What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-10 · 168 added, 103 removed, 459 unchanged (37% of the section changed)

6 unchanged sentences

Restricted cash

Accounts receivable, net of allowances of $ 2,668 and $ 2,745 as of March 31, 2022

Accounts receivable, net of allowances of $ 2,669 and $ 2,745 as of June 30, 2022

and December 31, 2021, respectively

20 unchanged sentences

10,000 shares authorized;

issued and outstanding as of March 31, 2022 and December 31, 2021

issued and outstanding as of June 30, 2022 and December 31, 2021

Common stock, $ 0.001 par value:

1 unchanged sentence

23,955 and 23,707 shares

issued and 22,300 and 22,230 shares outstanding as of March 31, 2022 and

issued and 22,444 and 22,230 shares outstanding as of June 30, 2022 and

December 31, 2021, respectively

Additional paid-in capital

Treasury stock, 1,494 and 1,477 shares as of March 31, 2022 and December 31, 2021,

Treasury stock, 1,511 and 1,477 shares as of June 30, 2022 and December 31, 2021,

Accumulated deficit

4 unchanged sentences

IDENTIV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

8 unchanged sentences

Interest expense, net

Gain on forgiveness of Paycheck Protection Program note

Gain on investment

Foreign currency gains, net

Loss before income tax benefit (provision)

Income tax benefit (provision)

Other comprehensive loss:

Income (loss) before income tax provision

Income tax provision

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustment

Comprehensive loss

Net loss per common share:

Weighted average common shares outstanding, basic and diluted

Comprehensive income (loss)

Net income (loss) per common share:

Weighted average shares used in computing net

income (loss) per common share:

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

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended June 30, 2022

Convertible Preferred Stock

1 unchanged sentence

Stockholders'

Balances, March 31, 2022

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, June 30, 2022

Six Months Ended June 30, 2022

Convertible Preferred Stock

Comprehensive

Stockholders'

Balances, December 31, 2021

3 unchanged sentences

with vesting of stock awards

Proceeds from exercise of

stock options

Stock-based compensation

2 unchanged sentences

restricted stock units

Issuance of common stock in connection with

warrant exercise

Balances, June 30, 2022

Three Months Ended June 30, 2021

Convertible Preferred Stock

Comprehensive

Stockholders'

Balances, March 31, 2021

Unrealized income 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

Issuance of common stock in connection with public offering

Proceeds from exercise of

stock options

Balances, June 30, 2021

Six Months Ended June 30, 2021

Convertible Preferred Stock

10 unchanged sentences

restricted stock units

Balances, March 31, 2022

Issuance of common stock in connection with warrant

Issuance of common stock in connection with public offering

Proceeds from exercise of

stock options

Balances, June 30, 2021

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

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended March 31,

Cash flows from operating activities

Adjustments to reconcile net loss to net cash used in

Six Months Ended June 30,

Cash flows used in operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in

operating activities:

Depreciation and amortization

Gain on forgiveness of Paycheck Protection Program note

Gain on investment

18 unchanged sentences

Repayments under revolving loan facility

Repayments of April 21 Funds promissory notes

Proceeds from the sale of common stock, net of issuance costs

Taxes paid related to net share settlement of restricted stock units

11 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Basis of Presentation

8 unchanged sentences

In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s unaudited condensed consolidated financial statements have been included.

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any future period.

The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any future period.

The unaudited condensed consolidated balance sheet as of December 31, 2021 has been derived from audited consolidated financial statements at that date, but does not include all disclosures required by U.S.

40 unchanged sentences

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.

Subscription contract terms range from month-to-month to six years in length and are billed monthly or annually.

Professional Services Revenue — Professional services revenue consists primarily of programming customization services performed relating to the integration of the Company’s software products with the customers other systems, such as human resources systems.

47 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30,

Europe and the Middle East

Six Months Ended June 30,

Europe and the Middle East

Contract Balances

4 unchanged sentences

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 three months ended March 31, 2022 and March 2021 were as follows (in thousands):

Three Months Ended March 31,

Changes in deferred revenue during the six months ended June 30, 2022 and June 30, 2021 were as follows (in thousands):

Six Months Ended June 30,

Deferred revenue, beginning of period

3 unchanged sentences

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 $ 0.5 million as of March 31, 2022.

Since the Company typically invoices customers at contract inception, this amount is included in the deferred revenue balance.

As of March 31, 2022, the Company expects to recognize 43 % of the revenue related to these unsatisfied performance obligations during the remainder of 2022, 30 % during 2023, and 27 % thereafter.

As of June 30, 2022, the Company expects to recognize 24 % of the revenue related to these unsatisfied performance obligations during the remainder of 2022, 33 % during 2023, and 43 % thereafter.

Fair Value Measurements

6 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of March 31, 2022 and December 31, 2021, the only assets measured and recognized at fair value on a recurring basis were nominal cash equivalents.

As of March 31, 2022 and December 31, 2021, there were no liabilities measured and recognized at fair value on a recurring basis.

As of June 30, 2022 and December 31, 2021, the only assets measured and recognized at fair value on a recurring basis were nominal cash equivalents.

As of June 30, 2022 and December 31, 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

2 unchanged sentences

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 March 31, 2022 and December 31, 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.

As of June 30, 2022 and December 31, 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.

1 unchanged sentence

The amount of privately-held investments is included in other assets in the accompanying condensed consolidated balance sheets.

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

As of June 30, 2022 and December 31, 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

4 unchanged sentences

Currency translation adjustment

Balance as of March 31, 2021

Balance as of June 30, 2022

Balance as of December 31, 2020

Currency translation adjustment

Balance as of March 31, 2022

Balance as of December 31, 2021

In accordance with ASC 350, Intangibles – Goodwill and Other , 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.

4 unchanged sentences

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 condensed consolidated statement of comprehensive loss.

During the three months ended March 31, 2022 and 2021, the Company noted no indicators of goodwill impairment and concluded no further testing was necessary.

If the carrying amount of the reporting unit is in excess of its fair value, an impairment loss would be recorded in the condensed consolidated statement of comprehensive income (loss).

During the six months ended June 30, 2022 and 2021, the Company noted no indicators of goodwill impairment and concluded no further testing was necessary.

Intangible Assets

2 unchanged sentences

Amortization period (in years)

Gross carrying amount as of March 31, 2022

Gross carrying amount as of June 30, 2022

Accumulated amortization

Intangible assets, net as of March 31, 2022

Intangible assets, net as of June 30, 2022

Gross carrying amount as of December 31, 2021

5 unchanged sentences

The Company performs an evaluation of its amortizable intangible assets for impairment at the end of each reporting period.

The Company did no t identify any impairment indicators during the three months ended March 31, 2022 and 2021.

The following table summarizes the amortization expense included in the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2022 and 2021, respectively (in thousands):

Three Months Ended March 31,

The Company did no t identify any impairment indicators during the six months ended June 30, 2022 and 2021.

The following table summarizes the amortization expense included in the condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021, respectively (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

Selling and marketing

The estimated annual future amortization expense for purchased intangible assets with definite lives as of March 31, 2022 was as follows (in thousands):

2022 (remaining nine months)

The estimated annual future amortization expense for purchased intangible assets with definite lives as of June 30, 2022 was as follows (in thousands):

2022 (remaining six months)

Balance Sheet Components

11 unchanged sentences

Property and equipment, net

The Company recorded depreciation expense of $ 0.2 million during each of the three months ended March 31, 2022 and 2021 .

The Company recorded depreciation expenses of $ 0.3 million and $ 0.2 million during the three months ended June 30, 2022 and 2021 , respectively, and $ 0.5 million and $ 0.4 million during the six months ended June 30, 2022 and 2021, respectively .

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

16 unchanged sentences

The Company’s obligations under the Loan and Security Agreement are collateralized by substantially all of its assets.

As of March 31, 2022, there were no amounts outstanding and the Company was in compliance with all financial covenants under the Loan and Security Agreement.

As of June 30, 2022, there were no amounts outstanding and the Company was in compliance with all financial covenants under the Loan and Security Agreement.

The Company conducts business globally and, as a result, files federal, state and foreign tax returns.

15 unchanged sentences

Series B Convertible Preferred Stock Dividend Accretion

The following table summarizes Series B convertible preferred stock and the accretion of dividend activity for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

The following table summarizes Series B convertible preferred stock and the accretion of dividend activity for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Series B Convertible Preferred Stock:

6 unchanged sentences

Number of shares at end of period

Based on the current conversion price, the outstanding shares, including the accretion of dividends, of Series B convertible preferred stock as of March 31, 2022 would be convertible into 6,103,819 shares of the Company’s common stock.

Based on the current conversion price, the outstanding shares, including the accretion of dividends, of Series B convertible preferred stock as of June 30, 2022 would be convertible into 6,178,823 shares of the Company’s common stock.

However, the conversion rate will be subject to adjustment in certain instances, such as if the Company issues shares of its common stock at a price less than $ 4.00 per common share, subject to a minimum conversion price of $ 3.27 per share.

As of March 31, 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 (10 th ) year in cash.

As of June 30, 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 years following the issuance of such share and 3 % for each year thereafter, with the Company retaining the option to settle each year’s dividend after the 10th year in cash.

The dividends accrue and are payable in kind upon such time as the shares convert into the Company’s common stock .

5 unchanged sentences

The shares of common stock issuable upon exercise of the April 21 Fund Warrants are entitled to resale registration rights pursuant to a Stockholders Agreement dated December 21, 2017.

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

Below is the summary of outstanding warrants issued by the Company as of June 30, 2022:

Number of Shares

4 unchanged sentences

Common Stock Reserved for Future Issuance

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

Common stock reserved for future issuance as of June 30, 2022 was as follows:

Exercise of outstanding stock options, vesting of restricted stock units ("RSUs"), vesting of

8 unchanged sentences

Stock Options

A summary of stock option activity for the three months ended March 31, 2022 is as follows:

Average Exercise

A summary of stock option activity for the six months ended June 30, 2022 is as follows:

Weighted Average Exercise

Price per Share

3 unchanged sentences

Cancelled or Expired

Balance as of March 31, 2022

Vested or expected to vest as of March 31, 2022

Exercisable as of March 31, 2022

The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s common stock as of March 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 March 31, 2022:

Balance as of June 30, 2022

Vested or expected to vest as of June 30, 2022

Exercisable as of June 30, 2022

The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s common stock as of June 30, 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 June 30, 2022:

Stock Options Outstanding

7 unchanged sentences

$4.36 - $29.55

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

As of June 30, 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 three months ended March 31, 2022:

The following is a summary of RSU activity for the six months ended June 30, 2022:

Weighted Average

Unvested as of December 31, 2021

Unvested as of March 31, 2022

Unvested as of June 30, 2022

RSUs vested but not released

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 March 31, 2022, there was $ 5.6 million of unrecognized compensation expense related to unvested RSUs granted, which is expected to be recognized over a weighted average period of 3.3 years.

No tax benefit was realized from RSUs for the three months ended March 31, 2022.

As of June 30, 2022, there was $ 5.6 million of unrecognized compensation expense related to unvested RSUs granted, which is expected to be recognized over a weighted average period of 3.0 years.

No tax benefit was realized from RSUs for the six months ended June 30, 2022.

Performance Stock Units

3 unchanged sentences

If the 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 three months ended March 31, 2022:

The following is a summary of PSU activity for the six months ended June 30, 2022:

Unvested as of December 31, 2021

Unvested as of March 31, 2022

As of March 31, 2022, there was $ 0.4 million of unrecognized compensation expense related to unvested PSUs, which is expected to be recognized over a period of 0 .8 years .

No tax benefit was realized from PSUs for the three months ended March 31, 2022.

Unvested as of June 30, 2022

As of June 30, 2022, there was $ 0.2 million of unrecognized compensation expense related to unvested PSUs, which is expected to be recognized over a period of 0 .5 years .

No tax benefit was realized from PSUs for the six months ended June 30, 2022.

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense related to stock options, RSUs, and PSUs included in the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

The following table summarizes stock-based compensation expense related to stock options, RSUs, and PSUs included in the condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

3 unchanged sentences

Restricted Stock Unit Net Share Settlements

During the three months ended March 31, 2022 and 2021, the Company repurchased 17,647 and 25,327 shares, respectively, of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of RSUs issued to employees.

Net Loss per Common Share

Basic net loss per common share is computed by dividing net loss available to common stockholders during the period by the weighted average number of common shares outstanding during that period.

Diluted net loss per common share is impacted by equity instruments considered to be potential common shares, if dilutive, computed using the treasury stock or the if-converted method of accounting.

Three Months Ended March 31,

Basic net loss per common share:

During the six months ended June 30, 2022 and 2021, the Company repurchased 34,111 and 48,590 shares, respectively, of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of RSUs issued to employees.

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.

Three Months Ended June 30,

Six Months Ended June 30,

Basic net income (loss) per common share:

Net income (loss)

accretion of Series B convertible preferred stock dividends

Net loss available to common stockholders

Net income (loss) available to common stockholders

Weighted average common shares outstanding - basic

Net loss per common share - basic

The following common stock equivalents have been excluded from diluted net loss per share for the three months ended March 31, 2022 and 2021 because their inclusion would have been anti-dilutive (in thousands):

Three Months Ended March 31,

Net income (loss) per common share - basic

Diluted net income (loss) per common share:

Net income (loss) available to common stockholders

accretion of Series B convertible preferred stock dividends, if dilutive

Net income (loss) available to common stockholders

Weighted average common shares outstanding - basic

Dilutive securities:

Stock options, RSUs, and warrants

Convertible preferred shares

Weighted average common shares outstanding - diluted

Net income (loss) per common share - diluted

The following common stock equivalents have been excluded from diluted net income (loss) per share for the three and six months ended June 30, 2022 and 2021 because their inclusion would have been anti-dilutive (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Shares of common stock subject to outstanding RSUs

13 unchanged sentences

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 for the three months ended March 31, 2022 and 2021 are as follows (in thousands):

Three Months Ended March 31,

Net revenue and gross profit information by segment for the three and six months ended June 30, 2022 and 2021 are as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Gross profit margin

10 unchanged sentences

Interest expense, net

Gain on forgiveness of Paycheck Protection Program note

Gain on investment

Foreign currency gains, net

Loss before income tax benefit (provision)

Income (loss) before income tax provision

Geographic Information

Geographic net revenue is based on the customer’s ship-to location.

Information regarding net revenue by geographic region for the three months ended March 31, 2022 and 2021 is as follows (in thousands):

Three Months Ended March 31,

Information regarding net revenue by geographic region for the three and six months ended June 30, 2022 and 2021 is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Europe and the Middle East

2 unchanged sentences

Concentration of Credit Risk

No customer accounted for 10% or more of net revenue for either of the three months ended March 31, 2022 or 2021.

No customer accounted for 10% or more of net accounts receivable as of March 31, 2022 or December 31, 2021.

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

No customer accounted for 10% or more of net revenue for either of the three or six months ended June 30, 2022 or 2021.

No customer accounted for 10% or more of net accounts receivable as of June 30, 2022 or December 31, 2021.

Long-lived assets by geographic location as of June 30, 2022 and December 31, 2021 are as follows (in thousands):

Property and equipment, net:

5 unchanged sentences

Restructuring and Severance

During the three months ended March 31, 2022, the Company entered into a settlement agreement associated with outstanding rental payments due the landlord on leased office space in San Francisco, California.

During the three and six months ended June 30, 2022, restructuring expenses consisted of severance related costs of $ 221,000 and $ 234,000 , respectively.

In the first quarter of 2022, the Company entered into a settlement agreement associated with outstanding rental payments due the landlord on leased office space in San Francisco, California.

As a result of the settlement, the Company recorded a net credit of $ 151,000 representing the difference between amounts accrued and the settlement amount.

The settlement credit was partially offset by severance related costs of $ 13,000 .

During the three months ended March 31, 2021, the Company incurred restructuring expenses of $ 388,000 , consisting of facility rental related costs of $ 329,000 , which included a charge of $ 281,000 resulting from the impairment of a right-of-use operating lease asset for office space the Company vacated in the first quarter of 2021, and severance related costs of $ 59,000 .

Restructuring expenses incurred during the three and six months ended June 30, 2021 of $ 274,000 and $ 662,000 , respectively, consists of facility rental related costs of $ 127,000 and $ 456,000 , respectively, and severance related costs of $ 147,000 and $ 206,000 , respectively.

Facility rental related costs during the six months ended June 30, 2021 included a charge of $ 281,000 resulting from the impairment of a right-of-use operating lease asset for office space the Company vacated in the first quarter of 2021 .

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.

1 unchanged sentence

Some lease agreements contain lease and non-lease components, which are accounted for as a single lease component.

Total rent expense was approximately $ 0.3 million for both the three months ended March 31, 2022 and 2021.

Total rent expense was $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2022, respectively, and $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2021, 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 condensed consolidated balance sheets.

Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets.

As the Company’s leases do not provide an implicit rate, the present value of future lease payments is determined using the Company’s incremental borrowing rate based on information available at the lease commencement date.

The table below reconciles the undiscounted cash flows for the first five years and the total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of March 31, 2022 (in thousands):

2022 (remaining nine months)

2022 (remaining six months)

Total minimum lease payments

3 unchanged sentences

Long-term operating lease liabilities

As of March 31, 2022, the weighted average remaining lease term for the Company’s operating leases was 2.3 years, and the weighted average discount rate used to determine the present value of the Company’s operating leases was 5.9 %.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 0.3 million for the three months ended March 31, 2022.

As of June 30, 2022, the weighted average remaining lease term for the Company’s operating leases was 2.4 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 $ 0.4 million and $ 0.7 million for the three and six months ended June 30, 2022, respectively.

Commitments and Contingencies

The following table summarizes the Company’s principal contractual commitments, excluding operating leases, as of March 31, 2022 (in thousands):

2022 (remaining nine months)

The following table summarizes the Company’s principal contractual commitments, excluding operating leases, as of June 30, 2022 (in thousands):

2022 (remaining six months)

Purchase commitments for inventories are highly dependent upon forecasts of customer demand.

1 unchanged sentence

These changes may lead to vendor cancellation charges on these purchases or contractual commitments.

The following table summarizes the Company’s warranty accrual account activity during the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

The following table summarizes the Company’s warranty accrual account activity during the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30,

Six Months Ended June 30,

Balance at beginning of period

7 unchanged sentences

Historically, the warranty accrual and the expense amounts have been immaterial.

Subsequent Events

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

Subsequent Event

In July 2022, the Company and its landlord amended the lease agreement at its Santa Ana, California facility by extending the term through January 31, 2028.

As the Company will account for the lease amendment as a modification of the original lease, in the third quarter of 2022, the Company will reassess the lease classification, remeasure the lease liability, and adjust the right-of-use lease asset.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements