1 unchanged sentence
Evaluation of Disclosure Controls and Procedures
−Removed: We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in our reports to the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosure.
−Removed: As required by SEC rules, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2022, the end of the period covered by this report.
−Removed: Based on the foregoing, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures were effective as of December 31, 2022.
+Added: We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in our reports to the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
+Added: As required by SEC rules, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023, the end of the period covered by this report.
+Added: Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.
Management’s Annual Report on Internal Control Over Financial Reporting
5 unchanged sentences
Based on our evaluation under the framework in Internal Control—Integrated Framework , our management concluded that our internal control over financial reporting was effective as of December 31, 2023.
−Removed: Marcum LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited our internal control over financial reporting as of December 31, 2022.
−Removed: Their report on the effectiveness of the Company’s internal control over financial reporting is included below.
Changes in Internal Control over Financial Reporting
−Removed: An evaluation was also performed under the supervision and with the participation of our management, including our principal executive officer and our principal financial and accounting officer, of any change in our internal control over financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
+Added: An evaluation was also performed under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of any change in our internal control over financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
The evaluation did not identify any change in our internal control over financial reporting that occurred during our latest fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
−Removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING
−Removed: To the Stockholders and Board of Directors of Inseego Corp.
−Removed: Opinion on Internal Control over Financial Reporting
−Removed: We have audited Inseego Corp.'s (the “Company”) internal control over financial reporting as of December 31, 2022 based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
−Removed: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
−Removed: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2022 and 2021 and the related consolidated statements of operations, comprehensive loss, stockholders’ deficit, and cash flows and the related notes for each of the three years in the period ended December 31, 2022 of the Company, and our report dated March 2, 2023 expressed an unqualified opinion on those financial statements.
−Removed: Basis for Opinion
−Removed: The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting.
−Removed: Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
−Removed: Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
−Removed: Our audit also included performing such other procedures as we considered necessary in the circumstances.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
−Removed: Definition and Limitations of Internal Control over Financial Reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
−Removed: Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
−Removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate.
−Removed: /s/ Marcum LLP
−Removed: Philadelphia, Pennsylvania
−Removed: March 2, 2023
Other Information
8 unchanged sentences
The following Exhibits are filed as part of, or incorporated by reference into this report:
−Removed: 2.1 Share Purchase Agreement, dated as of February 24, 2021, by and between Inseego Corp.
−Removed: and Main Street 1816 Proprietary Limited (in the process of being renamed Convergence CTSA Proprietary Limited)(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed February 25, 2021).
−Removed: 2.2 First Addendum dated March 17, 2021 to the Share Purchase Agreement dated February 24, 2021 between Main Street 1816 Proprietary Limited (in the process of being renamed Convergence CTSA Proprietary Limited) and Inseego Corp.
−Removed: (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed June 30, 2021.)
−Removed: 2.3 Second Addendum dated April 30, 2021 to the Share Purchase Agreement dated February 24, 2021 between Main Street 1816 Proprietary Limited (in the process of being renamed Convergence CTSA Proprietary Limited) and Inseego Corp.
−Removed: (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June 30, 2021).
−Removed: 2.4 Third Addendum dated June 30, 2021 to the Share Purchase Agreement dated February 24, 2021 between Main Street 1816 Proprietary Limited (in the process of being renamed Convergence CTSA Proprietary Limited) and Inseego Corp.
−Removed: (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 30, 2021.)
3.1 Amended 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).
1 unchanged sentence
(incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed November 9, 2016).
−Removed: 3.3 Certificate of Designation of Series D Junior Participating Preferred Stock of Inseego Corp.
−Removed: (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed January 22, 2018).
3.3 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 August 13, 2019).
3.4 Certificate 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).
+Added: 3.5 Certificate of Amendment of Certificate of Incorporation of Inseego Corp., dated January 23, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed January 23, 2024).
4.1 Form of Inseego Corp.
10 unchanged sentences
10.1* Amended and Restated Inseego Corp.
−Removed: 2000 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No.
+Added: 2000 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to the Company ’s Current Report on Form 8-K (File No.
001-38358), filed on August 9, 2022).
10.2* Change in Control Agreement dated September 25, 2017 between Inseego Corp.
−Removed: and Ashish Sharma.
+Added: and Ashish Sharma (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on form 10-K, filed March 3, 2023).
10.3* Form of Indemnification (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed August 21, 2017).
−Removed: 10.4* Transition Agreement, dated March 1, 2022, between Inseego Corp.
−Removed: and Dan Mondor (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q, filed May 4, 2022).
−Removed: 10.5* Inseego Corp.
−Removed: 2015 Incentive Compensation Plan (incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K, filed on March 16, 2018).
−Removed: 10.6* Form of Nonstatutory Stock Option Agreement under the Inseego Corp.
−Removed: 2015 Incentive Compensation Plan (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K, filed on March 16, 2018).
10.4* Amended Inseego Corp.
−Removed: 2018 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.
+Added: 2018 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company ’s Current Report on Form 8-K (File No.
001-38358), filed on August 9, 2022).
1 unchanged sentence
and the Investors identified on Exhibit A thereto (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed August 7, 2018).
−Removed: 10.9 Assignment and License Agreement, dated as of February 24, 2021, by and between Inseego Corp.
−Removed: and certain entities that will be acquired by Purchaser in the Sale Transaction (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed February 25, 2021).
−Removed: 10.10 Transitional Services Agreement, dated as of February 24, 2021, by and between Inseego Corp.
−Removed: and certain entities that will be acquired by Purchaser in the Sale Transaction (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed February 25, 2021).
−Removed: 10.11 Trademark Agreement, dated as of February 24, 2021, by and between Inseego Corp.
−Removed: Ctrack Holdings (Pty) Limited, and certain entities that will be acquired by Purchaser in the Sale Transaction (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed February 25, 2021).
+Added: 10.6* Inseego Corp.
+Added: Executive Officer Clawback Policy (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on October 30, 2023).
10.7 Equity Distribution Agreement, dated as of January 25, 2021, by and between Inseego Corp.
and Canaccord Genuity LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed January 26, 2021).
−Removed: 10.13* Amended and Restated Change in Control and Severance Agreement, dated June 7, 2021, by and between the Company and Dan Mondor (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed June 10, 2021).
−Removed: 10.16* Offer Letter dated October 13, 2021 between Inseego Corp.
−Removed: and Robert G.
−Removed: (incorporated by reference to Exhibit 10.1 to the Company’s Current on Form 8-K/A, filed October 26, 2021).
−Removed: 10.17* Form of Inducement Stock Option Agreement, by and between Inseego Corp.
−Removed: and Robert G.
−Removed: Barbieri (incorporated by reference to Exhibit 10.2 to the Company’s Current on Form 8-K/A, filed October 26, 2021).
+Added: 10.8* Offer Letter dated September 12, 2023 between Inseego Corp.
+Added: and Steven Gatoff.
+Added: (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed November 3, 2023).
10.9* Change in Control Agreement dated October 25, 2021 between Inseego Corp.
2 unchanged sentences
10.10 Loan and Security Agreement, dated as of August 5, 2022, among Siena Lending Group LLC (as Lender), Inseego Wireless, Inc., and Inseego North America LLC (as Borrowers), and Inseego Corp.
−Removed: (as Guarantor).
+Added: (as Guarantor) (incorporate d by reference to the Company ’ s (incoroporated by reference to Exhibit 10.3 to the Company ’ s Quarterly Report on form 10-Q, filed November 3, 2022 .
10.11 First Amendment, dated as of December 15, 2022, to Loan and Security Agreement, dated as of August 5, 2022, among Siena Lending Group LLC (as Lender), Inseego Wireless, Inc., and Inseego North America LLC (as Borrowers), and Inseego Corp.
−Removed: (as Guarantor).
+Added: (as Guarantor) (incorporated by reference to Exhibit 10.20 t o the Company ’ s Annual Report on form 10-K, filed March 3, 2023) .
+Added: 10.12 Third Amendment, dated as of May 2, 2023, to Loan and Security Agreement, dated as of August 5, 2022, among Siena Lending Group LLC (as Lender), Inseego Wireless, Inc., and Inseego North America LLC (as Borrowers), and Inseego Corp.
+Added: (as Guarantor) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 10-Q, filed on May 3, 2023).
+Added: 10.13 Exit Fee Letter Agreement, dated May 2, 2023, between Inseego Wireless, Inc., South Ocean Funding, LLC, and North Sound Ventures, LP.
+Added: (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 10-Q, filed on May 3, 2023).
21** Subsidiaries of Inseego Corp.
19 unchanged sentences
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
−Removed: March 2, 2023 INSEEGO CORP.
+Added: February 21, 2024 INSEEGO CORP.
By /s/ Ashish Sharma
5 unchanged sentences
/s/ Ashish Sharma Chief Executive Officer
−Removed: (Principal Executive Officer and Director) March 2, 2023
+Added: (Principal Executive Officer) February 21, 2024
Ashish Sharma
−Removed: /s/ Robert G.
−Removed: Barbieri Chief Financial Officer
−Removed: (Principal Financial and Accounting Officer) March 2, 2023
−Removed: /s/ Christopher Harland Director March 2, 2023
−Removed: Christopher Harland
−Removed: /s/ Christopher Lytle Director March 2, 2023
−Removed: Christopher Lytle
−Removed: /s/ Jeffrey Tuder Director March 2, 2023
+Added: /s/ Steven Gatoff Chief Financial Officer
+Added: (Principal Financial and Accounting Officer) February 21, 2024
+Added: Steven Gatoff
+Added: /s/ Jeffrey Tuder Director February 21, 2024
Jeffrey Tuder
−Removed: Avery Director March 2, 2023
−Removed: /s/ Stephanie Bowers Director March 2, 2023
+Added: /s/ Christopher Lytle Director February 21, 2024
+Added: Christopher Lytle
+Added: /s/ Christopher Harland Director February 21, 2024
+Added: Christopher Harland
+Added: Avery Director February 21, 2024
+Added: /s/ Stephanie Bowers Director February 21, 2024
Stephanie Bowers
+Added: /s/ Philip Brace Director February 21, 2024
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
10 unchanged sentences
We have audited the accompanying consolidated balance sheets of Inseego Corp.
−Removed: (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, stockholders’ deficit and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2022, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated March 2, 2023, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
+Added: (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
5 unchanged sentences
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
+Added: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
+Added: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
+Added: Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
9 unchanged sentences
Philadelphia, Pennsylvania
−Removed: March 2, 2023
+Added: February 21, 2024
INSEEGO CORP.
3 unchanged sentences
Cash and cash equivalents $ 7,519 $ 7,143
−Removed: Restricted cash — 3,338
−Removed: Accounts receivable, net of allowances of $ 541 and $ 408 , respectively
+Added: Accounts receivable, net of allowance for expected credit losses of $ 1,113 and $ 541 , respectively
22,616 25,259
7 unchanged sentences
Goodwill 21,922 21,922
−Removed: Right-of-use assets 6,662 7,839
+Added: Operating lease right-of-use assets 5,412 6,662
Other assets 1,256 1,420
4 unchanged sentences
Accrued expenses and other current liabilities 27,022 27,945
+Added: Revolving credit facility, net 4,094 —
Total current liabilities 55,911 56,963
2 unchanged sentences
Revolving credit facility, net — 7,851
+Added: Operating lease liabilities 5,039 5,903
Deferred tax liabilities, net 680 323
6 unchanged sentences
Series E Preferred stock, par value $ 0.001 ;
−Removed: 39,500 shares designated, 25,000 shares issued and outstanding as of December 31, 2022 and 2021, liquidation preference of $ 1,000 per share (plus any accrued but unpaid dividends)
+Added: 39,500 shares designated, 25,000 shares issued and outstanding as of December 31, 2023 and 2022 (aggregate liquidation preference of $ 35,123 )
Common stock, par value $ 0.001 ;
1 unchanged sentence
Additional paid-in capital ( * )
+Added: 810,138 793,952
Accumulated other comprehensive loss ( 5,327 ) ( 6,329 )
2 unchanged sentences
Total liabilities and stockholders’ deficit $ 121,797 $ 159,949
+Added: (*) Adjusted retroactively for reverse stock split that occurred on January 24, 2024, see Note 1
See accompanying notes to consolidated financial statements.
3 unchanged sentences
Year Ended December 31,
−Removed: 2022 2021 2020
−Removed: Net revenues:
−Removed: IoT & Mobile Solutions $ 218,401 $ 217,984 $ 261,169
−Removed: Enterprise SaaS Solutions 26,922 44,415 52,663
−Removed: Total net revenues 245,323 262,399 313,832
−Removed: Cost of net revenues:
−Removed: IoT & Mobile Solutions 166,033 168,604 202,421
−Removed: Enterprise SaaS Solutions 12,381 17,870 20,568
−Removed: Total cost of net revenues 178,414 186,474 222,989
+Added: Mobile solutions $ 80,498 $ 143,524
+Added: Fixed wireless access solutions 54,900 43,602
+Added: Product revenues 135,398 187,126
+Added: Services and other 60,290 58,197
+Added: Total revenues 195,688 245,323
+Added: Cost of revenues:
+Added: Product 127,157 161,943
+Added: Services and other 16,077 16,471
+Added: Total cost of revenues 143,234 178,414
Gross profit 52,454 66,909
3 unchanged sentences
General and administrative 20,721 26,208
−Removed: Amortization of purchased intangible assets 1,749 2,092 3,175
+Added: Depreciation and amortization 19,759 24,490
Impairment of capitalized software 5,239 3,014
2 unchanged sentences
Other income (expense):
−Removed: Gain on sale of Ctrack South Africa — 5,262 —
−Removed: Loss on debt conversion and extinguishment, net ( 450 ) ( 432 ) ( 76,354 )
Interest expense, net ( 9,072 ) ( 8,606 )
−Removed: Other (expense) income, net ( 1,460 ) 845 992
+Added: Other income (expense), net 54 ( 1,910 )
Loss before income taxes ( 45,300 ) ( 68,434 )
−Removed: Income tax (benefit) provision ( 465 ) 191 748
+Added: Income tax provision (benefit) 885 ( 465 )
Net loss ( 46,185 ) ( 67,969 )
−Removed: Net income attributable to noncontrolling interests — ( 214 ) ( 29 )
−Removed: Net loss attributable to Inseego Corp.
−Removed: ( 67,969 ) ( 48,125 ) ( 111,215 )
−Removed: Series E preferred stock dividends and deemed dividends from the preferred stock exchange ( 2,736 ) ( 4,243 ) ( 2,904 )
+Added: Series E preferred stock dividends and deemed dividends ( 2,991 ) ( 2,736 )
Net loss attributable to common stockholders $ ( 49,176 ) $ ( 70,705 )
2 unchanged sentences
Basic and diluted ( * )
+Added: $ ( 4.32 ) $ ( 6.59 )
Weighted-average shares used in computation of net loss per common share:
Basic and diluted ( * )
+Added: 11,372,069 10,726,933
+Added: (*) Adjusted retroactively for reverse stock split that occurred on January 24, 2024, see Note 1
See accompanying notes to consolidated financial statements.
3 unchanged sentences
Year Ended December 31,
−Removed: 2022 2021 2020
Net loss $ ( 46,185 ) $ ( 67,969 )
+Added: Other comprehensive (loss) gain:
Foreign currency translation adjustment 1,002 2,202
−Removed: Release of cumulative foreign currency translation adjustments as a result of the sale of Ctrack South Africa — 1,608 —
Total comprehensive loss $ ( 45,183 ) $ ( 65,767 )
−Removed: Comprehensive income attributable to noncontrolling interests — ( 214 ) ( 29 )
−Removed: Comprehensive loss attributable to Inseego Corp.
−Removed: $ ( 65,767 ) $ ( 49,684 ) $ ( 114,308 )
See accompanying notes to consolidated financial statements.
4 unchanged sentences
Paid-in Capital Accumulated Deficit Accumulated
−Removed: Comprehensive Income (Loss) Noncontrolling Interests Total
+Added: Comprehensive (Loss) Income Total
Stockholders’ Deficit
−Removed: Shares Amount Shares Amount
−Removed: Balance, December 31, 2019 10 $ — 81,974 $ 82 $ 584,862 $ ( 618,303 ) $ ( 3,879 ) $ ( 120 ) $ ( 37,358 )
−Removed: Net loss — — — — — ( 111,215 ) — 29 ( 111,186 )
−Removed: Foreign currency translation adjustment — — — — — — ( 3,093 ) — ( 3,093 )
−Removed: Exercise of stock options, vesting of restricted stock units (RSUs) and stock issued under employee stock purchase plan (ESPP) — — 2,081 2 5,420 — — — 5,422
−Removed: Taxes withheld on net settled vesting of RSUs — — — — ( 354 ) — — — ( 354 )
−Removed: Issuance of Series E preferred stock 25 — — — 25,000 — — — 25,000
−Removed: Issuance of Series E preferred stock in lieu of interest 2 — — — 2,330 — — — 2,330
−Removed: Repurchase of Series E preferred stock ( 2 ) — — — ( 2,354 ) — — — ( 2,354 )
−Removed: Issuance of common stock in connection with Notes Exchange — — 13,739 14 66,074 — — — 66,088
−Removed: Issuance of common stock related to conversion of 2025 Notes — — 1,177 1 14,353 — — — 14,354
−Removed: Exercise of warrants — — 338 — 1,861 — — — 1,861
−Removed: Share-based compensation — — — — 10,419 — — — 10,419
−Removed: Series E preferred stock dividends — — — — 2,904 ( 2,904 ) — — —
−Removed: Issuance of common stock under settlement agreement — — 90 — 972 — — — 972
+Added: Shares Amount Shares ( * )
Balance, December 31, 2021 25 $ — 10,538 $ 105 $ 770,619 $ ( 787,047 ) $ ( 8,531 ) $ ( 24,854 )
1 unchanged sentence
Foreign currency translation adjustment — — — — — — 2,202 2,202
+Added: Adjustment relating to extinguishment of 2022 Notes — — — — 1,728 — — 1,728
Exercise of stock options, vesting of RSUs and stock issued under ESPP — — 310 3 1,187 — — 1,190
Taxes withheld on net settled vesting of RSUs — — ( 1 ) — ( 290 ) — — ( 290 )
−Removed: Divestiture of Ctrack South Africa — — — — 8 ( 2,497 ) 1,608 ( 8 ) ( 889 )
−Removed: Issuance of common stock related to conversion of 2025 Notes — — 429 — 5,382 — — — 5,382
−Removed: Issuance of common stock in connection with public offering, net of issuance costs — — 1,516 2 29,368 — — — 29,370
Share-based compensation — — — — 17,875 — — 17,875
Series E preferred stock dividends — — — — 2,736 ( 2,736 ) — —
−Removed: Series E preferred stock exchange ( 10 ) — 1,525 2 1,102 ( 1,104 ) — — —
−Removed: Net noncontrolling interest acquired — — — — — 240 — ( 115 ) 125
+Added: Impact of retroactively adjusted stock split ( 97 ) 97
Balance, December 31, 2022 25 — 10,847 11 793,952 ( 857,752 ) ( 6,329 ) ( 70,118 )
1 unchanged sentence
Foreign currency translation adjustment — — — — — — 1,002 1,002
−Removed: Adjustment relating to extinguishment of 2022 Notes — — — — 1,728 — — — 1,728
−Removed: Exercise of stock options, vesting of RSUs and stock issued under ESPP — — 3,092 3 1,187 — — — 1,190
−Removed: Taxes withheld on net settled vesting of RSUs — — ( 5 ) — ( 290 ) — — — ( 290 )
+Added: Vesting of RSUs and stock issued under ESPP, net of taxes withheld — — 228 3 ( 308 ) — — ( 305 )
+Added: Issuance of common shares in connection with a public offering, net of issuance costs — — 804 8 6,049 — — 6,057
Share-based compensation — — — — 7,444 — — 7,444
Series E preferred stock dividends — — — — 2,991 ( 2,991 ) — —
+Added: Impact of retroactively adjusted reverse stock split ( 10 ) 10 —
Balance, December 31, 2023 25 $ — 11,879 $ 12 $ 810,138 $ ( 906,928 ) $ ( 5,327 ) $ ( 102,105 )
+Added: (*) Adjusted retroactively for reverse stock split that occurred on January 24, 2024, see Note 1
See accompanying notes to consolidated financial statements.
3 unchanged sentences
Year Ended December 31,
−Removed: 2022 2021 2020
Cash flows from operating activities:
Net loss $ ( 46,185 ) $ ( 67,969 )
−Removed: Adjustments to reconcile net loss to net cash (used in) provided by operating activities
+Added: Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization 22,522 27,206
Fair value adjustment on derivative instrument — ( 926 )
−Removed: Provision for bad debts, net of recoveries 189 401 512
+Added: Provision for expected credit losses 446 189
Impairment of capitalized software 5,239 3,014
Provision for excess and obsolete inventory 9,562 2,614
+Added: Write-off of capitalized inventory order fees 1,275 —
+Added: Impairment of operating lease right-of-use assets 469 —
Share-based compensation expense 7,444 17,875
1 unchanged sentence
Loss on debt conversion and extinguishment, net — 450
−Removed: Gain on sale of Ctrack South Africa — ( 5,262 ) —
Deferred income taxes 388 ( 570 )
−Removed: Right-of-use assets 1,268 1,144 1,432
−Removed: Other — 286 ( 765 )
+Added: Non-cash operating lease expense 1,726 1,268
Changes in assets and liabilities, net of effects of divestiture:
3 unchanged sentences
Accounts payable ( 1,860 ) ( 26,313 )
−Removed: Accrued expenses, income taxes, and other 3,450 4,448 8,785
+Added: Accrued expenses other liabilities 1,110 3,450
Operating lease liabilities ( 1,925 ) ( 1,555 )
−Removed: Net cash (used in) provided by operating activities ( 33,289 ) ( 25,212 ) 20,050
+Added: Net cash provided by (used in) operating activities 7,165 ( 33,289 )
Cash flows from investing activities:
−Removed: Acquisition of noncontrolling interest — ( 116 ) —
Purchases of property, plant and equipment ( 704 ) ( 1,481 )
−Removed: Proceeds from the sale of property, plant and equipment — 1,338 392
−Removed: Proceeds from sale of Ctrack South Africa, net of cash divested 1
Additions to capitalized software development costs and purchases of intangible assets ( 9,465 ) ( 11,838 )
−Removed: Net cash (used in) provided by investing activities ( 13,319 ) 6,078 ( 34,713 )
+Added: Net cash used in investing activities ( 10,169 ) ( 13,319 )
Cash flows from financing activities:
−Removed: Gross proceeds received from issuance of Series E preferred stock — — 25,000
−Removed: Gross proceeds from the issuance of 2025 Notes — — 100,000
−Removed: Payment of issuance costs related to 2025 Notes — — ( 3,645 )
−Removed: Cash paid to investors in private exchange transactions — — ( 32,062 )
−Removed: Payoff of term loan and related extinguishment costs — — ( 48,830 )
−Removed: Repurchase of Series E preferred stock — — ( 2,354 )
−Removed: Proceeds from the exercise of warrants to purchase common stock — — 1,861
−Removed: Net borrowing of bank and overdraft facilities ( 569 ) 265 ( 199 )
−Removed: Principal payments on financed assets ( 1,567 ) — —
−Removed: Borrowings on asset-backed revolving credit facility 12,351 — —
−Removed: Repayment on asset-backed revolving credit facility ( 4,500 ) — —
+Added: Net repayment of bank and overdraft facilities ( 186 ) ( 569 )
+Added: Net (repayments) borrowings on asset-backed revolving credit facility ( 3,757 ) 7,851
Payment of debt issuance costs on asset-backed revolving credit facility — ( 1,126 )
Principal payments under finance lease obligations — ( 62 )
+Added: Principal payments on financed assets — ( 1,567 )
Proceeds from a public offering, net of issuance costs 6,057 —
−Removed: Proceeds from stock option exercises and ESPP, net of taxes paid on vested restricted stock units 900 3,486 5,066
+Added: Proceeds from stock option exercises and ESPP 97 900
Net cash provided by financing activities 2,211 5,427
Effect of exchange rates on cash 1,169 ( 1,488 )
−Removed: Net (decrease) increase in cash, cash equivalents and restricted cash ( 42,669 ) 9,797 27,941
+Added: Net increase (decrease) in cash, cash equivalents and restricted cash 376 ( 42,669 )
Cash, cash equivalents and restricted cash, beginning of period 7,143 49,812
−Removed: Cash, cash equivalents and restricted cash, end of period $ 7,143 $ 49,812 $ 40,015
+Added: Cash and cash equivalents, end of period $ 7,519 $ 7,143
Supplemental disclosures of cash flow information:
4 unchanged sentences
Transfer of inventories to rental assets $ 3,415 $ 442
−Removed: Purchases of property, plant and equipment under finance leases $ — $ — $ 664
Right-of-use assets obtained in exchange for operating leases liabilities $ 1,030 $ 705
−Removed: Proceeds related to divestiture of Ctrack South Africa in exchange for settlement of tax liabilities $ — $ 421 $ —
−Removed: Exchange of Series E Preferred Stock for common stock $ — $ 11,982 $ —
−Removed: Issuance of common stock in exchange for Series E Preferred Stock $ — $ 13,086 $ —
−Removed: Deemed dividend on exchange of Series E Preferred Stock for common stock $ — $ 1,104 $ —
Capital expenditures financed through accounts payable or accrued liabilities $ 98 $ 2,276
−Removed: Issuance of common stock under Settlement Agreement $ — $ — $ 972
−Removed: Preferred stock issued in extinguishment of term loan accrued interest $ — $ — $ 2,330
−Removed: Debt discount and issuance costs extinguished in notes conversion $ — $ — $ 1,728
−Removed: 2022 Notes conversion to equity $ — $ — $ 59,907
−Removed: Novatel Wireless Notes conversion to equity $ — $ — $ 250
−Removed: 2025 Notes issued to extinguish 2022 Notes $ — $ — $ 80,375
−Removed: 2025 Notes conversion, including shares issued in satisfaction of interest-make-whole payment $ — $ 5,382 $ 14,353
−Removed: 1 The amount for the year ended December 31, 2021 is net of cash divested of $ 5.0 million .
See accompanying notes to consolidated financial statements.
3 unchanged sentences
Inseego Corp.
−Removed: (the “Company”, “Inseego”, “We” or “Our”) is a leader in the design and development of fixed and mobile wireless solutions (advanced 4G and 5G NR), Industrial Internet of Things (“IIoT”) and cloud solutions for Fortune 500 enterprises, service providers, small and medium-sized businesses, governments, and consumers around the globe.
−Removed: Our product portfolio consists of fixed and mobile device-to-cloud solutions that provide compelling, intelligent, reliable and secure end-to-end IoT services with deep business intelligence.
−Removed: Inseego’s products and solutions, designed and developed in the U.S., power mission critical applications with a “zero unscheduled downtime” mandate, such as our 5G fixed wireless access (“FWA”) gateway solutions, 4G and 5G mobile broadband, IIoT applications such as software-defined wide area network failover management, asset tracking and fleet management services.
−Removed: Our solutions are powered by our key wireless innovations in mobile and FWA technologies, including a suite of products employing the 5G NR standards, and purpose-built SaaS cloud platforms.
+Added: (the “Company”, “Inseego”, “We” or “Our”) is a leader in the design and development of fixed and mobile wireless products as well as cloud solutions for businesses, consumers, and governments around the globe.
+Added: Our products and solutions are powered by our key wireless innovations in mobile and FWA technologies, including a suite of products employing the 5G NR standards, and purpose-built SaaS cloud platforms.
Inseego is a Delaware corporation formed in 2016 and is the successor to Novatel Wireless, Inc., a Delaware corporation formed in 1996, resulting from an internal reorganization that was completed in November 2016.
12 unchanged sentences
These reclassifications had no effect on previously reported operating results.
+Added: During 2023 the Company has reclassified revenue on the Consolidated Statement of Operations.
+Added: Historically, the Company classified revenues from products and services into two categories, IoT & Mobile Solutions and Enterprise SaaS Solutions.
+Added: The Company is now classifying revenues from products and services into the following two categories:
+Added: Product Revenue, which consists of our Mobile Solutions and Fixed Wireless Access Solutions, and Services and Other.
+Added: See Revenue Recognition below for a description of these groupings.
+Added: Additionally, during 2023 the Company reclassified all depreciation and amortization expense previously recorded in the operating expense line items of research and development, sales and marketing, and general and administrative expenses on the Consolidated Statement of Operations into a separate line labeled Depreciation and amortization.
+Added: All prior periods have been reclassified to conform to the current period presentation for these changes.
+Added: Reverse Stock Split
+Added: On January 24, 2024, the Company completed a 1-for-10 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”).
+Added: As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to January 24th were automatically converted into one-tenth (1/10) of a share of common stock.
+Added: The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder's percentage interest in the Company's equity, except to the extent that the Reverse Stock Split would result in a stockholder owning a fractional share.
+Added: No fractional shares were issued in connection with the Reverse Stock Split.
+Added: Stockholders who otherwise would be entitled to receive a fractional share instead were entitled to receive cash in lieu of such fractional share.
+Added: The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock.
+Added: All outstanding convertible notes entitling their holders to purchase or obtain or convert into shares of our common stock were adjusted, as required by the terms of these securities.
+Added: All common share and per-share amounts in this Form 10-K have been retroactively restated to reflect the effect of the Reverse Stock Split.
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Segment Information
The Company has one reportable segment.
−Removed: 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.
+Added: 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 financial results.
Use of Estimates
3 unchanged sentences
Estimates are assessed each period and updated to reflect current information.
−Removed: Significant estimates include revenue recognition, capitalized software costs, allowance for credit losses, provision for excess and obsolete inventory, valuation of long-lived assets, valuation of goodwill and indefinite-lived intangible assets, valuation of derivatives, accruals relating to litigation, income taxes and share-based compensation expense.
+Added: Significant estimates include revenue recognition, capitalized software costs, allowance for credit losses, provision for excess and obsolete inventory, accrued liabilities related to our contract manufacturers, valuation of tangible and intangible long-lived assets, valuation of goodwill, valuation of derivatives, accruals relating to litigation, income taxes and share-based compensation expense.
Risks and Uncertainties
−Removed: The COVID-19 pandemic continues to impact worldwide economic activity.
−Removed: A pandemic, including COVID-19 or other public health epidemic, poses the risk that we or our employees, manufacturers, suppliers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to spread of the disease within these groups or due to shutdowns that may be requested or mandated by governmental authorities.
−Removed: The COVID-19 pandemic and mitigation measures have also had an adverse impact on global economic conditions which could have an adverse effect on our business and financial condition.
−Removed: The extent to which the COVID-19 pandemic, or any other outbreak of an epidemic disease, impacts
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: our results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.
−Removed: In addition, a global semiconductor supply shortage is causing wide-ranging impacts across the technology industry.
−Removed: While the shortage has not materially impacted the Company’s operations and financial results, it may negatively impact our customers and the supply of materials needed for our testing and production timeline.
−Removed: Our suppliers, contract manufacturers, and customers are all taking actions to reduce the impact of the semiconductor shortage;
−Removed: however, if the shortage persists, the impact on our operations and financial results could be material.
−Removed: The inflationary pressures impacting the global supply chain could potentially increase our future cost of net revenues.
−Removed: The ongoing inflation challenges could adversely impact our future revenues, gross margins and financial results.
−Removed: Sale of Ctrack South Africa
−Removed: On July 30, 2021, the Company completed the sale of its Ctrack business operations in Africa, Pakistan and the Middle East (together “Ctrack South Africa”) and recognized a pre-tax gain of $ 5.3 million.
−Removed: Total cash proceeds received from the sale were $ 31.5 million, net of cash divested of $ 5.0 million.
−Removed: Business Divestiture , for more information.
−Removed: As of December 31, 2022, the Company had available unrestricted cash and cash equivalents totaling $ 7.1 million, working capital of $ 21.4 million, and $ 6.1 million of availability under its secured asset-backed Credit Facility (as defined below in Note 6 .
−Removed: Debt , for more information on this new Credit Facility.
+Added: We may be affected by various macroeconomic factors and the current and future conditions in the global financial markets.
+Added: The global credit and financial markets have recently experienced volatility and disruptions, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, rising interest rates, inflation, increases in unemployment rates and uncertainty about economic stability.
+Added: The inflationary pressures impacting the global supply chain could potentially increase the cost of revenues in the current and future years.
+Added: The ongoing inflation challenges could adversely impact future revenues, gross margins and financial results.
+Added: Furthermore, a global semiconductor supply shortage continues to have wide-ranging impacts across the technology industry.
+Added: While the shortage has not materially impacted the Company’s operations and financial results, it may negatively impact the Company’s customers and the supply of materials needed for testing and production timeline.
+Added: The Company’s suppliers, contract manufacturers, and customers are all taking actions to reduce the impact of the semiconductor shortage;
+Added: however, if the shortage persists, the impact on operations and financial results could be material.
+Added: As of December 31, 2023, the Company had available cash and cash equivalents totaling $ 7.5 million, working capital of $ 2.3 million, and $ 3.2 million of availability to borrow under its secured asset-backed Credit Facility (as defined below).
The Company has a history of operating and net losses and overall usage of cash from operating and investing activities.
−Removed: The Company’s management believes that its cash and cash equivalents on-hand, together with anticipated cash flows from operations, availability under its secured asset-backed Credit Facility, and anticipated savings from ongoing cost reduction efforts, will be sufficient to meet its cash flow needs for the next twelve months from the filing date of this report.
−Removed: To the extent that additional liquidity may be needed, the Company may issue up to $ 9.5 million in equivalent shares of the Company’s common stock available, pursuant to a shelf-registration statement filed with the SEC on May 7, 2020 and amended from time to time.
−Removed: 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.
−Removed: 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 and capital expenditures, which could have an adverse impact on its ability to achieve its intended business objectives.
−Removed: The Company’s liquidity could also be impaired by significant interruptions in its business operations, such as those described above under the heading Risks and Uncertainties , or, a material failure to satisfy its contractual commitments or a failure to generate revenues from new or existing products.
−Removed: In addition, 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.
+Added: The Company’s management believes that its cash and cash equivalents on-hand, together with anticipated cash flows from operations, expected availability under its secured asset-backed Credit Facility, and anticipated savings from ongoing cost reduction efforts, will be sufficient to meet its cash flow needs for the next twelve months from the filing date of this report.
+Added: The Company’s ability to attain profitable operations and generate positive cash flow is dependent upon achieving a level and mix of revenues adequate to support its evolving cost structure.
+Added: 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 potential litigation or otherwise, the Company may be required to raise capital, reduce planned research and development activities, incur additional restructuring charges or reduce other operating expenses and capital expenditures, which could have an adverse impact on the Company’s ability to achieve its intended business objectives.
+Added: The Company’s Credit Facility has a maturity date of December 31, 2024.
+Added: The Company’s convertible 2025 Notes (as defined below) have a principal balance of $ 161.9 million and matures on May 1, 2025.
+Added: The Company’s intention is to restructure or refinance the Credit Facility and the 2025 Notes, however 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.
+Added: See Note 5 – Debt for more information on the Credit Facility and the 2025 Notes.
Cash, Cash Equivalents, and Restricted Cash
1 unchanged sentence
The Company’s cash and cash equivalents are generally held with large financial institutions worldwide to reduce the amount of exposure to credit risk.
−Removed: Cash, cash equivalents and restricted cash are recorded at market value, which approximates cost.
+Added: Cash and cash equivalents are recorded at market value, which approximates cost.
+Added: There are no cash equivalents as of December 31, 2023 or December 31, 2022.
Gains and losses associated with the Company’s foreign currency denominated demand deposits are recorded as a component of other income, net, in the consolidated statements of operations.
−Removed: Restricted cash held in escrow with a financial institution as of December 31, 2021, which was set up as collateral for potential future uninsured warranty claims related to the divestiture of Ctrack South Africa, was released during the third quarter of 2022, and we no longer have any restricted cash on our balance sheet as of December 31, 2022.
−Removed: Business Divestiture for additional information about the divestiture of Ctrack South Africa.
−Removed: Cash and cash equivalents $ 7,143 $ 46,474
−Removed: Restricted cash — 3,338
−Removed: Cash, cash equivalents and restricted cash, end of period
−Removed: $ 7,143 $ 49,812
+Added: Restricted cash held in escrow as of December 31, 2021 was released during 2022 and we no longer have any restricted cash on our balance sheet as of December 31, 2023 and December 31, 2022.
INSEEGO CORP.
2 unchanged sentences
The Company’s products and services primarily include intelligent mobile hotspots, wireless routers for IoT applications, USB modems, integrated telematics and mobile tracking hardware devices, which are supported by applications software and cloud services designed to enable customers to easily analyze data insights and configure and manage their hardware.
−Removed: The Company classifies its revenues from the sale of its products and services into two distinct groupings, IoT & Mobile Solutions and Enterprise SaaS Solutions.
−Removed: Both IoT & Mobile Solutions and Enterprise SaaS Solutions revenues include any hardware and software required for the respective solution.
−Removed: Net revenues by grouping for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
−Removed: 2022 2021 2020
−Removed: IoT & Mobile Solutions $ 218,401 $ 217,984 $ 261,169
−Removed: Enterprise SaaS Solutions 26,922 44,415 52,663
−Removed: Total $ 245,323 $ 262,399 $ 313,832
−Removed: See geographic disaggregation information in Note 13 .
−Removed: Geographic Information and Concentrations of Risk .
−Removed: IoT & Mobile Solutions .
−Removed: The IoT & Mobile Solutions portfolio is comprised of end-to-end edge to cloud solutions including 4G LTE mobile broadband gateways, routers, modems, hotspots, HD quality VoLTE based wireless home phones, cloud management software and an advanced 5G portfolio of products (currently in various stages of development).
−Removed: The solutions are offered under the MiFi TM brand for consumer and business markets, and under the Skyus brand for industrial IoT markets.
−Removed: IoT & Mobile Solutions also includes Inseego Subscribe TM , a hosted SaaS platform that helps organizations manage the selection, deployment and spend of their customer’s wireless assets, helping them save money on personnel and telecom expenses.
−Removed: Enterprise SaaS Solutions .
−Removed: The Enterprise SaaS Solutions portfolio consists of various subscription offerings within the Company’ s Ctrack tel ematics platforms, which provide fleet vehicle, aviation ground vehicle and asset tracking and performance information, and other telematics applications.
+Added: The Company classifies its revenues from the sale of its products and services into two categories, Product Revenue, which consists of our Mobile Solutions and Fixed Wireless Access Solutions, and Services and Other.
+Added: See geographic disaggregation information in Note 12 – Geographic Information and Concentrations of Risk .
+Added: Mobile solutions:
+Added: Our Mobile wireless product portfolio consists of intelligent mobile broadband solutions, HD quality VoLTE products, 4G mobile solutions and an advanced 5G portfolio of mobile products.
+Added: Our mobile broadband solutions, sold under the MiFi brand, are actively used by millions of end users annually to provide secure and convenient high-speed access to corporate, public and personal information through the Internet and enterprise networks.
+Added: Our mobile portfolio includes cloud offerings with Inseego Connect for device management, and 5G SD EDGE for secure networking enabling corporate managed mobile remote workforce.
+Added: Fixed wireless access solutions:
+Added: O ur Fixed Wireless Solutions product portfolio consists of indoor, outdoor and industrial wireless broadband solutions.
+Added: Our Fixed Wireless solutions, sold under the Wavemaker and Skyus brands, are sold by wireless operators such as T-Mobile, U.S.
+Added: Cellular and Verizon Wireless along with distribution and channel partners.
+Added: Services and other:
+Added: Services and other primarily consists of various subscription offerings within the Company’s telematics platforms, which provide fleet vehicle, aviation ground vehicle and asset tracking and performance information, and other telematics applications;
+Added: services performed under our Inseego Subscribe SaaS application, which provides managed the selection, deployment, and spend of customers’ wireless assets;
+Added: and non-recurring engineering services provided to our customers.
Revenue Recognition Criteria
8 unchanged sentences
and (v) recognition of revenue when, or as, performance obligations are satisfied.
+Added: Substantially all of our product revenues are recognized at a point in time, while substantially all of our service and other revenues are recognized over time.
Customer Contracts
3 unchanged sentences
The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Performance Obligations
The Company’s performance obligations are established when a customer submits a purchase order notification (in writing, electronically or verbally) for goods and services, and the Company accepts the order.
−Removed: The Company identifies performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order.
+Added: The Company identifies performance obligations as the delivery of the requested product or service in appropriate quantities and to the location
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: specified in the customer’s contract and/or purchase order.
The Company generally recognizes revenue upon the satisfaction of these criteria when control of the product or service has been transferred to the customer at which time the Company has an unconditional right to receive payment.
2 unchanged sentences
The Company enters into contracts that may include various combinations of products and services which are generally capable of being distinct and accounted for as separate performance obligations.
−Removed: Hardware revenue from the sale of the Company’s IoT & Mobile Solutions devices is recognized when the Company transfers control to the customer, typically at the time when the product is delivered, shipped or installed, at which time, title passes to the customer and there are no further performance obligations with regards to the hardware device.
+Added: Hardware revenue from the sale of the Company’s devices is recognized when the Company transfers control to the customer, typically at the time when the product is delivered, shipped or installed, at which time, title passes to the customer and there are no further performance obligations with regards to the hardware device.
The Company also considered the performance obligations in its customer master supply agreements and determined that, for the majority of its revenue, the Company generally satisfies performance obligations at a point in time upon delivery of the product to the customer.
+Added: Maintenance and support services revenue.
+Added: Periodically, the Company sells separately-priced warranty contracts that extend beyond the Company’s base warranty period.
+Added: The separately priced service contracts range from 12 to 36 months.
+Added: The Company typically receives payment at the inception of the contract and recognizes revenue as earned on a straight-line basis over the term of the contract.
+Added: The Company’s estimated allowances for product warranties can vary from actual results and the Company may have to record additional charges to cost of revenue.
+Added: Within cost of revenue, the Company records an estimate to reflect its standard warranty obligation to end users to provide for replacement of a defective product.
+Added: The standard obligation period for most regions is 12 months.
+Added: Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures.
SaaS and other services.
10 unchanged sentences
The Company recognizes revenue ratably over time throughout the term of the contract.
−Removed: Maintenance and support services revenue.
−Removed: Periodically, the Company sells separately-priced warranty contracts that extend beyond the Company’s base warranty period.
−Removed: The separately priced service contracts range from 12 months to 36 months.
−Removed: The Company typically receives payment at the inception of the contract and recognizes revenue as earned on a straight-line basis over the term of the contract.
−Removed: The Company’s estimated allowances for product warranties can vary from actual results and the Company may have to record additional charges to cost of revenue.
−Removed: Within cost of revenue, the Company records an estimate to reflect its standard warranty obligation to end users to provide for replacement of a defective product.
−Removed: The standard obligation period for most regions is 12 months.
−Removed: Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures.
Professional services revenue.
4 unchanged sentences
The Company’s contracts with customers may include commitments to transfer multiple products and services to a customer.
−Removed: When hardware, software and services are sold in various combinations, judgment is required to determine whether each performance obligation is considered distinct and accounted for separately, or not distinct
+Added: When hardware, software and services are sold in various combinations, judgment is required to determine whether each performance obligation is considered distinct and accounted for separately, or not distinct and accounted for together with other performance obligations.
+Added: The Company considered the performance obligations in its customer master supply agreements and determined that, for the majority of its revenue, the Company generally satisfies performance obligations at a point in time upon delivery of the product to the customer.
INSEEGO CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: and accounted for together with other performance obligations.
−Removed: The Company considered the performance obligations in its customer master supply agreements and determined that, for the majority of its revenue, the Company generally satisfies performance obligations at a point in time upon delivery of the product to the customer.
In instances where the software elements included within hardware for various products are considered to be functioning together with non-software elements to provide the tangible product’s essential functionality, these arrangements are accounted for as a single distinct performance obligation.
12 unchanged sentences
Contract liabilities are also recorded when the Company collects payments in advance of performing the services.
−Removed: As of December 31, 2022 and 2021, the Company had $ 5.1 million and $ 3.8 million, respectively, of contract liabilities which represent our deferred revenue included within accrued expenses and other current liabilities, and $ 0.6 million and $ 0.1 million, respectively, of contract liabilities included within other long-term liabilities on the consolidated balance sheets.
−Removed: Cost of Net Revenues
−Removed: Cost of net revenues includes the costs associated with the manufacturing of our portfolio of hardware devices, as well as personnel costs for employees and contractors, depreciation, allocated overhead costs and other period adjustments related to costs of inventories sold or for sale or use in manufacturing.
+Added: As of December 31, 2023 and 2022, the Company had contract liabilities comprised of $ 5.6 million and $ 5.1 million of short-term deferred revenue included within accrued expenses and other current liabilities and $ 1.7 million and $ 0.6 million of long-term deferred revenue included within other long-term liabilities on the consolidated balance sheets, respectively.
+Added: Cost of Revenues
+Added: Cost of revenues includes the costs associated with the manufacturing of our portfolio of hardware devices, as well as direct personnel costs for employees and contractors, depreciation and amortization, and other period adjustments related to costs of inventories sold or for sale or use in manufacturing.
Shipping and Handling Charges
Fees charged to customers for shipping and handling of products are included in product revenues, and costs for shipping and handling of products are included as a component of sales and marketing expense.
−Removed: Taxes Collected from Customers
−Removed: Taxes collected on the value of transaction revenue are excluded from product and services revenues and cost of sales and are accrued in current liabilities until remitted to governmental authorities.
+Added: Shipping and handling costs were approximately $ 1.0 million and $ 2.3 million for the years ended December 31, 2023 and December 31, 2022, respectively.
INSEEGO CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Accounts Receivable and Allowance for Credit Losses
+Added: Taxes Collected from Customers
+Added: Taxes collected on the value of transaction revenue are excluded from product and services revenues and cost of sales and are accrued in current liabilities until remitted to governmental authorities.
+Added: Accounts Receivable and Allowance for Expected Credit Losses
Accounts receivable are customer obligations generally due under normal trade terms for the industry.
4 unchanged sentences
The Company evaluates the aggregation and risk characteristics of a receivable pool and develops loss rates that reflect historical collections, current forecasts of future economic conditions over the time horizon the Company is exposed to credit risk, and payment terms or conditions that may materially affect future forecasts.
+Added: As needed, amounts are written-off when determined to be uncollectible.
As of December 31, 2023 and 2022, the Company reported $ 22.6 million and $ 25.3 million, respectively, of accounts receivable, net of allowances of $ 1.1 million and $ 0.5 million, respectively.
1 unchanged sentence
Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value.
−Removed: Inbound shipping and handling costs are classified as a component of cost of net revenues in the consolidated statements of operations.
+Added: Inbound shipping and handling costs are classified as a component of cost of revenues in the consolidated statements of operations.
The Company reviews the components of its inventory and its inventory purchase commitments on a regular basis for excess and obsolete inventory based on estimated future usage and sales.
1 unchanged sentence
Whenever inventory is written down, a new cost basis is established and the inventory is not subsequently written up if market conditions improve.
−Removed: The Company believes that, when made, the estimates used in calculating the inventory provision are reasonable and properly reflect the risk of excess and obsolete inventory.
Intangible Assets other than Goodwill
Intangible assets include purchased finite-lived and indefinite-lived intangible assets resulting from previous acquisitions, along with the costs of non-exclusive and perpetual worldwide software technology licenses and capitalized software development costs for both internal and external use.
−Removed: Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets.
−Removed: Indefinite-lived intangible assets, including in-process capitalized software development costs, are not amortized;
+Added: Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets, which range fr om two to ten years .
+Added: In definite-lived intangible assets, including in-process capitalized software development costs, are not amortized;
however, they are tested for impairment annually, and between annual tests, if certain events occur indicating that the carrying amounts may be impaired.
3 unchanged sentences
The straight-line recognition method approximates the manner in which the expected benefit will be derived.
−Removed: At each balance sheet date, the unamortized capitalized software development cost for external use is compared to the net realizable value of that product by analyzing critical inputs such as expected future lifetime revenue.
−Removed: The amount by which unamortized software costs exceed the net realizable value, if any, is recognized as a charge to amortization expense in the period it is determined.
Costs incurred to enhance existing software or after the software is available for general release to customers are expensed in the period they are incurred and included in research and development expense in the consolidated statements of operations.
+Added: At each balance sheet date, the unamortized capitalized software development cost for external use is compared to its net realizable value by analyzing critical inputs such as expected future lifetime revenue.
+Added: The amount by which unamortized software costs exceed the net realizable value, if any, is recognized as a charge to amortization expense in the period it is determined.
Software Development Costs for Internal Use
4 unchanged sentences
Maintenance and training costs are expensed as incurred.
−Removed: Capitalized internal-use software costs are recorded as intangible assets and are amortized on a straight-line basis to general and administrative expense in the consolidated statement of operations over the estimated useful life of the software.
−Removed: The Company tests these assets for impairment whenever events or circumstances occur that could impact their recoverability.
−Removed: For the years ended December 31, 2022, 2021, and 2020, the
+Added: Capitalized internal-use software costs are recorded as
INSEEGO CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Company recorded impairment losses of $ 3.0 million, $ 1.2 million and $ 1.4 million, respectively, related to software development costs for internal use.
+Added: intangible assets and are amortized on a straight-line basis to general and administrative expense in the consolidated statement of operations over the estimated useful life of the software.
+Added: The Company tests these assets for impairment whenever events or circumstances occur that could impact their recoverability.
Valuation of Indefinite-Lived Intangible Assets
9 unchanged sentences
An impairment charge is recognized if the asset’s estimated fair value is less than it’s carrying value.
−Removed: For the years ended December 31, 2022, 2021 and 2020 the Company recorded zero impairment loss related to indefinite-lived intangible assets.
+Added: The Company did not record any impairment losses related to indefinite-lived intangible assets during the years ended December 31, 2023 and 2022.
Goodwill represents the excess purchase price over estimated fair value of net assets of businesses acquired in a business combination.
17 unchanged sentences
Fair value is determined based on an evaluation of the assets’ associated discounted future cash flows or appraised value .
−Removed: For the years ended December 31, 2022, 2021 and 2020, the Company had no impairment loss related to long-lived assets, except for the impairment of the capitalized software development costs for internal use, noted above.
+Added: For the years ended December 31, 2023 and 2022, the Company had no impairment loss related to long-lived assets, except for the impairment of the capitalized software development costs for internal and external use, described further Note 3 – Goodwill and Other Intangible Assets .
Property, Plant and Equipment
13 unchanged sentences
The cost of rental assets, which represents fleet management and vehicle tracking hardware installed in customers’ vehicles where such hardware is provided as part of a fixed term contract with the customer, is capitalized and disclosed separately in the consolidated balance sheets.
−Removed: The Company recognizes depreciation expense on rental assets within Enterprise SaaS cost of net revenues on a straight-line basis over the term of the contract, generally three to four years , commencing on installation of the rental asset.
+Added: The Company recognizes depreciation expense on rental assets to costs of services and other revenues on a straight-line basis over the term of the contract, generally three to four years , commencing on installation of the rental asset.
Convertible Debt Instruments
30 unchanged sentences
Variable lease payments that do not depend on an index or rate are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred.
+Added: The Company has elected not to present short-term leases on the consolidated balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise.
Lessor Arrangements
26 unchanged sentences
The Company’s policy is to include interest and penalties related to such positions as a component of income tax expense.
−Removed: The Company is, from time to time, party to various legal proceedings arising in the ordinary course of business.
−Removed: The Company records a loss when information indicates that a loss is both probable and reasonably estimable.
−Removed: Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records the minimum estimated
INSEEGO CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: liability related to the claim.
+Added: The Company is, from time to time, party to various legal proceedings arising in the ordinary course of business.
+Added: The Company records a loss when information indicates that a loss is both probable and reasonably estimable.
+Added: Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records the minimum estimated liability related to the claim.
As additional information becomes available, the Company revises its estimates, if necessary.
17 unchanged sentences
The Company recognizes share-based compensation expense over the requisite service period of each individual award, which generally equals the vesting period, using the straight-line method for awards that contain only service conditions.
−Removed: For awards that contain performance conditions, the Company recognizes the share-based compensation expense on a straight-line basis for each vesting tranche.
+Added: For awards that contain performance conditions, the Company recognizes the share-based compensation expense on a straight-line basis for each vesting tranche, when achievement of that tranche is considered probable.
The Company evaluates the assumptions used to value stock awards on a quarterly basis.
1 unchanged sentence
If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense.
−Removed: Net Loss Per Share Attributable to Inseego Corp.
−Removed: Net loss attributable to common stockholders is computed by dividing the net loss by the weighted-average number of shares that were outstanding during the period.
+Added: Retirement Savings Plan
+Added: The Company has a defined contribution 401(k) retirement savings plan (the “Plan”).
+Added: Substantially all of the Company’s U.S.
+Added: employees are eligible to participate in the Plan after meeting certain minimum age and service requirements.
+Added: The Company matches 50 % of the first 6 % of an employee’s designated deferral of their eligible compensation.
+Added: Employees may make discretionary contributions to the Plan subject to Internal Revenue Service limitations.
+Added: Employer matching contributions under the Plan were $ 0.7 million and $ 0.9 million for the years ended December 31, 2023 and 2022, respectively.
+Added: Employer matching contributions vest immediately.
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Net Loss Per Share Attributable to Common Stockholders
+Added: Net loss attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares that were outstanding during the period.
Diluted net loss attributable to common stockholders (“EPS”) reflects the potential dilution that could occur if securities or other contracts to acquire common stock were exercised or converted into common stock.
5 unchanged sentences
The Company classifies inputs to measure fair value using a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.
−Removed: The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: to the fair value measurement.
−Removed: The hierarchy is prioritized into three levels (with Level 3 being the lowest) and is defined as follows:
+Added: The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
+Added: The hierarchy is prioritized into three levels and is defined as follows:
Pricing inputs are based on quoted market prices for identical assets or liabilities in active markets (e.g., NYSE or NASDAQ).
5 unchanged sentences
Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comprehensive Loss
−Removed: Comprehensive loss consists of net earnings and foreign currency translation adjustments.
+Added: Comprehensive loss consists of two components:
+Added: net loss and other comprehensive loss.
+Added: Other comprehensive loss refers to losses that are recorded as an element of stockholders’ deficit and are excluded from net loss.
+Added: The Company’s other comprehensive loss is currently composed of foreign currency translation adjustments.
Recently Adopted Accounting Pronouncements
5 unchanged sentences
The guidance is effective for annual and interim periods beginning after December 15, 2021.
−Removed: The Company adopted the ASU in the first quarter of fiscal 2022 and there was no impact to the consolidated financial statements.
+Added: The Company adopted the ASU in the first quarter of 2022 and there was no impact to the consolidated financial statements.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40).
1 unchanged sentence
The ASU is effective for annual and interim periods beginning after December 15, 2021.
−Removed: The Company adopted the ASU in the first quarter of fiscal 2022 and there was no impact to the consolidated financial statements.
−Removed: Recent Accounting Pronouncements Not Yet Adopted
+Added: The Company adopted the ASU in the first quarter of 2022 and there was no impact to the consolidated financial statements.
In September 2022, the FASB issued ASU No.
3 unchanged sentences
The ASU is effective for annual and interim periods beginning after December 15, 2022, except for the rollforward requirement, which is effective for annual periods beginning after December 15, 2023.
−Removed: The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations.
+Added: The Company adopted the ASU in the first quarter of 2023 and there was no impact to the consolidated financial statements.
+Added: Recent Accounting Pronouncements Not Yet Adopted
+Added: In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:
+Added: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative .
+Added: The FASB issued the standard to introduce changes to US GAAP that originate in either SEC Regulation S-X or S-K, which are rules about the form and content of financial reports.
+Added: The provisions of the standard are contingent when the SEC removes the related disclosure provisions from Regulation S-X and S-K.
+Added: The company does not expect the provisions of the standard to have a material impact on the Company's financial statements and related disclosures.
+Added: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures, which requires that an entity report segment information in accordance with Topic 280, Segment Reporting.
+Added: The amendment in the ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.
+Added: The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.
+Added: The Company is currently evaluating the impact of the new standard on its consolidated financial statements and related disclosures.
+Added: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures .
+Added: ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures.
+Added: The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.
+Added: Early adoption is permitted.
+Added: A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024.
+Added: The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
INSEEGO CORP.
5 unchanged sentences
Total inventories $ 22,880 $ 37,976
+Added: During the year ended December 31, 2023, t he Company record ed a write-down of $ 9.6 million to reflect inventories at net realizable value, in addition to a $ 1.3 million write-off of capitalized inventory order fees.
+Added: Further, management accrued an additional $ 6.8 million in net charges for contract manufacturing liabilities (whose remaining balance is accrued in the Accrued Expenses and Other Current Liabilities section below) related to excess materials at the contract manufacturers’ sites.
+Added: All $ 17.7 million of these charges are recorded i n product cost of revenues on the consolidated statement of operations.
Prepaid expenses and other
2 unchanged sentences
Receivables from contract manufacturers 1,823 3,561
−Removed: Software licenses 772 1,261
−Removed: Insurance 12 1,269
−Removed: Deposits 829 1,023
−Removed: Financed assets — 323
Other 1,438 2,379
11 unchanged sentences
Total property, plant and equipment, net $ 2,758 $ 5,390
−Removed: At December 31, 2022, the Company had property, plant and equipment under finance leases with an aggregate carrying value of $ 3.1 million, net of accumulated amortization of $ 2.1 million.
−Removed: At December 31, 2021, the Company had property, plant and equipment under finance leases with an aggregate carrying value of $ 3.1 million, net of accumulated amortization of $ 1.3 million.
Rental assets
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Rental assets consist of the following (in thousands):
2 unchanged sentences
Total rental assets $ 5,083 $ 4,816
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Depreciation and amortization
−Removed: Depreciation and amortization expense related to property, plant and equipment, including rental assets and property, plant and equipment under finance leases, was $ 7.1 million, $ 9.8 million and $ 10.0 million for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: Depreciation and amortization expense related to property, plant and equipment, including rental assets and property, plant and equipment under finance leases, was $ 6.1 million and $ 7.1 million for the years ended December 31, 2023 and 2022, respectively.
Accrued expenses and other current liabilities
4 unchanged sentences
Professional fees 310 738
−Removed: Bank overdrafts — 370
Accrued interest 1,038 1,112
3 unchanged sentences
Accrued contract manufacturing liabilities 7,537 1,416
−Removed: Liabilities related to financed assets — 1,593
Value added tax payables 531 449
2 unchanged sentences
Goodwill and Other Intangible Assets
−Removed: A summary of the activity in goodwill is presented below (in thousands):
−Removed: Balance at December 31, 2020 $ 32,511
−Removed: Effect of Ctrack South Africa divestiture
−Removed: Effect of change in foreign currency exchange rates ( 1,441 )
−Removed: Balance at December 31, 2021 20,336
−Removed: Effect of change in foreign currency exchange rates 1,586
−Removed: Balance at December 31, 2022 $ 21,922
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: The Company had a goodwill balance of $ 21.9 million at both December 31, 2023 and 2022.
The Company’s intangible assets are comprised of the following (in thousands):
December 31, 2023
−Removed: Weighted-Average Life
−Removed: (in years) Gross Carrying Value Accumulated Amortization Net Carrying Value
+Added: Gross Carrying Value Accumulated Amortization Net Carrying Value
Finite-lived intangible assets:
8 unchanged sentences
Total intangible assets $ 27,140
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2022
−Removed: Weighted-Average Life
−Removed: (in years) Gross Carrying Value Accumulated Amortization Net Carrying Value
+Added: Gross Carrying Value Accumulated Amortization Net Carrying Value
Finite-lived intangible assets:
8 unchanged sentences
Total intangible assets $ 41,383
−Removed: Amortization expense for the years ended December 31, 2022, 2021 and 2020 was approximately $ 20.1 million, $ 15.5 million, and $ 18.0 million, respectively, including approximately $ 17.9 million, $ 12.2 million and $ 12.9 million related to capitalized software development costs for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: For the years ended December 31, 2022, 2021, and 2020, the Company recorded $ 3.0 million, $ 1.2 million, and $ 1.4 million, respectively, of impairment losses on intangible assets related to internal use capitalized software.
+Added: Amortization expense for the years ended December 31, 2023 and 2022 was approximately $ 16.4 million and $ 20.1 million, respectively, including approximately $ 14.3 million and $ 17.9 million related to capitalized software development costs for the years ended December 31, 2023 and 2022, respectively.
+Added: For the years ended December 31, 2023 and 2022, the Company recorded $ 5.2 million and $ 3.0 million, respectively, of impairment losses on intangible assets related to capitalized software.
The following table represents details of the amortization of finite-lived intangible assets that is estimated to be expensed in the future (in thousands):
2 unchanged sentences
Total $ 26,936
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Fair Value Measurement of Assets and Liabilities
−Removed: The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2022 and 2021 (in thousands):
−Removed: December 31, 2022 December 31, 2021
−Removed: Total Fair Value Level 3 Level 1 Total Fair Value Level 3 Level 1
−Removed: Cash equivalents
−Removed: Money market funds $ — $ — $ — $ 126 $ — $ 126
−Removed: Total assets $ — $ — $ — $ 126 $ — $ 126
−Removed: Interest make-whole payment $ — $ — $ — $ 926 $ 926 $ —
−Removed: Total liabilities $ — $ — $ — $ 926 $ 926 $ —
−Removed: During the years ended December 31, 2022 and 2021, there were no transfers between the levels within the fair value hierarchy.
+Added: Fair Value Measurements
+Added: The Company’s only financial instrument measured at fair value on a recurring basis is its interest make-whole payment derivative liability on its 2025 Notes (see Note 5 – Debt ).
+Added: The fair value of that liability was zero as of both December 31, 2023 and 2022.
The fair value of the interest make-whole payment derivative liability was determined using a Monte Carlo model with the following key assumptions:
7 unchanged sentences
Risk-free rate 4.60 % 4.35 %
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The estimated fair value of the interest make-whole derivative liability at December 31, 2023 and December 31, 2022 was determined using assumptions which include an implied credit spread rate for notes with a similar term, the expected volatility and dividend yield of the Company’s common stock and the risk-free interest rate.
−Removed: During the year ended December 31, 2022, there were no conversions of the 3.25% convertible senior notes due 2025 (the “2025 Notes”) into shares of the Company’s common stock.
−Removed: During the year ended December 31, 2021, certain holders of the 2025 Notes converted an aggregate of approximately $ 5.0 million in principal amount of the 2025 Notes into shares of the Company’s common stock in accordance with the terms of such notes and a portion of the embedded derivative was settled in shares of the Company’s common stock resulting in $ 0.1 million of the derivative liability being extinguished upon conversion.
−Removed: There was a $ 0.9 million reduction in the fair value of the interest make-whole liability for the year ended December 31, 2022.
−Removed: For the years ended December 31, 2021 and 2020, the Company recorded a $ 3.8 million gain and a $ 0.6 million loss, respectively, as a result of the changes in fair value of the interest make-whole liability.
+Added: During the years ended December 31, 2023 and 2022, there were no conversions of the 3.25 % convertible senior notes due 2025 (the “2025 Notes”) into shares of the Company’s common stock.
+Added: During the year ended December 31, 2023, there was no change in the fair value of the interest make-whole liability.
+Added: For the year ended December 31, 2022, the Company recorded a $ 0.9 million gain as a result of the changes in fair value of the interest make-whole liability within other income (expense), net on the consolidated statement of operations.
Other Financial Instruments
1 unchanged sentence
The 2025 Notes are carried at amortized cost, adjusted for changes in fair value of the embedded derivative.
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Business Divestiture
−Removed: Sale of Ctrack South Africa Operations
−Removed: On July 30, 2021, the Company completed the sale of Ctrack South Africa to an affiliate of Convergence Partners (“Convergence”), an investment management firm in South Africa.
−Removed: Net cash proceeds received were approximately $ 33.7 million, net o f cash divested of $ 5.0 million.
−Removed: The Company placed in escrow approximately $ 3.3 million, which was released to the Company on July 30, 2022.
−Removed: The funds in escrow allowed for Convergence to submit claims that were deemed to be uninsured warranties as defined in the purchase agreement.
−Removed: Such funds in escrow were recorded as restricted cash on the Company’s consolidated balance sheet prior to their release.
−Removed: The transaction was considered a deconsolidation of a subsidiary.
−Removed: Accordingly, upon the sale of Ctrack South Africa, the Company recognized a pre-tax gain of $ 5.3 million for the year ended December 31, 2021.
−Removed: Such gain was recognized as gain on the sale of Ctrack South Africa in the consolidated statement of operations during the year ended December 31, 2021 The Company also recorded $ 2.2 million of transaction costs within other income (expense), net, in the consolidated results of operations for the year ended December 31, 2021.
−Removed: The carrying values of the assets and liabilities of Ctrack South Africa sold in the transaction as of July 30, 2021, are summarized below:
−Removed: (in thousands)
−Removed: Cash and cash equivalents $ 5,040
−Removed: Accounts receivable, net 3,505
−Removed: Inventory 3,821
−Removed: Prepaid expenses and other 370
−Removed: Property, plant and equipment, net 4,545
−Removed: Rental assets, net 2,448
−Removed: Intangible assets, net 11,278
−Removed: Goodwill 10,734
−Removed: Total assets 41,741
−Removed: Accounts payable 3,961
−Removed: Accrued expenses and other liabilities 1,107
−Removed: Deferred tax liabilities, net 3,647
−Removed: Other long-term liabilities 746
−Removed: Total liabilities 9,461
−Removed: Net assets $ 32,280
−Removed: Total consideration recognized was comprised of the following:
−Removed: (in thousands)
−Removed: Initial purchase consideration received, upon close $ 36,566
−Removed: Working capital adjustments (a)
−Removed: Total consideration recognized $ 39,150
−Removed: (a) $ 2.2 million was received on October 29, 2021, and the remaining $ 0.4 million was offset with the Company’s existing accounts payable balance to Convergence.
−Removed: Net gain on sale is comprised of the following:
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (in thousands)
−Removed: Total consideration recognized $ 39,150
−Removed: Book value of net assets sold 32,280
−Removed: Release of cumulative foreign currency translation adjustments related to Ctrack South Africa 1,608
−Removed: Net gain on sale $ 5,262
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Convertible Notes
−Removed: In May 2020, the Company completed its registered public offering of $ 100.0 million aggregate principal amount of the 2025 Notes.
−Removed: Also in May 2020, the Company entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain related party holders of the 5.5% convertible senior notes due 2022 (the “2022 Notes”).
−Removed: Pursuant to the Exchange Agreements, these noteholders agreed to exchange the 2022 Notes that they held (representing an aggregate of $ 45.0 million principal amount of 2022 Notes with an estimated fair value of approximately $ 112.4 million as of the date of exchange) for an aggregate of $ 32.0 million in cash and $ 80.4 million principal amount of 2025 Notes in private placement transactions that closed concurrently with the registered offering (the “Private Exchange Transaction”).
−Removed: In connection therewith, the Company recorded a $ 67.2 million loss on debt conversion and extinguishment in the consolidated statements of operations in the year ended December 31, 2020.
−Removed: The 2025 Notes issued in the Private Exchange Transaction are part of the same series as the 2025 Notes issued in the registered offering.
−Removed: During the year ended December 31, 2021, certain holders of the 2025 Notes converted, pursuant to the original terms of the 2025 Notes, an aggregate of approximately $ 5.0 million in principal amount of the 2025 Notes into 428,669 shares of the Company’s common stock, including 32,221 shares of common stock issued in satisfaction of the interest make-whole payment.
−Removed: In connection therewith, the Company recorded a loss of $ 0.4 million on debt conversion, shown as net in the consolidated statement of operations.
+Added: In May 2020, the Company completed both a registered public offering, and a privately negotiated exchange agreement, that resulted in the issuance of the 2025 Notes.
+Added: After taking into account exchanges and redemptions occurring in prior periods, the outstanding principal balance of the 2025 Notes was $ 161.9 million as of both December 31, 2023 and December 31, 2022 .
The 2025 Notes were issued under an indenture, dated May 12, 2020 (the “Base Indenture”), between the Company and Wilmington Trust, National Association, as trustee (the “Trustee”), as supplemented by the first supplemental indenture, dated May 12, 2020 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between the Company and the Trustee.
20 unchanged sentences
The Company has determined that this feature is an embedded derivative and has recognized the fair value of this derivative as a liability in the consolidated balance sheets, with subsequent changes to fair value to be recorded at each reporting period on the consolidated statement of operations in other income, net.
−Removed: As of December 31, 2022 and 2021, $ 161.9 million of principal of the 2025 Notes was outstanding.
−Removed: As of December 31, 2022 and 2021, $ 80.4 million principal amount of 2025 Notes was held by related parties and $ 0.9 million of accrued interest due to related parties was included within accrued expenses and other current liabilities on the consolidated balance sheets.
+Added: See Note 4 – Fair Value Measurements , for more information on this derivative liability.
+Added: As of December 31, 2023 and 2022, $ 161.9 million of principal of the 2025 Notes was outstanding, $ 80.4 million of which were held by related parties.
Assuming no repurchases or conversions of the 2025 Notes prior to May 1, 2025, the entire principal balance of $ 161.9 million of the 2025 Notes is due on May 1, 2025.
5 unchanged sentences
Net carrying amount $ 159,912 $ 158,427
−Removed: The effective interest rate of the 2025 Notes was 4.17 % and 4.15 %, respectively, for the twelve months ended December 31, 2022 and 2021.
+Added: The effective interest rate of the liability component of the 2025 Notes was 4.17 % for the twelve months ended December 31, 2023 and 2022.
The following table sets forth total interest expense recognized related to the 2025 Notes (in thousands):
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31,
−Removed: 2022 2021 2020
Contractual interest expense $ 5,262 $ 5,262
2 unchanged sentences
Total interest expense $ 6,749 $ 6,749
−Removed: The contractual interest expense on the 2025 Notes recorded within interest expense, net on the consolidated statements of operations attributable to related parties was $ 2.6 million in each of the years ended December 31, 2022 and 2021 and $ 1.7 million in the year ended December 31, 2020.
−Removed: The Company’s consolidated statements of operations for the year ended December 31, 2020 included related party interest expense of $ 0.8 million related to the 2022 Notes.
−Removed: The Company had interest expense relating to the following debt obligations that were fully settled in 2020 as follows:
−Removed: Year Ended December 31, 2020
−Removed: 2022 Notes Novatel Wireless Notes
−Removed: Contractual interest expense $ 768 $ 1,667
−Removed: Amortization of debt discount 1,952 859
−Removed: Amortization of debt issuance costs 111 103
−Removed: Total interest expense $ 2,831 $ 2,629
−Removed: The effective interest rates on the 2022 Notes and the Novatel Wireless Notes in the year ended December 31, 2020 were 12.89 % and 15.19 %, respectively.
+Added: The contractual interest expense on the 2025 Notes recorded within interest expense, net on the consolidated statements of operations attributable to related parties was $ 2.6 million and $ 2.6 million in the years ended December 31, 2023 and 2022,
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: respectively.
+Added: As of both December 31, 2023 and 2022, accrued interest due to related parties of $ 0.4 million was included within accrued expenses and other current liabilities on the consolidated balance sheets.
Asset-Backed Revolving Credit Facility
−Removed: On August 5, 2022, the Company entered into a Loan and Security Agreement (the “Credit Agreement”), by and among Siena Lending Group LLC, as lender (“Lender”), Inseego Wireless, Inc., a Delaware corporation (“Inseego Wireless”), a subsidiary of the Company, and Inseego North America LLC, an Oregon limited liability company, an indirect subsidiary of the Company, as borrowers (together with Inseego Wireless, the “Borrowers”), and the Company, as guarantor (together with the Borrowers, the “Loan Parties”) as amended on February 25, 2023.
−Removed: The Credit Agreement establishes a secured asset-backed revolving credit facility which is comprised of a maximum $ 50 million revolving credit facility (“Credit Facility”), with a minimum draw of $ 4.5 million upon execution of the Credit Agreement.
+Added: On August 5, 2022, the Company entered into a Loan and Security Agreement (the “Credit Agreement”), by and among Siena Lending Group LLC, as lender (“Lender”), Inseego Wireless, Inc., a Delaware corporation (“Inseego Wireless”), a subsidiary of the Company, and Inseego North America LLC, an Oregon limited liability company, an indirect subsidiary of the Company, as borrowers (together with Inseego Wireless, the “Borrowers”), and the Company, as guarantor (together with the Borrowers, the “Loan Parties”) as subsequently amended (see Note 13 – Subsequent Events for further information on the most recent amendment) .
+Added: The Credit Agreement establishes a secured asset-backed revolving credit facility which is comprised of a maximum $ 50 million revolving credit facility (“Credit Facility”), with a minimum borrowing amount for interest calculations of $ 4.5 million upon execution of the Credit Agreement.
The Credit Facility matures on December 31, 2024.
4 unchanged sentences
Borrowings under the Credit Facility may take the form of base rate (“Base Rate”) loans or Secured Overnight Financing Rate (“SOFR”) loans.
−Removed: SOFR loans will bear interest at a rate per annum equal to Term SOFR (defined in the Credit Agreement as the Term SOFR Reference Rate for a term of one month on the day) plus the Applicable Margin (as defined in the Credit Agreement), with a Term SOFR floor of 1 %.
+Added: SOFR loans will bear interest at a rate per annum equal to Term SOFR (as defined in the Credit Agreement as the Term SOFR Reference Rate for a term of one month on the day) plus the Applicable Margin (as defined in the Credit Agreement), with a Term SOFR floor of 1 %.
Base Rate loans will bear interest at a rate per annum equal to the Applicable Margin plus the greatest of (a) the per annum rate of interest which is identified as the “Prime Rate” and normally published in the Money Rates section of The Wall Street Journal, (b) the sum of the Federal Funds Rate (as defined in the Credit Agreement) plus 0.5 % and (c) 3.50 % per annum.
2 unchanged sentences
If the average outstanding amount for a preceding month is between $ 15 million and $ 25 million, the Applicable Margin will be 3.00 % for Base Rate loans and 4.00 % for SOFR loans.
−Removed: If the average outstanding amount for a
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: preceding month is greater than $ 25 million, the Applicable Margin will be 4.5 % for Base Rate loans and 5.50 % for SOFR loans.
+Added: If the average outstanding amount for a preceding month is greater than $ 25 million, the Applicable Margin will be 4.5 % for Base Rate loans and 5.50 % for SOFR loans.
The Company pays monthly fees of 0.4 % per annum on the unused portion of the Credit Facility.
2 unchanged sentences
The Company determined that the term “Eligible Accounts”, as defined in the Credit Agreement would have excluded certain balances used in the determination of eligible collateral upon which the Company’s borrowing base is calculated and that exclusion would have resulted in a violation of the Liquidity Covenant as of December 31, 2022.
−Removed: Accordingly, to clarify this matter and others, the Loan Parties agreed to amend the Credit Agreement, (the “Amended Credit Agreement”) to modify and clarify the definitions of “Eligible Accounts”, “Permitted Indebtedness” and also “Eligible Inventory”.
−Removed: The Amendment was entered into on February 25, 2023 with an effective date of December 15, 2022.
−Removed: The Company was in compliance with the financial covenants in the Amended Credit Agreement as of December 31, 2022.
+Added: Accordingly, to clarify this matter and others, the Loan Parties agreed to amend the Credit Agreement (as amended, the “Amended Credit Agreement”) to modify and clarify the definitions of “Eligible Accounts”, “Permitted Indebtedness” and also “Eligible Inventory.” The Amended Credit Agreement was entered into on February 25, 2023 with an effective date of December 15, 2022.
+Added: The Company was in compliance with the financial covenants of the Amended Credit Agreement as of December 31, 2023.
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: On May 2, 2023, (1) two related parties (the “Participants”) collectively purchased a $ 4.0 million last-out subordinated participation interest in the Amended Credit Agreement (the “Participation Interest”) from the Lender, and (2) the Borrowers entered into an amendment to the Amended Credit Agreement which increased the borrowing base under the Credit Facility by $ 4.0 million, increased the minimum borrowing amount for interest calculations to $ 8.5 million, and modified certain covenants.
+Added: In connection with the purchase of the Participation Interest, we agreed to pay the Participants an aggregate exit fee ranging from 7.5 % to 12.5 % of the amount of the Participation Interest, payable upon the earlier to occur of (a) the maturity date of the Credit Facility, (b) termination of the Lender’s commitment to make revolving loans prior to the scheduled maturity date of the Credit Facility, and (c) the early redemption of the Participation Interest, as applicable.
+Added: Further, the purchase of the Participation Interest granted an option for the Participants to purchase the subject revolving loan or to redeem its Participation Interest under certain circumstances.
+Added: The Participants are each affiliates of beneficial holders of greater than five percent of our outstanding common stock.
+Added: Accretion of the exit fee attributable to related parties recorded within interest expense, net on the consolidated statements of operations was $ 0.2 million for the year ended December 31, 2023.
Upon execution of the Credit Agreement on August 5, 2022, the Company paid $ 1.1 million of debt issuance costs, which are being amortized to interest expense throughout the term of the agreement.
−Removed: Amortization expense of $ 0.2 million related to debt issuance cost was recognized for the year ended December 31, 2022.
−Removed: As of December 31, 2022, the Company had outstanding borrowings of $ 7.9 million, gross borrowing base of $ 15.7 million and availability of $ 7.8 million.
+Added: Amortization expense of $ 0.5 million and $ 0.2 million related to debt issuance cost was recognized for the years ended December 31, 2023 and 2022, respectively.
+Added: As of December 31, 2023 and 2022, there were $ 0.5 million and $ 0.9 million of unamortized debt issuance costs on the Credit Facility included within prepaid expenses and other and other assets on the consolidated balance sheets, respectively.
+Added: As of December 31, 2023, the Company had outstanding borrowings of $ 4.1 million and availability of $ 3.2 million.
The Company’s policy is to classify outstanding borrowings as long-term so long as such borrowings are not expected to exceed the borrowing base over the 12 months subsequent to the balance sheet date, in which case, any excess borrowings would be classified as short-term.
−Removed: Gross amount outstanding (in thousands) $ 7,851
−Removed: unamortized debt issuance cost ( 932 )
−Removed: Revolving credit facility, net $ 6,919
−Removed: The effective interest rate of the Credit Facility was 17.71 %, which includes 8.50 % related to amortization of original issuance costs, for the twelve months ended December 31, 2022.
+Added: The effective interest rate of the average outstanding balance of the Credit Facility was 54.5 %, which includes 14.4 % related to amortization of original issuance costs, and 17.7 %, which includes 8.5 % related to amortization of original issuance costs, for the twelve months ended December 31, 2023 and 2022, respectively.
+Added: The higher interest rates relate to the fact that there is a minimum borrowing amount for interest calculations under the Credit Facility.
The following table sets forth total interest expense recognized related to the Credit Facility (in thousands):
+Added: Year Ended December 31,
Contractual interest expense $ 861 $ 211
3 unchanged sentences
Year Ended December 31,
−Removed: 2022 2021 2020
Domestic $ ( 47,703 ) $ ( 63,939 )
5 unchanged sentences
Year Ended December 31,
−Removed: 2022 2021 2020
Federal $ — $ —
−Removed: State 50 30 ( 4 )
Foreign 477 55
Total current 497 105
−Removed: Federal 15 12 12
Foreign 379 ( 585 )
7 unchanged sentences
Convertible debt 3,526 9,782
+Added: Depreciation and amortization 1,725 —
Interest expense limitation 18,689 12,722
16 unchanged sentences
The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized.
−Removed: The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a “more likely than not” realization standard.
−Removed: The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are:
−Removed: (1) future reversals of existing taxable
INSEEGO CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: temporary differences (i.e., offset of gross deferred tax assets against gross deferred tax liabilities);
+Added: The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a “more likely than not” realization standard.
+Added: The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are:
+Added: (1) future reversals of existing taxable temporary differences (i.e., offset of gross deferred tax assets against gross deferred tax liabilities);
(2) taxable income in prior carryback years, if carryback is permitted under the applicable tax law;
2 unchanged sentences
During the years ended December 31, 2023 and 2022, the Company recognized valuation allowances of $ 10.1 million, and $ 13.6 million, respectively, related to its deferred tax assets created in those respective years for entities with historical losses and full valuation allowances.
−Removed: In 2021, certain valuation allowances in the amount of $ 10.0 million were released related to entities included in the divestiture of Ctrack South Africa.
−Removed: The Company also recognized $ 3.0 million of additional valuation allowance in 2021 related to true-up of prior year deferred taxes, partially offset by foreign currency loss of $ 0.2 million.
Based on the Company’s current position on valuation allowance, no net income tax benefits resulted in the Company’s consolidated statements of operations from the operating losses created during those years.
3 unchanged sentences
Year Ended December 31,
−Removed: 2022 2021 2020
Federal tax benefit, at statutory rate $ ( 9,154 ) $ ( 14,371 )
2 unchanged sentences
Valuation allowance against future tax benefits 9,727 13,564
−Removed: Gain on sale of foreign subsidiaries — 3,008 —
−Removed: Sub-part F income — 791 —
−Removed: Loss on conversion of debt — — 2,015
Research and development credits ( 760 ) ( 2,222 )
7 unchanged sentences
Approximately $ 106.9 million of these NOLs have no expiration date.
−Removed: The remainder began to expire in 2023, unless previously utilized.
+Added: The remainder will begin to expire in 2024, unless previously utilized.
Some of these NOLs may be limited by either past or future changes in control events.
The Company has California NOLs at December 31, 2023 of approximately $ 64.2 million, which begin to expire in 2028, unless previously utilized, and foreign NOLs for its active foreign subsidiaries of approximately $ 25.5 million, which generally have no expiration date.
−Removed: At December 31, 2022, the Company had federal research and development tax credit carryforwards of approximately $ 15.9 million, which begin to expire in 2026, unless previously utilized, and California research and development tax credit carryforwards of approximately $ 17.4 million, which have no expiration date.
+Added: At December 31, 2023, the Company had federal research and development tax credit carryforwards, net of unrecognized tax benefits, of approximately $ 10.9 million, which begin to expire in 2026, unless previously utilized, and California research and development tax credit carryforwards, net of unrecognized tax benefits, of approximately $ 10.9 million, which have no expiration date.
Pursuant to Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of the Company’s net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a rolling three-year period.
4 unchanged sentences
income taxes which may become payable if undistributed earnings of the foreign subsidiary were paid as dividends to the Company.
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On March 27, 2020, the U.S.
government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a payment delay of employer payroll taxes during 2020 after the date of enactment.
−Removed: Payments of approximately $ 1.4 million of employer payroll taxes otherwise due in 2020, were delayed with 50% due and paid by December 31, 2021 and the remaining 50% in February 2023.
+Added: Payments of approximately $ 1.4 million of employer payroll taxes otherwise due in 2020, were delayed with 50% due and paid by December 31, 2021 and
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: the remaining 50% in February 2023.
The CARES Act did not have a material impact on the Company’s consolidated financial statements.
10 unchanged sentences
Increases related to current and prior year tax positions 506
+Added: Decreases from lapses of statute of limitations and prior year tax positions ( 30,782 )
Balance at December 31, 2023 $ 12,639
8 unchanged sentences
The IRA provides for excise taxes on corporate stock buy-backs and a minimum tax on corporate financial statement income in excess of $1.0 billion.
−Removed: These new provisions become effective January 1, 2023.
+Added: These new provisions became effective January 1, 2023.
The Company does not expect the IRA to have a material impact on the Company’s effective tax rate or income tax expense for the year ending December 31, 2023.
2 unchanged sentences
The Company has a total of 2,000,000 shares of preferred stock authorized for issuance at a par value of $ 0.001 per share, 150,000 of which have been designated Series D Preferred Stock and 39,500 of which have been designated Series E Preferred Stock.
+Added: As of December 31, 2023, the Company had 25,000 shares of Series E preferred stock issued and outstanding.
Each share of Series E Preferred Stock entitles the holder thereof to receive, when and if declared by the Company out of assets legally available therefor, cumulative cash dividends at an annual rate of 9.00 % payable quarterly in arrears on January 1 April 1, July 1 and October 1 of each year, beginning on October 1, 2019.
4 unchanged sentences
The “Series E Base Amount” means $ 1,000 per share, plus any accrued but unpaid dividends, whether or not declared by the Company’s board of directors, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series E Preferred Stock.
−Removed: In the event of a liquidation, dissolution or winding
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: up of the Company, the holders of the Series E Preferred Stock will be entitled to receive, after satisfaction of liabilities to creditors and subject to the rights of holders of any senior securities, but before any distribution of assets is made to holders of common stock or any other junior securities, the Series E Base Amount plus (without duplication) any accrued and unpaid dividends.
−Removed: Exchange Transactions
−Removed: On March 6, 2020, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which, among other things, the Company issued and sold to the investor, in a private placement transaction, an aggregate of 25,000 shares of the Company’s Series E Preferred Stock, for a purchase price of $ 1,000 per share of Series E Preferred Stock, resulting in gross proceeds to the Company of $ 25.0 million.
−Removed: On September 3, 2021, the Company entered into separate privately-negotiated exchange agreements (the “September Exchange Agreements”) with Golden Harbor Ltd.
−Removed: and North Sound Trading, L.P.
−Removed: (the “Participating Stockholders”), holders of the Company’s outstanding Series E Preferred Stock.
−Removed: Pursuant to each respective September Exchange Agreement, each of the Participating Stockholders agreed to exchange Series E Preferred Stock that they held (representing an aggregate of 10,000 shares of Series E Preferred Stock) for an aggregate of 1,525,207 shares of common stock, of the Company (the “Series E Exchange Transactions”).
−Removed: The Company did not receive any cash proceeds from the Participating Stockholders in connection with the Series E Exchange Transactions.
−Removed: The Company used the Guidance in ASC 470 Debt , regarding the modification of debt instruments and determined that the Series E Exchange Transactions were an extinguishment.
−Removed: If a modification or exchange represents an extinguishment for accounting purposes, it is accounted for as a redemption of the existing equity instrument and the issuance of a new instrument.
−Removed: ASC 260-10-S99-2, “SEC Staff Announcement:
−Removed: The Effect on the Calculation of Earnings Per Share for a Period That Includes the Redemption or Induced Conversion of Preferred Stock,” provides guidance on the accounting for extinguishments (redemptions) of equity-classified preferred stock.
−Removed: Under that guidance, an SEC registrant compares (1) the fair value of the consideration transferred to the holders of the preferred stock and (2) the carrying amount of the preferred stock immediately before the modification or exchange (net of issuance costs).
−Removed: The difference is treated as a return to (or from) the holder of the preferred stock in a manner similar to dividends paid on preferred stock.
−Removed: Any excess of fair value of the consideration transferred to the holders of the preferred stock over the carrying amount of the preferred stock in the issuer’s balance sheet is treated as a dividend to those holders and charged against retained earnings.
−Removed: The Company determined that the Series E Exchange Transactions resulted in an extinguishment of preferred stock and an issuance of common stock.
−Removed: The difference between the carrying amount of the preferred stock plus accrued dividends, and the fair value of the common stock exchanged for such preferred stock, totaled $ 1.1 million.
−Removed: This difference was treated as a deemed dividend, and was included within the Series E Preferred Stock dividends and deemed dividends from the preferred stock exchange, in the consolidated results of operations for the year ended December 31, 2021.
−Removed: During the years ended December 31, 2022, 2021 and 2020, dividends declared, but not paid, related to the Series E Preferred Stock resulted in $ 9.1 million, $ 6.4 million and $ 3.3 million of dividends accrued, approximating $ 365.60 , $ 256.16 and $ 130.60 per preferred share, as of December 31, 2022, 2021, and 2020, respectively.
−Removed: On August 6, 2018, the Company completed a private placement of 12,062,000 shares of its common stock and warrants (the “2018 Warrants”) to purchase an additional 4,221,700 shares of its common stock, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, to certain accredited investors for gross proceeds of $ 19.7 million in cash.
−Removed: Each warrant had an initial exercise price of $ 2.52 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions.
−Removed: On March 28, 2019, the 2018 Warrants were exercised at an exercise price of $ 2.52 per share, for aggregate cash proceeds to the Company of approximately $ 10.6 million.
−Removed: In connection with the exercise of the 2018 Warrants, on March 28, 2019, the Company issued additional warrants to purchase 2,500,000 shares of common stock (the “2019 Warrants”) to the accredited investors.
−Removed: Each 2019 Warrant had an initial exercise price of $ 7.00 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, were exercisable at any time on or after September 28, 2019.
−Removed: The 2019 Warrants were not exercised and expired on June 30, 2022.
−Removed: The Company assessed the terms of the warrants under ASC 815.
−Removed: Pursuant to this guidance, the Company determined that the warrants did not require liability accounting and classified the warrants as equity.
+Added: In the event of a liquidation, dissolution or winding up of the Company, the holders of the Series E Preferred Stock will be entitled to receive, after satisfaction of liabilities to creditors and subject to the rights of holders of any senior securities, but before any distribution of assets is made to holders of
INSEEGO CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: On January 25, 2021, the Company entered into an Equity Distribution Agreement with Canaccord Genuity LLC (the “Agent”), pursuant to which the Company may offer and sell, from time to time, through or to the Agent, up to $ 40.0 million of shares of its common stock (the “ATM Offering”).
−Removed: In January 2021, the Company sold 1,516,073 shares of common stock, at an average price of $ 20.11 per share, for net proceeds of $ 29.4 million, after deducting underwriter fees and discounts of $ 0.9 million, and other offering fees, pursuant to the ATM Offering.
−Removed: Common Shares Reserved for Future Issuance
−Removed: The Company had reserved shares of common stock for possible future issuance as of December 31, 2022 and 2021 as follows:
−Removed: Common stock warrants outstanding — 2,500,000
−Removed: Stock options outstanding 8,132,959 8,085,793
−Removed: Restricted stock units outstanding 1,178,370 1,247,723
−Removed: Shares available for issuance pursuant to Convertible Notes 14,090,448 14,340,786
−Removed: Shares available for future grants of awards under the 2018 Omnibus Incentive Compensation Plan 8,848,748 3,311,023
−Removed: Shares available under the 2000 Employee Stock Purchase Plan 895,141 170,811
−Removed: Total shares of common stock reserved for issuance 33,145,666 29,656,136
+Added: common stock or any other junior securities, the Series E Base Amount plus (without duplication) any accrued and unpaid dividends.
+Added: Dividends declared, but not paid, related to the Series E Preferred Stock resulted in $ 10.1 million and $ 7.1 million of dividends accrued, approximating $ 404.93 and $ 285.29 per preferred share, as of December 31, 2023 and 2022, respectively.
+Added: As of December 31, 2023, the Company had 150,000,000 shares of $ 0.001 par value common stock authorized for issuance and 11,878,557 shares issued and outstanding.
+Added: In January 2021, the Company entered into an Equity Distribution Agreement with Canaccord Genuity LLC (the “Agent”), pursuant to which the Company may offer and sell, from time to time, through or to the Agent, up to $ 40.0 million of shares of its common stock (the “ATM Offering”).
+Added: There were no sales under the ATM during the year ended December 31, 2022.
+Added: During the year ended December 31, 2023 the Company sold 803,596 shares of common stock, at an average price of $ 7.54 per share, for net proceeds of $ 5.9 million, after deducting underwriter fees and discounts.
+Added: Effective as of November 2, 2023, the Equity Distribution Agreement was terminated by the Company, and there will be no further sales under the ATM Offering.
Share-based Compensation
−Removed: During the year ended December 31, 2022, the Company granted awards under the 2018 Omnibus Incentive Compensation Plan, previously named the Amended and Restated 2009 Omnibus Incentive Compensation Plan (the “2018 Plan”), and the 2015 Incentive Compensation Plan (the “2015 Plan”).
+Added: During the years ended December 31, 2023 and 2022, the Company granted awards under the 2018 Omnibus Incentive Compensation Plan, previously named the Amended and Restated 2009 Omnibus Incentive Compensation Plan (the “2018 Plan”).
The Compensation Committee of the Board of Directors administers the plans.
1 unchanged sentence
The 2018 Plan authorizes 3,275,309 shares, of which 910,076 remain available for future grants.
−Removed: During the year ended December 31, 2022, the Board of Directors of the Company approved and the Company granted RSUs to eligible employees under the 2018 Omnibus Incentive Compensation Plan, previously named the Amended and Restated 2009 Omnibus Incentive Compensation Plan (the “2018 Plan”) that were immediately vested, as fiscal 2021 annual bonus payments.
−Removed: The total charges recorded for the year ended December 31, 2022 were $ 8.8 million.
−Removed: Total charges related to bonus payments recorded for the year ended December 31, 2021 were $ 7.0 million.
−Removed: Total charges related to bonus payments recorded for the year ended December 31, 2020 were $ 2.7 million.
−Removed: During the year ended December 31, 2021, the Board of Directors of the Company approved, and the Company granted additional RSUs under the 2018 Plan to certain employees who contributed to the completion of the divestiture of Ctrack South Africa.
−Removed: Such grants were immediately vested, and the total charges were $ 0.6 million.
+Added: During the year ended December 31, 2023 and 2022, the Board of Directors of the Company approved and the Company granted RSUs to eligible employees under the 2018 Plan, previously named the Amended and Restated 2009 Omnibus Incentive Compensation Plan (the “2018 Plan”), as annual bonus payments.
+Added: During the years ended December 31, 2023 and 2022, the total charges related to bonus payments were $ 1.2 million and $ 8.8 million, respectively.
For the years ended December 31, 2023 and 2022, the following table presents total share-based compensation expense in each functional line item on the consolidated statements of operations (in thousands):
Year Ended December 31,
−Removed: 2022 2021 2020
Cost of revenues $ 772 $ 2,110
5 unchanged sentences
The Compensation Committee of the Board of Directors determines eligibility, vesting schedules and exercise prices for stock options granted.
+Added: For performance stock awards subject to market-based vesting conditions, fair values are determined using the Monte-Carlo simulation model.
Stock options generally have a term of ten years and vest over a three - to four-year period.
21 unchanged sentences
Outstanding — December 31, 2023 545,872 $ 44.16 6.30 $ 1
−Removed: Granted 1,505,000 4.63
−Removed: Exercised ( 370,688 ) 1.37
−Removed: Canceled ( 1,087,146 ) 7.97
−Removed: Outstanding — December 31, 2022 8,132,959 $ 4.65 5.25 $ —
Vested and Expected to Vest — December 31, 2023 504,839 $ 45.74 6.08 $ —
Exercisable — December 31, 2023 365,246 $ 49.57 5.07 $ —
−Removed: The total intrinsic value of stock options exercised to purchase common stock during the years ended December 31, 2022, 2021 and 2020 was approximately $ 3.7 million, $ 4.3 million and $ 11.7 million, respectively.
+Added: The total intrinsic value of stock options exercised to purchase common stock during the years ended December 31, 2022 was approximately $ 3.7 million.
As of December 31, 2023, total unrecognized share-based compensation expense related to non-vested stock options was $ 3.0 million, which is expected to be recognized over a weighted-average period of approximately 2.78 years.
−Removed: The Company recognized approximately $ 5.9 million, $ 6.3 million and $ 5.8 million of share-based compensation expense related to the vesting of stock option awards during the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: The Company recognized approximately $ 4.0 million and $ 5.9 million of share-based compensation expense related to the vesting of stock option awards during the years ended December 31, 2023 and 2022, respectively.
Restricted Stock Units
16 unchanged sentences
Non-vested — December 31, 2023 203,008 19.84
−Removed: Granted 2,544,053 4.51
−Removed: Vested ( 2,278,818 ) 4.53
−Removed: Forfeited ( 334,588 ) 3.45
−Removed: Non-vested — December 31, 2022 1,178,370 7.33
−Removed: During the years ended December 31, 2022, 2021 and 2020, the total fair value of shares vested was $ 9.5 million, $ 10.4 million and $ 5.1 million, respectively.
+Added: During the years ended December 31, 2023 and 2022, the total fair value of shares vested was $ 1.2 million and $ 9.5 million, respectively.
As of December 31, 2023, there was $ 2.3 million of unrecognized share-based compensation expense related to non-vested RSUs, which is expected to be recognized over a weighted-average period of 1.39 years.
−Removed: The Company recognized approximately $ 11.7 million, $ 9.6 million and $ 4.1 million of share-based compensation expense related to the vesting of RSUs during the years ended December 31, 2022, 2021 and 2020 respectively.
+Added: The Company recognized approximately $ 3.3 million and $ 11.7 million of share-based compensation expense related to the vesting of RSUs during the years ended December 31, 2023 and 2022, respectively.
2000 Employee Stock Purchase Plan
2 unchanged sentences
During the years ended December 31, 2023 and 2022, the Company issued 64,150 shares and 52,567 shares, respectively, under the ESPP.
−Removed: The Company recognized approximately $ 0.3 million, $ 0.7 million and $ 0.6 million of share-based compensation expense related to the ESPP during the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: Earnings per Share
+Added: The Company recognized approximately $ 0.1 million and $ 0.3 million of share-based compensation expense related to the ESPP during the years ended December 31, 2023 and 2022, respectively.
+Added: Loss per Share
Basic EPS excludes dilution and is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period.
1 unchanged sentence
Potentially dilutive securities (consisting primarily of the convertible notes calculated using the if-converted and treasury stock method and warrants, stock options and RSUs calculated using the treasury stock method) are excluded from the diluted EPS computation in loss periods and when the applicable exercise price is greater than the market price on the period end date as their effect would be anti-dilutive.
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The calculation of basic and diluted earnings per share was as follows (in thousands, except share and per share data):
Year Ended December 31,
−Removed: 2022 2021 2020
Net loss attributable to common stockholders $ ( 49,176 ) $ ( 70,705 )
Weighted-average common shares outstanding *
+Added: 11,372,069 10,726,933
Basic and diluted net loss per share $ ( 4.32 ) $ ( 6.59 )
+Added: (*) Adjusted retroactively for reverse stock split that occurred on January 24, 2024, see Note 1
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of outstanding potential shares of common stock that have been excluded from the computation of diluted net loss per share attributable to common stockholders because their inclusion would have been anti-dilutive:
2 unchanged sentences
Convertible notes 1,291 1,409
−Removed: Warrants — 2,500 2,500
Non-qualified stock options 546 813
15 unchanged sentences
The components of the right-of-use assets and lease liabilities were as follows (in thousands):
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheet Classification December 31,
2023 December 31,
−Removed: Operating right-of-use assets Right-of-use assets $ 6,662 $ 7,839
+Added: Operating right-of-use assets, net Operating lease right-of-use assets $ 5,412 $ 6,662
Current operating lease liabilities Accrued expenses and other current liabilities $ 1,681 $ 1,759
−Removed: Non-current operating lease liabilities Other long-term liabilities 5,903 7,112
+Added: Non-current operating lease liabilities Operating lease liabilities 5,039 5,903
Total operating lease liabilities $ 6,720 $ 7,662
2 unchanged sentences
The components of lease cost were as follows (in thousands):
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2023
−Removed: 2022 2021 2020
Operating lease costs included in operating costs and expenses $ 2,303 $ 2,453
1 unchanged sentence
Year Ended December 31, 2023
−Removed: 2022 2021 2020
Operating cash flows related to operating leases $ 2,369 $ 2,464
1 unchanged sentence
The future minimum payments under operating leases were as follows at December 31, 2023 (in thousands):
+Added: Thereafter 723
Total minimum operating lease payments 8,143
5 unchanged sentences
Geographic Information
−Removed: The following table details the geographic concentration of the Company’s assets (in thousands):
−Removed: United States and Canada $ 122,074 $ 176,094
−Removed: Europe 32,903 35,630
+Added: The following table details the Company’s long-lived tangible assets, excluding financial instruments and tax assets, classified by the location of the controlling statutory company (in thousands):
+Added: United States $ 7,667 $ 12,103
+Added: United Kingdom 5,159 4,259
Other 1,683 1,926
−Removed: $ 159,017 $ 215,843
−Removed: INSEEGO CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Total $ 14,509 $ 18,288
The following table details the Company’s net revenues by geographic region based on shipping destination (in thousands):
Year Ended December 31,
−Removed: 2022 2021 2020
United States and Canada $ 163,491 $ 201,799
−Removed: Europe 27,562 23,123 21,720
+Added: Europe (including United Kingdom) 26,097 27,562
Australia 5,982 11,250
−Removed: South Africa — 17,346 28,208
Other 118 4,712
Total $ 195,688 $ 245,323
+Added: INSEEGO CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Concentrations of Risk
+Added: For the year ended December 31, 2023, three customers accounted for 31.6 %, 27.2 % and 15.0 % of net revenues, respectively.
For the year ended December 31, 2022, two customers accounted for 35.1 % and 32.2 % of net revenues, respectively.
−Removed: For the year ended December 31, 2021, the same two customers accounted for 43.9 % and 26.4 % of net revenues, respectively.
−Removed: For the year ended December 31, 2020, only one of these two customers accounted for 54.5 % of net revenues.
At December 31, 2023, two customers accounted for 41.8 % and 10.2 % of total accounts receivable, net, respectively.
At December 31, 2022, two customers accounted for 37.4 % and 21.9 % of total accounts receivable, net, respectively.
−Removed: Retirement Savings Plan
−Removed: The Company has a defined contribution 401(k) retirement savings plan (the “Plan”).
−Removed: Substantially all of the Company’s U.S.
−Removed: employees are eligible to participate in the Plan after meeting certain minimum age and service requirements.
−Removed: The Company matches 50 % of the first 6 % of an employee’s designated deferral of their eligible compensation.
−Removed: Employees may make discretionary contributions to the Plan subject to Internal Revenue Service limitations.
−Removed: Employer matching contributions under the Plan were $ 0.9 million, $ 0.9 million and $ 0.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: Employer matching contributions vest immediately.
+Added: Subsequent Events
+Added: On February 19, 2024, Ashish Sharma resigned as Chief Executive Officer and President of the Company, to be effective as of February 23, 2024.
+Added: In addition, the Company’s board of directors (the “Board”) appointed Philip G.
+Added: Brace, a member of the Board, as Executive Chairman, effective as of February 19, 2024.
+Added: On February 20, 2024, we entered into a fourth amendment (the “Fourth Amendment”) of the Credit Agreement.
+Added: The Fourth Amendment relaxed the financial covenants under the Credit Agreement by decreasing the minimum liquidity level we are required to maintain from $ 10 million to $ 8 million.
+Added: No costs were incurred by the Company in connection with the Fourth Amendment.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.