10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2021

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: 000-29440

IDENTIV, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	77-0444317
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2201 Walnut Avenue, Suite 100 Fremont, California	94538
(Address of principal executive offices)	(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	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.001 par value per share	INVE	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☑    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☑    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑

As of November 4, 2021, the registrant had 22,206,839 shares of common stock outstanding.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30,2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 6.	Exhibits	40
SIGNATURES		41

2

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

IDENTIV, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except par value)

	September 30,			December 31,
	2021			2020
ASSETS
Current assets:
Cash and cash equivalents	$	29,218		$	11,409
Accounts receivable, net of allowances of $395 and $178 as of September 30, 2021    and December 31, 2020, respectively		19,263			18,927
Inventories		21,617			20,296
Prepaid expenses and other current assets		4,107			2,813
Total current assets		74,205			53,445
Property and equipment, net		4,131			2,827
Operating lease right-of-use assets		2,370			3,405
Intangible assets, net		6,725			7,563
Goodwill		10,268			10,266
Other assets		1,113			1,171
Total assets	$	98,812		$	78,677
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	9,311		$	10,964
Contractual payment obligation		269			1,040
Financial liabilities, net of debt issuance costs of $0    and $59 as of September 30, 2021 and December 31, 2020, respectively		—			20,084
Operating lease liabilities		1,285			1,279
Deferred revenue		2,343			1,981
Accrued compensation and related benefits		3,162			2,985
Other accrued expenses and liabilities		4,473			3,240
Total current liabilities		20,843			41,573
Long-term operating lease liabilities		1,214			2,272
Long-term deferred revenue		266			385
Other long-term liabilities		237			258
Total liabilities		22,560			44,488
Commitments and contingencies (see Note 16)
Stockholders' equity:
Series B convertible preferred stock, $0.001 par value: 5,000 shares authorized; 5,000 shares    issued and outstanding as of September 30, 2021 and December 31, 2020		5			5
Common stock, $0.001 par value: 50,000 shares authorized; 23,641 and 19,450 shares    issued and 22,178 and 18,055 shares outstanding as of September 30, 2021 and    December 31, 2020, respectively		24			19
Additional paid-in capital		492,015			452,129
Treasury stock, 1,463 and 1,395 shares as of September 30, 2021 and December 31, 2020,    respectively		(10,853	)		(9,933	)
Accumulated deficit		(407,068	)		(410,609	)
Accumulated other comprehensive income		2,129			2,578
Total stockholders' equity		76,252			34,189
Total liabilities and stockholders' equity	$	98,812		$	78,677

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

3

IDENTIV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Net revenue	$	29,097		$	24,859		$	75,252		$	62,084
Cost of revenue		17,979			14,974			47,602			36,987
Gross profit		11,118			9,885			27,650			25,097
Operating expenses:
Research and development		2,088			2,380			6,556			7,398
Selling and marketing		4,471			4,245			12,682			12,978
General and administrative		2,400			2,118			7,120			6,460
Decrease in fair value of earnout liability		—			—			—			(261	)
Restructuring and severance		99			163			761			1,645
Total operating expenses		9,058			8,906			27,119			28,220
Income (loss) from operations		2,060			979			531			(3,123	)
Non-operating income (expense):
Interest expense, net		(62	)		(407	)		(451	)		(1,066	)
Gain on forgiveness of Paycheck Protection Program note		—			—			2,946			—
Gain on investment		611			—			611			—
Foreign currency losses, net		(48	)		(175	)		(2	)		(119	)
Income (loss) before income tax provision		2,561			397			3,635			(4,308	)
Income tax provision		(21	)		(8	)		(94	)		(99	)
Net income (loss)		2,540			389			3,541			(4,407	)
Other comprehensive income (loss):
Foreign currency translation adjustment		(229	)		369			(449	)		104
Comprehensive income (loss)	$	2,311		$	758		$	3,092		$	(4,303	)
Net income (loss) per common share:
Basic	$	0.10		$	0.01		$	0.13		$	(0.29	)
Diluted	$	0.09		$	0.01		$	0.12		$	(0.29	)
Weighted average shares used in computing net    income (loss) per common share:
Basic		22,448			18,144			20,948			17,868
Diluted		29,330			18,650			21,861			17,868

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

4

IDENTIV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands)

	Three Months Ended September 30, 2021
	Series B Convertible Preferred Stock				Common Stock					Additional Paid-in		Treasury			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares			Amount		Capital		Stock			Deficit			Income			Equity
Balances, June 30, 2021		5,000	$	5		22,123		$	23	$	491,431	$	(10,519	)	$	(409,608	)	$	2,358		$	73,690
Net income		—		—		—			—		—		—			2,540			—			2,540
Unrealized loss from foreign    currency translation adjustments		—		—		—			—		—		—			—			(229	)		(229	)
Issuance of common stock in connection    with vesting of stock awards		—		—		73			—		—		—			—			—			—
Stock-based compensation		—		—		—			—		572		—			—			—			572
Shares withheld in payment of taxes in    connection with net share settlement of    restricted stock units		—		—		(20	)		—		—		(334	)		—			—			(334	)
Proceeds from exercise of stock options		—		—		2			1		12		—			—			—			13
Balances, September 30, 2021		5,000	$	5		22,178		$	24	$	492,015	$	(10,853	)	$	(407,068	)	$	2,129		$	76,252
	Nine Months Ended September 30, 2021
	Series B Convertible Preferred Stock				Common Stock					Additional Paid-in		Treasury			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares			Amount		Capital		Stock			Deficit			Income			Equity
Balances, December 31, 2020		5,000	$	5		18,055		$	19	$	452,129	$	(9,933	)	$	(410,609	)	$	2,578		$	34,189
Net income		—		—		—			—		—		—			3,541			—			3,541
Unrealized loss from foreign    currency translation adjustments		—		—		—			—		—		—			—			(449	)		(449	)
Issuance of common stock in connection    with vesting of stock awards		—		—		366			—		—		—			—			—			—
Stock-based compensation		—		—		—			—		2,027		—			—			—			2,027
Shares withheld in payment of taxes in    connection with net share settlement of    restricted stock units		—		—		(68	)		—		—		(920	)		—			—			(920	)
Issuance of common stock in connection    with warrant exercise		—		—		28			—		—		—			—			—			—
Issuance of common stock in connection with public offering		—		—		3,779			4		37,711		—			—			—			37,715
Proceeds from exercise of stock options		—		—		18			1		148		—			—			—			149
Balances, September 30, 2021		5,000	$	5		22,178		$	24	$	492,015	$	(10,853	)	$	(407,068	)	$	2,129		$	76,252

5

	Three Months Ended September 30, 2020
	Series B Convertible Preferred Stock				Common Stock					Additional Paid-in			Treasury			Accumulated			Accumulated Other Comprehensive		Total Stockholders'
	Shares		Amount		Shares			Amount		Capital			Stock			Deficit			Income		Equity
Balances, June 30, 2020		5,000	$	5		17,860		$	19	$	450,480		$	(9,451	)	$	(410,300	)	$	1,760		32,513
Net income		—		—		—			—		—			—			389			—		389
Unrealized income from foreign    currency translation adjustments		—		—		—			—		—			—			—			369		369
Issuance of common stock in connection    with vesting of stock awards		—		—		143			—		—			—			—			—		—
Stock-based compensation		—		—		—			—		791			—			—			—		791
Shares withheld in payment of taxes in    connection with net share settlement of    restricted stock units		—		—		(37	)		—		—			(196	)		—			—		(196	)
Balances, September 30, 2020		5,000	$	5		17,966		$	19	$	451,271		$	(9,647	)	$	(409,911	)	$	2,129	$	33,866
	Nine Months Ended September 30, 2020
	Series B Convertible Preferred Stock				Common Stock					Additional Paid-in			Treasury			Accumulated			Accumulated Other Comprehensive		Total Stockholders'
	Shares		Amount		Shares			Amount		Capital			Stock			Deficit			Income		Equity
Balances, December 31, 2019		5,000	$	5		16,986		$	18	$	447,965		$	(9,043	)	$	(405,504	)	$	2,025	$	35,466
Net loss		—		—		—			—		—			—			(4,407	)		—		(4,407	)
Unrealized income from foreign    currency translation adjustments		—		—		—			—		—			—			—			104		104
Issuance of common stock in connection    with vesting of stock awards		—		—		505			—		—			—			—			—		—
Stock-based compensation		—		—		—			—		2,182			—			—			—		2,182
Shares withheld in payment of taxes in    connection with net share settlement of    restricted stock units		—		—		(131	)		—		—			(604	)		—			—		(604	)
Issuance of common stock in connection    with warrant exercise		—		—		387			1		(1	)		—			—			—		—
Issuance of common stock in connection    with earnout liability		—		—		157			—		489			—			—			—		489
Issuance of shares to non-employees		—		—		62			—		304			—			—			—		304
Issuance of warrants		—		—		—			—		332			—			—			—		332
Balances, September 30, 2020		5,000	$	5		17,966		$	19	$	451,271		$	(9,647	)	$	(409,911	)	$	2,129	$	33,866

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

6

IDENTIV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Nine Months Ended September 30,
	2021			2020
Cash flows from operating activities:
Net income (loss)	$	3,541		$	(4,407	)
Adjustments to reconcile net income (loss) to net cash provided by (used in)    operating activities:
Depreciation and amortization		1,460			2,470
Gain on forgiveness of Paycheck Protection Program note		(2,946	)		—
Gain on investment		(611	)		—
Accretion of interest on contractual payment obligation		41			115
Amortization of debt issuance costs		101			321
Stock-based compensation expense		2,027			2,182
Impairment of right-of-use operating lease assets		281			1,199
Decrease in fair value of earnout liability		—			(261	)
Changes in operating assets and liabilities:
Accounts receivable		(346	)		(2,035	)
Inventories		(1,332	)		(4,244	)
Prepaid expenses and other assets		(1,123	)		(875	)
Accounts payable		(1,639	)		962
Contractual payment obligation liability		(812	)		(590	)
Deferred revenue		243			(158	)
Accrued expenses and other liabilities		1,120			(4	)
Net cash provided by (used in) operating activities		5			(5,325	)
Cash flows from investing activities:
Capital expenditures		(1,923	)		(928	)
Proceeds from investment		611			—
Net cash used in investing activities		(1,312	)		(928	)
Cash flows from financing activities:
Borrowings under revolving loan facility, net of issuance costs		3,964			2,762
Repayments under revolving loan facility		(18,548	)		(3,347	)
Borrowings under East West Bank term loan		—			4,500
Repayments under East West Bank term loan		—			(1,250	)
Proceeds from April 21 Funds promissory notes		—			4,000
Repayments of April 21 Funds promissory notes		(2,800	)		—
Proceeds from the sale of common stock, net of issuance costs		37,715			—
Proceeds from Paycheck Protection Program note		—			2,915
Taxes paid related to net share settlement of restricted stock units		(920	)		(604	)
Proceeds from exercise of stock options		149			—
Net cash provided by financing activities		19,560			8,976
Effect of exchange rates on cash and cash equivalents		(444	)		188
Net increase in cash and cash equivalents		17,809			2,911
Cash and cash equivalents at beginning of period		11,409			9,383
Cash and cash equivalents at end of period	$	29,218		$	12,294
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	329		$	733
Taxes paid, net	$	61		$	44
Non-cash investing and financing activities:
Common stock issued to settle vendor liability	$	—		$	304
Common stock issued to settle earnout liability	$	—		$	489
Fair value of warrants issued in connection with financial liabilities	$	—		$	332
Reclassification of debt issuance costs to prepaid expenses and other current assets	$	114		$	—

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

7

IDENTIV, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Identiv, Inc. and its wholly owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the fiscal year 2020 condensed consolidated financial statements to conform to the fiscal year 2021 presentation. The reclassifications had no impact on net income (loss), total assets, total liabilities, or stockholders’ equity.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s unaudited condensed consolidated financial statements have been included. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any future period. The unaudited condensed consolidated balance sheet as of December 31, 2020 has been derived from audited consolidated financial statements at that date, but does not include all disclosures required by U.S. GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors,” and the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

2. Significant Accounting Policies and Recent Accounting Pronouncements

Significant Accounting Policies

No material changes have been made to the Company's significant accounting policies disclosed in Note 2, Significant Accounting Policies and Recent Accounting Pronouncements, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“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.

Additionally, ASU No. 2019-10 defers the effective date for the adoption of the new standard on credit losses for public filers that are considered small reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which will be fiscal 2023 for the Company if it continues to be classified as a smaller reporting company. 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. While the Company is currently evaluating the impact of Topic 326, the Company does not expect the adoption of the ASU to have a material impact on its consolidated financial statements.

In December 2019, FASB issued ASU 2019-12, Income Taxes (740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for incomes taxes by removing certain exceptions to the general principles in Topic 740 and amending existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard on January 1, 2021, and it did not have a material impact on the Company’s condensed consolidated financial statements.   

8

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 Revenue — 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 delivery 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, physical possession, 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 Accounting Standards Codification (“ASC”) 460, Guarantees (“ASC 460”).  

Software License Revenue — 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 upon delivery of the license to the customer, while the software updates and technical support revenue is recognized over the term of the support contract.

Subscription Revenue — Subscription revenue 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 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. 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 Revenue — Support and maintenance contract revenue consists 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 Revenue — 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.

9

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

Significant Judgments

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 Revenue

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

	Three Months Ended September 30,
	2021						2020
	Point-in- Time		Over Time		Total		Point-in- Time		Over Time		Total
Americas	$	18,820	$	847	$	19,667	$	14,217	$	833	$	15,050
Europe and the Middle East		3,131		92		3,223		1,995		87		2,082
Asia-Pacific		6,207		—		6,207		7,727		—		7,727
Total	$	28,158	$	939	$	29,097	$	23,939	$	920	$	24,859

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	Nine Months Ended September 30,
	2021						2020
	Point-in- Time		Over Time		Total		Point-in- Time		Over Time		Total
Americas	$	46,598	$	2,425	$	49,023	$	39,587	$	3,001	$	42,588
Europe and the Middle East		9,026		283		9,309		7,033		279		7,312
Asia-Pacific		16,920		—		16,920		12,184		—		12,184
Total	$	72,544	$	2,708	$	75,252	$	58,804	$	3,280	$	62,084

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 to software maintenance contracts. Payment terms and conditions vary by contract type, although payment is typically due within 30 to 90 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 nine months ended September 30, 2021 and September 30, 2020 were as follows (in thousands):

	Nine Months Ended September 30,
	2021			2020
Deferred revenue, beginning of period	$	2,366		$	2,833
Deferral of revenue billed in current period, net of recognition		1,992			1,719
Recognition of revenue deferred in prior periods		(1,749	)		(1,877	)
Deferred revenue, end of period	$	2,609		$	2,675

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 $0.6 million as of September 30, 2021. Since the Company typically invoices customers at contract inception, this amount is included in the deferred revenue balance. As of September 30, 2021, the Company expects to recognize 23% of the revenue related to these unsatisfied performance obligations during the remainder of 2021, 48% during 2022, and 29% thereafter.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain sales incentive programs (i.e., commissions) meet the requirements to be capitalized. Capitalized incremental costs related to contracts are amortized over the respective contract periods. For the nine months ended September 30, 2021, total capitalized costs to obtain contracts were immaterial.

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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 September 30, 2021 and December 31, 2020, the only assets measured and recognized at fair value on a recurring basis were nominal cash equivalents. As of September 30, 2021 and December 31, 2020, there were no liabilities measured and recognized at fair value on a recurring basis, other than contingent consideration related to prior acquisitions as of December 31, 2020 which had no fair value.

 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 September 30, 2021 and December 31, 2020, 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 condensed consolidated balance sheets.

In the third quarter of 2021, the Company received proceeds of approximately $611,000 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 September 30, 2021 and December 31, 2020, there were no liabilities that are measured and recognized at fair value on a non-recurring basis.

Assets and Liabilities Not Measured at Fair Value

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

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5. Goodwill and Intangible Assets

Goodwill

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

	Identity		Premises		Total
Balance as of December 31, 2020	$	3,554	$	6,712	$	10,266
Currency translation adjustment		—		2		2
Balance as of September 30, 2021	$	3,554	$	6,714	$	10,268

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. 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 nine months ended September 30, 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):

				Developed			Customer
	Trademarks			Technology			Relationships			Total
Amortization period (in years)	5			10 – 12			4 – 12
Gross carrying amount as of September 30, 2021	$	763		$	9,127		$	15,774		$	25,664
Accumulated amortization		(497	)		(6,106	)		(12,336	)		(18,939	)
Intangible assets, net as of September 30, 2021	$	266		$	3,021		$	3,438		$	6,725
Gross carrying amount as of December 31, 2020	$	765		$	9,123		$	15,771		$	25,659
Accumulated amortization		(382	)		(5,773	)		(11,941	)		(18,096	)
Intangible assets, net as of December 31, 2020	$	383		$	3,350		$	3,830		$	7,563

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 it its amortizable intangible assets for impairment at the end of each reporting period. The Company did not identify any impairment indicators during the nine months ended September 30, 2021 and 2020.

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The following table summarizes the amortization expense included in the unaudited condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020, respectively (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenue	$	114	$	223	$	340	$	669
Selling and marketing		168		419		503		1,254
Total	$	282	$	642	$	843	$	1,923

The estimated annual future amortization expense for purchased intangible assets with definite lives as of September 30, 2021 was as follows (in thousands):

2021 (remaining three months)	$	281
2022		1,120
2023		1,043
2024		967
2025		967
Thereafter		2,347
Total	$	6,725

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6. Balance Sheet Components

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

	September 30,		December 31,
	2021		2020
Raw materials	$	8,089	$	6,518
Work-in-progress		2		34
Finished goods		13,526		13,744
Total	$	21,617	$	20,296

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

	September 30,			December 31,
	2021			2020
Building and leasehold improvements	$	1,361		$	1,498
Furniture, fixtures and office equipment		1,354			1,295
Plant and machinery		13,076			11,429
Purchased software		2,282			2,191
Total		18,073			16,413
Accumulated depreciation		(13,942	)		(13,586	)
Property and equipment, net	$	4,131		$	2,827

The Company recorded depreciation expense of $0.2 million during the three months ended September 30, 2021 and 2020, respectively, and $0.6 million during the nine months ended September 30, 2021 and 2020, respectively.

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

	September 30,		December 31,
	2021		2020
Rental payments due landlord	$	734	$	158
Accrued professional fees		717		586
Accrued restructuring		411		801
Customer deposits		386		72
Accrued warranties		352		321
Other accrued expenses		1,873		1,302
Total	$	4,473	$	3,240

The rental payments due landlord relate to leased office space acquired in a prior acquisition. The office space was subleased, but the tenant went into default for non-payment beginning April 1, 2020. The Company is currently in active negotiations with the lessor to negotiate a settlement of the outstanding lease obligation.

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7. Contractual Payment Obligation

Hirsch Electronics Corporation (“Hirsch”) Acquisition – Secure Keyboards and Secure Networks. Prior to the Company’s acquisition of Hirsch in 2009, in November 1994, Hirsch had entered into a settlement agreement (the “1994 Settlement Agreement”) with two limited partnerships, Secure Keyboards, Ltd. (“Secure Keyboards”) and Secure Networks, Ltd. (“Secure Networks”). On April 8, 2009, the 1994 Settlement Agreement was amended and restated to replace the royalty-based payment arrangement with an installment payment schedule with contractual payments to be made in future periods through 2021 (the “2009 Settlement Agreement”). On April 30, 2009, as part of the acquisition of Hirsch, the Company provided Secure Keyboards and Secure Networks with a limited guarantee of Hirsch’s payment obligation under the 2009 Settlement Agreement.   

On April 13, 2020, the Company, Secure Keyboards, and Secure Networks, amended the 2009 Settlement Agreement. The amendment reduced the amount of quarterly payments due under the obligation in 2020, and requires three additional quarterly payments in 2021. The Company’s remaining payment obligation under the 2009 Settlement Agreement, as amended, was extended through October 31, 2021. The Company included approximately $8,000 and $41,000 of interest expense during the three and nine months ended September 30, 2021, respectively, and approximately $28,000 and $115,000 of interest expense during the three and nine months ended September 30, 2020, respectively, in its condensed consolidated statements of comprehensive income (loss) for interest accreted on the payment obligation.     

The payment obligation under the 2009 Settlement Agreement, as amended, as of September 30, 2021, is as follows (in thousands): 

2021 (remaining three months)	$	271
Present value discount factor		(2	)
Total	$	269

8. Financial Liabilities

Financial liabilities consist of (in thousands):

	September 30,		December 31,
	2021		2020
Revolving loan facility	$	—	$	14,428
April 21 Funds promissory notes		—		2,800
Paycheck Protection Program note		—		2,915
Total		—		20,143
Less: Current maturities of financial liabilities		—		(20,084	)
Less: Unamortized debt issuance costs		—		(59	)
Long-term financial liabilities	$	—	$	—

East West Bank

On February 8, 2017, the Company entered into a Loan and Security Agreement with East West Bank (“EWB”). Following subsequent amendments, on February 8, 2021 the Company amended and restated the Loan and Security Agreement in its entirety (the “Loan and Security Agreement”). The Loan and Security Agreement provides for a $20.0 million revolving loan facility subject to a borrowing base and a $4.0 million non-formula revolving loan facility that is not subject to a borrowing base. The Company’s obligations under the Loan and Security Agreement are collateralized by substantially all of its assets. As of September 30, 2021, the Company had repaid all amounts outstanding under its Loan and Security Agreement.

The maturity date of the main revolving loan facility is February 8, 2023. The non-formula revolving loan facility will terminate on February 7, 2022, however the Company may, at its option if certain conditions are met, convert prior to their maturity any loans under the non-formula revolving loan facility to a term loan that will fully amortize and mature on February 1, 2025. Advances under the revolving loan facilities and the term loan (if converted) will initially bear interest at a per annum rate equal to the prime rate as determined under the Loan and Security Agreement plus 0.25%. On April 30, 2021, the Company entered into an amendment to its Loan and Security Agreement which reduced the per annum interest rate to the prime interest rate.  

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The Company may voluntarily prepay amounts outstanding under the revolving loan facilities and the term loan without prepayment charges. In the event the Loan and Security Agreement is terminated prior to February 8, 2023, the Company would be required to pay an early termination fee in the amount of 2.0% of the main revolving loan line if terminated prior to February 8, 2022 and 1% of the main revolving loan line thereafter. Additional borrowing requests under the revolving loan facilities are subject to various customary conditions precedent, including a borrowing base for the main revolving loan facility.

The Loan and Security 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. In addition, the Loan and Security Agreement contains financial covenants requiring that the Company (i) hold $5 million in unrestricted cash in accounts with EWB, (ii) maintain a monthly minimum trailing six-month EBITDA of $0.6 million for the first two quarters of 2021 and $1.2 million thereafter and (iii) maintain, if the Company converts into the term loan and starting with the quarter ending March 31, 2022, a quarterly fixed charge coverage ratio of at least 1.35:1.00.

The Loan and Security Agreement contains customary events of default that entitle EWB to cause any or all of the Company’s indebtedness under it to become immediately due and payable. The events of default (some of which are subject to applicable grace or cure periods), include, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. Upon the occurrence and during the continuance of an event of default, EWB may terminate its lending commitment and/or declare all or any part of the unpaid principal of all loans, all interest accrued and unpaid thereon and all other amounts payable under the Loan and Security Agreement to be immediately due and payable.

As of September 30, 2021, the Company was in compliance with all financial covenants under the Loan and Security Agreement.

April 21 Funds

On May 5, 2020, the Company issued secured subordinated promissory notes in an aggregate principal amount of $4.0 million (the “Notes”) to 21 April Fund, LP and 21 April Fund, Ltd. (collectively referred to as the “April 21 Funds”) pursuant to a Note and Warrant Purchase Agreement entered into with the April 21 Funds (the “Note Purchase Agreement”). The Notes were collateralized by the Company’s assets, but subordinate to the Company’s obligations to EWB under its Loan and Security Agreement. Proceeds from the sale of the Notes were only to be used for expenses incurred by the Company in connection with its provisions of goods and services under a statement of work with a third party. The Notes had an initial term of nine months and did not bear interest during that period. If the Notes were not repaid on or before the nine-month anniversary of issuance, (a) the Notes would thereafter bear interest of 8% per annum, payable quarterly, and (b) additional warrants to purchase common stock would be issuable to the April 21 Funds for each month all or a portion of the Notes remain unpaid, as further detailed in the Note Purchase Agreement. In the event the Notes were not paid in full by the first anniversary of their issuance, May 5, 2021, they would thereafter bear interest of 12% per annum, payable quarterly, and additional warrants would be issuable to the April 21 Funds.

As discussed in Note 10, Stockholders’ Equity, the fair value of the warrants issued to April 21 Funds was calculated using the Black Scholes pricing model using the following assumptions: estimated volatility of 63.2%, risk free interest rate of 0.24%, no dividend yield, and an expected life of three years. The relative fair value of the warrants of $290,000 was recorded as a direct reduction from the carrying amount of the Notes and was being amortized as interest expense over the term of the April 21 Funds promissory notes.

On February 5, 2021, the Company entered into an amendment to the secured subordinated promissory note with April 21 Funds, which extended the initial term of the Notes to March 31, 2021. As a result of the amendment, if the Notes were repaid on or before March 31, 2021, the Company would incur no further interest on the Notes, or be obligated to issue additional warrants. On March 31, 2021, April 21 Funds waived any additional warrants issuable, and interest payable, to April 21 Funds through May 5, 2021. On April 13, 2021, the Company repaid the remaining principal amount outstanding of $2.8 million.

Paycheck Protection Program

On April 9, 2020, the Company entered into a promissory note (the “PPP Note”) under the Paycheck Protection Program established under Section 1102 of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Note was dated April 8, 2020 with EWB. The Company borrowed a principal amount of approximately $2.9 million. The interest on the PPP Note was 1.0% per annum. The PPP Note was payable two years from the date of the PPP Note, and there was no prepayment penalty. All interest which accrues during the initial six months of the loan period was deferred and payable on the maturity date of the PPP Note. Notes issued under the CARES Act may be eligible for forgiveness in whole or in part in accordance with Small Business Administration rules established for the Paycheck Protection Program. On May 7, 2021, the principal and accrued interest amounts outstanding of approximately $2.9 million under the Company’s promissory note pursuant to the Paycheck Protection Program had been forgiven. As a result, the Company recorded a gain on forgiveness of debt of $2.9 million in the second quarter of 2021.

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9. Income Taxes

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

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

The Company generally is no longer subject to tax examinations for years prior to 2016. However, if loss carryforwards of tax years prior to 2016 are utilized in the U.S., these tax years may become subject to investigation by the tax authorities. While timing of the resolution and/or finalization of tax audits is uncertain, the Company does not believe that its unrecognized tax benefits would materially change in the next 12 months.

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (the “Act”) into law. The $1.9 trillion Act includes COVID-19 relief, as well as broader stimulus, but also includes several revenue-raising and business tax provisions. The CARES Act also includes several significant provisions for corporations, including the usage of net operating losses and payroll benefits. Several foreign (non-U.S.) jurisdictions in which the Company operates have taken similar economic stimulus measures. The Act and the CARES Act had no material impact on the Company’s condensed consolidated financial statements and disclosures.

10. Stockholders’ Equity

Series B Convertible Preferred Stock Dividend Accretion

The following tables summarize Series B convertible preferred stock and the accretion of dividend activity for the nine months ended September 30, 2021 and 2020 (in thousands):

	Nine Months Ended September 30,
	2021		2020
Series B Convertible Preferred Stock:
Balance at beginning of period	$	22,969	$	21,875
Cumulative dividends on Series B convertible preferred stock		859		818
Balance at end of period	$	23,828	$	22,693
Number of Common Shares Issuable Upon Conversion:
Number of shares at beginning of period		5,742		5,469
Cumulative dividends on Series B convertible preferred stock		215		204
Number of shares at end of period		5,957		5,673

Based on the current conversion price, the outstanding shares, including the accretion of dividends, of Series B convertible preferred stock as of September 30, 2021 would be convertible into 5,956,945 shares of the Company’s common stock. However, the conversion rate will be subject to adjustment in certain instances, such as if the Company issues shares of its common stock at a price less than $4.00 per common share, subject to a minimum conversion price of $3.27 per share. As of September 30, 2021, none of the contingent conditions to adjust the total common shares to convert the shares 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. 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).

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Sale of Common Stock

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 $37.7 million from the sale of the common stock in the public offering, after deducting the underwriting discounts and other offering related expenses of $2.5 million.

Common Stock Warrants 

On February 8, 2017, the Company entered into a Loan and Security Agreement with EWB. In connection with the Loan and Security Agreement, the Company issued to EWB a warrant (the "EWB Warrant") to purchase up to 40,000 shares of the Company's common stock at a per share exercise price of $3.64 which were immediately exercisable for cash or by net exercise and expire on February 8, 2022. On May 5, 2020, the Company entered into an amendment to the Loan and Security Agreement, which included amending the EWB Warrant, reducing its exercise price from $3.64 to $3.50 per share and extending the expiration date of the EWB Warrant from February 8, 2022 to February 8, 2023. The Company calculated the fair value of the amended EWB Warrant using the Black Scholes pricing model using the following assumptions: estimated volatility of 63.2%, risk free interest rate of 0.24%, no dividend yield, and an expected life of three years. The fair value of the amended EWB Warrant of $42,000, as well as legal and administrative costs of $92,000, were recorded as a direct reduction from the carrying amount of the Revolving Loan Facility and amortized as interest expense over the remaining term of the Loan and Security Agreement. On February 11, 2021, EWB exercised their warrant on a cashless net exercise basis receiving 27,599 shares of the Company’s common stock.

On May 5, 2020, the Company entered into a Note and Warrant Purchase Agreement with the April 21 Funds, as discussed in Note 8, Financial Liabilities, in 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 (subject to early termination upon the closing of an acquisition); provided, that in the event that the Note is not paid in full by the nine-month anniversary of issuance, the term of the April 21 Funds Warrants shall be extended for a period of time equal to the period of time from such nine-month anniversary until the date the Note is fully paid (“Extension Warrants”). The Extension Warrants would have a term of three years from the date of issuance of the latest Extension Warrant to be issued (subject to early termination upon an acquisition). The shares of common stock issuable upon exercise of the April 21 Fund Warrants and any Extension Warrants that may be issued are entitled to the same resale registration rights granted to the April 21 Funds Warrants under the Stockholders Agreement dated December 21, 2017 in connection with the April 21 Funds previous purchase of certain securities of the Company.

Below is the summary of outstanding warrants issued by the Company as of September 30, 2021:

Warrant Type	Number of Shares Issuable Upon Exercise		Weighted Average Exercise Price		Issue Date	Expiration Date
April 21 Funds Warrants		275,000	$	3.50	May 5, 2020	May 5, 2023

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of September 30, 2021 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	1,527,411
Employee Stock Purchase Plan	293,888
Shares of common stock available for grant under the 2011 Plan	943,591
Warrants to purchase common stock	275,000
Shares of common stock issuable upon conversion of Series B convertible preferred stock	7,541,449
Total	10,581,339

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11. Stock-Based Compensation

Stock Incentive Plan   

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

Stock Options

The following is a summary of stock option activity for the nine months ended September 30, 2021:

	Number Outstanding			Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance as of December 31, 2020		550,769		$	5.56		4.88	$	1,875,719
Granted		—			—
Cancelled or Expired		(4,642	)		21.39
Exercised		(18,651	)		7.94
Balance as of September 30, 2021		527,476		$	5.34		4.28	$	7,126,485
Vested or expected to vest as of     September 30, 2021		527,476		$	5.34		4.28	$	7,126,485
Exercisable as of September 30, 2021		527,476		$	5.34		4.28	$	7,126,485

The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s common stock as of September 31, 2021 and the stock option 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 September 30, 2021:

	Stock Options Outstanding						Stock Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$4.36 - $7.20		452,510		4.62	$	4.41		452,510	$	4.41
$7.50 - $11.25		61,317		2.48		10.19		61,317		10.19
$11.30 - $16.95		11,302		0.98		13.03		11,302		13.03
$19.70 - $29.55		2,347		0.36		20.98		2,347		20.98
$4.36 - $29.55		527,476		4.28	$	5.34		527,476	$	5.34

As of September 30, 2021, there was no unrecognized stock-based compensation expense related to stock options.   

Restricted Stock Units

The following is a summary of RSU activity for the nine months ended September 30, 2021:

	Number Outstanding			Weighted Average Fair Value
Unvested as of December 31, 2020		682,563		$	4.34
Granted		258,277			14.03
Vested		(335,631	)		5.57
Forfeited		(71,788	)		4.43
Unvested as of September 30, 2021		533,421		$	8.25
RSUs vested but not released		291,514		$	5.13

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The fair value of the Company’s RSUs is calculated based upon the fair market value of the Company’s stock on the date of grant. As of September 30, 2021, there was $3.6 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.

Performance Stock Units

The Company granted 200,000 PSUs to a certain key employee during the year ended December 31, 2020, with a grant date fair value of $6.38 per share. The PSUs 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 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 nine months ended September 30, 2021:

	Number Outstanding
Unvested as of December 31, 2020		200,000
Granted		—
Vested		(23,500	)
Forfeited		(1,500	)
Unvested as of September 30, 2021		175,000

As of September 30, 2021, there was $1.1 million of unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a period of 1.3 years. No tax benefit was realized from PSUs for the nine months ended September 30, 2021.

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 income (loss) for the three and nine months ended September 30, 2021 and 2020 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenue	$	49	$	43	$	130	$	124
Research and development		109		159		364		506
Selling and marketing		155		127		382		371
General and administrative		259		462		1,151		1,181
Total	$	572	$	791	$	2,027	$	2,182

Restricted Stock Unit Net Share Settlements

During the nine months ended September 30, 2021 and 2020, the Company repurchased 68,519 and 130,745 shares, respectively, of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of RSUs issued to employees.

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12. 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 for the three and nine months ended September 30, 2021 and September 30, 2021 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Basic net income (loss) per common share:
Numerator:
Net income (loss)	$	2,540		$	389		$	3,541		$	(4,407	)
Accretion of Series B convertible preferred stock dividends		(289	)		(275	)		(859	)		(818	)
Net income (loss) available to common stockholders	$	2,251		$	114		$	2,682		$	(5,225	)
Denominator:
Weighted average common shares outstanding - basic		22,448			18,144			20,948			17,868
Net income (loss) per common share - basic	$	0.10		$	0.01		$	0.13		$	(0.29	)
Diluted net income (loss) per common share:
Numerator:
Net income (loss) available to common stockholders	$	2,251		$	114		$	2,682		$	(5,225	)
Plus: accretion of Series B convertible preferred stock dividends, if dilutive		289			—			—			—
Net income (loss) available to common stockholders	$	2,540		$	114		$	2,682		$	(5,225	)
Denominator:
Weighted average common shares outstanding - basic		22,448			18,144			20,948			17,868
Dilutive securities:
Stock options, RSUs, and warrants		925			506			913			—
Convertible preferred shares		5,957			—			—			—
Weighted average common shares outstanding - diluted		29,330			18,650			21,861			17,868
Net income (loss) per common share - diluted	$	0.09		$	0.01		$	0.12		$	(0.29	)

The following common stock equivalents have been excluded from diluted net income (loss) per share for the three and nine months ended September 30, 2021 and 2020 because their inclusion would have been anti-dilutive (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Shares of common stock subject to outstanding RSUs		—		—		—		906
Shares of common stock subject to outstanding PSUs		175		—		175		—
Shares of common stock subject to outstanding stock options		2		102		2		553
Shares of common stock subject to outstanding warrants		—		—		—		315
Shares of common stock issuable upon conversion of Series B convertible preferred stock		—		5,673		5,957		5,673
Total		177		5,775		6,134		7,447

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13. Segment Reporting, Geographic Information, and Concentration of Credit Risk

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 for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Identity:
Net revenue	$	18,745		$	15,429		$	47,199		$	36,938
Gross profit		5,211			4,694			12,133			11,287
Gross profit margin		28	%		30	%		26	%		31	%
Premises:
Net revenue		10,352			9,430			28,053			25,146
Gross profit		5,907			5,191			15,517			13,810
Gross profit margin		57	%		55	%		55	%		55	%
Total:
Net revenue		29,097			24,859			75,252			62,084
Gross profit		11,118			9,885			27,650			25,097
Gross profit margin		38	%		40	%		37	%		40	%
Operating expenses:
Research and development		2,088			2,380			6,556			7,398
Selling and marketing		4,471			4,245			12,682			12,978
General and administrative		2,400			2,118			7,120			6,460
Decrease in fair value of earnout liability		—			—			—			(261	)
Restructuring and severance		99			163			761			1,645
Total operating expenses:		9,058			8,906			27,119			28,220
Income (loss) from operations		2,060			979			531			(3,123	)
Non-operating income (expense):
Interest expense, net		(62	)		(407	)		(451	)		(1,066	)
Gain on forgiveness of Paycheck Protection Program note		—			—			2,946			—
Gain on investment		611			—			611			—
Foreign currency losses, net		(48	)		(175	)		(2	)		(119	)
Income (loss) before income tax provision	$	2,561		$	397		$	3,635		$	(4,308	)

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Geographic Information

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Americas	$	19,667		$	15,050		$	49,023		$	42,588
Europe and the Middle East		3,223			2,082			9,309			7,312
Asia-Pacific		6,207			7,727			16,920			12,184
Total	$	29,097		$	24,859		$	75,252		$	62,084
Percentage of net revenue:
Americas		68	%		61	%		65	%		69	%
Europe and the Middle East		11	%		8	%		12	%		12	%
Asia-Pacific		21	%		31	%		23	%		19	%
Total		100	%		100	%		100	%		100	%

Concentration of Credit Risk

No customer accounted for 10% or more of net revenue for either of the three or nine months ended September 30, 2021 or 2020. As of September 30, 2021, one customer accounted for 10% of accounts receivable. No customer accounted for 10% of net accounts receivable as of December 31, 2020.

Long-lived assets by geographic location as of September 30, 2021 and December 31, 2020 are as follows (in thousands):

	September 30,		December 31,
	2021		2020
Property and equipment, net:
Americas	$	587	$	606
Europe and the Middle East		330		73
Asia-Pacific		3,214		2,148
Total property and equipment, net	$	4,131	$	2,827
Operating lease ROU assets:
Americas	$	1,504	$	2,100
Europe and the Middle East		138		224
Asia-Pacific		728		1,081
Total operating lease right-of-use assets	$	2,370	$	3,405

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14. Restructuring and Severance  

 Restructuring expenses incurred during the three and nine months ended September 30, 2021 of $99,000 and $761,000, respectively, consists of facility rental related costs of $67,000 and $523,000, respectively, and severance related costs of $32,000 and $238,000, respectively. Facility rental related costs during the nine months ended September 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.

Restructuring expenses incurred during the three and nine months ended September 30, 2020 of $163,000 and $1,645,000, respectively, consists of severance related costs of $145,000, and $229,000, respectively, and facility rental related costs associated with office space from a prior acquisition of $18,000 and $1,416,000, respectively. The facility rental related costs included a charge of $1,199,000 associated with the impairment of the ROU operating lease asset, which was subleased, but went into default due to non-payment of rent beginning April 1, 2020. Sublease income of $198,000 was received in the first quarter of 2020, however, no rental payments were received during the three months ended September 30, 2020.

15. 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 $0.3 million and $1.0 million for the three and nine months ended September 30, 2021, respectively, and $0.4 million and $1.2 million for the three and nine months ended September 30, 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 five 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. As the Company’s leases do not provide an implicit rate, the present value of future lease payments is determined using the Company’s incremental borrowing rate based on information available at the lease commencement date.

The table below reconciles the undiscounted cash flows for the first five years and the total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of September 30, 2021 (in thousands):

	September 30,
	2021
2021 (remaining three months)	$	347
2022		1,357
2023		482
2024		242
2025		231
Thereafter		42
Total minimum lease payments		2,701
Less: amount of lease payments representing interest		(202	)
Present value of future minimum lease payments		2,499
Less: current liabilities under operating leases		(1,285	)
Long-term operating lease liabilities	$	1,214

As of September 30, 2021, the weighted average remaining lease term for the Company’s operating leases was 2.5 years, and the weighted average discount rate used to determine the present value of the Company’s operating leases was 6.3%. Sublease rental income due in the future under non-cancelable subleases was $1.6 million. As discussed in Note 14, Restructuring and Severance, sublease income is associated with office space acquired in an acquisition where the tenant went into default due to non-payment of rent beginning April 1, 2020. No cash has been received from the tenant since April 1, 2020.

Cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million and $1.2 million for the three and nine months ended September 30, 2021, respectively.

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16. Commitments and Contingencies

The following table summarizes the Company’s principal contractual commitments, excluding operating leases, as of September 30, 2021 (in thousands):

	Purchase Commitments		Other Contractual Commitments		Total
2021 (remaining three months)	$	21,774	$	143	$	21,917
2022		10,848		75		10,923
2023		695		—		695
Total	$	33,317	$	218	$	33,535

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

The following table summarizes the Company’s warranty accrual account activity during the three and nine months ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021			2020
Balance at beginning of period	$	352	$	401	$	321		$	407
Accruals for warranties charged to expense		—		36		33			125
Cost of warranty claims		—		37		(2	)		(58	)
Balance at end of period	$	352	$	474	$	352		$	474

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.

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

This Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other parts of this Quarterly Report on Form 10-Q (“Quarterly Report”) contain forward-looking statements, within the meaning of the safe harbor provisions under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. Forward-looking statements reflect current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “will,” “believe,” “could,” “should,” “would,” “may,” “anticipate,” “intend,” “plan,” “estimate,” “expect,” “project” or the negative of these terms or other similar expressions. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part II, Item 1A of this Report and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020 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, 2020. 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” and “us” as used herein refers collectively to Identiv, Inc. and its wholly-owned subsidiaries, unless otherwise stated.

Overview

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

We are leveraging our Radio Frequency Identification (“RFID”) based 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 Internet of Things (“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 Near-Field Communication (“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 2020, we saw several events that we believe are opening up the third wave of RFID deployments which is occurring 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 NFC Data Exchange Format (“NDEF”) 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, world class quality and automation, 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.  

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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. We 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 future proofing our facilities with the most recent expansion 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 may 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 may be adversely affected.

Effects of the COVID-19 Pandemic on our Business.

In March 2020, the World Health Organization characterized the coronavirus (“COVID-19”) a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy. In view of the rapidly changing business environment created by the uncertainty related to the depth and or duration of the impact resulting from COVID-19, we have experienced delays in our sales in select vertical markets and 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 progression of the pandemic and its effect on our financial position, results of operations, and cash flows.

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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).

	Three Months Ended September 30,									Nine Months Ended September 30,
	2021			2020			% Change			2021			2020			% Change
Identity:
Net revenue	$	18,745		$	15,429			21	%	$	47,199		$	36,938			28	%
Gross profit		5,211			4,694			11	%		12,133			11,287			7	%
Gross profit margin		28	%		30	%					26	%		31	%
Premises:
Net revenue		10,352			9,430			10	%		28,053			25,146			12	%
Gross profit		5,907			5,191			14	%		15,517			13,810			12	%
Gross profit margin		57	%		55	%					55	%		55	%
Total:
Net revenue		29,097			24,859			17	%		75,252			62,084			21	%
Gross profit		11,118			9,885			12	%		27,650			25,097			10	%
Gross profit margin		38	%		40	%					37	%		40	%
Operating expenses:
Research and development		2,088			2,380			(12	%)		6,556			7,398			(11	%)
Selling and marketing		4,471			4,245			5	%		12,682			12,978			(2	%)
General and administrative		2,400			2,118			13	%		7,120			6,460			10	%
Decrease in fair value of earnout liability		—			—		N/A				—			(261	)	N/A
Restructuring and severance		99			163			(39	%)		761			1,645			(54	%)
Total operating expenses:		9,058			8,906			2	%		27,119			28,220			(4	%)
Income (loss) from operations		2,060			979			110	%		531			(3,123	)		(117	%)
Non-operating income (expense):
Interest expense, net		(62	)		(407	)		(85	%)		(451	)		(1,066	)		(58	%)
Gain on forgiveness of Paycheck Protection Program note		—			—			—			2,946			—		N/A
Gain on investment		611			—		N/A				611			—		N/A
Foreign currency losses, net		(48	)		(175	)		(73	%)		(2	)		(119	)		(98	%)
Income (loss) before income tax provision	$	2,561		$	397			545	%	$	3,635		$	(4,308	)		(184	%)

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

	Three Months Ended September 30,									Nine Months Ended September 30,
	2021			2020			% Change				2021			2020			% Change
Americas	$	19,667		$	15,050			31	%		$	49,023		$	42,588			15	%
Europe and the Middle East		3,223			2,082			55	%			9,309			7,312			27	%
Asia-Pacific		6,207			7,727			(20	%)			16,920			12,184			39	%
Total	$	29,097		$	24,859			17	%		$	75,252		$	62,084			21	%
Percentage of net revenue:
Americas		68	%		61	%						65	%		69	%
Europe and the Middle East		11	%		8	%						12	%		12	%
Asia-Pacific		21	%		31	%						23	%		19	%
Total		100	%		100	%						100	%		100	%

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Net Revenue

Net revenue for the three months ended September 30, 2021 was $29.1 million, an increase of 17% compared with $24.9 million for the comparable period of 2020. Net revenue in the Americas was $19.7 million for the three months ended September 30, 2021, an increase of 31% compared to $15.1 million for the comparable period of 2020. Net revenue in Europe, the Middle East, and Asia-Pacific was $9.4 million for the three months ended September 30, 2021, a decrease of 4% compared with the comparable period of 2020.

Net revenue for the nine months ended September 30, 2021 was $75.3 million, an increase of 21% compared with $62.1 million for the comparable period of 2020. Net revenue in the Americas was $49.0 million for the nine months ended September 30, 2021, an increase of 15% compared to $42.6 million for the comparable period of 2020. Net revenue in Europe, the Middle East, and Asia-Pacific was $26.2 million for the nine months ended September 30, 2021, an increase of 35% compared with the comparable period of 2020.

Identity Segment

Net revenue in our Identity segment was $18.7 million for the three months ended September 30, 2021, an increase of 21% compared with $15.4 million for the comparable period of 2020. For the nine months ended September 30, 2021, net revenue in this segment was $47.2 million, an increase of 28% compared with $36.9 million for the comparable period of 2020. Net revenue in this segment for the three and nine months ended September 30, 2021 represented 64% and 63%, respectively, of our net revenue, compared to 62% and 59% in the comparable periods of the prior year.

Net revenue in the Americas was $10.2 million for the three months ended September 30, 2021, an increase of 64% compared with $6.2 million for the comparable period of 2020. For the nine months ended September 30, 2021 net revenue in the Americas was $23.4 million, an increase of 20% compared with $19.5 million for the comparable period of 2020. The increases were primarily due to higher sales of RFID transponder products and smart card readers associated with the increased demand for transponder and smart card reader products beginning in the second quarter of 2020 with shelter in place actions underway which drove the need for more work from home technologies. In addition, sales of access cards increased in the nine months ended September 30, 2021 as sales to commercial consumers in select market verticals, including retail, banking and travel, began to rebound in 2021.

Net revenue in Europe, the Middle East, and the Asia-Pacific for the three months ended September 30, 2021 was $8.6 million, a decrease of 7% compared with $9.2 million in the comparable period of 2020, while net revenue for the nine months ended September 30, 2021 was $23.8 million, an increase of 37% compared with $17.5 million in the comparable period of 2020. The decrease in the three months ended September 30, 2021 compared to the comparable period of 2020 was primarily attributable to the timing of project rollout schedules associated with RFID transponder sales to mobile phone and consumer products contract manufacturers in the Asia-Pacific, with a substantial portion of the products delivered in the first half of 2021 compared to the comparable period of 2020. The increase in the nine months ended September 30, 2021 is due to higher sales of RFID transponder products to mobile phone and consumer products contract manufacturers noted above.

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 70% and 67% of net revenue in these regions for the three and nine months ended September 30, 2021, respectively, compared to 72% and 62% in the comparable periods of the prior year. Smart card reader products comprised 20% and 22% of net revenue in these regions for the three and nine months ended September 30, 2021, respectively, compared to 19% and 26% in the comparable periods of the prior year.

Premises Segment

Net revenue in our Premises segment was $10.4 million for the three months ended September 30, 2021, an increase of 10% compared with $9.4 million for the comparable period of 2020. For the nine months ended September 30, 2021, net revenue in this segment was $28.1 million, an increase of 12% compared with $25.1 million for the comparable period of 2020. Net revenue in our Premises segment for the three and nine months ended September 30, 2021 represented 36% and 37%, respectively, of our net revenue, compared to 38% and 41% in the comparable periods of the prior year.

Net revenue in the Americas was $9.5 million for the three months ended September 30, 2021, an increase of 7% compared with $8.9 million for the comparable period of 2020. For the nine months ended September 30, 2021 net revenue in the Americas was $25.7 million, an increase of 11% compared with $23.1 million for the comparable period of 2020. The increases were primarily due to a rebound in sales of Hirsch Velocity hardware and software products to consumers in select commercial verticals, growth in sales to the federal government, and higher sales of video technology and analytics software products. Net revenue from our Premises solution 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, in the three and nine months ended September 30, 2021 represented 48% and 52%, respectively, of our net revenue in the Americas.

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Net revenue in Europe, the Middle East, and Asia-Pacific for the three months ended September 30, 2021 was $0.9 million, an increase of 50% compared $0.6 million with the comparable period of 2020, while net revenue for the nine months ended September 30, 2021 was $2.4 million, an increase of 17% compared with $2.0 million in the comparable period of 2020. 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 (“OMB M-11-11”). 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.

More recently, in response to the new needs for health and safety in the physical security market overall, due to the COVID-19 pandemic, we have released products to address these trends. During 2020, we launched our contact tracing downloadable extension for our Velocity access system, our occupancy tracking system based on our 3VR platform, our MobilisID touchless reader and our temperature tracking tag. In addition, with the economic impact of the COVID-19 pandemic continuing to create uncertainty for our customers, we have released several products which are subscription based and which allow payments over time for our physical access and video solutions as a service.

Gross Profit and Gross Margin

Gross profit for the three months ended September 30, 2021 was $11.1 million, or 38% of net revenue, compared with $9.9 million, or 40% of net revenue in the comparable period of 2020. Gross profit for the nine months ended September 30, 2021 was $27.7 million, or 37% of net revenue, compared with $25.1 million, or 40% of net revenue in the comparable period of 2020. 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 in the three and nine months ended September 30, 2021 was $5.2 million and $12.1 million, respectively. Gross profit in the three and nine months ended September 30, 2020 was $4.7 million and $11.3 million, respectively. Gross profit margins in this segment decreased to 28% in the three months ended September 30, 2021 from 30% in the comparable period of 2020 and decreased to 26% in the nine months ended September 30, 2021 from 31% in the comparable period of 2020. The decreases were primarily attributable to near-term investments in technology and manufacturing processes and systems, as well as changes in product mix, with a higher proportion of lower margin RFID transponder product sales in 2021 compared to the comparable period in 2020.

Premises Segment

In our Premises segment, gross profit was $5.9 million in the three months ended September 30, 2021 compared with $5.2 million in the comparable period of 2020. Gross profit margins in this segment increased to 57% in the three months ended September 30, 2021 from 55% in the comparable period of 2020 primarily due to product mix, with higher sales of higher margin video analytics software compared to the comparable period in 2020. Gross profit was $15.5 million in the nine months ended September 30, 2021 compared with $13.8 million in the comparable period of 2020. Gross profit margins in this segment in the nine months ended September 30, 2021 were comparable to the comparable period in 2020.

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 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.

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Operating Expenses

Information about our operating expenses for the three and nine months ended September 30, 2021 and 2020 is set forth below (dollars in thousands).

Research and Development

	Three Months Ended September 30,									Nine Months Ended September 30,
	2021			2020			% Change			2021			2020			% Change
Research and development	$	2,088		$	2,380			(12	%)	$	6,556		$	7,398			(11	%)
as a % of net revenue		7	%		10	%					9	%		12	%

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 and nine months ended September 30, 2021 decreased compared to the comparable prior year periods primarily due to lower headcount and related costs, partially offset by higher external contractor costs.

Selling and Marketing

	Three Months Ended September 30,									Nine Months Ended September 30,
	2021			2020			% Change			2021			2020			% Change
Selling and marketing	$	4,471		$	4,245			5	%	$	12,682		$	12,978			(2	%)
as a % of net revenue		15	%		17	%					17	%		21	%

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 for the three months ended September 30, 2021 increased compared to the comparable prior year period primarily due to higher tradeshow and advertising costs, partially offset by lower headcount and related costs and lower amortization expense associated with intangible assets that were fully amortized in the fourth quarter of 2020. Selling and marketing expenses for the nine months ended September 30, 2021 decreased compared to the prior year period primarily due to the lower intangible asset amortization noted above, and higher recruiting fees in the prior year period. These decreases were partially offset by higher tradeshow and advertising costs in 2021.

General and Administrative

	Three Months Ended September 30,									Nine Months Ended September 30,
	2021			2020			% Change			2021			2020			% Change
General and administrative	$	2,400		$	2,118			13	%	$	7,120		$	6,460			10	%
as a % of net revenue		8	%		9	%					9	%		10	%

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

General and administrative expenses for the three and nine months ended September 30, 2021 increased compared to the prior year periods primarily due to higher professional fees and external contractor costs, as well as an increase in bad debt expense.

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Decrease in Fair Value of Earnout Liability

	Three Months Ended September 30,					Nine Months Ended September 30,
	2021		2020		% Change	2021		2020			% Change
Decrease in fair value of earnout liability	$	—	$	—	N/A	$	—	$	(261	)	N/A

The decrease in earnout consideration expense of $261,000 during the nine months ended September 30, 2020 was attributable to the decrease in the fair value of the earnout liability associated with a prior acquisition, representing the settlement date fair value of the shares issued and the recorded earnout liability.

Restructuring and Severance

	Three Months Ended September 30,							Nine Months Ended September 30,
	2021		2020		% Change			2021		2020		% Change
Restructuring and severance	$	99	$	163		(39	%)	$	761	$	1,645		(54	%)

Restructuring expenses incurred during the three and nine months ended September 30, 2021 consists of facility rental related costs of $67,000 and $523,000, respectively, and severance related costs of $32,000 and $238,000, respectively. Facility rental related costs during the nine months ended September 30, 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.

Restructuring expenses incurred during the three and nine months ended September 30, 2020 consists of severance related costs of $145,000 and $229,000, respectively, and facility rental related costs associated with office space from a prior acquisition of $18,000 and $1,416,000, respectively, which included a charge of $1,199,000 associated with the impairment of the right-of-use operating lease asset, which was subleased, but went into default due to non-payment of rent beginning April 1, 2020. Sublease income of $198,000 was received in the first quarter of 2020, however, since the first quarter of 2020, no rental payments have been received.

Non-operating Income (Expense)

Information about our non-operating income (expense) for the three and nine months ended September 30, 2021 and 2020 is set forth below (dollars in thousands).

	Three Months Ended September 30,									Nine Months Ended September 30,
	2021			2020			% Change			2021			2020			% Change
Interest expense, net	$	(62	)	$	(407	)		(85	%)	$	(451	)	$	(1,066	)		(58	%)
Gain on forgiveness of Paycheck Protection Program note	$	—		$	—			—		$	2,946		$	—		N/A
Gain on investment	$	611		$	—		N/A			$	611		$	—		N/A
Foreign currency losses, net	$	(48	)	$	(175	)		(73	%)	$	(2	)	$	(119	)		(98	%)

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 for the three and nine months ended September 30, 2021 compared to the comparable periods of 2020 was primarily attributable to lower borrowings outstanding under our revolving loan facility with our lender, and lower amounts outstanding under our contractual payment obligation. See Note 7, Contractual Payment Obligation and Note 8, Financial Liabilities, in the accompanying notes to our unaudited condensed consolidated financial statements for more information.

On May 7, 2021, the principal and accrued interest amounts outstanding of approximately $2.9 million under our promissory note pursuant to the Paycheck Protection Program had been forgiven. As a result, we recorded a gain on forgiveness of the promissory note of $2.9 million in the second quarter of 2021.

Gain on investment of $611,000 in the third quarter of 2021 was from the 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.

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Income Tax Provision

	Three Months Ended September 30,									Nine Months Ended September 30,
	2021			2020			% Change			2021			2020			% Change
Income tax provision	$	(21	)	$	(8	)		163	%	$	(94	)	$	(99	)		(5	%)
Effective tax rate		1	%		2	%					3	%		(2	%)

As of September 30, 2021, 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 three and nine months ended September 30, 2021 and 2020. The effective tax rates for the three and nine months ended September 30, 2021 and 2020 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.

Liquidity and Capital Resources

As of September 30, 2021, our working capital, defined as current assets less current liabilities, was $53.4 million, an increase of $41.5 million compared to $11.9 million as of December 31, 2020. As of September 30, 2021, our cash balance was $29.2 million.

Sale of Common Stock

On April 7, 2021, we sold an aggregate of 3,779,342 shares of our common stock at a public offering price of $10.65 per share in an underwritten public offering. We received net proceeds of approximately $37.7 million from the sale of the common stock in the public offering, after deducting the underwriting discount and other offering related expenses of $2.5 million.

East West Bank

On February 8, 2017, we entered into a loan and security agreement with East West Bank (“EWB”). Following subsequent amendments, on February 8, 2021 we amended and restated the Loan and Security Agreement in its entirety (the “Loan and Security Agreement”). The Loan and Security Agreement provides for a $20.0 million revolving loan facility subject to a borrowing base and a $4.0 million non-formula revolving loan facility that is not subject to a borrowing base. The maturity date of the main revolving loan facility is February 8, 2023. Our obligations under the Loan and Security Agreement are collateralized by substantially all of our assets. As of September 30, 2021, there were no amounts outstanding under our Loan and Security Agreement.

See Note 8, Financial Liabilities in the accompanying notes to our unaudited condensed consolidated financial statements for more information.

April 21 Funds

On May 5, 2020, we issued secured subordinated promissory notes in an aggregate principal amount of $4.0 million (the “Notes”) to 21 April Fund, LP and 21 April Fund, Ltd. (collectively referred to as the “April 21 Funds”) pursuant to a Note and Warrant Purchase Agreement entered into with the April 21 Funds (the “Note Purchase Agreement”). The Notes were collateralized by our assets, but subordinate to our obligations to EWB under the Loan and Security Agreement. Proceeds from the sale of the Notes were only to be used for expenses incurred by us in connection with our provisions of goods and services under a statement of work with a third party. The Notes had an initial term of nine months and did not bear interest during that period. However, if the Notes were not repaid on or before the nine-month anniversary of issuance, (a) the Notes would thereafter bear interest of 8% per annum, payable quarterly, and (b) additional warrants to purchase common stock would be issuable to the April 21 Funds for each month all or a portion of the Notes remained unpaid. In the event the Notes were not paid in full by the first anniversary of their issuance, May 5, 2021, they would thereafter bear interest of 12% per annum, payable quarterly, and additional warrants would be issuable to the April 21 Funds.

On February 5, 2021, we entered into an amendment to our secured subordinated promissory note with April 21 Funds, which extended the initial term of the Notes to March 31, 2021. As a result of the amendment, if the Notes were repaid on or before March 31, 2021, we would incur no further interest on the Notes, or be obligated to issue additional warrants. On March 31, 2021, April 21 Funds waived any additional warrants issuable, and interest payable, to April 21 Funds through May 5, 2021. On April 13, 2021, we repaid the remaining principal amount outstanding of $2.8 million.

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Paycheck Protection Program

On April 9, 2020, we entered into a promissory note (the “PPP Note”) under the Paycheck Protection Program established under Section 1102 of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Note was dated April 8, 2020 with EWB. We borrowed a principal amount of approximately $2.9 million. The interest on the PPP Note was 1.0% per annum. The PPP Note was payable two years from the date of the PPP Note, and there was no prepayment penalty. All interest which accrues during the initial six months of the loan period was deferred and payable on the maturity date of the PPP Note. Notes issued under the CARES Act may be eligible for forgiveness in whole or in part in accordance with Small Business Administration rules established for the Paycheck Protection Program. On May 7, 2021, the principal and accrued interest amounts outstanding of approximately $2.9 million under our promissory note pursuant to the Paycheck Protection Program had been forgiven. As a result, we recorded a gain on forgiveness of the PPP Note debt of $2.9 million in the second quarter of 2021.

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 September 30, 2021, the amount of cash included at such subsidiaries was $5.2 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.

While we recorded net income during the period, we have historically incurred operating losses and negative cash flows from operating activities, and we may incur losses in the future. As of September 30, 2021, we had a total accumulated deficit of $407.1 million.

We believe our existing cash balance, together with cash generated from operations and available credit under our Loan and Security 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 and Security 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.

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The following summarizes our cash flows for the nine months ended September 30, 2021 and 2020 (in thousands):

	Nine Months Ended September 30,
	2021			2020
Net cash provided by (used in) operating activities	$	5		$	(5,325	)
Net cash used in investing activities		(1,312	)		(928	)
Net cash provided by financing activities		19,560			8,976
Effect of exchange rates on cash and cash equivalents		(444	)		188
Net increase in cash and cash equivalents		17,809			2,911
Cash and cash equivalents at beginning of period		11,409			9,383
Cash and cash equivalents at end of period	$	29,218		$	12,294

Cash flows from operating activities

Cash provided by operating activities for the nine months ended September 30, 2021 of less than $0.1 million was primarily due to net income of $3.5 million, and adjustments for certain non-cash items of $0.4 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, offset by a decrease in cash from net changes in operating assets and liabilities of $3.9 million.

Cash used in operating activities for the nine months ended September 30, 2020 of $5.3 million was primarily due to net loss of $4.4 million, a decrease in cash from net changes in operating assets and liabilities of $6.9 million, partially offset by adjustments for certain non-cash items of $6.0 million, consisting primarily of impairment of right-of-use operating lease assets, decrease in fair value of earnout liability, depreciation, amortization, amortization of debt issuance costs, and stock-based compensation.

Cash flows from investing activities

Cash used in investing activities for the nine months ended September 30, 2021 of $1.3 million was primarily due to $1.9 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 the proceeds from an investment.

Cash used in investing activities for the nine months ended September 30, 2020 of $0.9 million related primarily to capital investment expenditures in our manufacturing facility in Singapore.

Cash flows from financing activities

Cash provided by financing activities during the nine months ended September 30, 2021 was primarily due to net proceeds of $37.7 million received from the sale of common stock in our underwritten public offering, partially offset by net repayments under our revolving loan facility of $14.6 million, repayments of April 21 Funds promissory notes of $2.8 million and taxes paid related to net share settlement of restricted stock units of $0.9 million.

Cash provided by financing activities during the nine months ended September 30, 2020 was primarily due to the issuance of secured subordinated promissory notes to April 21 Funds of $4.0 million, proceeds received under the Payment Protection Program of $2.9 million, and net borrowings under our revolving loan and term loan facilities of $2.7 million, partially offset by taxes paid related to net share settlement of restricted stock units of $0.6 million.

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Off-Balance Sheet Arrangements

We have not entered into off-balance sheet arrangements, or issued guarantees to third parties, except as disclosed in Note 7, Contractual Payment Obligation.

Climate Change

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

Critical Accounting Policies and Estimates

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

During the three months ended September 30, 2021, 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, 2020.

Recent Accounting Pronouncements

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

10b5-1 Trading Plans

From time to time, we expect our executive officers and directors will enter into written trading plans pursuant to Rule 10b5-1 of the Securities and Exchange Act of 1934.  

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, or Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Interim 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 Interim Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Controls over Financial Reporting

We have made no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended September 30, 2021, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

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PART II: OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

Our business and results of operations are subject to numerous risks, uncertainties, and other factors that you should be aware of. You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Part I - Item 1A (Risk Factors) in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Other than as discussed below, there have been no material changes from the risk factors disclosed in our 2020 Annual Report on Form 10-K. 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.

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 could 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 global semiconductor shortage in 2021 may 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 could 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.

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

During the nine months ended September 30, 2021 and 2020, we repurchased 68,519 shares and 130,745 shares, respectively, of common stock surrendered to us to satisfy tax withholding obligations in connection with the vesting of restricted stock units issued to employees.

39

Item 6. Exhibits

Exhibit Number	Description
31.1^	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2^	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32#	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
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)

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

^ Filed herewith.

40

SIGNATURES

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

	IDENTIV, INC.
November 10, 2021	By:	/S/ Steven Humphreys
		Steven Humphreys
		Chief Executive Officer
		(Principal Executive Officer)
November 10, 2021	By:	/S/ Ed Kirnbauer
		Ed Kirnbauer
		Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)

41

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven Humphreys, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Identiv, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 10, 2021	/s/ Steven Humphreys
	Steven Humphreys
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ed Kirnbauer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Identiv, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 10, 2021	/s/ Ed Kirnbauer
	Ed Kirnbauer
	Interim Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven Humphreys, the Chief Executive Officer of Identiv, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) the Quarterly Report of Identiv, Inc. on Form 10-Q for the quarterly period ended September 30, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (2) the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Identiv, Inc.  

Date:  November 10, 2021	/s/ Steven Humphreys
	Steven Humphreys
	Chief Executive Officer
	(Principal Executive Officer)

I, Ed Kirnbauer, the Interim Chief Financial Officer of Identiv, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) the Quarterly Report of Identiv, Inc. on Form 10-Q for the quarterly period ended September 30, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (2) the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Identiv, Inc.  

Date:  November 10, 2021	/s/ Ed Kirnbauer
	Ed Kirnbauer
	Interim Chief Financial Officer
	(Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Nov. 04, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Trading Symbol	INVE
Entity Registrant Name	Identiv, Inc.
Entity Central Index Key	0001036044
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	000-29440
Entity Tax Identification Number	77-0444317
Entity Address, Address Line One	2201 Walnut Avenue
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Fremont
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94538
City Area Code	949
Local Phone Number	250-8888
Entity Common Stock, Shares Outstanding		22,206,839
Security12b Title	Common Stock, $0.001 par value per share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 29,218	$ 11,409
Accounts receivable, net of allowances of $395 and $178 as of September 30, 2021 and December 31, 2020, respectively	19,263	18,927
Inventories	21,617	20,296
Prepaid expenses and other current assets	4,107	2,813
Total current assets	74,205	53,445
Property and equipment, net	4,131	2,827
Operating lease right-of-use assets	2,370	3,405
Intangible assets, net	6,725	7,563
Goodwill	10,268	10,266
Other assets	1,113	1,171
Total assets	98,812	78,677
Current liabilities:
Accounts payable	9,311	10,964
Contractual payment obligation	269	1,040
Financial liabilities, net of debt issuance costs of $0 and $59 as of September 30, 2021 and December 31, 2020, respectively		20,084
Operating lease liabilities	1,285	1,279
Deferred revenue	2,343	1,981
Accrued compensation and related benefits	3,162	2,985
Other accrued expenses and liabilities	4,473	3,240
Total current liabilities	20,843	41,573
Long-term operating lease liabilities	1,214	2,272
Long-term deferred revenue	266	385
Other long-term liabilities	237	258
Total liabilities	22,560	44,488
Commitments and contingencies (see Note 16)
Stockholders' equity:
Common stock, $0.001 par value: 50,000 shares authorized; 23,641 and 19,450 shares issued and 22,178 and 18,055 shares outstanding as of September 30, 2021 and December 31, 2020, respectively	24	19
Additional paid-in capital	492,015	452,129
Treasury stock, 1,463 and 1,395 shares as of September 30, 2021 and December 31, 2020, respectively	(10,853)	(9,933)
Accumulated deficit	(407,068)	(410,609)
Accumulated other comprehensive income	2,129	2,578
Total stockholders' equity	76,252	34,189
Total liabilities and stockholders' equity	98,812	78,677
Series B Convertible Preferred Stock
Stockholders' equity:
Series B convertible preferred stock, $0.001 par value: 5,000 shares authorized; 5,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020	5	5
Total stockholders' equity	$ 5	$ 5

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Accounts receivable, allowances	$ 395	$ 178
Debt instrument debt issuance costs, current	$ 0	$ 59
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	23,641,000	19,450,000
Common stock, shares outstanding	22,178,000	18,055,000
Treasury stock, shares	1,463,000	1,395,000
Series B Convertible Preferred Stock
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, issued	5,000,000	5,000,000
Preferred stock, outstanding	5,000,000	5,000,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Net revenue	$ 29,097	$ 24,859	$ 75,252	$ 62,084
Cost of revenue	17,979	14,974	47,602	36,987
Gross profit	11,118	9,885	27,650	25,097
Operating expenses:
Research and development	2,088	2,380	6,556	7,398
Selling and marketing	4,471	4,245	12,682	12,978
General and administrative	2,400	2,118	7,120	6,460
Decrease in fair value of earnout liability				(261)
Restructuring and severance	99	163	761	1,645
Total operating expenses	9,058	8,906	27,119	28,220
Income (loss) from operations	2,060	979	531	(3,123)
Non-operating income (expense):
Interest expense, net	(62)	(407)	(451)	(1,066)
Gain on forgiveness of Paycheck Protection Program note			2,946
Gain on investment	611		611
Foreign currency losses, net	(48)	(175)	(2)	(119)
Income (loss) before income tax provision	2,561	397	3,635	(4,308)
Income tax provision	(21)	(8)	(94)	(99)
Net income (loss)	2,540	389	3,541	(4,407)
Other comprehensive income (loss):
Foreign currency translation adjustment	(229)	369	(449)	104
Comprehensive income (loss)	$ 2,311	$ 758	$ 3,092	$ (4,303)
Net income (loss) per common share:
Basic	$ 0.10	$ 0.01	$ 0.13	$ (0.29)
Diluted	$ 0.09	$ 0.01	$ 0.12	$ (0.29)
Weighted average shares used in computing net income (loss) per common share:
Basic	22,448	18,144	20,948	17,868
Diluted	29,330	18,650	21,861	17,868

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Series B Convertible Preferred Stock	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Deficit	Accumulated Other Comprehensive Income
Beginning Balances at Dec. 31, 2019	$ 35,466	$ 5	$ 18	$ 447,965	$ (9,043)	$ (405,504)	$ 2,025
Beginning Balances (in shares) at Dec. 31, 2019		5,000,000	16,986,000
Net income (loss)	(4,407)					(4,407)
Unrealized income (loss) from foreign currency translation adjustments	104						104
Issuance of common stock in connection with vesting of stock awards (shares)			505,000
Stock-based compensation	2,182			2,182
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units	(604)				(604)
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units (shares)			(131,000)
Issuance of common stock in connection with warrant exercise			$ 1	(1)
Issuance of common stock in connection with warrant exercise (shares)			387,000
Issuance of common stock in connection with earnout liability	489			489
Issuance of common stock in connection with earnout liability (shares)			157,000
Issuance of shares to non-employees	304			304
Issuance of shares to non-employees (shares)			62,000
Issuance of warrants	332			332
Ending Balances at Sep. 30, 2020	33,866	$ 5	$ 19	451,271	(9,647)	(409,911)	2,129
Ending Balances (in shares) at Sep. 30, 2020		5,000,000	17,966,000
Beginning Balances at Jun. 30, 2020	32,513	$ 5	$ 19	450,480	(9,451)	(410,300)	1,760
Beginning Balances (in shares) at Jun. 30, 2020		5,000,000	17,860,000
Net income (loss)	389					389
Unrealized income (loss) from foreign currency translation adjustments	369						369
Issuance of common stock in connection with vesting of stock awards (shares)			143,000
Stock-based compensation	791			791
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units	(196)				(196)
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units (shares)			(37,000)
Ending Balances at Sep. 30, 2020	33,866	$ 5	$ 19	451,271	(9,647)	(409,911)	2,129
Ending Balances (in shares) at Sep. 30, 2020		5,000,000	17,966,000
Beginning Balances at Dec. 31, 2020	34,189	$ 5	$ 19	452,129	(9,933)	(410,609)	2,578
Beginning Balances (in shares) at Dec. 31, 2020		5,000,000	18,055,000
Net income (loss)	3,541					3,541
Unrealized income (loss) from foreign currency translation adjustments	(449)						(449)
Issuance of common stock in connection with vesting of stock awards (shares)			366,000
Stock-based compensation	2,027			2,027
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units	(920)				(920)
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units (shares)			(68,000)
Issuance of common stock in connection with warrant exercise (shares)			28,000
Issuance of common stock in connection with public offering	37,715		$ 4	37,711
Issuance of common stock in connection with public offering (shares)			3,779,000
Proceeds from exercise of stock options	$ 149		$ 1	148
Proceed of exercise of stock options (shares)	18,651		18,000
Ending Balances at Sep. 30, 2021	$ 76,252	$ 5	$ 24	492,015	(10,853)	(407,068)	2,129
Ending Balances (in shares) at Sep. 30, 2021		5,000,000	22,178,000
Beginning Balances at Jun. 30, 2021	73,690	$ 5	$ 23	491,431	(10,519)	(409,608)	2,358
Beginning Balances (in shares) at Jun. 30, 2021		5,000,000	22,123,000
Net income (loss)	2,540					2,540
Unrealized income (loss) from foreign currency translation adjustments	(229)						(229)
Issuance of common stock in connection with vesting of stock awards (shares)			73,000
Stock-based compensation	572			572
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units	(334)				(334)
Shares withheld in payment of taxes in connection with net share settlement of restricted stock units (shares)			(20,000)
Proceeds from exercise of stock options	13		$ 1	12
Proceed of exercise of stock options (shares)			2,000
Ending Balances at Sep. 30, 2021	$ 76,252	$ 5	$ 24	$ 492,015	$ (10,853)	$ (407,068)	$ 2,129
Ending Balances (in shares) at Sep. 30, 2021		5,000,000	22,178,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net income (loss)	$ 3,541	$ (4,407)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1,460	2,470
Gain on forgiveness of Paycheck Protection Program note	(2,946)
Gain on investment	(611)
Accretion of interest on contractual payment obligation	41	115
Amortization of debt issuance costs	101	321
Stock-based compensation expense	2,027	2,182
Impairment of right-of-use operating lease assets	281	1,199
Decrease in fair value of earnout liability		(261)
Changes in operating assets and liabilities:
Accounts receivable	(346)	(2,035)
Inventories	(1,332)	(4,244)
Prepaid expenses and other assets	(1,123)	(875)
Accounts payable	(1,639)	962
Contractual payment obligation liability	(812)	(590)
Deferred revenue	243	(158)
Accrued expenses and other liabilities	1,120	(4)
Net cash provided by (used in) operating activities	5	(5,325)
Cash flows from investing activities:
Capital expenditures	(1,923)	(928)
Proceeds from investment	611
Net cash used in investing activities	(1,312)	(928)
Cash flows from financing activities:
Proceeds from the sale of common stock, net of issuance costs	37,715
Taxes paid related to net share settlement of restricted stock units	(920)	(604)
Proceeds from exercise of stock options	149
Net cash provided by financing activities	19,560	8,976
Effect of exchange rates on cash and cash equivalents	(444)	188
Net increase in cash and cash equivalents	17,809	2,911
Cash and cash equivalents at beginning of period	11,409	9,383
Cash and cash equivalents at end of period	29,218	12,294
Supplemental Disclosures of Cash Flow Information:
Interest paid	329	733
Taxes paid, net	61	44
Non-cash investing and financing activities:
Common stock issued to settle vendor liability		304
Common stock issued to settle earnout liability		489
Fair value of warrants issued in connection with financial liabilities		332
Reclassification of debt issuance costs to prepaid expenses and other current assets	114
April 21 Funds Promissory Notes
Cash flows from financing activities:
Repayments under revolving loan facility, East West Bank term loan and April 21 Funds promissory note, net of issuance costs	(2,800)
Proceeds from promissory notes		4,000
Paycheck Protection Program Note
Cash flows from financing activities:
Proceeds from promissory notes		2,915
Revolving Loan Facility
Cash flows from financing activities:
Borrowings under revolving loan facility and East West Bank term loan, net of issuance costs	3,964	2,762
Repayments under revolving loan facility, East West Bank term loan and April 21 Funds promissory note, net of issuance costs	$ (18,548)	(3,347)
East West Bank Term Loan
Cash flows from financing activities:
Borrowings under revolving loan facility and East West Bank term loan, net of issuance costs		4,500
Repayments under revolving loan facility, East West Bank term loan and April 21 Funds promissory note, net of issuance costs		$ (1,250)

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Identiv, Inc. and its wholly owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the fiscal year 2020 condensed consolidated financial statements to conform to the fiscal year 2021 presentation. The reclassifications had no impact on net income (loss), total assets, total liabilities, or stockholders’ equity.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s unaudited condensed consolidated financial statements have been included. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any future period. The unaudited condensed consolidated balance sheet as of December 31, 2020 has been derived from audited consolidated financial statements at that date, but does not include all disclosures required by U.S. GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors,” and the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

XML

Significant Accounting Policies and Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Significant Accounting Policies and Recent Accounting Pronouncements

2. Significant Accounting Policies and Recent Accounting Pronouncements

Significant Accounting Policies

No material changes have been made to the Company's significant accounting policies disclosed in Note 2, Significant Accounting Policies and Recent Accounting Pronouncements, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“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.

Additionally, ASU No. 2019-10 defers the effective date for the adoption of the new standard on credit losses for public filers that are considered small reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which will be fiscal 2023 for the Company if it continues to be classified as a smaller reporting company. 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. While the Company is currently evaluating the impact of Topic 326, the Company does not expect the adoption of the ASU to have a material impact on its consolidated financial statements.

In December 2019, FASB issued ASU 2019-12, Income Taxes (740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for incomes taxes by removing certain exceptions to the general principles in Topic 740 and amending existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard on January 1, 2021, and it did not have a material impact on the Company’s condensed consolidated financial statements.   

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Revenue

9 Months Ended

Sep. 30, 2021

Revenue From Contract With Customer [Abstract]

Revenue

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 Revenue — 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 delivery 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, physical possession, 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 Accounting Standards Codification (“ASC”) 460, Guarantees (“ASC 460”).  

Software License Revenue — 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 upon delivery of the license to the customer, while the software updates and technical support revenue is recognized over the term of the support contract.

Subscription Revenue — Subscription revenue 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 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. 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 Revenue — Support and maintenance contract revenue consists 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 Revenue — 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.

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

Significant Judgments

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 Revenue

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

	Three Months Ended September 30,
	2021						2020
	Point-in- Time		Over Time		Total		Point-in- Time		Over Time		Total
Americas	$	18,820	$	847	$	19,667	$	14,217	$	833	$	15,050
Europe and the Middle East		3,131		92		3,223		1,995		87		2,082
Asia-Pacific		6,207		—		6,207		7,727		—		7,727
Total	$	28,158	$	939	$	29,097	$	23,939	$	920	$	24,859

	Nine Months Ended September 30,
	2021						2020
	Point-in- Time		Over Time		Total		Point-in- Time		Over Time		Total
Americas	$	46,598	$	2,425	$	49,023	$	39,587	$	3,001	$	42,588
Europe and the Middle East		9,026		283		9,309		7,033		279		7,312
Asia-Pacific		16,920		—		16,920		12,184		—		12,184
Total	$	72,544	$	2,708	$	75,252	$	58,804	$	3,280	$	62,084

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 to software maintenance contracts. Payment terms and conditions vary by contract type, although payment is typically due within 30 to 90 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 nine months ended September 30, 2021 and September 30, 2020 were as follows (in thousands):

	Nine Months Ended September 30,
	2021			2020
Deferred revenue, beginning of period	$	2,366		$	2,833
Deferral of revenue billed in current period, net of recognition		1,992			1,719
Recognition of revenue deferred in prior periods		(1,749	)		(1,877	)
Deferred revenue, end of period	$	2,609		$	2,675

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 $0.6 million as of September 30, 2021. Since the Company typically invoices customers at contract inception, this amount is included in the deferred revenue balance. As of September 30, 2021, the Company expects to recognize 23% of the revenue related to these unsatisfied performance obligations during the remainder of 2021, 48% during 2022, and 29% thereafter.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain sales incentive programs (i.e., commissions) meet the requirements to be capitalized. Capitalized incremental costs related to contracts are amortized over the respective contract periods. For the nine months ended September 30, 2021, total capitalized costs to obtain contracts were immaterial.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

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 September 30, 2021 and December 31, 2020, the only assets measured and recognized at fair value on a recurring basis were nominal cash equivalents. As of September 30, 2021 and December 31, 2020, there were no liabilities measured and recognized at fair value on a recurring basis, other than contingent consideration related to prior acquisitions as of December 31, 2020 which had no fair value.

 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 September 30, 2021 and December 31, 2020, 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 condensed consolidated balance sheets.

In the third quarter of 2021, the Company received proceeds of approximately $611,000 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 September 30, 2021 and December 31, 2020, there were no liabilities that are measured and recognized at fair value on a non-recurring basis.

Assets and Liabilities Not Measured at Fair Value

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

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

5. Goodwill and Intangible Assets

Goodwill

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

	Identity		Premises		Total
Balance as of December 31, 2020	$	3,554	$	6,712	$	10,266
Currency translation adjustment		—		2		2
Balance as of September 30, 2021	$	3,554	$	6,714	$	10,268

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. 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 nine months ended September 30, 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):

				Developed			Customer
	Trademarks			Technology			Relationships			Total
Amortization period (in years)	5			10 – 12			4 – 12
Gross carrying amount as of September 30, 2021	$	763		$	9,127		$	15,774		$	25,664
Accumulated amortization		(497	)		(6,106	)		(12,336	)		(18,939	)
Intangible assets, net as of September 30, 2021	$	266		$	3,021		$	3,438		$	6,725
Gross carrying amount as of December 31, 2020	$	765		$	9,123		$	15,771		$	25,659
Accumulated amortization		(382	)		(5,773	)		(11,941	)		(18,096	)
Intangible assets, net as of December 31, 2020	$	383		$	3,350		$	3,830		$	7,563

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 it its amortizable intangible assets for impairment at the end of each reporting period. The Company did not identify any impairment indicators during the nine months ended September 30, 2021 and 2020.

The following table summarizes the amortization expense included in the unaudited condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020, respectively (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenue	$	114	$	223	$	340	$	669
Selling and marketing		168		419		503		1,254
Total	$	282	$	642	$	843	$	1,923

The estimated annual future amortization expense for purchased intangible assets with definite lives as of September 30, 2021 was as follows (in thousands):

2021 (remaining three months)	$	281
2022		1,120
2023		1,043
2024		967
2025		967
Thereafter		2,347
Total	$	6,725

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Balance Sheet Components

9 Months Ended

Sep. 30, 2021

Statement Of Financial Position [Abstract]

Balance Sheet Components

6. Balance Sheet Components

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

	September 30,		December 31,
	2021		2020
Raw materials	$	8,089	$	6,518
Work-in-progress		2		34
Finished goods		13,526		13,744
Total	$	21,617	$	20,296

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

	September 30,			December 31,
	2021			2020
Building and leasehold improvements	$	1,361		$	1,498
Furniture, fixtures and office equipment		1,354			1,295
Plant and machinery		13,076			11,429
Purchased software		2,282			2,191
Total		18,073			16,413
Accumulated depreciation		(13,942	)		(13,586	)
Property and equipment, net	$	4,131		$	2,827

The Company recorded depreciation expense of $0.2 million during the three months ended September 30, 2021 and 2020, respectively, and $0.6 million during the nine months ended September 30, 2021 and 2020, respectively.

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

	September 30,		December 31,
	2021		2020
Rental payments due landlord	$	734	$	158
Accrued professional fees		717		586
Accrued restructuring		411		801
Customer deposits		386		72
Accrued warranties		352		321
Other accrued expenses		1,873		1,302
Total	$	4,473	$	3,240

The rental payments due landlord relate to leased office space acquired in a prior acquisition. The office space was subleased, but the tenant went into default for non-payment beginning April 1, 2020. The Company is currently in active negotiations with the lessor to negotiate a settlement of the outstanding lease obligation.

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Contractual Payment Obligation

9 Months Ended

Sep. 30, 2021

Related Party Transactions [Abstract]

Contractual Payment Obligation

7. Contractual Payment Obligation

Hirsch Electronics Corporation (“Hirsch”) Acquisition – Secure Keyboards and Secure Networks. Prior to the Company’s acquisition of Hirsch in 2009, in November 1994, Hirsch had entered into a settlement agreement (the “1994 Settlement Agreement”) with two limited partnerships, Secure Keyboards, Ltd. (“Secure Keyboards”) and Secure Networks, Ltd. (“Secure Networks”). On April 8, 2009, the 1994 Settlement Agreement was amended and restated to replace the royalty-based payment arrangement with an installment payment schedule with contractual payments to be made in future periods through 2021 (the “2009 Settlement Agreement”). On April 30, 2009, as part of the acquisition of Hirsch, the Company provided Secure Keyboards and Secure Networks with a limited guarantee of Hirsch’s payment obligation under the 2009 Settlement Agreement.   

On April 13, 2020, the Company, Secure Keyboards, and Secure Networks, amended the 2009 Settlement Agreement. The amendment reduced the amount of quarterly payments due under the obligation in 2020, and requires three additional quarterly payments in 2021. The Company’s remaining payment obligation under the 2009 Settlement Agreement, as amended, was extended through October 31, 2021. The Company included approximately $8,000 and $41,000 of interest expense during the three and nine months ended September 30, 2021, respectively, and approximately $28,000 and $115,000 of interest expense during the three and nine months ended September 30, 2020, respectively, in its condensed consolidated statements of comprehensive income (loss) for interest accreted on the payment obligation.     

The payment obligation under the 2009 Settlement Agreement, as amended, as of September 30, 2021, is as follows (in thousands): 

2021 (remaining three months)	$	271
Present value discount factor		(2	)
Total	$	269

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Financial Liabilities

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Financial Liabilities

8. Financial Liabilities

Financial liabilities consist of (in thousands):

	September 30,		December 31,
	2021		2020
Revolving loan facility	$	—	$	14,428
April 21 Funds promissory notes		—		2,800
Paycheck Protection Program note		—		2,915
Total		—		20,143
Less: Current maturities of financial liabilities		—		(20,084	)
Less: Unamortized debt issuance costs		—		(59	)
Long-term financial liabilities	$	—	$	—

East West Bank

On February 8, 2017, the Company entered into a Loan and Security Agreement with East West Bank (“EWB”). Following subsequent amendments, on February 8, 2021 the Company amended and restated the Loan and Security Agreement in its entirety (the “Loan and Security Agreement”). The Loan and Security Agreement provides for a $20.0 million revolving loan facility subject to a borrowing base and a $4.0 million non-formula revolving loan facility that is not subject to a borrowing base. The Company’s obligations under the Loan and Security Agreement are collateralized by substantially all of its assets. As of September 30, 2021, the Company had repaid all amounts outstanding under its Loan and Security Agreement.

The maturity date of the main revolving loan facility is February 8, 2023. The non-formula revolving loan facility will terminate on February 7, 2022, however the Company may, at its option if certain conditions are met, convert prior to their maturity any loans under the non-formula revolving loan facility to a term loan that will fully amortize and mature on February 1, 2025. Advances under the revolving loan facilities and the term loan (if converted) will initially bear interest at a per annum rate equal to the prime rate as determined under the Loan and Security Agreement plus 0.25%. On April 30, 2021, the Company entered into an amendment to its Loan and Security Agreement which reduced the per annum interest rate to the prime interest rate.  

The Company may voluntarily prepay amounts outstanding under the revolving loan facilities and the term loan without prepayment charges. In the event the Loan and Security Agreement is terminated prior to February 8, 2023, the Company would be required to pay an early termination fee in the amount of 2.0% of the main revolving loan line if terminated prior to February 8, 2022 and 1% of the main revolving loan line thereafter. Additional borrowing requests under the revolving loan facilities are subject to various customary conditions precedent, including a borrowing base for the main revolving loan facility.

The Loan and Security 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. In addition, the Loan and Security Agreement contains financial covenants requiring that the Company (i) hold $5 million in unrestricted cash in accounts with EWB, (ii) maintain a monthly minimum trailing six-month EBITDA of $0.6 million for the first two quarters of 2021 and $1.2 million thereafter and (iii) maintain, if the Company converts into the term loan and starting with the quarter ending March 31, 2022, a quarterly fixed charge coverage ratio of at least 1.35:1.00.

The Loan and Security Agreement contains customary events of default that entitle EWB to cause any or all of the Company’s indebtedness under it to become immediately due and payable. The events of default (some of which are subject to applicable grace or cure periods), include, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. Upon the occurrence and during the continuance of an event of default, EWB may terminate its lending commitment and/or declare all or any part of the unpaid principal of all loans, all interest accrued and unpaid thereon and all other amounts payable under the Loan and Security Agreement to be immediately due and payable.

As of September 30, 2021, the Company was in compliance with all financial covenants under the Loan and Security Agreement.

April 21 Funds

On May 5, 2020, the Company issued secured subordinated promissory notes in an aggregate principal amount of $4.0 million (the “Notes”) to 21 April Fund, LP and 21 April Fund, Ltd. (collectively referred to as the “April 21 Funds”) pursuant to a Note and Warrant Purchase Agreement entered into with the April 21 Funds (the “Note Purchase Agreement”). The Notes were collateralized by the Company’s assets, but subordinate to the Company’s obligations to EWB under its Loan and Security Agreement. Proceeds from the sale of the Notes were only to be used for expenses incurred by the Company in connection with its provisions of goods and services under a statement of work with a third party. The Notes had an initial term of nine months and did not bear interest during that period. If the Notes were not repaid on or before the nine-month anniversary of issuance, (a) the Notes would thereafter bear interest of 8% per annum, payable quarterly, and (b) additional warrants to purchase common stock would be issuable to the April 21 Funds for each month all or a portion of the Notes remain unpaid, as further detailed in the Note Purchase Agreement. In the event the Notes were not paid in full by the first anniversary of their issuance, May 5, 2021, they would thereafter bear interest of 12% per annum, payable quarterly, and additional warrants would be issuable to the April 21 Funds.

As discussed in Note 10, Stockholders’ Equity, the fair value of the warrants issued to April 21 Funds was calculated using the Black Scholes pricing model using the following assumptions: estimated volatility of 63.2%, risk free interest rate of 0.24%, no dividend yield, and an expected life of three years. The relative fair value of the warrants of $290,000 was recorded as a direct reduction from the carrying amount of the Notes and was being amortized as interest expense over the term of the April 21 Funds promissory notes.

On February 5, 2021, the Company entered into an amendment to the secured subordinated promissory note with April 21 Funds, which extended the initial term of the Notes to March 31, 2021. As a result of the amendment, if the Notes were repaid on or before March 31, 2021, the Company would incur no further interest on the Notes, or be obligated to issue additional warrants. On March 31, 2021, April 21 Funds waived any additional warrants issuable, and interest payable, to April 21 Funds through May 5, 2021. On April 13, 2021, the Company repaid the remaining principal amount outstanding of $2.8 million.

Paycheck Protection Program

On April 9, 2020, the Company entered into a promissory note (the “PPP Note”) under the Paycheck Protection Program established under Section 1102 of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Note was dated April 8, 2020 with EWB. The Company borrowed a principal amount of approximately $2.9 million. The interest on the PPP Note was 1.0% per annum. The PPP Note was payable two years from the date of the PPP Note, and there was no prepayment penalty. All interest which accrues during the initial six months of the loan period was deferred and payable on the maturity date of the PPP Note. Notes issued under the CARES Act may be eligible for forgiveness in whole or in part in accordance with Small Business Administration rules established for the Paycheck Protection Program. On May 7, 2021, the principal and accrued interest amounts outstanding of approximately $2.9 million under the Company’s promissory note pursuant to the Paycheck Protection Program had been forgiven. As a result, the Company recorded a gain on forgiveness of debt of $2.9 million in the second quarter of 2021.

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Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

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

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

The Company generally is no longer subject to tax examinations for years prior to 2016. However, if loss carryforwards of tax years prior to 2016 are utilized in the U.S., these tax years may become subject to investigation by the tax authorities. While timing of the resolution and/or finalization of tax audits is uncertain, the Company does not believe that its unrecognized tax benefits would materially change in the next 12 months.

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (the “Act”) into law. The $1.9 trillion Act includes COVID-19 relief, as well as broader stimulus, but also includes several revenue-raising and business tax provisions. The CARES Act also includes several significant provisions for corporations, including the usage of net operating losses and payroll benefits. Several foreign (non-U.S.) jurisdictions in which the Company operates have taken similar economic stimulus measures. The Act and the CARES Act had no material impact on the Company’s condensed consolidated financial statements and disclosures.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Stockholders' Equity

10. Stockholders’ Equity

Series B Convertible Preferred Stock Dividend Accretion

The following tables summarize Series B convertible preferred stock and the accretion of dividend activity for the nine months ended September 30, 2021 and 2020 (in thousands):

	Nine Months Ended September 30,
	2021		2020
Series B Convertible Preferred Stock:
Balance at beginning of period	$	22,969	$	21,875
Cumulative dividends on Series B convertible preferred stock		859		818
Balance at end of period	$	23,828	$	22,693
Number of Common Shares Issuable Upon Conversion:
Number of shares at beginning of period		5,742		5,469
Cumulative dividends on Series B convertible preferred stock		215		204
Number of shares at end of period		5,957		5,673

Based on the current conversion price, the outstanding shares, including the accretion of dividends, of Series B convertible preferred stock as of September 30, 2021 would be convertible into 5,956,945 shares of the Company’s common stock. However, the conversion rate will be subject to adjustment in certain instances, such as if the Company issues shares of its common stock at a price less than $4.00 per common share, subject to a minimum conversion price of $3.27 per share. As of September 30, 2021, none of the contingent conditions to adjust the total common shares to convert the shares 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. 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).

Sale of Common Stock

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 $37.7 million from the sale of the common stock in the public offering, after deducting the underwriting discounts and other offering related expenses of $2.5 million.

Common Stock Warrants 

On February 8, 2017, the Company entered into a Loan and Security Agreement with EWB. In connection with the Loan and Security Agreement, the Company issued to EWB a warrant (the "EWB Warrant") to purchase up to 40,000 shares of the Company's common stock at a per share exercise price of $3.64 which were immediately exercisable for cash or by net exercise and expire on February 8, 2022. On May 5, 2020, the Company entered into an amendment to the Loan and Security Agreement, which included amending the EWB Warrant, reducing its exercise price from $3.64 to $3.50 per share and extending the expiration date of the EWB Warrant from February 8, 2022 to February 8, 2023. The Company calculated the fair value of the amended EWB Warrant using the Black Scholes pricing model using the following assumptions: estimated volatility of 63.2%, risk free interest rate of 0.24%, no dividend yield, and an expected life of three years. The fair value of the amended EWB Warrant of $42,000, as well as legal and administrative costs of $92,000, were recorded as a direct reduction from the carrying amount of the Revolving Loan Facility and amortized as interest expense over the remaining term of the Loan and Security Agreement. On February 11, 2021, EWB exercised their warrant on a cashless net exercise basis receiving 27,599 shares of the Company’s common stock.

On May 5, 2020, the Company entered into a Note and Warrant Purchase Agreement with the April 21 Funds, as discussed in Note 8, Financial Liabilities, in 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 (subject to early termination upon the closing of an acquisition); provided, that in the event that the Note is not paid in full by the nine-month anniversary of issuance, the term of the April 21 Funds Warrants shall be extended for a period of time equal to the period of time from such nine-month anniversary until the date the Note is fully paid (“Extension Warrants”). The Extension Warrants would have a term of three years from the date of issuance of the latest Extension Warrant to be issued (subject to early termination upon an acquisition). The shares of common stock issuable upon exercise of the April 21 Fund Warrants and any Extension Warrants that may be issued are entitled to the same resale registration rights granted to the April 21 Funds Warrants under the Stockholders Agreement dated December 21, 2017 in connection with the April 21 Funds previous purchase of certain securities of the Company.

Below is the summary of outstanding warrants issued by the Company as of September 30, 2021:

Warrant Type	Number of Shares Issuable Upon Exercise		Weighted Average Exercise Price		Issue Date	Expiration Date
April 21 Funds Warrants		275,000	$	3.50	May 5, 2020	May 5, 2023

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of September 30, 2021 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	1,527,411
Employee Stock Purchase Plan	293,888
Shares of common stock available for grant under the 2011 Plan	943,591
Warrants to purchase common stock	275,000
Shares of common stock issuable upon conversion of Series B convertible preferred stock	7,541,449
Total	10,581,339

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

11. Stock-Based Compensation

Stock Incentive Plan   

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

Stock Options

The following is a summary of stock option activity for the nine months ended September 30, 2021:

	Number Outstanding			Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance as of December 31, 2020		550,769		$	5.56		4.88	$	1,875,719
Granted		—			—
Cancelled or Expired		(4,642	)		21.39
Exercised		(18,651	)		7.94
Balance as of September 30, 2021		527,476		$	5.34		4.28	$	7,126,485
Vested or expected to vest as of     September 30, 2021		527,476		$	5.34		4.28	$	7,126,485
Exercisable as of September 30, 2021		527,476		$	5.34		4.28	$	7,126,485

The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s common stock as of September 31, 2021 and the stock option 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 September 30, 2021:

	Stock Options Outstanding						Stock Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$4.36 - $7.20		452,510		4.62	$	4.41		452,510	$	4.41
$7.50 - $11.25		61,317		2.48		10.19		61,317		10.19
$11.30 - $16.95		11,302		0.98		13.03		11,302		13.03
$19.70 - $29.55		2,347		0.36		20.98		2,347		20.98
$4.36 - $29.55		527,476		4.28	$	5.34		527,476	$	5.34

As of September 30, 2021, there was no unrecognized stock-based compensation expense related to stock options.   

Restricted Stock Units

The following is a summary of RSU activity for the nine months ended September 30, 2021:

	Number Outstanding			Weighted Average Fair Value
Unvested as of December 31, 2020		682,563		$	4.34
Granted		258,277			14.03
Vested		(335,631	)		5.57
Forfeited		(71,788	)		4.43
Unvested as of September 30, 2021		533,421		$	8.25
RSUs vested but not released		291,514		$	5.13

The fair value of the Company’s RSUs is calculated based upon the fair market value of the Company’s stock on the date of grant. As of September 30, 2021, there was $3.6 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.

Performance Stock Units

The Company granted 200,000 PSUs to a certain key employee during the year ended December 31, 2020, with a grant date fair value of $6.38 per share. The PSUs 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 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 nine months ended September 30, 2021:

	Number Outstanding
Unvested as of December 31, 2020		200,000
Granted		—
Vested		(23,500	)
Forfeited		(1,500	)
Unvested as of September 30, 2021		175,000

As of September 30, 2021, there was $1.1 million of unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a period of 1.3 years. No tax benefit was realized from PSUs for the nine months ended September 30, 2021.

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 income (loss) for the three and nine months ended September 30, 2021 and 2020 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenue	$	49	$	43	$	130	$	124
Research and development		109		159		364		506
Selling and marketing		155		127		382		371
General and administrative		259		462		1,151		1,181
Total	$	572	$	791	$	2,027	$	2,182

Restricted Stock Unit Net Share Settlements

During the nine months ended September 30, 2021 and 2020, the Company repurchased 68,519 and 130,745 shares, respectively, of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of RSUs issued to employees.

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Net Income (Loss) per Common Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Net Income (Loss) per Common Share

12. 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 for the three and nine months ended September 30, 2021 and September 30, 2021 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Basic net income (loss) per common share:
Numerator:
Net income (loss)	$	2,540		$	389		$	3,541		$	(4,407	)
Accretion of Series B convertible preferred stock dividends		(289	)		(275	)		(859	)		(818	)
Net income (loss) available to common stockholders	$	2,251		$	114		$	2,682		$	(5,225	)
Denominator:
Weighted average common shares outstanding - basic		22,448			18,144			20,948			17,868
Net income (loss) per common share - basic	$	0.10		$	0.01		$	0.13		$	(0.29	)
Diluted net income (loss) per common share:
Numerator:
Net income (loss) available to common stockholders	$	2,251		$	114		$	2,682		$	(5,225	)
Plus: accretion of Series B convertible preferred stock dividends, if dilutive		289			—			—			—
Net income (loss) available to common stockholders	$	2,540		$	114		$	2,682		$	(5,225	)
Denominator:
Weighted average common shares outstanding - basic		22,448			18,144			20,948			17,868
Dilutive securities:
Stock options, RSUs, and warrants		925			506			913			—
Convertible preferred shares		5,957			—			—			—
Weighted average common shares outstanding - diluted		29,330			18,650			21,861			17,868
Net income (loss) per common share - diluted	$	0.09		$	0.01		$	0.12		$	(0.29	)

The following common stock equivalents have been excluded from diluted net income (loss) per share for the three and nine months ended September 30, 2021 and 2020 because their inclusion would have been anti-dilutive (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Shares of common stock subject to outstanding RSUs		—		—		—		906
Shares of common stock subject to outstanding PSUs		175		—		175		—
Shares of common stock subject to outstanding stock options		2		102		2		553
Shares of common stock subject to outstanding warrants		—		—		—		315
Shares of common stock issuable upon conversion of Series B convertible preferred stock		—		5,673		5,957		5,673
Total		177		5,775		6,134		7,447

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Segment Reporting, Geographic Information, and Concentration of Credit Risk

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Reporting, Geographic Information, and Concentration of Credit Risk

13. Segment Reporting, Geographic Information, and Concentration of Credit Risk

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 for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Identity:
Net revenue	$	18,745		$	15,429		$	47,199		$	36,938
Gross profit		5,211			4,694			12,133			11,287
Gross profit margin		28	%		30	%		26	%		31	%
Premises:
Net revenue		10,352			9,430			28,053			25,146
Gross profit		5,907			5,191			15,517			13,810
Gross profit margin		57	%		55	%		55	%		55	%
Total:
Net revenue		29,097			24,859			75,252			62,084
Gross profit		11,118			9,885			27,650			25,097
Gross profit margin		38	%		40	%		37	%		40	%
Operating expenses:
Research and development		2,088			2,380			6,556			7,398
Selling and marketing		4,471			4,245			12,682			12,978
General and administrative		2,400			2,118			7,120			6,460
Decrease in fair value of earnout liability		—			—			—			(261	)
Restructuring and severance		99			163			761			1,645
Total operating expenses:		9,058			8,906			27,119			28,220
Income (loss) from operations		2,060			979			531			(3,123	)
Non-operating income (expense):
Interest expense, net		(62	)		(407	)		(451	)		(1,066	)
Gain on forgiveness of Paycheck Protection Program note		—			—			2,946			—
Gain on investment		611			—			611			—
Foreign currency losses, net		(48	)		(175	)		(2	)		(119	)
Income (loss) before income tax provision	$	2,561		$	397		$	3,635		$	(4,308	)

Geographic Information

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Americas	$	19,667		$	15,050		$	49,023		$	42,588
Europe and the Middle East		3,223			2,082			9,309			7,312
Asia-Pacific		6,207			7,727			16,920			12,184
Total	$	29,097		$	24,859		$	75,252		$	62,084
Percentage of net revenue:
Americas		68	%		61	%		65	%		69	%
Europe and the Middle East		11	%		8	%		12	%		12	%
Asia-Pacific		21	%		31	%		23	%		19	%
Total		100	%		100	%		100	%		100	%

Concentration of Credit Risk

No customer accounted for 10% or more of net revenue for either of the three or nine months ended September 30, 2021 or 2020. As of September 30, 2021, one customer accounted for 10% of accounts receivable. No customer accounted for 10% of net accounts receivable as of December 31, 2020.

Long-lived assets by geographic location as of September 30, 2021 and December 31, 2020 are as follows (in thousands):

	September 30,		December 31,
	2021		2020
Property and equipment, net:
Americas	$	587	$	606
Europe and the Middle East		330		73
Asia-Pacific		3,214		2,148
Total property and equipment, net	$	4,131	$	2,827
Operating lease ROU assets:
Americas	$	1,504	$	2,100
Europe and the Middle East		138		224
Asia-Pacific		728		1,081
Total operating lease right-of-use assets	$	2,370	$	3,405

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Restructuring and Severance

9 Months Ended

Sep. 30, 2021

Restructuring And Related Activities [Abstract]

Restructuring and Severance

14. Restructuring and Severance  

 Restructuring expenses incurred during the three and nine months ended September 30, 2021 of $99,000 and $761,000, respectively, consists of facility rental related costs of $67,000 and $523,000, respectively, and severance related costs of $32,000 and $238,000, respectively. Facility rental related costs during the nine months ended September 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.

Restructuring expenses incurred during the three and nine months ended September 30, 2020 of $163,000 and $1,645,000, respectively, consists of severance related costs of $145,000, and $229,000, respectively, and facility rental related costs associated with office space from a prior acquisition of $18,000 and $1,416,000, respectively. The facility rental related costs included a charge of $1,199,000 associated with the impairment of the ROU operating lease asset, which was subleased, but went into default due to non-payment of rent beginning April 1, 2020. Sublease income of $198,000 was received in the first quarter of 2020, however, no rental payments were received during the three months ended September 30, 2020.

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Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

15. 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 $0.3 million and $1.0 million for the three and nine months ended September 30, 2021, respectively, and $0.4 million and $1.2 million for the three and nine months ended September 30, 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 five 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. As the Company’s leases do not provide an implicit rate, the present value of future lease payments is determined using the Company’s incremental borrowing rate based on information available at the lease commencement date.

The table below reconciles the undiscounted cash flows for the first five years and the total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of September 30, 2021 (in thousands):

	September 30,
	2021
2021 (remaining three months)	$	347
2022		1,357
2023		482
2024		242
2025		231
Thereafter		42
Total minimum lease payments		2,701
Less: amount of lease payments representing interest		(202	)
Present value of future minimum lease payments		2,499
Less: current liabilities under operating leases		(1,285	)
Long-term operating lease liabilities	$	1,214

As of September 30, 2021, the weighted average remaining lease term for the Company’s operating leases was 2.5 years, and the weighted average discount rate used to determine the present value of the Company’s operating leases was 6.3%. Sublease rental income due in the future under non-cancelable subleases was $1.6 million. As discussed in Note 14, Restructuring and Severance, sublease income is associated with office space acquired in an acquisition where the tenant went into default due to non-payment of rent beginning April 1, 2020. No cash has been received from the tenant since April 1, 2020.

Cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million and $1.2 million for the three and nine months ended September 30, 2021, respectively.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

16. Commitments and Contingencies

The following table summarizes the Company’s principal contractual commitments, excluding operating leases, as of September 30, 2021 (in thousands):

	Purchase Commitments		Other Contractual Commitments		Total
2021 (remaining three months)	$	21,774	$	143	$	21,917
2022		10,848		75		10,923
2023		695		—		695
Total	$	33,317	$	218	$	33,535

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

The following table summarizes the Company’s warranty accrual account activity during the three and nine months ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021			2020
Balance at beginning of period	$	352	$	401	$	321		$	407
Accruals for warranties charged to expense		—		36		33			125
Cost of warranty claims		—		37		(2	)		(58	)
Balance at end of period	$	352	$	474	$	352		$	474

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.

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Significant Accounting Policies and Recent Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“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.

Additionally, ASU No. 2019-10 defers the effective date for the adoption of the new standard on credit losses for public filers that are considered small reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which will be fiscal 2023 for the Company if it continues to be classified as a smaller reporting company. 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. While the Company is currently evaluating the impact of Topic 326, the Company does not expect the adoption of the ASU to have a material impact on its consolidated financial statements.

In December 2019, FASB issued ASU 2019-12, Income Taxes (740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for incomes taxes by removing certain exceptions to the general principles in Topic 740 and amending existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard on January 1, 2021, and it did not have a material impact on the Company’s condensed consolidated financial statements.   

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Revenue (Tables)

9 Months Ended

Sep. 30, 2021

Revenue From Contract With Customer [Abstract]

Schedule of Performance Obligation

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

Total Net Revenue Based on Disaggregation Criteria

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

	Three Months Ended September 30,
	2021						2020
	Point-in- Time		Over Time		Total		Point-in- Time		Over Time		Total
Americas	$	18,820	$	847	$	19,667	$	14,217	$	833	$	15,050
Europe and the Middle East		3,131		92		3,223		1,995		87		2,082
Asia-Pacific		6,207		—		6,207		7,727		—		7,727
Total	$	28,158	$	939	$	29,097	$	23,939	$	920	$	24,859

	Nine Months Ended September 30,
	2021						2020
	Point-in- Time		Over Time		Total		Point-in- Time		Over Time		Total
Americas	$	46,598	$	2,425	$	49,023	$	39,587	$	3,001	$	42,588
Europe and the Middle East		9,026		283		9,309		7,033		279		7,312
Asia-Pacific		16,920		—		16,920		12,184		—		12,184
Total	$	72,544	$	2,708	$	75,252	$	58,804	$	3,280	$	62,084

Changes in Deferred Revenue

Changes in deferred revenue during the nine months ended September 30, 2021 and September 30, 2020 were as follows (in thousands):

	Nine Months Ended September 30,
	2021			2020
Deferred revenue, beginning of period	$	2,366		$	2,833
Deferral of revenue billed in current period, net of recognition		1,992			1,719
Recognition of revenue deferred in prior periods		(1,749	)		(1,877	)
Deferred revenue, end of period	$	2,609		$	2,675

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Activity in Goodwill

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

	Identity		Premises		Total
Balance as of December 31, 2020	$	3,554	$	6,712	$	10,266
Currency translation adjustment		—		2		2
Balance as of September 30, 2021	$	3,554	$	6,714	$	10,268

Summary of Gross Carrying Amount and Accumulated Amortization for Intangible Assets Resulting from Acquisitions

The following table summarizes the gross carrying amount and accumulated amortization for intangible assets resulting from acquisitions (in thousands):

				Developed			Customer
	Trademarks			Technology			Relationships			Total
Amortization period (in years)	5			10 – 12			4 – 12
Gross carrying amount as of September 30, 2021	$	763		$	9,127		$	15,774		$	25,664
Accumulated amortization		(497	)		(6,106	)		(12,336	)		(18,939	)
Intangible assets, net as of September 30, 2021	$	266		$	3,021		$	3,438		$	6,725
Gross carrying amount as of December 31, 2020	$	765		$	9,123		$	15,771		$	25,659
Accumulated amortization		(382	)		(5,773	)		(11,941	)		(18,096	)
Intangible assets, net as of December 31, 2020	$	383		$	3,350		$	3,830		$	7,563

Amortization Expense Included in Unaudited Condensed Consolidated Statements of Operations

The following table summarizes the amortization expense included in the unaudited condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020, respectively (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenue	$	114	$	223	$	340	$	669
Selling and marketing		168		419		503		1,254
Total	$	282	$	642	$	843	$	1,923

Estimated Future Amortization Expense of Purchased Intangible Assets with Definite Lives

The estimated annual future amortization expense for purchased intangible assets with definite lives as of September 30, 2021 was as follows (in thousands):

2021 (remaining three months)	$	281
2022		1,120
2023		1,043
2024		967
2025		967
Thereafter		2,347
Total	$	6,725

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Balance Sheet Components (Tables)

9 Months Ended

Sep. 30, 2021

Statement Of Financial Position [Abstract]

Inventories

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

	September 30,		December 31,
	2021		2020
Raw materials	$	8,089	$	6,518
Work-in-progress		2		34
Finished goods		13,526		13,744
Total	$	21,617	$	20,296

Property and Equipment, Net

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

	September 30,			December 31,
	2021			2020
Building and leasehold improvements	$	1,361		$	1,498
Furniture, fixtures and office equipment		1,354			1,295
Plant and machinery		13,076			11,429
Purchased software		2,282			2,191
Total		18,073			16,413
Accumulated depreciation		(13,942	)		(13,586	)
Property and equipment, net	$	4,131		$	2,827

Other Accrued Expenses and Liabilities

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

	September 30,		December 31,
	2021		2020
Rental payments due landlord	$	734	$	158
Accrued professional fees		717		586
Accrued restructuring		411		801
Customer deposits		386		72
Accrued warranties		352		321
Other accrued expenses		1,873		1,302
Total	$	4,473	$	3,240

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Contractual Payment Obligation (Tables)

9 Months Ended

Sep. 30, 2021

Related Party Transactions [Abstract]

Payment Obligation Under 2009 Settlement Agreement

The payment obligation under the 2009 Settlement Agreement, as amended, as of September 30, 2021, is as follows (in thousands): 

2021 (remaining three months)	$	271
Present value discount factor		(2	)
Total	$	269

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Financial Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Summary of Financial Liabilities

Financial liabilities consist of (in thousands):

	September 30,		December 31,
	2021		2020
Revolving loan facility	$	—	$	14,428
April 21 Funds promissory notes		—		2,800
Paycheck Protection Program note		—		2,915
Total		—		20,143
Less: Current maturities of financial liabilities		—		(20,084	)
Less: Unamortized debt issuance costs		—		(59	)
Long-term financial liabilities	$	—	$	—

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Summary of Series B Preferred Stock and Accretion of Dividends

The following tables summarize Series B convertible preferred stock and the accretion of dividend activity for the nine months ended September 30, 2021 and 2020 (in thousands):

	Nine Months Ended September 30,
	2021		2020
Series B Convertible Preferred Stock:
Balance at beginning of period	$	22,969	$	21,875
Cumulative dividends on Series B convertible preferred stock		859		818
Balance at end of period	$	23,828	$	22,693
Number of Common Shares Issuable Upon Conversion:
Number of shares at beginning of period		5,742		5,469
Cumulative dividends on Series B convertible preferred stock		215		204
Number of shares at end of period		5,957		5,673

Summary of Outstanding Warrants Issued by Company

Below is the summary of outstanding warrants issued by the Company as of September 30, 2021:

Warrant Type	Number of Shares Issuable Upon Exercise		Weighted Average Exercise Price		Issue Date	Expiration Date
April 21 Funds Warrants		275,000	$	3.50	May 5, 2020	May 5, 2023

Summary of Common Stock Reserved for Future Issuance

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of September 30, 2021 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	1,527,411
Employee Stock Purchase Plan	293,888
Shares of common stock available for grant under the 2011 Plan	943,591
Warrants to purchase common stock	275,000
Shares of common stock issuable upon conversion of Series B convertible preferred stock	7,541,449
Total	10,581,339

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2021

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Stock Option Activity

The following is a summary of stock option activity for the nine months ended September 30, 2021:

	Number Outstanding			Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance as of December 31, 2020		550,769		$	5.56		4.88	$	1,875,719
Granted		—			—
Cancelled or Expired		(4,642	)		21.39
Exercised		(18,651	)		7.94
Balance as of September 30, 2021		527,476		$	5.34		4.28	$	7,126,485
Vested or expected to vest as of     September 30, 2021		527,476		$	5.34		4.28	$	7,126,485
Exercisable as of September 30, 2021		527,476		$	5.34		4.28	$	7,126,485

Summary Information about Stock Options Outstanding

The following table summarizes information about stock options outstanding as of September 30, 2021:

	Stock Options Outstanding						Stock Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$4.36 - $7.20		452,510		4.62	$	4.41		452,510	$	4.41
$7.50 - $11.25		61,317		2.48		10.19		61,317		10.19
$11.30 - $16.95		11,302		0.98		13.03		11,302		13.03
$19.70 - $29.55		2,347		0.36		20.98		2,347		20.98
$4.36 - $29.55		527,476		4.28	$	5.34		527,476	$	5.34

Summary of Stock Unit Activity

The following is a summary of RSU activity for the nine months ended September 30, 2021:

	Number Outstanding			Weighted Average Fair Value
Unvested as of December 31, 2020		682,563		$	4.34
Granted		258,277			14.03
Vested		(335,631	)		5.57
Forfeited		(71,788	)		4.43
Unvested as of September 30, 2021		533,421		$	8.25
RSUs vested but not released		291,514		$	5.13

Stock-Based Compensation Expense Related to Stock Options, RSUs and PSUs

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 nine months ended September 30, 2021 and 2020 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenue	$	49	$	43	$	130	$	124
Research and development		109		159		364		506
Selling and marketing		155		127		382		371
General and administrative		259		462		1,151		1,181
Total	$	572	$	791	$	2,027	$	2,182

Performance Stock Units

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Stock Unit Activity

The following is a summary of PSU activity for the nine months ended September 30, 2021:

	Number Outstanding
Unvested as of December 31, 2020		200,000
Granted		—
Vested		(23,500	)
Forfeited		(1,500	)
Unvested as of September 30, 2021		175,000

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Net Income (Loss) per Common Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Calculations for Basic and Diluted Net Income (Loss) Per Common Share

The calculations for basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2021 and September 30, 2021 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Basic net income (loss) per common share:
Numerator:
Net income (loss)	$	2,540		$	389		$	3,541		$	(4,407	)
Accretion of Series B convertible preferred stock dividends		(289	)		(275	)		(859	)		(818	)
Net income (loss) available to common stockholders	$	2,251		$	114		$	2,682		$	(5,225	)
Denominator:
Weighted average common shares outstanding - basic		22,448			18,144			20,948			17,868
Net income (loss) per common share - basic	$	0.10		$	0.01		$	0.13		$	(0.29	)
Diluted net income (loss) per common share:
Numerator:
Net income (loss) available to common stockholders	$	2,251		$	114		$	2,682		$	(5,225	)
Plus: accretion of Series B convertible preferred stock dividends, if dilutive		289			—			—			—
Net income (loss) available to common stockholders	$	2,540		$	114		$	2,682		$	(5,225	)
Denominator:
Weighted average common shares outstanding - basic		22,448			18,144			20,948			17,868
Dilutive securities:
Stock options, RSUs, and warrants		925			506			913			—
Convertible preferred shares		5,957			—			—			—
Weighted average common shares outstanding - diluted		29,330			18,650			21,861			17,868
Net income (loss) per common share - diluted	$	0.09		$	0.01		$	0.12		$	(0.29	)

Common Stock Equivalents Excluded From Diluted Net Income (Loss) Per Share

The following common stock equivalents have been excluded from diluted net income (loss) per share for the three and nine months ended September 30, 2021 and 2020 because their inclusion would have been anti-dilutive (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Shares of common stock subject to outstanding RSUs		—		—		—		906
Shares of common stock subject to outstanding PSUs		175		—		175		—
Shares of common stock subject to outstanding stock options		2		102		2		553
Shares of common stock subject to outstanding warrants		—		—		—		315
Shares of common stock issuable upon conversion of Series B convertible preferred stock		—		5,673		5,957		5,673
Total		177		5,775		6,134		7,447

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Segment Reporting, Geographic Information, and Concentration of Credit Risk (Tables)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Information Regarding Net Revenue and Gross Profit by Segment

Net revenue and gross profit information by segment for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Identity:
Net revenue	$	18,745		$	15,429		$	47,199		$	36,938
Gross profit		5,211			4,694			12,133			11,287
Gross profit margin		28	%		30	%		26	%		31	%
Premises:
Net revenue		10,352			9,430			28,053			25,146
Gross profit		5,907			5,191			15,517			13,810
Gross profit margin		57	%		55	%		55	%		55	%
Total:
Net revenue		29,097			24,859			75,252			62,084
Gross profit		11,118			9,885			27,650			25,097
Gross profit margin		38	%		40	%		37	%		40	%
Operating expenses:
Research and development		2,088			2,380			6,556			7,398
Selling and marketing		4,471			4,245			12,682			12,978
General and administrative		2,400			2,118			7,120			6,460
Decrease in fair value of earnout liability		—			—			—			(261	)
Restructuring and severance		99			163			761			1,645
Total operating expenses:		9,058			8,906			27,119			28,220
Income (loss) from operations		2,060			979			531			(3,123	)
Non-operating income (expense):
Interest expense, net		(62	)		(407	)		(451	)		(1,066	)
Gain on forgiveness of Paycheck Protection Program note		—			—			2,946			—
Gain on investment		611			—			611			—
Foreign currency losses, net		(48	)		(175	)		(2	)		(119	)
Income (loss) before income tax provision	$	2,561		$	397		$	3,635		$	(4,308	)

Information Regarding Net Revenue by Geographic Region

Geographic Information

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Americas	$	19,667		$	15,050		$	49,023		$	42,588
Europe and the Middle East		3,223			2,082			9,309			7,312
Asia-Pacific		6,207			7,727			16,920			12,184
Total	$	29,097		$	24,859		$	75,252		$	62,084
Percentage of net revenue:
Americas		68	%		61	%		65	%		69	%
Europe and the Middle East		11	%		8	%		12	%		12	%
Asia-Pacific		21	%		31	%		23	%		19	%
Total		100	%		100	%		100	%		100	%

Long-Lived Assets by Geographic Location

Long-lived assets by geographic location as of September 30, 2021 and December 31, 2020 are as follows (in thousands):

	September 30,		December 31,
	2021		2020
Property and equipment, net:
Americas	$	587	$	606
Europe and the Middle East		330		73
Asia-Pacific		3,214		2,148
Total property and equipment, net	$	4,131	$	2,827
Operating lease ROU assets:
Americas	$	1,504	$	2,100
Europe and the Middle East		138		224
Asia-Pacific		728		1,081
Total operating lease right-of-use assets	$	2,370	$	3,405

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Leases (Tables)

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Schedule of Reconciles Undiscounted Cash flows of Operating Lease Liabilities Recorded on the Condensed Consolidated Balance Sheet

The table below reconciles the undiscounted cash flows for the first five years and the total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of September 30, 2021 (in thousands):

	September 30,
	2021
2021 (remaining three months)	$	347
2022		1,357
2023		482
2024		242
2025		231
Thereafter		42
Total minimum lease payments		2,701
Less: amount of lease payments representing interest		(202	)
Present value of future minimum lease payments		2,499
Less: current liabilities under operating leases		(1,285	)
Long-term operating lease liabilities	$	1,214

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Summary of Principal Contractual Obligations, Excluding Operating Leases

The following table summarizes the Company’s principal contractual commitments, excluding operating leases, as of September 30, 2021 (in thousands):

	Purchase Commitments		Other Contractual Commitments		Total
2021 (remaining three months)	$	21,774	$	143	$	21,917
2022		10,848		75		10,923
2023		695		—		695
Total	$	33,317	$	218	$	33,535

Summary of Warranty Accrual Account Activity

The following table summarizes the Company’s warranty accrual account activity during the three and nine months ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021			2020
Balance at beginning of period	$	352	$	401	$	321		$	407
Accruals for warranties charged to expense		—		36		33			125
Cost of warranty claims		—		37		(2	)		(58	)
Balance at end of period	$	352	$	474	$	352		$	474

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Revenue - Additional Information (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2021 USD ($)
Revenue From Contract With Customer [Line Items]
Remaining performance obligations	$ 0.6
Minimum
Revenue From Contract With Customer [Line Items]
Payment period from contract inception	30 days
Maximum
Revenue From Contract With Customer [Line Items]
Payment period from contract inception	90 days
Software Licenses | Minimum
Revenue From Contract With Customer [Line Items]
Contract period	1 year
Software Licenses | Maximum
Revenue From Contract With Customer [Line Items]
Contract period	3 years
Subscriptions | Minimum
Revenue From Contract With Customer [Line Items]
Contract period	1 month
Subscriptions | Maximum
Revenue From Contract With Customer [Line Items]
Contract period	6 years
Software Maintenance and Support Services | Minimum
Revenue From Contract With Customer [Line Items]
Contract period	1 year
Software Maintenance and Support Services | Maximum
Revenue From Contract With Customer [Line Items]
Contract period	3 years
Extended Hardware Warranties | Minimum
Revenue From Contract With Customer [Line Items]
Contract period	1 year
Extended Hardware Warranties | Maximum
Revenue From Contract With Customer [Line Items]
Contract period	2 years

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Schedule of Performance Obligation (Detail)	9 Months Ended
	Sep. 30, 2021
Hardware Products
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Performance Obligation	Hardware products
When Performance Obligation is Typically Satisfied	When customer obtains control of the product (point-in-time)
When Payment is Typically Due	Within 30-60 days of shipment
How Standalone Selling Price is Typically Estimated	Observable in transactions without multiple performance obligations
Software Licenses
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Performance Obligation	Software licenses
When Performance Obligation is Typically Satisfied	When license is delivered to customer or made available for download, and the applicable license period has begun (point-in-time)
When Payment is Typically Due	Within 30-60 days of the beginning of license period
How Standalone Selling Price is Typically Estimated	Established pricing practices for software licenses bundled with software maintenance, which are separately observable in renewal transactions
Subscriptions
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Performance Obligation	Subscriptions
When Performance Obligation is Typically Satisfied	Ratably over the course of the subscription term (over time)
When Payment is Typically Due	In advance of subscription term
How Standalone Selling Price is Typically Estimated	Contractually stated or list price
Professional Services
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Performance Obligation	Professional services
When Performance Obligation is Typically Satisfied	As services are performed and/or when contract is fulfilled (point-in-time)
When Payment is Typically Due	Within 30-60 days of delivery
How Standalone Selling Price is Typically Estimated	Observable in transactions without multiple performance obligations
Software Maintenance and Support Services
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Performance Obligation	Software maintenance    and support services
When Performance Obligation is Typically Satisfied	Ratably over the course of the support contract (over time)
When Payment is Typically Due	Within 30-60 days of the beginning of the contract period
How Standalone Selling Price is Typically Estimated	Observable in renewal transactions
Extended Hardware Warranties
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Performance Obligation	Extended hardware    warranties
When Performance Obligation is Typically Satisfied	Ratably over the course of the support contract (over time)
When Payment is Typically Due	Within 30-60 days of the beginning of the contract period
How Standalone Selling Price is Typically Estimated	Observable in renewal transactions

XML

Schedule of Performance Obligation (Parenthetical) (Detail)	9 Months Ended
	Sep. 30, 2021
Hardware Products | Minimum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	30 days
Hardware Products | Maximum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	60 days
Software Licenses | Minimum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	30 days
Software Licenses | Maximum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	60 days
Professional Services | Minimum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	30 days
Professional Services | Maximum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	60 days
Software Maintenance and Support Services | Minimum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	30 days
Software Maintenance and Support Services | Maximum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	60 days
Extended Hardware Warranties | Minimum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	30 days
Extended Hardware Warranties | Maximum
Revenue Recognition Multiple Deliverable Arrangements [Line Items]
Payment period, after shipment	60 days

XML

Total Net Revenue Based on Disaggregation Criteria (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 29,097	$ 24,859	$ 75,252	$ 62,084
Point-in-Time
Disaggregation Of Revenue [Line Items]
Total net revenue	28,158	23,939	72,544	58,804
Over Time
Disaggregation Of Revenue [Line Items]
Total net revenue	939	920	2,708	3,280
Americas
Disaggregation Of Revenue [Line Items]
Total net revenue	19,667	15,050	49,023	42,588
Americas | Point-in-Time
Disaggregation Of Revenue [Line Items]
Total net revenue	18,820	14,217	46,598	39,587
Americas | Over Time
Disaggregation Of Revenue [Line Items]
Total net revenue	847	833	2,425	3,001
Europe and the Middle East
Disaggregation Of Revenue [Line Items]
Total net revenue	3,223	2,082	9,309	7,312
Europe and the Middle East | Point-in-Time
Disaggregation Of Revenue [Line Items]
Total net revenue	3,131	1,995	9,026	7,033
Europe and the Middle East | Over Time
Disaggregation Of Revenue [Line Items]
Total net revenue	92	87	283	279
Asia-Pacific
Disaggregation Of Revenue [Line Items]
Total net revenue	6,207	7,727	16,920	12,184
Asia-Pacific | Point-in-Time
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 6,207	$ 7,727	$ 16,920	$ 12,184

XML

Changes in Deferred Revenue (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Revenue From Contract With Customer [Abstract]
Deferred revenue	$ 2,366	$ 2,833
Deferral of revenue billed in current period, net of recognition	1,992	1,719
Recognition of revenue deferred in prior periods	(1,749)	(1,877)
Deferred revenue	$ 2,609	$ 2,675

XML

Revenue - Unsatisfied Performance Obligation - Additional Information (Detail)	Sep. 30, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-10-01
Revenue From Contract With Customer [Line Items]
Unsatisfied performance obligations, expected to recognize	23.00%
Unsatisfied performance obligations, expected to recognize, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01
Revenue From Contract With Customer [Line Items]
Unsatisfied performance obligations, expected to recognize	48.00%
Unsatisfied performance obligations, expected to recognize, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01
Revenue From Contract With Customer [Line Items]
Unsatisfied performance obligations, expected to recognize	29.00%

XML

Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Dec. 31, 2020
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Proceeds from investment	$ 611,000	$ 611,000
Carrying value of investment	0	0
Fair Value Measurements, Non-recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liability measured and recognized at fair value	0	0	$ 0
Fair Value Measurements, Non-recurring | Fair Value, Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Privately-held investments measured at fair value	348,000	348,000	348,000
Fair Value Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liability measured and recognized at fair value	$ 0	$ 0	$ 0

XML

Summary of Activity in Goodwill (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Goodwill [Line Items]
Beginning Balance	$ 10,266
Currency translation adjustment	2
Ending Balance	10,268
Identity
Goodwill [Line Items]
Beginning Balance	3,554
Ending Balance	3,554
Premises
Goodwill [Line Items]
Beginning Balance	6,712
Currency translation adjustment	2
Ending Balance	$ 6,714

XML

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Impairment of goodwill	$ 0	$ 0
Impairment of intangible assets	$ 0	$ 0

XML

Summary of Gross Carrying Amount and Accumulated Amortization for Intangible Assets Resulting from Acquisitions (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Acquired Finite Lived Intangible Assets [Line Items]
Gross carrying amount	$ 25,664	$ 25,659
Accumulated amortization	(18,939)	(18,096)
Intangible assets, net	$ 6,725	7,563
Trademarks
Acquired Finite Lived Intangible Assets [Line Items]
Amortization period (in years)	5 years
Gross carrying amount	$ 763	765
Accumulated amortization	(497)	(382)
Intangible assets, net	266	383
Developed Technology
Acquired Finite Lived Intangible Assets [Line Items]
Gross carrying amount	9,127	9,123
Accumulated amortization	(6,106)	(5,773)
Intangible assets, net	$ 3,021	3,350
Developed Technology | Minimum
Acquired Finite Lived Intangible Assets [Line Items]
Amortization period (in years)	10 years
Developed Technology | Maximum
Acquired Finite Lived Intangible Assets [Line Items]
Amortization period (in years)	12 years
Customer Relationships
Acquired Finite Lived Intangible Assets [Line Items]
Gross carrying amount	$ 15,774	15,771
Accumulated amortization	(12,336)	(11,941)
Intangible assets, net	$ 3,438	$ 3,830
Customer Relationships | Minimum
Acquired Finite Lived Intangible Assets [Line Items]
Amortization period (in years)	4 years
Customer Relationships | Maximum
Acquired Finite Lived Intangible Assets [Line Items]
Amortization period (in years)	12 years

XML

Amortization Expense Included in Unaudited Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Finite Lived Intangible Assets [Line Items]
Amortization expense	$ 282	$ 642	$ 843	$ 1,923
Cost of revenue
Finite Lived Intangible Assets [Line Items]
Amortization expense	114	223	340	669
Selling and Marketing Expense
Finite Lived Intangible Assets [Line Items]
Amortization expense	$ 168	$ 419	$ 503	$ 1,254

XML

Estimated Future Amortization Expense of Purchased Intangible Assets with Definite Lives (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
2021 (remaining three months)	$ 281
2022	1,120
2023	1,043
2024	967
2025	967
Thereafter	2,347
Intangible assets, net	$ 6,725	$ 7,563

XML

Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 8,089	$ 6,518
Work-in-progress	2	34
Finished goods	13,526	13,744
Total	$ 21,617	$ 20,296

XML

Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 18,073	$ 16,413
Accumulated depreciation	(13,942)	(13,586)
Property and equipment, net	4,131	2,827
Building and Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	1,361	1,498
Furniture, Fixtures and Office Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	1,354	1,295
Plant and Machinery
Property Plant And Equipment [Line Items]
Property and equipment, gross	13,076	11,429
Purchased Software
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 2,282	$ 2,191

XML

Balance Sheet Components - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Property Plant And Equipment [Abstract]
Depreciation expense	$ 0.2	$ 0.2	$ 0.6	$ 0.6

XML

Other Accrued Expenses and Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Accrued Liabilities And Other Liabilities Current [Abstract]
Rental payments due landlord	$ 734	$ 158
Accrued professional fees	717	586
Accrued restructuring	411	801
Customer deposits	386	72
Accrued warranties	352	321
Other accrued expenses	1,873	1,302
Total	$ 4,473	$ 3,240

XML

Contractual Payment Obligation - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Related Party Transaction [Line Items]
Interest accreted on payment obligation	$ 8,000	$ 28,000	$ 41,000	$ 115,000
Settlement Agreement
Related Party Transaction [Line Items]
Amended installment payment, contractual payment period			Oct. 31, 2021

XML

Payment Obligation Under 2009 Settlement Agreement (Detail) $ in Thousands	Sep. 30, 2021 USD ($)
Related Party Transaction [Line Items]
2021 (remaining three months)	$ 21,774
Total	33,317
Settlement Agreement
Related Party Transaction [Line Items]
2021 (remaining three months)	271
Present value discount factor	(2)
Total	$ 269

XML

Summary of Financial Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Total		$ 20,143
Less: Current maturities of financial liabilities		(20,084)
Less: Unamortized debt issuance costs	$ 0	(59)
April 21 Funds Promissory Notes
Debt Instrument [Line Items]
Total		2,800
Paycheck Protection Program Note
Debt Instrument [Line Items]
Total		2,915
Revolving Loan Facility
Debt Instrument [Line Items]
Total		$ 14,428

XML

Financial Liabilities - Additional Information (Detail) - USD ($)					3 Months Ended		6 Months Ended	9 Months Ended
	Apr. 13, 2021	Feb. 08, 2021	May 05, 2020	Apr. 20, 2020	Sep. 30, 2021	Jun. 30, 2021	Jun. 30, 2021	Sep. 30, 2021	May 07, 2021
Debt Instrument [Line Items]
Interest rate				1.00%
Principal amount, repaid	$ 2,800,000
Proceeds from Lines of Credit				$ 2,900,000
Notes payable, description				The PPP Note was payable two years from the date of the PPP Note, and there was no prepayment penalty.
Number of years note payable				2 years
Principal and accrued interest amount outstanding									$ 2,900,000
Gain on forgiveness of debt						$ 2,900,000		$ 2,946,000
April 21 Funds Warrants
Debt Instrument [Line Items]
Warrants outstanding term			3 years
Estimated Volatility | April 21 Funds Warrants
Debt Instrument [Line Items]
Warrant, measurement input			63.2
Risk Free Interest Rate | April 21 Funds Warrants
Debt Instrument [Line Items]
Warrant, measurement input			0.24
Dividend Yield | April 21 Funds Warrants
Debt Instrument [Line Items]
Warrant, measurement input			0
Expected Life | April 21 Funds Warrants
Debt Instrument [Line Items]
Warrants outstanding term			3 years
April 21 Funds Promissory Notes
Debt Instrument [Line Items]
Promissory notes principal amount			$ 4,000,000.0
Interest rate			8.00%
Debt instrument, frequency of periodic payment			quarterly
April 21 Funds Promissory Notes | April 21 Funds Warrants
Debt Instrument [Line Items]
Fair value of warrants			$ 290,000
Minimum
Debt Instrument [Line Items]
Loan conversion fixed charge coverage ratio		1.35
Loan and Security Agreements | East West Bank
Debt Instrument [Line Items]
Line of credit facility liquidity covenant in cash		$ 5,000,000
Minimum trailing six month EBITDA					$ 1,200,000		$ 600,000
Loan and Security Agreements | Revolving Loan Facility
Debt Instrument [Line Items]
Line of credit facility early termination fee percentage								2.00%
Line of credit facility termination fee percentage thereafter								1.00%
Loan and Security Agreements | Revolving Loan Facility | East West Bank
Debt Instrument [Line Items]
Borrowing capacity under credit facility		$ 20,000,000.0
Loan facility payable date		Feb. 08, 2023
Loan and Security Agreements | Revolving Loan Facility | Prime Rate
Debt Instrument [Line Items]
Percentage of interest rate		0.25%
Loan and Security Agreements | Non-formula Revolving Credit Facility | East West Bank
Debt Instrument [Line Items]
Borrowing capacity under credit facility		$ 4,000,000.0
Loan facility payable date		Feb. 07, 2022
Loan facility amortize and mature date		Feb. 01, 2025
Period One | April 21 Funds Promissory Notes
Debt Instrument [Line Items]
Interest rate			12.00%

XML

Summary of Series B Convertible Preferred Stock and Accretion of Dividend (Detail) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Stockholders Equity [Line Items]
Dividends earned on Series B preferred stock	$ 289	$ 275	$ 859	$ 818
Series B Convertible Preferred Stock
Stockholders Equity [Line Items]
Balance at beginning of period			22,969	21,875
Dividends earned on Series B preferred stock			859	818
Balance at end of period	$ 23,828	$ 22,693	$ 23,828	$ 22,693
Number of shares at beginning of period			5,742	5,469
Cumulative dividends on Series B convertible preferred stock			215	204
Number of shares at end of period	5,957	5,673	5,957	5,673

XML

Stockholders' Equity - Additional Information (Detail)			9 Months Ended
	Apr. 07, 2021 USD ($) $ / shares shares	May 05, 2020 USD ($) $ / shares shares	Sep. 30, 2021 USD ($) $ / shares shares	Feb. 11, 2021 shares	Feb. 08, 2017 $ / shares shares
Stockholders Equity [Line Items]
Proceeds from the sale of common stock, net of issuance costs | $			$ 37,715,000
EWB Warrant
Stockholders Equity [Line Items]
Warrants issued to purchase common stock | shares					40,000
Warrant exercise price					$ 3.64
Warrants or exercised received for common shares | shares				27,599
Warrants and rights outstanding | $		$ 42,000
Legal and administrative cost | $		$ 92,000
EWB Warrant | Estimated Volatility
Stockholders Equity [Line Items]
Warrants measurement input		63.2
EWB Warrant | Risk Free Interest Rate
Stockholders Equity [Line Items]
Warrants measurement input		0.24
EWB Warrant | Dividend Yield
Stockholders Equity [Line Items]
Warrants measurement input		0
EWB Warrant | Expected Life
Stockholders Equity [Line Items]
Warrants outstanding term		3 years
April 21 Funds Warrants
Stockholders Equity [Line Items]
Warrants issued to purchase common stock | shares		275,000
Warrant exercise price			$ 3.50
Warrants outstanding term		3 years
April 21 Funds Warrants | Estimated Volatility
Stockholders Equity [Line Items]
Warrants measurement input		63.2
April 21 Funds Warrants | Risk Free Interest Rate
Stockholders Equity [Line Items]
Warrants measurement input		0.24
April 21 Funds Warrants | Dividend Yield
Stockholders Equity [Line Items]
Warrants measurement input		0
April 21 Funds Warrants | Expected Life
Stockholders Equity [Line Items]
Warrants outstanding term		3 years
Common Stock
Stockholders Equity [Line Items]
Common stock sold | shares	3,779,342
Offering price	$ 10.65
Proceeds from the sale of common stock, net of issuance costs | $	$ 37,700,000
Offering related expenses | $	$ 2,500,000
Series B Convertible Preferred Stock
Stockholders Equity [Line Items]
Minimum conversion price			$ 3.27
Dividend payment terms			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
Cumulative annual dividend for first six years			5.00%
Cumulative annual dividend for each year after sixth year			3.00%
Price per share distributable to stockholders			$ 4.00
Series B Convertible Preferred Stock | Common Stock
Stockholders Equity [Line Items]
Preferred stock shares convertible into common stock | shares			5,956,945
Maximum | EWB Warrant
Stockholders Equity [Line Items]
Warrant exercise price		$ 3.50
Warrant expiration date		Feb. 08, 2023
Maximum | Common Stock
Stockholders Equity [Line Items]
Shares issued, price per share			$ 4.00
Minimum | EWB Warrant
Stockholders Equity [Line Items]
Warrant exercise price					$ 3.64
Warrant expiration date		Feb. 08, 2022

XML

Summary of Outstanding Warrants Issued by Company (Detail) - April 21 Funds Warrants	9 Months Ended
	Sep. 30, 2021 $ / shares shares
Class Of Warrant Or Right [Line Items]
Number of Shares Issuable Upon Exercise | shares	275,000
Weighted Average Exercise Price | $ / shares	$ 3.50
Issue Date	May 05, 2020
Expiration Date	May 05, 2023

XML

Summary of Common Stock Reserved for Future Issuance (Detail)	Sep. 30, 2021 shares
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Common stock reserved for future issuance	10,581,339
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
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Common stock reserved for future issuance	1,527,411
Employee Stock Purchase Plan
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Common stock reserved for future issuance	293,888
Shares of Common Stock Available for Grant Under the 2011 Plan
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Common stock reserved for future issuance	943,591
Warrants to Purchase Common Stock
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Common stock reserved for future issuance	275,000
Shares of Common Stock Issuable Upon Conversion of Series B Convertible Preferred Stock
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Common stock reserved for future issuance	7,541,449

XML

Summary of Stock Option Activity (Detail) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares
Stock Options Number Outstanding
Beginning Balance | shares	550,769
Cancelled or Expired | shares	(4,642)
Exercised | shares	(18,651)
Ending Balance | shares	527,476	550,769
Vested or expected to vest as of September 30, 2021 | shares	527,476
Exercisable as of September 30, 2021 | shares	527,476
Stock Options Average Exercise Price per share
Beginning Balance | $ / shares	$ 5.56
Cancelled or Expired | $ / shares	21.39
Exercised | $ / shares	7.94
Ending Balance | $ / shares	5.34	$ 5.56
Vested or expected to vest as of September 30, 2021 | $ / shares	5.34
Exercisable as of September 30, 2021 | $ / shares	$ 5.34
Stock Options Remaining Contractual Life (in years)
Weighted Average Remaining Contractual Term (Years)	4 years 3 months 10 days	4 years 10 months 17 days
Vested or expected to vest as of September 30, 2021	4 years 3 months 10 days
Exercisable as of September 30, 2021	4 years 3 months 10 days
Stock Options Aggregate Intrinsic Value
Aggregate intrinsic value | $	$ 7,126,485	$ 1,875,719
Vested or expected to vest as of September 30, 2021 | $	7,126,485
Exercisable as of September 30, 2021 | $	$ 7,126,485

XML

Summary Information about Stock Options Outstanding (Detail)	9 Months Ended
	Sep. 30, 2021 $ / shares shares
$4.36 - $7.20
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 4.36
Range of Exercise Prices, upper limit	$ 7.20
Stock Options Number Outstanding | shares	452,510
Stock Options Outstanding Weighted Average Remaining Contractual Life (Years)	4 years 7 months 13 days
Stock Options Outstanding Weighted Average Exercise Price	$ 4.41
Stock Options Number Exercisable | shares	452,510
Stock Options Exercisable Weighted Average Exercise Price	$ 4.41
$7.50 - $11.25
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	7.50
Range of Exercise Prices, upper limit	$ 11.25
Stock Options Number Outstanding | shares	61,317
Stock Options Outstanding Weighted Average Remaining Contractual Life (Years)	2 years 5 months 23 days
Stock Options Outstanding Weighted Average Exercise Price	$ 10.19
Stock Options Number Exercisable | shares	61,317
Stock Options Exercisable Weighted Average Exercise Price	$ 10.19
$11.30 - $16.95
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	11.30
Range of Exercise Prices, upper limit	$ 16.95
Stock Options Number Outstanding | shares	11,302
Stock Options Outstanding Weighted Average Remaining Contractual Life (Years)	11 months 23 days
Stock Options Outstanding Weighted Average Exercise Price	$ 13.03
Stock Options Number Exercisable | shares	11,302
Stock Options Exercisable Weighted Average Exercise Price	$ 13.03
$19.70 - $29.55
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	19.70
Range of Exercise Prices, upper limit	$ 29.55
Stock Options Number Outstanding | shares	2,347
Stock Options Outstanding Weighted Average Remaining Contractual Life (Years)	4 months 9 days
Stock Options Outstanding Weighted Average Exercise Price	$ 20.98
Stock Options Number Exercisable | shares	2,347
Stock Options Exercisable Weighted Average Exercise Price	$ 20.98
$4.36 - $29.55
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	4.36
Range of Exercise Prices, upper limit	$ 29.55
Stock Options Number Outstanding | shares	527,476
Stock Options Outstanding Weighted Average Remaining Contractual Life (Years)	4 years 3 months 10 days
Stock Options Outstanding Weighted Average Exercise Price	$ 5.34
Stock Options Number Exercisable | shares	527,476
Stock Options Exercisable Weighted Average Exercise Price	$ 5.34

XML

Stock-Based Compensation - Additional Information (Detail) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense related to stock options	$ 0
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 3,600,000
Unrecognized stock-based compensation expense, weighted average period of recognition	3 years
Granted	258,277
Grant fair value	$ 14.03
Repurchase of common stock (in shares)	68,519	130,745
Performance Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 1,100,000
Unrecognized stock-based compensation expense, weighted average period of recognition	1 year 3 months 18 days
Granted			200,000
Grant fair value			$ 6.38
Realized tax benefit	$ 0

XML

Summary of RSU Activity (Detail) - Restricted Stock Units	9 Months Ended
	Sep. 30, 2021 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning Balance, Unvested, Number Outstanding | shares	682,563
Granted, Number Outstanding | shares	258,277
Vested, Number Outstanding | shares	(335,631)
Forfeited, Number Outstanding | shares	(71,788)
Ending Balance, Unvested, Number Outstanding | shares	533,421
RSUs vested but not released, Number Outstanding | shares	291,514
Beginning Balance, Unvested, Weighted Average Fair Value | $ / shares	$ 4.34
Granted, Weighted Average Fair Value | $ / shares	14.03
Vested, Weighted Average Fair Value | $ / shares	5.57
Forfeited, Weighted Average Fair Value | $ / shares	4.43
Ending Balance, Unvested, Weighted Average Fair Value | $ / shares	8.25
RSUs vested but not released, Weighted Average Fair Value | $ / shares	$ 5.13

XML

Summary of PSU Activity (Detail) - Performance Stock Units - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning Balance, Unvested, Number Outstanding	200,000
Granted, Number Outstanding		200,000
Vested, Number Outstanding	(23,500)
Forfeited, Number Outstanding	(1,500)
Ending Balance, Unvested, Number Outstanding	175,000	200,000

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Stock-Based Compensation Expense Related to Stock Options, RSUs and PSUs (Detail) - Stock Options and Restricted Stock Units - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-Based Compensation Expense	$ 572	$ 791	$ 2,027	$ 2,182
Cost of revenue
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-Based Compensation Expense	49	43	130	124
Research and Development Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-Based Compensation Expense	109	159	364	506
Selling and Marketing Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-Based Compensation Expense	155	127	382	371
General and Administrative Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-Based Compensation Expense	$ 259	$ 462	$ 1,151	$ 1,181

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Calculations for Basic and Diluted Net Income (Loss) Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Numerator:
Net income (loss)	$ 2,540	$ 389	$ 3,541	$ (4,407)
Accretion of Series B convertible preferred stock dividends	(289)	(275)	(859)	(818)
Net income (loss) available to common stockholders	$ 2,251	$ 114	$ 2,682	$ (5,225)
Denominator:
Weighted average common shares outstanding - basic	22,448	18,144	20,948	17,868
Net income (loss) per common share - basic	$ 0.10	$ 0.01	$ 0.13	$ (0.29)
Dilutive securities:
Stock options, RSUs, and warrants	925	506	913
Convertible preferred shares	5,957
Weighted average common shares outstanding - diluted	29,330	18,650	21,861	17,868
Net income (loss) per common share - diluted	$ 0.09	$ 0.01	$ 0.12	$ (0.29)
Diluted net income (loss) per common share:
Net income (loss) available to common stockholders	$ 2,251	$ 114	$ 2,682	$ (5,225)
Plus: accretion of Series B convertible preferred stock dividends, if dilutive	289
Net income (loss) available to common stockholders	$ 2,540	$ 114	$ 2,682	$ (5,225)

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Common Stock Equivalents Excluded From Diluted Net Income (Loss) Per Share (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common stock equivalents diluted net income (loss) per share inclusion anti-dilutive	177	5,775	6,134	7,447
Restricted Stock Units
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common stock equivalents diluted net income (loss) per share inclusion anti-dilutive				906
PSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common stock equivalents diluted net income (loss) per share inclusion anti-dilutive	175		175
Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common stock equivalents diluted net income (loss) per share inclusion anti-dilutive	2	102	2	553
Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common stock equivalents diluted net income (loss) per share inclusion anti-dilutive				315
Shares of Common Stock Issuable Upon Conversion of Series B Convertible Preferred Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common stock equivalents diluted net income (loss) per share inclusion anti-dilutive		5,673	5,957	5,673

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Information Regarding Net Revenue and Gross Profit by Segment (Detail) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Segment Reporting Information [Line Items]
Net revenue	$ 29,097		$ 24,859	$ 75,252	$ 62,084
Gross profit	$ 11,118		$ 9,885	$ 27,650	$ 25,097
Gross profit margin	38.00%		40.00%	37.00%	40.00%
Operating expenses:
Research and development	$ 2,088		$ 2,380	$ 6,556	$ 7,398
Selling and marketing	4,471		4,245	12,682	12,978
General and administrative	2,400		2,118	7,120	6,460
Decrease in fair value of earnout liability					(261)
Restructuring and severance	99		163	761	1,645
Total operating expenses	9,058		8,906	27,119	28,220
Income (loss) from operations	2,060		979	531	(3,123)
Non-operating income (expense):
Interest expense, net	(62)		(407)	(451)	(1,066)
Gain on forgiveness of Paycheck Protection Program note		$ 2,900		2,946
Gain on investment	611			611
Foreign currency losses, net	(48)		(175)	(2)	(119)
Income (loss) before income tax provision	2,561		397	3,635	(4,308)
Identity
Segment Reporting Information [Line Items]
Net revenue	18,745		15,429	47,199	36,938
Gross profit	$ 5,211		$ 4,694	$ 12,133	$ 11,287
Gross profit margin	28.00%		30.00%	26.00%	31.00%
Premises
Segment Reporting Information [Line Items]
Net revenue	$ 10,352		$ 9,430	$ 28,053	$ 25,146
Gross profit	$ 5,907		$ 5,191	$ 15,517	$ 13,810
Gross profit margin	57.00%		55.00%	55.00%	55.00%

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Information Regarding Net Revenue by Geographic Region (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Segment Reporting Information [Line Items]
Net revenue	$ 29,097	$ 24,859	$ 75,252	$ 62,084
Geographic Concentration Risk | Revenue from Contract with Customer
Segment Reporting Information [Line Items]
Percentage of net revenue	100.00%	100.00%	100.00%	100.00%
Americas
Segment Reporting Information [Line Items]
Net revenue	$ 19,667	$ 15,050	$ 49,023	$ 42,588
Americas | Geographic Concentration Risk | Revenue from Contract with Customer
Segment Reporting Information [Line Items]
Percentage of net revenue	68.00%	61.00%	65.00%	69.00%
Europe and the Middle East
Segment Reporting Information [Line Items]
Net revenue	$ 3,223	$ 2,082	$ 9,309	$ 7,312
Europe and the Middle East | Geographic Concentration Risk | Revenue from Contract with Customer
Segment Reporting Information [Line Items]
Percentage of net revenue	11.00%	8.00%	12.00%	12.00%
Asia-Pacific
Segment Reporting Information [Line Items]
Net revenue	$ 6,207	$ 7,727	$ 16,920	$ 12,184
Asia-Pacific | Geographic Concentration Risk | Revenue from Contract with Customer
Segment Reporting Information [Line Items]
Percentage of net revenue	21.00%	31.00%	23.00%	19.00%

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Segment Reporting, Geographic Information and Concentration of Credit Risk - Additional Information (Detail) - Customer	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Segment Reporting [Abstract]
Concentration Risk, Customer			No customer accounted for 10% or more of net revenue for either of the three or nine months ended September 30, 2021 or 2020. As of September 30, 2021, one customer accounted for 10% of accounts receivable. No customer accounted for 10% of net accounts receivable as of December 31, 2020.
Number of major customer represented stated percentage of total net revenue	0	0	0	0
Number of customers who accounted for 10% or more net accounts receivable			1		0

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Long-Lived Assets by Geographic Location (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Segment Reporting Information [Line Items]
Property and equipment, net	$ 4,131	$ 2,827
Operating lease ROU assets	2,370	3,405
Americas
Segment Reporting Information [Line Items]
Property and equipment, net	587	606
Operating lease ROU assets	1,504	2,100
Europe and the Middle East
Segment Reporting Information [Line Items]
Property and equipment, net	330	73
Operating lease ROU assets	138	224
Asia-Pacific
Segment Reporting Information [Line Items]
Property and equipment, net	3,214	2,148
Operating lease ROU assets	$ 728	$ 1,081

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Restructuring and Severance - Additional Information (Detail) - USD ($)	3 Months Ended			9 Months Ended		18 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021
Restructuring Cost And Reserve [Line Items]
Restructuring and severance expenses	$ 99,000	$ 163,000		$ 761,000	$ 1,645,000
Impairment of right-of-use operating lease assets				281,000	1,199,000
Sublease income received						$ 0
3VR
Restructuring Cost And Reserve [Line Items]
Restructuring and severance expenses	99,000			761,000
3VR | Facility Rental
Restructuring Cost And Reserve [Line Items]
Restructuring and severance expenses	67,000			523,000
Impairment of right-of-use operating lease assets				281,000
3VR | Severance
Restructuring Cost And Reserve [Line Items]
Restructuring and severance expenses	$ 32,000			$ 238,000
Prior Acquisition
Restructuring Cost And Reserve [Line Items]
Restructuring and severance expenses		163,000			1,645,000
Sublease income received		0	$ 198,000
Prior Acquisition | Facility Rental
Restructuring Cost And Reserve [Line Items]
Restructuring and severance expenses		18,000			1,416,000
Impairment of right-of-use operating lease assets		1,199,000
Prior Acquisition | Severance
Restructuring Cost And Reserve [Line Items]
Restructuring and severance expenses		$ 145,000			$ 229,000

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Leases - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		18 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021
Lessee Lease Description [Line Items]
Total rent expense	$ 0.3	$ 0.4	$ 1.0	$ 1.2
Lessee, Operating Lease, Existence of Option to Extend [true false]			true
Weighted average remaining operating lease term	2 years 6 months		2 years 6 months		2 years 6 months
Weighted average discount rate of operating lease	6.30%		6.30%		6.30%
Sublease rental income due in future under non-cancelable subleases	$ 1.6		$ 1.6		$ 1.6
Sublease income received					$ 0.0
Operating lease liabilities, cash paid	$ 0.4		$ 1.2
Minimum
Lessee Lease Description [Line Items]
Remaining lease term	1 year		1 year		1 year
Maximum
Lessee Lease Description [Line Items]
Remaining lease term	5 years		5 years		5 years
Operating leases, options to extend leases term	5 years		5 years		5 years

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Leases - Schedule of Reconciles Undiscounted Cash flows of Operating Lease Liabilities Recorded on the Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Leases [Abstract]
2021 (remaining three months)	$ 347
2022	1,357
2023	482
2024	242
2025	231
Thereafter	42
Total minimum lease payments	2,701
Less: amount of lease payments representing interest	(202)
Present value of future minimum lease payments	2,499
Less: current liabilities under operating leases	(1,285)	$ (1,279)
Long-term operating lease liabilities	$ 1,214	$ 2,272

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Summary of Principal Contractual Obligations, Excluding Operating Leases (Detail) $ in Thousands	Sep. 30, 2021 USD ($)
Purchase Commitments
2021 (remaining three months)	$ 21,774
2022	10,848
2023	695
Total	33,317
Other Contractual Commitments
2021 (remaining three months)	143
2022	75
Total	218
Total Commitments
2021 (remaining three months)	21,917
2022	10,923
2023	695
Total	$ 33,535

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Summary of Warranty Accrual Account Activity (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Leases [Abstract]
Balance at beginning of period	$ 352	$ 401	$ 321	$ 407
Accruals for warranties charged to expense	0	36	33	125
Cost of warranty claims	0	37	(2)	(58)
Balance at end of period	$ 352	$ 474	$ 352	$ 474

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Commitments and Contingencies - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2021
Minimum
Commitment And Contingencies [Line Items]
Term of warranties on certain product sales	12 months
Maximum
Commitment And Contingencies [Line Items]
Term of warranties on certain product sales	36 months