Identiv, Inc.

Current report

Risks Related to our Business, Products, and Industry

Current report

Adverse global and regional economic conditions have and may continue to materially adversely affect our business, results of operations and financial condition.

Current report

We conduct operations internationally with sales in the Americas, Europe and the Middle East, and Asia-Pacific regions. Our manufacturing operations are primarily performed at our manufacturing facility in Thailand, and to a lesser extent, with third-party contract manufacturers in Southeast Asia. We also purchase certain products and key components from a limited number of sources that depend on the supply chain, including freight, to receive components, transport finished goods and deliver our products across the world. As a result, adverse global and regional economic conditions may materially adversely affect our business, results of operations and financial condition.

Current report

Such conditions, including but not limited to geopolitical tensions, inflation, tariffs, sanctions or other trade restrictions, slower growth or recession, higher interest rates and currency fluctuations, and other conditions that may impact market volatility, consumer confidence and spending may adversely affect demand for our products and our operations. For example, armed conflicts and heightened geopolitical tensions in the Middle East, including ongoing U.S. and Israeli military operations against Iran, pose risks to the global economy and to our business, even though we do not have direct operations in the region. An escalation of military action in the Middle East could adversely affect global supply chains, including through disruptions to shipping routes and increases in transit times and freight costs for components and raw materials.

Current report

During fiscal years 2025 and 2024, we were impacted by adverse macroeconomic conditions including but not limited to inflation, foreign currency fluctuations, and the slowdown of economic activity around the globe. Adverse conditions included experiencing delays and reductions in customer orders, shifting supply chain availability and component shortages. Global economic conditions have also impacted our suppliers, contract manufacturers, logistics providers, and distributors, causing increases in cost of materials and higher shipping and transportation rates, which then impacted the pricing of our products. Price increases may not successfully offset cost increases or may cause us to lose market share and, in turn, may adversely impact our operations. In fiscal year 2025, we were impacted by increases in U.S. tariffs applicable to products manufactured in Thailand, which created additional uncertainty in our supply chain and pricing environment. For additional information regarding our exposure to U.S. trade policy changes and tariffs, see the risk factor entitled “—Changes in U.S. trade policy and the impact of tariffs may have a material adverse effect on our business and results of operations” in our 2025 Annual Report on Form 10-K, as amended.

Current report

More recently, adverse macroeconomic conditions have had a greater impact on our consumer-facing applications, where demand for higher-end products has softened. In particular, one of our larger consumer-facing customers accumulated significant inventory over the last three quarters and has paused new order activity for several months to align its inventory levels with current demand. Although the customer has indicated that it expects to resume ordering later this year, the timing and volume of any resumed orders are uncertain. This pause will negatively affect our third and fourth quarter results, and may affect future periods depending on when orders resume and the levels of those orders. Further softening in demand, prolonged or additional customer inventory adjustments, or reductions or delays in customer orders could materially adversely affect our revenue, results of operations and cash flows.

Current report

Our financial performance depends on the extent and pace of RFID and BLE market adoption and end-user adoption of our RFID and BLE products and the timing of customer deployments.

Current report

Our financial performance depends on the pace, scope and depth of end-user adoption of our RFID and BLE products in multiple industries. If RFID and BLE 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 results of operations and business prospects may be adversely affected. In addition, given the uncertainties of the specific timing of our customer deployments, we cannot be assured that we will have appropriate inventory and capacity levels or that we will not experience inventory shortfalls or overages in the future. We seek to mitigate those risks by being deeply embedded in our customers’ design cycle, working with our chip partners on long lead time components, managing our limited capital equipment needs within a short cycle and expanding our facilities to accommodate several scenarios for growth potential. BLE inlays and labels are a newer technology and product category, which carry additional market adoption risks as these solutions have not been widely scaled across multiple industries. Many customer deployments depend on successful product development and manufacturing process development, and we cannot assure you that technical product and manufacturing process development will be completed on schedule or achieve required performance specifications and satisfy applicable customer and/or cost requirements. Development risks have and may continue to delay or prevent customer deployments and adversely affect our operating results. If end users with sizable projects change requirements or choose to delay due to market conditions or strategic prioritization or if we are not able to develop products that meet customer requirements on a cost effective basis, we have and may continue to experience significant fluctuation in revenue on a quarterly or annual basis, and we anticipate that such uncertainty and fluctuations may continue to characterize our business for the foreseeable future. In particular, we are negotiating with an existing customer on terms related to increase in costs for a BLE product under development which could impact the commercialization timeline. There can be no assurances that our negotiations will be successful.

Current report

We depend on a number of suppliers and contract manufacturers for the production of our products and components, making us vulnerable to supply disruption.

Current report

Our reliance on suppliers and contract manufacturers for the production of our products and components has and may continue to result in product delivery problems and delays. We have recently experienced chip allocation delays for certain products, which have delayed production and shipment of some customer orders. We may suffer a disruption if the supply of chips or other components causes us to be unable to purchase sufficient components on a timely basis. For example, the global semiconductor shortage that began in 2021 adversely impacted our ability to meet product demand in a timely fashion and had a negative impact on our revenue and operating results. Component shortages or low inventory levels can affect our ability to meet customer demand, delay production and shipments, lengthen lead times and potentially cause us to defer or lose revenue, miss opportunities, lose market share and/or damage customer relationships, also adversely affecting our business. We are currently experiencing significantly longer lead times with several of our chip suppliers and anticipate delays in certain chips in the third and fourth quarters of 2026 which could impact our results. We are also experiencing increases in prices for many of these chips. We are able to pass along these costs in certain cases, but not all. There can be no assurance that our efforts to secure adequate supply 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.

Current report

Risks Related to the Asset Sale

Current report

Failure to complete the Asset Sale could materially and adversely affect our business, results of operations, financial condition and stock price.

Current report

The closing of the Asset Sale is conditioned on the receipt of the Required Stockholder Approval, as well as the satisfaction of other closing conditions, including those referenced in the risk factor entitled “—We cannot be sure if or when the Asset Sale will be completed”. In the event the Asset Sale is not completed or is delayed for any reason, our business, results of operations, financial condition and stock price may be harmed because:

Current report

management's and our employee's attention may be diverted from our day-to-day operations as they focus on matters related to the Asset Sale;

Current report

we may lose key employees if such employees experience uncertainty about their future roles with us or Buyer and decide to pursue other opportunities;

Current report

we may lose customers or vendors, harm existing customer or vendor relationships, and new customer or vendor contracts could be delayed or reduced;

Current report

activities related to the Asset Sale and related uncertainties may lead to a loss of revenue and market position unrelated to the Asset Sale that we may not be able to regain if the Asset Sale does not occur;

Current report

the failure to consummate, or delays in consummating, the Asset Sale may result in a negative impression of us with customers, potential customers or the investment community; and

Current report

our stock price may continue to fluctuate significantly based on announcements by us, Buyer or other third parties regarding the Asset Sale or our business.

Current report

In addition, we have agreed to restrictions in the Purchase Agreement that limit how we conduct our business prior to the closing of the Asset Sale. Subject to certain exceptions, these restrictions require Buyer’s prior written consent before we may take certain actions, including, among other things, making certain capital expenditures, investments and acquisitions, selling, transferring or disposing of our assets, entering into material contracts outside of the ordinary course of business, amending our organizational documents and incurring indebtedness. These restrictions may not be in our best interests and may disrupt or otherwise adversely affect our business and our relationships with our customers, prevent us from pursuing otherwise attractive business opportunities, limit our ability to respond effectively to competitive pressures, industry developments and future opportunities, and otherwise harm our business, financial results and operations.

Current report

The occurrence of these or other events individually or in combination could have a material adverse effect on our business, results of operations, financial condition and stock price. If the Asset Sale is not completed, the Board of Directors, in discharging its fiduciary obligations, may evaluate other strategic alternatives that may be available, which alternatives may not be as favorable to our stockholders as the Asset Sale. These may include retaining and continuing to operate the IoT Business or pursuing an alternate sale transaction that would yield reduced consideration or involve significant delays. The Board of Directors may also decide to wind down the operations of the Company. Any future sale of substantially all of the assets of the Company or other transactions may be subject to further stockholder approval.

Current report

We cannot be sure if or when the Asset Sale will be completed.

Current report

The consummation of the Asset Sale is subject to the satisfaction or waiver, to the extent permitted by applicable law, of various conditions, including:

Current report

the Company having obtained the Required Stockholder Approval of the Asset Sale;

Current report

the absence of any order or law enjoining, restraining, prohibiting or making illegal the consummation of the Asset Sale;

Current report

the absence of any pending or overtly threatened legal proceeding challenging or seeking to restrain or prohibit the consummation of the Asset Sale;

Current report

each party’s representations and warranties being true and correct to the applicable specified standard as of the date of the Purchase Agreement and as of the closing of the Asset Sale;

Current report

each party’s material compliance with covenants required to be performed or complied with prior to or on the closing of the Asset Sale;

Current report

delivery of the stock certificate representing the Buyer Series C Shares;

Current report

delivery of the ancillary agreements;

Current report

delivery of the Purchased Assets and the Purchased Cash (each as defined in the Purchase Agreement); and

Current report

the filing by Buyer of a charter amendment with the Secretary of State of the State of Delaware to increase the authorized number of shares of Buyer Series C Preferred Stock.

Current report

We cannot guarantee that the closing conditions set forth in the Purchase Agreement will be satisfied. If either party is unable to satisfy the closing conditions in the other party’s favor or if other mutual closing conditions are not satisfied, a party will not be obligated to complete the Asset Sale.

Current report

The Purchase Agreement contains provisions that could discourage a potential competing acquirer.

Current report

The Purchase Agreement contains “no solicitation” provisions that restrict our ability to solicit, initiate, or knowingly encourage or knowingly facilitate third party proposals for the acquisition of 20% of our assets or 20% of our outstanding voting securities or to pursue an unsolicited offer, subject to certain limited exceptions. In addition, Buyer has an opportunity to modify or amend the terms of the Asset Sale in response to any unsolicited competing acquisition proposal before the Board of Directors may withdraw or change its recommendation with respect to the Asset Sale. Upon the termination of the Purchase Agreement to pursue an alternative transaction with respect to a Superior Proposal (as defined in the Purchase Agreement), we will be required to pay Buyer $750,000 as a termination fee.

Current report

These provisions could discourage a potential third-party acquirer from considering or proposing an acquisition transaction, even if it were prepared to pay a higher price than what would be received in the Asset Sale. These provisions might also result in a potential third-party acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable.

Current report

The Buyer preferred equity we receive in the Asset Sale is illiquid and may not generate the value we expect.

Current report

In connection with the Asset Sale, we expect to receive Buyer Series C Shares with an agreed value of $50.0 million. There is currently no public market for Buyer’s equity securities, and there can be no assurance that any public market for its equity securities will develop in the future or that we will otherwise be able to monetize our investment on favorable terms, or at all. In addition, our investment in Buyer will be subject to transfer restrictions that may limit our ability to monetize the investment. Subject to limited exceptions, we, or any liquidating trust, grantor trust or similar vehicle established for our benefit and/or the benefit of our stockholders, may transfer our Buyer Series C Shares only to a transferee that is an accredited investor, is not a competitor of Buyer, subject to specified exceptions, and is reasonably acceptable to Buyer. Any transfer also must satisfy a minimum share threshold. In addition, our Buyer Series C Shares will be subject to standard market stand-off restrictions in connection with certain liquidity events We may not be able to sell the preferred equity at the time, price or valuation we desire, or at all, and the value attributed to the preferred equity in the Asset Sale may not reflect the amount we ultimately realize, if any.

Current report

The value of our Buyer Series C Shares will depend on Buyer’s future performance, financial condition, liquidity, strategic decisions and ability to execute its business plan, all of which are outside of our control. In addition, because Buyer is a private company and not subject to reporting obligations applicable to public companies, our stockholders will have limited visibility into Buyer’s financial performance and prospects. Following the Asset Sale, we do not expect to provide periodic financial or operating information or other metrics regarding Buyer’s business or performance, other than information required to be disclosed in our periodic reports in connection with our accounting for our Buyer Series C Shares. If Buyer does not perform as expected, if there is not sufficient information about the Buyer available, if the value of Buyer's equity declines or if we are unable to realize liquidity from our investment, our financial condition, results of operations and the market price of our common stock could be adversely affected.

Current report

We have and will continue to incur significant expenses in connection with the Asset Sale, whether or not it is consummated.