teum-20190930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q


x			Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2019


o			Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to ______

001-35360

(Commission file No.)

PARETEUM CORPORATION

(Exact name of registrant as specified in its charter)


Delaware			95-4557538
(State or other jurisdiction of incorporation or organization)			(I.R.S. employer identification no.)

1185 Avenue of the Americas, 2nd Floor, New York, NY 10036

(Address of principal executive offices) (Zip Code)

(646) 975-0400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.00001 par value per share

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 ý

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and 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 and post such files). Yes ¨ No ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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 ý

As of July 1, 2021, there were 141,778,392 shares of the Company’s common stock outstanding.

Table of Contents

PARETEUM CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

QUARTERLY REPORT ON FORM 10-Q

For the Period Ended September 30, 2019


PART I - FINANCIAL INFORMATION			3

Item 1. Financial Statements			3
Unaudited C ondensed Consolidated Balance Sheets			3
Unaudited C ondensed Consolidated Statements of Comprehensive Loss			4
Unaudited C ondensed Consolidated Statements of Changes in Stockholder s ' Equity			5
Unaudited C ondensed Consolidated Statements of Cash Flows			6
Notes to Unaudited Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			30
Item 3. Quantitative and Qualitative Disclosures About Market Risk			38
Item 4. Controls and Procedures			38

PART II - OTHER INFORMATION			40

Item 1. Legal Proceedings			40
Item 1A. Risk Factors			40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			40
Item 3. Defaults upon Senior Securities			40
Item 4. Mine Safety Disclosures			41
Item 5. Other Information			42
Item 6. Exhibits			43

SIGNATURES			44

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

PARETEUM CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


(Dollars in thousands, except par values)	September 30, 2019		December 31, 2018 As revised
ASSETS
Current assets:
Cash and cash equivalents	$	5,247	$	6,052
Restricted cash	1,105		431
Accounts receivable, net of allowance for doubtful accounts of $787 and $514, as of September 30, 2019 and December 31, 2018, respectively	8,742		3,338
Current portion of notes receivable, net	494		—
Prepaid expenses and other current assets	3,672		2,084
Total current assets	19,260		11,905
Right-of-use assets, net	2,721		—
Notes receivable, net of current portion, net	—		1,082
Property, equipment, and software development, net	5,414		5,444
Intangible assets, net	47,149		39,264
Goodwill	133,408		100,428
Other assets	927		45
TOTAL ASSETS	$	208,879	$	158,168

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and customer deposits	$	25,894	$	10,338
Net billings in excess of revenues	1,971		227
Accrued expenses and other payables	9,602		7,741
Promissory notes	482		681
Current portion of lease liabilities	2,222		—
Unsecured subordinated convertible promissory note, net	—		107
Total current liabilities	40,171		19,094
Lease liabilities, net of current portion	833		—
Related party loan	423		342
Deferred taxes, net	7,574		8,386
Other liabilities	45		213
TOTAL LIABILITIES	49,046		28,035

Commitments and contingencies

Stockholders' equity:
Preferred stock, $0.00001 par value: 50,000,000 shares authorized, 4,283 shares issued, and zero shares outstanding as of September 30, 2019 and December 31, 2018	—		—
Common stock and additional paid-in capital, $0.00001 par value: 500,000,000 shares authorized, 133,924,905 and 98,292,530 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	546,243		453,995
Accumulated other comprehensive loss	(13,521)		(6,716)
Accumulated deficit	(372,889)		(317,146)
TOTAL STOCKHOLDERS' EQUITY	159,833		130,133
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	208,879	$	158,168

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

SEC Form 10-Q filed by Pareteum Corporation