 2023 revenue, as well as a substantial portion of our assets, representing approximately 47% of our assets as of December 31, 2023. The gross margin profile of our continuing business, ~~see~~has ~~“Risks~~and ~~Related~~will continue to ~~the~~be ~~Company’s~~significantly ~~IoT~~lower ~~Business”~~than ~~under~~our ~~“Risk~~historical ~~Factors”~~total ingross ~~Part~~margins IIacross a lower revenue base. As a result, ~~Item~~we 1Aexpect ofour ~~this~~loss ~~Quarterly~~from ~~Report~~continuing onoperations ~~Form~~to ~~10-Q~~continue until we substantially increase our revenue to achieve scale.

For additional information regarding the risks related to our continuing business, see “Risks Related to Our Business, Products, and Industry” under “Risk Factors” in Part II, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2024.

Results of Operations

Our results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 isare as follows (in thousands, except percentages).

	Three Months Ended September 30,			Nine Months Ended September 30,
	Three Months Ended March 31,
	2024	2023	% Change	2024	2023	% Change
	2025	2024	% Change
Net revenue	$65,~~532~~269	$116,~~732~~658	(4421%)	~~$19,931~~	~~$32,097~~	~~(38%)~~
Gross profit	~~238~~132	~~1,319~~483	(8273%)	~~1,335~~	~~4,169~~	~~(68%)~~
Gross profit margin	43%	117%		7%	~~13%~~
Operating expenses:
Research and development	~~1,102~~787	~~1,019~~897	8(12%)	~~2,965~~	~~3,150~~	~~(6%)~~
Selling and marketing	1,~~657~~407	1,~~404~~169	1820%	~~4,654~~	~~4,525~~	3%
General and administrative	73,~~032~~146	23,~~215~~480	~~217~~(10%)	~~15,052~~	~~6,577~~	~~129%~~
Restructuring and severance	—260	—	0100%	—	46	~~(100%)~~
Total operating expenses	95,~~791~~600	45,~~638~~546	~~111~~1%	~~22,671~~	~~14,298~~	~~59%~~
Loss from continuing operations	(95,~~553~~468)	(35,~~319~~063)		~~(21,336)~~	~~(10,129)~~
Non-operating income (expense):
Interest income (expense), net	~~244~~1,212	(~~211~~87)	~~(216%)~~N.M.	8	~~(351)~~	~~(102%)~~
Gain on investment	—	132	(100%)	—	132	(100%)
Foreign currency losses, net	(530)	(226)	(135%)
Foreign currency gains (losses), net	340	(249)	(237%)	55	(187)	(129%)
Loss from continuing operations before income tax provision	(4,786)	(5,376)
Loss from continuing operations before income tax provision	(8,969)	(3,647)		(21,273)	(10,535)
Income tax provision	(3)	(6)	(50%)
Income tax provision	(360)	(13)	2,669%	(361)	(15)	2,307%
Net loss from continuing operations	(4,789)	(5,382)
Net loss from continuing operations	(9,329)	(3,660)		(21,634)	(10,550)
Income from discontinued operations, net of tax	—	824	(100%)
Net income (loss) from discontinued operations, net of tax:
Net loss	$(4,789)	$(4,558)
Income (loss) from Physical Security Business, net of tax	(4,268)	3,638	(217%)	(2,737)	6,665	(141%)
N.M. - Not meaningful
Gain on sale of Physical Security Business, net of tax	99,546	—	100%	99,546	—	100%
Total income from discontinued operations, net of tax	95,278	3,638		96,809	6,665
Net income (loss)	$85,949	$(22)		$75,175	$(3,885)

2420

Geographic net revenue based on each customer’s ship-to location is as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2024

2023

% Change

2024

2023

% Change

2025

2024

% Change

Americas

$2,~~751~~238

$42,~~151~~958

(3424%)

~~$9,095~~

~~$18,487~~

~~(51%)~~

Europe and the Middle East

1,~~641~~787

42,~~110~~538

(6030%)

~~6,247~~

~~6,351~~

~~(2%)~~

Asia-Pacific

21,~~140~~244

31,~~471~~162

~~(38~~7%)

~~4,589~~

~~7,259~~

~~(37%)~~

Total

$65,~~532~~269

$116,~~732~~658

~~$19,931~~

~~$32,097~~

Percentage of net revenue:

Americas

42%

3544%

~~46%~~

~~58%~~

Europe and the Middle East

2534%

3538%

~~31%~~

~~20%~~

Asia-Pacific

3324%

3018%

~~23%~~

~~22%~~

Total

100%

~~100%~~

Net Revenue

Net revenue was $5.3 million for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, ~~was~~a decrease of $61.54 million ~~and~~compared with $196.97 million, ~~respectively~~for the three months ended March 31, ~~decreases~~2024. ofNet ~~44%~~revenue ~~and~~in 38the Americas for three months ended March 31, 2025 decreased 24% compared with ~~$11~~the comparable period of 2024.7 ~~million~~Net revenue in Europe, the Middle East, and the Asia-Pacific for three months ended March 31, 2025 was $323.10 million, ~~respectively,~~a ~~for~~decrease of 18% compared with $3.7 million in the comparable ~~periods~~period of ~~2023~~2024. The decrease was primarily due to substantially lower unit sales of RFID transponder products as we exit low margin business opportunities.

Net revenue in the Americas for the three and nine months ended September 30, 2024 was $2.8 million and $9.1 million, respectively, decreases of 34% and 51% compared to $4.2 million and $18.5 million, respectively, for the comparable periods of 2023. These decreases were primarily due to substantially lower unit sales of RFID transponder products to one of our customers undergoing a technology transition to their next-generation (Gen 3) chip. We do not expect shipments to this customer for at least a few quarters while they work on producing their Gen 3 chip.

Net revenue in Europe, the Middle East, and the Asia-Pacific for the three and nine months ended September 30, 2024 was $3.8 million and $10.8 million, decreases of 50% and 20%, respectively, compared with the comparable period of 2023. The decreases were primarily due to lower sales of RFID transponder products in both Europe and the Middle East and the Asia-Pacific.

Gross Profit and Gross Margin

Gross profit for the three months ended ~~September~~March 3031, ~~2024~~2025 was $0.21 million compared with $10.35 million in the comparable period of ~~2023. Gross profit for nine months ended September 30,~~ 2024 ~~was $1~~.3 ~~million compared with $4.2 million in the comparable period of 2023.~~ Gross profit represents net revenue less direct cost of product sales, manufacturing overhead, other costs directly related to preparing the product for sale including freight, scrap, and inventory adjustments, where applicable.

Gross profit ~~margins~~margin for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 decreased to 43% ~~and~~from 7% ~~from 11% and 13%~~ in the comparable ~~periods~~period of ~~2023~~2024. The decrease in gross profit ~~margins~~margin was primarily attributable to ~~substantially~~incremental ~~lower~~costs ~~unit~~related ~~sales~~ to ~~one~~the transition of production to our ~~customers,~~Thailand asfacility ~~discussed~~and ~~above~~the dual manufacturing sites required during the transition, ~~resulting~~combined inwith underutilization of our manufacturing production facilities due to lower sales. In addition, we recorded a charge to cost of revenue of approximately $0.4 million in the first quarter of 2025, which included the write-down of approximately $0.3 million of obsolete inventory at our Singapore production facility, and ~~Thailand~~a warranty claim from one of our customers of approximately $0.2 million.

We expect there will be variation in our gross profit from period to period, as our gross profit has been and will continue to be affected primarily by varying mix among our products. Within each product category, gross margins have tended to be consistent, but over time may be affected by a variety of factors, including, without limitation, competition, product pricing, the volume of sales in any given quarter, manufacturing volumes, product configuration and mix, the availability of new products, product enhancements, risk of inventory write-downs and the cost and availability of components. We expect gross product margins to increase overall after our RFID transponder production is transitioned from Singapore to our Thailand production facility. We anticipate this transition to be complete in the third quarter of 2025.

Operating Expenses

Information about our operating expenses for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 is set forth below (dollars in thousands).

Research and Development

	Three Months Ended September 30,									Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			% Change			2024			2023			% Change
	2025			2024			% Change
Research and development	$	~~1,102~~787		$	~~1,019~~897			8(12	%)	$	~~2,965~~		$	~~3,150~~			(6	%)
as a % of net revenue		1715	%		913	%					15	%		10	%

Research and development expenses consist primarily of employee compensation and fees for the development of hardware, software and firmware products. We focus the bulk of our research and development activities on the continued development of existing products and the development of new offerings for emerging market opportunities.

Research and development expenses for the three months ended September 30, 2024 increased compared to the comparable prior year period primarily due to higher external contractor costs as well as higher travel related costs. For the nine months ended September 30, 2024, the decrease in research and development expenses were attributable to lower headcount and payroll related costs.21

Research and development expenses for the three months ended March 31, 2025 decreased compared to the comparable prior year period primarily due to lower subscription fees and external services costs, as well as lower prototype related costs.

Selling and Marketing

	Three Months Ended September 30,									Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			% Change			2024			2023			% Change
	2025			2024			% Change
Selling and marketing	$	1,~~657~~407		$	1,~~404~~169			1820	%	$	~~4,654~~		$	~~4,525~~			3	%
as a % of net revenue		2527	%		1218	%					23	%		14	%

Selling and marketing expenses consist primarily of employee compensation as well as customer lead generation activities, tradeshow participation, advertising and other marketing and selling costs.

Selling and marketing expenses for the three months ended ~~September~~March 3031, ~~2024~~2025 increased compared to the comparable period in ~~the~~2024 ~~prior year~~ primarily due to higher ~~advertising~~headcount and ~~trade~~payroll ~~show-~~related costs~~. For the nine months ended September 30~~, ~~2024, the increase period over period was associated with~~ higher ~~trade~~external ~~show-related~~contractor costs, ~~offset~~and byhigher ~~lower~~consulting ~~third-party~~related ~~contractor~~ costs.

General and Administrative

	Three Months Ended September 30,									Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			% Change			2024			2023			% Change
	2025			2024			% Change
General and administrative	$	73,~~032~~146		$	23,~~215~~480			~~217~~(10	%)	$	~~15,052~~		$	~~6,577~~			~~129~~	%
as a % of net revenue		~~108~~60	%		1952	%					76	%		20	%

General and administrative expenses consist primarily of compensation expenses for employees performing administrative functions, and professional fees incurred for legal, auditing and other consulting services.

General and administrative expenses for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 ~~increased~~decreased compared to the ~~prior~~comparable ~~year~~period ~~periods~~in 2024 primarily due to ~~higher~~strategic ~~headcount and~~ review-related ~~payroll~~ costs, ~~higher~~associated ~~stock-based~~with ~~compensation~~the ~~expense,~~asset ~~higher~~sale ~~outside~~of ~~contractors~~$0.9 ~~costs,~~million ~~and~~incurred ~~legal~~in ~~fees,~~the asfirst ~~well~~quarter asof ~~professional~~2024 ~~services~~that ~~fees~~did ofnot ~~$3.6~~recur ~~million~~in ~~and~~the ~~$6.1~~first ~~million,~~quarter ~~respectively~~of 2025, ~~associated~~partially ~~with~~offset ~~strategic~~by ~~review~~higher stock-~~related~~based ~~activities~~compensation ~~incurred~~expense in ~~2024~~the first quarter of 2025.

Restructuring and Severance Charges

	Three Months Ended September 30,							Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		% Change			2024		2023		% Change
	2025		2024		% Change
Restructuring and severance	$	—260	$	—		0100	%	$	—	$	46		~~(100~~	%)

Restructuring expenses for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2025 ~~consisted~~related primarily to the impairment of ~~severance~~an operating lease right-of-use asset associated with vacated production space at our Singapore manufacturing facility, and the remaining restructuring expense related to severance costs.

Non-operating Income (Expense)

Information about our non-operating income (expense) for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 is set forth below (dollars in thousands).

	Three Months Ended September 30,									Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			% Change			2024		2023			% Change
	2025			2024			% Change
Interest income (expense), net	$	~~244~~1,212		$	(~~211~~87	)	N.M.	~~216~~	%	$	8	$	~~(351~~	)		~~102~~	%
Gain on investment	$	—		$	132			(100	%)	$	—	$	132			(100	%)
Foreign currency losses, net	$	(530	)	$	(226	)		(135	%)
Foreign currency gains (losses), net	$	340		$	(249	)		(237	%)	$	55	$	(187	)		(129	%)
N.M - Not meaningful

26Interest income (expense), net consists of interest income generated on our cash equivalents net of interest costs on our financial liabilities and amortization of debt issuance costs. The increase in interest income (expense), net for the three months ended March 31, 2025 compared to the comparable period of 2024 was primarily attributable to interest earned on our money market accounts and treasury bills.

Interest income (expense), net consists interest income generated on our cash equivalents offset by interest costs on our financial liabilities and amortization of debt issuance costs. The increase in interest income (expense), net for the three and nine months ended September 30, 2024 compared to the comparable period of 2023 was primarily attributable to interest earned on our money market accounts and treasury bills.

Gain on investment is associated with additional proceeds received in connection with the acquisition of a private company that we had previously invested in, which had been fully impaired and had no carrying value.

Changes in currency valuation in the periods mainly were the result of exchange rate movements between the U.S. Dollar, the Euro and the Thai Baht. Our foreign currency gains and losses primarily result from the valuation of current assets and liabilities denominated in a currency other than the functional currency of the respective entity in the local financial statements.

Income Tax Provision

	Three Months Ended September 30,									Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			% Change			2024			2023			% Change
	2025			2024			% Change
Income tax provision	$	~~(360~~3	)	$	~~(13~~6	)		~~2,669~~50	%	$	~~(361~~	)	$	~~(15~~	)		~~2,307~~	%
Effective tax rate		(60	%)	0%							(2	%)		(0	%)

As of ~~September~~March 3031, ~~2024~~2025, our deferred tax assets are fully offset by a valuation allowance. ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Based upon the weight of available evidence, which includes historical operating performance, reported cumulative net losses since inception and difficulty in accurately forecasting our future results, we provided a full valuation allowance against all of our net U.S. and foreign deferred tax assets. We reassess the need for our valuation allowance on a quarterly basis. If it is later determined that a portion or all of the valuation allowance is not required, it generally will be a benefit to the income tax provision in the period such determination is made.

We recorded an income tax provision during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, respectively, associated with taxable income from one of our foreign subsidiaries. The effective tax rates for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 differ from the federal statutory rate of 21% primarily due to a change in valuation allowance, and the provision or benefit in certain foreign jurisdictions, which are subject to higher tax rates.

Income ~~(Loss)~~ from Discontinued Operations, net of tax

	Three Months Ended September 30,								Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023		% Change			2024			2023		% Change
	2025			2024		% Change
Income (loss) from discontinued operations, net of tax	$	(4,268	)	$	3,638		(217	%)	$	(2,737	)	$	6,665		(141	%)
Income from discontinued operations, net of tax	$	—		$	824		(100	%)
Gain on sale of Physical Security Business, net of tax	$	99,546		$	—		100	%	$	99,546		$	—		100	%

Income from discontinued operations consists of the results of operations, net of tax, of our Physical Security Business which we disclosed as discontinued operations. ~~The~~See ~~gain~~Note on sale of the Physical Security Business is subject to adjustment as we complete our tax analysis on the ability to utilize net operating loss and credit carryforwards to reduce the amount of income tax provision. Any adjustment to the income tax provision recorded in connection with the Sale of the Physical Security Business will be completed by December 313, ~~2024.~~Discontinued Operations.

Liquidity and Capital Resources

As of ~~September~~March 3031, ~~2024~~2025, our working capital, defined as current assets less current liabilities, was $~~147~~141.05 million, ana ~~increase~~decrease of $~~98.~~3.4 million compared to $48144.79 million as of December 31, ~~2023~~2024. As of ~~September~~March 3031, ~~2024~~2025, our cash and cash equivalents balance was $~~145~~132.4 million.

On ~~February~~November 87, ~~2017~~2024, we ~~entered~~announced ~~into~~that aour ~~Loan~~board ~~and~~of ~~Security~~directors ~~Agreement~~authorized a stock repurchase program (asthe ~~amended~~“Stock orRepurchase ~~amended~~Program”). ~~and~~Under ~~restated~~the ~~from~~Stock ~~time~~Repurchase toProgram, ~~time~~effective November 15, ~~the~~2024, ~~“Loan~~we ~~Agreement”)~~may ~~with~~repurchase ~~East~~up ~~West~~to ~~Bank~~$10 ~~(“EWB”).~~million ~~Following~~of ~~subsequent~~shares ~~amendments,~~of common stock on ~~April~~a ~~14,~~discretionary ~~2022,~~basis wefrom ~~amended~~time ~~and~~to ~~restated~~time ~~the~~through ~~Loan~~open ~~Agreement~~market byrepurchases, ~~replacing~~privately ~~the~~negotiated ~~$20.0~~transactions, ~~million~~or ~~revolving~~other ~~loan~~means. ~~facility~~The ~~subject~~timing toand aamount ~~borrowing~~of ~~base~~shares ~~with~~repurchased depends on a ~~non-formula~~number ~~revolving~~of ~~loan~~factors, ~~facility~~including ~~with~~stock noprice, ~~borrowing~~trading ~~base~~volume, ~~requirement~~general market and abusiness ~~maturity~~conditions, ~~date~~liquidity ofand ~~February~~capital 8needs, ~~2023.~~and Inother ~~addition,~~factors. ~~the~~The ~~interest~~Stock ~~rate~~Repurchase ~~was~~Program ~~lowered~~does ~~from~~not ~~prime~~obligate us to ~~prime~~repurchase ~~minus~~any ~~0.25%,~~specific ~~and~~dollar ~~certain~~amount ~~financial~~or ~~covenants~~acquire ~~were~~any ~~amended~~specific number of shares of common stock. OnThe ~~February~~Stock 8,Repurchase ~~2023,~~Program wehas ~~entered~~no ~~into~~expiration andate ~~amendment~~and ~~(the~~may ~~"Fourth~~be ~~Amendment")~~suspended toor ~~the~~discontinued ~~Loan~~at ~~Agreement.~~any ~~The~~time ~~Fourth~~without ~~Amendment~~notice. ~~amends~~As ~~the~~of ~~Loan~~March ~~Agreement~~31, to2025, ~~among~~we ~~other~~have ~~things~~repurchased a total of 463,779 ~~extend~~shares ~~the~~of ~~maturity~~common ~~date~~stock tounder ~~February~~the 8,Stock ~~2025~~Repurchase ~~and~~Program ~~amend~~for ~~certain~~total ~~financial~~consideration ~~covenants~~of approximately $1.9 Asmillion. ofDuring ~~September~~the 30quarter ended March 31, ~~2024~~2025, there were no ~~amounts~~repurchases ~~outstanding~~of shares of common stock under the ~~Loan~~Stock ~~Agreement~~Repurchase Program.

27As our previously unremitted earnings have been subjected to U.S. federal income tax, we expect any repatriation of these earnings to the U.S. would not incur significant additional taxes related to such amounts. However, our estimates are provisional and subject to further analysis. Generally, most of our foreign subsidiaries have accumulated deficits and cash and cash equivalents that are held outside the United States are typically not cash generated from earnings that would be subject to tax upon repatriation if transferred to the United States. We have access to the cash held outside the United States to fund domestic operations and obligations without any material income tax consequences. As of March 31, 2025, the amount of cash included at such subsidiaries was $14.7 million. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements.

AsWe ~~our previously unremitted earnings~~ have ~~been~~historically ~~subjected~~incurred tooperating ~~U.S.~~losses ~~federal income tax, we expect any repatriation of these earnings to the U.S. would not incur significant additional taxes related to such amounts. However, our estimates are provisional~~ and ~~subject~~negative ~~to further analysis. Generally, most of our foreign subsidiaries have accumulated deficits and~~ cash ~~and~~flows ~~cash equivalents that are held outside the United States are typically not cash generated~~ from ~~earnings~~operating ~~that~~activities, ~~would~~and bewe ~~subject~~expect to ~~tax~~continue ~~upon repatriation if transferred~~ to ~~the~~incur ~~United~~losses ~~States.~~in ~~We have access to~~ the ~~cash held outside the United States to fund domestic operations and obligations without any material income tax consequences~~future. As of ~~September~~March 3031, ~~2024~~2025, ~~the~~we ~~amount~~had ofan ~~cash~~accumulated ~~included~~deficit atof ~~such subsidiaries was~~ $3344.38 million. WeDuring ~~have~~the ~~not,~~three ~~nor~~months doended weMarch ~~anticipate~~31, ~~the need to~~2025, ~~repatriate~~we ~~funds~~had toa ~~the~~loss ~~United~~from ~~States~~continuing tooperations ~~satisfy domestic liquidity needs arising in the ordinary course~~ of ~~business,~~$4.8 ~~including liquidity needs associated with our domestic debt service requirements~~million.

We ~~have~~believe ~~historically~~our ~~incurred~~existing ~~operating~~cash ~~losses~~ and ~~negative~~cash equivalents, together with cash ~~flows~~generated from ~~operating activities~~operations, ~~and~~will webe ~~expect~~sufficient to ~~continue~~satisfy our working capital needs to ~~incur~~fund ~~losses~~operations infor the ~~future~~next twelve months and beyond. AsWe ofmay ~~September~~also 30use cash to acquire or invest in complementary businesses, ~~2024~~technologies, weservices ~~had~~or anproducts ~~accumulated~~that ~~deficit~~would ofchange ~~$339.7~~our ~~million~~cash requirements. ~~During~~We ~~the~~may ~~nine~~also ~~months~~choose ~~ended~~to ~~September~~finance 30our business through public or private equity offerings, ~~2024~~debt financings or other arrangements. However, wethere ~~had~~can abe ~~loss~~no ~~from~~assurance ~~continuing~~that ~~operations~~additional ofcapital ~~$21.6~~will ~~million~~be ~~which~~available ~~included~~to ~~strategic~~us ~~review-related~~or ~~costs~~that ofsuch ~~$6.1~~capital ~~million~~will be available to us on acceptable terms. If we raise

We believe our existing cash and cash equivalents, together with cash generated from operations and available credit under our Loan Agreement will be sufficient to satisfy our working capital needs to fund operations for the next 12 months. We may also use cash to acquire or invest in complementary businesses, technologies, services or products that would change our cash requirements. We may also choose to finance our business through public or private equity offerings, debt financings or other arrangements. However, there can be no assurance that additional capital will be available to us or that such capital will be available to us on acceptable terms. If we raise funds by issuing equity securities, dilution to stockholders could result. Debt or any equity securities issued also may provide for rights, preferences or privileges senior to those of holders of our common stock. The terms of debt securities issued or loans could impose significant restrictions on our operations. The incurrence of additional indebtedness or the issuance of certain debt or equity securities could result in increased fixed payment obligations and could also result in restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely affect our ability to conduct our business. Our Loan Agreement imposes restrictions on our operations, increases our fixed payment obligations and has restrictive covenants. In addition, the issuance of additional equity securities by us, or the possibility of such issuance, may cause the market price of our common stock to decline. If we are not able to secure additional funding when needed, we may have to curtail or reduce the scope of our business or forgo potential business opportunities.23

funds by issuing equity securities, dilution to stockholders could result. Debt or any equity securities issued also may provide for rights, preferences or privileges senior to those of holders of our common stock. The ~~following~~terms ~~summarizes~~of debt securities issued or borrowings could impose significant restrictions on our ~~cash~~operations. ~~flows~~The ~~for~~incurrence of additional indebtedness or the ~~nine~~issuance ~~months~~of ~~ended~~certain ~~September~~debt ~~30,~~or ~~2024~~equity securities could result in increased fixed payment obligations and ~~2023~~could (also result in ~~thousands):~~restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely affect our ability to conduct our business. In addition, the issuance of additional equity securities by us, or the possibility of such issuance, may cause the market price of our common stock to decline. If we are not able to secure additional funding when needed, we may have to curtail or reduce the scope of our business or forgo potential business opportunities.

	Nine Months Ended September 30,
	2024			2023
Net cash used in operating activities	$	(9,510	)	$	(3,614	)
Net cash provided by (used in) investing activities		142,521			(3,007	)
Net cash provided by (used in) financing activities		(11,712	)		10,459
Effect of exchange rates on cash, cash equivalents, and restricted cash		62			(47	)
Net increase in cash, cash equivalents, and restricted cash		121,361			3,791
Cash, cash equivalents, and restricted cash at beginning of period		24,384			17,137
Cash, cash equivalents, and restricted cash at end of period	$	145,745		$	20,928

The following summarizes our cash flows for the three months ended March 31, 2025 and 2024 (in thousands):


	Three Months Ended March 31,
	2025			2024
Net cash used in operating activities	$	(3,280	)	$	(1,301	)
Net cash used in investing activities		(301	)		(232	)
Net cash used in financing activities		(169	)		(358	)
Effect of exchange rates on cash, cash equivalents, and restricted cash		486			(59	)
Net decrease in cash, cash equivalents, and restricted cash		(3,264	)		(1,950	)
Cash, cash equivalents, and restricted cash at beginning of period		135,946			24,384
Cash, cash equivalents, and restricted cash at end of period	$	132,682		$	22,434

Cash flows from operating activities

Cash used in operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 of $93.53 million, was primarily due to ~~adjustments~~a to net ~~income~~loss ~~for certain non-cash items~~ of $894.38 million, ~~consisting~~and ~~primarily~~a ofdecrease ~~the~~in ~~gain~~cash onfrom ~~sale~~net ofchanges ~~our~~in ~~Physical~~operating ~~Security~~assets ~~Business~~and liabilities of $990.52 million,; aspartially ~~well~~offset asby ~~depreciation,~~adjustments ~~amortization~~to ~~and~~net ~~stock-based~~loss ~~compensation,~~for ~~offset~~certain bynon-cash ~~net~~items ~~income~~ of $751.27 million, ~~and~~consisting anof ~~increase~~depreciation, inamortization, ~~cash~~stock-based ~~from~~compensation, ~~net~~and ~~changes~~impairment inof operating ~~assets~~lease ~~and~~ROU ~~liabilities of $4~~asset.6 ~~million.~~

Cash used in operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 of $31.63 million, was primarily due to net loss of $34.96 million, apartially ~~decrease~~offset by an increase in cash from net changes in operating assets and liabilities of $41.64 million, ~~partially~~and ~~offset by~~ adjustments for certain non-cash items of $41.98 million, consisting primarily of depreciation, amortization and stock-based compensation.

Cash flows from investing activities

Cash ~~provided~~used byin investing activities for the ~~nine~~three months ended ~~September~~March 3031, 2025 and 2024 was $~~142~~0.53 million ~~which~~and ~~related~~$0.2 ~~primarily~~million, ~~to proceeds received in connection with the sale of our Physical Security Business in the third quarter of 2024~~respectively, ~~partially~~which ~~offset~~related byto capital expenditures for our manufacturing ~~facility~~facilities in Singapore and Thailand.

Cash used in investing activities for the nine months ended September 30, 2023 was $3.0 million related primarily to capital expenditures for our manufacturing facility in Thailand.

Cash flows from financing activities

Cash used in financing activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 was $110.72 million, which ~~consisted~~related ofto ~~net~~taxes ~~repayments~~paid ofrelated ~~$10.1~~to ~~million under our revolving loan facility with our lender, and~~ net share settlements of RSUs ~~of $1~~.6 ~~million.~~

Cash ~~provided~~used byin financing activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 was $100.54 million, which consisted of net borrowings of $95.9 million ~~under~~offset ~~our~~by ~~revolving~~repayments ~~loan~~of ~~facility~~$6.0 ~~with~~million under our ~~lender,~~revolving ~~proceeds~~loan ~~received from the exercise of warrants by 21 April Fund~~facility, LP and 21taxes ~~April~~paid ~~Fund,~~related ~~Ltd.~~to ~~of approximately $1.0 million, partially offset by~~ net share settlements of RSUs of $0.43 million.

Contractual Obligations

We lease facilities, certain equipment, and automobiles under non-cancelable operating lease agreements. See Note 1413, Leases, in the accompanying notes to our condensed consolidated financial statements.

Purchases for inventories are highly dependent upon forecasts of customer demand. Due to the uncertainty in demand from our customers, we may have to change, reschedule, or cancel purchases or purchase orders from our suppliers. These changes may lead to vendor cancellation charges on these orders or contractual commitments. See Note 1514, Commitments and Contingencies, in the accompanying notes to our condensed consolidated financial statements.

Our other long-term liabilities include gross unrecognized tax benefits, and related interest and penalties. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years in connection with these tax liabilities.

Off-Balance Sheet Arrangements

We have not entered into off-balance sheet arrangements, or issued guarantees to third parties.

Climate Change

We believe that neither climate change, nor governmental regulations related to climate change, have had a material effect on our business, financial condition or results of operations.

Critical Accounting Estimates

Our condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires management to establish accounting policies that contain estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These policies relate to revenue recognition, inventory, income taxes, ~~goodwill, intangible and~~ long-lived assets, and stock-based compensation. We have other important accounting policies and practices; however, once adopted, these other policies either generally do not require us to make significant estimates or assumptions or otherwise only require implementation of the adopted policy and not a judgment as to the policy itself. Management bases its estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Despite our intention to establish accurate estimates and assumptions, actual results may differ from these estimates under different assumptions or conditions.

During the three months ended ~~September~~March 3031, ~~2024~~2025, management believes there have been no significant changes to the items that we disclosed within our critical accounting policies and estimates in “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, ~~2023, as amended~~2024.

Recent Accounting Pronouncements

See Note 2, Significant Accounting Policies and Recent Accounting Pronouncements, in the accompanying notes to our unaudited condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report for a description of recent accounting pronouncements, which is incorporated herein by reference.

29Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, or Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Our disclosure controls and procedures have been designed to meet reasonable assurance standards. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Controls over Financial Reporting

We have made no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended ~~September~~March 3031, ~~2024~~2025, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

3025

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

We are and from time to time, may become subject to various legal proceedings and claims arising in the ordinary course of business or could be named a defendant in other lawsuits. Legal proceedings could result in material costs, occupy significant management resources and entail penalties, even if we prevail. The outcome of such claims or other proceedings cannot be predicted with certainty and may have a material effect on our financial condition, results of operations or cash flows.

Item 1A. Risk Factors

Our business and results of operations are subject to numerous risks, uncertainties, and other factors that you should be aware of. You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2023,~~2024 ~~as amended,~~ under the heading “Risk Factors.” There have been no material changes from the risk factors disclosed in our ~~2023~~2024 Annual Report on Form 10-K, ~~as amended,~~ other than as set forth below. The risks, uncertainties and other factors described in the risk factors are not the only ones facing our company. Additional risks, uncertainties and other factors not presently known to us or that we currently deem immaterial may also impair our business operations. Any of the risks, uncertainties and other factors could have a materially adverse effect on our business, financial condition, results of operations, cash flows or product market share and could cause the trading price of our common stock to decline substantially.

~~Risks~~Changes ~~Related~~in toU.S. ~~Our~~trade ~~Intellectual~~policy ~~Property,~~and the impact of tariffs may have a material adverse effect on our business and ~~Litigation~~results of operations.

WeOur ~~may~~business, ~~not~~financial condition and results of operations may be ~~able~~adversely affected by uncertainty and changes in U.S. trade policies, including tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments. For example, the U.S. government has recently announced changes to ~~protect~~its ~~our~~trade ~~intellectual~~policy, ~~property~~including ~~rights~~increasing tariffs on imports, ~~which~~in ~~could~~some ~~make~~cases ussignificantly. ~~less~~Several ~~competitive~~of these recent tariff actions have been followed by announcements of limited exemptions, temporary pauses, and ~~cause~~retaliatory usmeasures toagainst ~~lose~~certain ~~market~~U.S. ~~share~~imports.

~~Our~~As ~~future~~of ~~success~~April ~~will~~1, ~~depend~~2025, inapproximately ~~part,~~25% ~~upon~~of our ~~intellectual~~finished ~~property~~goods ~~rights~~are ~~and~~imported ~~our~~into ~~ability~~the toU.S., ~~protect~~either ~~these~~by ~~rights.~~us Weor ~~rely~~our oncustomers. aAny ~~combination~~imposition of ~~patent,~~or ~~copyright,~~increase ~~trademark~~in ~~and~~tariffs ~~trade~~applicable ~~secret laws, nondisclosure agreements and other contractual provisions~~ to ~~establish~~us, ~~maintain~~including ~~and~~reciprocal ~~protect our proprietary rights. From time to time~~tariffs, wewould ~~may~~increase bethe ~~required~~cost toof ~~use~~importing ~~litigation to protect~~ our ~~proprietary technology~~products. AsThis awould ~~result,~~in weturn ~~may~~increase ~~incur~~our ~~substantial~~ costs ~~and~~unless we ~~may~~are ~~not~~able beto ~~successful~~implement inactions ~~any~~to ~~such~~offset ~~litigation.~~these ~~Despite~~costs, ~~our~~such ~~efforts~~as toleveraging ~~protect~~tariff ~~our~~exemptions ~~proprietary~~where ~~rights~~possible, ~~unauthorized~~taking ~~third~~actions ~~parties~~to ~~may~~optimize ~~copy aspects of~~ our ~~products,~~supply ~~obtain~~chain ~~and~~or ~~use~~source ~~information~~from ~~that~~alternative ~~we regard as proprietary~~suppliers, or ~~infringe~~increasing ~~upon~~ our ~~patents~~prices. InWe ~~addition,~~are ~~the~~currently ~~laws~~developing ofa ~~some~~pass-through ~~foreign~~strategy ~~countries~~to ~~do not~~ protect ~~proprietary~~margins, and ~~intellectual~~preparing ~~property~~for ~~rights~~multiple toscenarios ~~the~~should ~~same~~reciprocal ~~extent~~tariffs asresume doafter the ~~laws~~current ~~in the U~~pause.S. ~~Because~~There ~~many~~can ofbe ~~our~~no ~~products~~assurance ~~are~~that ~~sold~~we ~~and~~will abe ~~significant~~able ~~portion~~to ofsuccessfully ~~our~~offset ~~business~~or ismitigate ~~conducted~~any ~~outside~~resulting ~~the~~increase ~~U.S.,~~in our ~~exposure~~costs. toIf ~~intellectual~~we ~~property~~are ~~risks~~unable ~~may~~to bepass ~~higher.~~on ~~Our~~any ~~efforts~~cost toincreases ~~protect~~or ~~our~~if ~~proprietary~~supply and ~~intellectual~~demand ~~property~~conditions ~~rights~~will ~~may~~ not besupport ~~adequate.~~price ~~Additionally,~~increases ~~there~~for isour aproducts, ~~risk that~~ our ~~competitors~~revenue ~~will~~and ~~independently~~gross ~~develop~~margin ~~similar~~would ~~technology~~be ornegatively ~~duplicate~~impacted. ~~our~~In ~~products~~addition, orretaliatory ~~design~~actions ~~around~~by ~~patents~~other orcountries ~~other~~in ~~intellectual~~response ~~property~~to ~~rights~~U.S. Iftrade wepolicy ~~are~~could ~~unsuccessful~~increase inprices ~~protecting~~for our ~~intellectual property or our~~ products orand ~~technologies~~could ~~are~~negatively ~~duplicated~~affect bydemand ~~others,~~for our ~~competitive position could be harmed and we could lose market share~~products.

AsTariffs anor ~~example,~~other ~~the~~trade ~~complexity~~restrictions ~~and~~may ~~uncertainty~~also oflead ~~European~~to ~~patent laws have~~ increased incosts ~~recent~~for ~~years.~~our ~~In Europe~~customers, adeclining ~~new~~consumer ~~unitary patent system took effect June 1~~confidence, ~~2023~~significant ~~which~~inflation ~~will~~and ~~significantly~~diminished ~~impact~~expectations ~~European~~for ~~patents~~the economy, ~~including~~as ~~those~~well ~~granted~~as ~~before~~ultimately ~~the~~reduced ~~introduction~~demand offor ~~such~~our ~~a system~~products. ~~Under~~Such ~~the~~conditions ~~unitary~~could ~~patent system, European applications~~ have ~~the~~a ~~option,~~material ~~upon~~adverse ~~grant~~impact ofon aour ~~patent~~business, ofresults ~~becoming a Unitary Patent which will be subject to the jurisdiction~~ of ~~the~~operations ~~Unitary~~and ~~Patent~~cash ~~Court (UPC)~~flows. AsIn ~~the UPC is a new court system~~addition, ~~there~~tariff isactions noby ~~precedent for~~ the ~~court, increasing the uncertainty of any litigation~~U.S. ~~Patents~~and ~~granted~~retaliatory ~~before~~actions ~~the~~by ~~implementation~~other ofcountries ~~the UPC will~~ have ~~the~~caused ~~option~~and ofmay ~~opting~~in ~~out of~~ the ~~jurisdiction~~future ofcause ~~the~~significant ~~UPC~~disruption and ~~remaining~~volatility ~~as national patents~~ in the ~~UPC~~financial ~~countries.~~markets, ~~Patents~~which ~~that~~could ~~remain~~adversely ~~under~~affect the ~~jurisdiction~~availability, ofterms ~~the~~and ~~UPC~~cost ~~will~~of ~~be potentially vulnerable to a single UPC-based revocation challenge that~~capital, ifwhich ~~successful, could invalidate the patent~~ in ~~all~~turn ~~countries~~could ~~who~~increase ~~are~~our ~~signatories~~costs ~~to the UPC. We cannot predict with certainty the long-term effects~~ of ~~the~~capital ~~unitary~~and ~~patent~~limit ~~system~~our ~~and~~access ~~any~~to ~~potential~~external ~~changes~~financing sources.

~~Risks~~Changes ~~Related~~in tariffs and trade restrictions can be announced with little or no advance notice. The adoption and expansion of tariffs or other trade restrictions, increasing trade tensions, or other changes in governmental policies related to ~~the~~tariffs, ~~Company’s~~trade ~~IoT~~agreements ~~Business~~or trade policies are difficult to predict, which makes risks difficult to anticipate and mitigate. If we are unable to navigate further changes in U.S. or international trade policy, it could have a material adverse impact on our business, financial condition and results of operations.

~~The growing number of competitors in the RFID industry is posing additional risks to our business.~~ 26

As the RFID industry continues to grow, there has been an increase in the number of companies entering the market, including from China. Competitors have and may continue to sell products or solutions at low prices in order to gain market share, because they have lower costs than other competitors, or for other reasons. The number of contract manufacturers and the amount of manufacturing capacity has also increased significantly. If the growth of the RFID industry does not keep pace with the increased manufacturing capacity, this may result in downward pressure on pricing and reduced margins, each of which could have a serious adverse impact on our business, financial condition and results of operations.

Our success depends largely on the continued service and availability of key personnel.

Our future success depends on our ability to continue to attract, retain, and motivate our senior management as well as qualified technical personnel in the RFID industry. Competition for these employees is intense and many of our competitors may have greater name recognition and significantly greater financial resources to better compete for these employees. We have in the past, and may in the future, experience the loss of employees to our competitors. If we are unable to retain our existing personnel, or attract and retain additional qualified personnel, specifically following the completion of the Asset Sale, our growth may be limited. Our key employees are employed on an “at will” basis, meaning either we or the employee may terminate their employment with us at any time. The loss of or inability to hire or replace key employees could slow our product development processes and sales efforts or harm our reputation. Also, if our stock price declines, as it has recently, it may result in difficulty attracting and retaining personnel as equity incentives generally comprise a significant portion of our employee compensation.

The separation of the Physical Security Business following the closing of the Asset Sale may significantly disrupt our operations.

The separation of the Physical Security Business from our operations and financial reporting and corporate functions has required us to reconfigure our system processes, transactions, data and controls. This transition has required significant management attention, capital and personnel resources, and the coordination of our system providers and internal business teams. We may experience difficulties, including delays and higher than anticipated costs related to capital and personnel resources, as we continue to manage these changes, including loss or corruption of data, delays in finalizing our financial records for each accounting period and related delays in completion of our financial reporting, unanticipated expenses, and lost revenue. In addition, any delays in finalizing our records could result in our failure to timely file our periodic reports with the SEC, which could limit our access to the public markets to raise debt or equity capital, restrict our ability to issue equity securities, and result in the delisting of our common stock and/or regulatory sanctions from the SEC or The Nasdaq Stock Market, any of which could have a material adverse impact on our operations. Difficulties in continuing to implement the separation of the Physical Security Business could disrupt our operations, divert management’s attention from key strategic initiatives and have an adverse effect on our results of operations, financial condition and cash flows.

Failure to expand our IoT Business to penetrate new markets and scale successfully within those markets may negatively impact our revenues and financial condition.

Following the closing of the Asset Sale, our growth strategy for the IoT Business depends in part on our ability to penetrate emerging markets, such as the medical device market, and scale successfully within those markets. The medical device market and other new markets present distinct and substantial challenges and risks and will likely require us to develop new customized solutions to address the particular requirements of that market. Additionally, these new market opportunities may be outside the scope of our proven expertise or in areas which have unproven market demand, and the utility and value of new products developed by us may not be accepted in the markets served by the new products. Our inability to gain market acceptance of new products could prevent us from scaling successfully within new markets and may harm our future operating results. Our future success also depends on our ability to manufacture new products to meet customer demand in a timely and cost-effective manner. Difficulties or delays in replacing existing products with new products we introduce or in manufacturing improved or new products in sufficient quantities to meet customer demand could diminish future demand for our products and harm our future operating results. In addition, if the medical device market and other new market opportunities for our current and future products are smaller than estimated or do not develop as we expect, our growth may be limited and our business, financial condition and results of operations could be adversely affected. Even if the medical device market and other emerging markets develop as expected, we may not be able to achieve the high gross margins associated with such markets, or, if we do achieve such gross margins, we may not be able to sustain them.

We continue to incur significant expenses and administrative burdens as a public company despite our revenue being significantly lower following the Asset Sale, which could have an adverse effect on our business, financial condition and results of operations.

Following the closing of the Asset Sale, we continue to incur significant legal, accounting, administrative and other costs and expenses as a public company. Because our revenue has and will continue to be significantly reduced as a result of the divestiture of the Physical Security Business, these expenses will represent a larger percentage of our revenue and will have a negative effect on our gross margins. If we are unable to generate sufficient revenue through our IoT Business, these increased expenses as a percentage of our revenue may have an adverse effect on our business, financial condition and results of operations.

Uncertainty regarding the use of proceeds from the Asset Sale and our future operations may negatively impact the value and liquidity of our common stock.

As consideration for the Asset Sale, we received approximately $144.3 million in cash, subject to further customary adjustments as set forth in the Purchase Agreement. Our board of directors will have discretion regarding the use of proceeds from the Asset Sale and plans to use a portion of the net proceeds to pursue growth opportunities for the IoT Business. It may also use the funds to pay dividends and distributions on or redeem or repurchase our capital stock pursuant to our stock repurchase program; for working capital and other general corporate purposes, which may include sales and marketing activities, research and development, general and administrative matters and capital expenditures; to invest in or acquire complementary businesses, products, services, technologies or assets; or to otherwise execute our growth strategy. Although our board of directors continues to evaluate various alternatives regarding use of the proceeds from the Asset Sale, it has not yet identified any specific plans, investments or acquisitions or committed to making any such decision by a particular date. This uncertainty may negatively impact the value and liquidity of our common stock. While our board of directors has approved a stock repurchase program following the Asset Sale, we cannot guarantee that the program will be fully completed. The program does not obligate us to repurchase any specific dollar amount or number of shares of our common stock. Additionally, it has no expiration date and may be suspended or terminated at any time at our discretion.

We may use the net proceeds for purposes that do not yield a significant return or any return at all for our stockholders. In addition, pending their use, we may invest the net proceeds from the Asset Sale in a manner that does not produce income or that loses value, or in a manner that stockholders do not agree with. For example, repurchases pursuant to our stock repurchase program could affect the trading price of our stock, increase volatility and reduce the market liquidity for our common stock. If we do not invest or apply the net proceeds from the Asset Sale in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

The amount of net proceeds that we receive from the Asset Sale is subject to decrease.

We received approximately $144.3 million in cash as consideration for the Asset Sale, which amount is subject to further customary adjustments as set forth in the Purchase Agreement. Such post-closing adjustment process, including any disputes between us and the Buyer regarding the final purchase price and any adjustments thereof, could result in a significant reduction to the amount of net proceeds that we receive from the Asset Sale.

Our business prospects may diminish following completion of the Asset Sale and our stock price has and may continue to decline.

We continue to operate our IoT Business despite the sale of assets that have historically generated a significant portion of our revenue. For example, the Physical Security Business generated approximately 63% of the Company’s revenue for the fiscal year ended December 31, 2023. The divestiture of the Physical Security Business resulted in material cash proceeds to the Company and a reduction in operating expenses and liabilities; however, our revenue following the closing of the Asset Sale is now limited to our IoT Business. A failure by us to grow our IoT Business could result in our business prospects diminishing, and the value and liquidity of our common stock could be negatively impacted.

We cannot provide any assurances that we will realize the intended benefits of the Asset Sale.

We cannot provide any assurances that we will realize the intended benefits of the Asset Sale. We expect to continue to focus our resources, capital, and management attention towards expanding our IoT Business. However, we may not be able to realize our goals for the IoT Business. In addition, we have and will continue to experience a significant decrease in revenue as a result of the sale of the Physical Security Business. Any failure to realize the intended benefits of the Asset Sale could have a material adverse impact on our future operating results and financial condition and could materially and adversely affect our stock price or trading volume.

To the extent we pursue acquisitions, strategic alliances, or investments in other businesses, products, services, technologies or assets, we could experience operating difficulties and other consequences that may harm our business, financial condition, and operating results, and we may not be able to successfully consummate favorable transactions or successfully integrate such acquisitions.

We expect to apply a portion of the net proceeds from the Asset Sale to pursue growth opportunities for the IoT Business, including potentially investing in opportunities such as acquisitions of complementary businesses, products, services, technologies or assets. We may also pursue strategic alliances that leverage our core technology and industry experience to expand our IoT offerings or make investments in other companies or technologies.

The identification of suitable acquisition candidates is difficult, and we may not be able to complete acquisitions on favorable terms, if at all. With respect to any future acquisitions, we may not be able to integrate such acquisitions successfully into our existing business, and we could assume unknown or contingent liabilities. Any acquisitions by us also could result in significant write-offs or the incurrence of debt and contingent liabilities, any of which could harm our operating results. Furthermore, the loss of customers, partners or suppliers following the completion of any acquisition could harm our business. Changes in services, sources of revenue, and branding or rebranding initiatives may involve substantial costs and may not be favorably received by customers, resulting in an adverse impact on our financial results, financial condition and stock price. Integration of an acquired company or business also may require management’s time and resources that otherwise would be available for ongoing development of our existing business. We may also need to divert cash from other uses, or issue equity securities in order to fund these integration activities and these new businesses. If the stock price of our common stock is low or volatile, we may not be able to acquire other companies for stock. In addition, our stockholders may experience substantial dilution as a result of additional securities we may issue for acquisitions. Open market sales of substantial amounts of our common stock issued to stockholders of companies we acquire could also depress our stock price.

Ultimately, we may not realize the anticipated benefits of any acquisition, strategic alliance, or investment, or these benefits may take longer to realize than we expected. The occurrence of any of these risks could harm our business, results of operations, and financial condition.

Changes in management following the closing of the Asset Sale may adversely affect the future performance of our IoT Business.

In connection with the closing of the Asset Sale, our former Chief Executive Officer, Steven Humphreys, and certain other members of our senior management joined Buyer. The senior management of the Company currently includes Kirsten Newquist, Chief Executive Officer, Justin Scarpulla, Chief Financial Officer, Edward Kirnbauer, Vice President, Global Corporate Controller, Dr. Manfred Mueller, Chief Strategy Officer, Amir Khoshniyati, Executive Vice President and General Manager, IoT Solutions, and Boon Yong (BY) Koh, Executive Vice President, Operations. In connection with these changes in management and the sale of our Physical Security Business, there have been and will continue to be changes to the Company’s operations and our key strategies and tactical initiatives related to our IoT Business over time. If we do not successfully implement and adapt to these changes, we may be unable to successfully execute our long-term business development plans for our IoT Business, which could adversely affect our financial condition and results of operations. Further, the future performance of our IoT Business will depend, in part, on the successful transition of our workforce to our new operating and organizational structure, and our inability to successfully manage these transitions could be viewed negatively by our customers, employees, investors and other third-party partners, and could have an adverse impact on our business and results of operations.

We are subject to five-year non-competition and non-solicitation covenants under the Purchase Agreement, which will prevent us from reentering the Physical Security Business.

We are subject to five-year non-competition and non-solicitation covenants in the Purchase Agreement. During such five-year period, the Company and its controlled affiliates are restricted from directly or indirectly engaging with, managing or operating, or having any ownership interest in any person that engages with, manages, or operates, a business that is competitive with the Physical Security Business or competes for customers of the Physical Security Business, in each case, with respect to geographies that the Physical Security Business participated in as of the closing of the Asset Sale. In addition, during this five-year period, the Company has agreed, not to directly or indirectly hire, engage, recruit, employ, solicit or otherwise attempt to employ or engage or enter into any business relationship with any Business Employee or Acquired Entity Employee (each as defined in the Purchase Agreement), or induce or attempt to induce any such employee to leave his or her employment with Buyer or Buyer’s affiliates, subject to certain customary limitations. These limitations will prevent us from reentering the Physical Security Business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended ~~September~~March 3031, ~~2024~~2025, we repurchased ~~325~~47,~~781~~538 shares of our common stock. ~~The~~surrendered ~~table~~to ~~below~~the ~~sets~~Company ~~forth~~to ~~information~~satisfy ~~regarding~~tax ~~the~~withholding ~~Company’s~~obligations ~~purchases~~in connection with the vesting of ~~its~~RSUs ~~common~~issued ~~stock~~to employees. There were no repurchases under the Stock Repurchase Program during the three months ended ~~September~~March 3031, ~~2024:~~2025.

	Issuer Purchases of Equity Securities
Period	Total number of shares purchased(1)		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
July 1, 2024 – July 31, 2024		9,561	$	4.04		—		—
August 1, 2024 – August 31, 2024		8,114		3.58		—		—
September 1, 2024 – September 30, 2024		308,106		3.22		—		—
Total		325,781	$	3.25		—
(1) Consists of shares surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of restricted stock units issued to employees.

The table below sets forth information regarding the Company’s purchases of its common stock during the three months ended March 31, 2025:


	Issuer Purchases of Equity Securities
Period	Total number of shares purchased(1)		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
January 1, 2025 – January 31, 2025		5,851	$	3.66		—		—
February 1, 2025 – February 28, 2025		39,276		3.51		—		—
March 1, 2025 – March 31, 2025		2,411		3.67		—		—
Total		47,538	$	3.54		—

(1) Consists of shares surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of RSUs issued to employees.

Item 5. Other Information

Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements

During the quarter ended ~~September~~March 3031, ~~2024~~2025, no director or officer adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits

Exhibit Number		Description
2.1*		Stock and Asset Purchase Agreement dated April 2, 2024 between Identiv, Inc. and Hawk Acquisition, Inc. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on April 3, 2024).
10.1^		Amendment No. 1 to Stock and Asset Purchase Agreement dated September 6, 2024 between Identiv, Inc. and Hawk Acquisition, Inc.
31.1^		Certification of Chief Executive Officer pursuant to Section 302 of the Securities Exchange Act of 1934.
31.2^		Certification of Chief Financial Officer pursuant to Section 302 of the Securities Exchange Act of 1934.
32#		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document with embedded Linkbase Documents.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

^ Filed herewith.

# Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates them by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IDENTIV, INC.
November 12, 2024	By:	/S/ Kirsten Newquist
May 9, 2025	By:	/S/ Kirsten Newquist
		Kirsten Newquist
		Chief Executive Officer
		(Principal Executive Officer)
November 12, 2024	By:	/S/ Justin Scarpulla
May 9, 2025	By:	/S/ Justin Scarpulla
		Justin Scarpulla
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Filing Compare · Identiv, Inc.