What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-08 compared with 2025-05-09 · 133 added, 52 removed, 167 unchanged (53% of the section changed)

17 unchanged sentences

• our dependence on wireless telecommunication operators delivering acceptable wireless services;

• our ability to meet the price and performance standards of the evolving 5G New Radio (“5G NR”) products and technologies;

• our ability to develop sales channels and to onboard and execute successfully with channel partners;

• our ability to introduce and sell new products that comply with current and evolving industry standards and government regulations;

• our ability to develop and expand into new markets;

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• our ability to make successful investments in research and development;

• our ability to introduce and sell new products that comply with current and evolving industry standards and government regulations such as the evolving 5G New Radio (“5G NR”) price and performance standards;

• our ability to mitigate the impact of tariffs or other government-imposed sanctions;

• the continuing impact of uncertain global economic conditions on the demand for our products;

• the impact of geopolitical instability on our business.

• our ability to make payments on or to refinance our indebtedness;

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• infringement claims with respect to intellectual property contained in our solutions.

• the impact of potential tariffs or other trade restrictions;

• the continuing impact of uncertain global economic conditions on the demand for our products;

• the impact of geopolitical instability on our business.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this and other reports we file with or furnish to the Securities and Exchange Commission (“SEC”), including the information in “Item 1A.

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Results of Operations

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Revenues for the three months ended March 31, 2025 were $31.7 million, compared to $37.5 million for the same period in 2024.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Revenues for the three months ended June 30, 2025 were $40.2 million, compared to $51.6 million for the same period in 2024.

The following table summarizes revenues by our two categories (in thousands):

Three Months Ended

March 31, Change

June 30, Change

Product Category 2025 2024 $ %

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Mobile solutions.

The $2.5 million increase in mobile solutions revenues is primarily due to increased sales of our higher margin premium 5G MiFi at multiple carriers, including a promotional offer at one of our carrier partners.

The $12.2 million decrease in mobile solutions revenues is primarily due to decreased sales with one of our carrier partners due to significant promotional activity in the prior period.

Fixed wireless access solutions.

The $12.3 million decrease in fixed wireless access solutions revenues is primarily due to decreased sales with one of our carrier partners as we transition to our next generation of fixed wireless access products and decreased sales in our channel program.

Services and other The $3.9 million increase in services and other revenues is primarily due to increased Inseego Subscribe revenues related to the terms of a two-year service contract renewal with a major customer that was executed in April 2024.

The $1.2 million increase in fixed wireless access solutions revenues is primarily due to the successful launch of our current generation indoor FWA solution during the current period.

Services and other The $0.4 million decrease in services and other revenues is primarily due to non-recurring engineering revenue generated in the prior period.

Cost of revenues.

Cost of revenues for the three months ended March 31, 2025 was $16.7 million, or 52.7% of revenues, compared to $24.3 million, or 64.7% of revenues, for the same period in 2024.

Cost of revenues for the three months ended June 30, 2025 was $23.7 million, or 58.9% of revenues, compared to $32.8 million, or 63.6% of revenues, for the same period in 2024.

The following table summarizes cost of revenues by category (in thousands):

Three Months Ended

March 31, Change

June 30, Change

Product Category 2025 2024 $ %

2 unchanged sentences

Total cost of revenues $ 23,708 $ 32,811 $ (9,103) (27.7)

The $7.3 million decrease in product cost of revenues is primarily due to decreased product revenues.

The $8.1 million decrease in product cost of revenues is primarily due to decreased product revenues, partially offset by an increased proportion of higher cost FWA products in comparison to lower cost mobile products.

Services and other.

The $0.3 million decrease in services and other cost of revenues is primarily due to decreased non-recurring engineering revenues and the related costs of performing those services, partially offset by increased Inseego Subscribe revenues and related costs.

The $1.0 million decrease in services and other cost of revenues is primarily due to decreased outside service costs related to Inseego Subscribe revenues, decreased annual incentive bonus accruals, and decreased non-recurring engineering revenues and the related costs of performing those services.

Gross profit.

Gross profit for the three months ended March 31, 2025 was $15.0 million, or a gross margin of 47.3%, compared to $13.2 million, or a gross margin of 35.3% , for the same period in 2024.

The increase in gross profit and gross profit margin is primarily due to a larger proportion of higher margin service revenues as a percentage of total revenues and increased margins on the Company’s premium 5G MiFi offerings in the first quarter of 2025 in comparison to the lower margin products offered in the first quarter of the prior year.

Gross profit for the three months ended June 30, 2025 was $16.5 million, or a gross margin of 41.1%, compared to $18.8 million, or a gross margin of 36.4% , for the same period in 2024.

The decrease in gross profit is primarily due to decreased mobile solutions revenues.

The increase in gross margin is primarily due to a increased proportion of higher margin service and FWA revenues as a percentage of total revenues.

Operating costs and expenses.

The following table summarizes operating costs and expenses (in thousands):

Three Months Ended March 31, Change

Three Months Ended June 30, Change

Operating costs and expenses 2025 2024 $ %

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Depreciation and amortization 1,761 3,652 (1,891) (51.8)

Total $ 15,235 $ 16,955 $ (1,720) (10.1)

Research and development expenses.

Research and development expenses for the three months ended June 30, 2025 were $4.8 million, or 12.0% of revenues, compared to $5.2 million, or 10.0% of revenues, for the same period in 2024.

The decrease in research and development expenses was primarily due to more research and development projects that were capitalizable during the three months ended June 30, 2025, which resulted in a lower percentage of research and development costs being recorded as operating expenses, and decreased annual incentive bonus accruals, partially offset by increased outside services costs related to the Company’s increased development efforts for its next line of products.

Sales and marketing expenses.

Sales and marketing expenses for the three months ended June 30, 2025 were $4.0 million, or 9.8% of revenues, compared to $4.2 million, or 8.2% of revenues, for the same period in 2024.

The decrease in sales and marketing expenses was primarily due to decreased sales commissions as a result of lower sales and decreased annual incentive bonus accruals.

General and administrative expenses.

General and administrative expenses for the three months ended June 30, 2025 were $4.7 million, or 11.7% of revenues, compared to $3.9 million, or 7.6% of revenues, for the same period in 2024.

The increase in general and administrative expense was primarily due to an increase in share-based compensation expense related to awards issued to the Company’s CEO who was hired in January 2025 and an increase in compensation costs due to increased headcount, partially offset by decreased legal and consulting expenses related to the Company’s overall capital structure management efforts in the three months ended June 30, 2024.

Depreciation and amortization expenses .

Depreciation and amortization expenses for the three months ended June 30, 2025 were $1.8 million, or 4.4% of revenues, compared to $3.7 million, or 7.1% of revenues, for the same period in 2024.

The decrease in depreciation and amortization expenses was primarily due to the capitalized costs on the Company’s next generation of software intended for sale being capitalized but not amortizable until future quarters and the ending of useful life of certain amortizable purchased intangibles.

Other (expense) income.

The following table summarizes other (expense) income (in thousands):

Three Months Ended June 30, Change

Other (expense) income 2025 2024 $ %

Interest expense $ (933) $ (1,776) $ 843 (47.5) %

Loss on extinguishment of revolving credit facility — (788) 788 (100.0)

Gain on debt restructurings, net — 1,324 (1,324) *

Other income (expense), net 182 (417) 599 *

Total $ (751) $ (1,657) $ 906 (54.7) %

* Percentage not meaningful

Interest expense.

The $0.8 million decrease in interest expense for the three months ended June 30, 2025 over the same period in 2024 was primarily a result the Company’s various repurchases and exchanges of the 2025 Convertible Notes (as defined below) that occurred during 2024 and the full repayment of the remaining Notes on May 1, 2025, resulting in lower coupon interest, partially offset by interest expense on the Company’s 2029 Senior Secured Notes (as defined below) that were issued in the fourth quarter of 2024.

Loss on extinguishment of revolving credit facility The $0.8 million loss on extinguishment of revolving credit facility for the three months ended June 30, 2024 relates to the terminations of the Company’s Credit Facility (as defined in Part I, Item 1, Note 5 - Debt ) in April 2024.

Gain on debt restructurings, net The $1.3 million net gain on troubled debt restructurings for the three months ended June 30, 2024 is a result of the Company’s various 2025 Convertible Notes restructurings completed during 2024 as part of our overall capital structure management efforts.

Other income (expense), net.

Other income (expense), net for the three months ended June 30, 2025 and 2024 was $0.2 million and $(0.4) million, respectively.

The increase in other income, net was primarily due to interest income earned on money market fund accounts that the Company began investing in during the first quarter of 2025.

Income tax provision.

Income tax provision for the six months ended June 30, 2025 and 2024 was a provision of $0.0 million and $0.1 million, respectively.

Income (Loss) from discontinued operations, net of tax.

Income (loss) from discontinued operations, net of tax for the three months ended June 30, 2025 and 2024 was $0.0 million and $0.5 million, respectively.

Preferred stock dividends.

During the three months ended June 30, 2025 and 2024, we recorded dividends of $0.9 million and $0.8 million, respectively, on our Series E preferred stock.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Revenues for the six months ended June 30, 2025 were $71.9 million, compared to $89.1 million for the same period in 2024.

The following table summarizes revenues by our two product categories (in thousands):

Six Months Ended

June 30, Change

Product Category 2025 2024 $ %

Mobile solutions $ 31,462 $ 41,149 $ (9,687) (23.5) %

Fixed wireless access solutions 16,414 27,499 (11,085) (40.3)

Product 47,876 68,648 (20,772) (30.3)

Services and other 24,020 20,477 3,543 17.3

Total revenues $ 71,896 $ 89,125 $ (17,229) (19.3)

Mobile solutions.

The $9.7 million decrease in mobile solutions revenues is primarily due to decreased sales with one of our carrier partners due to significant promotional activity in the prior period.

Fixed wireless access solutions.

The $11.1 million decrease in fixed wireless access solutions revenues is primarily due to decreased sales with one of our carrier partners during the first three months of 2025 as we transitioned to our next generation of fixed wireless access products that launched during the second quarter of 2025 combined with decreased sales in our channel program.

Services and other The $3.5 million increase in services and other revenues is primarily due to increased Inseego Subscribe revenues related to the terms of a two-year service contract renewal with a major customer that was executed in April 2024.

Cost of revenues.

Cost of revenues for the six months ended June 30, 2025 was $40.4 million, or 56.2% of revenues, compared to $57.1 million, or 64.0% of revenues, for the same period in 2024.

The following table summarizes cost of revenues by category (in thousands):

Six Months Ended

June 30, Change

Product Category 2025 2024 $ %

Product $ 37,761 $ 53,220 $ (15,459) (29.0) %

Services and other 2,637 3,852 (1,215) (31.5)

Total cost of revenues $ 40,398 $ 57,072 $ (16,674) (29.2)

The $15.5 million decrease in product cost of revenues is primarily due to decreased product revenues, partially offset by an increased proportion of higher cost FWA products in comparison to lower cost mobile products.

Services and other.

The $1.2 million decrease in services and other cost of revenues is primarily due to decreased outside service costs related to Inseego Subscribe revenues, decreased annual incentive bonus accruals, and decreased non-recurring engineering revenues and the related costs of performing those services.

Gross profit.

Gross profit for the six months ended June 30, 2025 was $31.5 million, or a gross margin of 43.8%, compared to $32.1 million, or a gross margin of 36.0%, for the same period in 2024.

The decrease in gross profit is primarily due to decreased product revenues, partially offset by increased Inseego Subscribe service revenues.

The increase in gross margin is primarily due to a increased proportion of higher margin service revenues as a percentage of total revenues.

Operating costs and expenses.

The following table summarizes operating costs and expenses (in thousands):

Six Months Ended

June 30, Change

Operating costs and expenses 2025 2024 $ %

Research and development $ 9,355 $ 9,856 $ (501) (5.1) %

Sales and marketing 7,885 8,051 (166) (2.1)

General and administrative 9,193 7,873 1,320 16.8

Depreciation and amortization 3,825 6,944 (3,119) (44.9)

Impairment of capitalized software 384 420 (36) (8.6)

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Research and development expenses.

Research and development expenses for the three months ended March 31, 2025 were $4.5 million, or 14.3% of revenues, compared to $4.7 million, or 12.5% of revenues, for the same period in 2024.

The decrease in research and development expenses was primarily due to more research and development projects that were capitalizable during the three months ended March 31, 2025, which resulted in a lower percentage of research and development costs being recorded as operating expenses, partially offset by increased prototype builds, testing and certification costs, and outside services costs related to the Company’s increased development efforts for its next line of products.

Research and development expenses for the six months ended June 30, 2025 were $9.4 million, or 13.0% of revenues, compared to $9.9 million, or 11.1% of revenues, for the same period in 2024.

The decrease in research and development expenses was primarily due to more research and development projects that were capitalizable during the six months ended June 30, 2025, which resulted in a lower percentage of research and development costs being recorded as operating expenses, and decreased annual incentive bonus accruals, partially offset by increased prototype builds, testing and certification costs, and outside services costs related to the Company’s increased development efforts for its next line of products.

Sales and marketing expenses.

Sales and marketing expenses for the three months ended March 31, 2025 were $3.9 million, or 12.4% of revenues, compared to $3.8 million, or 10.2% of revenues, for the same period in 2024.

The increase in sales and marketing expenses was primarily due to higher trade show related costs, partially offset by decreased sales commissions and outbound freight costs as a result of lower sales.

Sales and marketing expenses for the six months ended June 30, 2025 were $7.9 million, or 11.0% of revenues, compared to $8.1 million, or 9.0% of revenues, for the same period in 2024.

The decrease in sales and marketing expenses was primarily due to decreased sales commissions as a result of lower sales and decreased annual incentive bonus accruals, partially offset by increased sales personnel-related compensation costs as a result of an increase in overall sales headcount.

General and administrative expenses.

General and administrative expenses for the three months ended March 31, 2025 were $4.5 million, or 14.2% of revenues, compared to $4.0 million, or 10.5% of revenues, for the same period in 2024.

The increase in general and administrative expense was primarily due to an increase in share-based compensation expense related to awards issued to the Company’s CEO that was hired in January 2025.

General and administrative expenses for the six months ended June 30, 2025 were $9.2 million, or 12.8% of revenues, compared to $7.9 million, or 8.8% of revenues, for the same period in 2024.

The increase in general and administrative expense was primarily due to an increase in share-based compensation expense related to awards issued to the Company’s CEO who was hired in January 2025, partially offset by decreased legal and consulting expenses related to the Company’s overall capital structure management efforts in the six months ended June 30, 2024.

Depreciation and amortization expenses .

Depreciation and amortization expenses for the three months ended March 31, 2025 were $2.1 million, or 6.5% of revenues, compared to $3.3 million, or 8.8% of revenues, for the same period in 2024.

Depreciation and amortization expenses for the six months ended June 30, 2025 were $3.8 million, or 5.3% of revenues, compared to $6.9 million, or 7.8% of revenues, for the same period in 2024.

The decrease in depreciation and amortization expenses was primarily due to the capitalized costs on the Company’s next generation of software intended for sale being capitalized but not amortizable during all or most of the six months ended June 30, 2025 and the ending of the useful life of certain amortizable purchased intangibles.

Impairment of capitalized software.

For each of the three months ended March 31, 2025 and 2024, w e recorded impairments of $0.4 million.

For each of the six months ended June 30, 2025 and 2024, we recorded impairments of $0.4 million,

Other (expense) income.

The following table summarizes other (expense) income (in thousands):

Three Months Ended March 31, Change

Six Months Ended

June 30, Change

Other (expense) income 2025 2024 $ %

Interest expense $ (1,959) $ (3,955) $ 1,996 (50.5)

Loss on extinguishment of revolving credit facility — (788) 788 (100.0)

Gain on debt restructurings, net — 1,324 (1,324) *

Other income (expense), net 485 (792) 1,277 *

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Interest expense.

The $1.2 million decrease in interest expense for the three months ended March 31, 2025 over the same period in 2024 was primarily a result the Company’s various repurchases and exchanges of the 2025 Convertible Notes (as defined below) that occurred during 2024, resulting in lower coupon interest, partially offset by interest expense on the Company’s 2029 Senior Secured Notes (as defined below) that were issued in the fourth quarter of 2024.

The $2.0 million decrease in interest expense for the six months ended June 30, 2025 over the same period in 2024 was primarily a result the Company’s various repurchases and exchanges of the 2025 Convertible Notes (as defined below) that occurred during 2024 and the full repayment of the remaining Notes on May 1, 2025, resulting in lower coupon interest, partially offset by interest expense on the Company’s 2029 Senior Secured Notes (as defined below) that were issued in the fourth quarter of 2024.

Loss on extinguishment of revolving credit facility The $0.8 million loss on extinguishment of revolving credit facility for the six months ended June 30, 2024 relates to the terminations of the Company’s Credit Facility in April 2024.

Gain on debt restructurings, net The $1.3 million net gain on troubled debt restructurings for the six months ended June 30, 2024 is a result of the Company’s various 2025 Convertible Notes restructurings completed during 2024 as part of our overall capital structure management efforts.

Other income (expense), net.

Other income (expense), net for the three months ended March 31, 2025 and 2024 was $0.3 million and $(0.4) million, respectively.

The increase in other income, net was primarily due to interest income earned on money market fund accounts that the Company began investing in during the first quarter of 2025.

Other income (expense), net for the six months ended June 30, 2025 and 2024 was $0.5 million and $(0.8) million, respectively.

The increase in other income, net was primarily due to interest income earned on money market fund accounts that the Company began investing in during the first quarter of 2025 and a decrease in consulting and legal fees that were incurred during 2024 related to the preliminary stages of the Company’s capital structure management efforts.

Income tax provision.

Income tax provision for the six months ended June 30, 2025 and 2024 was a provision of $0.0 million and $0.1 million, respectively.

Income (loss) from discontinued operations, net of tax.

Income (loss) from discontinued operations, net of tax for the three months ended March 31, 2025 and 2024 was $(0.4) million and $1.1 million, respectively.

Income (loss) from discontinued operations, net of tax for the six months ended June 30, 2025 and 2024 was $(0.4) million and $1.6 million, respectively.

Preferred stock dividends.

During the three months ended March 31, 2025 and 2024, we recorded dividends of $0.9 million and $0.8 million, respectively, on our Preferred Stock.

During the six months ended June 30, 2025 and 2024, we recorded dividends of $1.7 million and $1.6 million, respectively, on our Series E preferred stock.

Liquidity and Capital Resources

As of March 31, 2025, the Company had available cash and cash equivalents totaling $35.1 million and maintained positive working capital of $7.1 million.

The Company had negative cash outflows from operations of $3.5 million for the three months ended March 31, 2025, which was largely due to the payout of the Company’s annual bonuses that was fully accrued for at December 31, 2024.

The Company’s 3.25% convertible notes due in 2025 (the “2025 Convertible Notes”) had a principal balance of $14.9 million as of March 31, 2025 and matured on May 1, 2025.

The Company’s 9.0% senior secured notes due in 2029 (the “2029 Senior Secured Notes”) had a principal balance of $40.9 million as of March 31, 2025 and mature on May 1, 2029.

As of June 30, 2025, the Company had available cash and cash equivalents totaling $13.2 million and maintained positive working capital of $9.9 million.

The Company had negative cash outflows from operations of $7.9 million for the six months ended June 30, 2025, which was largely due to the payout of the Company’s annual bonuses that were fully accrued for at December 31, 2024 and an increase in sales occurring late in the current period.

The Company’s 3.25% convertible notes due in 2025 (the “2025 Convertible Notes”) had a principal balance of $14.9 million as of December 31, 2024 and matured on May 1, 2025, at which time all outstanding principal and related accrued interest was paid-off in full.

The Company’s 9.0% senior secured notes due in 2029 (the “2029 Senior Secured Notes”) had a principal balance of $40.9 million as of June 30, 2025 and mature on May 1, 2029.

While the Company’s liquidity and financial results had several positive developments in 2024, the Company has a history of operating and net losses and overall usage of cash from operating and investing activities.

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Contractual Obligations and Commitments

As of March 31, 2025, our material contractual obligations consisted of the following:

As of June 30, 2025, our material contractual obligations consisted of the following:

• To mitigate the risk of material shortages and price increases, we enter into non-cancellable purchase obligations with certain key contract manufacturers for the purchase of goods and services in the three to four quarters following the balance sheet date.

Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business.

As of March 31, 2025, our future payments under these noncancellable purchase obligations were approximately $44.1 million.

• $14.9 million in outstanding principal amount of 2025 Convertible Notes with required interest payments;

the entire principal balance and all accrued interest amounts thereon were due and paid in cash on May 1, 2025;

see Part I, Item 1 Note 5 – Debt ;

As of June 30, 2025, our future payments under these noncancellable purchase obligations were approximately $62.3 million.

• $40.9 million in outstanding borrowings under the 2029 Senior Secured Notes;

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• Operating lease liabilities that are included on our consolidated balance sheet.

There were no material changes in our other contractual obligations during the three or three months ended March 31, 2025.

There were no material changes in our other contractual obligations, other than the full repayment upon maturity of the 2025 Convertible Notes, during the three or six months ended June 30, 2025.

Historical Cash Flows

The following table summarizes our unaudited condensed consolidated statements of cash flows for the periods indicated (in thousands):

Three Months Ended

Six Months Ended

Operating cash flows from continuing operations $ (7,055) $ 32,022

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Financing cash flows from discontinued operations — —

Net cash provided by financing activities 42 583

Net cash used in (provided by) financing activities (14,677) 9,970

Effect of exchange rates on cash 119 (209)

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Operating activities.

Net cash used in operating activities for the three months ended March 31, 2025 is primarily comprised of a $1.2 million net loss from continuing operations during the period and net cash used for working capital of $7.0 million, which was largely due to the payout of the annual bonus that was accrued for at December 31, 2024, partially offset by non-cash charges, including depreciation and amortization of $2.1 million, share-based compensation expense of $1.6 million, and provision for excess and obsolete inventory of $0.7 million.

Net cash provided by operating activities for three months ended March 31, 2024 is comprised of cash flows from continuing operations of $3.9 million and cash flows from discontinued operations of $1.3 million.

The cash inflows from continuing operations were primarily related to net cash used for working capital of $4.5 million, partially offset by a net loss from continuing operations of $5.5 million that was offset by non-cash charges, including depreciating and amortization of $3.3 million, share-based compensation expense of $0.7 million, amortization of debt discount and debt issuance costs of $0.5 million, and capitalized software impairments of $0.4 million.

Net cash used in operating activities for the six months ended June 30, 2025 is primarily comprised of a $0.7 million net loss from continuing operations during the period and net cash used for working capital of $15.0 million, which was largely due to the payout of the Company’s annual bonuses that were fully accrued for at December 31, 2024 and an increase in sales occurring late in the current period, partially offset by non-cash charges, including depreciation and amortization of $3.9 million, share-based compensation expense of $3.3 million, and provision for excess and obsolete inventory of $1.2 million.

Net cash provided by operating activities for six months ended June 30, 2024 is comprised of cash flows from continuing operations of $32.0 million and cash flows from discontinued operations of $0.9 million.

The cash inflows from continuing operations were primarily related to net cash provided by working capital of $28.6 million, partially offset by a net loss from continuing operations of $5.4 million that was offset by non-cash charges, including depreciating and amortization of $7.0 million, share-based compensation expense of $1.5 million, amortization of debt discount and debt issuance costs of $0.9 million, and capitalized software impairments of $0.4 million.

Investing activities.

Net cash used in investing activities during the three months ended March 31, 2025 is comprised of $1.7 million of cash outflows related to the development of software in support of our products and services, partially offset by $0.7 million received during the period related to a working capital adjustment payment from the purchaser of the Company’s Telematics Business that was sold in 2024.

Net cash used in investing activities for the three months ended March 31, 2024 is comprised of $0.6 million of cash outflows related to the development of software in support of our products and services.

Net cash used in investing activities during the six months ended June 30, 2025 is comprised of $4.4 million of cash outflows related to the development of software in support of our products and services, partially offset by $0.7 million received during the period related to a working capital adjustment payment from the purchaser of the Company’s Telematics Business that was sold in 2024.

Net cash used in investing activities for the six months ended June 30, 2024 is comprised of $2.3 million of cash outflows related to the development of software in support of our products and services.

Financing activities.

Net cash provided by financing activities during the three months ended March 31, 2025 is comprised of less than $0.1 million of cash received from exercises of stock options.

Net cash provided by financing activities for the three months ended March 31, 2024 is comprised of $0.6 million of cash outflow related to net borrowings of the Credit Facility (as defined in Part I, Item 1 Note 5 – Debt ).

Net cash used in financing activities during the six months ended June 30, 2025 is primarily comprised of the repayment of the remaining $14.9 million 2025 Convertible Notes principal balance, partially offset by $0.3 million of cash received from exercises of stock options.

Net cash provided by financing activities for the six months ended June 30, 2024 is comprised of $16.5 million from the issuance of the short-term loan and common stock warrants, partially offset by $4.0 million of cash outflow from the

termination and repayment of our revolving credit facility and $1.7 million of cash outflow from the repurchase of a portion of our convertible notes.

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 2. Management’s Discussion and Analysis