What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-10 · 248 added, 130 removed, 311 unchanged (55% of the section changed)

23 unchanged sentences

Accrued expenses and other current liabilities 37,019 27,022

Short-term loan 13,664 —

2025 Convertible Notes, net 157,679 —

Revolving credit facility — 4,094

1 unchanged sentence

Long-term liabilities:

2025 Notes, net 160,284 159,912

2025 Convertible Notes, net — 159,912

Operating lease liabilities 4,394 5,039

6 unchanged sentences

2,000,000 shares authorized:

Series E Preferred stock, par value $ 0.001 ;

39,500 shares designated, 25,000 shares issued and outstanding as of March 31, 2024 and December 31, 2023 (aggregate liquidation preference of $ 35,913,326 )

Preferred stock, par value $ 0.001 ;

39,500 shares designated, 25,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively (aggregate liquidation preference of $ 36,721,385 )

Common stock, par value $ 0.001 ;

150,000,000 shares authorized, 11,882,844 and 11,878,557 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

150,000,000 shares authorized, 11,910,151 and 11,878,557 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 816,002 810,138

3 unchanged sentences

Total liabilities and stockholders’ deficit $ 149,563 $ 121,797

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements (unaudited).

INSEEGO CORP.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Mobile solutions $ 25,879 $ 18,895 $ 41,149 $ 41,935

Fixed wireless access solutions 13,317 19,505 27,499 31,375

Product revenues 29,452 34,910

Product 39,196 38,400 68,648 73,310

Services and other 19,953 15,157 35,510 31,041

12 unchanged sentences

Total operating costs and expenses 20,691 22,172 39,767 43,950

Operating loss ( 1,684 ) ( 3,591 )

Operating income (loss) 2,349 ( 3,276 ) 665 ( 6,867 )

Other (expense) income:

Interest expense, net ( 1,774 ) ( 2,014 ) ( 3,948 ) ( 4,011 )

Other (expense) income, net ( 360 ) 795

Loss before income taxes ( 4,218 ) ( 4,793 )

Other income (expense), net 355 658 ( 5 ) 1,453

Income (Loss) before income taxes 930 ( 4,632 ) ( 3,288 ) ( 9,425 )

Income tax provision 306 304 543 616

Net loss ( 4,455 ) ( 5,104 )

Series E preferred stock dividends ( 790 ) ( 723 )

Net income (loss) 624 ( 4,936 ) ( 3,831 ) ( 10,041 )

Preferred stock dividends ( 808 ) ( 739 ) ( 1,598 ) ( 1,462 )

Net loss attributable to common stockholders $ ( 184 ) $ ( 5,675 ) $ ( 5,429 ) $ ( 11,503 )

6 unchanged sentences

11,894,746 11,108,029 11,887,233 10,984,794

Other comprehensive income:

Other comprehensive loss:

Foreign currency translation adjustment ( 355 ) ( 619 ) ( 93 ) ( 525 )

Comprehensive loss $ ( 4,193 ) $ ( 5,010 )

Comprehensive income (loss) $ 269 $ ( 5,555 ) $ ( 3,924 ) $ ( 10,566 )

( * ) Adjusted retroactively for reverse stock split that occurred on January 24, 2024, see Note 1

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements (unaudited).

INSEEGO CORP.

6 unchanged sentences

Shares Amount Shares (*) Amount (*)

Balance, December 31, 2022 25 $ — 10,847 $ 11 $ 793,952 ( 857,751 ) $ ( 6,329 ) $ ( 70,117 )

Balance, March 31, 2023 25 $ — 10,937 $ 11 $ 797,079 ( 863,579 ) $ ( 6,236 ) $ ( 72,725 )

Net loss — — — — — ( 4,936 ) — ( 4,936 )

Foreign currency translation adjustment — — — — — — ( 619 ) ( 619 )

Vesting of restricted stock units and stock issued under employee stock purchase plan, net of taxes withheld — — 4 — 75 — — 75

Exercises of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan, net of taxes withheld — — 32 — ( 28 ) — — ( 28 )

Issuance of common shares in connection with a public offering, net of issuance costs 718 1 5,528 5,529

Share-based compensation — — — — 1,964 — — 1,964

Series E preferred stock dividends — — — — 723 ( 723 ) — —

Preferred stock dividends — — — — 739 ( 739 ) — —

Balance, June 30, 2023 25 $ — 11,687 $ 12 $ 805,282 $ ( 869,254 ) $ ( 6,855 ) $ ( 70,815 )

Balance, March 31, 2024 25 $ — 11,883 $ 12 $ 811,637 $ ( 912,173 ) $ ( 5,065 ) $ ( 105,589 )

Net income — — — — — 624 — 624

Foreign currency translation adjustment — — — — — — ( 355 ) ( 355 )

Exercises of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan, net of taxes withheld — — 27 — 2 — — 2

Share-based compensation

— — — — 869 — — 869

Issuance of common stock warrants, net of issuance costs — — — — 2,686 — — 2,686

Preferred stock dividends — — — — 808 ( 808 ) — —

Balance, June 30, 2024 25 $ — 11,910 $ 12 $ 816,002 $ ( 912,357 ) $ ( 5,420 ) $ ( 101,763 )

(*) Adjusted retroactively for reverse stock split that occurred on January 24, 2024, see Note 1

See accompanying notes to condensed consolidated financial statements (unaudited).

INSEEGO CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands)

Preferred Stock Common Stock Additional

Paid-in Capital (*) Accumulated Deficit Accumulated

Comprehensive (Loss) Income Total

Stockholders’ Deficit

Shares Amount Shares (*) Amount (*)

Balance, December 31, 2022 25 $ — 10,847 $ 11 $ 793,952 $ ( 857,751 ) $ ( 6,330 ) $ ( 70,118 )

1 unchanged sentence

Foreign currency translation adjustment — — — — — — ( 525 ) ( 525 )

Vesting of restricted stock units and stock issued under employee stock purchase plan, net of taxes withheld — — 4 — ( 8 ) — — ( 8 )

Exercises of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan, net of taxes withheld — — 37 — 49 — — 49

Issuance of common shares in connection with a public offering, net of issuance costs — — 803 1 6,057 — — 6,058

Share-based compensation — — — — 3,762 — — 3,762

— — — — 717 — — 717

Series E preferred stock dividends — — — — 790 ( 790 ) — —

Balance, March 31, 2024 25 $ — 11,883 $ 12 $ 811,637 $ ( 912,173 ) $ ( 5,065 ) $ ( 105,589 )

Preferred stock dividends — — — — 1,462 ( 1,462 ) — —

Balance, June 30, 2023 25 $ — 11,687 $ 12 $ 805,282 $ ( 869,254 ) $ ( 6,855 ) $ ( 70,815 )

Balance, December 31, 2023 25 $ — 11,879 $ 12 $ 810,138 $ ( 906,928 ) $ ( 5,327 ) $ ( 102,105 )

Net loss — — — — — ( 3,831 ) — ( 3,831 )

Foreign currency translation adjustment — — — — — — ( 93 ) ( 93 )

Exercises of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan, net of taxes withheld — — 31 — ( 6 ) — — ( 6 )

Share-based compensation — — — — 1,586 — — 1,586

Issuance of common stock warrants, net of issuance costs — — — — 2,686 — — 2,686

Preferred stock dividends — — — — 1,598 ( 1,598 ) — —

Balance, June 30, 2024 25 $ — 11,910 $ 12 $ 816,002 $ ( 912,357 ) $ ( 5,420 ) $ ( 101,763 )

(*) Adjusted retroactively for reverse stock split that occurred on January 24, 2024, see Note 1

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements (unaudited).

INSEEGO CORP.

1 unchanged sentence

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

5 unchanged sentences

Provision for excess and obsolete inventory 31 310

Impairment of operating lease right-of-use assets — 469

Share-based compensation expense 1,586 3,762

Amortization of debt discount and debt issuance costs 857 977

Gain on debt repurchases ( 1,324 ) —

Deferred income taxes 12 95

13 unchanged sentences

Cash flows from financing activities:

Principal payments under finance lease obligations — ( 199 )

Proceeds from a public offering, net of issuance costs — 529

Payments related to repurchases of 2025 Convertible Notes ( 1,650 ) —

Proceeds from issuance of short-term loan and warrants, net of issuance costs 16,500 —

Proceeds from a public offering of equity, net of issuance costs — 6,059

Principal payments on financed assets — ( 360 )

Net borrowings (repayments) on revolving credit facility 583 ( 3,385 )

Proceeds from ESPP — 75

Net cash provided by (used in) financing activities 583 ( 3,340 )

Net repayments on revolving credit facility ( 4,094 ) ( 4,598 )

Other investing activities 2 126

Net cash provided by financing activities 10,758 1,227

Effect of exchange rates on cash ( 209 ) ( 1,282 )

9 unchanged sentences

Capital expenditures financed through accounts payable or accrued liabilities $ 162 $ 4,312

Debt and warrant issuance costs financed through accrued liabilities $ 150 $ —

Right-of-use assets obtained in exchange for operating leases liabilities $ 146 $ 833

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements (unaudited).

INSEEGO CORP.

41 unchanged sentences

All common share and per-share amounts in this Form 10-Q have been retroactively restated to reflect the effect of the Reverse Stock Split.

As of March 31, 2024, the Company had available cash and cash equivalents totaling $ 12.3 million and working capital of $ 3.6 million.

The Company’s Credit Facility (as defined in Note 4 – Debt), which had an outstanding balance of $ 4.7 million as of March 31, 2024, was voluntarily paid-off and terminated by the Company effective April 18, 2024.

The Company generated positive cash flow from operations both for the year ended December 31, 2023 and in the three months ended March 31, 2024.

On June 28, 2024, the Company entered into a series of agreements, as part of its overall capital structure management, to reduce its total debt and restructure its outstanding 3.25 % convertible notes due 2025 (the “2025 Convertible Notes”).

Specifically, pursuant to agreements summarized in Note 4 – Debt, the Company executed three transactions that, together, involved the three largest noteholders of $ 125.9 million in face value, or 80 %, of the 2025 Convertible Notes, as follows:

(1) Convertible Debt Repurchase:

the Company agreed to purchase for cash, all of the $ 45.9 million in face value of the 2025 Convertible Notes held by certain entities managed by Highbridge Capital Management, LLC (such entities, “Highbridge”), the second largest noteholder, at a discount of 30 % to face value;

(2) Short-Term Loan Agreement:

to finance a portion of the Convertible Debt Repurchase, the Company agreed to a $ 19.5 million loan from (i) South Ocean Funding, LLC (“South Ocean”), which is an affiliate of Golden Harbor Ltd.

(“Golden Harbor”), and Tavistock Financial, LLC, and (ii) certain participant lenders (the “Participating Lenders”);

(3) Convertible Debt Exchange:

the Company entered into binding term sheets (the “Exchange Agreements”) to exchange $ 80.0 million of face value that represents all of the 2025 Convertible Notes held by North Sound Partners and Golden Harbor (the “Noteholders”), the largest and third-largest bondholders, respectively, for the same 30 % discount as the Highbridge Notes purchase, for a combination of new long-term debt and equity.

Specifically, the Noteholders will receive an aggregate of approximately 2.4 million shares of Common Stock and $ 31.8 million principal amount of new long-term senior secured notes.

In addition the Noteholders will receive warrants to purchase an aggregate of approximately 1.5 million shares of Common Stock.

As of June 30, 2024, the Company had available cash and cash equivalents totaling $ 49.0 million.

Under the Short-Term Loan Agreement, the Company received $ 16.5 million in cash on June 28, 2024.

Subsequent to June 30, 2024 (on July 1, 2024), the Company received the remaining $ 3.0 million under the Short-Term Loan Agreement and closed the Convertible Debt Repurchase, paying $ 32.1 million to Highbridge, plus accrued interest.

The 2025 Convertible Notes had a principal balance of $ 158.9 million as of June 30, 2024 and mature on May 1, 2025.

The closing of the Convertible Debt Repurchase on July 1, 2024 reduced the principal balance of the 2025 Convertible Notes by $ 45.9 million.

Taking into account the Convertible Debt Repurchase, the Convertible Debt Exchange, and certain other transactions with individual holders of the 2025 Convertible Notes through the date of issuance of this report, the Company has repurchased and/or entered into binding agreements to repurchase and/or exchange approximately $ 141.9 million, or 87.7 %, of the face value of the outstanding 2025 Convertible Notes.

Consummation of the Convertible Debt Exchanges are subject to, among other things, the drafting, execution and delivery of one or more final agreements reflecting the terms contained in the Exchange Agreements and other customary and mutually acceptable terms and conditions, which agreements the Company and the Noteholders have agreed to negotiate in good faith.

There can be no assurance that the Convertible Debt Exchanges will be consummated on the terms set forth in the Exchange Agreements, or at all.

As the closing of the Convertible Debt Exchanges cannot be assured, accounting guidance requires disclosure that this raises substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance of these financial statements.

The Company generated positive cash flow from operations both for the year ended December 31, 2023 and in the three and six months ended June 30, 2024.

In April 2024, the Company received a $ 15.0 million upfront payment from a customer in connection with a two-year service contract.

Based on the factors above, and to reduce financing costs, the Company voluntarily paid-off and terminated the Credit Facility effective April 18, 2024.

Based on the factors above, and to reduce financing costs, the Company voluntarily paid-off and terminated its Credit Facility (as defined below) effective April 18, 2024.

These factors have had a positive impact on our liquidity.

The Company’s 3.25 % convertible senior notes due in May 2025 (the “2025 Notes”) have a principal balance of $ 161.9 million and matures on May 1, 2025.

The Company’s intention is to restructure or refinance the 2025 Notes, and the Company is in active negotiations to do so, 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.

As the refinancing of the 2025 Notes cannot be assured, accounting guidance requires disclosure that this raises substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance of these financial statements.

While the Company’s liquidity has had several positive developments recently, as noted above, the Company has a history of operating and net losses and overall usage of cash from operating and investing activities.

The Company’s ability to attain profitable operations and continue to generate positive cash flows is dependent upon achieving a level and mix of revenues adequate to support its evolving cost structure.

In order to effect a restructuring or refinancing of the 2025 Notes, or 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 .

While the Company’s liquidity and financial results have had several positive developments recently, as noted above, the Company has a history of operating and net losses and overall usage of cash from operating and investing activities.

The Company’s ability to maintain profitable operations and continue to generate positive cash flows is dependent upon achieving a

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

level and mix of revenues adequate to support its evolving cost structure.

In order to effect the restructuring or refinancing of the Company’s obligations, or 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, 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.

Financial Statement Details

4 unchanged sentences

Total inventories $ 18,006 $ 22,880

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Prepaid expenses and other

4 unchanged sentences

Receivables from contract manufacturers

Software licenses

Total prepaid expenses and other $ 5,400 $ 5,211

11 unchanged sentences

Total accrued expenses and other current liabilities $ 37,019 $ 27,022

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Other long-term liabilities

Other long-term liabilities consist of the following (in thousands):

2024 December 31,

Long-term deferred revenue $ 6,981 $ 1,704

Warranty obligations 120 120

Total other long-term liabilities $ 7,134 $ 2,360

As of June 30, 2024, of the $ 7.0 million long-term deferred revenue balance, $ 6.3 million relates to performance obligations expected to be satisfied between one and two years, and $ 0.7 million relates to performance obligations expected to be satisfied between two and three years from June 30, 2024.

Fair Value Measurements

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 4 – Debt ).

The fair value of that liability was zero as of both March 31, 2024 and December 31, 2023.

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 Convertible Notes (see Note 4 – Debt ).

The fair value of that liability was zero as of both June 30, 2024 and December 31, 2023.

The fair value of the interest make-whole payment derivative liability was determined using a Monte Carlo model using the following key assumptions:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Volatility 98.50 % 77.00 %

5 unchanged sentences

Risk-free rate 5.17 % 4.60 %

There was no change in the fair value of the interest make-whole liability for the three months ended March 31, 2024 or March 31, 2023.

There was no change in the fair value of the interest make-whole liability for the three and six months ended June 30, 2024 or June 30, 2023.

Other Financial Instruments

The carrying values of the Company’s other financial assets and liabilities approximate their fair values because of their short-term nature, with the exception of the 2025 Notes.

The 2025 Notes are carried at amortized cost, adjusted for changes in the fair value of the embedded derivative.

The carrying values of the Company’s other financial assets and liabilities approximate their fair values because of their short-term nature, with the exception of the 2025 Convertible Notes.

The 2025 Convertible Notes are carried at amortized cost, adjusted for changes in the fair value of the embedded derivative.

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

In 2020, the Company completed both a registered public offering and a privately negotiated exchange agreement that resulted in the issuance of the 2025 Notes.

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 March 31, 2024 and December 31, 2023.

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.

The 2025 Notes will mature on May 1, 2025, unless earlier repurchased, redeemed or converted.

The 2025 Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 3.25 %, payable semi-annually in arrears on May 1 and November 1 of each year.

Holders of the 2025 Notes may convert the 2025 Notes into shares of the Company’s common stock (together with cash in lieu of any fractional share), at their option, at any time until the close of business on the scheduled trading day immediately before the maturity date.

Upon conversion of the 2025 Notes, the Company will deliver for each $1,000 principal amount of 2025 Notes converted a number of shares of the Company’s common stock (together with cash in lieu of any fractional share), equal to the conversion rate.

As of March 31, 2024, the conversion rate for the 2025 Notes is 7.92896 shares of common stock per $1,000 principal amount of 2025 Notes, which represents a conversion price of approximately $ 126.12 per share, and is subject to adjustment upon the occurrence of certain events, including, but not limited to, certain stock dividends, splits and combinations, the issuance of certain rights, options or warrants to holders of the common stock, certain distributions of assets, debt securities, capital stock or other property to holders of the common stock, cash dividends on the common stock and certain Company tender or exchange offers.

If a fundamental change (as defined in the Indenture) occurs at any time prior to the maturity date, then the noteholders may require the Company to repurchase their 2025 Notes at a cash repurchase price equal to the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

Short-Term Loan

On June 28, 2024, the Company entered into a Loan and Security Agreement (the “Short-Term Loan Agreement”), among South Ocean, as lender (“Lender”), the Participating Lenders, the Company, as borrower, and two of the Company’s wholly-owned subsidiaries, Inseego Wireless, Inc.

and Inseego North America LLC as guarantors (collectively, the “Guarantors,” and together with the Company, the “Loan Parties”).

The Loan Agreement establishes a senior secured $ 19.5 million loan facility (the “Short-Term Loan”) under which the Company borrowed $ 16.5 million as of June 30, 2024.

The remaining $ 3.0 million was borrowed in July 2024.

The Company’s obligations under the Short-Term Loan Agreement are guaranteed by the Guarantors.

Subject to the requirements of the Short-Term Loan Agreement, certain of the Company’s other subsidiaries may become guarantors and Loan Parties of the Loan Agreement after closing.

The Loan Parties’ obligations under the Loan Agreement are secured by a continuing security interest in substantially all property of each Loan Party, subject to certain excluded collateral, as defined in the Short-Term Loan Agreement.

The Short-Term Loan matures on September 30, 2024, provided that the Company may request an extension of the maturity date of up to six months, to March 31, 2025, which the Lender and each Participating Lender may grant or deny with respect to each of their respective portions of the Short-Term Loan.

Borrowings under the Short-Term Loan will bear interest at 12.0 % per annum.

Upon any repayment or prepayment of the amounts borrowed under the Short-Term Loan (including at maturity), the Company will be required to pay an exit fee equal to 4.0 % of the aggregate principal amount prepaid or repaid.

The Short-Term Loan Agreement contains certain customary covenants, which include, but are not limited to, restrictions on indebtedness, liens, fundamental changes, restricted payments, asset sales, and investments, and places limits on various other payments.

The Short-Term Loan Agreement contains certain customary provisions with respect to the definition of, and remedies with respect to, events of default.

Also on June 28, 2024, as part of the Short-Term Loan Agreement, the Participating Lenders contributed an aggregate of $ 3.0 million of participation interests in the Short-Term Loan Agreement (the “Participation Interests”).

The Participating Lenders consist of Philip Brace, the Company’s Executive Chairman, who acquired a $ 1.0 million Participation Interest, and North Sound Ventures, LP, which acquired a $ 2.0 million Participation Interest in the $ 19.5 million Loan.

As of the date hereof, affiliates of each of the Lender and North Sound Ventures, LP may be deemed to beneficially own more than 5 % of the Company’s outstanding Common Stock.

Avery, a member of the Company’s Board of Directors, currently serves as Senior Managing Director of Tavistock Group, an affiliate of the Lender.

Accordingly, the Lender and the Participating Lenders are considered related parties of the Company.

In connection with entering into the Short-Term Loan Agreement, the Company paid an arrangement and administration fee of $ 0.2 million to the Lender (the “Loan Costs”).

Additionally in connection with the Short-Term Loan Agreement, the Company issued to the Lender and the Participating Lenders warrants (the “Loan Warrants”) to purchase an aggregate of 550,000 shares of the Company’s common stock, par value $ 0.001 per share (“Common Stock”).

See Note 7 – Stockholders' Equity (Deficit) for further details regarding the Loan Warrants.

The gross proceeds received under the Short-Term Loan Agreement, along with the Loan Costs, were allocated between the Short-Term Loan and the Loan Warrants based on their relative fair values at issuance.

As of June 30, 2024, $ 16.5 million of principal amount of the Short-Term Loan was funded and outstanding.

The Short-Term Loan amount recorded in the Condensed Consolidated Balance Sheets as of June 30, 2024 consists of the following:

Principal $ 16,500

unamortized debt discount 1

Net carrying amount $ 13,664

1 Represents the portion of the net proceeds received for the Short-Term Loan and Loan Warrants that was allocated to the Loan Warrants, see Note 7 – Stockholders' Equity (Deficit)

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

2025 Convertible Notes

In 2020, the Company completed both a registered public offering and a privately negotiated exchange agreement that resulted in the issuance of the 2025 Convertible Notes.

After taking into account exchanges and redemptions occurring in prior periods, the outstanding principal balance of the 2025 Convertible Notes was $ 158.9 million and $ 161.9 million as of June 30, 2024 and December 31, 2023, respectively.

The 2025 Convertible 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.

The 2025 Convertible Notes will mature on May 1, 2025, unless earlier repurchased, redeemed or converted.

The 2025 Convertible Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 3.25 %, payable semi-annually in arrears on May 1 and November 1 of each year.

Holders of the 2025 Convertible Notes may convert the 2025 Convertible Notes into shares of the Company’s common stock (together with cash in lieu of any fractional share), at their option, at any time until the close of business on the scheduled trading day immediately before the maturity date.

Upon conversion of the 2025 Convertible Notes, the Company will deliver for each $1,000 principal amount of 2025 Convertible Notes converted a number of shares of the Company’s common stock (together with cash in lieu of any fractional share), equal to the conversion rate.

As of June 30, 2024, the conversion rate for the 2025 Convertible Notes is 7.92896 shares of common stock per $1,000 principal amount of 2025 Convertible Notes, which represents a conversion price of approximately $ 126.12 per share, and is subject to adjustment upon the occurrence of certain events, including, but not limited to, certain stock dividends, splits and combinations, the issuance of certain rights, options or warrants to holders of the common stock, certain distributions of assets, debt securities, capital stock or other property to holders of the common stock, cash dividends on the common stock and certain Company tender or exchange offers.

If a fundamental change (as defined in the Indenture) occurs at any time prior to the maturity date, then the noteholders may require the Company to repurchase their 2025 Convertible Notes at a cash repurchase price equal to the principal amount of the 2025 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

If a make-whole fundamental change (as defined in the Indenture) occurs, then the Company will in certain circumstances increase the conversion rate for a specified period of time.

The 2025 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after May 6, 2023 through the last scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, as long as the last reported sale price per share of the common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

The 2025 Convertible Notes are be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after May 6, 2023 through the last scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, as long as the last reported sale price per share of the common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

and (ii) the trading day immediately before the date the Company sends such notice.

The Indenture contains customary events of default.

If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the Trustee, by notice to the Company, or the holders of the 2025 Notes representing at least 25 % in aggregate principal amount of the outstanding 2025 Notes, by notice to the Company and the Trustee, may declare 100 % of the principal of, and all accrued and unpaid interest on, all of the then outstanding 2025 Notes to be due and payable immediately.

Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, 100 % of the principal of, and all accrued and unpaid interest on, all of the then outstanding 2025 Notes will automatically become immediately due and payable.

Notwithstanding the foregoing, the Indenture provides that, to the extent the Company elects, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture will, for the first 360 days after such event of default, consist exclusively of the right to receive additional interest on the 2025 Notes.

If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the Trustee, by notice to the Company, or the holders of the 2025 Convertible Notes representing at least 25 % in aggregate principal amount of the outstanding 2025 Convertible Notes, by notice to the Company and the Trustee, may declare 100 % of the principal of, and all accrued and unpaid interest on, all of the then outstanding 2025 Convertible Notes to be due and payable immediately.

Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, 100 % of the principal of, and all accrued and unpaid interest on, all of the then outstanding 2025 Convertible Notes will automatically become immediately due and payable.

Interest make-whole payment

The 2025 Notes also include an interest make-whole payment feature whereby if the last reported sale price of the Company’s common stock for each of the five trading days immediately preceding a conversion date is greater than or equal to $ 105.10 , the Company will, in addition to the other consideration payable or deliverable in connection with such conversion,

The 2025 Convertible Notes also include an interest make-whole payment feature whereby if the last reported sale price of the Company’s common stock for each of the five trading days immediately preceding a conversion date is greater than or equal to $ 105.10 , the Company will, in addition to the other consideration payable or deliverable in connection with such conversion,

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

make an interest make-whole payment to the converting holder equal to the sum of the present values of the scheduled payments of interest that would have been made on the 2025 Notes to be converted had such notes remained outstanding from the conversion date through the earlier of (i) the date that is three years after the conversion date and (ii) the maturity date.

make an interest make-whole payment to the converting holder equal to the sum of the present values of the scheduled payments of interest that would have been made on the 2025 Convertible Notes to be converted had such notes remained outstanding from the conversion date through the earlier of (i) the date that is three years after the conversion date and (ii) the maturity date.

The present values will be computed using a discount rate equal to 1 %.

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See Note 3 – Fair Value Measurements, for more information on this derivative liability.

As of March 31, 2024 and December 31, 2023, $ 161.9 million of principal amount 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 is due on May 1, 2025.

The 2025 Notes consist of the following (in thousands):

2025 Convertible Note Repurchases

On May 24, 2024, the Company entered into a repurchase agreement with a single holder of the 2025 Convertible Notes, resulting in the settlement of $ 3.0 million of outstanding principal at a purchase price of 55 % of par.

The repurchase price was equal to the aggregate principal amount at 55 % of par, plus accrued and unpaid interest up to, but excluding, the repurchase date.

The total repurchase payment was $ 1.7 million.

The repurchase resulted in a gain of $ 1.3 million, net of costs incurred directly with executing the transaction, recorded within other (expense) income, net on the condensed consolidated statement of operations.

Additional repurchase and exchange restructuring transactions involving the 2025 Convertible Notes were completed after June 30, 2024.

See Note 1 – Nature of Business and Significant Accounting Policies and Note 11 – Subsequent Events for more information.

As of June 30, 2024 and December 31, 2023, $ 158.9 million and $ 161.9 million of principal amount of the 2025 Convertible Notes was outstanding, respectively, $ 80.4 million of which was held by related parties.

The 2025 Convertible Notes consist of the following (in thousands):

2024 December 31,

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Net carrying amount $ 157,679 $ 159,912

The effective interest rate of the liability component of the 2025 Notes was 4.17 % and 4.23 % for the three months ended March 31, 2024 and 2023, respectively.

The following table sets forth total interest expense recog nized related to the 2025 Notes (in thousands):

Three Months Ended March 31,

The effective interest rate of the liability component of the 2025 Convertible Notes was 4.17 % and 4.23 % for the three months ended June 30, 2024 and 2023, respectively, and 4.17 % and 4.25 % for the six months ended June 30, 2024 and 2023 , respectively.

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table sets forth total interest expense recog nized related to the 2025 Convertible Notes (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Contractual interest expense $ 1,305 $ 1,315 $ 2,620 $ 2,631

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Total interest expense $ 1,673 $ 1,687 $ 3,360 $ 3,374

The contractual interest expense on the 2025 Notes recorded within interest expense, net on the consolidated statements of operations attributable to related parties was $ 0.7 million in the three months ended March 31, 2024 and 2023.

As of March 31, 2024 and December 31, 2023, accrued interest due to related parties of $ 1.1 million and $ 0.4 million, respectively, was included within accrued expenses and other current liabilities on the condensed consolidated balance sheets.

The contractual interest expense on the 2025 Convertible Notes recorded within interest expense, net on the consolidated statements of operations attributable to related parties was $ 0.7 million in the three months ended June 30, 2024 and 2023 and $ 1.3 million in the six months ended June 30, 2024 and 2023.

As of both June 30, 2024 and December 31, 2023, accrued interest due to related parties of $ 0.4 million was included within accrued expenses and other current liabilities on the condensed consolidated balance sheets.

Asset-backed Revolving Credit Facility

In August 2022, the Company entered into a Loan and Security Agreement (as subsequently amended, 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 and 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”).

Effective April 18, 2024, the Company exercised its right to voluntarily pay-off and terminate the Credit Agreement.

See Note 11 – Subsequent Events for more information on the termination of the Credit Agreement.

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Credit Agreement established a secured asset-backed revolving credit facility which was 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.

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The Loan Parties’ obligations under the Credit Agreement were secured by a continuing security interest in all property of each Loan Party, subject to certain Excluded Collateral (as defined in the Credit Agreement).

Borrowings under the Credit Facility took the form of base rate (“Base Rate”) loans or Secured Overnight Financing Rate (“SOFR”) loans.

SOFR loans bore 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 bore 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.

The Applicable Margin varied depending on the average outstanding amount for a preceding month.

If the average outstanding amount for a preceding month was less than $ 15 million, the Applicable Margin will be 2.50 % for Base Rate loans and 3.50 % for SOFR loans.

If the average outstanding amount for a preceding month was between $ 15 million and $ 25 million, the Applicable Margin will be 3.00 % for Base Rate loans and 4.00 % for SOFR loans.

If the average outstanding amount for a preceding month was greater than $ 25 million, the Applicable Margin will be 4.5 % for Base Rate loans and 5.50 % for SOFR loans.

The Company paid monthly fees of 0.4 % per annum on the unused portion of the Credit Facility.

The Credit Agreement contained a financial covenant whereby the Loan Parties shall not permit the consolidated Liquidity (as defined in the Amended Credit Agreement) to be less than $ 8 million at any time (the “Liquidity Covenant”).

The Credit Agreement also contained certain customary covenants, including restrictions on indebtedness, liens, fundamental changes, restricted payments, asset sales, and investments, and places limits on various other payments.

The Company was in compliance with the financial covenants of the Amended Credit Agreement as of March 31, 2024 .

On May 2, 2023, (1) two related parties (the “Participants”) collectively purchased a $ 4.0 million last-out subordinated participation interest in the Credit Agreement (the “Participation Interest”) from the Lender, and (2) the Borrowers entered into an amendment to the 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.

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.

On May 2, 2023, (1) two related parties, South Ocean Funding, LLC and North Sound Ventures, LP (collectively, the “Credit Facility Participants”) collectively purchased a $ 4.0 million last-out subordinated participation interest in the Credit Agreement (the “Credit Facility Participation Interest”) from the Lender, and (2) the Borrowers entered into an amendment to the 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.

In connection with the purchase of the Participation Interest, we agreed to pay the Participants an aggregate exit fee (the “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.

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.

The Participants are each affiliates of beneficial holders of greater than five percent of our outstanding common stock.

Accretion of the exit fee attributable to related parties recorded within interest expense, net on the condensed consolidated statements of operations was $ 0.1 million for the three months ended March 31, 2024 .

Upon execution of the Credit Agreement in August 2022, the Company incurred $ 1.1 million of debt issuance and related costs, which are being amortized to interest expense throughout the term of the agreement.

As of March 31, 2024 and December 31, 2023 , there were $ 0.4 million and $ 0.5 million, respectively, of unamortized debt issuance costs on the Credit Facility included within prepaid expenses and other and other assets on the condensed consolidated balance sheets.

As of March 31, 2024 , the Company had outstanding borrowings of $ 4.7 million.

The effective interest rate of the average outstanding balance for the Credit Facility was 29.7 %, which includes 8.3 % related to amortization of original issuance costs, and 21.1 %, which includes 10.5 % related to amortization of original issuance costs, for the three months ended March 31, 2024 and 2023, respectively.

Effective April 18, 2024, the Company exercised its right to voluntarily pay-off and terminate the Credit Facility.

As a result of the termination, the Company paid the outstanding balance and related termination fees on the Credit Facility of approximately $ 3.0 million.

The Company also paid the Exit Fee in the aggregate amount of $ 0.4 million to the Participants.

South Ocean Funding, LLC is an affiliate of Golden Harbor, Ltd.

and North Sound Ventures, LP is an affiliate of North Sound Management, Inc.

As of April 18, 2024, each of Golden Harbor, Ltd.

and North Sound Management, Inc.

were beneficial owners of in excess of 5% of the Company’s outstanding common stock.

As a result of the voluntary pay-off, the Company recorded a loss on extinguishment of debt of $ 0.8 million within other (expense) income, net on the c ondensed consolidated statements of operations during the six months ended June 30, 2024.

The effective interest rate of the average outstanding balance for the Credit Facility was 36.1 %, which includes 8.3 % related to amortization of original issuance costs, and 28.5 %, which includes 14.5 % related to amortization of original issuance costs, for the six months ended June 30, 2024 and 2023, respectively.

The following table sets forth total interest expense recognized related to the Credit Facility (in thousands):

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Contractual interest expense $ 90 $ 105 $ 312 $ 223

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Total interest expense $ 90 $ 221 $ 429 $ 456

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Share-based Compensation

During the three months ended March 31, 2024 and 2023 , 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”).

During the three and six months ended June 30, 2024 and 2023 , 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”).

The Compensation Committee of the Board of Directors administers the plans.

Under the 2018 Plan, shares of common stock may be issued upon the exercise of stock options, in the form of restricted stock, or in settlement of restricted stock units (“RSUs”) or other awards, including awards with alternative vesting schedules such as performance-based criteria.

The following table presents total share-based compensation expense within each functional line item on the condensed consolidated statements of operations for the three months end ed March 31, 2024 and 2023 (in thousands):

The following table presents total share-based compensation expense within each functional line item on the condensed consolidated statements of operations for the three and six months end ed June 30, 2024 and 2023 (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Cost of revenues $ 35 $ 223 $ 66 $ 406

8 unchanged sentences

Stock options generally have a term of ten years and vest over a three - to four-year period.

The following table summarizes the Company’s stock option activ ity for the three months ended March 31, 2024 :

The following table summarizes the Company’s stock option activity for the six months ended June 30, 2024:

Outstanding — December 31, 2023 545,872

Granted 14,250

Exercised ( 270 )

Canceled ( 262,605 )

Outstanding — March 31, 2024 448,128

Exercisable — March 31, 2024 338,346

At March 31, 2024, total unrecognized compensatio n expense related to stock options was $ 0.7 million , which is expected to be recognized over a weighted-average period of 3.29 years .

Outstanding — June 30, 2024 297,247

Exercisable — June 30, 2024 195,725

At June 30, 2024, total unrecognized compensation expense related to stock options was $ 0.5 million, which is expected to be recognized over a weighted-average period of 3.15 years.

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Restricted Stock Units

3 unchanged sentences

RSUs generally vest over a three - to four-year period.

The following table summarizes the Company’s RSU activity for the three months ended March 31, 2024 :

The following table summarizes the Company’s RSU activity for the six months ended June 30, 2024:

Non-vested — December 31, 2023 203,008

1 unchanged sentence

Forfeited ( 12,274 )

Non-vested — March 31, 2024 185,821

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

At March 31, 2024, total unrecognized compensation expense related to RSUs was $ 1.6 million , which is expected to be recognized over a weighted-average period of 1.07 years .

Non-vested — June 30, 2024 161,441

At June 30, 2024, total unrecognized compensation expense related to RSUs was $ 1.2 million , which is expected to be recognized over a weighted-average peri od of 0.90 years.

Loss per Share

Basic earnings (loss) per share (“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.

Basic loss per share (“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.

Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock using the treasury stock method.

Potentially dilutive securities (consisting primarily of the 2025 Notes calculated using the if-converted 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.

Potentially dilutive securities (consisting primarily of the 2025 Convertible Notes calculated using the if-converted 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.

The calculation of basic and diluted earnings per share was as follows (in thousands, except share and per share data):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net loss attributable to common stockholders $ ( 184 ) $ ( 5,675 ) $ ( 5,429 ) $ ( 11,503 )

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The following is a summary of outstanding anti-dilutive potential shares of common stock that have been excluded from diluted net loss per share attributable to common stockholders because their inclusion would have been anti-dilutive (in thousands):

As of March 31,

(in thousands) 2024 2023

2025 Notes 1,338 1,409

As of June 30,

2025 Convertible Notes 1,301 1,409

Common stock warrants 465 —

Non-qualified stock options 297 758

2 unchanged sentences

Total 2,224 2,676

Public Offering

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Stockholders' Equity (Deficit)

Loan Warrants

As noted in Note 4 – Debt, on June 28, 2024 in connection with the Short-Term Loan Agreement, the Company agreed to issue to the Lender and the Participating Lenders Loan Warrants to purchase an aggregate of 550,000 shares of the Company’s Common Stock.

The Loan Warrants have an exercise price of $ 12.12 per share of Common Stock, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions.

The Loan Warrants will expire on June 28, 2028, are exercisable on a cash basis, and contain customary registration rights with respect to the shares of Common Stock issuable upon exercise of the Loan Warrants.

As of June 30, 2024, 465,385 of the 550,000 warrants were issued in connection with the portion of the Short-Term Loan received.

The remaining 84,615 warrants were issued in July 2024.

The proceeds from the Short-Term Loan Agreement, along with the related Loan Costs incurred, were allocated to the Loan Warrants and Short-Term Loan based on their relative fair values.

This allocation resulted in the Warrants having a net value of $ 2.7 million that the Company recorded within Additional Paid-In Capital within the Company’s Condensed Consolidated Statements of Stockholders’ Deficit.

Public Equity Offering

In January 2021, the Company entered into an Equity Distribution Agreement with Canaccord Genuity LLC (the “Agent”), pursuant to which the Company could 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”) .

During the quarter ended March 31, 2023 the Company sold 85,810 shares of common stock, at an average price of $ 6.17 per share, for net proceeds of $ 0.5 million, after deducting underwriter fees and discounts.

During the three months ended June 30, 2023 the Company sold 717,786 shares of common stock, at an average price of $ 7.70 per share, for net proceeds of $ 5.4 million, after deducting underwriter fees and discounts.

D uring the six months ended June 30, 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.

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.

Preferred Stock

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.

As of June 30, 2024 and December 31, 2023, the Company had 25,000 shares of Series E preferred stock issued and outstanding.

Geographic Information and Concentrations of Risk

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

United States and Canada $ 50,808 $ 46,072 $ 86,284 $ 89,277

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Total $ 59,149 $ 53,557 $ 104,158 $ 104,351

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Concentrations of Credit Risk

For the three months ended March 31, 2024, two customers accounted for 39.3 % and 18.2 % of revenues, respectively.

For the three months ended March 31, 2023, two customers accounted for 31.1 % and 26.6 % of revenues, respectively.

As of March 31, 2024, three customers accounted for 32.0 %, 13.3 %, and 10.9 % of accounts receivable, net, respectively.

For the three months ended June 30, 2024, two customers accounted for 39.5 % and 30.0 % of revenues, respectively.

For the three months ended June 30, 2023, two customers accounted for 33.2 % and 25.9 % of revenues, respectively.

For the six months ended June 30, 2024, two customers accounted for 39.4 % and 24.9 % of revenues, respectively.

For the six months ended June 30, 2023, two customers accounted for 30.0 % and 28.4 %, respectively, of revenues.

As of June 30, 2024, three customers accounted for 30.7 %, 15.3 %, and 12.5 % of accounts receivable, net, respectively.

As of December 31, 2023, two customers accounted for 41.8 % and 10.2 % of accounts receivable, net, respectively.

INSEEGO CORP.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Commitments and Contingencies

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Such commitments are noncancellable (“noncancellable purchase obligations”).

As of March 31, 2024, future payments under these noncancellable purchase obligations were approximately $ 60.1 million.

As of June 30, 2024, future payments under these noncancellable purchase obligations were approximately $ 78.2 million.

The Company is, from time to time, party to various legal proceedings arising in the ordinary course of business.

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The Company’s maximum exposure under these indemnification provisions cannot be estimated but the Company does not believe that there are any matters individually or collectively that would have a material adverse effect on its consolidated results of operations or financial condition.

The Company’s income tax provision was $ 0.2 million and $ 0.3 million for the three months ended March 31, 2024 and 2023, respectively.

Income taxes for both periods consisted primarily of foreign income taxes at certain of the Company’s international entities and minimum state taxes for its U.S.-based entities.

The Company’s income tax provision was $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2024, respectively, compared to $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2023, respectively.

Income taxes for both periods consisted primarily of foreign income taxes at certain of the Company’s international entities and state taxes for its U.S.-based entities.

The Company’s income tax expense differs from the expected expense based on statutory rates primarily due to full valuation allowances at all of its U.S.-based entities and several of its foreign subsidiaries.

The income tax provisions for the three months ended March 31, 2024 and 2023, were largely driven by a combination of improved profits and unrealized foreign currency gains at the Company’s foreign subsidiaries.

The income tax provisions for the three and six months ended June 30, 2024 and 2023, were largely driven by a combination of improved profits and unrealized foreign currency gains at the Company’s foreign subsidiaries.

Subsequent Events

Effective April 18, 2024, the Company exercised its right to voluntarily pay-off and terminate its Credit Facility with Siena Lending Group LLC.

As a result of the termination, the Company paid the outstanding balance and related termination fees on the Credit Facility of approximately $ 3.0 million.

The Company has also paid an exit fee in the aggregate amount of $ 0.4 million to South Ocean Funding, LLC and North Sound Ventures, LP (collectively, the “Participants”) as a result of the early redemption of the Participants’ $ 4.0 million last-out subordinated participation interest in the Loan and Security Agreement pursuant to a Participation Agreement between the Participants and Siena Lending Group.

South Ocean Funding, LLC is an affiliate of Golden Harbor, Ltd.

and North Sound Ventures, LP is an affiliate of North Sound Management, Inc.

As of April 18, 2024, each of Golden Harbor, Ltd.

and North Sound Management, Inc.

were beneficial owners of in excess of 5% of the Company’s outstanding common stock.

On July 19, 2024, the Company entered into an agreement with a holder of approximately $ 4.7 million in principal amount of the Company’s 2025 Convertible Notes, pursuant to which the Company agreed to repurchase the holder’s 2025 Convertible Notes in exchange for 349,740 shares of the Company’s common stock, and warrants to purchase an aggregate of 236,074 shares of Common Stock, plus accrued interest.

The warrants have the same general terms as the Loan Warrants and an exercise price of $ 13.37 per share of Common Stock and will expire four years from the date of issuance.

On August 2, 2024, the Company entered into an agreement with another holder of approximately $ 5.0 million in principal amount of the Company’s 2025 Convertible Notes, pursuant to which the Company agreed to repurchase the holder’s 2025 Convertible Notes in exchange for new senior secured notes with an aggregate principal amount of $ 4.3 million and warrants to purchase an aggregate of 180,000 shares of Common Stock.

The new senior secured notes will bear interest at 9 % per annum, payable semi-annually in arrears, and matures on May 1, 2029.

The warrants have the same general terms as the Loan Warrants and an exercise price of $ 11.27 per share of Common Stock and will expire four years from the date of issuance.

Through the date of issuance of this report, the Company has repurchased and/or entered into binding agreements to repurchase and/or exchange approximately $ 141.9 million, or 87.7 %, of face value of the outstanding 2025 Convertible Notes.

On July 30, 2024, the Company’s Board of Directors approved new issuances of approximately 1.0 million restricted stock units to our employee base.

These restricted stock units will generally vest over a four year period.

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.

What changed 10-Q

Item 1. Financial Statements