insg-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM						10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

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.)

9710 Scranton Road, Suite 200
San Diego,	California	92121
(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

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 July 28, 2023, was 116,873,019.

TABLE OF CONTENTS


		Page
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets (Unaudited)	3

	Condensed Consolidated Statements of Operations (Unaudited)	4

	Condensed Consolidated Statements of Comprehensive Loss (Unaudited)	5

	Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	31

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults Upon Senior Securities	32

Item 4.	Mine Safety Disclosures	32

Item 5.	Other Information	33

Item 6.	Exhibits	34

SIGNATURES		35

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

INSEEGO CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share data)


	June 30, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	15,165	$	7,143

Accounts receivable, net of provision for credit losses of $761 and $541, respectively	25,203		25,259

Inventories	30,522		37,976

Prepaid expenses and other	7,581		7,978


Total current assets	78,471		78,356
Property, plant and equipment, net of accumulated depreciation of $27,555 and $26,049, respectively	4,091		5,390
Rental assets, net of accumulated depreciation of $7,047 and $5,484, respectively	5,222		4,816
Intangible assets, net of accumulated amortization of $40,736 and $31,629, respectively	37,302		41,383

Goodwill	21,922		21,922
Right-of-use assets	6,229		6,662
Other assets	451		488
Total assets	$	153,688	$	159,017
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	34,212	$	29,018
Accrued expenses and other current liabilities	21,343		27,945





Total current liabilities	55,555		56,963
Long-term liabilities:

2025 Notes, net	159,169		158,427

Revolving credit facility, net	2,554		6,919

Deferred tax liabilities, net	279		323
Other long-term liabilities	6,946		6,503
Total liabilities	224,503		229,135
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 shares designated, 25,000 shares issued and outstanding, liquidation preference of $1,000 per share (plus any accrued but unpaid dividends)	—		—
Common stock, par value $0.001; 150,000,000 shares authorized, 116,870,194 and 108,468,150 shares issued and outstanding, respectively	117		108
Additional paid-in capital	805,177		793,855
Accumulated other comprehensive loss	(6,855)		(6,329)
Accumulated deficit	(869,254)		(857,752)
Total stockholders’ deficit	(70,815)		(70,118)
Total liabilities and stockholders’ deficit	$	153,688	$	159,017

See accompanying notes to condensed consolidated financial statements.

INSEEGO CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net revenues:
IoT & Mobile Solutions	$	46,383	$	54,990	$	90,010	$	109,495
Enterprise SaaS Solutions	7,174		6,866		14,341		13,745
Total net revenues	53,557		61,856		104,351		123,240
Cost of net revenues:
IoT & Mobile Solutions	31,789		40,694		61,451		83,597
Enterprise SaaS Solutions	2,872		3,270		5,817		6,503
Total cost of net revenues	34,661		43,964		67,268		90,100
Gross profit	18,896		17,892		37,083		33,140
Operating costs and expenses:
Research and development	10,022		13,619		18,176		32,179
Sales and marketing	5,974		7,721		12,620		17,494
General and administrative	5,752		6,142		11,797		14,380
Amortization of purchased intangible assets	424		443		853		887
Impairment of capitalized software	—		—		504		—
Total operating costs and expenses	22,172		27,925		43,950		64,940
Operating loss	(3,276)		(10,033)		(6,867)		(31,800)
Other (expense) income:

Loss on debt conversion and extinguishment, net	—		—		—		(450)
Interest expense, net	(2,014)		(1,664)		(4,011)		(4,587)
Other income (expense), net	658		(982)		1,453		(1,387)
Total other expense	(1,356)		(2,646)		(2,558)		(6,424)
Loss before income taxes	(4,632)		(12,679)		(9,425)		(38,224)
Income tax provision (benefit)	304		(303)		616		(625)
Net loss	(4,936)		(12,376)		(10,041)		(37,599)


Series E preferred stock dividends	(739)		(677)		(1,462)		(1,338)
Net loss attributable to common stockholders	$	(5,675)	$	(13,053)	$	(11,503)	$	(38,937)
Per share data:
Net loss per common share:
Basic and diluted	$	(0.05)	$	(0.12)	$	(0.10)	$	(0.37)
Weighted-average shares used in computation of net loss per common share:
Basic and diluted	111,080,287		107,511,660		109,847,937		106,585,684

See accompanying notes to condensed consolidated financial statements.

INSEEGO CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net loss	$	(4,936)	$	(12,376)	$	(10,041)	$	(37,599)
Foreign currency translation adjustment	(619)		536		(525)		3,434

Total comprehensive loss	$	(5,555)	$	(11,840)	$	(10,566)	$	(34,165)

See accompanying notes to condensed consolidated financial statements.

INSEEGO CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands)

(Unaudited)


	Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit 1		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity (Deficit) 1
	Shares	Amount		Shares	Amount
Balance, March 31, 2022	25	$	—	107,389	$	107	$	784,267	$	(812,931)	$	(5,633)	$	(34,190)
Net loss	—	—		—	—		—		(12,376)		—		(12,376)
Foreign currency translation adjustment	—	—		—	—		—		—		536		536
Adjustment relating to extinguishment of 2022 Notes	—	—		—	—		—		—		—		—
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan	—	—		256	1		74		—		—		75
Taxes withheld on net settled vesting of restricted stock units	—	—		—	—		(22)		—		—		(22)


Share-based compensation	—	—

SEC Form 10-Q filed by Inseego Corp.