insg-20230930

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 September 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 October 30, 2023, was 117,031,701.

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	31

Item 4.	Controls and Procedures	32

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

SIGNATURES		36

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

INSEEGO CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share data)


	September 30, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	18,946	$	7,143

Accounts receivable, net of provision for credit losses of $1,101 and $541, respectively	17,435		25,259

Inventories	21,916		37,976

Prepaid expenses and other	5,562		7,978


Total current assets	63,859		78,356
Property, plant and equipment, net of accumulated depreciation of $28,240 and $26,049, respectively	3,597		5,390
Rental assets, net of accumulated depreciation of $5,037 and $5,484, respectively	5,037		4,816
Intangible assets, net of accumulated amortization of $42,138 and $31,629, respectively	35,057		41,383

Goodwill	21,922		21,922
Right-of-use assets	5,819		6,662
Other assets	1,464		488
Total assets	$	136,755	$	159,017
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	30,980	$	29,018
Accrued expenses and other current liabilities	28,917		27,945





Total current liabilities	59,897		56,963
Long-term liabilities:

2025 Notes, net	159,541		158,427

Revolving credit facility, net	—		6,919

Deferred tax liabilities, net	278		323
Other long-term liabilities	7,822		6,503
Total liabilities	227,538		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, 117,024,709 and 108,468,150 shares issued and outstanding, respectively	117		108
Additional paid-in capital	808,203		793,855
Accumulated other comprehensive loss	(7,288)		(6,329)
Accumulated deficit	(891,815)		(857,752)
Total stockholders’ deficit	(90,783)		(70,118)
Total liabilities and stockholders’ deficit	$	136,755	$	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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net revenues:
IoT & Mobile Solutions	$	41,357	$	62,633	$	131,367	$	172,129
Enterprise SaaS Solutions	7,226		6,534		21,567		20,279
Total net revenues	48,583		69,167		152,934		192,408
Cost of net revenues:
IoT & Mobile Solutions	43,560		48,209		105,011		131,805
Enterprise SaaS Solutions	3,128		3,002		8,945		9,505
Total cost of net revenues	46,688		51,211		113,956		141,310
Gross profit	1,895		17,956		38,978		51,098
Operating costs and expenses:
Research and development	8,951		15,417		27,127		47,597
Sales and marketing	5,355		8,295		17,975		25,789
General and administrative	4,906		5,720		16,703		20,101
Amortization of purchased intangible assets	424		433		1,277		1,319
Write-down of capitalized software	611		—		1,115		—
Total operating costs and expenses	20,247		29,865		64,197		94,806
Operating loss	(18,352)		(11,909)		(25,219)		(43,708)
Other (expense) income:

Loss on debt conversion and extinguishment, net	—		—		—		(450)
Interest expense, net	(2,891)		(2,034)		(6,902)		(6,621)
Other (expense) income, net	(578)		(1,758)		875		(3,145)
Total other expense	(3,469)		(3,792)		(6,027)		(10,216)
Loss before income taxes	(21,821)		(15,701)		(31,246)		(53,924)
Income tax (benefit) provision	(16)		42		600		(582)
Net loss	(21,805)		(15,743)		(31,846)		(53,342)


Series E preferred stock dividends	(756)		(691)		(2,218)		(2,029)
Net loss attributable to common stockholders	$	(22,561)	$	(16,434)	$	(34,064)	$	(55,371)
Per share data:
Net loss per common share:
Basic and diluted	$	(0.19)	$	(0.15)	$	(0.30)	$	(0.52)
Weighted-average shares used in computation of net loss per common share:
Basic and diluted	116,967,545		107,747,468		112,247,219		106,977,201

See accompanying notes to condensed consolidated financial statements.

INSEEGO CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net loss	$	(21,805)	$	(15,743)	$	(31,846)	$	(53,342)
Foreign currency translation adjustment	(433)		1,147		(958)		4,581

Total comprehensive loss	$	(22,238)	$	(14,596)	$	(32,804)	$	(48,761)

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 1		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity (Deficit) 1
	Shares	Amount		Shares	Amount
Balance, June 30, 2022	25	$	—	107,645	$	108	$	787,283	$	(825,984)	$	(5,097)	$	(43,690)
Net loss	—	—		—	—		—		(15,743)		—		(15,743)
Foreign currency translation adjustment	—	—		—	—		—		—		1,147		1,147

Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan, net of taxes withheld	—	—		201	—		80		—		—		80



Share-based compensation	—	—		—	—		2,406		—		—		2,406

Series E preferred stock dividends	—	—		—	—		691		(691)		—		—

SEC Form 10-Q filed by Inseego Corp.