美国
证券交易委员会
华盛顿特区20549
表格
截至2024年6月30日季度结束
为过渡期从 至 。
委员会档案编号：
（依凭章程所载的完整登记名称）
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(依据所在地或其他管辖区) |
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(国税局雇主识别号码) |
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(总部办公地址) |
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（邮政编码） |
注册人的电话号码，包括区号：(
根据法案第12(b)条规定注册的证券：
每种类别的名称 |
交易标的 |
每个注册交易所的名称 |
请以选项中的勾选表示登记公司是否：（1）在过去12个月内已根据1934年证券交易法第13条或第15(d)条的规定提交了应当提交的所有报告（或者在登记公司需要提交这些报告的更短时间内）；以及（2）过去90天内一直受到此类提交要求的要求。
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请勾选指示登记者是否为大型快速提交人、快速提交人、非快速提交人、较小的报告公司或新兴成长型公司。请参阅交易所法规120亿2条，了解「大型快速提交人」、「快速提交人」、「较小的报告公司」和「新兴成长型公司」的定义。
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加速归档人 |
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非加速归档人 |
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小型报告公司 |
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新兴成长型企业 |
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如果一家新兴成长公司，请打勾表示申请人已选择不使用根据交易所法第13(a)条提供的任何新的或修订的财务会计准则的扩展过渡期遵守。 ☐
请勾选表示登记者是否为外壳公司（根据交易所法第120亿2条定义）。 是 ☐ 否
截至2024年10月11日,
impinj inc
第10-Q表格季报告
表格 内容
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页面 |
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项目1。 |
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项目2。 |
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项目3。 |
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项目4。 |
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项目1。 |
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项目1A。 |
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项目2。 |
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项目3。 |
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项目4。 |
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项目5。 |
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第6项。 |
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51 |
2
日sk因子摘要
我们的业务受到许多风险和不确定性的影响，包括本报告中标题为“风险”一节中所强调的那些。
因素。这些风险包括但不限于以下:
3
第一部分 — 金融关联信息
条目1。 财务报表（未经查核）。附注（未经查核）。
impinj inc
简明综合账目表缩编平衡表
（以千为单位，除每股面值外，未经审计）
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2024年9月30日 |
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2023年12月31日 |
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资产： |
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流动资产: |
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现金及现金等价物 |
$ |
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短期投资 |
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应收帐款净额 |
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存货 |
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预付费用及其他流动资产 |
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全部流动资产 |
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长期投资 |
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— |
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物业及设备，扣除折旧后净值 |
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无形资产，扣除累计摊销 |
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营运租赁权使用资产 |
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其他非流动资产 |
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商誉 |
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资产总额 |
$ |
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$ |
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负债及股东权益： |
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流动负债： |
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应付账款 |
$ |
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$ |
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应计报酬及员工相关福利 |
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应计负债及其他流动负债 |
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营运租赁负债的流动部分 |
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长期债务的当期偿还 |
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已逾期的收益当前部分 |
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流动负债合计 |
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长期负债 |
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扣除当期偿还后之经营租赁负债净额 |
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递延所得税负债，净额 |
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透过分期收入取得的未来收入，减去当前部分 |
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总负债 |
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股东权益： |
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优先股，面额$0.01，授权股数为5,000,000股，发行且流通股数为截至2024年6月30日和2023年12月31日之184,668,188股和181,364,180股。 |
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0.01 |
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资本公积额额外增资 |
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其他综合收益累计额 |
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累积亏损 |
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股东权益总额 |
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负债总额及股东权益合计 |
$ |
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$ |
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请参阅简明合并基本报表附注。
4
impinj inc
综合财务报表摘要综合损益表
(以千为单位，除每股数据外，未经审核)
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截至9月30日的三个月 |
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截至9月30日的九个月 |
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2024 |
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2023 |
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2024 |
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2023 |
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营业收入 |
$ |
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$ |
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$ |
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$ |
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营业成本 |
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毛利润 |
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营业费用： |
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研发费用 |
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销售和市场推广费用 |
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总务与行政 |
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无形资产摊销 |
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重组成本 |
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— |
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— |
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营业费用总计 |
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营运亏损 |
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其他收益，净额 |
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诉讼和解所得 |
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— |
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— |
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— |
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利息费用 |
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( |
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税前收入（亏损） |
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( |
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所得税效益（费用） |
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( |
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净利润（损失） |
$ |
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$ |
( |
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$ |
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$ |
( |
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每股基本稀释后净收益（损失） |
$ |
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$ |
( |
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$ |
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$ |
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每股稀释后净收益（损失） |
$ |
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$ |
( |
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$ |
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$ |
( |
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基本每股流通股数加权平均 |
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稀释每股流通股数加权平均 |
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请参阅简明合并基本报表附注。
5
impinj inc
综合收益（损失）缩减综合财务报表综合收益（损失）简明综合财务报表
（以千为单位，未经审计）
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截至九月三十日止三个月， |
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截至九月三十日止九个月 |
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2024 |
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2023 |
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2024 |
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2023 |
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净收入（亏损） |
$ |
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$ |
( |
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$ |
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$ |
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其他综合收益（亏损）（除税）： |
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投资未实现收益（亏损） |
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外币转换调整 |
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其他综合收益总额（亏损） |
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综合收益（亏损） |
$ |
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$ |
( |
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$ |
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$ |
( |
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请参阅简明合并基本报表附注。
6
impinj inc
综合财务报表摘要现金流量表
（以千为单位，未经审计）
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截至9月30日的九个月 |
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2024 |
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2023 |
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营业活动： |
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净利润（损失） |
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$ |
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$ |
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调整净损失为经营活动提供的净现金流量： |
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折旧与摊提 |
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股份报酬 |
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股权重组变动费用 |
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— |
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投资折价增值或偿还溢价 |
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( |
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( |
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债务发行成本摊销 |
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推迟所得税费用 |
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( |
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( |
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收购相关条件负债重估 |
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— |
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营运资产和负债变动，扣除取得金额净额： |
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应收帐款 |
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( |
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存货 |
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( |
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预付费用及其他资产 |
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( |
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应付账款 |
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( |
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应计报酬及员工相关福利 |
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( |
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应计利益及其他负债 |
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收购相关的待定对价负债 |
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( |
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— |
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营运租赁权使用资产 |
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营业租赁负债 |
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( |
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( |
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逐步认列的收入 |
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( |
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营运活动之净现金提供（使用）量 |
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投资活动： |
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投资购买 |
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( |
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— |
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来自投资销售收入 |
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— |
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债券到期收回之现金增加额 |
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产销土地及设备款项 |
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— |
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购买无形资产 |
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— |
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( |
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购买不动产和设备 |
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( |
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业务收购净现金收入 |
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— |
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投资活动提供的（使用的）净现金 |
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融资活动: |
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行使期权和员工股票购买计划所得 |
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支付相关收购条件的款项 |
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( |
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筹资活动提供的净现金 |
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汇率变动对现金及现金等价物的影响 |
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现金及现金等价物的净增加（减少） |
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现金及现金等价物 |
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期初 |
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期末 |
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$ |
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$ |
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现金流量附注： |
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支付利息的现金 |
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尚未支付的固定资产和设备购买 |
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由取得ROU资产产生之营运租赁负债 |
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由重新衡量ROU资产产生之租赁负债 |
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收购相关条件考虑负债 |
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请参阅简明合并基本报表附注。
7
impinj inc
股东权益变动表简明合并财务报表
（以千为单位，未经审计）
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累计 |
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额外的 |
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其他 |
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总计 |
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普通股 |
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实收资本 |
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累计 |
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综合 |
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股东权益 |
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股份 |
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金额 |
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资本 |
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赤字累计 |
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收入（损失） |
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股权 |
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2023年12月31日余额 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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发行普通股股票 |
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— |
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— |
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股份报酬 |
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— |
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— |
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— |
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股权重组变动费用 |
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— |
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— |
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— |
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净利润 |
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— |
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— |
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— |
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— |
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其他全面损失 |
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— |
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— |
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— |
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— |
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( |
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( |
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2024年3月31日止结余 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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发行普通股股票 |
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— |
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— |
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股份报酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
净利润 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
其他全面损失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
2024年6月30日余额 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
发行普通股股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股份报酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
净利润 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
其他综合收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
2024年9月30日结余 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
累计 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
额外的 |
|
|
|
|
|
其他 |
|
|
总计 |
|
||||||
|
|
普通股 |
|
|
实收资本 |
|
|
累计 |
|
|
综合 |
|
|
股东权益 |
|
|||||||||
|
|
股份 |
|
|
金额 |
|
|
资本 |
|
|
赤字累计 |
|
|
收入（损失） |
|
|
股权 |
|
||||||
2022年12月31日结余 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
发行普通股股票 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
股份报酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
净损失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
其他综合收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
2023年3月31日结束余额 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
发行普通股股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股份报酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
净损失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
普通股票发行，用于Voyantic收购（附注4） |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
其他综合收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
2023年6月30日结余 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
发行普通股股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股份报酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
净损失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
其他全面损失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
截至2023年9月30日的结余 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
请参阅简明合并基本报表附注。
8
impinj inc
缩写财务报表备注基本报表
（未经审计）
附注1. 重大会计政策摘要
报告基础
附带的简明综合基本报表包括Impinj, Inc.及其全资附属公司。我们在合并时排除了公司间的余额和交易。我们根据美国通用会计原则（"GAAP"）和美国证券交易委员会（"SEC"）的适用规则和法规编制了这些简明综合基本报表，关于中期财务报告。按照这些规则和法规的规定，一些通常包含在按照GAAP编制的财务报表中的资讯和附注披露已被缩短或省略。因此，这些中期简明综合基本报表应与Impinj, Inc.截至2023年12月31日的年度报告形式Form 10-k中包含的经审计合并财务报表和附带的附注一起阅读，该报告已于2024年2月12日提交给SEC。
根据管理层的意见，未经审计的简明综合中期财务报表反映了包括正常重复性调整在内的所有调整，以公正陈述我们财务状况，营业成果和我们所呈现的现金流量的期间。中期结果未必代表全年结果或任何未来期间的结果。
估计的使用
知识产权许可
在2024年3月13日，我们与恩智浦公司（"恩智浦"）签订了一项解决方案和专利交叉许可协议（“解决协议”）。根据解决协议，恩智浦进行了一次性支付$
我们认定从授权使用功能性知识产权（例如上述讨论的解决协议）获得的营业收入，在控制权转移给客户的时候，一般是在交货时，或者随著使用发生。有关与恩智浦的解决协议的详细内容，请参见附注6「承诺和条款」。
最近发布的会计准则尚未采纳
在2023年11月，FASB发布了ASU 2023-07《分部报告（主题280）：改进报告性分部披露》，通过增强有关重要分部支出的披露，包括对具有单一报告分部的上市公司。该标准适用于2023年12月31日后开始的财政年度和2024年12月31日后开始的财政年度内的中期时段。我们目前正在评估该标准对我们基本报表披露的影响。
2023年12月，FASB发布了ASU 2023-09《所得税（主题740）：改善所得税披露》，修改了所得税披露要求，以提高基本报表用户数的透明度和决策有用性。此标准自2024年12月31日后开始的财政年度起生效。我们目前正在评估此标准对我们的基本报表披露是否有任何影响。
9
附注 2. 公平值衡量
会计标准将公平值定义为在衡量日期当天，在主要或最有利市场上在市场参与者之间进行有秩序交易时将获得以卖出资产或支付以转让负债（退出价）的价格。标准还建立了一个公平值层次结构，要求实体在衡量公平值时最大程度地利用可观察的输入，并最小化使用不可观察的输入。可能用于衡量公平值的输入有三个级别：
截至2024年9月30日，我们没有任何处于第3级的金融资产或负债，并且截至2023年12月31日，只有与Voyantic Oy收购相关的收益诉求负债处于第3级。我们将此负债归类为第3级，因为我们使用了重要不可观察的输入来确定公平值。
我们在估计我们的公平值衡量时采用了以下方法和假设：
现金等价物 — Cash equivalents comprise highly liquid investments, including money market funds with original maturities of less than three months at the acquisition date. We record the fair value measurement of these assets based on quoted market prices in active markets.
投资 — Our investments comprise fixed income securities, which include U.S. government agency securities, corporate notes and bonds, commercial paper, treasury bills and asset-backed securities. The fair value measurement of these assets is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
长期债务 — See Note 7 for the carrying amount and estimated fair value of the Notes.
待定先决条件 — The contingent consideration liability is related to our acquisition of Voyantic Oy (see Note 4: Goodwill and Intangible Assets). We paid the contingent consideration amount of $
以下表格展示了按照公允价值反复进行评估的资产和负债余额，按公允价值层次内的水平，截至提供的日期（以千元计）。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||||||||||||||||||||||||||
|
|
一级 |
|
|
二级 |
|
|
等级 3 |
|
|
总计 |
|
|
一级 |
|
|
二级 |
|
|
等级 3 |
|
|
总计 |
|
||||||||
现金等价物： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
货币市场基金 |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||||
美国国债 |
|
|
|
|
|
7,973 |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
商业本票 |
|
|
|
|
|
30,815 |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
现金等价物总额 |
|
|
|
|
|
38,788 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
短期投资： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
美国政府机构证券 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
美国国债 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
洋基债券 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
代理机构债券 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
资产支持证券 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
$ |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
商业本票 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
短期投资总额 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
长期投资： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
美国政府机构证券 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
美国国债 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
$ |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
总长期投资 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
总计 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
收购相关的条件性负债 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
公平价值的总负债 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
10
以下表格提供了有关负债的额外信息，根据公司使用Level 3数据来判断公允价值（以千为单位）。
|
|
截至9月30日的九个月 |
|
|
|
|
2024 |
|
|
1月1日的余额 |
|
$ |
|
|
由于再评估，应变价项下可变债负债的公允价值变化 |
|
|
|
|
已支付的应变债负债款项 |
|
|
( |
) |
截至9月30日之余额 |
|
$ |
|
|
在收购日期，我们使用不可观察的数据记录了与Voyantic Oy收购有关的应变债负债的公允价值，并使用了Monte Carlo模拟期权定价框架，包括有关财务预测、折扣率和预测营业收入和毛利的合同条款和假设。制定和判定Level 3公允价值测量和公允价值计算的不可观察数据是管理层的责任，并得到第三方估值专家的协助。在2024年第二季度，我们支付了应变债负债，截至2024年9月30日，应变债负债的金额为$
截至2023年12月31日，应付的条件性考量负债为$
我们预计短期投资将在报告日后的1年内到期，长期投资将在1至3年内到期。详见附注7关于我们可转换债券到期的携带金额和估计公允价值的情况
投资
下表列出按照表示日期（以千位）列出我们财务资产的成本或摊销成本，毛未实现收益，毛未实现亏损和总估计公允价值
|
2024年9月30日 |
|
|||||||||||||
|
成本或 |
|
|
毛额 |
|
|
毛额 |
|
|
Total Estimated |
|
||||
|
摊销后成本 |
|
|
未实现收益 |
|
|
未实现亏损 |
|
|
公平价值 |
|
||||
描述： |
|
|
|
|
|
|
|
|
|
|
|
||||
货币市场基金 |
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
美国政府机构证券 |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
美国国债 |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
$ |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
商业本票 |
|
|
|
|
|
|
|
— |
|
|
|
|
|||
总计 |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
2023年12月31日 |
|
|||||||||||||
|
Cost or |
|
|
毛额 |
|
|
毛额 |
|
|
总估计 |
|
||||
|
摊销后成本 |
|
|
未实现收益 |
|
|
未实现亏损 |
|
|
公平价值 |
|
||||
描述： |
|
|
|
|
|
|
|
|
|
|
|
||||
货币市场基金 |
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
美国政府机构证券 |
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
美元债券型 |
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
机构债券型 |
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
资产支持证券 |
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
总计 |
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
||
持有不足12个月的可转让证券估计公允价值为 〔数字〕 美元的连续亏损
11
N注3. 库存
下表提供截至所示日期的库存明细（以千计）：
|
|
|
|
|
|
|
||
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
原材料 |
|
$ |
|
|
$ |
|
||
在制品 |
|
|
|
|
|
|
||
成品 |
|
|
|
|
|
|
||
19,782 |
|
$ |
|
|
$ |
|
||
注4. 商誉和无形资产
在2023年4月3日，我们以总购买价格$收购了Voyantic Oy的所有股份。
收购相关的交易费用为$
本次收购对我们报告的营业收入或净损失金额没有重大影响，因此我们没有提供历史和备考披露。
商誉代表购买价格超过采用购买法会计处理的企业合并中获得的净资产公允价值的部分。
|
|
截至9月30日的九个月 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
期初余额 |
|
$ |
|
|
$ |
|
||
收购新增 |
|
|
— |
|
|
|
|
|
外币兑换调整 |
|
|
|
|
|
( |
) |
|
10,500,000 |
|
$ |
|
|
$ |
|
||
截至 截至2024年9月30日，无形资产包括以下内容（以千计）:
|
|
预计使用年限为几年 |
|
总账面价值 |
|
|
累计摊销 |
|
|
净值 |
|
|||
有限寿命的无形资产： |
|
|
|
|
|
|
|
|
|
|
|
|||
未完成订单 |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
||
客户关系 |
|
|
|
|
|
|
( |
) |
|
|
— |
|
||
开发的科技 |
|
|
|
|
|
|
( |
) |
|
|
|
|||
专利 |
|
|
|
|
|
|
( |
) |
|
|
|
|||
商标 |
|
|
|
|
|
|
( |
) |
|
|
|
|||
总的有限寿命无形资产 (1) |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
(1) 外国无形资产的账面价值受外币换算的影响 |
|
|||||||||||||
我们按直线法在其使用年限内对可识别的有形资产进行摊销。我们无形资产的加权平均使用年限约为
12
截至 截至2024年9月30日，预计未来五年及以后的无形资产摊销费用如下：
|
|
预计摊销 |
|
|
|
|
(以千为单位) |
|
|
2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
然后 |
|
|
|
|
总计 |
|
$ |
|
|
注意 5. 股票奖励
限制性股票单位
我们授予具有服务控件的限制性股票单位（"RSUs"）和具有市场和服务控件的RSUs（"MSUs"）。
下表总结了RSUs和MSUs的活动情况 2024年9月30日止九个月内的活动情况（以千为单位）：
|
|
|
基础股票数量 |
|
|||||
|
|
|
限制性股票单位(RSUs) |
|
|
MSUs |
|
||
2023年12月31日未行使的股票期权 |
|
|
|
|
|
|
|
||
已授予 |
|
|
|
|
|
|
|
||
归属 |
|
|
|
( |
) |
|
|
( |
) |
被取消 |
|
|
|
( |
) |
|
|
( |
) |
截至2024年9月30日为止尚未行使 |
|
|
|
|
|
|
|
||
股票补偿费用
下表列出了在我们所呈现的合并损益表中包含的股票薪酬费用的详细信息（以千为单位）：
|
截至9月30日的三个月 |
|
|
截至9月30日的九个月 |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
营收成本 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
研发费用 |
|
|
|
|
|
|
|
|
|
|
|
||||
销售和营销费用 |
|
|
|
|
|
|
|
|
|
|
|
||||
一般和行政费用 |
|
|
|
|
|
|
|
|
|
|
|
||||
总股权补偿费用 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
13
附注6：承诺和不确定事项
有关我们的承诺和或有事项的信息，请参见我们截至2023年12月31日的10-k表年度报告的第二部分，第8项（基本报表及补充数据，第12条，承诺与或有事项）。除下面讨论的“与第三方的义务”和“诉讼”外，我们截至2023年12月31日的10-k表年度报告中所披露的承诺和或有事项没有重大变化。
与第三方的义务
我们与第三方制造商生产产品。我们承诺购买 $
诉讼
不时，我们会面临各种法律程序或索赔，这些都是在正常的业务过程中产生的。当管理层相信我们已承担责任的可能性很大，并且可以合理估计损失金额时，我们会计提负债。截至2024年9月30日和2023年12月31日。我们未识别任何重大的非暂时性减值损失。减值损失已包括在其他收入（费用）净额中，在综合利润表中。请参阅注释2，以了解其他收入（费用）净额的详细信息。
专利侵权索赔及反诉
impinj对恩智浦的专利侵权索赔
从2019年到2023年，我们与主要的终端IC竞争对手恩智浦半导体公司（NXP Semiconductors N.V.，或称恩智浦）进行了积极的专利诉讼。在此期间，我们在加利福尼亚和德克萨斯的联邦法院对恩智浦的子公司提起了三起专利侵权诉讼。我们的投诉声称某些恩智浦的终端IC侵犯了我们的多项美国专利。作为回应，恩智浦在特拉华州的联邦法院对我们提起诉讼，后转至华盛顿州，并在德克萨斯州对我们进行反诉，同时对我们在中国的子公司提起了三起诉讼。恩智浦的投诉声称我们某些终端IC侵犯了他们自己的多项美国或中国专利，或是他们从第三方独家授权的美国专利，以对我们进行主张。
到2023年，我们在这些诉讼中获胜。在2023年进行的三次美国审判中，加利福尼亚和德克萨斯的陪审团裁定，恩智浦的终端IC侵犯了我们获得审理的五项专利，而华盛顿和德克萨斯的陪审团裁定我们没有侵犯恩智浦在法庭上指控我们侵犯的三项专利。此外，在2023年，恩智浦撤回了对我们在中国提起的所有三起案件。
在2024年3月13日，当时中国和德克萨斯的其他审判待决，而中国和美国的审判后动议和上诉也在进行中，我们和恩智浦达成了和解协议。根据该协议，我们和恩智浦同意终止并撤回所有待决的诉讼，互相解除在2024年3月31日之前所有专利侵权索赔，并授予彼此非独占的、全球性的专利许可，以制造、让制造、进口、使用、出售和卖出各自的产品和服务，受协议条款的限制。和解协议将在大约十年的时间内有效，直到一组指定的impinj专利（“指标专利”）的所有有效索赔到期。任何一方可以在另一方实质性违约协议条款时终止和解协议，如果恩智浦成功设计出所有指标专利的有效索赔，也可以终止和解协议。
根据和解协议，恩智浦向我们支付了一次性金额 $
我们将和解协议的对价分配给和解协议的各个元件。我们在2024年第一季度的简明合并运营报表中记录了 $
14
注意事项 7. 开多期债务
可转换资本性债券
在2021年11月，我们发行了$
下表列出了截至所示日期的2021年债券的未偿本金金额和账面价值（单位：千）:
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||||||||||||||||||
|
|
本金金额 |
|
|
尚未摊销的债务发行费用 |
|
|
净账面价值 |
|
|
本金金额 |
|
|
尚未摊销的债务发行费用 |
|
|
净账面价值 |
|
||||||
2021年票据 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
2021年票据的进一步细节如下：
发行 |
|
到期日 |
|
利率 |
|
首次利息支付日期 |
|
有效利率 |
|
半年度利息支付日期 |
|
每1000美元本金的初始兑换率 |
|
初始转换价格 |
|
|
股份数量（以百万为单位） |
|
2021年票据 |
|
|
|
|
|
|
|
$ |
|
|
||||||||
|
||||||||||||||||||
2021年票据是优先无担保义务，不包含任何财务契约，受契约（契约）的约束。扣除初始债务发行成本、费用和支出后的2021年票据的总净收益为$
2021年债券条款
2021年票据的持有者可以选择在任何时间，将其相应的2021年票据转换，直到各自的转换日期前的最后一个业务日，前提是满足以下情况：
如果我们普通股的最后报告销售价格至少为
在某些情况下，在与构成根本变更的特定公司事件相关的情况下转换其2021年票据的持有人，有权要求提高转换比例。此外，在构成根本变更的公司事件发生时，2021年票据的持有人可以要求我们以等于的回购价格回购其全部或部分2021年票据。
15
我们的普通股超过了
与票据相关的利息支出如下（以千计）：
|
|
截至9月30日的三个月 |
|
|
截至9月30日的九个月 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
2021 年注意事项 |
|
|
2021 年注意事项 |
|
|
2021 年注意事项 |
|
|
2021 年注意事项 |
|
||||
债务发行成本的摊销 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
现金利息支出 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
利息支出总额 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
截至2024年9月30日和2023年12月31日与2021年票据相关的应计利息s $
我们估计2021年票据的公允价值为 $
通话上限
在发行2019年票据方面，我们与某些金融交易对手进行了私下谈判的上限看涨期权交易。上限看涨期权交易通常旨在减少2019年票据转换或结算时我们普通股的潜在摊薄，或抵消我们在转换2019年票据时需要支付的超过本金的任何现金支付 请注意，视情况而定，减免或抵消的上限取决于上限价格。但是，如果我们普通股的每股市场价格超过上限看涨期权交易的上限价格，那么我们的股票将经历一定的稀释和/或上限看涨期权将无法完全抵消潜在的现金支付，在每种情况下，只要我们普通股的每股市场价格超过上限价格。尽管我们已经回购了2019年票据，但上限看涨期权仍未兑现。上限看涨交易的初始上限价格为美元
16
注意8。每股净利润（损失）
对于所呈现的时期，以下表格提供了计算基本每股和稀释每股净利润（损失）所使用的分子和分母的调解（以千为单位，除每股数额外）：
|
|
截至9月30日的三个月 |
|
|
截至9月30日的九个月 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
分子： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
净利润（损失） |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
利息增加部分 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
归属于普通股股东的净利润（损失） |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
分母： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
基本稀释的加权平均普通股份在外流通 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
稀释效应为： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
股票计划 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
2021年票据 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
稀释的加权平均普通股份在外流通 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
每股基本净利润（亏损） |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
每股摊薄净利润（亏损） |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
基本每股净收益（亏损）是使用我们的净利润（亏损）和我们的加权平均未偿的普通股股份计算的。
扩展每股净收益（亏损）是使用归属于普通股股东的净利润（亏损），根据如转换方法下适用于我们可转债的利息费用再加回，如具有稀释效应的情况下，以及我们加权平均未偿的普通股份包括股权奖励和员工股票购买计划股份的稀释效应，根据库存方法确定情况和我们的可转债使用如转换方法下的影响，如果具有稀释效应。在我们确认净损失的时期，我们从每股亏损中排除尚未履行的股权奖励和与我们的可转债相关的潜在股份结算影响，因为它们的包含会对稀释效应产生作用。
以下表格展示了我们的普通股等价物中被排除在稀释每股净收益（亏损）计算之外的未偿股份，截至提供日期，因为它们的影响会造成反稀释效应（以千计）：
|
|
截至9月30日的三个月 |
|
|
截至9月30日的九个月 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
股票期权 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
RSUs，MSUs和PSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
员工股票购买计划股票 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2021年票据 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
注 9. 段 部 信息
我们有
我们的首席执行官审查有关我们的营业收入类别、终端集成电路，包括许可收入，以及定义为读取集成电路、读取器、网关、测试和测量解决方案以及软件和云服务的系统的信息。
|
截至9月30日的三个月 |
|
|
截至9月30日的九个月 |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
端点集成电路 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
系统 |
|
|
|
|
|
|
|
|
|
|
|
||||
总营业收入 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
17
N注10. 递延收入
递延收入，包括对延长保修、增强产品维修和非经常性工程（"NRE"）服务合同的预付款项的单独不重要金额，代表尚未确认的合同收入。我们确认了 $
下表展示了所指期间递延收入的变化（以千计）：
|
截至9月30日的九个月 |
|
|||||
|
2024 |
|
|
2023 |
|
||
期初余额 |
$ |
|
|
$ |
|
||
来自Voyantic收购的期初余额 |
|
— |
|
|
|
|
|
收入递延 |
|
|
|
|
|
||
认定的递延收入 |
|
( |
) |
|
|
( |
) |
期末余额 |
$ |
|
|
$ |
|
||
备注11. 关联方交易
2023年6月23日，我们从一家关联方收购了一项专利，该关联方的董事会成员担任行政领导职务。 该专利涉及我们的端点IC产品，收购价格为$。 该专利包含在指示专利中，有效期至2026年7月17日，没有续约权。 该专利包含在我们的无形资产中，截至财务报表日的合并资产负债表上
注12. 重组
2024年2月7日，我们启动了一项战略重组，以使财务、业务和研发目标与长期增长对齐，包括裁员，影响约
截至2024年9月30日的累积重组成本摘要如下表所示（单位：千）：
|
|
2024年9月30日结束的九个月 |
|
|
重组成本 |
|
$ |
|
|
非现金支付 |
|
|
( |
) |
现金支付 |
|
|
( |
) |
截至2024年9月30日的累计重组费用 |
|
$ |
— |
|
18
项目2。 管理层的讨论与分析 财务状况和经营业绩。
本报告包含根据《1933年证券法》第27A条和《1934年证券交易法》第21E条修订的某些前瞻性陈述。包含“可能”、“相信”、“预期”、“期望”、“打算”、“计划”、“项目”、“预测”、“业务展望”、“估计”或类似表达的陈述构成前瞻性陈述。您应仔细阅读这些陈述，因为它们讨论未来预期，包含未来运营或财务状况的预测或陈述其他“前瞻性”信息。这些陈述涉及我们的未来计划、目标、预期、意图和财务表现以及支撑这些陈述的假设。它们包括但不限于关于以下内容的陈述：
我们的实际结果可能与任何前瞻性声明中包含的或暗示的结果有实质性差异。可能导致或有助于这些差异的因素包括本报告中以下以及其他地方讨论的因素，包括第二部分第1A项（风险因素）中讨论的因素。
考虑到这些前瞻性声明中固有的重大不确定性和风险，您不应将这些声明视为我们或其他任何人会在任何特定时间范围内，或根本上，实现我们的目标和计划的陈述或保证，也不应将其视为未来事件的预测。此外，我们或其他任何人都不对前瞻性声明的准确性和完整性承担责任。我们没有义务公开更新任何前瞻性声明，无论是由于新信息、未来事件还是其他原因，除非法律要求。
我们的业务
我们的愿景是创造一个每个企业制造、运输和销售的物品，以及每个人拥有、使用和回收的物品，都会无线且普遍地连接到云端的世界。并且在这个世界中，这些物品的所有权、历史和关联信息能够无缝地提供给企业和个人。我们称这个广泛的愿景为无限的物联网，或称为物联网。我们设计并销售一个平台，使得无线物品与云端的连接成为可能，让我们和我们的合作伙伴在物联网解决方案上进行创新。
截至目前，我们已连接了超过1000亿个物品，为零售商、供应链和物流、餐厅和食品服务提供商、航空公司、汽车制造商、医疗保健公司等提供物品可见性，并提高了运营效率。我们今天致力于将物品连接从数百亿扩展到数万亿，并将物品数据不仅传送给企业，也传送给个人，使他们也能从其连接的物品中获得价值。我们相信我们正在启用的无限Iot将在不久的将来使人们普遍访问每个物品的基于云的数字孪生体，每个数字孪生体都存储物品的历史和关联信息，帮助人们探索和学习有关物品的信息。我们相信，这种连接将改变世界。
我们与合作伙伴生态系统一起构建项目可见性解决方案，使用我们设计的产品，这些产品我们要么出售，要么许可，包括硅RAIN无线电；制造、测试、编码和读取系统，软件和云服务， encapsulate我们的解决方案知识和知识产权。我们卖出两种类型的硅集成电路，或称IC，无线电。第一种是存储序列号的端点IC，用于无线识别物品。我们的合作伙伴将端点IC嵌入物品或其包装中。这些IC还可能包含一个加密密钥来验证物品的真实性。第二种是读取IC，我们的合作伙伴在成品读取器中使用，以无线发现、清点和交互端点IC。这些读取器还可以保护物品或消费者，例如通过验证物品的真实性或通过在消费者首先提供密码之前使端点IC无响应来使物品私密化。我们的制造、测试和编码系统使合作伙伴的产品得以实现并促进企业的部署。我们的读取
19
系统由高性能成品阅读器和网关组成，提供自主阅读解决方案。我们的软件和云服务专注于解决方案的实现。
我们卖出我们的产品，可以单独出售，也可以作为一个完整平台提供，主要通过我们的合作伙伴生态系统。该生态系统包括原始设备制造商（OEM）、标签服务局、原始设备制造商（ODM）、系统集成商（SI）、增值转售商（VAR）、独立软件供应商（ISV）和其他解决方案合作伙伴。
我们的硅基无线电遵循RAIN行业板块的空气接口标准，以实现其核心功能。我们通过在产品中增加差异化功能，并在整个平台上支持或许可这些功能，从而为我们的无线电和解决方案创造合作伙伴和企业的偏好，以提供超越竞争对手产品组合的解决方案能力和性能。
影响我们业绩的因素
库存供应
我们的营业收入大部分来自我们的合作伙伴嵌入在企业产品中的终端集成电路，因此受宏观经济趋势的影响。此外，我们大部分产品，包括终端集成电路和系统，都是通过合作伙伴和分销商销售的，这限制了我们对企业需求的可见性。我们与这些合作伙伴和分销商密切合作，以尽可能准确地了解情况，但准确预测我们的产品需求并及时识别市场变化仍然是一个挑战。因此，我们有时会经历库存过剩或短缺。库存过剩会增加费用，使我们面临产品过时和/或增加储备的风险，并对我们的业务产生负面影响。库存短缺可能导致长交货期、错失机会、市场份额损失和/或客户关系受损，这同样会对我们的业务产生负面影响。
在2021年和2022年，我们端点IC需求增加，而全球晶圆需求也增加，导致许多半导体公司面临晶圆短缺，包括我们。这些晶圆短缺阻止了我们完全满足客户需求，在一些情况下导致客户取消订单，选择备选供应商或从我们的竞争对手购买。在2023年，宏观经济状况导致需求萎缩和库存过剩。
产品采用和单位增长率
企业在零售服装、我们最大的市场和SC&L方面已经大力采用RAIN技术，但采用率和单位增长率一直不平稳和不可预测。2010年至2023年，我们整体端点IC销量以26%的复合年增长率增长；然而，在不同时期我们经历了不均匀的增长率。
尽管零售行业的步伐不均，SC&L及其他行业的采用和增长率各不相同，但我们相信长期趋势是持续的RAIN采用和增长，我们打算在可预见的未来继续投资于开发新产品和扩展我们的产品线。然而，我们无法预测历史年度增长率是否代表未来增长的速度。
我们的系统业务，至少对于阅读器和网关，显著依赖于在独立最终用户处的大规模部署，并且部署时机导致我们的系统营业收入在每年之间有很大的波动。例如，我们在2019年从一个大型美国SC&L供应商的网关部署中产生了14%的总营业收入。我们在2020年没有类似的项目收入。同样，在2021年第二季度，我们从一个大型位于欧洲的全球零售商的基于RAIN的自助结账和损失防范项目收入中产生了13%的营业收入。在2022年、2023年或2024年前三季度，我们没有类似的项目收入。
季节性和定价
我们通常在日历年第一季度与大多数终端IC OEM进行定价谈判。过去，此谈判通常导致第一季度的营业收入和毛利较之前时期有所减少，随后在我们降低成本并通过将这些OEM和最终用户转移到更新、成本更低的产品来调整产品组合的情况下，在随后的季度得以恢复正常。
IC终端用户数量在第四季度通常低于第三季度。 系统销售额在第四季度往往较高，在第一季度较低，这可能是因为在许多最终用户财政年度结束之前，对资本支出的剩余资金可供使用。
我们在2023年没有看到这些季节性趋势。我们确实预计，由于宏观经济条件的变化和项目启动的时间，营业收入在季度之间会继续波动，这可能会影响未来的季节性趋势。
20
业务运营结果
下表呈现了我们所报告的期间内的经营结果：
|
|
截至9月30日的三个月 |
|
|
截至9月30日的九个月 |
|
||||||||||||||||||
(以千为单位，除了百分比) |
|
2024 |
|
|
2023 |
|
|
变化 |
|
|
2024 |
|
|
2023 |
|
|
变化 |
|
||||||
收入 |
|
$ |
95,198 |
|
|
$ |
65,005 |
|
|
$ |
30,193 |
|
|
$ |
274,518 |
|
|
$ |
236,888 |
|
|
$ |
37,630 |
|
毛利润 |
|
$ |
47,569 |
|
|
$ |
30,768 |
|
|
$ |
16,801 |
|
|
$ |
142,633 |
|
|
$ |
118,112 |
|
|
$ |
24,521 |
|
毛利率 |
|
|
50.0 |
% |
|
|
47.3 |
% |
|
|
2.7 |
% |
|
|
52.0 |
% |
|
|
49.9 |
% |
|
|
2.1 |
% |
营业损失 |
|
$ |
(769 |
) |
|
$ |
(15,834 |
) |
|
$ |
15,065 |
|
|
$ |
(3,456 |
) |
|
$ |
(28,645 |
) |
|
$ |
25,189 |
|
截至2024年9月30日的三个月与截至2023年9月30日的三个月相比
营业收入和毛利润增加，主要是由于终端IC营业收入增加，部分抵消了较低的系统营业收入。终端IC营业收入增加主要是由于终端IC出货量比去年同期增加。系统营业收入下降，主要是由于出货量下降。毛利率增加主要是由于当前年度的库存过剩和过时费用较去年同期减少。营业亏损减少，主要是由于毛利润增加，部分抵消了营业费用增加。营业费用增加是由于研发成本增加，部分抵消了一般和管理费用、销售和营销费用以及无形资产摊销费用的降低。
截至2024年9月30日的九个月与截至2023年9月30日的九个月相比
营业收入和毛利润增加，主要是由于终端IC营业收入的增加，部分抵消了系统营业收入的下降。与去年同期相比，终端IC营业收入的增加主要是由于许可收入以及终端IC的出货量增加。系统营业收入下降，主要是由于出货量减少。毛利率提高，主要得益于高毛利的许可收入贡献。营业损失下降，主要是由于毛利润增加和营业费用略有减少。营业费用的减少主要是由于一般和行政费用、销售与市场费用以及无形资产摊销的降低，部分被研发和重组费用的增加抵消。
收入
|
|
截至9月30日的三个月 |
|
|
截至9月30日的九个月 |
|
||||||||||||||||||
(以千为单位) |
|
2024 |
|
|
2023 |
|
|
变化 |
|
|
2024 |
|
|
2023 |
|
|
变化 |
|
||||||
端点集成电路 |
|
$ |
80,966 |
|
|
$ |
48,592 |
|
|
$ |
32,374 |
|
|
$ |
231,864 |
|
|
$ |
180,546 |
|
|
$ |
51,318 |
|
系统 |
|
|
14,232 |
|
|
|
16,413 |
|
|
|
(2,181 |
) |
|
|
42,654 |
|
|
|
56,342 |
|
|
|
(13,688 |
) |
总营业收入 |
|
$ |
95,198 |
|
|
$ |
65,005 |
|
|
$ |
30,193 |
|
|
$ |
274,518 |
|
|
$ |
236,888 |
|
|
$ |
37,630 |
|
我们目前几乎所有的营业收入都来自于终端集成电路、读卡器集成电路、读卡器、网关、测试和测量解决方案以及许可的销售。我们主要将终端集成电路和测试测量解决方案卖给内嵌制造商；我们的读卡器集成电路主要通过分销商卖给OEM和ODM；而我们的读卡器和网关则主要通过分销商卖给解决方案提供商、增值经销商和系统集成商。我们预计，终端集成电路的销售将在可预见的未来占据我们营业收入的大部分。
截至2024年9月30日的三个月与截至2023年9月30日的三个月相比
终端IC的营业收入增加了3240万美元，主要由于出货量增加了3820万美元，部分被由于产品组合导致的每单位平均销售价格降低580万美元所抵消，并且在较小程度上受到对旧产品的短期价格激励影响。
系统收入减少220万美元，主要是由于出货量减少。 阅读器和网关的收入分别减少了100万美元和290万美元，而非经常性工程收入减少了40万美元。 这些减少部分被阅读器 IC 和测试测量解决方案收入分别增加了150万美元和60万美元抵消。
21
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
Endpoint IC revenue increased $51.3 million due to a $54.5 million increase in shipment volumes and a $15.0 million increase in licensing revenue that did not occur in the prior-year period, partially offset by a $18.2 million decrease in ASP due primarily to product mix shift, and to a lesser extent, short-term pricing incentives on legacy products.
Systems revenue decreased by $13.7 million due primarily to a decrease in shipment volumes. Reader and gateway revenues decreased $7.9 million and $8.2 million, respectively, and nonrecurring engineering revenue decreased $0.8 million. These decreases were partially offset by an increase of $3.5 million from test and measurement solutions revenue.
Gross Profit and Gross Margin
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Cost of revenue |
|
$ |
47,629 |
|
|
$ |
34,237 |
|
|
$ |
13,392 |
|
|
$ |
131,885 |
|
|
$ |
118,776 |
|
|
$ |
13,109 |
|
Gross profit |
|
|
47,569 |
|
|
|
30,768 |
|
|
|
16,801 |
|
|
|
142,633 |
|
|
|
118,112 |
|
|
|
24,521 |
|
Gross margin |
|
|
50.0 |
% |
|
|
47.3 |
% |
|
|
2.7 |
% |
|
|
52.0 |
% |
|
|
49.9 |
% |
|
|
2.1 |
% |
Cost of revenue includes costs associated with manufacturing our endpoint ICs, reader ICs, readers, gateways and test and measurement solutions, including direct materials and outsourced manufacturing costs as well as associated overhead costs such as logistics, quality control, planning and procurement. Cost of revenue also includes charges for excess and obsolescence and warranty costs. Our gross margin varies from period to period based on the mix of endpoint IC and systems; underlying product margins driven by changes in mix, ASPs or costs; as well as from inventory excess and obsolescence charges.
Three months ended September 30, 2024 compared with three months ended September 30, 2023
Gross profit increased, due primarily to increased endpoint IC revenue, partially offset by decreased systems revenue. Gross margin increased, due primarily to lower excess and obsolescence charges compared to the prior-year period.
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
Gross profit increased, due primarily to increased endpoint IC revenue partially offset by decreased systems revenue. Gross margin increased, due primarily to high-margin licensing revenue recognized in the year that did not occur in the prior year.
Operating Expenses
Research and Development
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Research and development |
|
$ |
25,492 |
|
|
$ |
21,588 |
|
|
$ |
3,904 |
|
|
$ |
72,935 |
|
|
$ |
67,426 |
|
|
$ |
5,509 |
|
Research and development expense comprises primarily personnel expenses (salaries, benefits and other employee related costs) and stock-based compensation expense for our product-development personnel; product development costs which include external consulting and service costs, prototype materials and other new-product development costs; and an allocated portion of infrastructure costs which include occupancy, depreciation and software costs. We expect research and development expense to increase in absolute dollars in future periods as we continue to focus on new product development and introductions.
Three months ended September 30, 2024 compared with three months ended September 30, 2023
Research and development expense increased $3.9 million, due primarily to increases of $2.8 million in personnel expenses related to higher bonus achievement; $1.4 million in stock-based compensation expense primarily related to increased outstanding equity grants; and $0.3 million in infrastructure costs; partially offset by a decrease of $0.6 million in product development costs due to timing.
22
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
Research and development expense increased $5.5 million, due primarily to increases of $6.1 million in personnel expenses from higher bonus achievement and higher headcount; $2.7 million in stock-based compensation expense primarily related to increased outstanding equity grants; and $1.0 million in infrastructure costs; partially offset by a decrease of $4.1 million in product development costs due to timing.
Sales and Marketing
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Sales and marketing |
|
$ |
9,888 |
|
|
$ |
10,073 |
|
|
$ |
(185 |
) |
|
$ |
29,891 |
|
|
$ |
30,678 |
|
|
$ |
(787 |
) |
Sales and marketing expense comprises primarily personnel expenses (salaries, incentive sales compensation, or commission, benefits and other employee-related costs) and stock-based compensation expense for our sales and marketing personnel; travel, advertising and promotional expenses; and an allocated portion of infrastructure costs which include occupancy, depreciation and software costs.
Three months ended September 30, 2024 compared with three months ended September 30, 2023
Sales and marketing expense was comparable for the periods with offsetting fluctuations. Personnel expenses decreased resulting from a decrease in headcount, which was offset by higher bonus achievement and commissions.
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
Sales and marketing expense decreased $0.8 million, due primarily to decreases of $0.6 million in personnel expenses resulting from a decrease in headcount, partially offset by higher bonus achievement and commissions.
General and Administrative
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
General and administrative |
|
$ |
12,452 |
|
|
$ |
13,532 |
|
|
$ |
(1,080 |
) |
|
$ |
39,040 |
|
|
$ |
45,098 |
|
|
$ |
(6,058 |
) |
General and administrative expense comprises primarily personnel expenses (salaries, benefits and other employee related costs) and stock-based compensation expense for our executive, finance, human resources and information technology personnel; legal, accounting and other professional service fees; travel and insurance expense; and an allocated portion of infrastructure costs which include occupancy, depreciation and software costs.
Three months ended September 30, 2024 compared with three months ended September 30, 2023
General and administrative expense decreased $1.1 million, due primarily to a decrease of $3.8 million in professional services related to legal fees. This decrease was partially offset by increases of $1.5 million in personnel expenses related to higher bonus achievement and $1.0 million in stock compensation expense related to increased outstanding equity grants.
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
General and administrative expense decreased $6.1 million, due primarily to a decrease of $12.3 million in professional services related to legal fees and transaction expenses in the current year. This decrease was offset by an increase of $3.5 million in personnel expenses from higher bonus achievement, higher headcount and higher taxes associated with equity vesting, and an increase of $2.4 million in stock-based compensation expense, from increased outstanding equity grants.
Amortization of Intangibles
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Amortization of intangibles |
|
$ |
506 |
|
|
$ |
1,409 |
|
|
$ |
(903 |
) |
|
$ |
2,411 |
|
|
$ |
3,555 |
|
|
$ |
(1,144 |
) |
23
2024年9月30日结束的三个月，与2023年9月30日结束的三个月相比
无形资产摊平减少了90万美元。这个减少与我们于2023年4月3日收购Voyantic Oy时所获得的无形资产有关。某些获得的无形资产的使用年限不足1年，导致前一年期间摊销费用增加。
截至2024年9月30日的九个月与截至2023年9月30日的九个月相比
无形资产摊销额减少110万美元。该减少与我们于2023年4月3日收购Voyantic Oy时所获得的无形资产有关。某些获得的无形资产寿命不足1年，导致上一年度周期的摊销费用增加。
重组成本
|
|
截至九月三十日止三个月， |
|
|
截至九月三十日止九个月 |
|
||||||||||||||||||
(以千计) |
|
2024 |
|
|
2023 |
|
|
变更 |
|
|
2024 |
|
|
2023 |
|
|
变更 |
|
||||||
重组成本 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,812 |
|
|
$ |
— |
|
|
$ |
1,812 |
|
2024年9月30日结束的三个月，与2023年9月30日结束的三个月相比
截至2024年和2023年9月30日三个月，没有进行重组费用。
截至2024年9月30日的九个月与截至2023年9月30日的九个月相比
重组成本增加与我们在2024年2月7日发起的重组相关。详情请参见第12条注释《重组》。
其他收入，净利润
|
|
截至九月三十日止三个月， |
|
|
截至九月三十日止九个月 |
|
||||||||||||||||||
(以千计) |
|
2024 |
|
|
2023 |
|
|
变更 |
|
|
2024 |
|
|
2023 |
|
|
变更 |
|
||||||
其他收入净额 |
|
$ |
2,416 |
|
|
$ |
1,090 |
|
|
$ |
1,326 |
|
|
$ |
5,830 |
|
|
$ |
3,620 |
|
|
$ |
2,210 |
|
其他收入，主要包括我们短期投资的利息收入。
2024年9月30日结束的三个月，与2023年9月30日结束的三个月相比
其他收入, 净值由于投资余额增加和利率期货提高而增加。
截至2024年9月30日的九个月与截至2023年9月30日的九个月相比
其他收入, 净值由于投资余额增加和利率期货提高而增加。
诉讼和解所得
|
|
截至九月三十日止三个月， |
|
|
截至九月三十日止九个月 |
|
||||||||||||||||||
(以千计) |
|
2024 |
|
|
2023 |
|
|
变更 |
|
|
2024 |
|
|
2023 |
|
|
变更 |
|
||||||
诉讼解决收入 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
45,000 |
|
|
$ |
— |
|
|
$ |
45,000 |
|
2024年9月30日结束的三个月，与2023年9月30日结束的三个月相比
截至2024年9月30日和2023年，诉讼收入为零。
24
截至2024年9月30日的九个月与截至2023年9月30日的九个月相比
诉讼和解所得的收入增加，与2024年3月13日与NXP的和解协议相关。有关更多详情，请参见附注6《承诺和条件》。
利息费用
|
|
截至九月三十日止三个月， |
|
|
截至九月三十日止九个月 |
|
||||||||||||||||||
(以千计) |
|
2024 |
|
|
2023 |
|
|
变更 |
|
|
2024 |
|
|
2023 |
|
|
变更 |
|
||||||
利息支出 |
|
$ |
1,219 |
|
|
$ |
1,213 |
|
|
$ |
6 |
|
|
$ |
3,652 |
|
|
$ |
3,633 |
|
|
$ |
19 |
|
利息费用主要由我们的债务上的现金利息和债务发行成本摊销组成。
2024年9月30日结束的三个月与2023年9月30日结束的三个月相比
期间内利息费用大致相当。
2024年9月30日结束的九个月与2023年9月30日结束的九个月相比
期间内利息费用大致相当。
所得税费用
|
|
截至九月三十日止三个月， |
|
|
截至九月三十日止九个月 |
|
||||||||||||||||||
(以千计) |
|
2024 |
|
|
2023 |
|
|
变更 |
|
|
2024 |
|
|
2023 |
|
|
变更 |
|
||||||
所得税优惠（费用） |
|
$ |
(207 |
) |
|
$ |
195 |
|
|
$ |
(402 |
) |
|
$ |
(194 |
) |
|
$ |
472 |
|
|
$ |
(666 |
) |
我们受美国联邦和州政府所得税以及国外司法管辖权所得税的约束。与前一年的同期相比，截至2024年9月30日的三个月和九个月的所得税支出分别增加了40万美元和70万美元，这是由于我们估计的有效税率的变化。
非通用会计原则财务指标
我们的主要非依据通用会计准则的业绩指标包括调整后的EBITDA和非通用会计净利润（损失），如下所定义。我们将调整后的EBITDA和非通用会计净利润（损失）作为评估我们核心业务表现和趋势、准备和核准我们的年度预算以及制定短期和长期营运计划的主要指标。我们认为这些指标提供了有用的资讯，以便进行业务的期间对期间比较，让投资者和其他人能够理解和评估我们的营运成果，就像我们的管理层和董事会一样。我们呈献这些非通用会计财务指标，并不意味著要单独考虑，或作为取代根据通用会计原则准备的财务结果，而我们的非通用会计指标可能与其他公司使用的同类非通用会计指标不同。
25
调整后的税前利润减除折旧及摊销后的费用
我们将调整后的EBITDA定义为根据美国通用会计原则确定的净利润（损失），排除了适用于所示期间的股票酬劳成本影响；折旧和摊销；重整成本；和解收入及相关成本；诱使转换费用；其他收入，净额；利息费用；收购相关费用和相关购买会计调整；以及所得税效益（费用）。截至2023年12月31日的年度，我们修改了调整后的EBITDA定义，以排除与我们Voyantic Oy收购相关的费用，相关的购买会计调整和无形资产摊销。截至2024年3月31日的三个月，我们进一步修改了调整后的EBITDA定义，以排除和解收入。我们排除了这些项目，因为我们认为它们不反映我们的核心运营，而我们排除它们使我们更能一致地评估我们的营运绩效。我们的调整后的EBITDA定义修订并未对以前报告期的调整后EBITDA产生影响，因为在此前期间并未影响可比性的类似性质。
The following table presents a reconciliation of net loss to adjusted EBITDA:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Net income (loss) |
|
$ |
221 |
|
|
$ |
(15,762 |
) |
|
$ |
15,983 |
|
|
$ |
43,528 |
|
|
$ |
(28,186 |
) |
|
$ |
71,714 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other income, net |
|
|
(2,416 |
) |
|
|
(1,090 |
) |
|
|
(1,326 |
) |
|
|
(5,830 |
) |
|
|
(3,620 |
) |
|
|
(2,210 |
) |
Interest expense |
|
|
1,219 |
|
|
|
1,213 |
|
|
|
6 |
|
|
|
3,652 |
|
|
|
3,633 |
|
|
|
19 |
|
Income tax expense (benefit) |
|
|
207 |
|
|
|
(195 |
) |
|
|
402 |
|
|
|
194 |
|
|
|
(472 |
) |
|
|
666 |
|
Depreciation and amortization |
|
|
3,247 |
|
|
|
3,668 |
|
|
|
(421 |
) |
|
|
10,155 |
|
|
|
9,734 |
|
|
|
421 |
|
Stock-based compensation |
|
|
14,841 |
|
|
|
12,307 |
|
|
|
2,534 |
|
|
|
41,336 |
|
|
|
35,679 |
|
|
|
5,657 |
|
Restructuring costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,812 |
|
|
|
— |
|
|
|
1,812 |
|
Acquisition related expense |
|
|
— |
|
|
|
4 |
|
|
|
(4 |
) |
|
|
986 |
|
|
|
1,676 |
|
|
|
(690 |
) |
Purchase accounting adjustments |
|
|
— |
|
|
|
112 |
|
|
|
(112 |
) |
|
|
— |
|
|
|
388 |
|
|
|
(388 |
) |
Income on settlement of litigation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(45,000 |
) |
|
|
— |
|
|
|
(45,000 |
) |
Adjusted EBITDA |
|
$ |
17,319 |
|
|
$ |
257 |
|
|
$ |
17,062 |
|
|
$ |
50,833 |
|
|
$ |
18,832 |
|
|
$ |
32,001 |
|
Non-GAAP Net Income (Loss)
We define non-GAAP net income as net income (loss), excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation and amortization; restructuring costs; settlement income and related costs; induced conversion expense; acquisition related expense and related purchase accounting adjustments; and the corresponding income tax impacts of adjustments to net income (loss).
During the year ended December 31, 2023, we revised our definition of non-GAAP net income to adjust for acquisition related expenses, related purchase accounting adjustments and amortization of intangibles in connection with our Voyantic Oy acquisition. During the three months ended March 31, 2024, we further revised our definition of non-GAAP net income to exclude settlement income. The revisions to our definition of non-GAAP net income did not impact non-GAAP net income for any previously reported periods because there was no impact of a similar nature in such prior periods affecting comparability.
Additionally, during the year ended December 31, 2023, we revised our definition of non-GAAP net income (loss) to adjust for income tax effects of adjustments to net income (loss), calculated at the statutory rate for current and historical periods. We have revised the prior period amounts to conform to our current period presentation.
26
The following table presents a reconciliation of net loss to non-GAAP net income (loss):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Net income (loss) |
|
$ |
221 |
|
|
$ |
(15,762 |
) |
|
$ |
15,983 |
|
|
$ |
43,528 |
|
|
$ |
(28,186 |
) |
|
$ |
71,714 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization |
|
|
3,247 |
|
|
|
3,668 |
|
|
|
(421 |
) |
|
|
10,155 |
|
|
|
9,734 |
|
|
|
421 |
|
Stock-based compensation |
|
|
14,841 |
|
|
|
12,307 |
|
|
|
2,534 |
|
|
|
41,336 |
|
|
|
35,679 |
|
|
|
5,657 |
|
Restructuring costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,812 |
|
|
|
— |
|
|
|
1,812 |
|
Acquisition related expense |
|
|
— |
|
|
|
4 |
|
|
|
(4 |
) |
|
|
986 |
|
|
|
1,676 |
|
|
|
(690 |
) |
Purchase accounting adjustments |
|
|
— |
|
|
|
112 |
|
|
|
(112 |
) |
|
|
— |
|
|
|
388 |
|
|
|
(388 |
) |
Income on settlement of litigation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(45,000 |
) |
|
|
— |
|
|
|
(45,000 |
) |
Income tax effects of adjustments (1) |
|
|
(1,410 |
) |
|
|
(207 |
) |
|
|
(1,203 |
) |
|
|
(4,434 |
) |
|
|
(1,990 |
) |
|
|
(2,444 |
) |
Non-GAAP net income |
|
$ |
16,899 |
|
|
$ |
122 |
|
|
$ |
16,777 |
|
|
$ |
48,383 |
|
|
$ |
17,301 |
|
|
$ |
31,082 |
|
(1) The tax effects of the adjustments are calculated using the statutory rate, taking into consideration the nature of the item and relevant taxing jurisdiction. |
|
|||||||||||||||||||||||
Liquidity and Capital Resources
As of September 30, 2024, we had cash, cash equivalents and short-term investments of $170.3 million, comprising cash deposits held at major financial institutions and short-term investments in a variety of securities, including U.S. government securities, treasury bills, corporate notes and bonds, commercial paper, and money market funds. As of September 30, 2024, we had working capital of $(2.0) million, down from $39.4 million as of June 30, 2024. The decrease was driven by purchases of long-term investments in third-quarter 2024.
Historically, we have funded our operations primarily through cash generated from operations and by issuing equity securities, convertible-debt offerings and/or borrowing under our prior senior credit facility.
We believe, based on our current operating plan, that our existing cash, cash equivalents and short-term investments will be sufficient to meet our anticipated cash needs for at least the next 12 months. Over the longer term, we plan to continue investing to enhance and extend our platform. If our available funds are insufficient to fund our future activities or execute our strategy, then we may raise additional capital through equity, equity-linked or debt financing, to the extent such funding sources are available. Alternatively, we may need to reduce expenses to manage liquidity; however, any such reductions could adversely impact our business and competitive position.
Sources of Funds
From time to time, we may explore additional financing sources and ways to reduce our cost of capital, including equity, equity-linked and debt financing. In addition, in connection with any future acquisitions, we may pursue additional financing which may be debt, equity or equity-linked financing or a combination thereof. We can provide no assurance that any additional financing will be available to us on acceptable terms.
2021 Notes
In November 2021, we issued convertible notes due 2027 in an aggregate principal amount of $287.5 million which we refer to as the 2021 Notes. The 2021 Notes are our senior unsecured obligation, bearing interest at a fixed rate of 1.125% per year, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2022. The 2021 Notes are convertible into cash, shares of our common stock or a combination thereof, at our election, and will mature on May 15, 2027 unless earlier repurchased, redeemed or converted in accordance with the indenture terms.
The net proceeds from the 2021 Notes were approximately $278.4 million after initial debt issuance costs, fees and expenses. We used approximately $183.6 million of the net proceeds to repurchase approximately $76.4 million aggregate principal amount of convertible notes due 2026, or the 2019 Notes, through individual privately negotiated transactions concurrent with the 2021 Notes offering. We used $17.6 million to repurchase the remaining $9.85 million aggregate principal of the 2019 Notes through individual privately negotiated transactions in June 2022. We will use the rest of the net proceeds for general corporate purposes.
For further information on the terms of this debt, please refer to Note 7 to our condensed consolidated financial statements included elsewhere in this report.
27
Cash Flows
The following table shows a summary of our cash flows for the periods indicated:
|
|
Nine Months Ended September 30, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
Net cash provided by (used in) operating activities |
|
$ |
115,687 |
|
|
$ |
(50,809 |
) |
Net cash provided by (used in) investing activities |
|
|
(148,705 |
) |
|
|
101,480 |
|
Net cash provided by financing activities |
|
|
11,897 |
|
|
|
7,890 |
|
Operating Cash Flows
For the nine months ended September 30, 2024, we generated $115.7 million of net cash from operating activities. These net cash proceeds were due primarily to $96.9 million of net income adjusted for non-cash items and $18.8 million in working capital due primarily to higher accounts payable, accrued compensation and lower inventory, partially offset by higher accounts receivable.
For the nine months ended September 30, 2023, we used $50.8 million of net cash from operating activities. This net cash usage was due primarily to $67.0 million in working capital due primarily to higher inventory and lower accounts payable and $16.2 million of net loss adjusted for non-cash items.
Investing Cash Flows
For the nine months ended September 30, 2024, we used $148.7 million of net cash from investing activities. This net cash usage was due to purchases of investments of $154.3 million, cash paid for equipment purchases of $13.0 million, partially offset by cash generated by investment maturities of $18.6 million.
For the nine months ended September 30, 2023, we generated $101.5 million of net cash from investing activities. These net cash proceeds were due primarily to investment maturities of $127.5 million and investment sales of $13.4 million, partially offset by cash paid for the Voyantic Oy acquisition of $23.4 million and net property and equipment purchases of $16.0 million.
Financing Cash Flows
For the nine months ended September 30, 2024, we generated $11.9 million of net cash from financing activities. These net cash proceeds were due to stock-option exercises and our employee stock purchase plan, offset by $4.6 million of cash paid for the earnout payment related to the Voyantic Oy acquisition.
For the nine months ended September 30, 2023, we generated $7.9 million of net cash from financing activities. These net cash proceeds were due primarily to $7.9 million from stock-option exercises and our employee stock purchase plan.
Cash Requirements and Contractual Obligations
Our primary cash requirements are for operating expenses and capital expenditures. Our operating expenses have generally increased as we invest in developing products and technologies that we believe have the potential to drive long-term business growth.
Convertible Notes – As of September 30, 2024 the principal balance outstanding on the 2021 Notes is $287.5 million. Refer to Note 7 of our Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for maturity date, stated interest rate and additional information on our 2021 Notes.
Operating Lease Obligations – Our lease portfolio comprises primarily operating leases for our office space. For additional information regarding our operating leases, see Note 11 of our Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2023.
Purchase Commitments – Purchase commitments as of September 30, 2024 total $32.9 million and comprise noncancelable commitments to purchase inventory.
Off-Balance-Sheet Arrangements
Since inception, we have not had any relationships with unconsolidated entities, such as entities often referred to as structured finance or special-purpose entities, or financial partnerships that would have been established for the purpose of facilitating off-balance-sheet arrangements or for another contractually narrow or limited purpose.
Critical Accounting Policies and Significant Estimates
We have prepared our condensed consolidated financial statements in accordance with GAAP. Our preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue,
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expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates and assumptions. For information on our critical accounting policies and estimates, see Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risks in the ordinary course of our business.
Interest Rate Risk
Under our current investment policy, we invest our excess cash in money market funds, U.S. government securities, corporate bonds and notes and commercial paper. Our current investment policy seeks first to preserve principal, second to provide liquidity for our operating and capital needs and third to maximize yield without putting our principal at risk. We do not enter into investments for trading or speculative purposes.
We had cash, cash equivalents and short-term investments of $170.3 million as of September 30, 2024. Our investments are exposed to market risk due to fluctuations in prevailing interest rates, which may reduce the yield on our investments or their fair value. Because most of our investment portfolio is short-term in nature, we do not believe an immediate 10% increase in interest rates would have a material effect on the fair market value of our portfolio, and therefore we do not expect our results of operations or cash flows to be materially affected by a sudden change in market interest rates.
Our convertible notes have fixed interest rates, thus a hypothetical 100 basis point increase in interest rates would not impact interest expense.
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. To date, we have been able to substantially offset higher product costs by increasing our product selling prices. If our product costs became subject to significant future inflationary pressures, then we may not be able to fully offset these higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.
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Foreign Currency Exchange Risk
We are subject to risks associated with transactions that are denominated in currencies other than our functional currency and the effects of translating amounts denominated in a foreign currency to the U.S. dollar as a normal part of our reporting process. The functional currency of the majority of our foreign subsidiaries is the U.S. dollar. Accordingly, gains and losses resulting from remeasuring transactions denominated in currencies other than U.S. dollars are included in other income, net on the consolidated statements of operations. One of our European subsidiaries utilize Euros as their functional currency, which results in a translation adjustment that we include as a component of accumulated other comprehensive income. For any of the periods presented, we did not have material impact from exposure to foreign currency fluctuation. As we grow operations, our exposure to foreign currency risk will likely become more significant.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, including our chief executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our chief executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2024.
Changes in Internal Control over Financial Reporting
There were no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the three months ended September 30, 2024.
Limitations on Controls
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
In the normal course of business, we may be named as a party to various legal claims, actions and complaints. We cannot predict whether any resulting liability will have a material adverse effect on our financial position, results of operations, cash flows, market position or stock price.
Item 1A. Risk Factors.
You should carefully consider the following risk factors, in addition to the other information contained in this report, including the section of this report captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. If any of the events described in the following risk factors and the risks described elsewhere in this report occur, then our business, operating results and financial condition could be materially impacted. This report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements due to factors that are described below and elsewhere in this report.
Risks Relating to Our Platform, Products and Technologies
We operate in a very competitive market.
Our primary competitors are:
These competitors include companies that have much greater financial, operating, research and development, marketing and other resources than us. To gain market share, they could discount their products and accept lower margins, or they could maintain margins by achieving cost savings through better, more efficient designs or production methods. They could devote more resources than we can to product development, promotion, sales and support. They could also bundle other technologies, including those we do not have in our product portfolio, with their RAIN products.
Our partners, including our OEMs, ODMs, distributors, SIs, VARs and solution partners, may choose to compete with us rather than purchase our products, which would not only reduce our customer base but also increase competition in the market. Companies in adjacent markets or newly formed companies may decide to enter our market, particularly as RAIN adoption grows. Further, the Chinese government has made development of the Chinese semiconductor industry a priority, potentially increasing competition for us globally while possibly restricting our ability to participate in the Chinese market.
RAIN adoption is concentrated in key markets and the extent and pace of RAIN market adoption beyond those markets is uncertain.
Our financial performance depends on the pace of end-user RAIN adoption in key markets, such as retail apparel (our largest market), retail general merchandise and SC&L. Although RAIN has been adopted to some degree by end users in those markets, those end users as well as the markets themselves are subject to business cycles and macroeconomic trends. Continued RAIN adoption by those end users and in those markets may be at risk if and when negative business or economic conditions arise.
The RAIN opportunity is still developing. RAIN adoption, as well as adoption of our platform and products, depends on many factors, including the extent to which end users understand and embrace the benefits that RAIN offers; whether the benefits of RAIN adoption outweigh the cost and time to replace or modify end users’ existing systems and processes; and whether RAIN products and applications meet end users’ current or anticipated needs.
We have, at times, anticipated and forecasted a pace of end-user adoption that exceeded the actual pace of adoption. We expect continued difficulty forecasting the pace of adoption. As a result, we may be unable to accurately forecast our future operating results including revenue, gross margins, cash flows and—profitability, any or all of which could negatively impact our financial performance.
We must introduce new products, product enhancements and services to compete effectively.
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We introduce new products and services to advance our business, satisfy increasingly demanding end-user requirements and grow RAIN market adoption. We commit significant resources developing and introducing these new products and services, and to improving the performance and reliability of, and reducing the costs of, our existing products and services.
Whether our new or enhanced products and services will succeed is uncertain. Our success developing the technologies, processes or capabilities necessary or desired for new or enhanced products and services, or licensing or otherwise acquiring them from third parties, and our ability to introduce new or enhanced products and services before our competition, depends on many factors, including:
When we introduce new products and services, our success in ramping adoption depends, in part, on us making those products and services easy for our partners and end users to deploy and use. For example, for our new M800-family endpoint ICs, we are currently significantly supporting our inlay partners to produce high-performing, high-quality inlays. Until our partners are able to deploy our products widely, adoption and our operating results could suffer.
Our ability to deliver enterprise solutions at scale are nascent.
We believe we are still at a very early stage in our ability to deliver enterprise solutions. We are developing solutions for retail self-checkout and loss prevention and SC&L package routing that have been, or that we expect to be, deployed by the industry-leading enterprise end users. However, to fully capitalize on our platform's potential, we must make our current offerings repeatable across multiple enterprises as well as deliver additional solutions to enterprise needs. We must also develop relationships with top-tier solution partners to gain access to and address challenging new use cases. If we do not succeed in identifying, developing, selling and deploying enterprise solutions, particularly solutions that rely on autonomous reading, with top-tier partners and end users and across a range of markets and use cases, then our business prospects will suffer.
Delivering enterprise solutions requires a network of partner products and services that complement our own product offerings and that together address enterprise needs. Convincing enterprises to partner with us to solve their business problems—including evaluation, design, deployment, operations and services, as well as integrating RAIN data into the enterprise's information systems—requires tight coordination among our and our partners' sales, marketing, operations and engineering teams. We, or our partners, may be unable to successfully acquire customers for our enterprise solutions, or successfully address our market opportunity. Although we have partners who can successfully introduce our platform, or aspects of it, to their customers, even today their knowledge of our platform and RAIN in general is often still nascent. If we do not build our network of solutions, and partners to deliver those solutions, and broaden our efforts to deliver solutions that leverage our platform in large, complex enterprise opportunities, then our business prospects will suffer.
We rely on endpoint IC sales to generate most of our revenue.
We derive, and expect to continue to derive, most of our revenue from our endpoint ICs. If demand declines, or if we are unable to procure enough wafers to meet the demand we have, or if we are unable to raise prices to offset cost increases, then our business and operating results will suffer. In addition, the continued adoption of, and demand for, our endpoint ICs, derives in part from us demonstrating the benefits of using our systems. If we fail to establish those benefits then we may be unsuccessful in countering competitive endpoint IC price pressures and our business and operating results could be adversely affected.
The average selling prices of our products could fluctuate substantially.
The average selling price, or ASP, of our products has historically decreased with time or to meet end-user demands, encourage adoption, address macroeconomic conditions or respond to competitive pressure. As demand for older products declines, or as competition from competitors with lower product costs or lower profitability expectations increases, or during times of oversupply, ASPs may decline quickly.
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To compete profitably we must continually improve our technology and processes, reduce unit costs in line with lower selling prices, and introduce new, higher margin products. If we are unable to offset ASP reductions with increased sales volumes or reduced product costs, or if we are unable to introduce new products that command higher prices and better gross margins, then our overall revenue and gross margins will suffer.
Though less common, we have also increased prices from time to time, especially during times of increasing wafer costs. For example, we raised prices in 2021, 2022 and 2023 to accommodate higher costs. We may be required to raise prices again if macroeconomic conditions, including inflation, create upward pressure on our product costs. Increased prices could dampen adoption and market growth.
Pricing commitments and other restrictive provisions in our customer agreements could adversely affect our operating results.
In the ordinary course of our business, we enter into agreements containing pricing terms that could, in some instances, adversely affect our operating results and gross margins. For example, some contracts specify future IC, reader or gateway pricing or contain most-favored-customer pricing for certain products. Other agreements contain exclusivity terms that prevent us from pursuing certain business with other customers during the exclusivity period. Reducing prices or offering favorable terms to one customer could adversely affect our ability to negotiate favorable terms with other customers.
Changes in our product mix could adversely affect our overall gross margin.
Endpoint IC sales, which constitute and likely will continue to constitute the majority of our product revenue, have, for the most part, lower gross margins than our systems product sales. Our overall product gross margins are affected by product mix, which can fluctuate based on supply and demand, competitive pressures and end-user needs and demand. A shift in sales mix away from our higher margin products to lower margin products, either within our endpoint IC product portfolio or from our systems business to our endpoint ICs, could negatively affect our gross margins.
Poor product quality could result in significant costs to us and impair our ability to sell our products.
Our products must meet increasingly demanding specifications for quality, reliability and performance. Our products are both highly technical and deployed in large, complex systems in which errors, defects or incompatibilities can be problematic for our partners and end users.
If we are unable to identify or correct errors, defects, incompatibilities or other problems in our products, we could experience:
Moreover, if we encounter product quality issues, then we may be required to incur significant time and costs to diagnose, test and fix the issues. There can be no assurance that such remediation efforts would be successful. Even if successful, these efforts could further constrain our ability to supply our partners and end users with new products until we have resolved the issues.
End users and partners must design our products into their products and business processes.
Persuading end users or partners to design our products into their business processes or products requires educating them about RAIN’s and our products’ value. They may use other technologies or products and may not be receptive to introducing RAIN into their business processes or products. Even when convinced, they often undertake long pilot programs and qualifications prior to placing orders. These pilot programs and qualifications can be time-consuming and expensive, and there is no assurance they will
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result in an order for our products. If we fail to develop new products that adequately or competitively address end users’ or our partners’ needs, then we may not receive product orders, which could adversely affect our business, prospects and operating results.
Our visibility into the length of the sales and deployment cycles for our products is limited.
We have limited visibility into end user sales and deployment cycles, and these cycles are often longer than we anticipate. Many factors contribute to our limited visibility, including the time our partners and end users spend evaluating our products, the time educating them on RAIN’s benefits and the time integrating our products with end users’ systems. The length and uncertain timing of the sales and deployment cycles can lead to delayed product orders. In anticipation of those orders, we may incur substantial costs before the sales cycle is complete and before we receive any customer orders or payments, if we receive them at all.
An inability or limited ability of end user systems to exploit RAIN information may adversely affect the market for our products.
A successful end-user deployment requires not only tags and readers or gateways, but RAIN integration with information systems and applications that create business value from the RAIN data. Unless third parties continue developing and advancing business analytics tools, and end users enhance their information systems to use these tools, RAIN deployments could stall. Our efforts to foster third-party development and deployment of these tools could fail. In addition, our guidance to business-analytics providers for integrating our products with their tools could prove ineffective.
Solution providers and SIs are essential to the RAIN market. They provide deployment know-how to enable end users to successfully deploy RAIN solutions. Integrating our products with end-user information systems could prove more difficult or time-consuming than we or they anticipate, which could delay deployments.
Alternative technologies may enable products and services that compete with ours.
Technology developments may affect our business negatively. Breakthroughs in legacy RFID technologies or markets, including those using low frequency or high frequency RFID technology, or in other radio technologies, could adversely affect RAIN market growth and demand for our products. Likewise, new technologies may enable lower-cost ICs than our products. If we are unable to innovate using new or enhanced technologies or are slow to react to changes in existing technologies or in the market, or if we have difficulty competing with advances in new or legacy technologies, then our development of new or enhanced products could be impacted and result in product obsolescence, decreased revenue and reduced market share.
Significant changes in RAIN standards bodies, standards or qualification processes could impede our ability to sell our products and services.
We have historically taken a leadership position in developing RAIN industry standards, including with GS1 and ISO, and have designed our products to comply with those standards. We could lose that leadership position; our influence in standards development could diminish; or we could choose not to participate in certain standards activities.
New or changed industry standards could affect us negatively. If industry standards diverge from our or the RAIN market’s needs, then our products may fail to keep pace with the market or cause end users to delay their deployments. Moreover, the adoption or expected adoption of new or changed standards could slow sales of our existing products before we can introduce new products that meet the new or changed standards. New standards or changes to existing standards could also limit our ability to implement new features in our products. The lost opportunities as well as time and expense to develop new products or change our existing products to comply with new or changed standards could be substantial, and we may not ultimately succeed in developing products that comply with the new or changed standards.
Certain organizations develop requirements for RAIN tags and test tags against those requirements. For example, the ARC Program at Auburn University develops tag performance and quality requirements for end users that engage them. Some participants in the RAIN market are ARC sponsors, but we are not among them. If ARC or a similar organization fails to certify or delays certifying tags incorporating our endpoint ICs, adoption and sales of our products could suffer.
Changes in government spectrum regulations or in their enforcement could adversely affect our ability to sell our products.
Our readers and gateways are collectively certified for use in more than 40 countries worldwide, including the United States, Canada, Mexico, China, Japan, South Korea and every country in the European Union, or the EU.
Our products operate in spectrum bands in which governments permit the use of RFID/RAIN technology. If spectrum regulations or the application or enforceability or such regulations should change, or if our products were found to be noncompliant despite being certified, we could need to redesign our products, potentially resulting in significant costs, including costs associated with obsolete inventory. Regulatory changes may also cause us to forego opportunities, adversely affecting our business.
In April 2024, NextNav Inc. asked the Federal Communications Commission, or the FCC, to initiate a proceeding that would consider whether to reconfigure the 902–928 MHz ISM spectrum, or Lower 900 MHz Band, in which RAIN and other unlicensed
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services operate to enable a terrestrial backup to the U.S. Global Positioning System. To pay for the backup system, NextNav also asked for a license to use certain spectrum bands, including parts of the Lower 900 MHz Band used for RAIN operations, to deliver 5G broadband services. If approved as proposed, this ISM spectrum reconfiguration could interfere with RAIN radio transmissions and negatively impact the RAIN industry.
We and other RAIN providers and end users, as well as other Lower 900 MHz Band users, have already registered our opposition to NextNav’s petition and asked the FCC to reject it quickly. If the FCC declines to do so then we expect there to be a protracted decision-making process. The FCC would be required to consider all relevant comments and material of record before it decides whether to proceed with the proposal, issue a new or modified proposal, or take no action on the proposal. The fate of NextNav’s petition is uncertain at this time, but if the FCC were to adopt NextNav's proposal and customers were not able to consistently use our RAIN products without interference, then our business would be significantly and negatively affected.
Sales of some of our products could cannibalize revenue from other products.
Some of our partners develop products that compete with our products. For example, some of our OEM partners use our reader ICs to build and sell readers and gateways that compete with our readers and gateways. Similarly, some of our partners use our readers to build and sell gateways that compete with our gateways. If we fail to manage such conflicts successfully, then our business and operating results could be negatively affected.
Our licensing program is nascent.
While we believe we have valuable RAIN intellectual property and aspire to monetize that intellectual property by licensing it to third parties, including third parties who compete with us to some extent, our experience in doing so is nascent, and our ability to grow licensing revenue remains subject to numerous risks and uncertainties. To materially grow our licensing program and revenues, we will need to maintain and grow our intellectual property portfolio and continue to research and develop RAIN innovations that will generate and maintain demand for licenses to our technology and features. We will also need to develop and maintain an ability to monitor infringement of our intellectual property rights by others and possibly seek enforcement action against those who attempt to infringe our intellectual property rights. These enforcement actions could require significant investments in management time and attention as well as cash as we incur legal and other expenses. They could also compete with our objectives in other areas of our business such as wanting to maintain close, strategic relationships with important partners or end users of our products. These are just some of the risks and uncertainties we face with respect to our nascent licensing program.
We currently derive a substantial share of our licensing revenues from NXP, our primary endpoint IC competitor, based on our Settlement Agreement with them. For more information regarding the terms of our Settlement Agreement with NXP, please refer to Note 6 of our condensed consolidated financial statements included elsewhere in this report. If NXP were to breach its license payment obligations, or if NXP were to design around our intellectual property rights and exercise its right to terminate our license before the end of the agreement's 10-year term, our licensing revenues would decline and our overall results of operations and cash flows would suffer.
Risks Relating to Our Personnel and Business Operations
We obtain the products we sell through a limited number of third parties with whom we do not have long-term supply contracts.
Our ability to secure cost-effective, quality products in a timely manner could be adversely affected by many factors, including:
If our suppliers fail to manufacture our products at reasonable prices or with satisfactory quality levels, then our ability to bring those products to market and our reputation could both suffer. If supplier capacity diminishes, whether from equipment failures, closures, bankruptcy, capacity allocation, in response to public health events (such as Covid-19), catastrophic loss of facilities or otherwise, then we could have difficulty fulfilling orders, our revenue could decline and our growth prospects could be impaired. Transitioning our product manufacturing to new providers would take many months and, in the case of ICs, could take years. Any
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transition would require a requalification by our customers or end users, which could also adversely affect our ability to sell our products as well as our operating results.
Shortages of silicon wafers, integrated-circuit (IC) post-processing capacity or components used in our readers and gateways may adversely affect our ability to meet demand for our products and adversely affect our revenue and/or gross margins.
Wafer shortfalls limit sales and may cause market-share losses. We expect wafer capacity in at least some of the semiconductor nodes we use to be tight for the foreseeable future. We procure wafers on a purchase-order basis, so our wafer supply is not guaranteed, and we may not receive adequate supply from our foundry partners when shortages occur.
Wafer shortages may also artificially increase bookings as customers over-order our products, and then cause sales declines as those customers consume their accumulated inventory. Additionally, if our suppliers charge us more but we are unable to raise our prices to cover those higher costs, our gross margins and other financial results could suffer.
Shortages of our silicon products can also occur due to post-processing constraints. To convert the wafers we receive from our foundry partner into saleable ICs, we perform additional steps including testing, thinning, bumping and dicing. If our third-party suppliers are unable to efficiently perform these steps, and our production capacity is constrained as a result, we may be unable to satisfy demand for our products and our financial results could suffer.
We have also experienced shortages and price increases for components we use in our readers and gateways, as well as in packaging and test capacity for our reader ICs, and we may continue to experience such shortages and price increases in the future. Any such shortages or price increases will negatively impact our product availability and costs and our financial results will suffer.
We bear inventory risks because our products have relatively long lead times, demand for our products are hard to accurately forecast, and we rely on partners to sell and distribute our products.
We maintain inventory to meet customer demand. To guard against wafer shortages, and to allow for production risks given the relatively long lead times for our many of our products, we may invest in inventory to support anticipated business growth, like we did with endpoint IC inventory in 2017, 2020 and late 2022/early 2023. When we introduce new products, we may also initially carry higher inventory or have slower inventory turns depending on market acceptance.
We typically order products from our suppliers based on partner forecasts before we receive purchase orders. However, many of our partners have difficulty accurately forecasting their demand and the timing of that demand, and sometimes cancel orders or reschedule product shipments, in some cases with little or no advance notice to us. Partners will also sometimes give us soft commitments for large orders that do not materialize. We have additional uncertainty arising from competition and from unanticipated external events, such as macroeconomic trends or events and changes in regulatory standards, all of which can adversely affect demand and consequently our inventory levels, sales and operating results.
High inventory levels can increase expenses or reserves and expose us to a higher risk of product obsolescence, especially when we introduce new products and technologies. If we are unable to sell the inventory we purchased, or if we must sell it at lower prices, then our business will be negatively impacted.
Acquisitions could result in operating difficulties, dilution and other harmful consequences.
We regularly evaluate potential strategic transactions, and we may pursue them if complementary to our business. For example, in April 2023 we completed our acquisition of Voyantic Oy, a global provider of RFID (primarily RAIN and NFC) inlay and label design, manufacturing and test systems. Strategic transactions could be material to our financial condition and operating results. We have limited experience executing acquisitions. Integrating an acquired company, business or technology may create unforeseen operating difficulties and expenditures. Acquisition-related risks include:
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Foreign acquisitions involve additional risks beyond those above, including those related to integrating operations across different cultures and languages, currency risks and the economic, political and regulatory risks associated with other countries. Also, the anticipated benefit of any acquisition, domestic or foreign, may not materialize. Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, debt incurrence, contingent liabilities or amortization expenses or goodwill write-offs, any of which could harm our financial condition. Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on favorable terms or at all.
Changes in global trade policies could have a material adverse effect on us.
Changes in U.S. and foreign laws and policies governing foreign trade, manufacturing, development and investment in the jurisdictions where we currently develop and sell products, and any negative consequences resulting from such changes, could materially affect our business.
The U.S. government has imposed significant tariffs on a variety of items imported from other countries, particularly China. China responded by imposing significant tariffs on a variety of items imported from the United States. These tariffs could materially and adversely affect our ability to compete internationally. Although the United States and China signed a preliminary trade agreement in early 2020, the tariffs remain in place as negotiations between the countries continue. The future of these tariffs, as well as the possibility for new tariffs, remains uncertain. Changes in U.S. and Chinese industrial policy also contribute to uncertainty regarding the global trade environment.
Other causes of uncertainty include the effects of sanctions and other actions against Russia after Russia invaded Ukraine. While we do not today have business with Russian partners or end users, the effect of these sanctions on global trade and macroeconomic conditions generally—such as increasing energy costs and inflation—could nevertheless negatively affect our business.
We are subject to risks inherent in operating abroad and may not be able to successfully maintain or expand our international operations.
In 2023, we derived 72% of our total revenue from sales outside the United States. We anticipate growing our business, in part, by growing our international operations, which presents a variety of risks, including:
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We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.
We must export and import our products in compliance with U.S. export controls, including the Commerce Department’s Export Administration Regulations and economic and trade sanctions established by the Treasury Department’s Office of Foreign Assets Controls, as well as similar controls established in the countries in which we do business. For example, the U.S. Commerce Department recently strengthened rules regarding semiconductor- and supercomputer-related products and restrictions against sending certain chips and chip-related technology and software to China without an export license. The modifications included an expansion of the products and destinations that require licensing. In addition, the United States and other countries continue to expand the economic sanctions and export control restrictions imposed against Russia and Belarus and certain Russian nationals and entities after Russia invaded Ukraine. We must undertake additional diligence efforts to comply with these rules, which may be time-consuming and result in delayed or lost opportunities. We may not always be successful in obtaining necessary export or import licenses, and our failure to obtain required export or import approval for our products or limitations on our ability to export or sell our products may harm our domestic and international sales and negatively affect our revenue.
Tariffs could also have a material impact on our product costs and decrease our ability to sell our products to existing or potential customers as well as harm our ability to compete internationally. For more information, see “Changes in global trade policies could have a material adverse effect on us.” Any changes in our product or in export or import regulations or legislation; shifts or changes in enforcement; or changes in the countries, persons or technologies targeted by these regulations could delay us introducing new products in international markets, decrease use of our products by, or decrease our ability to export or sell our products to, existing or potential customers with international operations, adversely affecting our business and results of operations.
Instability or deterioration in the political, social, business or economic conditions in key jurisdictions could harm our supply or development of products.
Deterioration in the political, social, business or economic conditions in any jurisdictions in which we have significant suppliers, distributors or end users—including as a result of natural disasters, labor strikes, public health crises, geopolitical events or other developments—could slow or halt product shipments or disrupt our ability to manufacture, test or post-process our products., as well as our ability to effectively and timely execute on end user deployments. We outsource our manufacturing and production to suppliers in a small number of Asian jurisdictions, including Thailand, Malaysia, Taiwan and China. Some of these jurisdictions experienced significant restrictions during the Covid-19 pandemic. These jurisdictions have also experienced significant changes in political, social, business or economic conditions in the past and may experience them in the future.
We could be forced to transfer our manufacturing, testing and post-processing activities to more stable, and potentially more costly, regions or find alternative suppliers.
We source a significant portion of our wafers from suppliers in Taiwan, and our supply of wafers and other critical components may be materially and adversely affected by diplomatic, geopolitical and other developments between China and Taiwan. Notably, China has refused to renounce the use of military force against Taiwan, and there can be no assurance that relations between China and Taiwan will not deteriorate further, particularly in light of ongoing tensions between the United States and China. Any such developments could materially and adversely affect our business, financial condition and results of operations.
Our business operations could be adversely affected by public health outbreaks and pandemics, or by natural disasters.
Starting in 2020, Covid-19 created significant worldwide economic volatility, uncertainty and disruption, and presented our business with several risks and challenges. Although the Covid-19 global health emergency officially ended in 2023, experts caution that Covid-19 remains a public health risk, and the extent to which any public health outbreak or pandemic could impact future market demand and our business results is uncertain.
In addition, other disasters, whether natural or manmade, could decrease demand for our products, disable our facilities, disrupt operations or cause catastrophic losses. We have facilities in areas with known seismic activity, such as our headquarters in Seattle, Washington. We have facilities in areas with known flooding, such as our office in Shanghai, China. We have a wafer post-processing
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subcontractor in Thailand, a region with a known, and recent, history of flooding. A loss at any of these or other of our or our suppliers’ facilities could disrupt operations, delay production and shipments, reduce revenue and engender potentially large expenses. We do not carry insurance covering potential losses caused by pandemics, earthquakes, floods or other disasters.
Risks Relating to Our Relationships with Partners and End Users
We rely on a small number of customers for a large share of our revenue.
We sell our endpoint ICs directly to inlay and tag OEMs and ODMs. We sell our reader ICs to OEMs and ODMs and our readers and gateways to solution providers, VARs and SIs, all primarily through distribution. If we fail to retain our endpoint IC, reader IC, reader or gateway partners or distributors or fail to establish relationships with new partners, then our business, financial condition or operating results could be harmed.
In 2023, sales to tag OEMs Avery Dennison and Arizon accounted for 33% and 11% of our total revenue, respectively. Sales concentration to a small number of OEMs decreases our bargaining power and increases the risk that our pricing or sales could decline based on actions taken by our competitors or our own failure to compete effectively.
Our competitors’ relationships with, or acquisitions of, these partners or distributors could interfere with our relationships with them. Any such interference could impair or delay our product sales or increase our cost of sales.
We engage directly with some end users. Their projects, often involving large purchases of our readers and gateways, are often discrete deployments that can result in significant sales for periods of time. They also increase the volatility of our revenue and operating results. If we are unable to replace project-based revenue with new revenue streams, or if end users with large projects change or delay those projects without providing us with adequate notice, then our sales could decline from period to period and harm our stock price.
Our ability to affect or determine end-user demand is limited in part because we sell and fulfill primarily through partners and rarely directly to end users.
End users drive demand for our products but because we sell our products primarily through partners, we are one step removed from those end users and are often unable to directly assess and affect their demand. Our partners may choose to prioritize selling our competitors’ products over ours, or they may offer products that compete with our products or limit sales of our products. If our partners do not sell enough of our products or if they choose to decrease their inventories of our products, then our sales to those partners and our revenue will decline.
Our partners may not properly forecast end users’ demand for our products.
Our reserve estimates for products stocked by our distributors are based primarily on reports provided to us by those distributors, typically monthly. If the inventory and resale information our partners and distributors provide is inaccurate, or if we do not receive it in a timely manner, then we may not have a reliable view of products being sold to end users which could negatively impact our operating results. If our partners overestimate demand, they may invest in building too much capacity, which would put pricing pressure on the RAIN industry. In the short term, our partners might purchase more of our products than they need, increasing their inventory and reducing our future sales to them, and distributors may, subject to time and quality limitations, seek to return products in exchange for other products. If our partners underestimate demand, we may not be able to satisfy their needs and that of their customers, and adoption might suffer. In either case, our business and operating results could be negatively affected.
Our growth strategy depends in part on the success of strategic relationships with third parties and their continued performance and alignment.
We invest in relationships with solution providers, SIs, VARs and software providers whose product and/or solution offerings complement ours and through which we often fulfill our product sales. Our business will be harmed if we fail to develop and grow these partner relationships. For example, our operating results may suffer if our efforts developing partner relationships increase our costs but do not increase revenue. Partner relationships may also include exclusivity provisions, multiple levels of distribution, discounted pricing or investments in other companies. The cost of developing and maintaining these partner relationships may go unrecovered and our efforts may not generate a corresponding revenue increase.
Occasionally we also engage directly with end users, often at their request, to help them develop solutions for challenging use cases. Such direct engagements could cause, or could be perceived to cause, conflicts with partners that could harm our partner relationships and our business, results of operations or financial condition.
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If we fail to maintain or enhance our brand recognition or reputation on which our business depends, then our business could be harmed.
We believe that building our brand and reputation is key to our relationships with partners and end users and our ability to attract new partners and end users. We also believe that our brand and reputation will be increasingly important as market competition increases. Our success depends on a range of factors, including:
Product supply shortages have challenged our ability to meet market needs and we have increased prices in response to our suppliers increasing their prices to us. Our inability to supply partners and end users with products they need, and/or our need to increase our prices could result in long-lasting, negative consequences to our relationships with those partners and end users, to RAIN adoption and to our business overall.
Increasing attention to environmental, social and governance and regulatory matters may cause us to incur additional costs or expose us to additional risks.
Investors, governmental and nongovernmental organizations, partners and end users are increasingly focusing on environmental, social and governance, or ESG, practices. Our ESG practices may not meet their standards, and they as well as advocacy groups may campaign for us to change our business or practices to address their ESG-related concerns. Our failure, or perceived failure, to adequately respond to any such campaigns could harm our business and reputation and negatively impact the market price of our securities. Moreover, with the continued evolution of ESG practices and reporting and disclosure requirements, our costs related to those ESG practices and reporting and disclosure requirements could increase, which could negatively affect our operating results. For example, the SEC has adopted final rules regarding climate-related disclosures in public companies’ periodic reporting, and compliance with these rules—including the implementation of necessary internal controls and reporting procedures—may lead to increased expenses and additional demands on our management and board of directors.
We are subject to disclosure and reporting requirements for companies that use “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries in their products, whether or not these products are manufactured by third parties. These requirements could affect the sourcing and availability of minerals that are used in the manufacture of our products. We have to date incurred costs and expect to incur significant additional costs associated with complying with the disclosure requirements, including for example, due diligence in regard to the sources of any conflict minerals used in our products, in addition to the cost of remediation and other changes to products, processes or sources of supply as a consequence of such verification activities. Additionally, we may face reputational challenges with our customers and other stakeholders if we are unable to sufficiently verify the origins of all minerals used in our products through the due diligence procedures that we implement. We may also face challenges with government regulators and our customers and suppliers if we are unable to sufficiently verify that the metals used in our products are conflict free.
Risks Relating to Our Intellectual Property
If we are unable to protect and enforce our intellectual property, then our business could be adversely affected.
Our success depends in part upon our ability to obtain, maintain and enforce our patents, copyrights, trade secrets, trademarks and other intellectual property rights and prevent third parties from infringing, misappropriating or circumventing those rights. We have historically focused on filing U.S. patent applications, for many reasons, including the fact that a significant portion of RAIN products are sold for use in the United States. We have only a small number of foreign patents and applications. We also only have registered trademarks and domain names in select countries where we believe filing for such protection is appropriate. By focusing our intellectual property protection on the United States and a small number of foreign countries, we have a limited ability to assert intellectual property rights outside the United States, including in some significant foreign markets such as China or Europe. Moreover, the global manufacturing and distribution systems for tags or labels incorporating our endpoint IC products could complicate our efforts to enforce our U.S. patents.
As we increasingly work with third parties, possibly including parties that compete with us to an extent, to advance our technical innovations and features, we cannot guarantee that our efforts to protect our intellectual property will be completely effective.
We cannot guarantee that:
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Monitoring and addressing unauthorized use of our intellectual property is difficult and costly, and litigation to enforce our intellectual property rights is time consuming, distracting, expensive and uncertain. Our failure to identify unauthorized use of, or otherwise adequately protect our intellectual property could adversely affect our business.
We have been and may in the future be party to intellectual property disputes which could be time consuming and costly to prosecute, defend or settle, result in the loss of significant rights, and adversely affect RAIN adoption or adoption of our products or platform.
Patent litigation is complex and uncertain. We may or may not prevail in patent-related proceedings and such proceedings may result in increased legal expenses, additional demands on our management’s time and attention, and negative effects on our relationships with partners or end users. If any pending or future proceedings result in an adverse outcome, our intellectual property rights could be weakened and we could be required to:
Even if we do prevail in patent-related proceedings, verdicts and judgments can be modified or even reversed by trial or appellate courts. License agreements entered in settlement of patent litigation, particularly any entered into with our competition, may not be as effective over the long term in providing us with all the benefits we bargained for when we entered into them.
Many companies in our industry, as well as nonpracticing entities, hold patents and other intellectual property rights and may pursue, protect and enforce those intellectual property rights. We receive invitations to license patent and other intellectual property rights to technologies that could be important to our business. We also receive assertions against us, our partners and end users claiming we or they infringe patent or other intellectual property rights. If we decline to accept an invitation to license or to refute an asserted claim, then the offering or claiming party may pursue litigation against us.
Intellectual property disputes have adversely affected RAIN adoption in the past and could disrupt growth prospects in the future. In 2011, Round Rock Research filed lawsuits against 11 end users, including Walmart and Macy’s, for RAIN-related patent infringement. Despite the subsequent availability of an industry-wide license, we believe those lawsuits adversely affected demand for our products from 2011 to 2019. Subsequent litigation, including our patent litigation against NXP between 2019 and early 2024, may not have had as pronounced effects on demand as the Round Rock litigation, but could have dampened RAIN growth particularly in categories beyond those where RAIN is already established such as retail apparel. We, our partners, suppliers or end users could continue to be involved in intellectual property disputes in the future which could adversely affect our operating results and growth prospects.
Many of our agreements require us to indemnify and defend partners and end users from third-party infringement claims and pay damages in the case of adverse rulings. These damages could be sizable and disproportionate to the business we derive from those partners or end users. Moreover, we may not know whether we are infringing a third party’s intellectual property rights due to the
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large number of RAIN-related patents or other systemic factors. For example, patent applications in the United States are maintained in confidence for up to 18 months after filing or, in some instances, for the entire time prior to patent issuance. Consequently, we may not be able to account for such rights until after a patent issues.
Intellectual property policies of industry standards organizations in whose working groups we participate could require us to provide royalty-free licenses of some to our intellectual property.
When participating in GS1, ISO, RAIN and other industry-standards organizations, it is a general policy that those who participate in developing a protocol or standard must license, either royalty-free or under reasonable and nondiscriminatory, or RAND, terms, intellectual property that is necessary to implement all or part of the protocol or standard. The standards body may require that the license be granted to members, as in the case of GS1, or to all parties, as in the case of ISO, that implement the protocol or standard.
As a participant in developing GS1 EPCglobal UHF Gen2, UHF Gen2 V2, UHF Gen2 V3, tag data standards, low-level reader protocol and other GS1 EPCglobal protocols, we agreed to license to other GS1 EPCglobal members, on a royalty-free basis, those of our patents necessary to practice those protocols, subject to us receiving reciprocal royalty-free rights from the other GS1 EPCglobal member practicing the protocol. As a participant in developing ISO standards, we agreed to license on a RAND basis those of our patents necessary to practice those standards, subject to us receiving a reciprocal RAND license from the other entity practicing the standard.
Although the policies themselves seek to advance protocol or standards development, disputes can arise because it may not be clear whether certain intellectual property is necessary to practice a protocol or standard. Such uncertainty could complicate us asserting our not-necessary patents against others, or to use those patents in our own defense, thereby devaluing our intellectual property. Further, some GS1 EPCglobal members declined to license their intellectual property on royalty-free terms, instead retaining the right to license their technology on RAND terms. These members may choose to assert their intellectual property, in which case we will need to defend ourselves within the confines of the GS1 and ISO intellectual property policies.
We rely on third-party license agreements which, if impaired or terminated, could cause production or shipment delays that could harm our business.
We have license agreements with third parties for patents, software and technology we use in our operations and in our products. For example, we license tools from design-automation software vendors to design our silicon ICs. Third-party licenses for patents, software and other technology important to our business may not continue to be available on commercially reasonable terms or may not be available at all. Loss of any such licenses could cause manufacturing interruptions or delays or reductions in product shipments until we can develop, license, integrate and deploy alternative technologies which, if even possible, could harm our business and operating results.
Our use of open-source software may expose us to additional risks and weaken our intellectual property rights.
Our products, processes and technology sometimes use or incorporate software that is subject to an open-source license. Certain open-source licenses require a user who intends to distribute the open-source software as a component of the user’s software to disclose publicly part or all of the user’s source code. In addition, certain open-source software licenses require the user of such software to make derivative works of the open-source software available to others at low or no cost. Open-source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of their code, opening us to business risks that could materially harm our operating results.
We cannot guarantee that we have incorporated open-source software in a manner that is consistent with our policies and procedures relative to such open-source software, or in a manner that will not subject us to liability.
Risks Relating to Privacy and Cybersecurity
Privacy and security concerns relating to RAIN could damage our reputation and deter current or potential customers from using our products.
Privacy advocates and others have raised and may continue raising concerns about RAIN compromising consumer privacy or facilitating theft. These concerns include unauthorized parties potentially collecting personal information or personal data, tracking consumers, stealing identities or causing other issues relating to privacy or data protection. Any such incident could cause our or our partners’ or end users’ operations to be disrupted and subject us or them to regulatory investigations or proceedings and claims, demands or litigation; consequently, we could face potential liability and significant costs and expenses to remediate or otherwise respond to the incident. Any failure or perceived failure to comply with any privacy- or security-related laws, regulations or contractual or other obligations to which we are or may be subject may result in regulatory actions, claims or litigation; legal and other costs; substantial time and resources; and fines, penalties or other liabilities. Any actions or concerns about security and privacy may be expensive to defend, cause us to expend substantial time and resources and damage our reputation and operating results or negatively impact overall RAIN industry development, even if unfounded.
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We cannot be sure that any limitation-of-liability provisions in our agreements with customers, contracts with third-party vendors and service providers or other contracts are enforceable or adequate or will protect us from any liabilities or damages against claims relating to a security breach or other privacy- or security-related issue.
Government regulations and guidelines and other standards relating to consumer privacy and cybersecurity may adversely impact adoption of our products, require us to make design changes or constrain our ability to implement new and desired product features, and actual or alleged violations of laws relating to privacy or cyber security may result in claims, proceedings and liability.
Our partners and end users are subject to laws and regulations related to collecting, storing, transmitting and using personal information and personal data, as well as to additional laws and regulations that address privacy and cybersecurity related to RFID in general. Because RAIN is a type of RFID, we believe these laws and regulations apply to RAIN.
The European Commission, or the EC, has issued guidance to address privacy concerns about RFID. In May 2009, the EC issued a recommendation that retailers in the EU inform their customers when RFID tags are either on or embedded within products. In April 2011, the EC signed a voluntary agreement with private and public entities to develop privacy guidelines for companies using RFID in the EU. Whereas compliance is voluntary, our partners and end users that do business in the EU prefer products that comply with the guidelines. If our products do not comply or enable compliance with the guidelines, then our business may suffer.
More generally, the data security and privacy legislative and regulatory landscape in the United States, EU and other jurisdictions continues evolving. Aspects of key privacy laws and regulations—including the California Consumer Privacy Act of 2018, the California Privacy Rights Act, similar privacy laws enacted in other states and the EU General Data Protection Regulation—remain unclear as of the date of this report and continue evolving, potentially with far-reaching implications. Laws and regulations relating to privacy, data protection and security; related industry standards and guidelines; and continued evolution of these laws, regulations, standards, guidelines and other actual and asserted obligations, as well as their interpretation and enforcement, may require us to modify our products, practices and policies, which we may not be able to do on commercially reasonable terms or at all, and otherwise could cause us to incur substantial costs and expenses. Any failure or perceived failure by us or any third parties with which we do business to comply with these laws and regulations or other actual or asserted obligations may result in claims or litigation; actions against us by governmental entities; legal and other costs; substantial time and resources and fines, penalties or other liabilities. Any such actions may be expensive to defend, may incur substantial legal and other costs and substantial time and resources and likely would damage our reputation and adversely affect our business, financial condition and results of operations.
Additionally, if we fail to develop products that meet end-user privacy requirements, then end users may choose not to use our products.
Although the Gen2 V3 protocol includes features for addressing consumer privacy and authenticating a tag, and although we have incorporated custom features in our products designed to further protect consumer privacy, a third party may still breach these features, including as implemented in our products, in which case our reputation could be damaged and our business and prospects could suffer.
A breach of security or other security incident impacting our systems or others used in our business could have an adverse effect on our business.
We face risks of security breaches and incidents from a variety of sources including viruses, ransomware, hacking, malicious code, supply-chain attacks as well as social engineering or other employee or contractor negligence, malfeasance or unintentional acts. Accidental or willful security breaches or incidents, or unauthorized access to our facilities or information systems, or to others used in our business, could compromise the security of those facilities or information systems and the confidentiality, integrity and availability of confidential, personal or proprietary information. These risks may be heightened in connection with geopolitical tensions and events.
The consequences of loss, unavailability, misuse, corruption or other unauthorized processing of confidential, personal or proprietary information could include, among other things, unfavorable publicity, reputational damage, difficulty marketing or selling our products, customer allegations of breach of contract, loss or theft of intellectual property, claims and litigation, governmental and regulatory investigations and other proceedings and fines, penalties and other damages and liabilities. Any of these consequences could have a material adverse effect on our business, financial condition, reputation and business relationships.
We rely on third-party services to store and process data on our behalf, and on third-party security systems in a variety of applications. Our platform operates in conjunction with, and depends on, third-party products, services and components for security. The cybersecurity threat environment continues evolving, especially with heightened activity by state-sponsored actors. If we, our platform, or any of the third parties on which we rely suffers or is believed to have suffered a security breach or incident, vulnerability, error, ransomware or malicious event, then we could face increased costs, claims, liability, reduced revenue and harm to our reputation.
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We devote resources to detect and prevent security breaches and other security-related incidents. In the event of an actual or perceived security breach or incident we may need to expend significant resources to mitigate, notify third parties of, and otherwise address the breach or incident, its root cause and take steps to prevent further breaches or incidents. Our insurance may not adequately cover claims relating to an actual or perceived security breach or incident and any breach or incident may increase our insurance costs as well as reduce or eliminate the future availability of such insurance, harming our business and reputation.
Risks Relating to Our Financial Position and Capital Needs
We have a history of losses and have only achieved profitability periodically. We cannot be certain that we will attain or sustain profitability in the future.
We have incurred losses since our inception in 2000, with a net loss of $43.4 million for the year ended December 31, 2023, and an accumulated deficit of $430.2 million as of December 31, 2023. Although we reported GAAP net income for the first three quarters of 2024, there can be no assurance that we will be able to sustain profitability in the future. Our ability to attain or sustain profitability depends on numerous factors, many of which are out of our control, including continued RAIN industry adoption and us maintaining or growing our market share. Our costs to support operations, product development and business and personnel expansion in sales, engineering and marketing are significant and are likely to increase as we invest to grow the market and our share of it, reduce our costs and improve our operations. If we fail to increase our revenue or manage our expenses, or if our investments in growing the market or our share of it fail, then we may not attain or sustain profitability.
We have a history of significant fluctuations in our quarterly and annual operating results.
Our history shows significant sales volatility and a limited ability to forecast sales. We anticipate that, for the foreseeable future, our visibility to future sales, including volumes and prices, will continue to be limited. That limited visibility may cause fluctuations in our operating results and differences between actual and expected quarterly or annual operating results.
Many factors, some outside our control, may cause or contribute to fluctuations in our quarterly and annual operating results. These fluctuations make financial planning and forecasting difficult. These fluctuations may also cause unanticipated decreases in our available cash, which could negatively affect our business and prospects. Material factors that contribute to fluctuations in our operating results include:
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A substantial portion of our operating expenses are fixed in the short term, and as a result, fluctuations in revenue or unanticipated expenses can have a material and immediate impact on our profitability and negatively affect our operating results, which could cause the price of our common stock to decline.
We may need to raise additional capital, which may not be available on favorable terms or at all.
In the future, we may need to raise additional capital, including pursuant to shelf registration statements we may file from time to time with the SEC, potentially diluting our stockholders, restricting our operations or otherwise adversely affecting our business.
Debt financing, if available, may include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, expending capital or declaring dividends, or may impose financial covenants that limit our ability to achieve our business objectives.
Our management has broad discretion in how to invest and spend our cash and cash equivalents and the proceeds from financings, including on capital expenditures, product development, working capital and other general corporate purposes. We may spend our cash and cash equivalents in ways that our stockholders may not agree with or that do not yield favorable returns.
If we need additional capital but cannot raise it on acceptable terms, if at all, then we may not be able to meet our business objectives, financial obligations or both. If we raise additional capital but do not deploy it effectively then our business, financial condition, results of operations and prospects could be harmed and the market price of our common stock could suffer.
Risks Relating to U.S. Federal Income Tax
Our ability to use net operating losses and research and development credits to offset future taxable income and income taxes may be limited.
As of December 31, 2023, we had federal U.S. net operating loss carryforwards, or NOLs, of $230.5 million and U.S. federal research and development credit carryforwards of $30.5 million, which we may use to reduce future taxable income or income taxes. We have established a valuation allowance against the carrying value of these deferred tax assets. The U.S. federal NOLs and U.S. federal research and development credit carryforwards began expiring in 2020.
Under Sections 382 and 383 of the U.S. Internal Revenue Code, or the Code, a corporation that experiences a more-than 50% ownership change by one or more stockholders or groups of stockholders who own at least 5% of a company's stock over a three-year testing period is limited in its ability to use its pre-change NOLs and other tax assets to offset future taxable income or income taxes. If we undergo a future ownership change then our ability to use our NOLs and credit carryforwards could be limited by Sections 382 and 383 of the Code. Our NOLs may also be limited under state law. As a result of these limitations, we may not be able to utilize a material portion of, or possibly any of, our NOLs and/or credit carryforwards to reduce future taxable income or income taxes.
We could be subject to additional income tax liabilities.
We are subject to income taxes in the United States and certain foreign jurisdictions. During the ordinary course of business, we use significant judgment in evaluating our worldwide income tax obligations and we conduct many transactions for which the ultimate tax determination is uncertain. Although we believe our tax determinations are proper, the final determination of any tax audits and any possible litigation could be materially different from our historical income tax provisions and accruals. The results of an audit or litigation could have a material effect on our operating results or cash flows in the period or periods for which that determination is made.
Changes in tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions.
We are subject to tax laws, regulations and policies of several taxing jurisdictions. Changes in tax laws, as well as other factors, could cause us to experience fluctuations in our tax obligations and effective tax rates and otherwise adversely affect our tax positions and results of our operations. For example, in August 2022, as part of the Inflation Reduction Act of 2022, the United States enacted a 1% excise tax on stock buybacks and a 15% alternative minimum tax on adjusted financial statement income. Additionally, beginning in 2022, the Code eliminated the right to deduct research and development expenditures and instead requires taxpayers to capitalize and amortize U.S. and foreign research and development expenditures over five and 15 tax years, respectively. We have accounted for
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these changes in accordance with our understanding of the guidance available as of the date of this filing and as described in more detail in our financial statements.
The CHIPS and Science Act, enacted August 9, 2022, provides tax credits for semiconductor manufacturing activities within the United States, but because we outsource our semiconductor manufacturing we do not expect to be entitled to these tax credits.
Many countries, as well as organizations such as the Organization for Economic Cooperation and Development, have implemented or proposed changes to existing tax laws, including a 15% global minimum tax. Any of these developments or changes in U.S. federal, state or international tax laws or tax rulings could adversely affect our effective tax rate and our operating results. There can be no assurance that our effective tax rates, tax payments or tax credits and incentives will not be adversely affected by these or other developments or changes in law.
Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value-added or similar taxes.
We do not collect sales and use, value-added or similar taxes in all jurisdictions in which we have sales, based on our belief that such taxes are either not applicable or an exemption from such taxes applies. Certain jurisdictions may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future, including as a result of a change in law. Such tax assessments, penalties and interest or future requirements may negatively affect our operating results.
Risks Relating to Our Financial Reporting and Disclosure
Any failure to maintain an effective system of disclosure and internal controls over financial reporting, or our ability to produce timely and accurate financial statements, could adversely affect investor confidence in us.
As a public company, we must maintain effective disclosure controls and procedures and internal control over financial reporting. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.
Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including identifying material weaknesses, could cause investors to lose confidence in the accuracy and completeness of our financial statements and reports, which could adversely affect the market price of our common stock. We could also be subject to sanctions or investigations by The Nasdaq Stock Market, the SEC and other regulatory authorities.
Risks Relating to Owning or Trading Our Securities
The market price of our common stock has been and will likely continue to be volatile, and the value of your investment could decline significantly.
The trading price of our common stock has fluctuated and is likely to continue to fluctuate substantially. The following factors, in addition to general risks and other risks described in this report, may have a material effect on the trading price of our common stock:
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Technology stocks like ours have experienced extreme price and volume fluctuations, often unrelated or disproportionate to the company’s underlying operating performance. Stock price volatility can cause stockholders to institute securities class-action litigation or stockholder derivative litigation, as occurred to us between 2018 and 2020. If any of our stockholders were to sue us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management, harm our operating results and negatively impact the trading price of our common stock.
Transactions relating to the 2021 Notes may affect our stock’s value.
If the 2021 Notes are converted by holders, then we are entitled to deliver cash, stock or any combination of cash or stock, at our election. If we elect to deliver stock, the ownership interests of our existing stockholders will be diluted, and public market sales of stock issued upon a conversion could decrease our stock price. Anticipated future conversions of the 2021 Notes into stock could also decrease our stock price, as could short selling by holders of the 2021 Notes to hedge their positions.
In December 2019, we issued the 2019 Notes. When we did so, we entered into privately negotiated capped-call transactions with financial counterparties to mitigate the dilutive impact on the Company above a given stock price. We left those capped-call transactions intact after we acquired the remainder of the outstanding 2019 Notes in June 2022. From time to time, the financial counterparties to the capped calls may modify their hedge positions by entering into or unwinding various derivative transactions involving our stock or by purchasing or selling our stock or other securities of ours in secondary market transactions prior to the maturity of the capped calls. This activity could cause a decrease in our stock price.
For more information on the 2019 Notes, the 2021 Notes and the capped-call transactions, see Note 7 of our condensed consolidated financial statements included elsewhere in this report.
Our principal stockholders and management own a significant percentage of our stock and are able to exercise significant influence over matters subject to stockholder approval.
As of September 30, 2024, our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 47.2% of our stock. As a result, our executive officers, directors and principal stockholders may be able to significantly influence, in their capacity as stockholders, matters requiring approval by our stockholders, including electing directors and approving mergers, acquisitions or other transactions. They may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This ownership concentration could have the effect of delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which in turn could have a material adverse effect on our stock price. This ownership concentration could also prevent attempts by our stockholders to replace or remove our board of directors or management.
We may not have sufficient cash flow or access to cash necessary to satisfy our obligations under the 2021 Notes, and our current and future indebtedness may restrict our business.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance any current or future indebtedness, including the 2021 Notes, or to make cash payments in connection with any conversion of the 2021 Notes or upon any fundamental change if holders require us to repurchase their 2021 Notes for cash, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate sufficient future cash from operations to service our indebtedness and make necessary capital expenditures. If we are unable to generate sufficient cash flow, then we may be required to pursue other alternatives, such as selling assets, restructuring indebtedness or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance any of our indebtedness, including the 2021 Notes, will depend on the
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capital markets and our financial condition at that time. We may not be able to pursue these alternatives on favorable terms or at all, which could result in us defaulting on our debt obligations.
Our existing and future indebtedness could have important consequences to our stockholders and significant effects on our business. For example, it could:
Anti-takeover provisions in our charter documents and under Delaware or Washington law could prevent, delay or impede an acquisition of us and constrain our stock price.
Provisions of our certificate of incorporation and our bylaws may delay or discourage transactions involving an actual or potential change in our control or in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. These provisions could, therefore, adversely affect our stock price. Among other things, our certificate of incorporation and bylaws:
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Likewise, because our principal executive offices are located in Washington, the anti-takeover provisions of the Washington Business Corporation Act may apply to us under certain circumstances now or in the future. These provisions prohibit a “target corporation” from engaging in any of a broad range of business combinations with any stockholder constituting an “acquiring person” for a period of five years following the date on which the stockholder became an “acquiring person.”
Our bylaws include provisions that could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our bylaws provide that, unless we otherwise consent in writing, the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action
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asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. The choice of forum provision may limit stockholders’ ability to bring a claim in a judicial forum favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Securities Trading Plans of Directors and Executive Officers
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Up to |
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- |
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Up to |
(1) Except as indicated by footnote, each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense of Rule 10b5-1(c), as amended (the “Rule”).
(2) Except as indicated by footnote, each trading arrangement permits transactions through and including the earlier of (a) the execution or expiration of all trades specified under the trading arrangement or (b) the date listed in the table. Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” only permits transactions upon expiration of the applicable mandatory cooling-off period under the Rule.
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Item 6. Exhibits
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Incorporation by Reference |
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Exhibit Number |
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Exhibit Description |
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Form |
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Date |
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Number |
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Filed Herewith |
3.1(a) |
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8-K |
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6/12/2020 |
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3.1 |
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3.1(b) |
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8-K |
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6/7/2024 |
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3.1 |
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3.2 |
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Amended and Restated Bylaws of Impinj, Inc. adopted as of February 23, 2023 |
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8-K |
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2/23/2023 |
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3.1 |
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31.1 |
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X |
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31.2 |
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X |
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32.1* |
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X |
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32.2* |
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X |
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101 |
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Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q. |
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X |
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104 |
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Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set. |
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X |
* The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Impinj, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.
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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.
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Impinj, Inc. |
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Date: October 23, 2024 |
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By: |
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/s/ Cary Baker |
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Cary Baker Chief Financial Officer (principal financial officer and duly authorized signatory) |
51