Identiv, Inc.
Annual Report 2022

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 

Form 10-K 

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

For the fiscal year ended December 31, 2022
OR 

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

For the transition period from                     to

COMMISSION FILE NUMBER 0-29440 

IDENTIV, INC. 

(Exact Name of Registrant as Specified in its Charter) 

Delaware
(State or other jurisdiction of
Incorporation or organization)
2201 Walnut Avenue, Suite 100, Fremont, California
(Address of Principal Executive Offices)

77-0444317
(I.R.S. Employer
Identification Number)
94538
(Zip Code)

Registrant’s telephone number, including area code: 
(949) 250-8888 
Securities Registered Pursuant to Section 12(b) of the Act: 

Title of each class
Common Stock, $0.001 par value per share

Trading Symbol(s)
INVE

Name of exchange on which registered
The Nasdaq Stock Market LLC

Securities Registered Pursuant to Section 12(g) of the Act: 
Common Stock, $0.001 par value, and associated Preferred Share Purchase Rights 
(Title of Class) 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☑ 
Indicated by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☑ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 

1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing 
requirements for the past 90 days.    Yes  ☑    No  ☐ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of 

Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    
Yes  ☑    No  ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 

an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer

   Accelerated filer

   Smaller reporting company

  ☑
  ☐

Non-accelerated filer

  ☐
  ☐  
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any 

new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal 

control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or 
issued its audit report.  ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in 

the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation 

received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☑ 
Based on the closing sale price of the Registrant’s Common Stock on the Nasdaq National Market System on June 30, 2022, the last business day of 

the Registrant’s most recently completed second fiscal quarter, the aggregate market value of Common Stock held by non-affiliates of the Registrant was 
$228,257,711. 

At March 2, 2023, the Registrant had outstanding 22,674,362 shares of Common Stock, excluding 1,567,676 shares held in treasury. 

DOCUMENTS INCORPORATED BY REFERENCE 
Designated portions of the Company’s Proxy Statement to be filed within 120 days after the Registrant’s fiscal year end of December 31, 2022 are 

incorporated by reference into Part II, Item 5 and Part III of this Annual Report on Form 10-K. 

Auditor Firm Id:

207

Auditor Name: 

BPM LLP

Auditor Location:

San Jose, California

 
 
 
 
 
 
 
 
 
 
 
Identiv, Inc.
Form 10-K 
For the Fiscal Year Ended December 31, 2022

TABLE OF CONTENTS

PART I

Item 1
   Business ..........................................................................................................................................................................
Item 1A    Risk Factors.....................................................................................................................................................................
Item 1B    Unresolved Staff Comments ...........................................................................................................................................
   Properties ........................................................................................................................................................................
Item 2
   Legal Proceedings ...........................................................................................................................................................
Item 3
   Mine Safety Disclosures .................................................................................................................................................
Item 4
   Information About Our Executive Officers ....................................................................................................................

PART II

   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.....
Item 5
   [Reserved] .......................................................................................................................................................................
Item 6
Item 7
   Management’s Discussion and Analysis of Financial Condition and Results of Operations.........................................
Item 7A    Quantitative and Qualitative Disclosures About Market Risk........................................................................................
   Financial Statements and Supplementary Data...............................................................................................................
Item 8
Item 9
   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.........................................
Item 9A    Controls and Procedures .................................................................................................................................................
Item 9B    Other Information ...........................................................................................................................................................
Disclosure Regarding Foreign Jurisdiction that Prevent Inspections  ............................................................................
Item 9C

Item 10
Item 11
Item 12
Item 13
Item 14

   Directors, Executive Officers and Corporate Governance..............................................................................................
   Executive Compensation.................................................................................................................................................
   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.......................
   Certain Relationships and Related Transactions, and Director Independence ...............................................................
   Principal Accountant Fees and Services .........................................................................................................................

PART III

   Exhibits and Financial Statement Schedule ....................................................................................................................
Form 10-K Summary ......................................................................................................................................................

PART IV

Item 15
Item 16
Signatures

Page

3
9
18
18
18
19
19

20
21
22
35
36
66
66
68
68

69
69
69
69
69

69
71
72

2

 
 
      
ITEM 1.

BUSINESS 

Statement Regarding Forward Looking Statements 

PART I 

This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements within the meaning of the Private 
Securities Litigation Reform Act of 1995. For example, other than statements of historical facts, statements regarding our strategy, 
future operations and growth, financial position, expected financial or business results, projected costs, prospects, plans, market 
trends, potential market size, product attributes and benefits, growth drivers, competition and competitive advantages, objectives of 
management, management judgements and estimates, and the expected impact of changes in laws or accounting pronouncements 
constitute forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “will,” “believe,” 
“could,” “should,” “would,” “may,” “anticipate,” “intend,” “plan,” “estimate,” “expect,” “project” or the negative of these terms or 
other similar expressions. Although we believe that our expectations reflected in or suggested by the forward-looking statements that 
we make in this Annual Report are reasonable, we cannot guarantee future results, performance or achievements. You should not 
place undue reliance on these forward-looking statements. All forward-looking statements speak only as of the date of this Annual 
Report. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation 
to do so, even if our expectations change, whether as a result of new information, future events or otherwise. We also caution you that 
such forward-looking statements are subject to risks, uncertainties and other factors, not all of which are known to us or within our 
control, and that actual events or results may differ materially from those indicated by these forward-looking statements. Factors that 
could cause our actual results to differ materially from our expectations include, but are not limited to our ability to successfully 
execute our business plan and sell our products; continued market acceptance and growth or expansion in our target markets; our 
ability to successfully compete; our history of losses; the effects of product and component shortages; our ability to obtain additional 
capital; the benefits and attributes of our products and services; the level of customer orders; the ability of our products to perform as 
expected; risks related to the COVID-19 pandemic; fluctuations in net cash provided and used by operating, financing and investing 
activities; sources and uses of our cash, and expense levels; the loss of significant customers or types of business; the impact of 
macroeconomic conditions, including inflation, on our business; and the risks discussed elsewhere in this Annual Report under the 
heading “Risk Factors”. These cautionary statements qualify all of the forward-looking statements included in this Annual Report.

Identiv and the Identiv logo are trademarks of Identiv, Inc., registered in many jurisdictions worldwide. Certain product and 

service brands are also trademarks or registered trademarks of the Company, including HIRSCH, ScramblePad, TouchSecure, 
Velocity, Velocity Vision, Velocity AI, Bitse.io, Freedom, Enterphone MESH, 3VR, VisionPoint, Thursby Software, and Thursby 
SubRosa. Other product and brand names not belonging to Identiv that appear in this Annual Report may be trademarks or registered 
trademarks of their respective owners. 

Each of the terms the “Company,” “Identiv,” “we," “us” and “our” as used herein refers collectively to Identiv, Inc. and its 

wholly-owned subsidiaries, unless otherwise stated.

Overview

Our mission is to software-enable the entire physical world.  

Our radio-frequency identification ("RFID") Internet of Things ("IoT") devices and IoT software platform are designed to 
digitally enable and secure any physical item. Our products enable unique and secure digital interaction with the physical world while 
simultaneously managing data flows from each physical object, thereby creating a software-enabled experience for the user that goes 
beyond a purely physical interaction.

Our physical security systems secure virtually every aspect of places and our interaction with them. Our systems provide 

customers with identification, access control, video surveillance and analytics.  The result is a secure and responsive experience 
between the user and the place they are accessing.  We believe our systems are built to meet the needs of various stakeholders, from 
engineers, systems designers, installers, and administrators to systems managers and individual users.

By digitally enabling physical "things," we make them more secure, responsive, feature-rich, interactive and customer-

connected. RFID powers a wide range of IoT applications, including customer engagement, product authenticity, enhanced consumer 
experiences, instrumentation and sensor enabling, brand protection, product tracking, and tamper detection.

We execute our strategy of securing every place and thing through our two business segments: Identity segment for IoT and 

RFID-enabled solutions, and Premises segment for our physical security and access control.

3

•

•

Identity: Our Identity business is focused on digitally enabling and securing every physical thing. Our designs and 
products include RFID-enabled IoT solutions to make digital and physical devices  secure, responsive, and 
meaningful for the end user. Our RFID units have been integrated into more than a billion and a half IoT items 
around the world.

Premises: Our Premises business is focused on securing every physical place. We offer what we believe to be one 
of the most comprehensive, end-to-end systems available from a single service provider in the physical security 
market. Our product portfolio includes identity credentials, access readers, access control systems, video 
management systems, and video analytics, deployed in a hyper-converged platform or a cloud-based architecture. 
Our platform is deployed across buildings worldwide, including sensitive government facilities, schools, utilities, 
hospitals, stores, and apartment buildings.

Market Drivers

Identity Segment:

In our Identity segment, the emerging RFID market is driven by pervasive use cases to the extent they are adopted by companies 

and consumers. For example, RFID devices can verify whether a syringe dispenses the exact right amount of a patient’s medication. 
Mobile phone accessories can work together intelligently with a person’s handset to create novel experiences and applications. 
Temperature-sensitive products can be tracked to ensure the shipment has stayed within its safety parameters and remains unspoiled. 
RFID-enabled smart packaging products, like those being evaluated in the cannabis industry, allow service operators to remain in 
compliance with government regulations and, potentially, tax authorities.

These examples demonstrate the scale of the RFID market opportunity of hundreds of billions of units over time. As technology 
improves and costs drop, we believe competitive pressures will drive adoption across each sector until virtually all physical items have 
a sensor-augmented, integrated, digital existence – a vision we share with leading semiconductor manufacturers.  Identiv enables tiny, 
low-cost RFID chips with highly tuned and optimized antennas, systems, software and security to become embedded in a wide range 
of products, providing a digital identity to almost any object on the planet.  

Premises Segment:

Within our Premises segment, we believe the physical security market is undergoing a generational, technology-driven 

transformation. Fully integrated, software-defined, video, access and identity systems are being deployed to address evolving security 
threats that prior generations of security systems can no longer adequately secure.  Lower cost of ownership, lower cost of 
administration, higher security and lower cost of upgrades and enhancements are the internal drivers of this technological 
transformation. Cyber attacks, identity cloning and user expectations are some of the external forces also driving this generational 
turnover of systems and expansion of their reach. Our physical security platforms enable this transformation by encompassing each of 
the major components that work together to create a secure yet frictionless experience, tailored to the requirements of each customer 
and all stakeholders within each customer.

Competitive Advantages

Identity Segment:

In the Identity segment, we believe our core differentiation is our best-in-class designs, technologies, and intellectual property 
("IP") that enable the secure digital capabilities of RFID chips to work within the analog world of antennas, power harvesting, data 
conversion and security. Our devices can be attached to a prescription bottle, affixed to a shipment pallet, or embedded in an athletic 
jersey; they must then communicate through radio frequency (RF) and harvest power from the radio signal of a phone or reader in 
order to run the chip.  Furthermore, the device must perform reliably in real-world environments. We design the systems, the antennas, 
software, security and physical form that connects the chips, accesses their capabilities, manages RF communications and power 
conversion, and creates the platform for the digital experience, all harmoniously integrated with the physical experience of the 
product. 

We make this happen with our library of designs, patented technologies like tag-on-metal, and IP we have developed working 
with early adopters of RFID in multiple customer verticals including mobility and healthcare. We believe we deepen our value and 
competitive advantage by providing both the devices themselves in high volume, as well as the readers and programmers to 
personalize and read the RFID devices. Our RFID readers are among the most widely deployed for NFC (near-field communication) 
and high-frequency RFID programming and reading, which we believe gives us both credibility with our customers’ engineering 

4

 
teams and the flexibility to add software value.  We then work closely with our customers to build the complicated analog bridge and 
system to make the device function across radio frequencies.  The result for the end user is an engaged, dynamic interaction with very 
high reliability, high data security and optimized power transfer.

Our vertical integration allows us to go directly from prototypes to pilot runs to volume production and deliver a high-quality 

product, even for the most complicated devices. Oftentimes, the customers' engineers want to improve the product, making 
adjustments from lessons learned or because our chip suppliers release new chips, new features, and new price points. We would then 
typically run another rapid cycle of re-design, re-prototype, re-pilot, and re-production processes. We believe the design-through-
production platform incentivizes our customers to continue working with us as they drive increasing functionality and better 
performance into the experiences for their customers. We anticipate this dynamic will accelerate, driven by improving semiconductor 
performance as outlined in industry-recognized Moore's Law, and by competitive forces created when any digitally-enabled product is 
launched, pressuring others to catch up or lose the market opportunity.

Premises Segment:

In the Premises segment, we believe our competitive advantages are our technical depth and ability to offer a comprehensive, 

end-to-end product line with customization that meets the varying needs of our customers’ key stakeholders.  Our platform 
encompasses the total digitization of physical places; it spans access control, video, analytics, access card readers, credentials, and 
hyperconverged appliances, with the ability to manage the system using on-premises, hybrid or cloud architectures, using hardware 
and software that are either enterprise-grade or small-business optimized.  Our Premises products are developed and produced for high 
security applications and have met the requirements and are deployed in some of the most secure government facilities in the United 
States.  We believe that a high-security foundation creates a solid base for all systems, whatever security level is needed.

Our Premises products are built on Identiv-designed and built hardware that reduces component vulnerabilities.  We believe this 
purpose-built solution is more secure than comparable systems, and provides customers with higher performance, while retaining the 
ability to improve and quickly integrate new security features.  We also embed cybersecure technology into all our access control, 
credentials, and door readers.  From CAC/PIV credentials for US government customers to FICAM architecture that we helped to 
define, we believe our strong reputation in the physical security industry is a competitive advantage.

Growth Strategy

Identity Segment:

Our Identity segment growth strategy is focused on pervasive deployment of high-end, sensor-enabled RFID devices in every 

physical thing. We are engaged with technology early adopters, built on our reputation as the go-to partner for technologically 
complex advanced RFID devices. We believe there are three growth drivers in RFID: customer launches, design wins and technology 
expansion.  

Use Case Examples

• Mobile Accessories: Our RFID devices embedded in mobile phone accessories enable rich, extensible experiences 

on a mobile device with an RFID-enabled accessory.

• Medical Devices: It is critical that a patient’s medication be dispensed at the right dosage and temperature. Our 
RFID devices, when attached to a syringe, can enable doctors and their patients to monitor medical compliance.

•

Supply Chain Tracking: Our RFID devices, when attached to a shipment palette, enable a company to track the 
ambient conditions of goods in their supply chain, ensuring cold items remain cold and are delivered to the 
appropriate location.  

5

Design Wins

Design wins are the key to our leadership in the market as it expands. We believe our technical expertise, leadership, IP, active 

customer engagements and reputation across all facets of RFID provide a pipeline of design win opportunities.  We also engage in 
non-recurring engineering ("NRE") projects with strategic customers, with the expectation that many of these projects evolve into 
design wins.

Technology Expansion

Our ability to secure additional design wins and successful customer launches relies upon our best-in-class engineering team and 

production capabilities, as well as new technologies that we design and incorporate as new capabilities for our customers.  

Premises Segment:

In our Premises segment, our platform has the capability to secure virtually every place on the planet. Our platform is anchored 
by the reliability and robustness of our complete security solution.  This includes our Velocity single-pane solution and software, our 
line of controllers and IoT gateways including Mx, our EG Edge controller, our TouchSecure access sensors, our Velocity Vision 
video and our VisionAI machine-learning based analytics platform, our TS Cards credentials as well as our mobile credentials, and a 
wide range of integrations.

We build our Premises solution to meet the stringent requirements of the most high-security facilities in the world and offer a 

complete security solution that includes hardware, software, and professional services.  Our broad product portfolio allows us to 
provide customers a complete deployment, allowing them to consolidate vendors, minimizing execution risk.  This also leverages our 
channel strength as well as the engineering and product investments the company has made.  A key focus area for us is growing sales 
of our software licenses and related maintenance services.  

We sell our current high-security solution to customers within the U.S. government.  Since we offer a fully featured product 

portfolio that meets the needs of many end users, we aim to drive sales of our solution to quasi-governmental customers like airports 
and commercial customers in verticals such as retail, medical, and education.  We also expect to drive sales of our enterprise-level 
solution into the SMB markets that also have high-security needs, thereby expanding the market for our solution. Additionally, we 
have partnerships with original equipment manufacturers (OEMs) that make our products available to their respective sales teams, 
leveraging our engineering investment.

•

Premises Software: Our software platform for premises digitization enables centralized management of a physical 
place, including control of doors, cameras, gates, elevators and other building equipment, monitoring users as they 
move around a facility, preventing unwanted access, maintaining compliance and providing a continuous audit trail. 
Our platforms are IT-centric and highly scalable from small businesses through global organizations, multi-tenant, 
special-purpose campuses such as schools, military bases, utilities and others. Our platforms are available as local 
software or cloud based, accessible through browser, mobile and desktop interfaces. We leverage data 
infrastructures across LAN's, Wifi, Bluetooth, mobile, RFID and emerging communication standards such as 5G and 
UWB (ultra wide-band). As communications infrastructure becomes fully wireless, low-power and high-security, 
our software is architected to support seamless migration to fully software-defined systems, compatible with 
pervasive RFID devices to enable a frictionless, convenient and secure experience in almost any physical location.

• Access Readers & Sensors: As most of the physical infrastructure becomes wireless, virtual and software-defined, 
the remaining device will be the sensors at the door. As platforms for local presence confirmation, video and audio 
interaction, and to signal a door to open, we believe our family of TouchSecure (TS) sensors will continue to play a 
key physical role in providing security and convenience at the door.

• Video Analytics: We have integrated a wide set of machine learning analytics into our Velocity Vision system.  

Integrated with our Velocity access management platform, we are bringing intelligence to physical security and the 
entire experience as people interact with buildings and other facilities around them.

Sales & Marketing Strategy

Our go-to-market strategy is consistent across our business. We believe our competitive advantage is our technical expertise, 

technology and know-how which covers both the user side and the programmer/reader/infrastructure side.  With this depth of 
technology across the overall system we develop and prove our best-in-class use cases with our customers.  

6

• Use-case Proliferation: We apply our digital marketing platforms, sales teams and channel partners to proliferate 

each use case as best-in-class. We target product engineers or other decision makers to build awareness of a proven 
solution. We drive our marketing message in terms that engineers value because we have established the benefits 
from comparable use cases. As a company adopts RFID and delivers superior product experiences, we believe that 
drives faster adoption by others, until a use-case becomes pervasive.

•

•

Trusted advisor: Reducing adoption cost and risk: We have built a reputation as the trusted advisor to our customers 
by sharing benefits and pitfalls, risks and tradeoffs, as well as ways to mitigate them. We also communicate the risk 
of inaction, as others come to market with new capabilities. By highlighting risks of inaction, making customers 
aware of upcoming competitive threats and sharing insights into how they can confidently build competitive 
capabilities themselves, we believe we become their trusted advisor early in their learning and decision cycle. Then, 
because we help with the designs, provide devices as well as reader/programmers, and complete solutions or best-of-
breed components, we often become a long-term partner, reducing their risks and efforts and improving their 
competitive advantages. Throughout this process, confidentiality is paramount. A capability developed uniquely 
with and for a customer is not shared with another. That is fundamental to our culture and to our business practices.

Industry Leader and Facilitator: As we develop general use-case capabilities and insights, we share and leverage 
those cross-industry, adding value and building our competitive advantage. Specific differentiation established with 
a customer is protected. With this key guideline, we optimize our value across each use case, to each individual 
customer, and to the industry overall.

Research and Development

In RFID, we are a leader in a wide range of chip use cases, antenna designs across HF, UHF and LF (low frequency) as well as 
sensors, materials and form factors. We encompass both sides of the underlying technology platforms, the devices themselves as well 
as the programmers, testers, configurators and readers. We believe this provides credibility with customers, demonstrating an 
understanding of all components of the devices, because our devices are programming, configuring, testing and validating them at the 
time of production, as well as in use among customers. Similarly with our physical security IoT platforms, we encompass the total 
solution. We believe our technology and products span a far greater range of the platform solution than most of our competitors, 
encompassing readers, controllers, video, cards and software across local, cloud, mobile, and hybrid modes.

Our research and development (“R&D”) investment is highly leveraged because we optimally access expertise wherever we 

believe it is most advanced and most efficient. We maintain RFID R&D in Germany, in the region where the initial NFC and smart 
card technologies developed, and in Singapore/Southeast Asia, where the most advanced and flexible RFID production is centered. 
We also deploy Premises software and systems teams in India, Vietnam, Mexico and the U.S.   

Proprietary Technology and Intellectual Property 

We currently rely on a combination of patent, copyright and trademark laws, trade secrets, confidentiality agreements and 
contractual provisions to protect our proprietary rights. Although we may seek to protect our proprietary technology through patents, it 
is possible that no new patents will be issued, that our proprietary products or technologies are not patentable, and that any issued 
patent will fail to provide us with any competitive advantages. The core of our proprietary technology is the combination of our 
advanced technical expertise combined with our intimate customer knowledge, enabling us to develop bring to market and sometimes 
patent products uniquely positioned to deliver benefits to customers. We have a portfolio of approximately 36 patent families (designs, 
patents, utility models, patents pending and exclusive licenses) in individual or regional filings, covering products, electrical and 
mechanical designs, software systems and methods and manufacturing process ideas for our various businesses. Additionally, we 
leverage our own ASIC designs for smart card interface in some of our reader devices. Our issued patents expire between 2023 and 
2034.  

Manufacturing and Sources of Supply

We utilize a combination of our own manufacturing facilities and the services of contract manufacturers in various countries 
around the world to manufacture our products and components. Our RFID devices are predominantly manufactured and assembled by 
our own internal manufacturing teams in Singapore primarily using locally sourced components and are certified to the ISO 
9001:2015 and ISO 14001:2015 quality manufacturing standard. Our premises sensors readers, controllers and software are 
manufactured primarily in California. Our video appliances are manufactured primarily in Wisconsin and Arizona. The majority of 
our smart card reader products and components are manufactured in Singapore, Cambodia and South Korea. We have implemented 
formal quality control programs to satisfy customer requirements for high quality and reliable products. To ensure that products 
manufactured by third parties are consistent with internal standards, our quality control programs include management of all key 
aspects of the production process, including establishing product specifications, selecting the components to be used to produce 

7

products, selecting the suppliers of these components and negotiating the prices for certain of these components. In addition, we may 
work with suppliers to improve process control and product design. 

For the majority of our product manufacturing, we utilize a global sourcing strategy that serves all business solution areas within 
the company, which allows us to achieve economies of scale and uniform quality standards for our products. On an ongoing basis, we 
analyze the need to add alternative sources for both our products and components. For example, we currently utilize the foundry 
services of external suppliers to produce our ASICs for smart cards readers and RFID devices, and we use chips and antenna 
components from third-party suppliers. Wherever possible, we have qualified additional sources of supply for components. 

Government Regulation 

Our business is subject to government regulation as discussed in the Risk Factors.

Human Capital

Our key human capital management objectives are to attract, retain and develop the highest quality talent. To support these 

objectives, our human resources program is designed to develop talent to prepare them for critical roles and leadership positions for 
the future; reward and support employees through competitive pay and benefits; enhance our culture through efforts aimed at making 
the workplace more engaging and inclusive; acquire talent and facilitate internal talent mobility to create a high-performing and 
diverse workforce. As of December 31, 2022, we had 343 employees, of which 73 were in research and development, 92 were in sales 
and marketing, 145 were in manufacturing and 33 were in general and administrative. We are not subject to any collective bargaining 
agreements and, to our knowledge, none of our employees are currently represented by a labor union. To date, we have experienced 
no work stoppages and believe that our employee relations are generally good. 

Corporate Information 

Our corporate headquarters are located in Fremont, California. We maintain research and development facilities in California; 

Chennai, India; Munich, Germany; and local operations and sales facilities in Germany, the United Kingdom, Hong Kong, Singapore, 
Canada, India, Japan and the United States. We were founded in 1990 in Munich, Germany and incorporated in 1996 under the laws 
of the State of Delaware.

Availability of SEC Filings 

We make available through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current 

Reports on Form 8-K and amendments to those reports free of charge as soon as reasonably practicable after we electronically file 
such reports with the Securities and Exchange Commission (“SEC”). Our Internet address is www.identiv.com. The content on our 
website is not, nor should it be deemed to be, incorporated by reference into this Annual Report. Our filings with the SEC are also 
available to the public through the SEC’s website at www.sec.gov. 

8

Item 1A.

Risk Factors 

Risks Related to Our Customers, Products and Markets, and Our Business

Adverse global and regional economic conditions have and may continue to materially adversely affect our business, results 

of operations and financial condition.

 We conduct operations internationally with sales in the Americas, Europe and the Middle East, and Asia-Pacific regions. Our 

manufacturing operations and third-party contract manufacturers are located in China and Singapore/Southeast Asia. We also purchase 
certain products and key components from a limited number of sources that depend on the supply chain, including freight, to receive 
components, transport finished goods and deliver our products across the world. As a result, adverse global and regional economic 
conditions may materially adversely affect our business, results of operations and financial condition.

Such conditions, including but not limited to inflation, slower growth or recession, higher interest rates and currency 

fluctuations, and other conditions that may impact consumer confidence and spending may adversely affect demand for our products. 
During fiscal year 2022, we were impacted by adverse macroeconomic conditions including but not limited to inflation, foreign 
currency fluctuations, and the slowdown of economic activity around the globe. For example, in the second half of 2022, we 
experienced delays and reductions in customer orders, shifting supply chain availability and component shortages. We also continue to 
be affected by supply chain challenges. Global economic conditions have also impacted our suppliers, contract manufacturers, 
logistics providers, and distributors, causing increases in cost of materials and higher shipping and transportation rates, which then 
impacted the pricing of our products. Price increases may not successfully offset cost increases or may cause us to lose market share 
and, in turn, may adversely impact our operations.

We depend on a number of suppliers and contract manufacturers for the production of our products and components 

making us potentially vulnerable to supply disruption.

Our reliance on suppliers and contract manufacturers for the production of our products and hardware components has and may 

continue to result in product delivery problems and delays. We may suffer a disruption if the supply of components causes us to be 
unable to purchase sufficient components on a timely basis. For example, the ongoing global semiconductor shortage that began in 
2021 has and may continue to adversely impact our ability to meet product demand in a timely fashion. This shortage, which is due in 
part to COVID-19, may persist for an indefinite period of time and has and may continue to have a negative impact on our revenue 
and operating results. Low inventory levels can affect our ability to meet customer demand, lengthen lead times and potentially cause 
us to miss opportunities, lose market share and/or damage customer relationships, also adversely affecting our business. Although we 
have taken steps to ensure we have adequate supply for expected customer demand, there can be no assurance that our efforts will be 
successful. If we are not able to get the necessary products and components on a timely basis, our business, financial condition and 
results of operations may be adversely affected.

Our financial performance depends on the extent and pace of RFID market adoption and end-user adoption of our RFID 

products and the timing of new customer deployments.

Our financial performance depends on the pace, scope and depth of end-user adoption of our RFID products in multiple 
industries. That pace, scope and depth accelerated during 2022 which has caused large fluctuations in our operating results. If RFID 
market adoption, and adoption of our products specifically, does not meet our expectations, then our growth prospects and operating 
results will be adversely affected. If we are unable to meet end-user or customer volume or performance expectations, then our 
business prospects may be adversely affected. In addition, given the uncertainties of the specific timing of our new customer 
deployments, we cannot be assured that we will have appropriate inventory and capacity levels or that we will not experience 
inventory shortfalls or overages in the future. We seek to mitigate those risks by being deeply embedded in our customers' design 
cycle, working with our chip partners on long lead time components, managing our limited capital equipment needs within a short 
cycle and expanding our facilities to accommodate several scenarios for growth potential. If end users with sizable projects change or 
delay them, we may experience significant fluctuation in revenue on a quarterly or annual basis, and we anticipate that such 
uncertainty and fluctuations may continue to characterize our business for the foreseeable future.

9

The impact of the COVID-19 pandemic, or similar global health concerns, could negatively impact our operations, supply 

chain and customer base.

The COVID-19 pandemic has severely restricted the level of economic activity around the world, which has and may continue 

to impact timing of demand for our products and services. Our operations and supply chains for certain of our products or services 
may be negatively impacted by the regional or global outbreak of illnesses, including a resurgence of COVID-19 variants. Any 
quarantines, labor shortages or other disruptions to our operations, or those of our suppliers or customers, have and may continue to 
adversely impact our sales and operating results, including additional expenses and strain on the business as well as our supply chain. 
In addition, a resurgence in COVID-19 variants could continue to adversely affect some of the market verticals that we participate in 
as well as the general economies and financial markets of many countries, including those in which we operate, and negatively 
impacted supply and demand for our products and services, and has and may continue to result in delayed sales and extended payment 
cycles for our products and services. We are unable to accurately fully predict the effect of a future pandemic on our business, and 
which could be affected by other factors we are not currently able to predict, including the success of actions taken to contain or treat 
future COVID-19 variants, and reactions by consumers, companies, governmental entities and capital markets. 

Our business could be adversely affected by reductions or delays in the purchase of our products or services for government 

security programs in the United States and globally. 

We derive a substantial portion of our revenues from indirect sales to U.S. federal, state and local governments and government 

agencies, as well as from subcontracts under federal government prime contracts. Large government programs are an important 
market for our business, as high-security systems employing physical access, smart card, RFID or other access control technologies 
are increasingly used to enable applications ranging from authorizing building and network access for federal employees to paying 
taxes online, to citizen identification, to receiving health care. We believe that the success and growth of our business will continue to 
be influenced by our successful procurement of government business either directly or through our indirect sales channels. 
Accordingly, changes in government purchasing policies or government budgetary constraints, including government shutdowns, 
could directly affect our financial performance. Sales to government agencies and customers primarily serving the U.S. Government, 
including further sales pursuant to existing contracts, may be adversely affected by factors outside our control, such as, federal 
government shutdowns or other Congressional actions to reduce federal spending, and by adverse economic, political or market 
conditions. A reduction in current or future anticipated sales to the U.S. Government sector could harm our results of operations.

Additionally, we anticipate that an increasingly significant portion of our future revenues will come from government programs 

outside the U.S., such as electronic national identity, eGovernment and eHealth programs. We currently supply smart card readers, 
RFID products and credential provisioning and management solutions for various government programs in Europe, Asia and Australia 
and are actively targeting additional programs in these and other geographic areas. However, the allocation and availability of funding 
for such programs are often impacted by economic or political factors over which we have no control, and which may cause delays in 
program implementation, which could negatively impact our sales and results of operations. 

Our U.S. Government business depends upon the continuance of regulations that require federal agencies to implement 
security systems such as ours, and upon our ability to receive certain government approvals or certifications and demonstrate 
compliance in government audits or investigations. A failure to receive these government approvals or certifications or a negative 
audit result could result in a material adverse impact on our business, financial condition and results of operations.

While we are not able to quantify the amount of sales made to end customers in the U.S. Government market due to the indirect 

nature of our selling process, we believe that orders from U.S. Government agencies represent a significant portion of our revenues. 
The U.S. Government, suppliers to the U.S. Government and certain industries in the public sector currently fall, or may in the future 
fall, under regulations that require federal agencies to implement security systems that utilize physical and logical access control 
products and solutions such as ours. These regulations include, but are not limited to, HSPD 12 and FIPS 201 produced by the 
National Institute of Standards and Technology (“NIST”). Discontinuance of, changes in, or lack of adoption of laws or regulations 
pertaining to security related to sales to end customers in the U.S. Government market could adversely affect our sales. 

Our U.S. Government business is also dependent upon the receipt of certain governmental approvals or certifications and failure 

to receive such approvals or certifications could have a material adverse effect on our sales in those market segments for which such 
approvals or certifications are customary or required. Government agencies in the U.S. and other countries may audit our business as 
part of their routine audits and investigations of government procurement programs. Based on the outcome of any such audit, if any of 
our costs are found to be improperly allocated to a specific order, those costs may not be reimbursed, and any costs already reimbursed 
for such order may have to be refunded. If a government agency audit uncovers improper or illegal activities, we may be subject to 
civil and criminal penalties and administrative sanctions. A negative audit could materially affect our competitive position and result 
in a material adverse impact on our business, financial condition and results of operations.

10

Our revenues may decline if we cannot compete successfully in an intensely competitive market. 

We target our products at the rapidly evolving market for security technologies. Many of our current and potential competitors 

have significantly greater financial, technical, marketing, purchasing and other resources than we do. As a result, our competitors may 
be able to respond more quickly to new or emerging technologies or standards and to changes in customer requirements. Our 
competitors may also be able to devote greater resources to the development, promotion and sale of products or solutions and may be 
able to deliver competitive products or solutions at a lower end user price. 

We also experience indirect competition from certain of our customers who currently offer alternative products or solutions or 

are expected to introduce competitive offerings in the future. For example, in our Premises business, many of our dealer channel 
partners act as system integrators, providing installation and service, and therefore carry competitive lines of products and systems. 
This is a common practice within the industry as the integrators need access to multiple lines in order to support all potential service 
and user requirements. Depending on the technical competence of their sales forces, the comfort level of their technical staff with our 
systems and price pressures from customers, these integrators may choose to offer a competitor’s product. There is also business 
pressure to provide some level of sales to all vendors to maintain access to a range of products and systems.

We believe that the principal competitive factors affecting the markets for our products and solutions include: 

•

•

•

•

the extent to which products and systems must support evolving industry standards and provide interoperability; 

the extent to which products are differentiated based on technical features, quality and reliability, ease of use, strength of 
distribution channels and price;

the ability to quickly develop new products and solutions to satisfy new market and customer requirements; and

the total cost of ownership including installation, maintenance and expansion capability of systems. 

Increased competition and increased market volatility in our industry could result in lower prices, reduced margins or the failure 

of our product and service offerings to achieve or maintain market acceptance, any of which could have a serious adverse impact on 
our business, financial condition and results of operations. 

Our percentage of revenue and customer concentration is significant in certain of our businesses. 

Sales to our ten largest customers accounted for 25%, 32% and 33% of total net revenue in 2022, 2021 and 2020, respectively. 
No customer accounted for 10% or more of our total net revenue in 2022, 2021 or 2020. A significant amount of revenue is sourced 
from sales of products and systems to our OEM partners and an indirect sales network who sell to various entities within the U.S. 
federal government sector. We cannot guarantee that future reductions in U.S. Government budgets will not impact our sales to these 
government entities or that the terms of existing contracts will not be subject to renegotiation. Our loss of one or more significant 
customers could have a significant adverse impact on our business, financial condition and results of operations. 

Our business will not be successful if we do not keep up with the rapid changes in our industry. 

The market for security products and related services is characterized by rapid technological developments, frequent new 
product introductions and evolving industry standards. To be competitive, we have to continually improve the performance, features 
and reliability of our products and services, particularly in response to competitive offerings, and quickly demonstrate the value of 
new products and services or enhancements to existing products and services. Our failure to develop and introduce new products and 
services successfully on a timely basis and to achieve market acceptance for such products and services could have a significant 
adverse impact on our business, financial condition and results of operations. 

Security breaches, whether or not related to our products, could result in the disclosure of sensitive government information 

or private personal information that could result in the loss of clients and negative publicity. 

Many of the systems we sell manage private personal information or protect sensitive information related to our customers in 

the government or commercial markets. A well-publicized actual or perceived breach of network or computer security in one of these 
systems, regardless of whether such a breach is attributable to our products, could adversely affect the market’s perception of us and 
our products, and could result in the loss of customers, have an adverse effect on our reputation and reduce demand for our products.

11

As part of our technical support services, we agree, from time to time, to possess all or a portion of the security system database 

of our customers. This service is subject to a number of risks. For example, despite our security measures, our systems may be 
vulnerable to cyber-attacks by hackers, physical break-ins and service disruptions that could lead to interruptions, delays or loss of 
data. If any such compromise of our security were to occur, it could be very expensive to correct, could damage our reputation and 
result in the loss of customers, and could discourage potential customers from using our services. We could also be liable for damages 
and penalties. Although we have not experienced a cyber or physical security breach, we may experience breaches in the future. Our 
systems also may be affected by outages, delays and other difficulties. In addition, our insurance coverage may be insufficient to cover 
losses and liabilities that may result from such events. 

Our business and reputation may adversely affected by information technology system failures or network disruptions.

We may be subject to information technology system failures and network disruptions. These may be caused by natural 
disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic 
break-ins, or other events or disruptions. System redundancy may be ineffective or inadequate, and our disaster recovery planning may 
not be sufficient for all eventualities. Such failures or disruptions could compromise company or customer data and result in delayed 
or cancelled orders and expose us to liability. System failures and disruptions could also impede the manufacturing and shipping of 
products, delivery of online services, processing of transactions and reporting of financial results. In addition, any such failures or 
disruptions could harm our reputation. Although we do not have operations in Russia or Ukraine, we do not and cannot know if the 
current uncertainties in these geopolitical areas may escalate and result in broad economic and security conditions, which could result 
in material implications for our business.

Sales of our products could decline and we could be subject to legal claims for damages if our products are found to have 

defects.

Despite our testing efforts, our products may contain defects that are not detected until after the products have been shipped. The 

discovery of defects or potential defects may result in damage to our reputation, delays in market acceptance of our products and 
additional expenditures to resolve issues related to the products’ implementation. If we are unable to provide a solution to actual or 
potential product defects that is acceptable to our customers, we may be required to incur substantial costs for product recall, repair 
and replacement, or costs related to legal or warranty claims made against us. 

The global nature of our business exposes us to operational and financial risks and our results of operations could be 

adversely affected if we are unable to manage them effectively. 

We market and sell our products and solutions to customers in many countries around the world. To support our global sales, 

customer base and product development activities, we maintain offices and/or business operations in several locations around the 
world, including the United Kingdom, Germany, Hong Kong, India, Japan, Singapore, Canada, and the U.S. We also maintain 
manufacturing facilities in Singapore and California and engage contract manufacturers in multiple countries outside the U.S. 
Managing our global development, sales, administrative and manufacturing operations places a significant burden on our management 
resources and our financial processes and exposes us to various risks, including:

•

•

•

•

•

•

•

•

•

longer accounts receivable collection cycles; 

changes in foreign currency exchange rates;

compliance with and changes in foreign laws and regulatory requirements;

changes in political or economic conditions and stability, particularly in emerging markets;

difficulties managing widespread sales and manufacturing operations and related costs; 

export controls;

natural disasters;

less effective protection of our intellectual property; and

potentially adverse tax consequences. 

Any failure to effectively mitigate these risks and effectively manage our global operations could have a material adverse effect 

on our business, financial condition or operating results. 

12

If current or future export laws limit or otherwise restrict our business, we could be prohibited from shipping our products to 

certain countries, which could cause our business, financial condition and results of operations to suffer. 

Some of our products are subject to export controls or other laws restricting the sale of our products under the laws of the U.S., 

the European Union (“EU”) and other governments. The export regimes and the governing policies applicable to our business are 
subject to change. We cannot be certain that such export authorizations will be available to us or for our products in the future. In 
some cases, we rely upon the compliance activities of our prime contractors, and we cannot be certain they have taken or will take all 
measures necessary to comply with applicable export laws. If we or our prime contractor partners cannot obtain required government 
approvals under applicable regulations, we may not be able to sell our products in certain international jurisdictions. 

A significant portion of our revenue is through an indirect sales channel, and the loss of dealers, systems integrators, 

resellers, or other channel partners could result in decreased revenue. 

We currently use an indirect sales channel that includes dealers, systems integrators, value added resellers and resellers to sell a 

significant portion of our products and solutions, primarily into markets or to customers where the channel partner may have closer 
customer relationships or greater access than we do. Some of these channel partners also sell our competitors’ products, and if they 
favor our competitors’ products for any reason, they may fail to market our products as effectively or to devote necessary resources 
that result in sales of our products, which could cause our sales to suffer. Indirect selling arrangements are intended to benefit both us 
and the channel partner, and may be long- or short-term relationships, depending on market conditions, competition in the marketplace 
and other factors. If we are unable to maintain effective indirect sales channels, there could be a reduction in the amount of product we 
are able to sell, and our revenues could decrease. 

We depend upon third-party manufacturers and a limited number of suppliers, and if we experience disruptions in our 

supply chain or manufacturing, our business may suffer.

We rely upon a limited number of suppliers for some key components of our products which exposes us to various risks, 
including whether or not our suppliers will provide adequate quantities with sufficient quality on a timely basis and the risk that 
supplier pricing may be higher than anticipated. In addition, some of the basic components used in some of our products, such as 
semiconductors, may at any time be in great demand. This could result in components not being available to us in a timely manner or 
at all, particularly if larger companies have ordered significant volumes of those components, or in higher prices being charged for 
components we require. Disruption or termination of the supply of components or software used in our products could delay 
shipments of our products, which could have a material adverse effect on our business and operating results and could also damage 
relationships with current and prospective customers. 

Many of our products are manufactured outside the U.S. by contract manufacturers. Our reliance on these manufactures poses a 
number of risks, including lack of control over the manufacturing process and ultimately over the quality and timing of delivery of our 
products. If any of our contract manufacturers cannot meet our production requirements, we may be required to rely on other contract 
manufacturing sources or identify and qualify new contract manufacturers, and we may not be able to do this in a timely manner or on 
reasonable terms. Additionally, we may be subject to currency fluctuations, potentially adverse tax consequences, unexpected changes 
in regulatory requirements, tariffs and other trade barriers, export controls, natural disasters, or political and economic instability. Any 
significant delay in our ability to obtain adequate supplies of our products from our current or alternative manufacturers could 
materially and adversely affect our business and operating results. In addition, if we are not successful at managing the contract 
manufacturing process, the quality of our products could be jeopardized or inventory levels could be inadequate or excessive, which 
could result in damage to our reputation with our customers and in the marketplace, as well as possible shortages of products or write-
offs of excess inventory. 

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

Our future success depends on our ability to continue to attract, retain, and motivate our senior management as well as qualified 

technical personnel, particularly software engineers. Competition for these employees is intense and many of our competitors may 
have greater name recognition and significantly greater financial resources to better compete for these employees. If we are unable to 
retain our existing personnel, or attract and train additional qualified personnel, our growth may be limited. Our key employees are 
employed on an “at will” basis, meaning either we or the employee may terminate their employment with us at any time. The loss of 
key employees could slow our product development processes and sales efforts or harm our reputation. Also, if our stock price 
declines, it may result in difficulty attracting and retaining personnel as equity incentives generally comprise a significant portion of 
our employee compensation. Further, restructurings and reductions in force that we have recently experienced may have a negative 
effect on employee morale and the ability to attract and retain qualified personnel.

13

Risks Related to Our Financial Results, Liquidity and Need for Additional Capital

Our revenue and operating results are subject to significant fluctuations and such fluctuations may lead to a reduced market 

price for our stock. 

Our revenue and operating results have varied in the past and will likely continue to fluctuate in the future. We believe that 

period-to-period comparisons of our operating results are not necessarily meaningful, but securities analysts and investors often rely 
upon these comparisons as indicators of future performance. If our operating results in any future period fall below the expectations of 
securities analysts and investors, or the guidance that we provide, the market price of our stock would likely decline. 

Factors that have caused our results to fluctuate in the past and which are likely to affect us in the future include the following:

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

business and economic conditions overall and in our markets; 

the timing and size of customer orders, including orders that may be tied to annual or other budgetary cycles, seasonal 
demand, product plans or program roll-out schedules; 

the effects of U.S. Government shutdowns, spending cuts and other changes in budget allocation or availability that create 
uncertainty for customers in certain parts of our business; 

the absence of significant backlog in our business; 

cancellations or delays of customer orders or the loss of a significant customer; 

the length of sales cycles associated with our product or service offerings;

variations in the mix of products and services we sell;

reductions in the average selling prices that we are able to charge due to competition, new product introductions or other 
factors; 

the impact of increasing freight and logistics costs;

our ability to obtain an adequate supply of quality components and to deliver our products on a timely basis; 

our inventory levels and the inventory levels of our customers and indirect sales channels; 

the extent to which we invest in development, sales and marketing, and other expense categories;

acquisitions, dispositions or organizational restructuring; 

fluctuations in the value of foreign currencies against the U.S. dollar; 

the cost or impact of litigation; and

the write-off of trade receivables and investments. 

Estimating the amount and mix of future revenues is difficult, and our failure to do so accurately could affect our ability to 

be profitable or reduce the market price for our stock. 

Accurately estimating future revenues is difficult because the purchasing patterns of our customers can vary depending upon a 

number of factors. We sell our smart card readers primarily through a channel of distributors who place orders on an ongoing basis 
depending on their customers’ requirements. As a result, the size and timing of these orders can vary from quarter to quarter. Market 
demand for RFID and NFC technology is resulting in larger program deployments of these products and components, as well as 
increasing competition for these solutions. Across our business, the timing of closing larger orders increases the risk of quarter-to-
quarter fluctuation in revenues. If orders forecasted for a specific group of customers for a particular quarter are not realized or 
revenues are not otherwise recognized in that quarter, our operating results for that quarter could be materially adversely affected. In 
addition, from time to time, we may experience an unexpected increase or decrease in demand for our products resulting from 
fluctuations in our customers’ budgets, purchasing patterns or deployment schedules. These occurrences are not always predictable 
and can have a significant impact on our results in the period in which they occur. Failure to accurately forecast customer demand may 
result in excess or obsolete inventory, which if written down might adversely impact our cost of revenues and financial condition. 

In addition, our expense levels are based, in significant part, upon our expectations as to future revenues and are largely fixed in 
the short term. We may be unable to adjust spending in a timely manner to compensate for any unexpected shortfall in revenues. Any 
significant shortfall in revenues in relation to our expectations could have an immediate and significant effect on our operating results 
for that quarter and may lead to a reduced market price for our stock. 

14

If we are not able to secure additional capital when needed, our business could be adversely affected. 

We may seek or need to raise additional funds for capacity expansion, general corporate and commercial purposes or for 
acquisitions. Our ability to obtain financing depends on our historical and expected future operating and financial performance, and is 
also subject to prevailing economic conditions and to financial, business and other factors beyond our control. If we are unable to 
secure additional financing when desired, our ability to fund our business operations, make capital expenditures, pursue additional 
expansion or acquisition opportunities, or have resources available to capitalize on other opportunities could be limited, and this could 
adversely impact our financial results. There can be no assurance that additional capital will be available to us on favorable terms or at 
all. The sale of additional debt or equity securities may cause dilution to existing stockholders. Any debt or equity securities issued 
may also provide for rights, preferences or privileges senior to those of our common stock and could impose significant restrictions on 
our operations. 

Fluctuations in foreign exchange rates between the U.S. dollar and other major currencies in which we do business may 

adversely affect our business, financial condition and results of operations. 

A significant portion of our business is conducted in foreign currencies, principally the euro and Indian Rupee. Fluctuations in 
the value of foreign currencies relative to the U.S. dollar will result in currency exchange gains and losses in our reported results. If a 
significant portion of operating expenses are incurred in a foreign currency such as the euro or Indian Rupee, and revenues are 
generated in U.S. dollars, exchange rate fluctuations might have a positive or negative net financial impact on these transactions, 
depending on whether the value of the U.S. dollar decreases or increases compared to that currency. In addition, the valuation of 
current assets and liabilities that are denominated in a currency other than the functional currency can result in currency exchange 
gains and losses. For example, when one of our subsidiaries uses the euro as the functional currency, and this subsidiary has a 
receivable in U.S. dollars, a devaluation of the U.S. dollar against the euro of 10% would result in a foreign exchange loss to the 
reporting entity of 10% of the value of the underlying U.S. dollar receivable. We cannot predict the effect of exchange rate 
fluctuations upon future operating results. The effect of currency exchange rate changes may increase or decrease our costs and/or 
revenues in any given period, and we may experience currency losses in the future. To date, we have not adopted a hedging program 
to protect against the risks associated with foreign currency fluctuations. 

Risks Related to Our Intellectual Property, and Litigation

We may not be able to protect our intellectual property rights, which could make us less competitive and cause us to lose 

market share.

Our future success will depend, in part, upon our intellectual property rights and our ability to protect these rights. We rely on a 

combination of patent, copyright, trademark and trade secret laws, nondisclosure agreements and other contractual provisions to 
establish, maintain and protect our proprietary rights. From time to time, we may be required to use litigation to protect our proprietary 
technology. As a result, we may incur substantial costs and we may not be successful in any such litigation. Despite our efforts to 
protect our proprietary rights, unauthorized third parties may copy aspects of our products, obtain and use information that we regard 
as proprietary, or infringe upon our patents. In addition, the laws of some foreign countries do not protect proprietary and intellectual 
property rights to the same extent as do the laws in the U.S. Because many of our products are sold and a significant portion of our 
business is conducted outside the U.S., our exposure to intellectual property risks may be higher. Our efforts to protect our proprietary 
and intellectual property rights may not be adequate. Additionally, there is a risk that our competitors will independently develop 
similar technology or duplicate our products or design around patents or other intellectual property rights. If we are unsuccessful in 
protecting our intellectual property or our products or technologies are duplicated by others, our competitive position could be harmed 
and we could lose market share. 

As an example, the complexity and uncertainty of European patent laws have increased in recent years. In Europe, a new unitary 

patent system will likely be introduced by the end of 2023, which would significantly impact European patents, including those 
granted before the introduction of such a system. Under the unitary patent system, European applications will soon have the option, 
upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the Unitary Patent Court (UPC). As 
the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation. Patents granted before 
the implementation of the UPC will have the option of opting out of the jurisdiction of the UPC and remaining as national patents in 
the UPC countries. Patents that remain under the jurisdiction of the UPC will be potentially vulnerable to a single UPC-based 
revocation challenge that, if successful, could invalidate the patent in all countries who are signatories to the UPC. We cannot predict 
with certainty the long-term effects of any potential changes.

15

We face risks from claims of third parties and litigation, which could have an adverse effect on our results of operations. 

We have, and may in the future, receive notices of claims of infringement and misappropriation or misuse of other parties’ 

proprietary rights. From time to time, we are subject to claims of third parties, possibly resulting in litigation, which could include, 
among other things, claims regarding infringement of the intellectual property rights of third parties, product defects, employment-
related claims, and claims related to acquisitions, dispositions or restructurings. We cannot assure you that we will prevail in such 
actions, or that other actions alleging misappropriation or misuse by us of third-party trade secrets, alleging infringement by us of 
third-party patents and trademarks or challenging the validity of our patents, will not be asserted or prosecuted against us. Addressing 
any such claims or litigation may be time-consuming and costly, divert management resources, cause product shipment delays, require 
us to redesign our products, require us to accept returns of products and to write-off inventory, or result in other adverse effects to our 
business. Any of the foregoing could have a material adverse effect on our results of operations and could require us to pay significant 
monetary damages. 

We expect the likelihood of intellectual property infringement and misappropriation claims may increase as the number of 
products and competitors in the security market grows and as we increasingly incorporate third-party technology into our products. As 
a result of infringement claims, we could be required to license intellectual property from a third party or redesign our products. 
Licenses may not be offered when required or on acceptable terms. If we do obtain licenses from third parties, we may be required to 
pay license fees or royalties or we may be required to license some of our intellectual property to others in return for such licenses. If 
we are unable to obtain a license necessary for us or our third-party manufacturers to manufacture our allegedly infringing products, 
we could be required to suspend the manufacture of products or stop our suppliers from using processes that may infringe the rights of 
third parties. We may also be unsuccessful in redesigning our products. Our suppliers and customers may be subject to infringement 
claims based on intellectual property included in our products. We have historically agreed to indemnify our suppliers and customers 
for patent infringement claims relating to our products. The scope of this indemnity varies, but may, in some instances, include 
indemnification for damages and expenses, including attorney’s fees. We may periodically engage in litigation as a result of these 
indemnification obligations. Our insurance policies exclude coverage for third-party claims for patent infringement. 

We have in the past been named as a defendant in putative securities class action and derivative lawsuits. 

Securities class action lawsuits have often been brought against a company following periods of volatility in the market price of 

its securities. Companies such as ours in the technology industry are particularly vulnerable to this kind of litigation due to the 
volatility of their stock prices. We have in the recent past been named as a defendant in putative securities class action and derivative 
lawsuits and may again be so named in the future. Any litigation to which we were a party has and may in the future result in the 
diversion of management attention and resources from our business and business strategy. In addition, any litigation to which we may 
become a party to may result in onerous or unfavorable judgments that may not be reversed upon appeal and that may require us to 
pay substantial monetary damages or fines, or we may decide to settle lawsuits on similarly unfavorable terms, which could have a 
material adverse effect our business, financial condition or results of operations. 

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.

We have incurred, and in the future will incur, high costs associated with being a public company.

We have incurred significant legal, accounting and other costs associated with public-company reporting requirements. We 
ceased to be a “smaller reporting company” on December 31, 2021, and are no longer eligible for the reduced disclosure requirements 
and exemptions applicable to “smaller reporting companies.” Our loss of this status has required additional management attention and 
increased our costs, including legal, accounting, external professional consulting and investor-relations-related costs. We cannot 
predict or accurately estimate the additional costs we are likely to incur from being a public company or the timing of these costs.

16

General Risk Factors

Our stock price has been and is likely to remain volatile. 

Over the past several years, The Nasdaq Capital Market has experienced significant price and volume fluctuations that have 

particularly affected the market prices of the stocks of technology companies. Volatility in our stock price may result from a number 
of factors, some of which are beyond our control, including, among others: 

•

•

•

•

•

•

•

•

•

low volumes of trading activity in our stock; 

technical trading patterns of our stock; 

variations in our or our competitors’ financial and/or operational results; 

the fluctuation in market value of comparable companies in any of our markets; 

expected or announced news about strategic partner relationships, customer wins or losses, product announcements or 
organizational changes; 

comments and forecasts by securities analysts; 

litigation developments; 

global developments, including war, acts of terrorism, contagions such as COVID-19, and other such events; and 

general market downturns. 

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect 

the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the 
operating performance of those companies. Broad market and industry factors, as well as general economic, political, regulatory and 
market conditions, may negatively affect the market price of our common stock, regardless of our actual operating performance. 

You may experience dilution of your ownership interests due to the future issuance of additional shares of our stock, and 

future sales of shares of our common stock could adversely affect our stock price. 

We have issued a significant number of shares of our common stock as well as warrants to purchase shares of our common 
stock, in connection with a number of financing transactions and acquisitions in recent years. In the future, from time to time we may 
issue additional previously authorized and unissued securities, resulting in additional dilution of the ownership interests of our current 
stockholders. 

In addition, we have reserved shares of common stock for potential future issuance including stock issuable pursuant to our 

equity incentive plans, the conversion of our preferred stock and warrants issued in connection with previous capital raises and other 
transactions. As of March 2, 2023, 1,556,641 shares of common stock are reserved for future grants and outstanding equity awards 
under our equity incentive plans and an additional 8,529,203 shares of common stock are reserved for future issuance in connection 
with other potential issuances, including conversion of our preferred stock. We may issue additional shares of common stock or other 
securities that are convertible into or exercisable for shares of common stock in connection with the hiring of personnel, future 
acquisitions, and future financings or for other business purposes. If we issue additional securities, the aggregate percentage ownership 
of our existing stockholders will be reduced. In addition, any new securities that we issue may have rights senior to those of our 
common stock. The issuance of additional shares of common stock or preferred stock or other securities, or the perception that such 
issuances could occur, may create downward pressure on the trading price of our common stock. 

Provisions in our charter documents and Delaware law may delay or prevent our acquisition by another company, which 

could decrease the value of your shares. 

Our certificate of incorporation and bylaws and Delaware law contain provisions that could make it more difficult for a third 
party to acquire us or enter into a material transaction with us without the consent of our board of directors. These provisions include a 
classified board of directors and limitations on actions by our stockholders by written consent. Delaware law imposes some 
restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock. 
In addition, our board of directors has the right to issue preferred stock without stockholder approval, which could be used to dilute the 
stock ownership of a potential hostile acquirer. These provisions will apply even if the offer were to be considered adequate by some 
of our stockholders. Because these provisions may be deemed to discourage a change of control, they may delay or prevent the 
acquisition of our company, which could decrease the value of our common stock. 

17

ITEM 1B.

UNRESOLVED STAFF COMMENTS 

None. 

ITEM 2.

PROPERTIES 

Our corporate headquarters are located in Fremont, California and we maintain operational headquarters in Santa Ana, 
California. We lease additional facilities to house our engineering, sales and marketing, administrative and manufacturing functions. 
At December 31, 2022, our major facilities consisted of the following: 

Location
Fremont, California

Santa Ana, California

Sauerlach, Germany

Chennai, India
Singapore

Function

Square Feet

Corporate headquarters
Administration; manufacturing; research and
   development
European operations; research and
   development; sales
Research and development
RFID/NFC product manufacturing

3,082

34,599

5,156

17,500
16,060

Lease Expiration
November 2024

January 2028

April 2026

September 2024
May 2023

ITEM 3.

LEGAL PROCEEDINGS 

We are and from time to time, may become subject to various legal proceedings and claims arising in the ordinary course of 

business or could be named a defendant in other lawsuits. Legal proceedings could result in material costs, occupy significant 
management resources and entail penalties, even if we prevail. The outcome of such claims or other proceedings cannot be predicted 
with certainty and may have a material effect on our financial condition, results of operations or cash flows. We are not a party to any 
material legal proceedings as of December 31, 2022.

18

ITEM 4.

MINE SAFETY DISCLOSURES 

Not applicable. 

Information About Our Executive Officers

Information concerning our executive officers as of March 1, 2023 is as follows:

Steven Humphreys, 61, has served as our Chief Executive Officer since September 2015 and as a director since July 1996. Mr. 
Humphreys previously served as Chairman of the Board from September 2013 until September 9, 2015. Previously, he also served as 
Lead Director from May 2010 until April 2013 and as Chairman of the Board from April 2000 to March 2007. Mr. Humphreys also 
served as President of the Company from July 1996 to December 1996 and as President and Chief Executive Officer from January 
1997 to July 1999. From November 2011 to December 2014, Mr. Humphreys served as chief executive officer of Flywheel Software, 
Inc., a location-based mobile solutions company. From October 2008 until its acquisition by SMSC in February 2011, Mr. Humphreys 
served as Chief Executive Officer and President of Kleer Corporation, a provider of wireless audio technology. From October 2001 to 
October 2003, he served as Chairman of the Board and Chief Executive Officer of ActivIdentity Corporation ("ActivIdentity"), a 
provider of digital identity solutions, a publicly-listed company until its acquisition by HID Global in December 2010. He also served 
as a director of ActivIdentity from March 2008 until December 2010. Previously, Mr. Humphreys was President of Caere Corporation 
("Caere"), a publicly-listed optical character recognition software company. Prior to Caere, he spent ten years with General Electric in 
a variety of factory automation and information technology positions, most recently leading the Information Delivery Services 
business unit of GE Information Services. Philanthropically, Mr. Humphreys has been an elected public school board trustee and a 
contributor to a range of education-oriented charities. He also serves on the board of Summit Public Schools, a charter school system 
with schools across the West Coast, and developer of the Summit Learning System, developed in cooperation with Facebook and 
deployed in over 1,000 schools nationwide. Mr. Humphreys holds a B.S. degree from Yale University and M.S. and M.B.A. degrees 
from Stanford University. 

Justin Scarpulla, 49, has served as our Chief Financial Officer since December 2021. Mr. Scarpulla previously served as 
Director of Finance at Space Exploration Technologies Corp., a company that designs, manufactures and launches advanced rockets 
and spacecraft, from May 2017 to December 2021. From May 2016 to May 2017, Mr. Scarpulla served as Vice President of 
Accounting & Finance at Incipio, LLC, a designer and manufacturer of mobile device accessories and technologies. Mr. Scarpulla 
served as Vice President and Corporate Controller at Vizio, Inc. (NYSE: VZIO), a designer and manufacturer of entertainment-
focused technologies, from 2015 to 2016 and at JustFab, Inc., an online subscription fashion retailer, from 2014 to 2015. He also 
served as Chief Accounting Officer and Corporate Controller at MaxLinear, Inc. (NYSE: MXL), a provider of radio frequency, 
analog, digital and mixed-signal integrated circuits, from 2011 to 2014. From 1999 to 2011, Mr. Scarpulla held various roles in 
finance at Broadcom Corporation (Nasdaq: BRCM), a provider of semiconductor and infrastructure software solutions, including 
Director of Financial Reporting. Mr. Scarpulla is a Certified Public Accountant and started his career at Ernst & Young LLP. Mr. 
Scarpulla holds a B.A. in Accounting and Finance from California State University Fullerton.

19

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER 
PURCHASES OF EQUITY SECURITIES 

Our common stock is traded on The Nasdaq Capital Market under the symbol “INVE.” According to data available at March 2, 

2023, we had 108 registered holders of our common stock. Not represented in this figure are individual stockholders in Germany 
whose custodian banks do not release stockholder information to us. 

During the three months ended December 31, 2022, we repurchased 13,649 shares of our common stock. The table below sets 

forth information regarding the Company's purchases of its common stock during the three months ended December 31, 2022:

Issuer Purchases of Equity Securities

Period

October 1, 2022 – October 31, 2022
November 1, 2022 – November 30, 2022
December 1, 2022 – December 31, 2022
Total

Total number of 
shares 
purchased(1)

4,377
4,500
4,772
13,649

Average price 
paid per share
12.46
$
11.47
7.95
10.56

$

Total number of 
shares purchased as 
part of publicly 
announced plans or 
programs

Maximum number 
(or approximate 
dollar value) of 
shares that may yet 
be purchased under 
the plans or 
programs

—
—
—
—

—
—
—

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

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings and 

do not expect to pay any dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion 
of our board of directors and will depend on our financial condition, operating results, capital requirements and general business 
conditions and other factors that our board of directors may deem relevant.

The following stock performance graph compares total stockholder returns for our common stock from December 31, 2017 
through December 31, 2022 against the Nasdaq Market Composite Index and the RDG Technology Composite, assuming a $100 
investment made on December 31, 2017. Each of the two comparative measures of cumulative total return assumes reinvestment of 
dividends. The stock performance shown on the graph below is not necessarily indicative of future price performance.

20

 
 
This stock performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, 
nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the 
extent that we specifically incorporate it by reference into such filing.

ITEM 6.

[RESERVED]

21

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS 

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the 

consolidated financial statements and notes thereto included in Part II, Item 8 of this Annual Report. 

We have omitted discussion of the earliest of the three years covered by our consolidated financial statements presented in this 
report because that disclosure was already included in our Annual Report on Form 10-K for fiscal 2021, filed with the SEC on March 
14, 2022. You are encouraged to reference Part II, Item 7, within that report, for a discussion of our financial condition and results of 
operations for fiscal 2020 compared to fiscal 2021.

Overview 

Identiv is a global provider of secure identification and physical security.

We are leveraging our RFID-enabled physical device-management expertise as well as our physical access, video and analytics 

solutions to provide leading solutions as our customers, and our customers’ customers, embracing the IoT. Customers in the 
technology and mobility, consumer, government, healthcare, education and other sectors rely on Identiv’s identification and access 
solutions. Identiv’s platform encompasses RFID and NFC, cybersecurity, and the full spectrum of physical access, video, and audio 
security. We are bringing the benefits of the IoT to a wide range of physical, connected items.

Identiv’s mission is to digitally enable every physical thing and every physical place on the planet. Our full continuum of 
security solutions is delivered through our platform of RFID-enabled devices, mobile, client/server, cloud, web, dedicated hardware 
and software defined architectures. In doing so, we believe that we will create smart physical security and a smarter physical world.

Segments

We have organized our operations into two reportable business segments, principally by solution families: Identity and 
Premises. Our Identity segment includes products and solutions enabling secure access to information serving the logical access and 
cyber-security market, and protecting connected objects and information using RFID embedded security. Our Premises segment 
includes our solutions to address the Premises security market for government and enterprise, including access control, video 
surveillance, analytics, audio, access readers and identities.

Factors Affecting Our Performance

Market Adoption

Our financial performance depends on the pace, scope and depth of end-user adoption of our RFID products in multiple 
industries. That pace, scope and depth accelerated during 2020 causing large fluctuations in our operating results. During 2021, we 
believe RFID deployments occurred at a much faster pace of growth than historically. We believe significant improvement in chip 
capabilities at lower costs, combined with the incorporation of the full NDEF (NFC data exchange format) protocol by Apple in its 
iPhone 12 and iOS 14 has accelerated the opportunities for product engineers to integrate RFID into their products to create new and 
more engaging customer experiences, product reliability and performance. As the market hit this pivot point, we expanded both our 
capacity and technical leadership. We track growth indicators including design wins, customer launches and technology launches. We 
have made investments in our technology, high quality and automation production facilities, and we believe that our competitive 
advantages will continue to drive growth.

We believe the underlying, long-term trend is continued RFID adoption by multiple verticals. We also believe that expanding 

use cases fosters adoption across verticals and into other markets. In addition, we do not have any significant concentration of 
customers so we believe that our demand will continue to be resilient to the loss of any individual customer or application.

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

22

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

If end users with sizable projects change or delay them, we may experience significant fluctuation in revenue on a quarterly or 

annual basis, and we anticipate that uncertainty to continue to characterize our business for the foreseeable future.

Seasonality and Other Factors 

In our business overall, we experience variations in demand for our offerings from quarter to quarter, and typically experience a 
stronger demand cycle in the second half of our fiscal year. Sales of our physical access control solutions and related products to U.S. 
Government agencies are subject to annual government budget cycles and generally are highest in the third quarter of each year. Sales 
of our identity readers, many of which are sold to government agencies worldwide, are impacted by project schedules of government 
agencies, as well as roll-out schedules for application deployments. Further, this business is typically subject to seasonality based on 
differing commercial and global government budget cycles. Lower sales are expected in the U.S. in the first half, and in particular, the 
first quarter of the year, with higher sales typically in the second half of each year. In Asia-Pacific, with fiscal year-ends in March and 
June, order demand can be higher in the first quarter as customers attempt to complete projects before the end of the fiscal year. 
Accordingly, our net revenue levels in the first quarter each year often depend on the relative strength of project completions and sales 
mix between our U.S. customer base and our international customer base.

Purchasing of our Products and Services for U.S. Federal Government Security Programs

In addition to the general seasonality of demand, overall U.S. Federal Government expenditure patterns have a significant effect 

on demand for our products due to the significant portion of revenue that are typically sourced from U.S. Federal Government 
agencies. Drivers of growth included our technology strength and proven security solutions, work from home mandates, and continued 
strength in investments for security across a number of different agencies. We believe that the success and growth of our business will 
continue through the U.S. Federal Government focus on security and our successful procurement of government business. If there are 
changes in government purchasing policies or budgetary constraints there could be implications for our growth prospects and 
operating results. If we are unable to meet end-user or customer volume or performance expectations, then our business prospects and 
operating results may be adversely affected.

Impacts of Macroeconomic Conditions and Other Factors on our Business

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. The rapid spread of the 
pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy, 
including industry-wide global supply chain challenges, such as manufacturing, transportation and logistics. We purchase certain 
products and key components from a limited number of sources that depend on the supply chain, including freight, to receive 
components, transport finished goods and deliver our products across the world. In view of the rapidly changing business 
environment, we have experienced delays and reductions in customer orders, shifting supply chain availability, component shortages, 
and other production-related challenges. We are currently unable to determine if there will be any continued disruption and the extent 
to which this may have future impact on our business. We continue to monitor the global supply chain challenges and its effect on our 
financial position, results of operations, and cash flows.

More recently, we have also been impacted by other adverse macroeconomic conditions, including but not limited to, inflation, 

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

23

 
Results of Operations

The following table includes net revenue and net profit information by business segment and reconciles gross profit to income 

(loss) before income tax provision (in thousands).

Year Ended December 31,

2022

2021

% Change

Identity:

Net revenue
Gross profit
Gross profit margin

Premises:

Net revenue
Gross profit
Gross profit margin

Total:

Net revenue
Gross profit
Gross profit margin

Operating expenses:

Research and development
Selling and marketing
General and administrative
Restructuring and severance
Total operating expenses

Loss from operations
Non-operating income (expense):

$

67,422
15,153

$

22%

45,493
25,791

57%

112,915
40,944

36%

9,916
20,730
10,429
202
41,277
(333)

Interest expense, net
Gain on forgiveness of Paycheck Protection Program note
Gain on investment
Foreign currency gains (losses), net
Income (loss) before income tax provision

(143)
—
30
155
(291)

$

$

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

64,725
15,670

24%

39,044
21,397

55%

103,769
37,067

36%

8,673
17,033
11,891
817
38,414
(1,347)

(483)
2,946
611
(79)
1,648

4%
(3)%

17%
21%

9%
10%

14%
22%
(12)%
(75)%
7%
(75)%

(70)%
(100)%
(95)%
(296)%
(118)%

Americas
Europe and the Middle East
Asia-Pacific
Total
As a percentage of net revenue:
Americas
Europe and the Middle East
Asia-Pacific
Total

Year Ended December 31,

2022

2021

76,799
15,900
20,216
112,915

$

$

69,396
12,876
21,497
103,769

$

$

% 
Change

11%
23%
(6)%
9%

68%
14%
18%
100%

67%
12%
21%
100%

24

Fiscal 2022 Compared with Fiscal 2021 

Net Revenue 

Net revenue in 2022 was $112.9 million, an increase of 9% compared with $103.8 million in 2021. Net revenue in the Americas 

was $76.8 million in 2022, an increase of 11% compared with $69.4 million in 2021. Net revenue from our Premises segment for 
security programs within various U.S. government agencies and commercial customers for access control and video solutions, as well 
as reader, controller and appliance products, represented approximately 55% of our net revenue in the Americas. Net revenue in 
Europe, the Middle East, and Asia-Pacific was approximately $36.1 million in 2022, an increase of 5% compared with $34.4 million 
in 2021. Sales of RFID and NFC products and smart card readers comprised a significant proportion of our net revenue in these 
regions.

Identity Segment

Net revenue in our Identity segment was $67.4 million in 2022, an increase of 4% compared with $64.7 million in 2021. Net 

revenue in this segment in 2022 and 2021 represented 60% and 62%, respectively, of our net revenue. Net revenue in this segment in 
the Americas in 2022 increased 3% compared with 2021 primarily due to higher sales of RFID transponder products to mobile phone 
and consumer products contract manufacturers and higher sales of access cards, offset by lower sales of our legacy smart card readers 
resulting from critical component supply-chain constraints. Net revenue in this segment in Europe, the Middle East, and the Asia-
Pacific increased approximately 5% in 2022 compared with 2021 primarily due to higher sales of RFID transponder products to 
existing customers in the medical device and library markets. 

Sales of RFID and NFC products and smart card readers comprise a significant proportion of our net revenue in these regions. 
RFID transponder products comprised approximately 67% of net revenue in these regions in 2022, and 66% of net revenue in 2021, 
while smart card reader sales in 2022 and 2021 comprised approximately 22% and 24% of the net revenue, respectively.

Premises Segment

Net revenue in our Premises segment was $45.5 million in 2022, an increase of 17% compared with $39.0 million in 2021. Net 
revenue in this segment in 2022 and 2021 represented 40% and 38%, respectively, of our net revenue. Net revenue in this segment in 
the Americas in 2022 increased 18% compared with 2021 due to higher sales of Hirsch Velocity hardware, software, support services, 
and video product offerings across both federal government and commercial businesses. Net revenue in this segment across Europe, 
the Middle East, and Asia-Pacific increased 2% in 2022 compared with 2021. The increases in these regions are primarily project 
driven and can vary period to period.

As a general trend, U.S. Federal agencies continue to be subject to security improvement mandates under programs such as 
Homeland Security Presidential Directive-12 (“HSPD-12”) and reiterated in memoranda from the Office of Management and Budget. 
We believe that our solutions for trusted physical access is an attractive offering to help federal agency customers move towards 
compliance with federal directives and mandates. To address sales opportunities in the United States in general and with our U.S. 
Government customers in particular, we focus on a strong U.S. sales organization and our sales presence in Washington D.C.

Gross Profit and Gross Margin

Gross profit for 2022 was $40.9 million, or 36% of net revenue, compared to $37.1 million or 36% of net revenue in 2021. 
Gross profit represents net revenue less direct cost of product sales, manufacturing overhead, other costs directly related to preparing 
the product for sale including freight, scrap, inventory adjustments and amortization, where applicable.

Identity Segment

In our Identity segment, gross profit was $15.2 million in 2022 compared with $15.7 million in 2021. Gross profit margins in 

the Identity segment in 2022 decreased to 22% compared to 24% in 2021. The decrease in gross profit margins was primarily 
attributable to continued investments in technology, manufacturing processes and equipment, and changes in product mix, with lower 
sales of higher margin legacy smart card readers and higher sales of lower margin RFID transponder products.

Premises Segment

In our Premises segment, gross profit was $25.8 million in 2022 compared with $21.4 million in 2021. Gross profit margins in 
the Premises segment in 2022 increased to 57% compared to 55% in 2021. The increase was primarily due to product mix as well as 
the continued focus on production and logistical efficiencies.

25

We expect there will be variation in our total gross profit from period to period, as our gross profit has been and will continue to 

be affected primarily by varying mix among our products. Within each product category, gross profit margins have tended to be 
consistent, but over time may be affected by a variety of factors, including, without limitation, competition, product pricing, the 
volume of sales in any given quarter, manufacturing volumes, product configuration and mix, the availability of new products, product 
enhancements, software and services, risk of inventory write-downs and the cost and availability of components.

Operating Expenses

Information about our operating expenses for the years ended December 31, 2022 and 2021 is set forth below. 

Research and Development 

Research and development expenses

Percentage of revenue

2022

Year Ended December 31,
$ Change

2021

($ in thousands)

% Change

$

9,916

$

8,673

$

1,243

14%

9%

8%

Research and development expenses consist primarily of employee compensation and fees for the development of hardware, 

software and firmware products. We focus the bulk of our research and development activities on the continued development of 
existing products and the development of new offerings for emerging market opportunities.

Research and development expenses in 2022 increased compared with 2021 primarily due to higher headcount and related 

payroll costs, higher travel related costs, as well as higher stock-based compensation costs associated with performance stock units.

Selling and Marketing

Selling and marketing expenses

Percentage of revenue

2022

Year Ended December 31,
$ Change

2021

% Change

$

20,730

$

($ in thousands)
17,033

$

3,697

22%

18%

16%

Selling and marketing expenses consist primarily of employee compensation as well as amortization expense of certain 

intangible assets, customer lead generation activities, tradeshow participation, advertising and other marketing and selling costs.

Selling and marketing expenses in 2022 increased compared with 2021 primarily due to higher headcount and related payroll 

costs, higher external contractor costs as well as higher travel related costs.

General and Administrative 

General and administrative expenses

Percentage of revenue

2022

Year Ended December 31,
$ Change

2021

% Change

$

10,429

$

($ in thousands)
11,891

$

(1,462)

(12)%

9%

11%

General and administrative expenses consist primarily of compensation expenses for employees performing administrative 

functions, and professional fees incurred for legal, auditing and other consulting services.

General and administrative expenses decreased compared with 2021 primarily due to bad debt expense recorded in the fourth 

quarter of 2021 of $2.6 million for aged accounts receivables, and lower merchant card fees in 2022, partially offset by higher 
headcount and related payroll costs in 2022 compared to 2021.

26

 
Restructuring and Severance

Restructuring and severance expenses

$

202

$

($ in thousands)
$

817

(615)

(75)%

Year Ended December 31,

2022

2021

$ Change

% Change

Restructuring expenses incurred in 2022 consists of severance related costs of $353,000 offset by a net credit of $151,000 
associated with a settlement agreement for outstanding rental payments due the landlord on leased office space in San Francisco, 
California. The net credit represented the difference between amounts accrued and the settlement amount.

Restructuring expenses incurred in 2021 consists of facility rental related costs of $521,000 and severance related costs of 
$296,000. Facility rental related costs in 2021 included a charge of $281,000 resulting from the impairment of a right-of-use operating 
lease asset for office space we vacated in the first quarter of 2021.

Non-operating Income (Expense) 

Information about our non-operating income (expense) for the years ended December 31, 2022 and 2021 is set forth below.

Interest expense, net
Gain on forgiveness of Paycheck Protection Program note
Gain on investment
Foreign currency gains (losses), net

$
$
$
$

(143) $
— $
$
30
$
155

($ in thousands)

(483) $
$
2,946
$
611
(79) $

340
(2,946)
(581)
234

(70)%
100%
(95)%
(296)%

Year Ended December 31,

2022

2021

$ Change

% Change

Interest expense, net consists of interest on financial liabilities, amortization of debt issuance costs, and interest accretion 
expense for a liability on a contractual payment obligation arising from our acquisition of Hirsch Electronics Corporation. The 
decrease in interest expense in 2022 compared to 2021 was primarily attributable to lower borrowings outstanding under our revolving 
loan facility with our lender (which was fully paid down in August 2021), and lower amounts outstanding under our contractual 
payment obligation as all amounts outstanding had been paid as of December 31, 2021.

Gain on forgiveness of the Paycheck Protection Program note represented the principal and accrued interest amounts 
outstanding of approximately $2.9 million under our promissory note pursuant to the Paycheck Protection Program that had been 
forgiven in 2021. 

Gain on investment is associated with proceeds received in connection with the acquisition of a private company that we had 

invested in, which had been fully impaired and had no carrying value.

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

27

Income Tax Provision

Income tax provision

Year Ended December 31,

2022

2021

$ Change

% Change

$

101

$

($ in thousands)
$

28

73

261%

As of December 31, 2022, our deferred tax assets are fully offset by a valuation allowance. Accounting Standards Codification 

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

We recorded an income tax provision during the year ended December 31, 2022. The effective tax rate for the year ended 
December 31, 2022 differs from the federal statutory rate of 21% primarily due to stock-based compensation, global intangible low-
taxed income ("GILTI") inclusions, and the provision in certain foreign jurisdictions partially offset by the change in the valuation 
allowance. The effective tax rate for the year ended December 31, 2021 differs from the federal statutory rate of 21% primarily due to 
PPP loan forgiveness, stock-based compensation, GILTI inclusions the provision in certain foreign jurisdictions partially offset by the 
change in the valuation allowance.

Liquidity and Capital Resources

As of December 31, 2022, our working capital, defined as current assets less current liabilities, was $51.7 million, a decrease of 

$0.2 million compared to $51.9 million as of December 31, 2021. As of December 31, 2022, our cash and cash equivalents balance 
was $16.7 million.

On February 8, 2017, we entered into a Loan and Security Agreement with East West Bank (“EWB”). Following subsequent 

amendments, on April 14, 2022, we amended and restated the Loan and Security Agreement by replacing the $20.0 million revolving 
loan facility subject to a borrowing base with a non-formula revolving loan facility with no borrowing base requirement and a maturity 
date of February 8, 2023. In addition, the interest rate was lowered from prime to prime minus 0.25%, and certain financial covenants 
were amended. On February 8, 2023, we entered into an amendment (the "Fourth Amendment") to the amended and restated the Loan 
and Security Agreement with EWB (as amended to date, the "Loan Agreement"). The Fourth Amendment amends the Loan 
Agreement to, among other things, extend the maturity date to February 8, 2025 and amend certain financial covenants.

As our previously unremitted earnings have been subjected to U.S. federal income tax, we expect any repatriation of these 
earnings to the U.S. would not incur significant additional taxes related to such amounts. However, our estimates are provisional and 
subject to further analysis. Generally, most of our foreign subsidiaries have accumulated deficits and cash and cash equivalents that 
are held outside the United States are typically not cash generated from earnings that would be subject to tax upon repatriation if 
transferred to the United States. We have access to the cash held outside the United States to fund domestic operations and obligations 
without any material income tax consequences. As of December 31, 2022, the amount of cash included at such subsidiaries was $5.3 
million. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising 
in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements. 

We have historically incurred operating losses and negative cash flows from operating activities, and we may continue to incur 

losses in the future. As of December 31, 2022, we had a total accumulated deficit of $409.4 million. 

28

We believe our existing cash and cash equivalents, together with cash generated from operations and available credit under our 

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

The following summarizes our cash flows for the years ended December 31, 2022 and 2021 (in thousands): 

Net cash provided by (used in) operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Effect of exchange rates on cash, cash equivalents, and restricted cash
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash, beginning of year
Cash, cash equivalents, and restricted cash, end of year

Year Ended December 31,
2021
2022

$

$

(7,807)
(3,872)
(1,039)
48
(12,670)
29,807
17,137

$

$

1,228
(1,476)
19,341
(695)
18,398
11,409
29,807

29

Cash flows from operating activities

Cash used in operating activities in 2022 of $7.8 million was primarily due to net loss of $0.4 million, a decrease in cash from 

changes in operating assets and liabilities of $12.9 million, which included $9.3 million in strategic inventory purchases, partially 
offset by adjustments for certain non-cash items of $5.5 million, consisting primarily of depreciation, amortization, and stock-based 
compensation.

Cash provided by operating activities in 2021 of $1.2 million was primarily due to net income of $1.6 million and adjustments 

for certain non-cash items of $4.0 million, consisting primarily of depreciation, amortization, amortization of debt issuance costs, 
stock-based compensation, gain on forgiveness of the Paycheck Protection Program note and impairment of a right-of-use operating 
lease asset, partially offset by a decrease in cash from changes in operating assets and liabilities of $4.4 million.

Cash flows from investing activities

Cash used in investing activities in 2022 of $3.9 million was primarily due to capital investment expenditures in our 

manufacturing facility in Singapore and our research and development facility in Germany.

Cash used in investing activities in 2021 of $1.5 million was primarily due to $2.1 million of capital investment expenditures in 
our manufacturing facility in Singapore and our research and development facility in Germany, partially offset by $0.6 million related 
to proceeds received from an investment.

Cash flows from financing activities

Cash used in financing activities in 2022 was primarily due to taxes paid related to net share settlement of restricted stock units 

of $1.0 million.

Cash provided by financing activities in 2021 was primarily due to net proceeds of $37.6 million received from the sale of 
common stock in an underwritten public offering, partially offset by net repayments under our revolving loan facility of $14.6 million, 
repayments of promissory notes of $2.8 million to 21 April Fund, LP and 21 April Fund, Ltd., and taxes paid related to net share 
settlement of restricted stock units of $1.2 million.

Contractual Obligations 

We lease facilities, certain equipment, and automobiles under non-cancelable operating lease agreements. See Note 14, Leases, 

in the accompanying notes to our consolidated financial statements.

Purchases for inventories are highly dependent upon forecasts of customer demand. Due to the uncertainty in demand from our 
customers, we may have to change, reschedule, or cancel purchases or purchase orders from our suppliers. These changes may lead to 
vendor cancellation charges on these orders or contractual commitments. See Note 16, Commitments and Contingencies, in the 
accompanying notes to our consolidated financial statements. 

Our other long-term liabilities include gross unrecognized tax benefits, and related interest and penalties. At this time, we are 
unable to make a reasonably reliable estimate of the timing of payments in individual years in connection with these tax liabilities. 
Accordingly, such amounts are not included in the table above.

Climate Change

We believe that neither climate change, nor governmental regulations related to climate change, have had a material effect on 

our business, financial condition or results of operations.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the 

United States (“U.S. GAAP”). The preparation of these financial statements in accordance with U.S. GAAP requires management to 
make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the 
reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical 
experience and on various other factors, which we believe are reasonable based upon the information available to us at the time these 

30

estimates, judgments and assumptions are made. Actual results may differ from these estimates under different assumptions or 
conditions. 

Revenue Recognition

We recognize revenue when we transfer control of the promised products or services to our customers, in an amount that reflects 

the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various 
combinations of our products, software licenses, and services, which are generally capable of being distinct and accounted for as 
separate performance obligations. For contracts with multiple performance obligations, we allocate the transaction price of the 
contract to each performance obligation, generally on a relative basis using its standalone selling price. The stated contract value is 
generally the transaction price to be allocated to the separate performance obligations. Revenue is recognized net of any taxes 
collected from our customers that are subsequently remitted to governmental authorities.

Nature of Products and Services

We derive our revenues from sales of hardware products, software licenses, subscriptions, professional services, software 

maintenance and support, and extended hardware warranties.

Hardware Product Revenues — We generally have two performance obligations in arrangements involving the sale of hardware 
products. The first performance obligation is to transfer the hardware product (which includes software integral to the functionality of 
the hardware product). The second performance obligation is to provide assurance that the product complies with its agreed-upon 
specifications and is free from defects in material and workmanship for a period of one to three years (i.e., assurance warranty). The 
entire transaction price is allocated to the hardware product and is generally recognized as revenue at the time of shipment because the 
customer obtains control of the product at that point in time. We have concluded that control generally transfers at that point in time 
because the customer has title to the hardware, and a present obligation to pay for the hardware. None of the transaction price is 
allocated to the assurance warranty component, as we account for these product warranty costs in accordance with Accounting 
Standards Codification (“ASC”) 460, Guarantees. 

Software License Revenues — Our license arrangements grant customers the perpetual right to access and use the licensed 
software products at the outset of an arrangement. Technical support and software updates are generally made available throughout the 
term of the support agreement, which is generally one to three years. We account for these arrangements as two performance 
obligations: (1) the software licenses, and (2) the related updates and technical support. The software license revenue is recognized 
when the license is delivered to the customer or made available for download, while the software updates and technical support 
revenue is recognized over the term of the support contract. 

Subscription Revenues —   Subscription revenues consist of fees received in consideration for providing customers access to one 

or more of our software-as-a-service (“SaaS”) based solutions. These SaaS arrangements include access to our licensed software and, 
in certain arrangements, use of various hardware devices over the contract term. These SaaS arrangements do not provide the 
customer the right to take possession of the software supporting the subscription service, or if applicable, any hardware devices at any 
time during the contract period, and as such are not considered separate performance obligations. Revenue is recognized ratably on a 
straight-line basis over the term of the contract beginning when the service is made available to the customer. Subscription contract 
terms range from month-to-month to six years in length and billed monthly or annually.

Professional Services Revenues — Professional services revenues consist primarily of programming customization services 
performed relating to the integration of our software products with our customers other systems, such as HR systems. Professional 
services contracts are generally billed on a time and materials basis and revenue is recognized as the services are performed. 

Software Maintenance and Support Revenues — Support and maintenance contract revenues consist of the services provided to 

support the specialized programming applications performed by our professional services group. Support and maintenance contracts 
are typically billed at inception of the contract and recognized as revenue over the contract period, typically over a one or three year 
period.

Extended Hardware Warranties Revenues — Sales of our hardware products may also include optional extended hardware 

warranties, which typically provide assurance that the product will continue function as initially intended. Extended hardware 
warranty contracts are typically billed at inception of the contract and recognized as revenue over the respective contract period, 
typically over one to two year periods after the expiration of the original assurance warranty.

31

Significant Judgments

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

Judgment is required to determine the SSP for each distinct performance obligation in a contract. For the majority of items, we 

estimate SSP using historical transaction data. We use a range of amounts to estimate SSP when we sell each of our products and 
services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products 
and services. In instances where SSP is not directly observable, such as when the product or service is not sold separately, we 
determine the SSPs using information that may include market conditions and other observable inputs. The determination of SSP is an 
ongoing process and information is reviewed regularly in order to ensure SSPs reflect the most current information or trends.

Contract Balances

Amounts invoiced in advance of services being provided are accounted for as deferred revenue. The deferred revenue balance is 

primarily related software maintenance contracts. Payment terms and conditions vary by contract type, although payment is typically 
due within 30 to 60 days of contract inception. In instances where the timing of revenue recognition differs from the timing of 
invoicing, we have determined our contracts do not include a significant financing component. The primary purpose of our invoicing 
terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing 
from our customers. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables and are included 
in other current assets on the consolidated balance sheet. As of December 31, 2022 and 2021, the amount of unbilled receivables were 
immaterial.

Allowance for Doubtful Accounts

Our allowance for doubtful accounts is based on our assessment of the collectability of customer accounts. We regularly review 

our receivables that remain outstanding past their applicable payment terms and establish an allowance and potential write-offs by 
considering factors such as historical experience, credit quality, age of the accounts receivable balances, and current economic 
conditions that may affect a customer’s ability to pay. Although we expect to collect net amounts due as stated on the consolidated 
balance sheets, actual collections may differ from these estimated amounts.

Inventory Valuation

Inventories are stated at the lower of cost (using average cost or standard cost, as applicable) or net realizable value (market). 

We typically plan our production and inventory levels based on internal forecasts of customer demand, which can be highly 
unpredictable and can fluctuate significantly. We regularly review inventory quantities on hand and record an estimated provision for 
excess inventory based on judgment and assumptions involving an evaluation of technical obsolescence and our ability to sell based 
primarily on historical sales patterns and expectations for future demand. Actual demand and market conditions may differ from the 
projections utilized by management in establishing our inventory reserves. If we were to use different assumptions or utilize different 
estimates, the amount and timing of our inventory write-downs could be materially different. Adverse changes in our inventory 
valuations could have a material effect on our operating results and financial position.

32

Income Taxes 

Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s 

assessment of estimated current and future income taxes to be paid. We are subject to income taxes in the United States and in 
numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense, 
deferred tax assets and liabilities and reserves for unrecognized tax benefits. 

Deferred tax assets and liabilities arise from temporary differences between the tax basis of assets and liabilities and their 
reported amounts in the financial statements, which are expected to result in taxable or deductible amounts in the future. In evaluating 
our ability to recover our deferred tax assets within the jurisdiction from which they arise, for all material jurisdictions, we consider all 
available positive and negative evidence, including scheduled reversals of deferred tax balances, projected future taxable income, tax-
planning strategies and results of recent operations. In projecting future taxable income, we begin with historical results and 
incorporate assumptions about the amount of future state, federal and foreign pretax operating income adjusted for items that do not 
have tax consequences. The assumptions about future taxable income require significant judgment and are consistent with the plans 
and estimates we use to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we 
consider three years of cumulative operating results.  

As of December 31, 2022, we have federal and state income tax net operating loss (“NOL”) carryforwards of $121.0 million and 

$50.3 million, respectively, which will expire at various dates.

We believe that it is more likely than not that the benefit from these NOL carryforwards will not be realized. Accordingly, we 

have provided a full valuation allowance on any potential deferred tax assets relating to these NOL carryforwards. If our assumptions 
change and we determine we will be able to realize these NOLs, the tax benefits relating to any reversal of the valuation allowance on 
deferred tax assets as of December 31, 2022, will be accounted for as a reduction of income tax expense. 

The calculation of our tax liabilities involves evaluating uncertainties in the application of complex tax laws and regulations in a 

multitude of jurisdictions across our global operations. ASC 740, Income Taxes (“ASC 740”) states that a tax benefit from an 
uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, 
including the resolution of any related appeals or litigation processes, on the basis of the technical merits. 

We record unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment 

changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these 
uncertainties, the ultimate resolution may result in a tax payment that is materially different from our current estimate of the 
unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in 
which new information is made available. 

We believe that none of the unrecognized tax benefits, excluding the associated interest and penalties, which are insignificant, 

may be recognized by the end of 2022.

We consider the earnings of all our non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of 

estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and our specific plans for 
reinvestment of those subsidiary earnings. Should we decide to repatriate foreign earnings, we would need to adjust our income tax 
provision in the period we determined that the earnings will no longer be indefinitely invested outside the United States.

33

Goodwill

Goodwill represents the excess of the aggregate of the fair value of consideration transferred in a business combination, over the 
fair value of assets acquired, net of liabilities assumed. In accordance with ASC 350, Intangibles-Goodwill and Other, goodwill is not 
amortized but is tested for impairment on an annual basis, in the fourth quarter, or whenever events or changes in circumstances 
indicate that the carrying amount of these assets may not be recoverable. We perform an initial assessment of qualitative factors to 
determine whether the existence of events and circumstances leads to a determination that it is more likely than not that the fair value 
of a reporting unit is less than its carrying amount. In performing the qualitative assessment, we identify and consider the significance 
of relevant key factors, events, and circumstances that affect the fair value of its reporting units. These factors include external factors 
such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as actual and planned financial 
performance. If, after assessing the totality of relevant events and circumstances, we determine that it is more likely than not that the 
fair value of the reporting unit exceeds its carrying value and there is no indication of impairment, no further testing is performed; 
however, if we conclude otherwise, then we will perform the quantitative impairment test which compares the estimated fair value of 
the reporting unit to its carrying value, including goodwill. If the carrying amount of the reporting unit is in excess of its fair value, an 
impairment loss would be recorded in the consolidated statement of comprehensive income (loss). 

Intangible Assets and Long-lived Assets

We evaluate our identifiable amortizable intangible assets and long-lived assets for impairment in accordance with ASC 360, 

Property, Plant and Equipment, whenever events or changes in circumstances indicate that the carrying amount of such assets or 
intangibles may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount 
of an asset to future net undiscounted cash flows expected to be generated by an asset group. If such asset groups are considered to be 
impaired (i.e., if the sum of its estimated future undiscounted cash flows used to test for recoverability is less than its carrying value), 
the impairment loss to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair 
value of the asset group. Intangible assets with definite lives are amortized using the straight-line method over the estimated useful 
lives of the related assets. 

Critical estimates in valuing intangible assets include, but are not limited to, future expected cash flows from customer 
relationships, developed technology, and trademarks; and discount rates. Management estimates of fair value are based upon 
assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. Unanticipated events and circumstances 
may occur which may affect the accuracy or validity of such assumptions, estimates or actual results.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) 
assets, operating lease liabilities, and long-term operating lease liabilities on our consolidated balance sheets. Operating lease ROU 
assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease 
term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on 
the information available at the lease commencement date in determining the present value of future payments. The operating lease 
ROU assets also include any lease payments made and exclude lease incentives and initial direct costs incurred. Our lease terms may 
include options to extend the lease when it is reasonably certain that they we will exercise that option. Lease expense for minimum 
lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease 
components, which is accounted for as a single lease component.

Stock-based Compensation

We recognize stock-based compensation expense for all share-based payment awards in accordance with ASC 718, 
Compensation – Stock Compensation. Stock-based compensation expense for expected-to-vest awards is valued under the single-
option approach and amortized on a straight-line basis, net of estimated forfeitures. We utilize the Black Scholes pricing model in 
order to determine the fair value of stock-based option awards. The Black Scholes pricing model requires various highly subjective 
assumptions including volatility, expected option life, and risk-free interest rate. The assumptions used in calculating the fair value of 
share-based payment awards represent management’s best estimates. These estimates involve inherent uncertainties and the 
application of management judgment. If factors change and different assumptions are used, our stock-based compensation expense 
could be materially different in the future. In addition, we are required to estimate the expected forfeiture rate and recognize expense 
only for those expected-to-vest shares. If our actual forfeiture rate is materially different from our estimate, our recorded stock-based 
compensation expense and operating results could be different.

34

Recent Accounting Pronouncements 

See Note 2, Significant Accounting Policies and Recent Accounting Pronouncements, in the accompanying notes to our 
consolidated financial statements in Item 8 of Part II of this Annual Report for a description of recent accounting pronouncements, 
which is incorporated herein by reference.

10b5-1 Trading Plans

From time to time, our executive officers and directors have, and we expect they will in the future, enter into written trading 

plans pursuant to Rule 10b5-1 of the Securities and Exchange Act of 1934.  

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

We are primarily exposed to changes in currency exchange rates as certain of our operations are conducted in foreign currencies 

such as the Indian Rupee, the Canadian Dollar, and the Euro.

Economic Exposure 

We transact business in various foreign currencies and have significant international revenues, as well as costs denominated in 
foreign currencies. This exposes us to the risk of fluctuations in foreign currency exchange rates. Our objective is to identify material 
foreign currency exposures and to manage these exposures to minimize the potential effects of currency fluctuations on our 
consolidated financial statements.

Transaction Exposure 

Our exposure to foreign currency transaction gains and losses is the result of assets and liabilities (including inter-company 
transactions) that are denominated in currencies other than the relevant entity’s functional currency. In certain circumstances, changes 
in the functional currency value of these assets and liabilities create fluctuations in our consolidated financial statements. We have 
performed sensitivity analyses as of December 31, 2022 and December 31, 2021 using a modeling technique that evaluated the 
hypothetical impact of a 10% movement in the value of the U.S. Dollar compared to the functional currency of the foreign subsidiary, 
with all other variables held constant, to determine the incremental transaction gains or losses that would have been incurred. The 
foreign exchange rates used were based on market rates in effect at each of December 31, 2022 and December 31, 2021. The results of 
these sensitivity analyses indicated that the impact on a hypothetical 10% movement in foreign currency exchange rates would result 
in increased foreign currency gains or losses of $1.1 million as of December 31, 2022 and $0.4 million as of December 31, 2021. 

Translation Exposure 

We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiaries into 

U.S. Dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign subsidiaries’ 
financial statements into U.S. Dollars results in a gain or loss which is recorded as a component of accumulated other comprehensive 
income (loss) in our condensed consolidated statements of stockholders’ equity. 

With respect to our international operations, we have re-measured accounts which are denominated in the non-functional 
currencies into the functional currency of the subsidiary and recorded the resulting gains (losses) within foreign currency gains 
(losses), net in our consolidated statements of comprehensive income (loss). We re-measure all monetary assets and liabilities at the 
current exchange rate at the end of the period, non-monetary assets and liabilities at historical exchange rates, and revenue and 
expenses at average exchange rates in effect during the periods. 

35

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

Index to Consolidated Financial Statements 

Report of Independent Registered Public Accounting Firm (PCAOB ID: 207) ................................................................................
Consolidated Balance Sheets..............................................................................................................................................................
Consolidated Statements of Comprehensive Income (Loss) .............................................................................................................
Consolidated Statements of Stockholders’ Equity .............................................................................................................................
Consolidated Statements of Cash Flows ............................................................................................................................................
Notes to Consolidated Financial Statements ......................................................................................................................................

Page
37
39
40
41
42
43

36

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Identiv, Inc.

Opinion on the Consolidated Financial Statements

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Identiv,  Inc.  (a  Delaware  Corporation)  and  its  subsidiaries 
(collectively, the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of comprehensive income 
(loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes 
(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, 
in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and 
its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally 
accepted in the United States of America. 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), 
the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our 
report dated March 15, 2023, expressed an unqualified opinion. 

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion 
on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB 
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable 
rules and regulations of the Securities and Exchange Commission and the PCAOB. 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit 
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to 
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial 
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, 
on  a  test  basis,  evidence  regarding  the  amounts  and  disclosures  in  the  consolidated  financial  statements.  Our  audits  also  included 
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation 
of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements 
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are 
material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The 
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, 
and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the 
accounts or disclosures to which it relates.

Inventory Valuation – Adjustments for Excess or Obsolete Inventories
As described in Notes 2 and 6 to the consolidated financial statements, the Company’s consolidated inventories balance was $29 million 
as of December 31, 2022. The Company’s inventories are valued using standard cost, approximating average cost, and are stated at the 
lower of cost or net realizable value. The Company adjusts the carrying value of inventories based on assumptions about future demand, 
market conditions and technical obsolescence. If actual demand were to be substantially lower than estimated, there could be a significant 
adverse impact on the carrying value of inventories and results of operations.

The principal considerations for our determination that performing procedures relating to net realizable value adjustments to inventories 
is a critical audit matter are the significant amount of judgment by management in developing the assumptions of the forecasted product 
demand, which in turn lead to significant audit judgment, subjectivity, and effort in performing audit procedures and evaluating audit 
evidence relating to the forecasted product demand. Additionally, for newer products there may be limited historical data with which to 
evaluate forecasts.

37

 
 
 
 
 
 
 
 
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion 
on the consolidated financial statements. These procedures included, among others, testing management’s process for developing the 
valuation allowance for excess and obsolete inventory, testing the completeness and accuracy of the underlying data used in the estimate, 
and evaluating management’s assumptions of forecasted product demand. Evaluating management’s forecasted product demand for 
reasonableness involved considering historical sales by product, comparing prior period estimates to actual results of the same period, 
and determining whether the demand forecast used was consistent with evidence obtained in other areas of the audit.

/s/ BPM LLP

We have served as the Company’s auditor since 2015.

San Jose, California
March 15, 2023

38

  
 
IDENTIV, INC. 
CONSOLIDATED BALANCE SHEETS 
(In thousands, except par value) 

Current assets:

ASSETS

Cash and cash equivalents
Restricted cash
Accounts receivable, net of allowances of $2,666 and $2,745 as of December 31, 2022
   and 2021, respectively
Inventories
Prepaid expenses and other current assets

Total current assets
Property and equipment, net
Operating lease right-of-use assets
Intangible assets, net
Goodwill
Other assets
Total assets

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable
Operating lease liabilities
Deferred revenue
Accrued compensation and related benefits
Other accrued expenses and liabilities

Total current liabilities

Long-term operating lease liabilities
Long-term deferred revenue
Other long-term liabilities

Total liabilities

Commitments and contingencies (see Note 16)
Stockholders' equity:

Stockholders' equity:
Series B preferred stock, $0.001 par value: 5,000 shares authorized; 5,000 shares issued and 
outstanding as of December 31, 2022 and 2021, respectively
Common stock, $0.001 par value: 50,000 shares authorized; 24,168 and 23,707 shares
   issued and 22,623 and 22,230 shares outstanding as of December 31, 2022 and
   2021, respectively
Additional paid-in capital
Treasury stock 1,545 and 1,477 shares as of December 31, 2022 and 2021, respectively
Accumulated deficit
Accumulated other comprehensive income
Total stockholders' equity

Total liabilities and stockholders' equity

December 31,

2022

2021

16,650
487

$

24,826
28,958
4,177
75,098
6,719
4,373
5,265
10,190
1,120
102,765

14,760
1,190
2,068
2,757
2,618
23,393
3,366
587
25
27,371

$

$

28,553
1,254

19,963
19,924
3,032
72,726
4,066
2,088
6,445
10,268
1,070
96,663

10,502
1,269
2,153
3,150
3,774
20,848
938
280
85
22,151

5

5

24
495,818
(12,173)
(409,381)
1,101
75,394
102,765

$

24
492,657
(11,134)
(408,989)
1,949
74,512
96,663

$

$

$

$

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

39

IDENTIV, INC. 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) 
(In thousands, except per share data) 

Net revenue
Cost of revenue
Gross profit

Operating expenses:

Research and development
Selling and marketing
General and administrative
Decrease in fair value of earnout liability
Restructuring and severance
Total operating expenses

Loss from operations
Non-operating income (expense):

Interest expense, net
Gain on forgiveness of Paycheck Protection Program note
Gain on investment
Foreign currency gains (losses), net
Income (loss) before income tax provision

Income tax provision

Net income (loss)

Other comprehensive income (loss):
Foreign currency translation adjustment
Comprehensive income (loss)

Net income (loss) per common share:

Basic
Diluted

Weighted average shares used in computing net 
     income (loss) per common share:

Basic
Diluted

Year Ended December 31,
2021

2020

2022

$

$

112,915
71,971
40,944

$

103,769
66,702
37,067

9,916
20,730
10,429
—
202
41,277
(333)

(143)
—
30
155
(291)
(101)
(392) $

(848)
(1,240) $

(0.07) $
(0.07) $

8,673
17,033
11,891
—
817
38,414
(1,347)

(483)
2,946
611
(79)
1,648
(28)
1,620

(629)
991

0.02
0.02

$

$

$
$

22,659
22,659

21,340
22,267

$

$

$
$

86,920
53,239
33,681

9,781
17,270
8,623
(261)
1,716
37,129
(3,448)

(1,462)
—
—
(122)
(5,032)
(73)
(5,105)

553
(4,552)

(0.34)
(0.34)

17,978
17,978

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

40

   
IDENTIV, INC. 
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY 
(In thousands, except par value)

Common Stock

Shares

Amount

Additional
Paid-in
Capital

Treasury
Stock

Accumulated
Deficit

Accumulated
Other
Comprehensive
Income

Total
Equity

$

447,965
—

$

(9,043)
—

$

(405,504)
(5,105)

$

2,025
—

$

35,466
(5,105)

Balances, January 1, 2020
Net loss
Unrealized income from foreign
   currency translation
   adjustments
Issuance of common stock in
   connection with vesting of
   stock awards
Proceeds from exercise of
   stock options
Stock-based compensation
Shares withheld in payment of
   taxes in connection with net
   share settlement of
   restricted stock units
Issuance of common stock in
   connection with earnout
Issuance of shares to
   non-employees
Issuance of common stock in
   connection with warrant 
exercise
Issuance of warrants
Balances, December 31, 2020
Net income
Unrealized loss from foreign
   currency translation
   adjustments
Issuance of common stock in
   connection with vesting of
   stock awards
Proceeds from exercise of
   stock options
Stock-based compensation
Shares withheld in payment of
   taxes in connection with net
   share settlement of
   restricted stock units
Issuance of common stock in
   connection with warrant 
exercise
Issuance of common stock in 
connection with 
    public offering
Balances, December 31, 2021
Net loss
Unrealized loss from foreign
   currency translation
   adjustments
Issuance of common stock in
   connection with vesting of
   stock awards
Stock-based compensation
Shares withheld in payment of
   taxes in connection with net
   share settlement of
   restricted stock units
Balances, December 31, 2022

Shares

Series B Preferred Stock
Amount
5
$
—

5,000
—

—

—

—
—

—

—

—

—
—
5,000
—

—

—

—
—

—

—

—
5,000
—

—

—
—

—
5,000

$

—

—

—
—

—

—

—

—
—
5
—

—

—

—
—

—

—

—
5
—

—

—
—

—
5

16,986
—

$

—

632

3
—

(172)

157

62

387
—
18,055
—

—

421

29
—

(82)

28

3,779
22,230
—

—

461
—

18
—

—

—

—
—

—

—

—

1
—
19
—

—

1

—
—

—

—

4
24
—

—

—
—

—

—

13
3,027

—

489

304

(1)
332
452,129
—

—

—

299
2,606

—

—

—
—

(890)

—

—

—
—
(9,933)
—

—

—

—
—

—

—

(1,201)

—

—

—

—
—

—

—

—

—
—
(410,609)
1,620

—

—

—
—

—

—

553

—

—
—

—

—

—

—
—
2,578
—

553

—

13
3,027

(890)

489

304

—
332
34,189
1,620

(629)

(629)

—

—
—

—

—

1

299
2,606

(1,201)

—

37,627
74,512
(392)

37,623
492,657
—

—
(11,134)
—

—
(408,989)
(392)

—
1,949
—

—

—
3,161

—

—
—

—

—
—

(848)

(848)

—
—

—
3,161

(68)
22,623

$

—
24

—
495,818

(1,039)
$ (12,173)

$

$

—
(409,381)

$

—
1,101

$

(1,039)
75,394

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

41

IDENTIV, INC. 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(In thousands) 

Cash flows used in operating activities:

Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by 
   (used in) operating activities:

Depreciation and amortization
Provision for (recovery from) doubtful accounts
Gain on forgiveness of Paycheck Protection Program note
Gain on investment
Accretion of interest on contractual payment obligation
Loss on disposal of fixed assets
Amortization of debt issuance costs
Stock-based compensation expense
Impairment of right-of-use operating lease asset
Decrease in fair value of earnout liability
Changes in operating assets and liabilities:

Accounts receivable
Inventories
Prepaid expenses and other assets
Accounts payable
Contractual payment obligation liability
Deferred revenue
Accrued expenses and other liabilities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Capital expenditures
Proceeds from investment

Net cash used in investing activities

Cash flows from financing activities:

Borrowings under revolving loan facility, net of issuance costs
Repayments under revolving loan facility
Borrowings under East West Bank term loan
Repayments under East West Bank term loan
Proceeds from April 21 Funds promissory notes
Repayments of April 21 Funds promissory notes
Proceeds from the sale of common stock, net of issuance costs
Proceeds from Paycheck Protection Program promissory note
Taxes paid related to net share settlement of restricted stock units
Proceeds from exercise of stock options

Net cash provided by (used in) financing activities

Effect of exchange rates on cash, cash equivalents, and restricted cash
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents and restricted cash
Beginning of period
End of period
Supplemental Disclosures of Cash Flow Information:

Interest paid
Taxes paid, net

Non-cash investing and financing activities:

Dividends earned on Series B preferred stock
Operating lease right-of-use assets obtained in exchange for operating lease liabilities
Reclassification of debt issuance costs to prepaid expenses and other current assets
Common stock issued to settle vendor liability
Common stock issued to settle earnout liability
Fair value of warrants issued in connection with financial liabilities

Year Ended December 31,
2021

2020

2022

$

(392)

$

1,620

$

(5,105)

2,272
—
—
(30)
—
68
—
3,161
—
—

(5,051)
(9,330)
(1,210)
4,073
—
222
(1,590)
(7,807)

(3,902)
30
(3,872)

—
—
—
—
—
—
—
—
(1,039)
—
(1,039)
48
(12,670)

29,807
17,137

6
88

$

$
$

1,971
2,562
(2,946)
(611)
43
—
108
2,606
281
—

(3,572)
389
(12)
(441)
(1,083)
67
246
1,228

(2,087)
611
(1,476)

3,964
(18,548)
—
—
—
(2,800)
37,627
—
(1,201)
299
19,341
(695)
18,398

11,409
29,807

340
74

$

$
$

1,206
3,646

$
$
— $
— $
— $
— $

$
1,148
$
183
114
$
— $
— $
— $

3,313
(41)
—
—
139
—
497
3,027
1,294
(261)

(550)
(4,105)
(570)
2,455
(770)
(467)
(622)
(1,766)

(1,564)
—
(1,564)

3,362
(3,347)
4,500
(4,500)
4,000
(1,200)
—
2,915
(890)
13
4,853
503
2,026

9,383
11,409

945
112

1,094
1,676
—
304
489
332

$

$
$

$
$
$
$
$
$

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

42

IDENTIV, INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

1. Description of Business

Description of Business — Identiv, Inc. and its wholly owned subsidiaries (the “Company”) is a global security technology 

company provider of secure identification and physical security solutions that secure things, data and physical places. Global 
organizations in the mobility, consumer, government, healthcare, education and other markets rely upon the Company’s solutions. The 
Company’s solutions allow its customers to create safe, secure, validated and convenient experiences in their interaction with physical 
things around them and physical places like schools, government offices, factories, transportation, hospitals and other types of 
facilities. The Company’s corporate headquarters are in Fremont, California. The Company maintains research and development 
facilities in California, India, and Germany and local operations and sales facilities in Germany, Hong Kong, Japan, Singapore, 
Canada, and the United States. The Company was founded in 1990 in Munich, Germany and was incorporated in 1996 under the laws 
of the State of Delaware. 

2. Significant Accounting Policies and Recent Accounting Pronouncements

Principles of Consolidation — The accompanying consolidated financial statements include the accounts of the Company and 

its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications — Certain reclassifications have been made to the fiscal year 2021 consolidated financial statements to 
conform to the fiscal year 2022 presentation. The reclassifications had no impact on net income (loss), total assets, total liabilities, or 
stockholders’ equity. 

Use of Estimates — The preparation of consolidated financial statements in conformity with accounting principles generally 
accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the 
reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the consolidated financial statements 
and the reported amounts of revenue and expenses during the reporting period. The Company believes judgment is involved in 
determining revenue recognition; impairment of goodwill and intangible assets; the recoverability of long-lived assets; stock-based 
compensation expense; and income tax uncertainties. The Company bases these estimates on historical and anticipated results, trends, 
and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future 
events. Actual results could differ materially from those estimates and assumptions.

Cash and Cash Equivalents and Restricted Cash — The Company considers all highly liquid investments with an original 
maturity of 90 days or less or investments with a remaining maturity of 90 days or less at the date of purchase to be cash equivalents 
and investments with original maturities greater than 90 days but less than one year to be short-term investments.  

Restricted cash as of December 31, 2022 and 2021 of $0.5 million and $1.3 million, respectively, pertains primarily to a stand 

by letter of credit with a manufacturer for equipment purchased for the Company’s manufacturing facility in Singapore.

Concentration of Credit Risk — Financial instruments that potentially expose the Company to concentrations of credit risk 

consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with 
what it considers high credit quality financial institutions. No customer accounted for 10% or more of net revenue for the years ended 
December 31, 2022 , 2021 or 2020, respectively. No customer accounted for 10% or more of the Company’s accounts receivable, net 
balance as of December 31, 2022 or 2021. The Company does not require collateral or other security to support accounts receivable. 
To reduce risk, the Company’s management performs ongoing credit evaluations of its customers’ financial condition. The Company 
maintains allowances for potential credit losses in its consolidated financial statements. The Company relies upon a limited number of 
suppliers for some key components of their products which exposes them to various risks. One supplier accounted for 11% of the 
Company's accounts payable as of December 31, 2022, while no supplier accounted for 10% or more of the Company’s accounts 
payable balance as of December 31, 2021.

Allowance for Doubtful Accounts — The allowance for doubtful accounts is based on the Company’s assessment of the 

collectability of customer accounts. The Company regularly reviews its receivables that remain outstanding past their applicable 
payment terms and establishes an allowance and potential write-offs by considering factors such as historical experience, credit 
quality, age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. Although 
the Company expects to collect net amounts due as stated on the consolidated balance sheets, actual collections may differ from these 
estimated amounts. 

43

Inventories — Inventories are stated at the lower of cost (using average cost or standard cost, as applicable) or net realizable 
value (market). Inventory is written down for excess inventory, technical obsolescence and the inability to sell based primarily on 
historical sales and expectations for future use. The Company operates in an industry characterized by technological change. The 
planning of production and inventory levels is based on internal forecasts of customer demand, which are highly unpredictable and can 
fluctuate substantially. Should the demand for the Company’s products prove to be significantly less than anticipated, the ultimate 
realizable value of the Company’s inventory could be substantially less than amounts in the consolidated balance sheets. Once 
inventory has been written down below cost, it is not subsequently written up. 

Property and Equipment — Property and equipment are stated at cost less accumulated depreciation. Depreciation and 
amortization are computed using the straight-line method over estimated useful lives of three to ten years for furniture, fixture and 
office equipment, five to seven years for machinery, five years for automobiles and three years for computer software. Leasehold 
improvements are amortized over the shorter of the lease term or their estimated useful life. 

Intangible Assets — Amortizable intangible assets include trademarks, developed technology and customer relationships 
acquired as part of business combinations. Intangible assets subject to amortization are amortized using the straight-line method over 
their estimated useful lives ranging from four to twelve years and are reviewed for impairment. 

Goodwill — Goodwill represents the excess of the aggregate of the fair value of consideration transferred in a business 
combination, over the fair value of assets acquired, net of liabilities assumed. In accordance with Accounting Standards Codification 
(“ASC”) 350, Intangibles-Goodwill and Other (“ASC 350”), goodwill is not amortized but is tested for impairment on an annual 
basis, in the fourth quarter, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not 
be recoverable. The Company performs an initial assessment of qualitative factors to determine whether the existence of events and 
circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying 
amount. In performing the qualitative assessment, the Company identifies and considers the significance of relevant key factors, 
events, and circumstances that affect the fair value of its reporting units. These factors include external factors such as 
macroeconomic, industry, and market conditions, as well as entity-specific factors, such as actual and planned financial performance. 
If, after assessing the totality of relevant events and circumstances, the Company determines that it is more likely than not that the fair 
value of the reporting unit exceeds its carrying value and there is no indication of impairment, no further testing is performed; 
however, if the Company concludes otherwise, then it performs the quantitative impairment test which compares the estimated fair 
value of the reporting unit to its carrying value, including goodwill. If the carrying amount of the reporting unit is in excess of its fair 
value, an impairment loss would be recorded in the consolidated statement of comprehensive income (loss). 

Long-Lived Assets — The Company reviews long-lived assets for impairment whenever events or changes in circumstances 
indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the total estimated 
future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying 
amount. Impairment, if any, is assessed using discounted cash flows or other appropriate measures of fair value. There were no 
impairment losses recorded during the years ended December 31, 2022, 2021 or 2020.

Leases — The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease 

right-of-use (“ROU”) assets, operating lease liabilities, and long-term operating lease liabilities on the Company’s consolidated 
balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future 
minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit 
rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in 
determining the present value of future payments. The operating lease ROU assets also include any lease payments made and exclude 
lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend the lease when it is 
reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-
line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a 
single lease component.

Freight Costs — The Company reflects the cost of shipping its products to customers as a cost of revenue. Reimbursements 

received from customers for freight costs are recognized as product revenue. 

Research and Development — Costs to research, design, and develop the Company’s products are expensed as incurred and 

consist primarily of employee compensation, external contractor costs, and fees for the development of prototype products. Software 
development costs are capitalized beginning when a product’s technological feasibility has been established and ending when a 
product is available for general release to customers. Generally, the Company’s products are released soon after technological 
feasibility has been established. Costs incurred subsequent to achieving technological feasibility have not been significant and 
generally have been expensed as incurred. As of December 31, 2022 and 2021, the net amount of capitalized software development 
costs were $515,000 and $303,000, respectively, and are included in other current and long term assets in the accompanying 
consolidated balance sheets. 

44

The Company capitalizes certain costs for its internal-use software incurred during the application development stage. Costs 
related to preliminary project activities and post implementation activities are expensed as incurred. Internal-use software is amortized 
on a straight line basis over its estimated useful life, generally three years. The estimated useful life is determined based on 
management’s judgment on how long the core technology and functionality serves internal needs and the customer base. Management 
evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances 
occur that could impact the recoverability of these assets. The Company recorded amortization expense related to software 
development costs of $45,000, $55,000 and $78,000 for the years ended December 31, 2022, 2021 and 2020, respectively. The 
Company capitalized software development costs of $103,000 and $84,000 for the year ended December 31, 2022 and 2021, 
respectively. 

Advertising Costs — The Company expenses advertising costs as incurred. Advertising costs were not significant for the years 

ended December 31, 2022, 2021 and 2020.  

Stock-based Compensation — The Company accounts for all stock-based payment awards, including employee stock options, 
restricted stock awards, and performance share units in accordance with ASC 718, Compensation-Stock Compensation (“ASC 718”). 
Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the fair 
value of the award. Compensation expense for all stock-based payment awards is recognized using the straight-line single-option 
approach. Employee stock options awards are valued under the single-option approach and amortized on a straight-line basis, net of 
estimated forfeitures. The value of the portion of the stock option award that is ultimately expected to vest is recognized as expense 
over the requisite service periods in the Company’s consolidated statements of comprehensive income (loss). See Note 10, Stock-
Based Compensation, for further information regarding the Company’s stock-based compensation assumptions and expenses. 

The Company has elected to use the Black Scholes pricing model to estimate the fair value of its stock options, which 
incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate 
the fair value of stock option awards. Since the Company has been publicly traded for many years, it utilizes its own historical 
volatility in valuing its stock option grants. The expected life of an award is based on historical experience, the terms and conditions of 
the stock awards granted to employees, as well as the potential effect from options that have not been exercised at the time. The 
assumptions used in calculating the fair value of stock-based payment awards represent management’s estimates. These estimates 
involve inherent uncertainties and the application of management’s judgment. If factors change and the Company uses different 
assumptions, its stock-based compensation expense could be materially different in the future. In addition, the Company estimates the 
expected forfeiture rate and recognizes expense only for those awards which are ultimately expected-to-vest shares. If the actual 
forfeiture rate is materially different from the Company’s estimate, the recorded stock-based compensation expense could be different. 
ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures 
differ from those estimates.

Income Taxes — The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which 
requires the asset and liability approach for financial accounting and reporting of income taxes. Deferred income taxes reflect the 
recognition of future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The 
carrying value of net deferred tax assets reflects that the Company has been unable to generate sufficient taxable income in certain tax 
jurisdictions. A valuation allowance is provided to reduce the deferred tax asset to an amount that is more likely than not to be 
realized. The deferred tax assets are still available for the Company to use in the future to offset taxable income, which would result in 
the recognition of a tax benefit and a reduction in the Company’s effective tax rate. Actual operating results and the underlying 
amount and category of income in future years could render the Company’s current assumptions, judgments and estimates of the 
realizability of deferred tax assets inaccurate, which could have a material impact on its financial position or results of operations. 

The Company accounts for uncertain tax positions in accordance with ASC 740, which clarifies the accounting for uncertainty 
in income taxes recognized in an enterprise’s financial statements. It prescribes a recognition threshold and measurement attribute for 
the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also 
provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. 
Such changes in recognition or measurement might result in the recognition of a tax benefit or an additional charge to the tax 
provision in the period. 

The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the 

accompanying consolidated statement of comprehensive income (loss). Accrued interest and penalties are included within the related 
tax liability line in the consolidated balance sheets. See Note 8, Income Taxes, for further information regarding the Company’s tax 
disclosures.

Net Income (Loss) Per Share — Basic net income (loss) per share is based upon the weighted average number of common 
shares outstanding during the period. Diluted net income (loss) per share is based upon the weighted average number of common 
shares and dilutive-potential common share equivalents outstanding during the period (using the treasury stock or if-converted 
method), if applicable. Dilutive-potential common share equivalents are excluded from the computation of net income (loss) per share 

45

in loss periods, as their effect would be antidilutive. See Note 11, Net Income (Loss) per Common Share, for further information 
regarding the Company’s computation of both basic and diluted net income (loss) per common share. 

Comprehensive Income (Loss) — Comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020 has 

been disclosed within the consolidated statements of comprehensive income (loss). Other accumulated comprehensive income (loss) 
includes net foreign currency translation adjustments, which are excluded from consolidated net income (loss). 

Foreign Currency Translation and Transactions — The functional currencies of the Company’s foreign subsidiaries are the 

local currencies, except for the Singapore subsidiary, which uses the U.S. dollar as its functional currency. For those subsidiaries 
whose functional currency is the local currency, the Company translates assets and liabilities to U.S. dollars using period-end 
exchange rates and translates revenues and expenses using average exchange rates during the period. Exchange gains and losses 
arising from translation of foreign entity financial statements are included as a component of other comprehensive income (loss) and 
gains and losses from transactions denominated in currencies other than the functional currency of the Company are included in the 
Company’s consolidated statements of comprehensive income (loss). The Company recognized net currency gains of $0.2 million in 
2022 and net currency losses of $0.1 million and $0.1 million in 2021 and 2020, respectively. 

Recent Accounting Pronouncements

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

In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses 
(Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires measurement and recognition 
of expected credit losses for financial assets held at the reporting date based on external information, or a combination of both relating 
to past events, current conditions, and reasonable and supportable forecasts. ASU 2016-13 replaces the existing incurred loss 
impairment model with a forward-looking expected credit loss model which will result in earlier recognition of credit losses. 
Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvement to Topic 326, Financial 
Instruments – Credit Losses, ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 
815, Derivatives and Hedging, and Topic 825, Financial Instruments, ASU 2019-05, Financial Instruments Credit Losses (Topic 326) 
Targeted Transition Relief, ASU 2016-13, the FASB issued ASU 2019-10 Financial Instruments-Credit Losses (Topic 326), 
Derivatives and Hedging (Topic 815), and Leases (Topic 842), and ASU 2019-11 Codification Improvements to Topic 326, Financial 
Instruments-Credit Losses. The subsequent ASUs do not change the core principle of the guidance in ASU 2016-13. Instead, these 
amendments are intended to clarify and improve operability of certain topics included within ASU 2016-13.

In February 2020, the FASB issued ASU 2020-02, which provides guidance regarding methodologies, documentation, and 

internal controls related to expected credit losses. The subsequent amendments will have the same effective date and transition 
requirements as ASU No. 2016-13. Early adoption is permitted. Topic 326 requires a modified retrospective approach by recording a 
cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company adopted this standard 
on January 1, 2022, and it did not have a material impact on the Company’s consolidated financial statements.

46

3. Revenue

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the 
consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can 
include various combinations of its products, software licenses, and services, which are generally capable of being distinct and 
accounted for as separate performance obligations. For contracts with multiple performance obligations, the Company allocates the 
transaction price of the contract to each performance obligation, generally on a relative basis using its standalone selling price. The 
stated contract value is generally the transaction price to be allocated to the separate performance obligations. Revenue is recognized 
net of any taxes collected from customers that are subsequently remitted to governmental authorities.

Nature of Products and Services

The Company derives revenues from sales of hardware products, software licenses, subscriptions, professional services, 

software maintenance and support, and extended hardware warranties.

Hardware Product Revenues — The Company generally has two performance obligations in arrangements involving the sale of 

hardware products. The first performance obligation is to transfer the hardware product (which includes software integral to the 
functionality of the hardware product). The second performance obligation is to provide assurance that the product complies with its 
agreed-upon specifications and is free from defects in material and workmanship for a period of one to three years (i.e. assurance 
warranty). The entire transaction price is allocated to the hardware product and is generally recognized as revenue at the time of 
shipment because the customer obtains control of the product at that point in time. The Company has concluded that control generally 
transfers at that point in time because the customer has title to the hardware, and a present obligation to pay for the hardware. None of 
the transaction price is allocated to the assurance warranty component, as the Company accounts for these product warranty costs in 
accordance with ASC 460, Guarantees. 

Software License Revenues — The Company’s license arrangements grant customers the perpetual right to access and use the 

licensed software products at the outset of an arrangement. Technical support and software updates are generally made available 
throughout the term of the support agreement, which is generally one to three years. The Company accounts for these arrangements as 
two performance obligations: (1) the software licenses, and (2) the related updates and technical support. The software license revenue 
is recognized when the license is delivered to the customer or made available for download, while the software updates and technical 
support is recognized over the term of the support contract.  

Subscription Revenues —  Subscription revenues consist of fees received in consideration for providing customers access to one 
or more of the Company’s software-as-a-service (“SaaS”) based solutions. These SaaS arrangements include access to the Company’s 
licensed software and, in certain arrangements, use of various hardware devices over the contract term. These SaaS arrangements do 
not provide the customer the right to take possession of the software supporting the subscription service, or if applicable, any hardware 
devices at any time during the contract period, and as such are not considered separate performance obligations. Revenue is 
recognized ratably on a straight-line basis over the term of the contract beginning when the service is made available to the customer. 
Subscription contract terms range from month-to-month to six years in length and billed monthly or annually. 

Professional Services Revenues — Professional services revenues consist primarily of programming customization services 
performed relating to the integration of the Company’s software products with the customers other systems, such as HR systems. 
Professional services contracts are generally billed on a time and materials basis and revenue is recognized as the services are 
performed. 

Software Maintenance and Support Revenues — Support and maintenance contract revenues consist of the services provided to 
support the specialized programming applications performed by the Company’s professional services group. Support and maintenance 
contracts are typically billed at inception of the contract and recognized as revenue over the contract period, typically over a one or 
three year period.

Extended Hardware Warranties Revenues — Sales of the Company’s hardware products may also include optional extended 

hardware warranties, which typically provide assurance that the product will continue function as initially intended. Extended 
hardware warranty contracts are typically billed at inception of the contract and recognized as revenue over the respective contract 
period, typically over one to two year periods after the expiration of the original assurance warranty.

47

Performance
Obligation

Hardware products

Software licenses

Subscriptions

Professional services

When Performance Obligation is
Typically Satisfied

When customer obtains control of 
the product (point-in-time)
When license is delivered to 
customer or made available for 
download, and the applicable license 
period has begun (point-in-time)
Ratably over the course of the 
subscription term (over time)
As services are performed and/or 
when contract is fulfilled (point-in-
time)

When Payment is
Typically Due
Within 30-60 days of 
shipment

Within 30-60 days of 
the beginning of license 
period

How Standalone Selling Price is
Typically Estimated

Observable in transactions without 
multiple performance obligations
Established pricing practices for software 
licenses bundled with software 
maintenance, which are separately 
observable in renewal transactions

In advance of 
subscription term

Contractually stated or list price

Within 30-60 days of 
delivery

Observable in transactions without 
multiple performance obligations

Software maintenance
   and support services

Ratably over the course of the 
support contract (over time)

Extended hardware
   warranties

Ratably over the course of the 
support contract (over time)

Within 30-60 days of 
the beginning of the 
contract period
Within 30-60 days of 
the beginning of the 
contract period

Observable in renewal transactions

Observable in renewal transactions

Significant Judgments

The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. For 

such arrangements, the Company allocates the transaction price to each performance obligation based on its relative standalone selling 
price (“SSP”).

Judgment is required to determine the SSP for each distinct performance obligation in a contract. For the majority of items, the 
Company estimates SSP using historical transaction data. The Company uses a range of amounts to estimate SSP when it sells each of 
the products and services separately and needs to determine whether there is a discount to be allocated based on the relative SSP of the 
various products and services. In instances where SSP is not directly observable, such as when the product or service is not sold 
separately, the Company determines the SSP using information that may include market conditions and other observable inputs. The 
determination of SSP is an ongoing process and information is reviewed regularly in order to ensure SSPs reflect current information 
or trends.

Disaggregation of Revenues

The Company disaggregates revenue from contracts with customers based on the timing of transfer of goods or services to 
customers (point-in-time or over time) and geographic region based on the shipping location of the customer. The geographic regions 
that are tracked are the Americas, Europe and the Middle East, and Asia-Pacific regions.  

Total net sales based on the disaggregation criteria described above are as follows (in thousands):

Americas
Europe and the 
Middle East
Asia-Pacific
Total

Point-in-
Time
$ 73,317

2022
Over 
Time

 $

3,482

Total
 $ 76,799

Year Ended December 31,
2021
Over 
Time

 $

3,234

Total
 $ 69,396

Point-in-
Time
 $ 66,162

Point-in-
Time
$ 54,491

2020
Over 
Time

 $

3,811

Total
 $ 58,302

15,492

408

  15,900

  12,507

369

  12,876

9,124

373

9,497

20,216
$ 109,025

—   20,216
 $ 112,915

3,890

  21,497
 $ 100,166

 $

—   21,497
 $ 103,769

3,603

19,121
$ 82,736

 $

—   19,121
 $ 86,920

4,184

 $

48

 
 
 
 
 
 
 
 
 
 
 
Contract Balances

Amounts invoiced in advance of services being provided are accounted for as deferred revenue. Nearly all of the Company’s 
deferred revenue balance is related software maintenance contracts. Payment terms and conditions vary by contract type, although 
payment is typically due within 30 to 60 days of contract inception. In instances where the timing of revenue recognition differs from 
the timing of invoicing, the Company has determined its contracts do not include a significant financing component. The primary 
purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s 
products and services, not to receive financing from its customers.

Changes in deferred revenue during the years ended December 31, 2022 and 2021 were as follows (in thousands):

Deferred revenue, beginning of period
Deferral of revenue billed in current period, net of recognition
Recognition of revenue deferred in prior periods
Deferred revenue, end of period

Year Ended December 31,
2021
2022

$

$

2,433
2,241
(2,019)
2,655

$

$

2,366
1,905
(1,838)
2,433

Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables and are included in other 

current assets on the consolidated balance sheet. As of December 31, 2022 and 2021, the amount of unbilled receivables was 
immaterial.

Unsatisfied Performance Obligations

Revenue expected to be recognized in future periods related to remaining performance obligations, excluding revenue pertaining 

to contracts that have an original expected duration of one year or less, and contracts where revenue is recognized as invoiced, was 
approximately $0.9 million as of December 31, 2022. Since the Company typically invoices customers at contract inception, this 
amount is included in the deferred revenue balance. As of December 31, 2022, the Company expects to recognize approximately 39% 
of the revenue related to these unsatisfied performance obligations during 2023, 26% during 2024, and 35% thereafter.

Practical Expedients

The Company has elected the following practical expedients in accordance with ASC 606, Revenue from Contracts with 

Customers:

•

•

•

•

The Company expenses costs as incurred for costs to obtain a contract when the amortization period would have been one 
year or less. These costs include internal sales force compensation programs and certain partner sales incentive programs 
as the Company has determined annual compensation is commensurate with annual sales activities.

The Company generally expenses sales commissions when incurred because the amortization period would have been one 
year or less. These costs are recorded within selling and marketing expense.

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected 
length of one year or less.

The Company does not consider the time value of money for contracts with original durations of one year or less.

49

4. Fair Value Measurements 

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

•

•

•

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

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

Level 3 – Unobservable inputs.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of December 31, 2022 and 2021, the only assets measured and recognized at fair value on a recurring basis were nominal 
cash equivalents. As of December 31, 2022 and 2021, there were no liabilities measured and recognized at fair value on a recurring 
basis.

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

Certain of the Company's assets, including goodwill, intangible assets, and privately-held investments, are measured at fair 

value on a nonrecurring basis if impairment is indicated. Purchased intangible assets are measured at fair value primarily using 
discounted cash flow projections. For additional discussion of measurement criteria used in evaluating potential impairment involving 
goodwill and intangible assets, refer to Note 5, Goodwill and Intangible Assets.

As of December 31, 2022 and 2021, the Company had $348,000 of privately-held investments measured at fair value on a 
nonrecurring basis, which were classified as Level 3 assets due to the absence of quoted market prices and inherent lack of liquidity. 
The Company reviews its investments to identify and evaluate investments that have an indication of possible impairment. The 
Company adjusts the carrying value for its privately-held investments for any impairment if the fair value is less than the carrying 
value of the respective assets on an other-than-temporary basis. The amount of privately-held investments is included in other assets in 
the accompanying consolidated balance sheets.

During the years ended December 31, 2022 and 2021, the Company received proceeds of approximately $30,000 and $611,000, 

respectively from the acquisition of a private company that the Company had invested in, which had been fully impaired and had no 
carrying value.

As of December 31, 2022 and 2021, there were no liabilities that are measured and recognized at fair value on a non-recurring 

basis.

Assets and Liabilities Not Measured at Fair Value

The carrying amounts of the Company's accounts receivable, prepaid expenses and other current assets, accounts payable, and 

other accrued expenses and liabilities approximate fair value due to their short maturities. 

5. Goodwill and Intangible Assets 

Goodwill

The following table summarizes the activity of goodwill (in thousands):

Balance as of December 31, 2020
Currency translation adjustment
Balance as of December 31, 2021
Currency translation adjustment
Balance as of December 31, 2022

Identity

Premises

Total

$

$

3,554
—
3,554
—
3,554

$

$

6,712
2
6,714
(78)
6,636

$

$

10,266
2
10,268
(78)
10,190

50

 
In accordance with ASC 350, the Company tests goodwill for impairment on an annual basis, in the fourth quarter, or whenever 
events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company performs 
an initial assessment of qualitative factors to determine whether the existence of events and circumstances leads to a determination 
that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In performing the qualitative 
assessment, the Company identifies and considers the significance of relevant key factors, events, and circumstances that affect the 
fair value of its reporting units. These factors include external factors such as macroeconomic, industry, and market conditions, as well 
as entity-specific factors, such as actual and planned financial performance. If, after assessing the totality of relevant events and 
circumstances, the Company determines that it is more likely than not that the fair value of the reporting unit exceeds its carrying 
value and there is no indication of impairment, no further testing is performed; however, if the Company concludes otherwise, then the 
Company will perform the quantitative impairment test which compares the estimated fair value of the reporting unit to its carrying 
value, including goodwill. If the carrying amount of the reporting unit is in excess of its fair value, an impairment loss would be 
recorded in the consolidated statement of comprehensive income (loss). During the years ended December 31, 2022, 2021 and 2020, 
the Company noted no indicators of goodwill impairment and concluded no further testing was necessary.

Intangible Assets

The following table summarizes the gross carrying amount and accumulated amortization for intangible assets resulting from 

acquisitions (in thousands):

Amortization period (in years)

Gross carrying amount as of December 31, 2022
Accumulated amortization
Intangible assets, net as of December 31, 2022

Gross carrying amount as of December 31, 2021
Accumulated amortization
Intangible assets, net as of December 31, 2021

Trademarks
5

Developed
Technology
10 - 12

Customer
Relationships
4 - 12

Total

$

$

$

$

766
(691)
75

764
(536)
228

$

$

$

$

9,093
(6,666)
2,427

9,127
(6,219)
2,908

$

$

$

$

15,743
(12,980)
2,763

15,774
(12,465)
3,309

$

$

$

$

25,602
(20,337)
5,265

25,665
(19,220)
6,445

Each period, the Company evaluates the estimated remaining useful lives of purchased intangible assets and whether events or 

changes in circumstances warrant a revision to the remaining period of amortization. If a revision to the remaining period of 
amortization is warranted, amortization is prospectively adjusted over the remaining useful life of the intangible asset. Intangible 
assets subject to amortization are amortized on a straight-line basis over their useful lives as indicated in the table above. The 
Company performs an evaluation of its amortizable intangible assets for impairment at the end of each reporting period. The Company 
did not identify any impairment indicators during the years ended December 31, 2022, 2021 and 2020. 

The following table summarizes the amortization expense included in the consolidated statements of comprehensive income 

(loss) (in thousands): 

Cost of revenue
Selling and marketing

Total

2022

Year Ended December 31,
2021

2020

$

$

447
670
1,117

$

$

453
671
1,124

$

$

899
1,666
2,565

51

The estimated annual future amortization expense for purchased intangible assets with definite lives as of December 31, 2022 

was as follows (in thousands):

2023
2024
2025
2026
2027
Thereafter
Total

$

$

1,030
956
956
956
956
411
5,265

6. Balance Sheet Components 

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

Raw materials
Work-in-progress
Finished goods

Total

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

Building and leasehold improvements
Furniture, fixtures and office equipment
Plant and machinery
Purchased software

Total

Accumulated depreciation
Property and equipment, net

December 31,

2022

2021

13,333
55
15,570
28,958

$

$

7,182
—
12,742
19,924

December 31,

2022

2021

1,941
726
15,311
718
18,696
(11,977)
6,719

$

$

1,304
1,379
13,244
2,281
18,208
(14,142)
4,066

$

$

$

$

The Company recorded depreciation expense of $1.2 million, $0.8 million and $0.7 million during the years ended 

December 31, 2022, 2021 and 2020, respectively.

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

Accrued professional fees
Accrued restructuring
Accrued warranties
Rental payments due to landlord
Other accrued expenses

Total

7. Financial Liabilities 

December 31,

2022

2021

$

$

574
24
345
—
1,675
2,618

$

$

576
294
377
922
1,605
3,774

On February 8, 2017, the Company entered into a Loan and Security Agreement with East West Bank (“EWB”). Following 

subsequent amendments, on April 14, 2022, the Company and EWB amended the Loan and Security Agreement replacing the $20.0 
million revolving loan facility subject to a borrowing base with a non-formula revolving loan facility with no borrowing base 
requirement and a maturity date of February 8, 2023. In addition, the interest rate was lowered from prime to prime minus 0.25%, and 

52

 
 
certain financial covenants were amended. On February 8, 2023, the Company entered into an amendment (the "Fourth Amendment") 
to its amended and restated the Loan and Security Agreement with EWB (as amended to date, the "Loan Agreement"). The Fourth 
Amendment amends the Loan Agreement to, among other things, extend the maturity date to February 8, 2025, and amend certain 
financial covenants.

The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, 

including, limits or restrictions on the Company’s ability to incur liens, incur indebtedness, make certain restricted payments 
(including dividends), merge or consolidate and dispose of assets, as well as other financial covenants. The Company’s obligations 
under the Loan Agreement are collateralized by substantially all of its assets. As of December 31, 2022, there were no amounts 
outstanding and the Company was in compliance with all financial covenants under the Loan Agreement.

8. Income Taxes

Income (loss) before income tax provision for domestic and non-U.S. operations is as follows (in thousands): 

For the Year Ended December 31,
2021

2022

2020

(2,710) $
2,419
(291) $

(1,189) $
2,837
1,648

$

(6,321)
1,289
(5,032)

For the Year Ended December 31,
2021

2022

2020

— $
—
—
— $

— $
3
98
101
101

$

— $
—
—
— $

— $
(24)
52
28
28

$

—
—
—
—

—
(15)
88
73
73

Income (loss) from operations before income tax provision:

U.S.
Foreign

Income (loss) from operations before income tax provision

The income tax provision consisted of the following (in thousands): 

Deferred:
Federal
State
Foreign

Current:
Federal
State
Foreign
Total current
Total income tax provision

$

$

$

$

$

$

53

Significant items making up deferred tax assets and liabilities are as follows (in thousands): 

Deferred tax assets:

Allowances not currently deductible for tax purposes
Net operating loss carryforwards
Operating lease liabilities
General carryforwards
Stock-based compensation
Accrued and other

Less valuation allowance

Deferred tax liabilities:

Depreciation and amortization
Operating lease right-of-use assets
State income taxes

Net deferred tax asset

December 31,

2022

2021

$

$

777
41,730
1,018
16,407
1,471
2,090
63,493
(59,996)
3,497

(867)
(693)
(1,937)
(3,497)

$

— $

978
44,068
312
16,433
1,487
1,961
65,239
(62,441)
2,798

(925)
(10)
(1,863)
(2,798)
—

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be 
generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss 
incurred over the three-year period ended December 31, 2022. Such objective evidence limits the ability to consider other subjective 
evidence such as the Company’s projections for future growth. 

A valuation allowance of $60.0 million and $62.4 million, as of December 31, 2022 and 2021, respectively, has been recorded 
to offset the related net deferred tax assets as the Company is unable to conclude that it is more likely than not that such deferred tax 
assets will be realized. The net deferred tax liabilities are primarily from foreign tax liabilities as well as intangibles acquired as a 
result of the acquisitions, which are not deductible for tax purposes.

The following table summarizes the Company’s net deferred tax assets valuation allowance activity (in thousands):

Balance at beginning of period
Increases in valuation allowance
Decreases in valuation allowance
Balance at end of period

Year Ended December 31,
2021

2020

2022

$

$

62,441
—
(2,445)
59,996

$

$

62,699
459
(717)
62,441

$

$

62,492
1,142
(935)
62,699

Section 951A under the Tax Cuts and Jobs Act (the “Act”) requires a U.S. shareholder of a controlled foreign corporation to 
include in taxable income the shareholder’s share of global intangible low-taxed income (“GILTI”) for the year. The Company has 
determined that the Section 951A provisions do apply to its operations and relationships with its controlled foreign corporations 
(“CFCs”). The Company recorded $2.0 million and $2.5 million of GILTI income in 2022 and 2021, respectively. The Company did 
not record any GILTI income in 2020 due to net tested losses at its CFCs.

The Act also changed the treatment of Section 174 research and experimental costs beginning January 1, 2022. Historically, 

taxpayers had the option of expensing Section 174 costs currently or amortizing over five years. The Act provision requires taxpayers 
to now capitalize such costs and amortize over five years for research conducted domestically or fifteen years if conducted outside of 
the U.S. This new Section 174 rule had no material impact on the Company's consolidated financial statements in 2022, and any 
increases to taxable income as a result of capitalizing research and experimental costs in the future are expected to be offset by the 
Company's net operating losses.

As of December 31, 2022, the Company had net operating loss carryforwards of $121.0 million for federal, $50.3 million for 

state and $52.5 million for foreign income tax purposes. Certain of the Company’s federal, state and foreign loss carryforwards have 
started expiring and will continue to expire through 2042 if not utilized.       

54

The Tax Reform Act of 1986 (the “Tax Reform Act”) limits the use of net operating loss and tax credit carryforwards in certain 

situations where changes occur in stock ownership. The Company completed its acquisition of Bluehill ID AG on January 4, 2010, 
which resulted in a stock ownership change as defined by the Tax Reform Act. The Company also completed its acquisition of 3VR 
Security, Inc. on February 14, 2018, which resulted in a stock ownership change as defined by the Tax Reform Act. These transactions 
resulted in limitations on the annual utilization of federal and state net operating loss carryforwards and credits. As a result, the 
Company reevaluated its available deferred tax assets, and the loss carryforward and credit amounts, excluding the valuation 
allowance presented above have been adjusted for the limitation resulting from the change in ownership in accordance with the 
provisions of the Tax Reform Act. 

The income tax provision reconciled to the amount computed by applying the statutory federal tax rate to the income (loss) 

before income tax provision is as follows (in thousands): 

For the Year Ended December 31,
2021

2022

2020

Income tax provision (benefit) at statutory federal tax rate of 21%
State taxes, net of federal benefit
Foreign taxes provisions provided for at rates other than U.S. statutory rate
Section 951(A) inclusion
Stock options
Change in valuation allowance
Permanent differences
PPP loan forgiveness
Other
Total provision for income taxes

$

$

(61) $
2
(410)
428
(218)
274
86
—
—
101

$

345
(19)
(494)
523
(443)
700
42
(619)
(7)
28

$

$

(1,057)
(12)
(202)
—
—
1,432
(76)
—
(12)
73

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

The Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") includes provisions relating to refundable payroll 
tax credits, deferment of the employer portion of certain payroll taxes, net operating loss carryback periods, and alternative minimum 
tax credit refunds. The Company analyzed the provisions of the CARES Act and determined there was no significant impact to its 
provision for income taxes for the year ended December 31, 2020.

On August 16, 2022, the President of the United States signed into law the Inflation Reduction Act ("H.R. 5376"), which 
contained various tax law changes, including the imposition of an AMT on “large” corporations, a tax on certain stock buybacks, and 
other targeted revenue raisers. The Company analyzed the provisions of H.R. 5376 and currently does not expect this law to have any 
material effect on the Company.

On June 29, 2020, California Governor Gavin Newsom signed Assembly Bill 85 (“AB85”) into law as part of the California 

2020 Budget Act, which temporarily suspends the use of California net operating losses and imposes a cap on the amount of business 
incentive tax credits that companies can utilize against their net income for tax years 2020, 2021, and 2022. The Company analyzed 
the provisions of AB85 and determined there was no impact on the Company’s income tax provision for the years ended December 
31, 2022 and 2021.

On December 27, 2020, the Consolidated Appropriations Act, 2021 (the “CAA”) was signed into law. The CAA includes 
provisions meant to clarify and modify certain items put forth in CARES Act, while providing aid to businesses affected by the 
pandemic. The Company recorded an income tax benefit of $6.2 million in the year ended December 31, 2021 as a result of 
deductibility of expenses paid by the forgiveness of the PPP loan.

55

A reconciliation of the beginning and ending amount of unrecognized tax benefits with an impact on the Company’s 

consolidated balance sheets or statements of comprehensive income (loss) is as follows (in thousands): 

Balance at beginning of period
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions in prior year tax positions
Balance at end of period

December 31,

2022

2021

$

$

2,276
1
2
—
2,279

$

$

2,307
1
—
(32)
2,276

While timing of the resolution and/or finalization of tax audits is uncertain, the Company does not believe that its unrecognized 

tax benefits as presented in the above table would materially change in the next 12 months. 

As of December 31, 2022 and 2021, the Company recognized liabilities for unrecognized tax benefits of $2.3 million and $2.3 

million, respectively. Since there was a full valuation allowance against these deferred tax assets, there was no impact on the 
Company’s consolidated balance sheets or statements of comprehensive income (loss) for the years ended December 31, 2022, 2021 
and 2020. Also the subsequent recognition, if any, of these previously unrecognized tax benefits would not affect the effective tax rate. 
Such recognition would result in adjustments to other tax accounts, primarily deferred taxes. The amount of unrecognized tax benefits 
which, if recognized, would not affect the Company's tax rate as of December 31, 2022 and 2021, respectively. 

The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. For the year 

ended December 31, 2022, the Company recorded an increase in accrued penalties of $2,000 and an increase in accrued interest of 
$1,000 related to the unrecognized tax benefits noted above. As of December 31, 2022, the Company has recognized a total liability 
for penalties of $4,000 and interest of $7,000. For the year ended December 31, 2021, the Company recorded a decrease in accrued 
penalties of $3,000 and a decrease in accrued interest of $9,000 related to the unrecognized tax benefits noted above. As of December 
31, 2021, the Company had recognized a total liability for penalties of $3,000 and interest of $5,000. For the year ended December 31, 
2020, the Company recorded a decrease in accrued penalties of $5,000 and a decrease in accrued interest of $21,000.

The Company files U.S. federal, U.S. state and foreign tax returns. The Company generally is no longer subject to tax 

examinations for years prior to 2017. However, if loss carryforwards of tax years prior to 2017 are utilized in the U.S., these tax years 
may become subject to investigation by the tax authorities.

9. Stockholders’ Equity 

Preferred Stock 

The Company is authorized to issue 10,000,000 shares of preferred stock, 40,000 of which have been designated as Series A 

Participating Preferred Stock, par value $0.001 per share, and 5,000,000 of which have been designated as Series B Non-Voting 
Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”). No shares of the Company’s Series A 
Participating Preferred Stock were outstanding as of December 31, 2022 and 2021. At both December 31, 2022 and 2021, 5,000,000 
shares of the Series B convertible preferred stock were outstanding. 

The Board of Directors may from time to time, without further action by the Company’s stockholders, direct the issuance of 
shares of preferred stock in other series and may, at the time of issuance, determine the rights, preferences and limitations of each 
series, including voting rights, dividend rights and redemption and liquidation preferences. Satisfaction of any dividend preferences of 
outstanding shares of preferred stock would reduce the amount of funds available for the payment of dividends on shares of the 
Company’s common stock. Holders of shares of preferred stock may be entitled to receive a preference payment in the event of any 
liquidation, dissolution or winding-up of the Company before any payment is made to the holders of shares of the Company’s 
common stock. Upon the affirmative vote of the Board, without stockholder approval, the Company may issue shares of preferred 
stock with voting and conversion rights, which could adversely affect the holders of shares of its common stock.

Series B Convertible Preferred Stock and Private Placement

On December 20, 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with each of 
21 April Fund, Ltd. and 21 April Fund, LP (collectively, the “Purchasers”), pursuant to which the Company, in a private placement, 
agreed to issue and sell to the Purchasers an aggregate of up to 5,000,000 shares of the Series B convertible preferred stock, $0.001 
par value per share (collectively referred to as the “Shares”). The Purchasers agreed to purchase an aggregate of 3,000,000 Shares at a 
price of $4.00 per share in cash at the initial closing of the transaction, and at the sole option of the Company, an additional 2,000,000 

56

Shares at a price of $4.00 per share in cash at a second closing, if any (the “Private Placement”). The total purchase price payable to 
the Company was $20,000,000, of which $12,000,000 was paid at the initial closing. On May 30, 2018, the Company issued 
2,000,000 Shares at a price of $4.00 per share in the second closing of the Private Placement. Gross proceeds to the Company from the 
second closing were approximately $8.0 million, before deducting fees and certain expenses payable by the Company. The proceeds 
from the issuance of the Shares were required to be used to pay off existing debt obligations of the Company and to fund future 
acquisitions of technology, business and other assets by the Company.

Each Share shall be convertible into the Company’s common stock (i) following the sixth (6th) anniversary of the initial closing 

of the Private Placement or (ii) if earlier, during the thirty (30) day period following the last trading day of any period of three (3) or 
more consecutive trading days that the closing market price of the Company’s common stock exceeds $10.00. Each Share is 
convertible at the option of the holder of the Shares into such number of shares of the Company’s common stock determined by taking 
the accreted value of such Share (purchase price plus accrued but unpaid dividends) and dividing such value by the stated value of 
such Share ($4.00 per share, subject to adjustment for dilutive issuances, stock splits, stock dividends and the like); provided, 
however, that the Company shall not convert any Shares if doing so would cause the holder thereof, along with its affiliates, to 
beneficially own in excess of 19.9% of the outstanding common stock immediately after giving effect to the applicable conversion 
(the “Ownership Limitation”), unless waiver of this restriction has been effected by the holder requesting conversion of Shares. 

Based on the current conversion price, the outstanding shares, including the accretion of dividends, of Series B convertible 
preferred stock as of December 31, 2022 would be convertible into 6,330,762 shares of the Company’s common stock. However, the 
conversion rate will be subject to adjustment in certain instances, such as if the Company issues shares of its common stock at a price 
less than $4.00 per common share, subject to a minimum conversion price of $3.27 per share. As of December 31, 2022, none of the 
contingent conditions to adjust the conversion rate had been met.

Each share of Series B convertible preferred stock is entitled to a cumulative annual dividend of 5% for the first six (6) years 

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

Series B Convertible Preferred Stock Dividend Accretion

The following table summarizes Series B convertible preferred stock and the accretion of dividend activity for the years ended 

December 31, 2022 and 2021 (in thousands): 

Series B Convertible Preferred Stock:
Balance at beginning of period
Cumulative dividends on Series B convertible preferred stock
Balance at end of period
Number of Common Shares Issuable Upon Conversion:
Number of shares at beginning of period
Cumulative dividends on Series B convertible preferred stock
Number of shares at end of period

Sale of Common Stock

Year Ended December 31,

2022

2021

$

24,117
1,206
25,323

$

$

6,029
302
6,331

22,969
1,148
24,117

5,742
287
6,029

On April 7, 2021, the Company sold an aggregate of 3,779,342 shares of its common stock at a public offering price of $10.65 
per share in an underwritten public offering. The Company received net proceeds of approximately $37.6 million from the sale of the 
common stock in the public offering, after deducting the underwriting discounts and other offering related expenses of $2.6 million.

57

Common Stock Warrants

On May 5, 2020, the Company entered into a Note and Warrant Purchase Agreement with April 21 Fund, LP and 21 April Fund, 

Ltd. (collectively, the "April 21 Funds"), pursuant to which the Company issued warrants (“April 21 Funds Warrants”) to purchase 
275,000 shares of common stock of the Company. The April 21 Funds Warrants have a term of three years. The shares of common 
stock issuable upon exercise of the April 21 Fund Warrants are entitled to the same resale registration rights granted to the April 21 
Funds Warrants under the Stockholders Agreement dated December 21, 2017.

Below is the summary of outstanding warrants issued by the Company as of December 31, 2022:

Warrant Type

April 21 Funds Warrants

Number of Shares
Issuable Upon
Exercise

Weighted
Average Exercise
Price

Issue Date

275,000

$

3.50

May 5, 2020

Expiration Date
May 5, 2023

Common Stock Reserved for Future Issuance 

Common stock reserved for future issuance as of December 31, 2022 was as follows:

Exercise of outstanding stock options, vesting of restricted stock units ("RSU"), vesting of performance stock
   units ("PSU"), and issuance of RSUs vested but not released
Employee Stock Purchase Plan
Shares of common stock available for grant under the 2011 Plan
Warrants to purchase common stock
Shares of common stock issuable upon conversion of Series B convertible preferred stock

Total

10. Stock-Based Compensation

Stock Incentive Plan 

1,495,944

293,888
530,537
275,000
7,541,449
10,136,818

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

On June 6, 2011, the Company’s stockholders approved the 2011 Plan, which is administered by the Compensation Committee 
of the Board. The 2011 Plan provides that stock options, stock units, restricted shares, and stock appreciation rights may be granted to 
executive officers, directors, consultants, and other key employees. The Company reserved 400,000 shares of common stock under the 
2011 Plan, plus 459,956 shares of common stock that remained available for delivery under the 2007 Plan and the 2010 Plan as of 
June 6, 2011. In aggregate, as of June 6, 2011, 859,956 shares were available for future grant under the 2011 Plan, including shares 
rolled over from the 2007 Plan and the 2010 Plan. Subsequent to June 6, 2011 through December 31, 2022, the number of shares of 
common stock authorized for issuance under the 2011 Plan has been increased by an aggregate of 4,400,000 shares.

58

Stock Options 

The following is a summary of stock option activity for the year ended December 31, 2022:

Balance as of December 31, 2021
Granted
Cancelled or Expired
Exercised
Balance as of December 31, 2022
Vested or expected to vest as of December 31, 2022
Exercisable as of December 31, 2022

Average Exercise
Price per Share

Weighted Average
Remaining
Contractual Term 
(Years)

$

$
$
$

5.11
—
8.47
—
5.05
5.05
5.05

4.11

3.17
3.17
3.17

Aggregate 
Intrinsic 
Value
$ 11,850,930
—
—
—
$ 1,280,805
$ 1,280,805
$ 1,280,805

Number 
Outstanding
514,693
—
(9,100)
—
505,593
505,593
505,593

The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s common 

stock as of December 31, 2022 and the exercise price of in-the-money stock options multiplied by the number of such stock options.

The following table summarizes information about stock options outstanding as of December 31, 2022:

Range of Exercise Prices

$4.36 - $7.20
$7.50 - $11.25
$11.30 - $16.95
$19.70 - $29.55
$4.36 - $29.55

Stock Options Outstanding

Stock Options Exercisable

Weighted Average
Remaining
Contractual Life
(Years)

Number
Outstanding

Weighted Average
Exercise
 Price

Number
Exercisable

Weighted Average
Exercise
Price

445,960
59,100
500
33
505,593

3.42$
1.29
1.25
0.62
3.17$

4.37
10.17
11.30
19.70
5.05

445,960 $
59,100
500
33

505,593 $

4.37
10.17
11.30
19.70
5.05

As of December 31, 2022, there was no unrecognized stock-based compensation expense related to stock options.  

Restricted Stock Units

The following is a summary of RSU activity for the year ended December 31, 2022:

Unvested as of December 31, 2021
Granted
Vested
Forfeited
Unvested as of December 31, 2022
RSUs vested but not released

Number
Outstanding

Weighted Average
Fair Value

485,729
675,046
(274,834)
(66,756)
819,185
131,166

$

$
$

9.19
14.10
9.01
9.96
13.23
6.73

59

The fair value of the Company’s RSUs is calculated based upon the fair market value of the Company’s common stock at the 

date of grant. As of December 31, 2022, there was $8.7 million of unrecognized compensation cost related to unvested RSUs granted, 
which is expected to be recognized over a weighted average period of 3.3 years.

Performance Stock Units

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

The following is a summary of PSU activity for the year ended December 31, 2022:

Unvested as of December 31, 2021
Granted
Vested
Forfeited
Unvested as of December 31, 2022

Number
Outstanding

Weighted Average
Fair Value

175,000
25,000
(20,000)
(140,000)
40,000

$

$

6.38
12.05
6.38
6.79
8.51

As of December 31, 2022, there was $0.2 million of unrecognized compensation cost related to unvested PSUs, which is 
expected to be recognized over a period of 1.0 year. No tax benefit was realized from PSUs for the year ended December 31, 2022.

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense related to stock options, RSUs, and PSUs included in the 

consolidated statements of comprehensive income (loss) (in thousands): 

Cost of revenue
Research and development
Selling and marketing
General and administrative
Total

Restricted Stock Unit Net Share Settlements  

2022

Year Ended December 31,
2021

2020

$

$

192
699
845
1,425
3,161

$

$

183
486
545
1,392
2,606

$

$

160
685
480
1,702
3,027

During the years ended December 31, 2022, 2021 and 2020, the Company repurchased 67,723, 82,351, and 171,641 shares, 
respectively, of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of 
RSUs issued to employees.

60

11. Net Income (Loss) per Common Share   

Basic net income (loss) per common share is computed by dividing net income (loss) available to common stockholders during 

the period by the weighted average number of common shares outstanding during that period. Diluted net income (loss) per common 
share is impacted by equity instruments considered to be potential common shares, if dilutive, computed using the treasury stock or 
the if-converted method of accounting.

The calculations for basic and diluted net income (loss) per common share are as follows:

Basic net income (loss) per common share:
Numerator:
Net income (loss)
Less: accretion of Series B convertible preferred stock dividends
Net income (loss) available to common stockholders

Denominator:
Weighted average common shares outstanding - basic
Net income (loss) per common share - basic

Diluted net income (loss) per common share:
Numerator:
Net income (loss) available to common stockholders
Plus: accretion of Series B convertible preferred stock dividends, if dilutive
Net income (loss) available to common stockholders

Denominator:
Weighted average common shares outstanding - basic
Dilutive securities:
Stock options, RSUs, and warrants
Weighted average common shares outstanding - diluted
Net income (loss) per common share - diluted

Year Ended December 31,
2021

2020

2022

$

$

$

$

$

(392) $

(1,206)
(1,598) $

1,620
(1,148)
472

22,659  

(0.07) $

21,340
0.02

(1,598) $
—
(1,598) $

472
—
472

22,659  

21,340

—
22,659

$

(0.07) $

927
22,267
0.02

$

$

$

$

$

$

(5,105)
(1,094)
(6,199)

17,978
(0.34)

(6,199)
—
(6,199)

17,978

—
17,978
(0.34)

The following common stock equivalents have been excluded from diluted net income (loss) per share for the fiscal years 

presented below because their inclusion would have been anti-dilutive (in thousands): 

Shares of common stock subject to outstanding RSUs
Shares of common stock subject to outstanding stock options
Shares of common stock subject to outstanding warrants
Shares of common stock issuable upon conversion of Series B
   convertible preferred stock
Total

2022

December 31,
2021

2020

819
506
275

6,331
7,931

—
—
—

6,029
6,029

683
551
315

5,742
7,291

61

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12. Segment Reporting and Geographic Information 

Segment Reporting

ASC 280, Segment Reporting (“ASC 280”) establishes standards for the reporting by public business enterprises of information 

about operating segments, products and services, geographic areas, and major customers. The method for determining what 
information to report is based on the way management organizes the operating segments within the Company for making operating 
decisions and assessing financial performance. An operating segment is defined as a component of an enterprise that engages in 
business activities from which it may earn revenue and incur expenses and about which separate financial information is available to 
its chief operating decision makers (“CODM”). The Company’s CODM is its CEO.

The CODM reviews financial information and business performance for each operating segment. The Company evaluates the 

performance of its operating segments at the revenue and gross profit levels. The Company does not report total assets, capital 
expenditures or operating expenses by operating segment as such information is not used by the CODM for purposes of assessing 
performance or allocating resources.

Net revenue and gross profit information by segment are as follows (in thousands):

Year Ended December 31,
2021

2020

2022

$

67,422
15,153

$

22%

64,725
15,670

$

24%

45,493
25,791

57%

112,915
40,944

36%

9,916
20,730
10,429
—
202
41,277
(333)

52,742
14,781

28%

34,178
18,900

55%

86,920
33,681

39%

9,781
17,270
8,623
(261)
1,716
37,129
(3,448)

(1,462)
—
—
(122)
(5,032)

39,044
21,397

55%

103,769
37,067

36%

8,673
17,033
11,891
—
817
38,414
(1,347)

(483)
2,946
611
(79)
1,648

$

Identity:

Net revenue
Gross profit
Gross profit margin

Premises:

Net revenue
Gross profit
Gross profit margin

Total:

Net revenue
Gross profit
Gross profit margin

Operating expenses:

Research and development
Selling and marketing
General and administrative
Decrease in fair value of earnout liability
Restructuring and severance

Total operating expenses:
Loss from operations
Non-operating income (expense):

Interest expense, net
Gain on forgiveness of Paycheck Protection Program note
Gain on investment
Foreign currency gains (losses), net
Income (loss) before income tax provision

(143)
—
30
155
(291)

$

$

62

Geographic Information

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region is 

as follows (in thousands):

Americas
Europe and the Middle East
Asia-Pacific
Total

As percentage of net revenue:

Americas
Europe and the Middle East
Asia-Pacific

Total

Year Ended December 31,
2021

2020

2022

$

$

76,799
15,900
20,216
112,915

$

$

69,396
12,876
21,497
103,769

$

$

58,302
9,497
19,121
86,920

68%
14%
18%
100%

67%
12%
21%
100%

67%
11%
22%
100%

Long-lived assets by geographic location as of December 31, 2022 and 2021 are as follows (in thousands): 

Property and equipment, net:
Americas
Europe and the Middle East
Asia-Pacific

Total property and equipment, net

Operating lease ROU assets:
Americas
Europe and the Middle East
Asia-Pacific

Total operating lease ROU assets

13. Restructuring and Severance

December 31,

2022

2021

530
458
5,731
6,719

3,637
384
352
4,373

$

$

$

$

545
334
3,187
4,066

1,344
135
609
2,088

$

$

$

$

During the year ended December 31, 2022, the Company incurred restructuring expenses of $202,000, consisting of severance 

related costs of $353,000 offset by a net credit of $151,000 associated with a settlement agreement for outstanding rental payments 
due the landlord on leased office space in San Francisco, California. The net credit represented the difference between amounts 
accrued and the settlement amount. 

 During the year ended December 31, 2021, the Company incurred restructuring expenses of $817,000, consisting of facility 

rental related costs of $521,000, and severance related costs of $296,000. Facility rental related costs during the year ended December 
31, 2021 included a charge of $281,000 resulting from the impairment of a ROU operating lease asset for office space the Company 
vacated in the first quarter of 2021.          

During the year ended December 31, 2020, the Company incurred restructuring expenses of $1,716,000, consisting of severance 

related costs of $375,000, and facility rental related costs associated with office space of an acquired business of $1,341,000. The 
latter included a charge of $1,296,000 associated with the impairment of the ROU operating lease assets for office space the Company 
vacated in 2020.          

63

 
14. Leases

The Company’s leases consist primarily of operating leases for administrative office space, research and development facilities, 
a manufacturing facility, and sales offices in various countries around the world. The Company determines if an arrangement is a lease 
at inception. Some lease agreements contain lease and non-lease components, which are accounted for as a single lease component. 
Total rent expense was $1.4 million, $1.3 million and $1.5 million for the years ended December 31, 2022, 2021 and 2020, 
respectively. 

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

The table below reconciles the undiscounted cash flows for the first five years and the total of the remaining years to the 

operating lease liabilities recorded on the consolidated balance sheets as of December 31, 2022 (in thousands):

2023
2024
2025
2026
2027
Thereafter

Total minimum lease payments

Less: amount of lease payments representing interest
Present value of future minimum lease payments
Less: current liabilities under operating leases
Long-term operating lease liabilities

December 31,
2022

1,398
1,222
984
765
723
—
5,092
(536)
4,556
(1,190)
3,366

$

$

As of December 31, 2022, the weighted average remaining lease term for the Company’s operating leases was 2.8 years, and the 

weighted average discount rate used to determine the present value of the Company’s operating leases was 6.3%.

Cash paid for amounts included in the measurement of operating lease liabilities was $1.4 million, $1.4 million and $2.1 million 

for the years ended December 31, 2022, 2021 and 2020, respectively. 

15. Legal Proceedings 

The Company is and from time to time, may become subject to claims arising in the ordinary course of business or could be 
named a defendant in additional lawsuits. The outcome of such claims or other proceedings cannot be predicted with certainty and 
may have a material effect on the Company’s financial condition, results of operations or cash flows.

16. Commitments and Contingencies 

The following table summarizes the Company’s principal contractual commitments, excluding operating leases, as of 

December 31, 2022 (in thousands):

2023
2024
2025
Thereafter
Total

Purchase
Commitments

Other
Contractual
Commitments

$

$

61,366
3,809
4,005
—
69,180

$

$

64

99
—
—
—
99

$

$

Total

61,465
3,809
4,005
—
69,279

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

The following table summarizes the Company’s warranty accrual activity during the years ended December 31, 2022 and 2021 

(in thousands):

Balance at beginning of period
Charged (credited) to costs and expenses
Cost of warranty claims
Balance at end of period

Year Ended December 31,
2021
2022

377
(24)
(8)
345

$

$

321
59
(3)
377

$

$

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

17. Subsequent Events  

There were no subsequent events except as disclosed within Note 7, Financial Liabilities.

65

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL 
DISCLOSURE 

Not applicable.

ITEM 9A.

CONTROLS AND PROCEDURES 

Evaluation of Disclosure Controls and Procedures 

As of the end of the fiscal year ended December 31, 2022, as required in Rule 13a-15(b) under the Exchange Act, we carried out 
an evaluation under the supervision and with the participation of members of our senior management, including our CEO and CFO, of 
the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under 
the Exchange Act). Disclosure controls and procedures are those controls and other procedures that are designed to provide reasonable 
assurance that the information required to be disclosed in our SEC reports that we file or submit under the Exchange Act (i) is 
recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and 
communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required 
disclosure.

Based on our evaluation, our management, including our CEO and CFO, concluded that as of December 31, 2022, our 

disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in 

Rule 13a-15(f) under the Exchange Act, to provide reasonable assurance regarding the reliability of our financial reporting and the 
preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United 
States, or U.S. GAAP. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the 
reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. 
GAAP. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records 
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide 
reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in 
accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with 
authorizations of management and or directors; and (3) provide reasonable assurance regarding prevention or timely detection of 
unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the interim or annual 
consolidated financial statements.

A control system, no matter how well designed and operated, can only provide reasonable assurance that the objectives of the 
control system are met. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute 
assurance that all control issues and instances of fraud, if any, within the Company have been or will be detected.

A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely 
basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there 
is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented 
or detected on a timely basis.

Our management, including our CEO and CFO, assessed our internal control over financial reporting as of December 31, 2022. 

In making the assessment of internal control over financial reporting, our management based its assessment on the criteria issued by 
the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in “Internal Control — Integrated Framework of 
2013.” Our management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial 
reporting controls, process documentation, accounting policies, and our overall control environment. This assessment is supported by 
testing and monitoring performed by our internal accounting and finance organization.

Based on management’s assessment, management has concluded that the Company’s internal control over financial reporting 

was effective as of December 31, 2022. The effectiveness of our internal control over financial reporting as of December 31, 2022 has 
been audited by BPM LLP, our independent registered public accounting firm, as stated in their report which appears below.

Changes in Internal Controls over Financial Reporting 

We have made no changes to our internal control over financial reporting during the three months ended December 31, 2022 

that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

66

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Identiv, Inc.

 Opinion on Internal Control Over Financial Reporting

We  have  audited  the  internal  control  over  financial  reporting  of  Identiv,  Inc.  (a  Delaware  corporation)  and  its  subsidiaries’  (the 
“Company”) as of December 31, 2022 based on Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective 
internal control over financial reporting as of December 31, 2022, based on Internal Control—Integrated Framework (2013) issued by 
COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), 
the consolidated balance sheets as of December 31, 2022 and 2021 and the related consolidated statements of comprehensive income 
(loss), stockholders equity, and cash flows for each of the three years in the period ended December 31, 2022 and the related notes 
(collectively referred to as the “consolidated financial statements”) of the Company, and our report dated March 15, 2023 expressed an 
unqualified opinion on those consolidated financial statements. 

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of 
the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control 
Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based 
on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company 
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission 
and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. 
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, 
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control 
based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. 
We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of 
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting 
principles.  A  company’s  internal  control  over  financial  reporting  includes  those  policies  and  procedures  that  (1)  pertain  to  the 
maintenance  of  records  that,  in  reasonable  detail,  accurately  and  fairly  reflect  the  transactions  and  dispositions  of  the  assets  of  the 
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in 
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in 
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention 
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the 
financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections 
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in 
conditions, or that the degree of compliance with the policies or procedures may deteriorate. 

 /s/ BPM LLP

San Jose, California
March 15, 2023

67

 
 
 
 
 
 
 
 
 
ITEM 9B.

OTHER INFORMATION 

Not applicable. 

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS. 

Not applicable.

68

PART III 

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 

The information required by Item 10 concerning our directors will be set forth under the captions “Proposal No. 1, Election of 

Directors” and “Policy for Director Recommendations and Nominations” in our Proxy Statement relating to our 2023 Annual Meeting 
of Stockholders, referred to in this Annual Report on Form 10-K as the “Proxy Statement,” which we expect to file within 120 days of 
the end of our fiscal year pursuant to General Instruction G(3) of Form 10-K. Such information is incorporated herein by reference. 
Certain information required by this item concerning executive officers is set forth in Part I of this Report under the caption 
“Information About Our Executive Officers” and is incorporated herein by reference. Item 405 of Regulation S-K calls for disclosure 
of any known late filing or failure of an insider to file a report required by Section 16(a) of the Exchange Act. To the extent disclosure 
of a delinquent reports is being made, it can be found under, and is incorporated herein by reference to the section of the Proxy 
Statement captioned “Delinquent Section 16(a) Reports.” The information required by this item concerning our code of ethics is 
incorporated by reference to the section captioned “Code of Conduct and Ethics” in our Proxy Statement. To date, there have been no 
waivers under our Code of Conduct and Ethics. We intend to disclose future amendments to certain provisions of our Code of Conduct 
and Ethics or waivers of such code granted to executive officers and directors on our website at www.identiv.com within four business 
days following the date of such amendment or waiver. The information required by this item concerning the Audit Committee of our 
board of directors is incorporated by reference to the section captioned “Committees of the Board of Directors” in our Proxy 
Statement. 

ITEM 11.

EXECUTIVE COMPENSATION 

The information required by Item 11 will be contained in our Proxy Statement under the captions “Compensation of Directors” 

and “Executive Compensation”, which information is incorporated herein by reference. 

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED 
STOCKHOLDER MATTERS 

The information required by Item 12 will be set forth under the captions “Security Ownership of Certain Beneficial Owners and 

Management” and “Equity Compensation Plan Information” in our Proxy Statement, which information is incorporated herein by 
reference. 

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 

The information required by Item 13 will be set forth under the captions “Certain Relationships and Related Transactions” and 

“Director Independence” in our Proxy Statement, which information is incorporated herein by reference. 

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES 

The information required by Item 14 will be set forth under the captions “Principal Accountant Fees and Services” and “Policy 

on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Our Independent Registered Public Accounting 
Firms” in our Proxy Statement, which information is incorporated herein by reference. 

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 

(a) The following documents are filed as a part of this report: 

PART IV 

1. Financial Statements: Consolidated Financial Statements filed as part of this report are listed under Item 8. Financial 
Statements and Supplementary Data. 

2. Financial Statement Schedules: Not Applicable.

3. Exhibits: See Item 15(b) below.

(b) Exhibits:

69

Exhibit 
Number

Description of Document

    3.1

    3.2

    3.3

    3.4

    3.5

    3.6

    3.7

    4.1

    4.2

    4.3

    4.4

    4.5

  10.1*

  10.2*

  10.3*

  10.4*

  10.5

  10.6

  10.7

Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to the Company’s 
Registration Statement on Form S-4/A, filed on November 10, 2009 (SEC File No. 333-162618).)

Certificate of Amendment to Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to 
Exhibit 3.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.)

Certificate of Amendment to Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to 
Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 17, 2010.)

Certificate of Amendment to Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to 
Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 7, 2011.)

Certificate of Amendment to Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to 
Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 23, 2014.)

Certificate of Amendment to Fourth Amended and Restated Certificate of Incorporation, as amended. (Incorporated by 
reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 18, 2016.)

Amended and Restated Bylaws of the Company, as amended May 16, 2020 (Incorporated by reference to Exhibit 3.1 to 
the Company’s Current Report on Form 8-K filed on May 19, 2020.)

Specimen Common Stock Certificate. (Incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on 
Form 10-Q for the quarter ended June 30, 2010.)

Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock of SCM 
Microsystems, Inc. (Incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form 8-A 
filed on November 14, 2002.)

Certificate of Designation of Preferences, Rights and Limitations of Series B Non-Voting Convertible Preferred Stock 
dated December 21, 2017. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K 
filed on December 21, 2017.)

Warrants issued to 21 April Fund, Ltd. and 21 April Fund, L.P. dated May 5, 2020. (Incorporated by reference to 
Exhibit 4.4 to the Company’s Annual Report on Form 10-K filed on March 12, 2021.)

Description of Securities Registered Pursuant to Section 12 of the Securities and Exchange Act of 1934. (Incorporated 
by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K filed on March 18, 2020). 

Form of Director and Officer Indemnification Agreement. (Incorporated by Reference to Exhibit 10.1 to the 
Company’s Annual Report on Form 10-K for the year ended December 31, 2015).

2011 Incentive Compensation Plan, as amended through March 10, 2020. (Incorporated by reference to Exhibit 10.2 to 
the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.)

2011 Employee Stock Purchase Plan. (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on 
Form 8-K filed on June 7, 2011.)

Letter Agreement dated September 14, 2015 between the Company and Steven Humphreys. (Incorporated by reference 
to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on September 16, 2015.)

Securities Purchase Agreement dated December 21, 2017 among the Company, 21 April Fund, Ltd. and 21 April Fund, 
LP. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 21, 
2017.)

Stockholder Agreement dated December 21, 2017 among the Company, 21 April Fund, Ltd. and 21 April Fund, LP. 
(Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 21, 
2017.)

Promissory Note dated April 8, 2020 between the Company and East West Bank. (Incorporated by reference to Exhibit 
10.1 to the Company’s Current Report on Form 8-K filed on April 15, 2020.)

70

Exhibit 
Number

  10.8

  10.9*

  10.10  

  10.11

  10.12^

  10.13

Amended and Restated Loan and Security Agreement dated February 8, 2021 between the Company and East West 
Bank. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K on February 11, 
2021.)

Description of Document

Offer Letter dated October 25, 2021 between the Company and Justin Scarpulla. (Incorporated by reference to Exhibit 
10.1 to the Company’s Current Report on Form 8-K filed on December 1, 2021.) 

First Amendment to Amended and Restated Loan and Security Agreement dated as of April 30, 2021 between the 
Company and East West Bank. (Incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 
10-K for the year ended December 31, 2021.)

Second Amendment to Amended and Restated Loan and Security Agreement dated as of April 14, 2022 between the 
Company and East West Bank. (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-
K filed on April 20, 2022.)

Third Amendment to Amended and Restated Loan and Security Agreement dated as of December 30, 2022 between 
the Company and East West Bank. 

Fourth Amendment to Amended and Restated Loan and Security Agreement dated as of February 8, 2028 between the 
Company and East West Bank. (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-
K filed on February 8, 2023.)

  21.1^

Subsidiaries of the Registrant.

  23.1^

Consent of Independent Registered Public Accounting Firm.

  24.1

Power of Attorney (included on the signature page hereof.)

  31.1^

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

  31.2^

  32+

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted 
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

  101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL 
tags are embedded within the Inline XBRL document.

  101.SCH

Inline XBRL Taxonomy Extension Schema Document

  101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

  101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

  101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

  101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

  104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

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

ITEM 16.

FORM 10-K SUMMARY

Not applicable.  

71

Pursuant to the requirements of Section 13 or 15(d) 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. 

SIGNATURES 

Registrant
IDENTIV, INC.

By:

/s/    Steven Humphreys
Steven Humphreys
Chief Executive Officer

March 15, 2023 

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENT, that each person whose signature appears below constitutes and appoints 

Steven Humphreys and Justin Scarpulla, and each of them, his or her true and lawful attorneys in fact, each with full power of 
substitution, for him or her in any and all capacities, to sign any amendments to this report on Form 10-K and to file the same, with 
exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and 
confirming all that each of said attorneys in fact or their substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons 

on behalf of the registrant and in the capacities and on the dates indicated. 

Signature

Capacity in Which Signed

Date

/s/ STEVEN HUMPHREYS
Steven Humphreys

/s/ JUSTIN SCARPULLA 
Justin Scarpulla

/s/ JAMES E. OUSLEY
James E. Ousley

/s/ LAURA ANGELINI
Laura Angelini

/s/ GARY KREMEN
Gary Kremen

/s/ RICHARD E. KUNTZ
Richard E. Kuntz 

Chief Executive Officer and Director
(Principal Executive Officer)

Chief Financial Officer
(Principal Financial and Accounting Officer)

March 15, 2023

March 15, 2023

Chairman of the Board and Director

March 15, 2023

March 15, 2023

March 15, 2023

March 15, 2023

Director

Director

Director

72