# INVE Technologies, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [INVE Technologies, Inc.](/companies/inve.md) (CIK 1036044)
- Form: 10-Q
- Filed: 2025-05-09
- Accepted by EDGAR: May 9, 2025, 16:44 ET
- Period: 2025-03-31
- Accession: 0000950170-25-068153
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1036044/000095017025068153/inve-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1036044/000095017025068153/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $5.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $5.1m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $132.0k | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $787.0k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$5.5m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $3.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$4.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.21 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.21 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 23,599,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$3.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $301.0k | us-gaap:PaymentsToAcquireProductiveAssets |
| Cash and equivalents | at 2025-03-31 | $132.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $148.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $158.7m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $7.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $8.2m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $150.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 33,019 characters.

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

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

### Overview

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

On September 6, 2024, we completed the sale of our Physical Security Business (as defined below), which historically represented our Premises segment, as well as our access card and identity reader operations, which were historically were part of our Identity segment. As a result, we currently have one reportable segment: the *IoT Business* segment.

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

### Closing of Asset Sale

On September 6, 2024, we completed the sale of our physical security, access card, and identity reader operations and assets, including all outstanding shares of Identiv Private Limited, our wholly-owned subsidiary (the “Physical Security Business”) to Hawk Acquisition, Inc., a Delaware corporation (“Buyer”) and a wholly-owned subsidiary of Vitaprotech SAS, a French société par actions simplifiée and provider of security solutions, and Buyer assumed certain of our liabilities related to the Physical Security Business (collectively, the “Asset Sale”) pursuant to that certain Stock and Asset Purchase Agreement, dated as of April 2, 2024, by and between the Company and Buyer. As consideration for the Asset Sale, we received approximately $143.9 million in cash. In connection with the closing of the Asset Sale, we entered into a transition services agreement (the “Transition Services Agreement”) with Buyer, which outlines the information technology, people, and facility support we will provide to Buyer for a period of 12 months to 18 months after the transaction closing date.

Following the completion of the Asset Sale, we continue to be a public company operating under the name Identiv, Inc. and continue to own the assets and liabilities of our business that were not sold to Buyer, which we refer to herein as the “IoT Business”. The discussion in this Item 2, *Management’s Discussion and Analysis of Financial Condition and Results of Operations,* unless otherwise noted, relates solely to our continuing operations.

### Factors Affecting Our Performance

#### Market Adoption

Our financial performance depends on the pace, scope and depth of end-user adoption of our RFID products in multiple industries. That pace, scope and depth has resulted in large fluctuations in our operating results. For example, we have experienced lower unit sales of BLE transponder products to one of our customers undergoing a technology transition. We do not expect to resume shipments to this customer while they continue their technology transition. As a result, we have experienced a corresponding decrease in utilization in our production facilities in Southeast Asia.

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

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

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

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

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

#### RFID Device Production Transition

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

#### Focus on High-Margin Opportunities

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

#### Competitive Landscape

We have seen a large increase in global production capacity at several of our RFID competitors. This has resulted in competitive pricing pressure, and, in response, we continue to exit some of our lowest margin business. This has had, and we expect will continue to have, a negative impact on our operating results.

#### Impacts of Macroeconomic Conditions and Other Factors on our Business

We conduct operations internationally with sales in the Americas, Europe and the Middle East, and Asia-Pacific regions. Our manufacturing operations and third-party contract manufacturers are in China, Singapore, and Thailand. 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 continue to monitor the global supply chain and its effect on our financial position, results of operations, and cash flows.

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

#### Effects of Asset Sale

Our business has and will continue to be affected by the Asset Sale. The Asset Sale included assets and operations that had historically represented the majority of our revenues, representing approximately 63% of our 2023 revenue, as well as a substantial portion of our assets, representing approximately 47% of our assets as of December 31, 2023. The gross margin profile of our continuing business has and will continue to be significantly lower than our historical total gross margins across a lower revenue base. As a result, we expect our loss from continuing operations to continue until we substantially increase our revenue to achieve scale.

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

### Results of Operations

Our results of operations for the three months ended March 31, 2025 and 2024 are as follows (in thousands, except percentages).

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Net revenue | $5,269 | $6,658 | (21%) |
| Gross profit | 132 | 483 | (73%) |
| Gross profit margin | 3% | 7% |  |
| Operating expenses: |  |  |  |
| Research and development | 787 | 897 | (12%) |
| Selling and marketing | 1,407 | 1,169 | 20% |
| General and administrative | 3,146 | 3,480 | (10%) |
| Restructuring and severance | 260 | — | 100% |
| Total operating expenses | 5,600 | 5,546 | 1% |
| Loss from continuing operations | (5,468) | (5,063) |  |
| Non-operating income (expense): |  |  |  |
| Interest income (expense), net | 1,212 | (87) | N.M. |
| Foreign currency losses, net | (530) | (226) | (135%) |
| Loss from continuing operations before income tax provision | (4,786) | (5,376) |  |
| Income tax provision | (3) | (6) | (50%) |
| Net loss from continuing operations | (4,789) | (5,382) |  |
| Income from discontinued operations, net of tax | — | 824 | (100%) |
| Net loss | $(4,789) | $(4,558) |  |
| N.M. - Not meaningful |  |  |  |

20

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

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Americas | $2,238 | $2,958 | (24%) |
| Europe and the Middle East | 1,787 | 2,538 | (30%) |
| Asia-Pacific | 1,244 | 1,162 | 7% |
| Total | $5,269 | $6,658 |  |
| Percentage of net revenue: |  |  |  |
| Americas | 42% | 44% |  |
| Europe and the Middle East | 34% | 38% |  |
| Asia-Pacific | 24% | 18% |  |
| Total | 100% | 100% |  |

### Net Revenue

Net revenue was $5.3 million for the three months ended March 31, 2025, a decrease of $1.4 million compared with $6.7 million for the three months ended March 31, 2024. Net revenue in the Americas for three months ended March 31, 2025 decreased 24% compared with the comparable period of 2024. Net revenue in Europe, the Middle East, and the Asia-Pacific for three months ended March 31, 2025 was $3.0 million, a decrease of 18% compared with $3.7 million in the comparable period of 2024. The decrease was primarily due to substantially lower unit sales of RFID transponder products as we exit low margin business opportunities.

### Gross Profit and Gross Margin

Gross profit for the three months ended March 31, 2025 was $0.1 million compared with $0.5 million in the comparable period of 2024. Gross profit represents net revenue less direct cost of product sales, manufacturing overhead, other costs directly related to preparing the product for sale including freight, scrap, and inventory adjustments, where applicable.

Gross profit margin for the three months ended March 31, 2025 decreased to 3% from 7% in the comparable period of 2024. The decrease in gross profit margin was primarily attributable to incremental costs related to the transition of production to our Thailand facility and the dual manufacturing sites required during the transition, combined with underutilization of our manufacturing production facilities due to lower sales. In addition, we recorded a charge to cost of revenue of approximately $0.4 million in the first quarter of 2025, which included the write-down of approximately $0.3 million of obsolete inventory at our Singapore production facility, and a warranty claim from one of our customers of approximately $0.2 million.

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

### Operating Expenses

Information about our operating expenses for the three months ended March 31, 2025 and 2024 is set forth below (dollars in thousands).

#### Research and Development

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Research and development | $787 | $897 | (12%) |
| as a % of net revenue | 15% | 13% |  |

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

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

#### Selling and Marketing

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Selling and marketing | $1,407 | $1,169 | 20% |
| as a % of net revenue | 27% | 18% |  |

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

Selling and marketing expenses for the three months ended March 31, 2025 increased compared to the comparable period in 2024 primarily due to higher headcount and payroll related costs, higher external contractor costs, and higher consulting related costs.

#### General and Administrative

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| General and administrative | $3,146 | $3,480 | (10%) |
| as a % of net revenue | 60% | 52% |  |

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

General and administrative expenses for the three months ended March 31, 2025 decreased compared to the comparable period in 2024 primarily due to strategic review-related costs associated with the asset sale of $0.9 million incurred in the first quarter of 2024 that did not recur in the first quarter of 2025, partially offset by higher stock-based compensation expense in the first quarter of 2025.

#### Restructuring and Severance Charges

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Restructuring and severance | $260 | $— | 100% |

Restructuring expenses for the three months ended March 31, 2025 related primarily to the impairment of an operating lease right-of-use asset associated with vacated production space at our Singapore manufacturing facility, and the remaining restructuring expense related to severance costs.

### Non-operating Income (Expense)

Information about our non-operating income (expense) for the three months ended March 31, 2025 and 2024 is set forth below (dollars in thousands).

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Interest income (expense), net | $1,212 | $(87) | N.M. |
| Foreign currency losses, net | $(530) | $(226) | (135%) |
| N.M - Not meaningful |  |  |  |

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

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

### Income Tax Provision

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Income tax provision | $3 | $6 | 50% |
| Effective tax rate | 0% | 0% |  |

As of March 31, 2025, our deferred tax assets are fully offset by a valuation allowance. ASC 740, *Income Taxes*, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Based upon the weight of available evidence, which includes historical operating performance, reported cumulative net losses since inception and difficulty in accurately forecasting our future results, we provided a full valuation allowance against all of our net U.S. and foreign deferred tax assets. We reassess the need for our valuation allowance on a quarterly basis. If it is later determined that a portion or all of the valuation allowance is not required, it generally will be a benefit to the income tax provision in the period such determination is made.

We recorded an income tax provision during the three months ended March 31, 2025, respectively, associated with taxable income from one of our foreign subsidiaries. The effective tax rates for the three months ended March 31, 2025 and 2024 differ from the federal statutory rate of 21% primarily due to a change in valuation allowance, and the provision or benefit in certain foreign jurisdictions, which are subject to higher tax rates.

### Income from Discontinued Operations, net of tax

|  | Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Income from discontinued operations, net of tax | $— | $824 | (100%) |

Income from discontinued operations consists of the results of operations, net of tax, of our Physical Security Business which we disclosed as discontinued operations. See Note 3, *Discontinued Operations.*

### Liquidity and Capital Resources

As of March 31, 2025, our working capital, defined as current assets less current liabilities, was $141.5 million, a decrease of $3.4 million compared to $144.9 million as of December 31, 2024. As of March 31, 2025, our cash and cash equivalents balance was $132.4 million.

On November 7, 2024, we announced that our board of directors authorized a stock repurchase program (the “Stock Repurchase Program”). Under the Stock Repurchase Program, effective November 15, 2024, we may repurchase up to $10 million of shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions, or other means. The timing and amount of shares repurchased depends on a number of factors, including stock price, trading volume, general market and business conditions, liquidity and capital needs, and other factors. The Stock Repurchase Program does not obligate us to repurchase any specific dollar amount or acquire any specific number of shares of common stock. The Stock Repurchase Program has no expiration date and may be suspended or discontinued at any time without notice. As of March 31, 2025, we have repurchased a total of 463,779 shares of common stock under the Stock Repurchase Program for total consideration of approximately $1.9 million. During the quarter ended March 31, 2025, there were no repurchases of shares of common stock under the Stock Repurchase Program.

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 March 31, 2025, the amount of cash included at such subsidiaries was $14.7 million. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements.

We have historically incurred operating losses and negative cash flows from operating activities, and we expect to continue to incur losses in the future. As of March 31, 2025, we had an accumulated deficit of $344.8 million. During the three months ended March 31, 2025, we had a loss from continuing operations of $4.8 million.

We believe our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to satisfy our working capital needs to fund operations for the next twelve months and beyond. 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. 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 three months ended March 31, 2025 and 2024 (in thousands):

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

### Cash flows from operating activities

Cash used in operating activities for the three months ended March 31, 2025 of $3.3 million was primarily due to a net loss of $4.8 million and a decrease in cash from net changes in operating assets and liabilities of $0.2 million; partially offset by adjustments to net loss for certain non-cash items of $1.7 million, consisting of depreciation, amortization, stock-based compensation, and impairment of operating lease ROU asset.

Cash used in operating activities for the three months ended March 31, 2024 of $1.3 million was primarily due to net loss of $4.6 million, partially offset by an increase in cash from net changes in operating assets and liabilities of $1.4 million and adjustments for certain non-cash items of $1.8 million, consisting primarily of depreciation, amortization and stock-based compensation.

### Cash flows from investing activities

Cash used in investing activities for the three months ended March 31, 2025 and 2024 was $0.3 million and $0.2 million, respectively, which related to capital expenditures for our manufacturing facilities in Singapore and Thailand.

### Cash flows from financing activities

Cash used in financing activities during the three months ended March 31, 2025 was $0.2 million which related to taxes paid related to net share settlements of RSUs.

Cash used in financing activities during the three months ended March 31, 2024 was $0.4 million, which consisted of net borrowings of $5.9 million offset by repayments of $6.0 million under our revolving loan facility, and taxes paid related to net share settlements of RSUs of $0.3 million.

### Contractual Obligations

We lease facilities, certain equipment, and automobiles under non-cancelable operating lease agreements. See Note 13, *Leases*, in the accompanying notes to our condensed consolidated financial statements.

Purchases for inventories are highly dependent upon forecasts of customer demand. Due to the uncertainty in demand from our customers, we may have to change, reschedule, or cancel purchases or purchase orders from our suppliers. These changes may lead to vendor cancellation charges on these orders or contractual commitments. See Note 14, *Commitments and Contingencies*, in the accompanying notes to our condensed consolidated financial statements.

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

### Off-Balance Sheet Arrangements

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

### Climate Change

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

### Critical Accounting Estimates

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

During the three months ended March 31, 2025, management believes there have been no significant changes to the items that we disclosed within our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

### Recent Accounting Pronouncements

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

## Controls and procedures

As filed, 2,187 characters.

#### Evaluation of Disclosure Controls and Procedures

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

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

### Changes in Internal Controls over Financial Reporting

We have made no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended March 31, 2025, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 4,266 characters.

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

***Changes in U.S. trade policy and the impact of tariffs may have a material adverse effect on our business and results of operations.***

Our business, financial condition and results of operations may be adversely affected by uncertainty and changes in U.S. trade policies, including tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments. For example, the U.S. government has recently announced changes to its trade policy, including increasing tariffs on imports, in some cases significantly. Several of these recent tariff actions have been followed by announcements of limited exemptions, temporary pauses, and retaliatory measures against certain U.S. imports.

As of April 1, 2025, approximately 25% of our finished goods are imported into the U.S., either by us or our customers. Any imposition of or increase in tariffs applicable to us, including reciprocal tariffs, would increase the cost of importing our products. This would in turn increase our costs unless we are able to implement actions to offset these costs, such as leveraging tariff exemptions where possible, taking actions to optimize our supply chain or source from alternative suppliers, or increasing our prices. We are currently developing a pass-through strategy to protect margins, and preparing for multiple scenarios should reciprocal tariffs resume after the current pause. There can be no assurance that we will be able to successfully offset or mitigate any resulting increase in our costs. If we are unable to pass on any cost increases or if supply and demand conditions will not support price increases for our products, our revenue and gross margin would be negatively impacted. In addition, retaliatory actions by other countries in response to U.S. trade policy could increase prices for our products and could negatively affect demand for our products.

Tariffs or other trade restrictions may also lead to increased costs for our customers, declining consumer confidence, significant inflation and diminished expectations for the economy, as well as ultimately reduced demand for our products. Such conditions could have a material adverse impact on our business, results of operations and cash flows. In addition, tariff actions by the U.S. and retaliatory actions by other countries have caused and may in the future cause significant disruption and volatility in the financial markets, which could adversely affect the availability, terms and cost of capital, which in turn could increase our costs of capital and limit our access to external financing sources.

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

Filed May 9, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-068153. Last ingested by Listed: Oct 30, 2026, 07:17 ET. No prices; not investment advice.