Xperi Inc

Previous wording

We are a leading consumer and entertainment technology company. We believe we create extraordinary experiences at home and on the go for millions of consumers around the world, enabling audiences to connect with content in a way that is more intelligent, immersive, and personal. Powering smart devices, connected cars, entertainment experiences and more, we bring together ecosystems designed to reach highly-engaged consumers, allowing us and our ecosystem partners to uncover significant new business opportunities, now and in the future. Our technologies are integrated into consumer devices and a variety of media platforms worldwide, driving increased value for our partners, customers, and consumers. We operate in one reportable business segment and group our business into four categories: Pay-TV, Consumer Electronics, Connected Car and Media Platform. Headquartered in Silicon Valley with operations around the world, we have approximately 1,800 employees and more than 35 years of operating experience.

Current wording

We are a leading consumer and entertainment technology company. We believe we create extraordinary experiences at home and on the go for millions of consumers around the world, enabling audiences to connect with content in a way that is more intelligent, immersive, and personal. Powering smart devices, connected cars, entertainment experiences and more, we bring together ecosystems designed to reach highly-engaged consumers, allowing us and our ecosystem partners to uncover significant new business opportunities, now and in the future. Our technologies are integrated into consumer devices and a variety of media platforms worldwide, driving increased value for our partners, customers, and consumers. We operate in one reportable business segment and group our business into four categories: Pay-TV, Consumer Electronics, Connected Car and Media Platform. Headquartered in Silicon Valley with operations around the world, we have approximately 1,700 employees and more than 35 years of operating experience.

Previous wording

In December 2023, we entered into a definitive agreement with Tobii AB, an eye tracking and attention computing company, pursuant to which we agreed to sell our AutoSense in-cabin safety business and related imaging solutions (the “Divestiture”). The Divestiture was completed in January 2024, which has streamlined our business and further enhanced our focus on entertainment markets.

Current wording

In December 2023, we entered into a definitive agreement with Tobii AB (“Tobii”), an eye tracking and attention computing company, pursuant to which we agreed to sell our AutoSense in-cabin safety business and related imaging solutions (the “Auto-Sense Divestiture”). The AutoSense Divestiture was completed in January 2024, which has streamlined our business and further enhanced our focus on entertainment markets.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

Revenue decreased by $7.3 million, or 6%, for the three months ended June 30, 2024 compared to the same period in the prior year. The decrease was primarily attributable to a decline of $14.6 million in Consumer Electronics revenue as a result of a decline in minimum guarantee (“MG”) revenue driven by the timing and duration of MG contracts that were renewed as well as the Divestiture, and a decrease of $3.4 million in Media Platform revenue driven principally by a decline in advertising revenue from a unique initial ad buy that occurred in 2023. These decreases were partially offset by an increase of $8.0 million in Connected Car revenue due to an increase in MG revenue in audio solutions, which was partially offset by the Divestiture, and an increase of $2.7 million in Pay-TV revenue, driven largely by continued increase in IPTV Solutions revenue and by higher core guide product revenue due to the timing and duration of MG contracts that were renewed, offset by declines in consumer hardware and subscription revenue in the second quarter of 2024.

Current wording

Revenue increased by $2.5 million, or 2%, for the three months ended September 30, 2024 compared to the same period in the prior year. The increase was primarily attributable to an increase of $21.4 million in Pay-TV revenue, driven largely by higher core guide product revenue due to the timing and duration of minimum guarantee (“MG”) contracts that were executed and continued growth in IPTV Solutions revenue, partially offset by declines in consumer hardware and subscription revenue, and an increase of $2.1 million in Connected Car revenue driven principally by increases in Audio Solutions and AutoStage revenue, partially offset by the impact of the AutoSense Divestiture. These increases were partially offset by a decrease of $15.4 million in Consumer Electronics revenue resulting from declines in MG contract revenue and market-based softness in certain end products, and a decrease of $5.6 million in Media Platform middleware solutions revenue primarily due to the timing and duration of MG contracts that were renewed in the third quarter of 2023.

Previous wording

Revenue decreased by $15.3 million, or 6%, for the six months ended June 30, 2024 compared to the same period in the prior year. The decrease was primarily attributable to a decline of $25.2 million in Consumer Electronics revenue due to the Divestiture as well as a decline in MG revenue contracts due to the timing and duration of MG contracts up for renewal and executed, and a decrease of $1.1 million in Media Platform revenue driven principally by lower advertising revenue, which was partially offset by growth in our smart TV application software and middleware platform. These decreases were partially offset by an increase of $11.8 million in Connected Car revenue as the result of MG revenue coupled with settlements executed which was partially offset by the Divestiture, during the first six months of 2024.

Current wording

Revenue decreased by $12.8 million, or 3%, for the nine months ended September 30, 2024 compared to the same period in the prior year. The decrease was primarily attributable to a decline of $40.6 million in Consumer Electronics revenue due to the AutoSense Divestiture as well as fewer MG revenue contracts due to the timing and duration of MG contracts up for renewal, and a decrease of $6.8 million in Media Platform revenue driven principally by lower advertising revenue associated with our core Pay-TV products and lower MG revenue from our middleware solutions platform. These decreases were partially offset by an increase of $20.6 million in Pay-TV revenue driven largely by higher MG revenue in core guide products and continued growth in IPTV Solutions revenue, and an increase of $14.0 million in Connected Car revenue as a result of higher Audio Solutions and AutoStage revenue, coupled with settlements executed, all of which was partially offset by the impact of the AutoSense Divestiture, during the first nine months of 2024.

Previous wording

Cost of revenue, excluding depreciation and amortization of intangible assets, consists primarily of employee-related costs, royalties paid to third parties, hardware product-related costs, maintenance costs and an allocation of facilities costs, as well as service center and other expenses related to providing our offerings and non-recurring engineering (“NRE”) services.

Current wording

Cost of revenue, excluding depreciation and amortization of intangible assets, consists primarily of employee-related costs, royalties paid to third parties, hardware product-related costs, content costs, hosting fees, maintenance costs and an allocation of facilities costs, as well as service center and other expenses related to providing our offerings, and non-recurring engineering (“NRE”) services.

Previous wording

Cost of revenue, excluding depreciation and amortization of intangible assets, for the six months ended June 30, 2024 was $58.7 million, as compared to $58.6 million in the same period of the prior year, an increase of $0.1 million, or 0%. The increase was primarily attributable to higher delivery costs related to an increase in NRE revenue, mostly offset by lower costs incurred in connection with advertising revenue in the first six months of 2024.

Current wording

Cost of revenue, excluding depreciation and amortization of intangible assets, for the nine months ended September 30, 2024 was $86.2 million, as compared to $85.1 million in the same period of the prior year, an increase of $1.1 million, or 1%. The increase was primarily attributable to higher delivery costs related to an increase in NRE revenue as well as an increase in Media Platform costs, partially offset by lower costs incurred in connection with advertising revenue in the first nine months of 2024.

Previous wording

Research and development expense for the three months ended June 30, 2024 was $45.1 million, as compared to $55.7 million in the same period of the prior year, a decrease of $10.6 million, or 19%. The decrease was primarily driven by lower research and development spend in the AutoSense in-cabin safety business and related imaging solutions following the Divestiture, a reduction in expenses in the Perceive subsidiary, decreases in bonuses and contractor expenses, and an increase in capitalized costs for internal-use software in the second quarter of 2024.

Current wording

Research and development expense for the three months ended September 30, 2024 was $53.6 million, as compared to $56.4 million in the same period of the prior year, a decrease of $2.8 million, or 5%. The decrease was primarily driven by lower research and development spend in the AutoSense in-cabin safety business and related imaging solutions following the AutoSense Divestiture, a reduction in expenses related to the Perceive subsidiary, decreases in stock-based compensation and bonus expenses, and an increase in capitalized costs for internal-use software in the third quarter of 2024. These decreases were partially offset by certain one-time compensation and retention expenses associated with the Perceive Transaction as well as severance charges incurred during the third quarter of 2024.

Previous wording

Research and development expense for the six months ended June 30, 2024 was $95.6 million, as compared to $110.6 million in the same period of the prior year, a decrease of $15.0 million, or 14%. The decrease was primarily driven by lower research and development spend in the AutoSense in-cabin safety business and related imaging solutions following the Divestiture, a reduction in expenses in the Perceive subsidiary, decreases in bonuses and contractor expenses, and an increase in capitalized costs for internal-use software in the first six months of 2024.

Current wording

Research and development expense for the nine months ended September 30, 2024 was $149.2 million, as compared to $167.0 million in the same period of the prior year, a decrease of $17.8 million, or 11%. The decrease was primarily driven by lower research and development spend in the AutoSense in-cabin safety business and related imaging solutions following the AutoSense Divestiture, a reduction in expenses related to the Perceive subsidiary, decreases in stock-based compensation and bonus expenses, and an increase in capitalized costs for internal-use software in the first nine months of 2024. These decreases were partially offset by certain one-time compensation and retention expenses associated with the Perceive Transaction and severance charges incurred during the first nine months of 2024.

Previous wording

Selling expenses consist primarily of compensation and related costs (including stock-based compensation expense) for sales and marketing personnel engaged in sales and licensee support, marketing programs, public relations, promotional materials, travel, and trade show expenses. General and administrative expenses consist primarily of compensation and related costs (including stock-based compensation expense) for management, information technology, finance and legal personnel, legal fees and related expenses, facilities costs, and professional services. Our general and administrative expenses, other than facilities-related expenses and fringe benefits, are not allocated to other expense line items.

Current wording

Selling expenses consist primarily of compensation and related costs (including stock-based compensation expense) for sales and marketing personnel engaged in sales and licensee support, marketing programs, public relations, promotional materials, travel, and trade show expenses. General and administrative expenses consist primarily of compensation and related costs

Previous wording

Selling, general and administrative expenses for the three months ended June 30, 2024 were $53.1 million, as compared to $56.5 million in the same period of the prior year, a decrease of $3.4 million, or 6%. The decrease was primarily attributable to reduced employee headcount as well as decreases in stock-based compensation and bonus expenses, partially offset by an increase in certain one-time transaction costs in the second quarter of 2024.

Current wording

Selling, general and administrative expenses for the three months ended September 30, 2024 were $56.5 million, as compared to $59.6 million in the same period of the prior year, a decrease of $3.1 million, or 5%. The decrease was primarily attributable to reduced employee headcount as well as decreases in stock-based compensation and bonus expenses, partially offset by an increase in certain one-time transaction costs related to the Perceive Transaction in the third quarter of 2024.

Previous wording

Selling, general and administrative expenses for the six months ended June 30, 2024 were $109.5 million, as compared to $114.3 million in the same period of the prior year, a decrease of $4.8 million, or 4%. The decrease was primarily attributable to reduced employee headcount as well as decreases in stock-based compensation and bonus expenses, partially offset by an increase in certain one-time transaction costs in the first six months of 2024.

Current wording

Selling, general and administrative expenses for the nine months ended September 30, 2024 were $165.9 million, as compared to $173.9 million in the same period of the prior year, a decrease of $8.0 million, or 5%. The decrease was primarily attributable to reduced employee headcount as well as decreases in stock-based compensation and bonus expenses, partially offset by an increase in certain one-time transaction costs primarily related to the AutoSense Divestiture and the Perceive Transaction in the first nine months of 2024.

Previous wording

The following table sets forth our stock-based compensation expense for the three and six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table sets forth our stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

We recognized stock-based compensation expense from restricted stock units and purchases made under our employee stock purchase plan. Stock-based compensation expense decreased by $2.8 million and $4.0 million, or 15% and 12%, for the three and six months ended June 30, 2024 compared to the same periods of the prior year, respectively. The decreases were primarily driven by a lower PSU expense, and reduced employee headcount during the first six months of 2024.

Current wording

We recognized stock-based compensation expense from restricted stock units and purchases made under our employee stock purchase plan. Stock-based compensation expense decreased by $2.4 million and $6.4 million, or 13% and 12%, for the three and nine months ended September 30, 2024 compared to the same periods of the prior year, respectively. The decreases were primarily driven by lower expense for performance-based restricted stock units, and reduced employee headcount during each of the three and nine months ended September 30, 2024.

Previous wording

We recognized depreciation expense for certain equipment, capitalized internal-use software, leasehold improvements, and buildings and improvements. Depreciation expense for the three months ended June 30, 2024 was $3.3 million, as compared to $4.2 million in the same period of the prior year, a decrease of $0.9 million, or 22%. The decrease was primarily due to certain fixed assets becoming fully depreciated over the past 12 months.

Current wording

We recognized depreciation expense for certain equipment, capitalized internal-use software, leasehold improvements, and buildings and improvements. Depreciation expense for the three months ended September 30, 2024 was $2.9 million, as compared to $4.2 million in the same period of the prior year, a decrease of $1.3 million, or 31%. The decrease was primarily due to certain fixed assets becoming fully depreciated over the past 12 months.

Previous wording

Depreciation expense for the six months ended June 30, 2024 was $6.9 million, as compared to $8.3 million in the same period of the prior year, a decrease of $1.4 million, or 17%. The decrease was primarily due to certain fixed assets becoming fully depreciated over the past 12 months.

Current wording

Depreciation expense for the nine months ended September 30, 2024 was $9.8 million, as compared to $12.5 million in the same period of the prior year, a decrease of $2.7 million, or 22%. The decrease was primarily due to certain fixed assets becoming fully depreciated over the past 12 months.

Previous wording

We recognized amortization expense for certain intangible assets we acquired in business combinations that are recognized separately from goodwill. Amortization expense for the three months ended June 30, 2024 was $11.0 million, as compared to $14.8 million in the same period of the prior year, a decrease of $3.8 million, or 25%. The decrease was primarily due to certain intangible assets becoming fully amortized over the past 12 months.

Current wording

We recognized amortization expense for certain intangible assets we acquired in business combinations that are recognized separately from goodwill. Amortization expense for the three months ended September 30, 2024 was $10.9 million, as compared to $14.7 million in the same period of the prior year, a decrease of $3.8 million, or 26%. The decrease was primarily due to certain intangible assets becoming fully amortized over the past 12 months.

Previous wording

Amortization expense for the six months ended June 30, 2024 was $22.1 million, as compared to $29.6 million in the same period of the prior year, a decrease of $7.5 million, or 25%. The decrease was primarily due to certain intangible assets becoming fully amortized over the past 12 months.

Current wording

Amortization expense for the nine months ended September 30, 2024 was $33.0 million, as compared to $44.3 million in the same period of the prior year, a decrease of $11.3 million, or 26%. The decrease was primarily due to certain intangible assets becoming fully amortized over the past 12 months.

Previous wording

As a result of optimizing our global real estate footprint and subleasing certain offices following the Spin-Off (as defined in Note 1—Description Of Business And Summary Of Significant Accounting Policies), we recorded non-cash impairment charges of $1.1 million to reduce the carrying amount of certain operating lease ROU assets and property and equipment, including related leasehold improvements, during the six months ended June 30, 2023. We determined that we may not be able to fully recover the carrying amount of the leased offices due to how the offices were being used, a significant decrease in the expected market price of the ROU assets, and expected delays in subleasing the office facilities based on the condition of the commercial real estate leasing market.

Current wording

As a result of optimizing our global real estate footprint and subleasing certain offices following the Spin-Off (as defined in Note 1—Description Of Business And Summary Of Significant Accounting Policies), we recorded non-cash impairment charges of $0 and $1.1 million to reduce the carrying amount of certain operating lease right-of-use (“ROU”) assets and property and equipment, including related leasehold improvements, during the three and nine months ended September 30, 2023, respectively. We determined that we may not be able to fully recover the carrying amount of the leased offices due to how the offices were being used, a significant decrease in the expected market price of the ROU assets, and expected delays in subleasing the office facilities based on the condition of the commercial real estate leasing market.

Previous wording

We did not record any asset impairment charge for the six months ended June 30, 2024.

Current wording

We did not record any asset impairment charge for the three and nine months ended September 30, 2024.

Previous wording

As previously disclosed, we completed the Divestiture on January 31, 2024 and streamlined our business, further enhancing our focus on entertainment markets. Upon the completion of the Divestiture, we recognized a gain of $22.9 million in the six months ended June 30, 2024. Refer to Note 6—Divestitureof the Notes to Condensed Consolidated Financial Statements (Unaudited) for additional information.

Current wording

As previously disclosed, we completed the AutoSense Divestiture on January 31, 2024 and streamlined our business, further enhancing our focus on entertainment markets. Upon the completion of the AutoSense Divestiture, we recognized a gain of $22.9 million in the nine months ended September 30, 2024. Refer to Note 6—Divestituresof the Notes to Condensed Consolidated Financial Statements (Unaudited) for additional information.

Previous wording

For the three and six months ended June 30, 2024, we recorded an income tax expense of $9.3 million and $13.6 million on a pretax loss of $21.4 million and $30.5 million, respectively; which resulted in an effective tax rate of (43.4)% and (44.4)%, respectively. The income tax expense for the three and six months ended June 30, 2024 was primarily related to foreign withholding taxes, foreign income taxes, U.S. federal income taxes, and state income taxes.

Current wording

For the three and nine months ended September 30, 2024, we recorded an income tax expense of $2.9 million and $16.4 million on a pretax loss of $16.9 million and $47.4 million, respectively, which resulted in an effective tax rate of (17.1)% and (34.7)%, respectively. The income tax expense for the three and nine months ended September 30, 2024 was primarily related to foreign withholding taxes, foreign income taxes, U.S. federal income taxes, and state income taxes.

Previous wording

For the three and six months ended June 30, 2023, we recorded an income tax expense of $5.1 million and $4.8 million on a pretax loss of $34.3 million and $67.5 million, respectively; which resulted in an effective tax rate of (14.9)% and (7.1)%, respectively. The income tax benefit three and six months ended June 30, 2023 was primarily related to foreign withholding taxes, foreign income taxes, U.S. federal income taxes, and state income taxes.

Current wording

For the three and nine months ended September 30, 2023, we recorded an income tax expense of $9.7 million and $14.5 million on a pretax loss of $32.4 million and $99.9 million, respectively, which resulted in an effective tax rate of (29.9)% and (14.5)%, respectively. The income tax expense for the three and nine months ended September 30, 2023 was primarily related to foreign withholding taxes, foreign income taxes, U.S. federal income taxes, and state income taxes.

Previous wording

Our primary liquidity and capital resources are our cash and cash equivalents on hand. Cash and cash equivalents were $92.5 million at June 30, 2024, a decrease of $61.9 million from $154.4 million, including $12.3 million classified as held for sale in connection with the Divestiture, as of December 31, 2023. This decrease resulted primarily from cash used in operations of $51.9 million, $5.9 million in payments of withholding taxes on net share settlement of equity awards and $8.1 million of capital expenditures and capitalized internal-use software costs, offset by $4.3 million in proceeds from the issuance of common stock under our employee stock purchase plan (“ESPP”).

Current wording

Our primary liquidity and capital resources are our cash and cash equivalents on hand. Cash and cash equivalents were $72.7 million at September 30, 2024, a decrease of $81.7 million from $154.4 million, including $12.3 million classified as held for sale in connection with the AutoSense Divestiture, as of December 31, 2023. This decrease resulted primarily from cash used in operations of $56.6 million, $10.0 million in repurchases of common stock, $6.6 million in payments of withholding taxes on net share settlement of equity awards and $12.4 million of capital expenditures, including capitalized internal-use software costs, offset by $4.3 million in proceeds from the issuance of common stock under our employee stock purchase plan (“ESPP”). In addition, in October 2024, we completed the Perceive Transaction and received a cash payment of $68.0 million from the Buyer.

Previous wording

In April 2024, our Board of Directors (the “Board”) authorized the repurchase of up to $100.0 million of our common stock (the “Program”). Under the Program, we may make repurchases, from time to time, through open market purchases, block trades, privately negotiated transactions, accelerated share repurchase transactions, or other means. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases under the Program. Since the inception of the Program, we have not repurchased any shares of our common stock. The volume, timing, and manner of any repurchases will be determined at our discretion, subject to general market conditions, as well as our management of capital, general business conditions, other investment opportunities, regulatory requirements, and other factors. We currently expect to fund the repurchase program from cash and cash equivalents and/or future cash flows. The repurchase program does not obligate us to repurchase any specific number of shares of common stock, has no time limit, and may be modified, suspended, or discontinued at any time without notice at the discretion of the Board. Any repurchases under the Program may not enhance the value of our common stock.

Current wording

In April 2024, our Board of Directors (the “Board”) authorized the repurchase of up to $100.0 million of our common stock (the “Program”). Under the Program, we may make repurchases, from time to time, through open market purchases, block trades, privately negotiated transactions, accelerated share repurchase transactions, or other means. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases under the Program. During the three months ended September 30, 2024, we repurchased a total of approximately 1.1 million shares of common stock at an average price of $8.92 per share for a total cost of $10.0 million. As of September 30, 2024, the total remaining amount available for repurchase was $90.0 million. We expect to continue to fund the repurchase program from cash and cash equivalents, including from the net proceeds of the Perceive Transaction. Repurchases under the Program may not enhance the value of our common stock.

Previous wording

Net cash used in operating activities was $51.9 million for the six months ended June 30, 2024, primarily due to our net loss of $44.0 million being further adjusted by $42.2 million of changes in operating assets and liabilities, including payment of employee annual bonuses for 2023 performance, and $22.9 million of a non-cash gain recognized from the Divestiture, partially offset by non-cash items such as stock-based compensation expense of $30.1 million, amortization of intangible assets of $22.1 million, and depreciation expense of $6.9 million.

Current wording

Net cash used in operating activities was $56.6 million for the nine months ended September 30, 2024, primarily due to our net loss of $63.8 million being further adjusted by $55.6 million of changes in operating assets and liabilities driven principally by an increase of $43.5 million in unbilled contracts receivable, and $22.9 million of a non-cash gain recognized from the AutoSense Divestiture, partially offset by non-cash items such as stock-based compensation expense of $45.3 million, amortization of intangible assets of $33.0 million, and depreciation expense of $9.8 million.

Previous wording

Net cash used in operating activities was $44.6 million for the six months ended June 30, 2023, primarily due to our net loss of $72.3 million being further adjusted by $44.6 million of changes in operating assets and liabilities, partially offset by non-cash items such as depreciation expense of $8.3 million, amortization of intangible assets of $29.6 million, stock-based compensation expense of $34.1 million, an asset impairment charge of $1.1 million, and change in deferred income taxes of $0.7 million.

Current wording

Net cash used in operating activities was $20.6 million for the nine months ended September 30, 2023, primarily due to our net loss of $114.4 million being further adjusted by $14.7 million of changes in operating assets and liabilities, partially offset by non-cash items such as depreciation expense of $12.5 million, amortization of intangible assets of $44.3 million, stock-based compensation expense of $51.7 million, and an asset impairment charge of $1.1 million.

Previous wording

Net cash used in investing activities was $8.4 million and $6.2 million for six months ended June 30, 2024 and 2023, respectively, which was primarily related to capital expenditures and capitalized internal-use software.

Current wording

Net cash used in investing activities was $12.9 million and $9.6 million for nine months ended September 30, 2024 and 2023, respectively, which was primarily related to capital expenditures, including capitalized internal-use software.

Previous wording

Our capital expenditures for property and equipment consist primarily of purchases of computer hardware and software, capitalized internal-use software, information systems, and production and test equipment. We expect capital expenditures in 2024 to be approximately $20.0 million. These expenditures are expected to be paid with existing cash and cash equivalents. There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs.

Current wording

Our capital expenditures for property and equipment consist primarily of purchases of computer hardware and software, capitalized internal-use software, information systems, and production and test equipment. We expect capital expenditures in 2024 to be approximately $20.0 million. These expenditures are expected to be paid with existing cash and cash equivalents.

Previous wording

Net cash used in financing activities was $1.6 million for the six months ended June 30, 2024, due to $5.9 million in payment of withholding taxes related to net share settlement of equity awards, partially offset by $4.3 million in proceeds from the issuance of common stock under our ESPP.

Current wording

Net cash used in financing activities was $12.3 million for the nine months ended September 30, 2024, due to $10.0 million in repurchases of common stock under the Program and $6.6 million in payment of withholding taxes related to net share settlement of equity awards, partially offset by $4.3 million in proceeds from the issuance of common stock under our ESPP.

Previous wording

Net cash provided by financing activities was $2.7 million for the six months ended June 30, 2023, primarily due to $5.9 million in proceeds from the issuance of common stock under our ESPP, partially offset by the payment of $3.2 million in withholding taxes related to net share settlement of equity awards.

Current wording

Net cash provided by financing activities was $1.5 million for the nine months ended September 30, 2023, due to $5.9 million in proceeds from the issuance of common stock under our ESPP, partially offset by the payment of $4.4 million in withholding taxes related to net share settlement of equity awards.

Previous wording

We believe our current cash and cash equivalents will be sufficient to meet our needs for at least the next 12 months from the issuance date of these financial statements. As the Promissory Note (see “Long-Term Debt”) matures on July 1, 2025, we may access the capital markets for additional funding. As we assess growth strategies, we may need to supplement our cash and cash equivalents with outside sources. As part of our liquidity strategy, we will continue to monitor our current level of earnings and cash flow as well as our ability to access the capital markets in light of those levels.

Current wording

As we assess growth strategies, we may need to supplement our cash and cash equivalents with outside sources. As part of our liquidity strategy, we will continue to monitor our earnings and cash flow as well as our ability to access the capital markets in light of those levels.

Previous wording

Poor financial results, unanticipated expenses, unanticipated acquisitions of technologies or businesses or unanticipated strategic investments could give rise to additional financing requirements sooner than we expect. Equity or debt financing may not be available when needed or, if available, equity financing may not be on terms satisfactory to us.

Current wording

Poor financial results, unanticipated expenses, unanticipated acquisitions of technologies or businesses or unanticipated strategic investments could give rise to additional financing requirements sooner than we expect. Equity or debt financing may not be available when needed or, if available, equity or debt financing may not be on terms satisfactory to us.

Previous wording

We may supplement our short-term liquidity needs with access to capital markets, if necessary, and strategic cost savings initiatives. Our access to capital markets may be constrained and our cost of borrowing may increase under certain business and market conditions, and our liquidity is subject to various risks including the risks identified in “Risk Factors” included in Item 1A of our Form 10-K.

Current wording

We may supplement our short-term liquidity needs with access to capital markets, if necessary, and strategic cost savings initiatives. Our access to capital markets may be constrained and our cost of borrowing may increase under certain business and market conditions, and our liquidity is subject to various risks including the risks identified in “Risk Factors” included in Part I, Item 1A of our Form 10-K.

Previous wording

During the six months ended June 30, 2024, there were no significant changes in our critical accounting estimates. For a discussion of our critical accounting estimates, see Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K.

Current wording

During the nine months ended September 30, 2024, there were no significant changes in our critical accounting estimates. For a discussion of our critical accounting estimates, see Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K.