10-Q

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

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

For the quarterly period ended March 31, 2022

☐	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:

001-40856

KORE Group Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware		86-3078783
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3 Ravinia Drive NE, Suite 500 Atlanta, Georgia		30346
(Address of principal executive offices)		(Zip Code)

877-710-5673

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value per share	KORE	The New York Stock Exchange
Warrants to purchase common stock	KORE WS	The New York Stock Exchange

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.

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 ☒

As of May 11, 2022, there were

76,239,989 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

Table of Contents

TABLE OF CONTENTS


		Page No.

PART I - FINANCIAL INFORMATION			2

Item 1.	Financial Statements (Unaudited)		2

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		35

Item 4.	Controls and Procedures		35

PART II - OTHER INFORMATION			38

Item 1.	Legal Proceedings		38

Item 1A. Risk Factors			38

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		38

Item 5.	Other Information		38

Item 6.	Exhibits		38

Table of Contents

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form

10-Q

contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report on Form

10-Q

may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form

10-Q

include, but are not limited to statements regarding our future results of operations and financial position, industry and business trends, equity compensation, business strategy, plans, market growth and our objectives for future operations.

The forward-looking statements in this Quarterly Report on Form

10-Q

are only current expectations and predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statement. The forward-looking statements in this Quarterly Report on Form

10-Q

are based upon information available to us as of the date of this Quarterly Report on Form

10-Q,

and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form

10-Q

and the documents that we reference in this Quarterly Report on Form

10-Q

and have filed as exhibits to this Quarterly Report on Form

10-Q

with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form

10-Q.

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form

10-Q,

whether as a result of any new information, future events or otherwise.

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

KORE Group Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands USD, except share amounts)


	March 31 2022		December 31 2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	31,914	$	85,976
Accounts receivable, net of allowances for credits and doubtful accounts of $2,417 and $1,800, at March 31, 2022 and December 31, 2021, respectively		57,073		51,304
Inventories, net		12,069		15,470
Income taxes receivable		1,239		954
Prepaid expenses and other receivables		7,661		7,448

Total current assets		109,956		161,152
Non-current assets
Restricted cash		370		367
Property and equipment, net		12,167		12,240
Intangibles assets, net		222,759		203,474
Goodwill		426,700		381,962
Operating lease right-of-use assets		9,050		—
Other long-term assets		401		407

Total assets	$	781,403	$	759,602

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	19,901	$	16,004
Accrued liabilities		11,424		21,502
Current portion of operating lease liabilities		2,027		—
Income taxes payable		959		467
Deferred revenue		7,020		6,889
Current portion of long-term debt and other borrowings, net		3,206		3,326

Total current liabilities		44,537		48,188
Non-current liabilities
Deferred tax liabilities		36,443		36,722
Warrant liability		259		286
Non-current portion of operating lease liabilities		7,430		—
Long-term debt and other borrowings, net		414,026		399,115
Other long-term liabilities		3,624

SEC Form 10-Q filed by KORE Group Holdings Inc.