4. Stockholders’ Equity

Reverse Stock Split

On May 22, 2014, the stockholders approved, and the Company filed a certificate of amendment to its Amended and Restated Certificate of Incorporation with the Secretary of the State of Delaware effecting a one-for-ten reverse stock split. The reverse stock split did not change the par value of the Company’s common stock or the number of preferred stock authorized for issuance.

Common Stock Warrants

In connection with the Company’s entry into a consulting agreement in August 2014, the Company issued a consultant a warrant to purchase up to 85,000 shares of the Company’s common stock at a per share exercise price of $10.70 (the “Consultant Warrant”). One fourth of the shares under the warrant are exercisable for cash three months from the date the Consultant Warrant was issued and quarterly thereafter. The Consultant Warrant expires on August 13, 2019. In the event of an acquisition of the Company, the Consultant Warrant shall terminate and no longer be exercisable as of the closing of the acquisition. As of September 30, 2015, the Consultant Warrant has not been exercised.

In connection with the Company’s entry into a credit agreement with Opus Bank (“Opus”) as discussed in Note 8, Financial Liabilities, the Company issued Opus a warrant to purchase up to 100,000 shares of the Company’s common stock at a per share exercise price of $9.90 (the “Opus Warrant”). The Opus Warrant is immediately exercisable for cash or by net exercise and expires on March 31, 2019. The shares issuable upon exercise of the Opus Warrant are to be registered at the request of Opus pursuant to the Registration Rights Agreement, dated March 31, 2014 between the Company and Opus. As of September 30, 2015, the Opus Warrant has not been exercised.

On August 14, 2013, in a private placement, the Company issued 834,847 shares of its common stock at a price of $8.50 per share and warrants to purchase an additional 834,847 shares of its common stock at an exercise price of $10.00 per share (the “2013 Private Placement Warrants”) to accredited and other qualified investors (the “Investors”). The 2013 Private Placement Warrants have a term of four years and are exercisable beginning six months following the date of issuance. The number of shares issuable upon exercise of the 2013 Private Placement Warrants is subject to adjustment for any stock dividends, stock splits or distributions by the Company, or upon any merger or consolidation or sale of assets of the Company, tender or exchange offer for the Company’s common stock, or a reclassification of the Company’s common stock.

The Company issued warrants to purchase 409,763 shares of its common stock at an exercise price of $26.50 per share in a private placement to accredited and other qualified investors in November 2010 (the “2010 Private Placement Warrants”). The 2010 Private Placement Warrants are exercisable beginning on the date of issuance and expire on November 14, 2015.

Below is the summary of outstanding warrants issued by the Company as of September 30, 2015:

Warrant Type

Number of Shares Issuable Upon Exercise

Weighted Average Exercise Price

Issue Date

Expiration Date

Consultant Warrant

85,000

10.70

August 13, 2014

August 13, 2019

Opus Warrant

100,000

9.90

March 31, 2014

March 31, 2019

2013 Private Placement Warrants

186,878

10.00

August 14, 2013

August 14, 2017

2010 Private Placement Warrants

369,169

26.50

November 14, 2010

November 14, 2015

Total

741,047

2011 Employee Stock Purchase Plan

In June 2011, the Company’s stockholders approved the 2011 Employee Stock Purchase Plan (the “ESPP”). On December 18, 2013, the Compensation Committee of the Board suspended the ESPP effective January 1, 2014. No additional shares will be authorized and no shares will be issued under the ESPP until further notice. As of September 30, 2015, there were 293,888 shares reserved for future purchase under the ESPP. Since the ESPP was suspended effective January 1, 2014, there was no stock-based compensation expense resulting from the ESPP included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014.

Stock-Based Compensation Plans

The Company has various stock-based compensation plans 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. The Company’s stock-based compensation plans consist of the Director Option Plan, 1997 Stock Option Plan, 2000 Stock Option Plan, 2007 Stock Option Plan (the “2007 Plan”), the 2010 Bonus and Incentive Plan (the “2010 Plan”) and the 2011 Incentive Compensation Plan (the “2011 Plan”), as amended.

Stock Bonus and Incentive Plans

In June 2010, the Company’s stockholders approved the 2010 Plan which granted cash and equity-based awards to executive officers, directors and other key employees as designated by the Compensation Committee of the Board. An aggregate of 300,000 shares of the Company’s common stock was reserved for issuance under the 2010 Plan as equity-based awards, including shares, nonqualified stock options, restricted stock or deferred stock awards. These awards provide the Company´s executives, directors and other key employees the opportunity to earn shares of common stock depending on the extent to which certain performance goals are met. Since the adoption of the 2011 Plan (described below), the Company utilizes shares from the 2010 Plan only for performance-based awards and all equity awards granted under the 2010 Plan are issued pursuant to the 2011 Plan.

On June 6, 2011, the Company’s stockholders approved the 2011 Plan, which is administered by the Compensation Committee of the Board. The 2011 Plan provides that stock options, stock units, restricted shares, and stock appreciation rights may be granted to executive officers, directors, consultants, and other key employees. The Company reserved 400,000 shares of common stock under the 2011 Plan, plus 459,956 shares of common stock that remained available for delivery under the 2007 Plan and the 2010 Plan as of June 6, 2011. In aggregate, as of June 6, 2011, 859,956 shares were available for future grants under the 2011 Plan, including shares rolled over from the 2007 Plan and 2010 Plan.

Stock Option Plans

A summary of activity for the Company’s stock option plans for the nine months ended September 30, 2015 follows:

	Number Outstanding			Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)		Average Intrinsic Value
Balance at December 31, 2014		897,115		$	12.09			$	3,425,558
Granted		—			—
Cancelled or Expired		(90,666	)		18.27
Exercised		(5,180	)		8.01
Balance at September 30, 2015		801,269		$	11.42		6.71	$	—
Vested or expected to vest at September 30, 2015		752,543		$	11.57		6.63	$	20,848
Exercisable at September 30, 2015		462,747		$	13.18		5.78	$	—

The following table summarizes information about options outstanding as of September 30, 2015:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$5.20 - $8.40		160,364		7.75	$	6.38		91,834	$	6.68
$8.41 - $8.80		247,146		7.57		8.80		92,462		8.80
$8.81 - $10.99		168,476		8.61		10.85		58,010		10.71
$11.00 - $24.00		165,206		4.20		14.20		160,364		14.20
$24.01 - $43.40		60,077		2.02		29.56		60,077		29.56
$5.20 - $43.40		801,269	$	6.71		11.42		462,747	$	13.18

At September 30, 2015, there was $1.6 million of unrecognized stock-based compensation expense, net of estimated forfeitures related to unvested options, that is expected to be recognized over a weighted-average period of 2.43 years.

Restricted Stock and Restricted Stock Units

The following is a summary of restricted stock and restricted stock unit (“RSU”) activity for the nine months ended September 30, 2015:

	Number Outstanding			Weighted Average Fair Value		Weighted Average Remaining Contractual Term (Years)	Average Intrinsic Value
Balance at December 31, 2014		542,342		$	13.74		$	7,533,132
Granted		285,247			12.34
Vested and settled		(52,421	)		14.53
Forfeited		(33,500	)		10.74
Balance at September 30, 2015		741,668		$	13.28	1.36	$	2,588,423

Outstanding - Vested but not released		103,423
Outstanding - Unvested		638,245
Balance at September 30, 2015		741,668

The fair value of the Company’s restricted stock awards and RSUs is calculated based upon the fair market value of the Company’s stock at the date of grant. As of September 30, 2015, there was $5.8 million of unrecognized compensation cost related to unvested RSUs granted, which is expected to be recognized over a weighted average period of 2.71 years. As of September 30, 2015, an aggregate of 638,245 RSUs were outstanding and unvested under the 2011 Plan.

Stock-Based Compensation Expense

The following table illustrates all employee stock-based compensation expense related to stock options and RSUs included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
Cost of revenue	$	34	$	12	$	98	$	23
Research and development		73		55		212		91
Selling and marketing		363		121		911		165
General and administrative		659		351		2,316		717
Total	$	1,129	$	539	$	3,537	$	996

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of September 30, 2015 was as follows:

Exercise of outstanding stock options and vesting of RSU's			1,542,937
ESPP			293,888
Shares of common stock available for grants under the 2011 Plan			171,811
Noncontrolling interest in Bluehill AG			10,355
Warrants to purchase common stock			741,047
Total			2,760,038

Net Loss per Common Share Attributable to Identiv Stockholders’ Equity

Basic and diluted net loss per share is based upon the weighted average number of common shares outstanding during the period. For the three and nine months ended September 30, 2015 and 2014, common stock equivalents consisting of outstanding stock options, RSUs and warrants were excluded from the calculation of diluted loss per share because these securities were anti-dilutive due to the net loss in the respective periods. The total number of common stock equivalents excluded from diluted loss per share relating to these securities was 2,323,430 common stock equivalents for both the three and nine months ended September 30, 2015, and 2,761,161 common stock equivalents for both the three and nine months ended September 30, 2014.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income (“AOCI”) at September 30, 2015 and December 31, 2014 consists of foreign currency translation adjustments totaling $2.0 million and $1.7 million, respectively. As a result of the acquisition of the noncontrolling interest in a subsidiary company, $0.5 million was reclassified out of AOCI into net loss during the nine months ended September 30, 2015.