8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2020

Impinj, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-37824	91-2041398
(State or other jurisdiction<br><br><br>of incorporation)	(Commission<br><br><br>File Number)	(IRS Employer<br><br><br>Identification No.)

400 Fairview Avenue North, Suite 1200

Seattle, Washington 98109

(Address of principal executive offices, including zip code)

(206) 517-5300

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	PI	The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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.                                        ☐

Item 2.02	Results of Operations and Financial Conditions.

On October 28, 2020, Impinj Inc. (“Impinj” or the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2020. A copy of the press release, entitled “Impinj Reports Third Quarter 2020 Financial Results” is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.

The information in this current report on Form 8-K and the exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01	Financial Statements and Exhibits

(d) Exhibits

99.1	Press release dated October 28, 2020.
104	Inline XBRL for the cover page of this Current Report on Form 8-K.

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 hereunto duly authorized.

Impinj, Inc.
By:	/s/ Chris Diorio
	Chris Diorio<br><br><br>Chief Executive Officer

Date: October 28, 2020

pi-ex991_6.htm

Exhibit 99.1

Impinj Reports Third Quarter 2020 Financial Results

SEATTLE, WA, Oct. 28, 2020– Impinj, Inc. (NASDAQ: PI), a leading provider and pioneer of RAIN RFID solutions, today released its financial results for the third quarter ended September 30, 2020.

“Third-quarter revenue improved sequentially, driven primarily by rebounding retail-apparel volumes that drove endpoint IC sales,” said Chris Diorio, Impinj co-founder and CEO. “With game-changing new products and a platform and vision that sit squarely in the center of our end users’ digital transformation, the opportunity in front of us is more compelling than ever.”

Third Quarter 2020 Financial Summary

•	Revenue of $28.2 million
•	GAAP gross margin of 47.4%; non-GAAP gross margin of 50.1%
---	---
•	GAAP net loss of $14.3 million, or loss of $0.63 per diluted share using 22.9 million shares
---	---
•	Adjusted EBITDA loss of $6.2 million
---	---
•	Non-GAAP net loss of $6.7 million, or loss of $0.29 per diluted share using 22.9 million shares
---	---

A reconciliation between GAAP and non-GAAP information is contained in the tables below. Additionally, descriptions of these non-GAAP financial measures are provided in the “Non-GAAP Financial Measures” sections below.

Fourth Quarter 2020 Financial Considerations

Impinj provides guidance based on current market conditions and expectations; actual results may differ materially. Please refer to the comments below regarding forward-looking statements. The following table presents Impinj’s financial outlook for the fourth quarter of 2020 (in millions, except per share data):

	Three Months Ending
	December 31, 2020
Revenue	$26.5  to $28.5
GAAP Net loss	($17.2) to ($16.2)
Adjusted EBITDA loss	($8.9) to ($7.4)
Non-GAAP net loss	($9.3) to ($7.8)
GAAP Weighted-average shares — basic and diluted	23.00  to 23.10
GAAP Net loss per share — basic and diluted	($0.75) to ($0.70)
Non-GAAP Weighted-average shares — basic and diluted	23.00  to 23.10
Non-GAAP Net loss per share — basic and diluted	($0.40) to ($0.34)

A reconciliation between GAAP and non-GAAP is provided in the "Non-GAAP Financial Measures" section below.

Conference Call Information

Impinj will host a conference call today, Oct. 28, 2020 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to ask questions on its third quarter 2020 results. Open to the public, investors may access the call by dialing +1-412-317-5196. A live webcast of the conference call will also be accessible on our website at investor.impinj.com. Following the webcast, an archived version will be available on the website for one year. A telephonic replay of the call will be available one hour after the call and will run for five business days and may be accessed by dialing +1-412-317-0088 and entering passcode 10148757.

Management’s prepared written remarks, along with quarterly financial data, will be made available on our website at investor.impinj.com commensurate with this release.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the market for RAIN RFID, our strategy, prospects, the impact of Covid-19, and financial considerations for fourth quarter of 2020 and future periods.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance.

The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update this information unless required by law.

About Impinj

Impinj (NASDAQ: PI) helps businesses and people analyze, optimize, and innovate by wirelessly connecting billions of everyday things — such as apparel, automobile parts, luggage, and shipments — to the Internet. The Impinj platform uses RAIN RFID to deliver timely data about these everyday things to business and consumer applications, enabling a boundless Internet of Things. www.impinj.com

Impinj is a registered trademark of Impinj, Inc. All other trademarks are the property of their owners.

For more information, contact:

Investor Relations

ir@impinj.com

+1-206-315-4470

Media Relations Jill West Sr. Director, Marketing & Communications +1 206-834-1110 jwest@impinj.com

IMPINJ, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value, unaudited)

			December 31, 2019 ^(1)^
Assets:
Current assets:
Cash and cash equivalents	40,063		$	66,898
Short-term investments	65,057			49,597
Accounts receivable, net	17,730			23,735
Inventory	37,982			34,153
Prepaid expenses and other current assets	3,339			2,386
Total current assets	164,171			176,769
Property and equipment, net	16,365			17,442
Operating lease right-of-use assets	14,472			16,501
Other non-current assets	1,193			453
Goodwill	3,881			3,881
Total assets	200,082		$	215,046
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable	8,597		$	5,600
Accrued compensation and employee related benefits	4,062			5,859
Accrued liabilities	2,334			3,755
Current portion of operating lease liabilities	3,618			3,380
Current portion of deferred revenue	953			551
Other current liabilities	19			352
Total current liabilities	19,583			19,497
Long-term debt, net of current portion	53,595			50,876
Operating lease liabilities, net of current portion	16,160			18,907
Deferred revenue, net of current portion	260			213
Long-term liabilities — other	1,056			314
Total liabilities	90,654			89,807
Stockholders' equity:
Common stock, 0.001 par value	23			22
Additional paid-in capital	408,342			387,926
Accumulated other comprehensive income	12			34
Accumulated deficit	(298,949	)		(262,743	)
Total stockholders' equity	109,428			125,239
Total liabilities and stockholders' equity	200,082		$	215,046
(1) Certain immaterial amounts on our condensed consolidated balance sheets in prior periods have been reclassified to conform with current period presentation.

All values are in US Dollars.

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
Revenue	$	28,196		$	40,762		$	102,475		$	112,015
Cost of revenue		14,824			20,981			54,749			57,945
Gross profit		13,372			19,781			47,726			54,070
Operating expenses:
Research and development		11,901			10,344			33,619			27,678
Sales and marketing		6,964			7,842			20,577			24,579
General and administrative		7,527			5,503			26,215			16,653
Total operating expenses		26,392			23,689			80,411			68,910
Loss from operations		(13,020	)		(3,908	)		(32,685	)		(14,840	)
Other income, net		49			317			584			947
Interest expense		(1,360	)		(413	)		(4,021	)		(1,263	)
Loss before income taxes		(14,331	)		(4,004	)		(36,122	)		(15,156	)
Income tax expense		(15	)		(77	)		(84	)		(151	)
Net loss	$	(14,346	)	$	(4,081	)	$	(36,206	)	$	(15,307	)
Net loss per share — basic and diluted	$	(0.63	)	$	(0.19	)	$	(1.60	)	$	(0.70	)
Weighted-average shares — basic and diluted		22,931			21,961			22,686			21,738

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

	Nine Months Ended
	September 30,
	2020			2019
Operating activities:
Net loss	$	(36,206	)	$	(15,307	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		3,402			3,637
Stock-based compensation		15,501			11,813
Accretion of discount or amortization of premium on short-term investments		85			(464	)
Amortization of debt issuance costs and debt discount		2,719			51
Changes in operating assets and liabilities:
Accounts receivable		6,005			(6,341	)
Inventory		(3,829	)		8,451
Prepaid expenses and other assets		(1,637	)		(222	)
Deferred revenue		449			114
Accounts payable		2,608			1,508
Accrued compensation and employee related benefits		(1,797	)		(2,440	)
Operating lease right-of-use assets		2,029			1,505
Operating lease liabilities		(2,509	)		(2,255	)
Accrued liabilities and other liabilities		(372	)		164
Net cash provided by (used in) operating activities		(13,552	)		214
Investing activities:
Purchases of investments		(57,298	)		(59,036	)
Proceeds from maturities of investments		41,675			51,794
Purchases of property and equipment		(2,336	)		(971	)
Net cash used in investing activities		(17,959	)		(8,213	)
Financing activities:
Principal payments on finance lease obligations		(240	)		(410	)
Payments on term and equipment loans		—			(4,222	)
Proceeds from term loans, net of debt issuance costs		—			3,991
Proceeds from exercise of stock options and employee stock purchase plan		4,916			8,041
Net cash provided by financing activities		4,676			7,400
Net decrease in cash and cash equivalents		(26,835	)		(599	)
Cash and cash equivalents
Beginning of period		66,898			17,530
End of period	$	40,063		$	16,931

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements prepared and presented in accordance with U.S. generally accepted accounting principles, or GAAP, our key non-GAAP performance measures include adjusted EBITDA and non-GAAP net income (loss), as defined below. We use adjusted EBITDA and non-GAAP net income (loss) as key measures to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operating plans. We believe these measures provide useful information for period-to-period comparisons of our business to allow investors and others to understand and evaluate our operating results in the same manner as our management and board of directors. Our presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from similarly termed non-GAAP measures used by other companies.

Adjusted EBITDA

We define adjusted EBITDA as net income (loss) determined in accordance with GAAP, excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation; investigation costs; restructuring costs; settlement and related costs; other income, net; interest expense; loss on debt extinguishment; and income tax benefit (expense). In fourth-quarter 2019, we revised our definition of adjusted EBITDA to exclude loss on debt extinguishment incurred in connection with the December 2019 repayment of our senior credit facility. In second-quarter 2020, we revised our definition of adjusted EBITDA to exclude litigation settlement costs for the class-action and derivative lawsuits, including related costs. We have excluded these costs and expenses because we do not believe they reflect our core operations and us excluding them enables more consistent evaluation of our operating performance. Neither revision to the definition of adjusted EBITDA impacted adjusted EBITDA previously reported for prior periods preceding the revisions.

Non-GAAP Net Income (Loss)

We define non-GAAP net income (loss) as net income (loss), excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation; investigation costs; restructuring costs; settlement and related costs; amortization of debt discount related to the equity component of our convertible notes; and prepayment penalty on debt extinguishment. In fourth-quarter 2019, we revised our definition of non-GAAP net income (loss) to exclude the prepayment penalty on debt extinguishment incurred in connection with the December 2019 repayment of our senior credit facility and amortization of debt discount related to the equity component of the 2019 Notes. We have revised the prior period non-GAAP net income (loss) to conform to our current period presentation. In second-quarter 2020, we revised our definition of non-GAAP net income (loss) to exclude litigation settlement costs for the class-action and derivative lawsuits, including related costs. Excluding settlement and related costs did not impact non-GAAP net income (loss) previously reported for prior periods preceding the revision.

GAAP requires that certain convertible debt instruments that may be settled in cash on conversion be accounted for as separate liability and equity components in a manner that reflects our non-convertible debt borrowing rate. This accounting results in the debt component being treated as though it was issued at a discount, with the debt discount being amortized as additional non-cash interest expense over the debt instrument term using the effective interest method. As a result, we believe that excluding this non-cash interest expense attributable to the debt discount in calculating our non-GAAP net income (loss) is useful because this interest expense is not indicative of our ongoing operational performance.

IMPINJ, INC.

RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(in thousands, except percentages, unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
GAAP Gross margin		47.4	%		48.5	%		46.6	%		48.3	%
Adjustments:
Depreciation		1.9	%		1.2	%		1.3	%		1.4	%
Stock-based compensation		0.8	%		0.5	%		0.6	%		0.4	%
Non-GAAP Gross margin		50.1	%		50.2	%		48.5	%		50.1	%
GAAP Net loss	$	(14,346	)	$	(4,081	)	$	(36,206	)	$	(15,307	)
Adjustments:
Depreciation		1,108			1,220			3,402			3,637
Stock-based compensation		5,683			4,793			15,501			11,813
Other income, net		(49	)		(317	)		(584	)		(947	)
Interest expense		1,360			413			4,021			1,263
Income tax expense		15			77			84			151
Settlement and related costs		—			—			5,359			—
Adjusted EBITDA	$	(6,229	)	$	2,105		$	(8,423	)	$	610
GAAP Net loss	$	(14,346	)	$	(4,081	)	$	(36,206	)	$	(15,307	)
Adjustments:
Depreciation		1,108			1,220			3,402			3,637
Stock-based compensation		5,683			4,793			15,501			11,813
Amortization of debt discount		897			—			2,637			—
Settlement and related costs		—			—			5,359			—
Non-GAAP Net income (loss)	$	(6,658	)	$	1,932		$	(9,307	)	$	143
Non-GAAP Net income (loss) per share:
Basic	$	(0.29	)	$	0.09		$	(0.41	)	$	0.01
Diluted	$	(0.29	)	$	0.08		$	(0.41	)	$	0.01
GAAP and non-GAAP Weighted-average shares — basic		22,931			21,961			22,686			21,738
GAAP Weighted-average shares  — diluted		22,931			21,961			22,686			21,738
Dilutive shares from stock plans		—			894			—			658
Non-GAAP Weighted-average shares  — diluted		22,931			22,855			22,686			22,396

IMPINJ, INC.

RECONCILIATIONS OF GAAP FINANCIAL OUTLOOK TO NON-GAAP FINANCIAL OUTLOOK

(in thousands, except per share data, unaudited – calculated at the midpoint of the outlook range)

	Three Months Ending
	December 31,
	2020
GAAP Net loss	$	(16,700	)
Adjustments:
Forecasted Depreciation		1,200
Forecasted Stock-based compensation		6,000
Forecasted Interest expense		1,400
Forecasted Other income, net		(50	)
Forecasted Income tax expense		—
Adjusted EBITDA loss	$	(8,150	)
GAAP Net loss	$	(16,700	)
Adjustments:
Forecasted Depreciation		1,200
Forecasted Stock-based compensation		6,000
Forecasted Accretion of debt discount		950
Non-GAAP Net loss	$	(8,550	)
GAAP Net loss per share — basic and diluted	$	(0.72	)
Non-GAAP Net loss per share — basic and diluted	$	(0.37	)
GAAP weighted-average shares — basic and diluted		23,050
Non-GAAP weighted-average shares — basic and diluted		23,050