falsedesktopINSG2020-09-30000102265220000021{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Delaware\t\t81-3377646\n(State or Other Jurisdiction of Incorporation or Organization)\t\t(I.R.S. Employer Identification No.)\n12600 Deerfield Parkway Suite 100\t\t\nAlpharetta\tGeorgia\t30004\n(Address of Principal Executive Offices)\t\t(Zip Code)\n", "q10k_tbl_1": "Large accelerated filer\t☐\tAccelerated filer\t☒\nNon-accelerated filer\t☐\tSmaller reporting company\t☒\n\t\tEmerging growth company\t☐\n", "q10k_tbl_2": "\t\tPage\nPART I-FINANCIAL INFORMATION\t\t\nItem 1.\tFinancial Statements\t3\n\tCondensed Consolidated Balance Sheets (Unaudited)\t3\n\tCondensed Consolidated Statements of Operations (Unaudited)\t4\n\tCondensed Consolidated Statements of Comprehensive Loss (Unaudited)\t5\n\tCondensed Consolidated Statements of Stockholders' Deficit (Unaudited)\t6\n\tCondensed Consolidated Statements of Cash Flows (Unaudited)\t8\n\tNotes to Condensed Consolidated Financial Statements (Unaudited)\t10\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t25\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t37\nItem 4.\tControls and Procedures\t37\nPART II-OTHER INFORMATION\t\t\nItem 1.\tLegal Proceedings\t38\nItem 1A.\tRisk Factors\t38\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t38\nItem 3.\tDefaults Upon Senior Securities\t38\nItem 4.\tMine Safety Disclosures\t38\nItem 5.\tOther Information\t38\nItem 6.\tExhibits\t39\nSIGNATURES\t\t40\n", "q10k_tbl_3": "\tSeptember 30 2020\tDecember 31 2019\n\t(Unaudited)\t\nASSETS\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t41994\t12074\nAccounts receivable net of allowance for doubtful accounts of $1701 and $2133 respectively\t38042\t19656\nInventories net\t24241\t25290\nPrepaid expenses and other\t10962\t7117\nTotal current assets\t115239\t64137\nProperty plant and equipment net of accumulated depreciation of $18606 and $16017 respectively\t13052\t10756\nRental assets net of accumulated depreciation of $13934 and $12791 respectively\t5069\t5385\nIntangible assets net of accumulated amortization of $40772 and $33011 respectively\t51974\t44392\nGoodwill\t28742\t33659\nRight-of-use assets net\t9279\t2657\nOther assets\t384\t387\nTotal assets\t223739\t161373\nLIABILITIES AND STOCKHOLDERS' DEFICIT\t\t\nCurrent liabilities:\t\t\nAccounts payable\t51098\t26482\nAccrued expenses and other current liabilities\t23263\t17861\nDigiCore bank facilities\t130\t187\nTotal current liabilities\t74491\t44530\nLong-term liabilities:\t\t\n2025 Notes net\t162839\t0\n2022 Notes net\t0\t101334\nTerm loan net\t0\t46538\nDeferred tax liabilities net\t3278\t3949\nOther long-term liabilities\t10353\t2380\nTotal liabilities\t250961\t198731\nCommitments and contingencies\t\t\nStockholders' deficit:\t\t\nPreferred stock par value $0.001; 2000000 shares authorized:\t\t\nSeries E Preferred stock par value $0.001; 39500 and 10000 shares designated respectively 35000 and 10000 shares issued and outstanding respectively liquidation preference of $1000 per share (plus any accrued but unpaid dividends)\t0\t0\nCommon stock par value $0.001; 150000000 shares authorized 98788531 and 81974051 shares issued and outstanding respectively\t99\t82\nAdditional paid-in capital\t706212\t584862\nAccumulated other comprehensive loss\t(14613)\t(3879)\nAccumulated deficit\t(718829)\t(618303)\nTotal stockholders' deficit attributable to Inseego Corp.\t(27131)\t(37238)\nNoncontrolling interests\t(91)\t(120)\nTotal stockholders' deficit\t(27222)\t(37358)\nTotal liabilities and stockholders' deficit\t223739\t161373\n", "q10k_tbl_4": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nNet revenues:\t\t\t\t\nIoT & Mobile Solutions\t77342\t47733\t189071\t123548\nEnterprise SaaS Solutions\t12898\t14983\t38698\t43615\nTotal net revenues\t90240\t62716\t227769\t167163\nCost of net revenues:\t\t\t\t\nIoT & Mobile Solutions\t60135\t38482\t148414\t101607\nEnterprise SaaS Solutions\t4935\t5609\t14958\t16616\nTotal cost of net revenues\t65070\t44091\t163372\t118223\nGross profit\t25170\t18625\t64397\t48940\nOperating costs and expenses:\t\t\t\t\nResearch and development\t10684\t6655\t29448\t15328\nSales and marketing\t8446\t7149\t25849\t20769\nGeneral and administrative\t8699\t7148\t23257\t21086\nAmortization of purchased intangible assets\t779\t847\t2358\t2575\nTotal operating costs and expenses\t28608\t21799\t80912\t59758\nOperating loss\t(3438)\t(3174)\t(16515)\t(10818)\nOther income (expense):\t\t\t\t\nLoss on debt conversion and extinguishment net\t(1180)\t0\t(76354)\t0\nInterest expense net\t(1657)\t(5119)\t(8197)\t(15336)\nOther income (expense) net\t1053\t(307)\t2818\t(66)\nLoss before income taxes\t(5222)\t(8600)\t(98248)\t(26220)\nIncome tax provision\t217\t223\t193\t793\nNet loss\t(5439)\t(8823)\t(98441)\t(27013)\nLess: Net loss (income) attributable to noncontrolling interests\t(3)\t17\t(29)\t(57)\nNet loss attributable to Inseego Corp.\t(5442)\t(8806)\t(98470)\t(27070)\nSeries E preferred stock dividends\t(829)\t(131)\t(2056)\t(131)\nNet loss attributable to common shareholders\t(6271)\t(8937)\t(100526)\t(27201)\nPer share data:\t\t\t\t\nNet loss per common share:\t\t\t\t\nBasic and diluted\t(0.06)\t(0.11)\t(1.06)\t(0.35)\nWeighted-average shares used in computation of net loss per common share:\t\t\t\t\nBasic and diluted\t98016798\t79550445\t95136713\t77606317\n", "q10k_tbl_5": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nNet loss\t(5439)\t(8823)\t(98441)\t(27013)\nForeign currency translation adjustment\t1170\t(4119)\t(10734)\t(2912)\nTotal comprehensive loss\t(4269)\t(12942)\t(109175)\t(29925)\n", "q10k_tbl_6": "\tPreferred Stock\t\tCommon Stock\t\tAdditional Paid-in Capital\tAccumulated Other Comprehensive Income (Loss)\tAccumulated Deficit\tNoncontrolling Interests\tTotal Stockholders' Deficit\n\tShares\tAmount\tShares\tAmount\t\t\nBalance June 30 2019\t0\t0\t78985\t79\t562405\t(3670)\t(596081)\t(61)\t(37328)\nNet loss\t0\t0\t0\t0\t0\t0\t(8806)\t(17)\t(8823)\nForeign currency translation adjustment\t0\t0\t0\t0\t0\t(4119)\t0\t0\t(4119)\nExercise of stock options vesting of restricted stock units and stock issued under employee stock purchase plan\t0\t0\t645\t0\t601\t0\t0\t0\t601\nTaxes withheld on net settled vesting of restricted stock units\t0\t0\t0\t0\t(942)\t0\t0\t0\t(942)\nIssuance of Series E preferred shares\t10\t0\t0\t0\t10000\t0\t0\t0\t10000\nIssuance of common shares\t0\t0\t196\t1\t1037\t0\t0\t0\t1038\nShare-based compensation\t0\t0\t0\t0\t1253\t0\t0\t0\t1253\nSeries E preferred stock dividends\t0\t0\t0\t0\t131\t0\t(131)\t0\t0\nBalance September 30 2019\t10\t0\t79826\t80\t574485\t(7789)\t(605018)\t(78)\t(38320)\nBalance June 30 2020\t35\t0\t97018\t97\t686410\t(15783)\t(712558)\t(94)\t(41928)\nNet (loss) income\t0\t0\t0\t0\t0\t0\t(5442)\t3\t(5439)\nForeign currency translation adjustment\t0\t0\t0\t0\t0\t1170\t0\t0\t1170\nExercise of stock options vesting of restricted stock units and stock issued under employee stock purchase plan\t0\t0\t504\t1\t1485\t0\t0\t0\t1486\nTaxes withheld on net settled vesting of restricted stock units\t0\t0\t0\t0\t(45)\t0\t0\t0\t(45)\nIssuance of common shares under settlement agreement\t\t\t90\t0\t972\t0\t\t0\t972\nIssuance of common stock in connection with the Notes Exchange\t0\t0\t0\t0\t1\t0\t0\t0\t1\nIssuance of common shares in connection with conversion of 2025 Notes\t0\t0\t1177\t1\t14353\t0\t0\t0\t14354\nShare-based compensation\t0\t0\t0\t0\t2207\t0\t0\t0\t2207\nSeries E preferred stock dividends\t0\t0\t0\t0\t829\t0\t(829)\t0\t0\nBalance September 30 2020\t35\t0\t98789\t99\t706212\t(14613)\t(718829)\t(91)\t(27222)\n", "q10k_tbl_7": "\tPreferred Stock\t\tCommon Stock\t\tAdditional Paid-in Capital\tAccumulated Other Comprehensive Income (Loss)\tAccumulated Deficit\tNoncontrolling Interests\tTotal Stockholders'Deficit\n\tShares\tAmount\tShares\tAmount\t\t\nBalance December 31 2018\t0\t0\t73980\t74\t546230\t(4877)\t(577817)\t(135)\t(36525)\nNet (loss) income\t0\t0\t0\t0\t0\t0\t(27070)\t57\t(27013)\nForeign currency translation adjustment\t0\t0\t0\t0\t0\t(2912)\t0\t0\t(2912)\nExercise of stock options vesting of restricted stock units and stock issued under employee stock purchase plan\t0\t0\t1382\t1\t1516\t0\t0\t0\t1517\nTaxes withheld on net settled vesting of restricted stock units\t0\t0\t0\t0\t(1260)\t0\t0\t0\t(1260)\nExercise of warrants\t0\t\t4222\t4\t10635\t0\t0\t0\t10639\nIssuance of Series E preferred shares\t10\t0\t0\t0\t10000\t0\t0\t0\t10000\nIssuance of common shares\t0\t0\t242\t1\t1278\t0\t0\t0\t1279\nShare-based compensation\t0\t0\t0\t0\t5955\t0\t0\t0\t5955\nSeries E preferred stock dividends\t0\t0\t0\t0\t131\t0\t(131)\t0\t0\nBalance September 30 2019\t10\t0\t79826\t80\t574485\t(7789)\t(605018)\t(78)\t(38320)\nBalance December 31 2019\t10\t0\t81974\t82\t584862\t(3879)\t(618303)\t(120)\t(37358)\nNet (loss) income\t0\t0\t0\t0\t0\t0\t(98470)\t29\t(98441)\nForeign currency translation adjustment\t0\t0\t0\t0\t0\t(10734)\t0\t0\t(10734)\nExercise of stock options vesting of restricted stock units and stock issued under employee stock purchase plan\t0\t0\t1471\t2\t3196\t0\t0\t0\t3198\nTaxes withheld on net settled vesting of restricted stock units\t0\t0\t0\t0\t(326)\t0\t0\t0\t(326)\nIssuance of Series E preferred stock\t25\t0\t0\t0\t25000\t0\t0\t0\t25000\nIssuance of Series E preferred stock in lieu of interest\t2\t0\t0\t0\t2330\t0\t0\t0\t2330\nRepurchase of Series E preferred stock\t(2)\t0\t0\t0\t(2354)\t0\t0\t0\t(2354)\nIssuance of common shares in connection with private exchanges of 2022 Notes\t0\t0\t13739\t14\t66074\t0\t0\t0\t66088\nIssuance of common shares in connection with conversion of 2025 Notes\t0\t0\t1177\t1\t14353\t0\t0\t0\t14354\nExercise of warrants\t0\t0\t338\t0\t1861\t0\t0\t0\t1861\nShare-based compensation\t0\t0\t0\t0\t8188\t0\t0\t0\t8188\nSeries E preferred stock dividends\t0\t0\t0\t0\t2056\t0\t(2056)\t0\t0\nIssuance of common shares under settlement agreement\t\t\t90\t0\t972\t0\t0\t0\t972\nBalance September 30 2020\t35\t0\t98789\t99\t706212\t(14613)\t(718829)\t(91)\t(27222)\n", "q10k_tbl_8": "\tNine Months Ended September 30\t\n\t2020\t2019\nCash flows from operating activities:\t\t\nNet loss\t(98441)\t(27013)\nAdjustments to reconcile net loss to net cash provided by (used in) operating activities:\t\t\nDepreciation and amortization\t15948\t12770\nProvision for bad debts net of recoveries\t240\t691\nProvision for excess and obsolete inventory net of recoveries\t430\t389\nShare-based compensation expense\t8188\t5955\nAmortization of debt discount and debt issuance costs\t3632\t7329\nFair value adjustment on derivative instrument\t(1372)\t0\nLoss on debt conversion and extinguishment net\t76354\t0\nDeferred income taxes\t110\t(13)\nOther\t50\t1349\nChanges in assets and liabilities:\t\t\nAccounts receivable\t(19065)\t(1912)\nInventories\t(2078)\t(2525)\nPrepaid expenses and other assets\t(3918)\t(4535)\nAccounts payable\t25170\t(8887)\nAccrued expenses income taxes and other\t11464\t1404\nNet cash provided by (used in) operating activities\t16712\t(14998)\nCash flows from investing activities:\t\t\nPurchases of property plant and equipment\t(5084)\t(4169)\nProceeds from the sale of property plant and equipment\t327\t454\nAdditions to capitalized software development costs and purchases of intangible assets\t(20216)\t(16800)\nNet cash used in investing activities\t(24973)\t(20515)\nCash flows from financing activities:\t\t\nGross proceeds from the issuance of 2025 Notes\t100000\t0\nPayment of issuance costs related to 2025 Notes\t(3600)\t0\nCash paid to investors in private exchange transactions\t(32062)\t0\nPayoff of term loan and related extinguishment costs\t(48830)\t0\nGross proceeds received from issuance of Series E preferred stock\t25000\t10000\nRepurchase of Series E preferred stock\t(2354)\t0\nProceeds from the exercise of warrants to purchase common stock\t1861\t10639\nNet borrowing (repayment) of DigiCore bank and overdraft facilities\t110\t(1159)\nPrincipal payments under finance lease obligations\t(2243)\t(795)\nProceeds from stock option exercises and employee stock purchase plan net of taxes paid on vested restricted stock units\t2872\t257\nNet cash provided by financing activities\t40754\t18942\nEffect of exchange rates on cash\t(2573)\t(560)\nNet increase (decrease) in cash cash equivalents and restricted cash\t29920\t(17131)\nCash cash equivalents and restricted cash beginning of period\t12074\t31076\nCash cash equivalents and restricted cash end of period\t41994\t13945\nSupplemental disclosures of cash flow information:\t\t\nCash paid during the year for:\t\t\nInterest\t640\t6231\nIncome taxes\t286\t583\nSupplemental disclosures of non-cash activities:\t\t\nTransfer of inventories to rental assets\t2650\t2712\nCapital expenditures financed through accounts payable\t3786\t799\nRight-of-use assets obtained in exchange for operating leases liabilities\t7704\t3554\nIssuance of common stock under Settlement Agreement\t972\t1279\nPreferred stock issued in extinguishment of term loan accrued interest\t2330\t0\nDebt discount and issuance costs extinguished in notes conversion\t1728\t0\n2022 Notes conversion to equity\t59907\t0\nNovatel Wireless Notes conversion to equity\t250\t0\n2025 Notes issued to extinguish the 2022 Notes\t80375\t0\n2025 Notes conversion including shares issued in satisfaction of interest make-whole payment\t14353\t0\n", "q10k_tbl_9": "\tSeptember 30 2020\tDecember 31 2019\nFinished goods\t20299\t21229\nRaw materials and components\t3942\t4061\nTotal inventories net\t24241\t25290\n", "q10k_tbl_10": "\tSeptember 30 2020\tDecember 31 2019\nRoyalties\t2672\t1415\nPayroll and related expenses\t5426\t2716\nProfessional fees\t1522\t483\nAccrued interest\t2078\t1543\nDeferred revenue\t4295\t2235\nOperating lease liabilities\t1327\t1101\nAcquisition-related liabilities\t0\t1000\nOther\t5943\t7368\nTotal accrued expenses and other current liabilities\t23263\t17861\n", "q10k_tbl_11": "\tSeptember 30 2020\tDecember 31 2019\tSeptember 30 2019\tDecember 31 2018\nCash and cash equivalents\t41994\t12074\t13945\t31015\nRestricted cash\t0\t0\t0\t61\nTotal cash cash equivalents and restricted cash\t41994\t12074\t13945\t31076\n", "q10k_tbl_12": "\tBalance as of September 30 2020\tLevel 3\nLiabilities:\t\t\n2025 Notes\t\t\nInterest make-whole payment\t2929\t2929\nTotal embedded derivatives\t2929\t2929\n", "q10k_tbl_13": "\tMay 12 2020\tSeptember 30 2020\nVolatility\t60%\t50%\nStock price\t10.62 per share\t10.32 per share\nCredit spread\t14.97%\t21.50%\nTerm\t4.97 years\t4.59 years\nDividend yield\t-%\t-%\nRisk-free rate\t0.34%\t0.26%\n", "q10k_tbl_14": "\tBalance as of December 31 2019\tAdditions\tConversions\tChange in fair value\tBalance as of September 30 2020\nLiabilities:\t\t\t\t\t\nInterest make-whole payment\t0\t4582\t(281)\t(1372)\t2929\n", "q10k_tbl_15": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nContractual interest expense\t0\t1225\t1667\t3615\nAmortization of debt discount\t0\t333\t859\t999\nAmortization of debt issuance costs\t0\t40\t103\t120\nTotal interest expense\t0\t1598\t2629\t4734\n", "q10k_tbl_16": "\tSeptember 30 2020\nLiability component\t\nPrincipal\t166898\nAdd: fair value of embedded derivative\t2929\nLess: unamortized debt discount\t(3915)\nLess: unamortized issuance costs\t(3073)\nNet carrying amount\t162839\n", "q10k_tbl_17": "\tThree Months Ended September 30 2020\tNine Months Ended September 30 2020\nContractual interest expense\t1278\t\t2078\t\t\t\t\t\nAmortization of debt discount\t217\t\t341\t\t\t\t\t\nAmortization of debt issuance costs\t172\t\t268\t\t\t\t\t\nTotal interest expense\t1667\t\t2687\t\t\t\t\t\n", "q10k_tbl_18": "\tSeptember 30 2020\tDecember 31 2019\nLiability component\t\t\nPrincipal\t0\t105125\nLess: unamortized debt discount and issuance costs\t0\t(3791)\nNet carrying amount\t0\t101334\n", "q10k_tbl_19": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nContractual interest expense\t0\t1446\t768\t4337\nAmortization of debt discount\t0\t1955\t1952\t5866\nAmortization of debt issuance costs\t0\t115\t111\t344\nTotal interest expense\t0\t3516\t2831\t10547\n", "q10k_tbl_20": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nCost of revenues\t308\t202\t1296\t899\nResearch and development\t491\t183\t2292\t1315\nSales and marketing\t531\t307\t1810\t1339\nGeneral and administrative\t877\t561\t2790\t2402\nTotal\t2207\t1253\t8188\t5955\n", "q10k_tbl_21": "Outstanding - December 31 2019\t9044304\nGranted\t1526000\nExercised\t(910490)\nCanceled\t(450777)\nOutstanding - September 30 2020\t9209037\nExercisable - September 30 2020\t4034796\n", "q10k_tbl_22": "Non-vested - December 31 2019\t400315\nGranted\t437413\nVested\t(486092)\nForfeited\t(4584)\nNon-vested - September 30 2020\t347052\n", "q10k_tbl_23": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nUnited States and Canada\t77208\t47378\t188638\t122331\nSouth Africa\t6836\t9237\t20930\t26164\nOther\t6196\t6101\t18201\t18668\nTotal\t90240\t62716\t227769\t167163\n", "q10k_tbl_24": "2020 (remainder)\t495\n2021\t2330\n2022\t2190\n2023\t1887\n2024\t1769\nThereafter\t4437\nTotal minimum operating lease payments\t13108\nLess: amounts representing interest\t(3126)\nPresent value of net minimum operating lease payments\t9982\nLess: current portion\t(1327)\nLong-term portion of operating lease obligations\t8655\n", "q10k_tbl_25": "\tThree Months Ended September 30\t\tChange\t\nProduct Category\t2020\t2019\t$\t%\nIoT & Mobile Solutions\t77342\t47733\t29609\t62.0%\nEnterprise SaaS Solutions\t12898\t14983\t(2085)\t(13.9)%\nTotal\t90240\t62716\t27524\t43.9%\n", "q10k_tbl_26": "\tThree Months Ended September 30\t\tChange\t\nProduct Category\t2020\t2019\t$\t%\nIoT & Mobile Solutions\t60135\t38482\t21653\t56.3%\nEnterprise SaaS Solutions\t4935\t5609\t(674)\t(12.0)%\nTotal\t65070\t44091\t20979\t47.6%\n", "q10k_tbl_27": "\tNine Months Ended September 30\t\tChange\t\nProduct Category\t2020\t2019\t$\t%\nIoT & Mobile Solutions\t189071\t123548\t65523\t53.0%\nEnterprise SaaS Solutions\t38698\t43615\t(4917)\t(11.3)%\nTotal\t227769\t167163\t60606\t36.3%\n", "q10k_tbl_28": "\tNine Months Ended September 30\t\tChange\t\nProduct Category\t2020\t2019\t$\t%\nIoT & Mobile Solutions\t148414\t101607\t46807\t46.1%\nEnterprise SaaS Solutions\t14958\t16616\t(1658)\t(10.0)%\nTotal\t163372\t118223\t45149\t38.2%\n", "q10k_tbl_29": "\tNine Months Ended September 30\t\n\t2020\t2019\nNet cash provided by (used in) operating activities\t16712\t(14998)\nNet cash used in investing activities\t(24973)\t(20515)\nNet cash provided by financing activities\t40754\t18942\nEffect of exchange rates on cash\t(2573)\t(560)\nNet increase (decrease) in cash cash equivalents and restricted cash\t29920\t(17131)\nCash cash equivalents and restricted cash beginning of period\t12074\t31076\nCash cash equivalents and restricted cash end of period\t41994\t13945\n", "q10k_tbl_30": "Exhibit No.\tDescription\n3.1\tAmended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed November 9 2016).\n3.2\tAmended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed November 9 2016).\n3.3\tCertificate of Designation of Series D Junior Participating Preferred Stock of Inseego Corp. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed January 22 2018).\n3.4\tCertificate of Designation of Series E Fixed-Rate Cumulative Perpetual Preferred Stock filed with the Secretary of State of the State of Delaware on August 8 2019 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed August 13 2019).\n3.5\tCertificate of Amendment to Certificate of Designation of Series E Fixed-Rate Cumulative Perpetual Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed March 10 2020).\n10.1\tAmended Inseego Corp. 2018 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed July 24 2020).\n10.2*\tTransition Agreement dated August 11 2020 between Inseego Corp. and Stephen M. Smith.\n10.3*\tOffer Letter dated July 26 2020 between Inseego Corp. and Craig L. Foster.\n10.4*\tChange in Control Agreement dated August 17 2020 between Inseego Corp. and Craig L. Foster.\n31.1*\tCertification of our Principal Executive Officer adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n31.2*\tCertification of our Principal Financial Officer adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n32.1*\tCertification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n32.2*\tCertification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n101.INS\tXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\n101.SCH\tXBRL Taxonomy Extension Schema Document.\n101.CAL\tXBRL Taxonomy Extension Calculation Linkbase Document.\n101.DEF\tXBRL Taxonomy Extension Definition Linkbase Document.\n101.LAB\tXBRL Taxonomy Extension Label Linkbase Document.\n101.PRE\tXBRL Taxonomy Extension Presentation Linkbase Document.\n104\tCover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).\n*\tFiled herewith.\n"}{"bs": "q10k_tbl_3", "is": "q10k_tbl_4", "cf": "q10k_tbl_8"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto .
Commission File Number: 001-38358
INSEEGO CORP.
(Exact name of registrant as specified in its charter)
Delaware
81-3377646
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)
12600 Deerfield Parkway, Suite 100
Alpharetta,
Georgia
30004
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code: (858) 812-3400
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
INSG
Nasdaq Global Select Market
Preferred Stock Purchase Rights
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 ☒
The number of shares of the registrant’s common stock outstanding as of November 3, 2020 was 98,880,267.
Accounts receivable, net of allowance for doubtful accounts of $1,701 and $2,133, respectively
38,042
19,656
Inventories, net
24,241
25,290
Prepaid expenses and other
10,962
7,117
Total current assets
115,239
64,137
Property, plant and equipment, net of accumulated depreciation of $18,606 and $16,017, respectively
13,052
10,756
Rental assets, net of accumulated depreciation of $13,934 and $12,791, respectively
5,069
5,385
Intangible assets, net of accumulated amortization of $40,772 and $33,011, respectively
51,974
44,392
Goodwill
28,742
33,659
Right-of-use assets, net
9,279
2,657
Other assets
384
387
Total assets
$
223,739
$
161,373
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable
$
51,098
$
26,482
Accrued expenses and other current liabilities
23,263
17,861
DigiCore bank facilities
130
187
Total current liabilities
74,491
44,530
Long-term liabilities:
2025 Notes, net
162,839
—
2022 Notes, net
—
101,334
Term loan, net
—
46,538
Deferred tax liabilities, net
3,278
3,949
Other long-term liabilities
10,353
2,380
Total liabilities
250,961
198,731
Commitments and contingencies
Stockholders’ deficit:
Preferred stock, par value $0.001; 2,000,000 shares authorized:
Series E Preferred stock, par value $0.001; 39,500 and 10,000 shares designated, respectively, 35,000 and 10,000 shares issued and outstanding, respectively, liquidation preference of $1,000 per share (plus any accrued but unpaid dividends)
—
—
Common stock, par value $0.001; 150,000,000 shares authorized, 98,788,531 and 81,974,051 shares issued and outstanding, respectively
99
82
Additional paid-in capital
706,212
584,862
Accumulated other comprehensive loss
(14,613)
(3,879)
Accumulated deficit
(718,829)
(618,303)
Total stockholders’ deficit attributable to Inseego Corp.
(27,131)
(37,238)
Noncontrolling interests
(91)
(120)
Total stockholders’ deficit
(27,222)
(37,358)
Total liabilities and stockholders’ deficit
$
223,739
$
161,373
See accompanying notes to unaudited condensed consolidated financial statements.
3
INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Net revenues:
IoT & Mobile Solutions
$
77,342
$
47,733
$
189,071
$
123,548
Enterprise SaaS Solutions
12,898
14,983
38,698
43,615
Total net revenues
90,240
62,716
227,769
167,163
Cost of net revenues:
IoT & Mobile Solutions
60,135
38,482
148,414
101,607
Enterprise SaaS Solutions
4,935
5,609
14,958
16,616
Total cost of net revenues
65,070
44,091
163,372
118,223
Gross profit
25,170
18,625
64,397
48,940
Operating costs and expenses:
Research and development
10,684
6,655
29,448
15,328
Sales and marketing
8,446
7,149
25,849
20,769
General and administrative
8,699
7,148
23,257
21,086
Amortization of purchased intangible assets
779
847
2,358
2,575
Total operating costs and expenses
28,608
21,799
80,912
59,758
Operating loss
(3,438)
(3,174)
(16,515)
(10,818)
Other income (expense):
Loss on debt conversion and extinguishment, net
(1,180)
—
(76,354)
—
Interest expense, net
(1,657)
(5,119)
(8,197)
(15,336)
Other income (expense), net
1,053
(307)
2,818
(66)
Loss before income taxes
(5,222)
(8,600)
(98,248)
(26,220)
Income tax provision
217
223
193
793
Net loss
(5,439)
(8,823)
(98,441)
(27,013)
Less: Net loss (income) attributable to noncontrolling interests
(3)
17
(29)
(57)
Net loss attributable to Inseego Corp.
(5,442)
(8,806)
(98,470)
(27,070)
Series E preferred stock dividends
(829)
(131)
(2,056)
(131)
Net loss attributable to common shareholders
$
(6,271)
$
(8,937)
$
(100,526)
$
(27,201)
Per share data:
Net loss per common share:
Basic and diluted
$
(0.06)
$
(0.11)
$
(1.06)
$
(0.35)
Weighted-average shares used in computation of net loss per common share:
Basic and diluted
98,016,798
79,550,445
95,136,713
77,606,317
See accompanying notes to unaudited condensed consolidated financial statements.
4
INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Net loss
$
(5,439)
$
(8,823)
$
(98,441)
$
(27,013)
Foreign currency translation adjustment
1,170
(4,119)
(10,734)
(2,912)
Total comprehensive loss
$
(4,269)
$
(12,942)
$
(109,175)
$
(29,925)
See accompanying notes to unaudited condensed consolidated financial statements.
5
INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(In thousands)
(Unaudited)
Preferred Stock
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Noncontrolling Interests
Total Stockholders’ Deficit
Shares
Amount
Shares
Amount
Balance, June 30, 2019
—
$
—
78,985
$
79
$
562,405
$
(3,670)
$
(596,081)
$
(61)
$
(37,328)
Net loss
—
—
—
—
—
—
(8,806)
(17)
(8,823)
Foreign currency translation adjustment
—
—
—
—
—
(4,119)
—
—
(4,119)
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan
—
—
645
—
601
—
—
—
601
Taxes withheld on net settled vesting of restricted stock units
—
—
—
—
(942)
—
—
—
(942)
Issuance of Series E preferred shares
10
—
—
—
10,000
—
—
—
10,000
Issuance of common shares
—
—
196
1
1,037
—
—
—
1,038
Share-based compensation
—
—
—
—
1,253
—
—
—
1,253
Series E preferred stock dividends
—
—
—
—
131
—
(131)
—
—
Balance, September 30, 2019
10
$
—
79,826
$
80
$
574,485
$
(7,789)
$
(605,018)
$
(78)
$
(38,320)
Balance, June 30, 2020
35
$
—
97,018
$
97
$
686,410
$
(15,783)
$
(712,558)
$
(94)
$
(41,928)
Net (loss) income
—
—
—
—
—
—
(5,442)
3
(5,439)
Foreign currency translation adjustment
—
—
—
—
—
1,170
—
—
1,170
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan
—
—
504
1
1,485
—
—
—
1,486
Taxes withheld on net settled vesting of restricted stock units
—
—
—
—
(45)
—
—
—
(45)
Issuance of common shares under settlement agreement
90
—
972
—
—
972
Issuance of common stock in connection with the Notes Exchange
—
—
—
—
1
—
—
—
1
Issuance of common shares in connection with conversion of 2025 Notes
—
—
1,177
1
14,353
—
—
—
14,354
Share-based compensation
—
—
—
—
2,207
—
—
—
2,207
Series E preferred stock dividends
—
—
—
—
829
—
(829)
—
—
Balance, September 30, 2020
35
$
—
98,789
$
99
$
706,212
$
(14,613)
$
(718,829)
$
(91)
$
(27,222)
6
INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(In thousands)
(Unaudited)
Preferred Stock
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Noncontrolling Interests
Total Stockholders’Deficit
Shares
Amount
Shares
Amount
Balance, December 31, 2018
—
$
—
73,980
$
74
$
546,230
$
(4,877)
$
(577,817)
$
(135)
$
(36,525)
Net (loss) income
—
—
—
—
—
—
(27,070)
57
(27,013)
Foreign currency translation adjustment
—
—
—
—
—
(2,912)
—
—
(2,912)
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan
—
—
1,382
1
1,516
—
—
—
1,517
Taxes withheld on net settled vesting of restricted stock units
—
—
—
—
(1,260)
—
—
—
(1,260)
Exercise of warrants
—
4,222
4
10,635
—
—
—
10,639
Issuance of Series E preferred shares
10
—
—
—
10,000
—
—
—
10,000
Issuance of common shares
—
—
242
1
1,278
—
—
—
1,279
Share-based compensation
—
—
—
—
5,955
—
—
—
5,955
Series E preferred stock dividends
—
—
—
—
131
—
(131)
—
—
Balance, September 30, 2019
10
$
—
79,826
$
80
$
574,485
$
(7,789)
$
(605,018)
$
(78)
$
(38,320)
Balance, December 31, 2019
10
$
—
81,974
$
82
$
584,862
$
(3,879)
$
(618,303)
$
(120)
$
(37,358)
Net (loss) income
—
—
—
—
—
—
(98,470)
29
(98,441)
Foreign currency translation adjustment
—
—
—
—
—
(10,734)
—
—
(10,734)
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan
—
—
1,471
2
3,196
—
—
—
3,198
Taxes withheld on net settled vesting of restricted stock units
—
—
—
—
(326)
—
—
—
(326)
Issuance of Series E preferred stock
25
—
—
—
25,000
—
—
—
25,000
Issuance of Series E preferred stock in lieu of interest
2
—
—
—
2,330
—
—
—
2,330
Repurchase of Series E preferred stock
(2)
—
—
—
(2,354)
—
—
—
(2,354)
Issuance of common shares in connection with private exchanges of 2022 Notes
—
—
13,739
14
66,074
—
—
—
66,088
Issuance of common shares in connection with conversion of 2025 Notes
—
—
1,177
1
14,353
—
—
—
14,354
Exercise of warrants
—
—
338
—
1,861
—
—
—
1,861
Share-based compensation
—
—
—
—
8,188
—
—
—
8,188
Series E preferred stock dividends
—
—
—
—
2,056
—
(2,056)
—
—
Issuance of common shares under settlement agreement
90
—
972
—
—
—
972
Balance, September 30, 2020
35
$
—
98,789
$
99
$
706,212
$
(14,613)
$
(718,829)
$
(91)
$
(27,222)
See accompanying notes to unaudited condensed consolidated financial statements.
7
INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended September 30,
2020
2019
Cash flows from operating activities:
Net loss
$
(98,441)
$
(27,013)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
15,948
12,770
Provision for bad debts, net of recoveries
240
691
Provision for excess and obsolete inventory, net of recoveries
430
389
Share-based compensation expense
8,188
5,955
Amortization of debt discount and debt issuance costs
3,632
7,329
Fair value adjustment on derivative instrument
(1,372)
—
Loss on debt conversion and extinguishment, net
76,354
—
Deferred income taxes
110
(13)
Other
50
1,349
Changes in assets and liabilities:
Accounts receivable
(19,065)
(1,912)
Inventories
(2,078)
(2,525)
Prepaid expenses and other assets
(3,918)
(4,535)
Accounts payable
25,170
(8,887)
Accrued expenses, income taxes, and other
11,464
1,404
Net cash provided by (used in) operating activities
16,712
(14,998)
Cash flows from investing activities:
Purchases of property, plant and equipment
(5,084)
(4,169)
Proceeds from the sale of property, plant and equipment
327
454
Additions to capitalized software development costs and purchases of intangible assets
(20,216)
(16,800)
Net cash used in investing activities
(24,973)
(20,515)
Cash flows from financing activities:
Gross proceeds from the issuance of 2025 Notes
100,000
—
Payment of issuance costs related to 2025 Notes
(3,600)
—
Cash paid to investors in private exchange transactions
(32,062)
—
Payoff of term loan and related extinguishment costs
(48,830)
—
Gross proceeds received from issuance of Series E preferred stock
25,000
10,000
Repurchase of Series E preferred stock
(2,354)
—
Proceeds from the exercise of warrants to purchase common stock
1,861
10,639
Net borrowing (repayment) of DigiCore bank and overdraft facilities
110
(1,159)
Principal payments under finance lease obligations
(2,243)
(795)
Proceeds from stock option exercises and employee stock purchase plan, net of taxes paid on vested restricted stock units
2,872
257
Net cash provided by financing activities
40,754
18,942
Effect of exchange rates on cash
(2,573)
(560)
Net increase (decrease) in cash, cash equivalents and restricted cash
29,920
(17,131)
Cash, cash equivalents and restricted cash, beginning of period
12,074
31,076
Cash, cash equivalents and restricted cash, end of period
$
41,994
$
13,945
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest
$
640
$
6,231
Income taxes
$
286
$
583
Supplemental disclosures of non-cash activities:
Transfer of inventories to rental assets
$
2,650
$
2,712
Capital expenditures financed through accounts payable
$
3,786
$
799
Right-of-use assets obtained in exchange for operating leases liabilities
$
7,704
$
3,554
Issuance of common stock under Settlement Agreement
$
972
$
1,279
Preferred stock issued in extinguishment of term loan accrued interest
$
2,330
$
—
Debt discount and issuance costs extinguished in notes conversion
$
1,728
$
—
2022 Notes conversion to equity
$
59,907
$
—
Novatel Wireless Notes conversion to equity
$
250
$
—
2025 Notes issued to extinguish the 2022 Notes
$
80,375
$
—
2025 Notes conversion, including shares issued in satisfaction of interest make-whole payment
$
14,353
$
—
8
See accompanying notes to unaudited condensed consolidated financial statements.
9
INSEEGO CORP.
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
The information contained herein has been prepared by Inseego Corp. (the “Company”) in accordance with the rules of the Securities and Exchange Commission (the “SEC”). The information at September 30, 2020 and the results of the Company’s operations for the three and nine months ended September 30, 2020 and 2019 are unaudited. The condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring accruals, except otherwise disclosed herein, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods presented. These unaudited condensed consolidated financial statements and notes hereto should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The year-end condensed consolidated balance sheet data as of December 31, 2019 was derived from the Company’s audited consolidated financial statements and may not include all disclosures required by accounting principles generally accepted in the United States. Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not affect total revenues, costs and expenses, net loss, assets, liabilities or stockholders’ deficit. Except as set forth below, the accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for any other interim period or for the year as a whole.
Risks and Uncertainties
In December 2019, COVID-19 was reported to have surfaced in Wuhan, China, resulting in shutdowns of manufacturing and commerce globally in the months that followed. Since then, the COVID-19 pandemic has spread to multiple countries worldwide, including the United States and has resulted in authorities implementing numerous measures to try to contain the disease or slow its spread, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns. The extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by the U.S. government, state and local government officials, and international governments to prevent the spread of the disease, all of which are uncertain and cannot be predicted.
Liquidity
As of September 30, 2020, the Company had available cash and cash equivalents totaling $42.0 million and working capital of $40.7 million.
In order to make continued growth investments, on March 6, 2020, the Company issued and sold 25,000 shares of Fixed-Rate Cumulative Perpetual Preferred Stock, Series E, par value $0.001 per share (the “Series E Preferred Stock”), for an aggregate purchase price of $25.0 million.
In the first quarter of 2020, $59.9 million of the Company’s 5.5% convertible senior notes due 2022 (the “2022 Notes” formerly referred to as the “Inseego Notes”) were exchanged for common stock in private exchange transactions. Additionally, in the second quarter of 2020, the Company restructured its outstanding debt by completing a $100.0 million registered public offering (the “Offering”) of 3.25% convertible senior notes due 2025 (the “2025 Notes”) and also entered in privately-negotiated Exchange Agreements, pursuant to which an aggregate of $45.0 million in principal amount of the 2022 Notes were exchanged for an aggregate of $32 million in cash and $80.4 million in principal amount of the 2025 Notes (the “Private Exchange Transactions”). In the third quarter of 2020, the Company redeemed the remaining $2,000 principal amount of the 2022 Notes.
During the quarter ended September 30, 2020, certain holders of the 2025 Notes converted approximately $13.5 million in principal amount of the 2025 Notes into 1,177,156 shares of the Company’s common stock in accordance with the terms of such notes. As of September 30, 2020, the Company’s outstanding debt primarily consisted of $166.9 million in principal amount of 2025 Notes.
The Company has a history of operating and net losses and overall usage of cash from operating and investing activities. The Company’s management believes that its cash and cash equivalents, together with anticipated cash flows from operations, will be sufficient to meet its cash flow needs for the next twelve months from the filing date of this report. The Company’s ability to attain more profitable operations and continue to generate positive cash flow is dependent upon achieving a level and mix of revenues adequate to support its evolving cost structure. If events or circumstances occur such that the Company does not meet its operating plan as expected, or if the Company becomes obligated to pay unforeseen expenditures as a result of ongoing litigation, the Company may be required to raise capital, reduce planned research and development activities, incur additional restructuring charges or reduce other operating expenses which could have an adverse impact on its ability to achieve its intended business objectives.
10
INSEEGO CORP.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The Company’s liquidity could be impaired if there is any interruption in its business operations, a material failure to satisfy its contractual commitments or a failure to generate revenue from new or existing products. There can be no assurance that any required or desired restructuring or financing will be available on terms favorable to the Company, or at all. Additionally, the Company is uncertain of the full extent to which the COVID-19 pandemic will impact the Company’s business, operations and financial results.
Principles of Consolidation
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly- and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Segment Information
Management has determined that the Company has one reportable segment. The Chief Executive Officer, who is also the Chief Operating Decision Maker, does not manage any part of the Company separately, and the allocation of resources and assessment of performance is based solely on the Company’s consolidated operations and operating results.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities.