UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-38358 INSEEGO CORP. (Exact name of registrant as specified in its charter) Delaware 81-3377646 (State or Other Jurisdiction of Incorporatio ...

Inseego Corp. (NASDAQ:INSG) Q2 2022 Earnings Conference Call August 8, 2022 5:00 PM ET Company Participants Ashish Sharma - Chief Executive Officer Bob Barbieri - Chief Financial Officer Conference Call Participants Tore Svanberg - Stifel Scott Searles - ROTH Capital Mike Walkley - Canaccord Genuity Aditya Dagaonkar - Northland Capital Markets Operator Hello, and welcome to Inseego Corp's Second Quarter 2022 Financial Results Conference Call. Please note today's event is being recorded. All participants tod ...

Inseego Corp. (NASDAQ:INSG) Q1 2022 Earnings Conference Call May 4, 2022 5:00 PM ET Corporate Participants Ashish Sharma - Chief Executive Officer Bob Barbieri - Chief Financial Officer Conference Call Participants Lance Vitanza - Cowen and Company Operator Hello, and welcome to Inseego Corp's First Quarter 2022 Financial Results Conference Call. Please note today's event is being recorded. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-38358 INSEEGO CORP. (Exact name of registrant as specified in its charter) Delaware 81-3377646 (State or Other Jurisdiction of Incorporation or Organization) Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES E ...

Financial Data and Key Metrics Changes - In Q4 2021, the company reported revenue of $72.9 million, reflecting a sequential growth of 15% after adjusting for the sale of Ctrack South Africa, and a 10% increase on an as-reported basis [5][10][29] - For the full year, 5G revenue increased by 132% year-over-year, with a 73% growth in cloud solutions in Q4 compared to Q1 on a pro forma basis [10][29] - Gross margin for the IoT and mobile business was 22.2%, down from 24.4% in the previous quarter, attributed to a product mix shift and higher freight costs [31] Business Line Data and Key Metrics Changes - IoT & Mobile Solutions revenue was $66.2 million in Q4, up 16% from Q3, driven by demand for mobile hotspots [30] - Enterprise SaaS solutions revenue remained flat at $6.7 million sequentially, as the company integrates its software assets into a new cloud-driven 5G enabling solution suite [30] - The company launched a new family of 5G FWA solutions and expanded its cloud-delivered software portfolio, with higher software attach rates and gross margins compared to its carrier hotspot business [12][30] Market Data and Key Metrics Changes - The 5G FWA pipeline grew from 30 enterprise customers in early 2021 to over 200 by the end of the year, indicating significant expansion opportunities [11] - The company expanded its strategic relationship with T-Mobile, which became its largest 5G customer, and announced partnerships with Vodafone Qatar and Zain KSA [13][20] - The Middle East is highlighted as a key region for 5G development, with over 9 million 5G users and 900,000 5G FWA users [20] Company Strategy and Development Direction - The company is transitioning to focus on multiple 5G products, particularly in the enterprise sector, moving away from reliance on a single carrier customer [6][7] - The strategy includes expanding the partner ecosystem, with 79 new channel partners added, and enhancing go-to-market strategies with both channel partners and carriers [12][22] - The company aims for 25% year-over-year growth in 2022 and plans to be free cash flow positive by year-end [15][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate supply chain challenges and expects some stabilization in component costs [16][35] - The outlook for 2022 includes a robust demand for 5G solutions across various verticals, with expectations for revenue growth driven by enterprise fixed wireless access [15][34] - Management emphasized the importance of 5G technology leadership and the growing enterprise pipeline as key factors for future success [34][39] Other Important Information - The company reported a net loss of $8 million or $0.08 per share in Q4, consistent with the prior quarter, and an EBITDA loss of $1.2 million [32] - Cash and cash equivalents at the end of Q4 were $49.8 million, with outstanding convertible debt remaining at $157.9 million [33] Q&A Session Summary Question: Inquiry about gross margin pressures and future expectations - Management indicated that Q4 margins do not reflect expectations for 2022, citing three major headwinds affecting margins, including the divestiture of Ctrack South Africa and logistics costs [44][45] Question: Discussion on the enterprise pipeline and deal sizes - Management expressed optimism about the enterprise pipeline, noting that many customers are moving from initial product trials to broader deployments [47][48] Question: Clarification on the contribution of software and hardware to margins - Management stated that both software and hardware are expected to grow in parallel, with software contributing more over time as the business scales [55][56] Question: Expectations for free cash flow and CapEx in 2022 - Management reaffirmed the goal of being free cash flow positive by the end of 2022 and indicated that CapEx would remain stable without significant growth [61][62]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38358 INSEEGO CORP. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organization) 12600 Deerf ...

| --- | --- | --- | --- | |-------|-------------------------------------------------|-------|-------| | | | | | | | | | | | | 24TH ANNUAL NEEDHAM VIRTUAL GROWTH CONFERENCE | | | | | DAN MONDOR, CHAIRMAN & CEO | | | | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-38358 INSEEGO CORP. (Exact name of registrant as specified in its charter) Delaware 81-3377646 (State or Other Jurisdiction of Incorpo ...

Inseego Corp. (NASDAQ:INSG) Q3 2021 Earnings Conference Call November 3, 2021 5:00 PM ET Company Participants Dan Mondor – Chairman and Chief Executive Officer Ashish Sharma – President Bob Barbieri – Chief Financial Officer Conference Call Participants Lance Vitanza – Cowen & Co. Scott Searle – Roth Capital Operator Hello, and welcome to Inseego Corp's Third Quarter 2021 Financial Results Conference Call. Please note, today's event is being recorded. [Operator Instructions] On the call today are Dan Mondor ...

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' deficit, cash flows, and related notes [Condensed Consolidated Balance Sheets (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Condensed consolidated balance sheets reflect financial position, showing decreased assets, liabilities, and stockholders' deficit Balance Sheet Summary | Metric (in thousands) | June 30, 2021 | December 31, 2020 | | :-------------------- | :------------ | :---------------- | | Total assets | $224,740 | $227,394 | | Total liabilities | $233,646 | $255,293 | | Total stockholders' deficit | $(8,906) | $(27,899) | - Assets held for sale **increased significantly** to **$42,450 thousand** as of June 30, 2021, from zero at December 31, 2020, related to the expected sale of Ctrack South Africa operations[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) Statements of operations show decreased net revenues but significantly reduced net loss due to lower debt extinguishment losses Statements of Operations Summary | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total net revenues | $65,693 | $80,689 | $123,290 | $137,529 | | Gross profit | $20,349 | $22,000 | $38,824 | $39,227 | | Operating loss | $(10,520) | $(5,337) | $(26,714) | $(13,077) | | Net loss attributable to Inseego Corp. | $(13,043) | $(74,830) | $(30,215) | $(93,028) | | Net loss per common share (Basic and Diluted) | $(0.14) | $(0.78) | $(0.31) | $(1.01) | - Loss on debt conversion and extinguishment, net, was **significantly lower** in 2021 (**$0** for Q2, **$432k** for H1) compared to 2020 (**$67.2M** for Q2, **$75.2M** for H1), **contributing to the reduced net loss**[11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(Unaudited)) Comprehensive loss statements show net loss adjusted for foreign currency translation, indicating substantial improvement from prior year Statements of Comprehensive Loss Summary | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(13,043) | $(74,836) | $(30,001) | $(93,002) | | Foreign currency translation adjustment | $2,425 | $1,576 | $693 | $(11,904) | | Total comprehensive loss | $(10,618) | $(73,260) | $(29,308) | $(104,906) | [Condensed Consolidated Statements of Stockholders' Deficit (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit%20(Unaudited)) Stockholders' deficit statements detail changes in equity components, including net loss, foreign currency translation, share-based compensation, and stock issuances Stockholders' Deficit Summary | Metric (in thousands) | Balance, December 31, 2020 | Balance, June 30, 2021 | | :-------------------- | :------------------------- | :--------------------- | | Common Stock Amount | $99 | $103 | | Additional Paid-in Capital | $711,487 | $761,412 | | Accumulated Deficit | $(732,422) | $(764,150) | | Total Stockholders' Deficit | $(27,899) | $(8,906) | - Additional paid-in capital **increased by $49.9 million** from December 31, 2020, to June 30, 2021, **driven by** share-based compensation, stock option exercises, and common shares issued in public offerings and debt conversions[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Operating cash flows shifted to negative, investing activities used cash, and financing activities provided cash from a public offering Cash Flow Activities Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(12,030) | $4,662 | | Net cash used in investing activities | $(17,434) | $(13,233) | | Net cash provided by financing activities | $29,511 | $41,144 | | Net increase in cash, cash equivalents and restricted cash | $368 | $30,026 | | Cash, cash equivalents and restricted cash, end of period | $40,383 | $42,100 | - The **shift in operating cash flow from positive to negative** in H1 2021 was **mainly due to the net loss incurred and net cash used by working capital**, **partially offset by non-cash adjustments** like depreciation and share-based compensation[208](index=208&type=chunk) - Financing activities in H1 2021 were **primarily driven by net proceeds from the ATM Offering ($29.4 million)** and stock option exercises, while H1 2020 included proceeds from 2025 Notes and Series E Preferred Stock issuance[211](index=211&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Notes provide essential context and detailed breakdowns for financial statements, covering accounting policies, estimates, segments, and line items [1. Basis of Presentation](index=10&type=section&id=1.%20Basis%20of%20Presentation) Outlines financial statement preparation, highlights COVID-19 and semiconductor risks, details liquidity, and describes revenue recognition across IoT & Mobile and Enterprise SaaS segments - The COVID-19 pandemic and global semiconductor shortage **pose ongoing risks**, potentially impacting supply chains and demand, though the semiconductor shortage has **not materially impacted** the Company directly as of June 30, 2021[26](index=26&type=chunk)[27](index=27&type=chunk) Liquidity and Capital Resources | Liquidity Metric (in thousands) | June 30, 2021 | | :------------------------------ | :------------ | | Available cash and cash equivalents | $36,700 | | Working capital | $32,400 | - The company generates revenue from IoT & Mobile Solutions (4G LTE, 5G products, MiFi™, Skyus, Inseego Subscribe™) and Enterprise SaaS Solutions (Ctrack telematics platforms)[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) [2. Financial Statement Details](index=12&type=section&id=2.%20Financial%20Statement%20Details) Provides detailed breakdown of inventories and accrued expenses, showing changes between June 30, 2021, and December 31, 2020 Inventories Breakdown | Inventories (in thousands) | June 30, 2021 | December 31, 2020 | | :------------------------- | :------------ | :---------------- | | Finished goods | $24,881 | $27,009 | | Raw materials and components | $2,663 | $6,943 | | Total inventories | $27,544 | $33,952 | Accrued Expenses and Other Current Liabilities | Accrued Expenses (in thousands) | June 30, 2021 | December 31, 2020 | | :------------------------------ | :------------ | :---------------- | | Payroll and related expenses | $9,063 | $6,006 | | Other | $3,835 | $6,540 | | Total accrued expenses and other current liabilities | $22,874 | $23,373 | [3. Fair Value Measurement of Assets and Liabilities](index=12&type=section&id=3.%20Fair%20Value%20Measurement%20of%20Assets%20and%20Liabilities) Explains fair value measurement hierarchy and details valuation of Level 3 interest make-whole payment derivative liability for 2025 Notes - The fair value of the interest make-whole payment derivative liability for the 2025 Notes was determined using a Monte Carlo model, with key assumptions including **50% volatility** and a **0.63% risk-free rate** as of June 30, 2021[50](index=50&type=chunk) Level 3 Liabilities (Interest Make-Whole Payment) | Level 3 Liabilities (in thousands) | December 31, 2020 | June 30, 2021 | | :--------------------------------- | :---------------- | :------------ | | Interest make-whole payment | $4,898 | $2,929 | - A **$1.8 million** gain on the change in fair value of the embedded derivative was recorded in other income, net, for the six months ended June 30, 2021[56](index=56&type=chunk) [4. Business Divestiture](index=14&type=section&id=4.%20Business%20Divestiture) Company agreed to sell Ctrack South Africa operations for $36.6 million, with assets classified as held for sale; sale completed July 30, 2021 - On February 24, 2021, Inseego Corp. agreed to sell its Ctrack South Africa operations for **528.9 million ZAR** (approximately **$36.6 million USD**)[58](index=58&type=chunk) Ctrack South Africa Assets and Liabilities Held for Sale | Ctrack South Africa (in thousands) | Balance as of June 30, 2021 | | :--------------------------------- | :-------------------------- | | Total assets held for sale | $42,450 | | Total liabilities related to assets held for sale | $11,132 | - The sale was **completed on July 30, 2021**, with **initial cash proceeds** of approximately **$36.6 million** received[34](index=34&type=chunk) [5. Debt](index=15&type=section&id=5.%20Debt) Details debt structure, including Term Loan repayment, 2025 Notes issuance, and 2022 Notes conversion; $161.9 million of 2025 Notes outstanding - The Term Loan was fully repaid on May 12, 2020, using proceeds from the 2025 Notes offering, including **$47.5 million** in principal[65](index=65&type=chunk) - The company issued **$100.0 million** in 2025 Notes through a public offering and **$80.4 million** in 2025 Notes through private exchange transactions for 2022 Notes[70](index=70&type=chunk)[71](index=71&type=chunk) 2025 Notes Debt Details | 2025 Notes (in thousands) | June 30, 2021 | December 31, 2020 | | :------------------------ | :------------ | :---------------- | | Principal | $161,898 | $166,898 | | Net carrying amount | $159,120 | $165,147 | | Effective interest rate (H1) | **4.16%** | N/A | - During H1 2021, approximately **$5.0 million** in principal amount of 2025 Notes were converted into **428,669 shares** of common stock[72](index=72&type=chunk) [6. Share-based Compensation](index=19&type=section&id=6.%20Share-based%20Compensation) Share-based compensation expense for Q2 and H1 2021 was $2.3 million and $11.4 million, respectively, with summarized stock option and RSU activity Share-based Compensation Expense | Share-based Compensation (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total | $2,307 | $4,428 | $11,405 | $5,981 | Stock Options Activity | Stock Options Activity | December 31, 2020 | June 30, 2021 | | :--------------------- | :---------------- | :------------ | | Outstanding | 8,479,979 | 8,571,014 | | Exercisable | N/A | 4,596,393 | Restricted Stock Units Activity | Restricted Stock Units Activity | December 31, 2020 | June 30, 2021 | | :------------------------------ | :---------------- | :------------ | | Non-vested | 417,105 | 419,619 | [7. Earnings Per Share](index=19&type=section&id=7.%20Earnings%20Per%20Share) Explains basic and diluted EPS calculation, noting exclusion of anti-dilutive securities like convertible notes, stock options, and RSUs during loss periods - For the three and six months ended June 30, 2021, **25,831,419 shares** related to convertible notes, stock options, and RSUs were excluded from diluted EPS computation because their effect would have been anti-dilutive[97](index=97&type=chunk) [8. Private Placements and Public Offering](index=20&type=section&id=8.%20Private%20Placements%20and%20Public%20Offering) Details equity financing activities, including January 2021 ATM Offering generating $29.4 million net proceeds, and Series E Preferred Stock transactions - In January 2021, the company sold **1,516,073 shares** of common stock through an ATM Offering, generating **net proceeds of $29.4 million**[100](index=100&type=chunk) - On March 6, 2020, the company issued **25,000 shares** of Series E Preferred Stock for **$25.0 million**, and later repurchased **2,330 shares** for **$2.4 million** on May 12, 2020[101](index=101&type=chunk)[102](index=102&type=chunk) [9. Geographic Information and Concentrations of Risk](index=20&type=section&id=9.%20Geographic%20Information%20and%20Concentrations%20of%20Risk) Provides net revenue breakdown by geographic region and highlights significant customer and vendor concentrations, indicating reliance on key customers Net Revenues by Geographic Region | Geographic Region (in thousands) | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | | :------------------------------- | :------------------------------- | :----------------------------- | | United States and Canada | $51,473 | $94,209 | | South Africa | $7,790 | $14,898 | | Other | $6,430 | $14,183 | | Total | $65,693 | $123,290 | - For the three months ended June 30, 2021, two customers **accounted for 68.0%** of net revenues[104](index=104&type=chunk)[106](index=106&type=chunk) - For the six months ended June 30, 2021, two customers **accounted for 65.1%** of net revenues[104](index=104&type=chunk)[106](index=106&type=chunk) - As of June 30, 2021, two customers and one vendor **accounted for 35.6%**, **12.9%**, and **11.3%** of accounts receivable, net, respectively[106](index=106&type=chunk) [10. Commitments and Contingencies](index=21&type=section&id=10.%20Commitments%20and%20Contingencies) Addresses legal proceedings, including patent infringement and RER settlement, with management believing no material adverse effect on financial condition - The company is involved in patent infringement lawsuits and other legal actions, but believes liabilities from these matters will **not have a material adverse effect**[107](index=107&type=chunk)[109](index=109&type=chunk) - In July 2020, the company issued **89,928 shares** of common stock to former RER stockholders, satisfying all remaining liabilities under a settlement agreement[108](index=108&type=chunk) [11. Leases](index=21&type=section&id=11.%20Leases) Details lease accounting for operating leases as lessee and lessor, outlining right-of-use assets, lease liabilities, and future minimum lease payments Lease Financial Metrics | Lease Metrics (in thousands) | June 30, 2021 | | :--------------------------- | :------------ | | Right-of-use assets | $8,300 | | Lease liabilities | $9,200 | | Weighted-average remaining lease term | **5.5 years** | | Weighted-average discount rate | **9.1%** | Future Minimum Operating Lease Payments Schedule | Future Minimum Operating Lease Payments (in thousands) | Amount | | :------------------------------------- | :----- | | 2021 (remainder) | $1,231 | | 2022 | $2,282 | | 2023 | $1,959 | | 2024 | $1,806 | | 2025 | $1,652 | | Thereafter | $2,813 | | Total minimum operating lease payments | $11,743 | [12. Income Taxes](index=22&type=section&id=12.%20Income%20Taxes) Income tax provision for H1 2021 was $0.4 million, primarily due to foreign and state taxes, with full valuation allowances; American Rescue Plan Act not expected to materially impact tax rate Income Tax Provision (Benefit) | Income Tax (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax provision (benefit) | $228 | $(115) | $449 | $(24) | - The company's income tax expense differs from statutory rates **primarily due to full valuation allowances** at its U.S.-based entities and many foreign subsidiaries[119](index=119&type=chunk) - The American Rescue Plan Act, 2021, is **not expected to have a material impact** on the company's effective tax rate or income tax expense for the year ending December 31, 2021[121](index=121&type=chunk) [13. Subsequent Events](index=24&type=section&id=13.%20Subsequent%20Events) Completed Ctrack South Africa sale on July 30, 2021, receiving $36.6 million cash proceeds; estimated $4.4 million gain expected in Q3 2021 - The sale of Ctrack South Africa was **completed on July 30, 2021**, with **initial cash proceeds** of approximately **$36.6 million**[124](index=124&type=chunk) - An **estimated gain** of approximately **$4.4 million** from the sale is expected to be recognized as other income, net, in the condensed consolidated results of operations during the three months ended September 30, 2021[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of financial condition and results of operations, covering forward-looking statements, business overview, revenue, influencing factors, accounting policies, performance, liquidity, and cash flows [Forward Looking Statements](index=25&type=section&id=Forward%20Looking%20Statements) Cautionary note on forward-looking statements, outlining risks and uncertainties that could cause actual results to differ materially from projections - Key risk factors include the ability to compete in wireless broadband and asset management, successful product development (especially 5G NR), customer concentration, debt refinancing, supply chain reliance (semiconductors), impact of COVID-19, and geopolitical instability[127](index=127&type=chunk)[130](index=130&type=chunk) - The company disclaims any undertaking to publicly update or revise forward-looking statements[126](index=126&type=chunk) [Business Overview](index=27&type=section&id=Business%20Overview) Inseego Corp. leads in 4G/5G wireless, IIoT, and cloud solutions, recently completing the sale of Ctrack South Africa operations for $36.6 million - Inseego Corp. **specializes in** 4G and 5G NR fixed and mobile wireless solutions, IIoT, and cloud solutions, with products designed and developed in the U.S[132](index=132&type=chunk) - The company **completed the sale** of its Ctrack South Africa operations on July 30, 2021, for approximately **$36.6 million USD**[134](index=134&type=chunk)[135](index=135&type=chunk) [Our Sources of Revenue](index=27&type=section&id=Our%20Sources%20of%20Revenue) Generates revenue from intelligent wireless hardware (MiFi, Skyus) for mobile and IIoT markets, and SaaS solutions (Ctrack, Inseego Subscribe), classified into IoT & Mobile and Enterprise SaaS - Revenue sources include intelligent wireless 4G and 5G hardware (fixed wireless routers, gateways, mobile hotspots, USB modems) for mobile communications and IIoT markets, and SaaS platforms for fleet management, telematics, and subscription management[136](index=136&type=chunk)[140](index=140&type=chunk) - Products are sold under MiFi and Skyus brands, with MiFi customers **primarily wireless operators** (Verizon, AT&T, T-Mobile), and IIoT products sold through direct sales, VARs, and distributors to transportation, industrial, and government sectors[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) - Revenue is classified into IoT & Mobile Solutions (including Inseego Subscribe) and Enterprise SaaS Solutions (Ctrack platforms)[141](index=141&type=chunk) [Factors Which May Influence Future Results of Operations](index=28&type=section&id=Factors%20Which%20May%20Influence%20Future%20Results%20of%20Operations) Future results influenced by economic conditions, competition, 5G adoption, supply chain, pricing, and COVID-19; operating costs driven by R&D, sales, marketing, and G&A - Future net revenues are **influenced by** economic environment, competition in telematics and 5G, acceptance in new vertical markets, 5G infrastructure deployment and adoption, supply chain for semiconductors, product pricing, COVID-19 impact, and the Ctrack South Africa sale[142](index=142&type=chunk)[145](index=145&type=chunk) - Cost of net revenues includes manufacturing, distribution, SaaS delivery, warranty, and inventory adjustments, which are impacted by product demand[147](index=147&type=chunk) - Operating costs **consist of** R&D (5G product development), sales and marketing (5G product promotion), and general and administrative expenses (corporate functions, public company compliance, legal)[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) [Critical Accounting Policies and Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No material changes to critical accounting policies and estimates since the December 31, 2020, Form 10-K filing - **No material changes** to critical accounting policies and estimates have occurred since the last Form 10-K filing[153](index=153&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Comparative analysis of financial performance for Q2 and H1 2021 versus 2020, detailing changes in revenues, costs, gross profit, and operating expenses [Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020](index=30&type=section&id=Three%20Months%20Ended%20June%2030,%202021%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202020) Net revenues decreased by 18.6% due to lower IoT & Mobile sales, offset by Enterprise SaaS growth; gross margin improved, and net loss significantly decreased Results of Operations Summary | Metric (in thousands) | June 30, 2021 | June 30, 2020 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Total net revenues | $65,693 | $80,689 | $(14,996) | **(18.6%)** | | IoT & Mobile Solutions | $51,836 | $69,314 | $(17,478) | **(25.2%)** | | Enterprise SaaS Solutions | $13,857 | $11,375 | $2,482 | **21.8%** | | Gross profit | $20,349 | $22,000 | $(1,651) | **(7.5%)** | | Gross margin | **31.0%** | **27.3%** | **3.7 pp** | | | Net loss attributable to Inseego Corp. | $(13,043) | $(74,830) | $61,787 | **82.6%** | - The **decrease in IoT & Mobile Solutions revenue** was **mainly due to** lower LTE gigabit hotspot sales as COVID-19 demand eased, partially offset by increased 5G hotspot sales and Inseego Subscribe subscriber growth[155](index=155&type=chunk) - Operating expenses (R&D, S&M, G&A) **increased due to** 5G product development, marketing, and legal expenses, partially offset by timing of bonus grants[160](index=160&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk) [Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020](index=32&type=section&id=Six%20Months%20Ended%20June%2030,%202021%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202020) Total net revenues decreased by 10.4% due to IoT & Mobile decline, offset by Enterprise SaaS growth; gross margin improved, and net loss significantly reduced Results of Operations Summary | Metric (in thousands) | June 30, 2021 | June 30, 2020 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Total net revenues | $123,290 | $137,529 | $(14,239) | **(10.4%)** | | IoT & Mobile Solutions | $94,795 | $111,729 | $(16,934) | **(15.2%)** | | Enterprise SaaS Solutions | $28,495 | $25,800 | $2,695 | **10.4%** | | Gross profit | $38,824 | $39,227 | $(403) | **(1.0%)** | | Gross margin | **31.5%** | **28.5%** | **3.0 pp** | | | Net loss attributable to Inseego Corp. | $(30,215) | $(93,028) | $62,813 | **67.5%** | - The **decrease in IoT & Mobile Solutions revenue** was **primarily due to** lower enterprise and carrier offerings and reduced LTE gigabit hotspot sales, partially offset by increased 5G hotspot sales and Inseego Subscribe growth[172](index=172&type=chunk) - Research and development expenses **increased by $7.5 million**, sales and marketing by **$3.4 million**, and general and administrative by **$1.5 million**, **mainly due to** 5G product programs, marketing, and bonus grants[177](index=177&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2021, the company had $36.7 million cash and $32.4 million working capital; recent financing includes Series E Preferred Stock, 2025 Notes, and ATM Offering, with management expecting sufficient liquidity Liquidity and Capital Resources | Liquidity Metric (in thousands) | June 30, 2021 | | :------------------------------ | :------------ | | Available cash and cash equivalents | $36,700 | | Working capital | $32,400 | | Outstanding 2025 Notes principal | $161,900 | - The company raised **$29.4 million** in **net proceeds** from an ATM Offering in January 2021[192](index=192&type=chunk) - The sale of Ctrack South Africa, **completed on July 30, 2021**, provided **initial cash proceeds** of approximately **$36.6 million**, **further enhancing liquidity**[193](index=193&type=chunk) - Management believes current cash and anticipated cash flows from operations will be **sufficient for the next twelve months**, but notes risks if operating plans are not met or unforeseen expenditures occur[194](index=194&type=chunk) [Contractual Obligations and Commitments](index=34&type=section&id=Contractual%20Obligations%20and%20Commitments) No material changes in contractual obligations occurred during the second quarter of 2021 - **No material changes** in contractual obligations occurred in the second quarter of 2021[196](index=196&type=chunk) [Convertible Notes](index=34&type=section&id=Convertible%20Notes) Details 2025 Notes terms: $180.4 million aggregate principal, 3.25% annual interest, maturing May 1, 2025, convertible into common stock at 79.2896 shares per $1,000 principal - The 2025 Notes, **totaling $180.4 million** in aggregate principal, **mature on May 1, 2025**, and **bear an annual interest rate of 3.25%**[197](index=197&type=chunk)[198](index=198&type=chunk)[200](index=200&type=chunk) - Holders can convert notes into common stock at an **initial conversion rate of 79.2896 shares** per **$1,000 principal amount** (approx. **$12.61 per share**)[201](index=201&type=chunk)[202](index=202&type=chunk) - The notes include an interest make-whole payment feature under certain conversion conditions and are **redeemable by the company** after May 6, 2023, **if specific stock price thresholds are met**[204](index=204&type=chunk)[206](index=206&type=chunk) [Historical Cash Flows](index=35&type=section&id=Historical%20Cash%20Flows) Operating cash flows used $12.0 million in H1 2021, investing activities used $17.4 million, and financing activities provided $29.5 million, largely from ATM Offering Historical Cash Flows Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(12,030) | $4,662 | | Net cash used in investing activities | $(17,434) | $(13,233) | | Net cash provided by financing activities | $29,511 | $41,144 | - The **shift to net cash used in operating activities** in H1 2021 was **primarily due to the net loss incurred and net cash used by working capital**, partially offset by non-cash adjustments[208](index=208&type=chunk) - Investing activities continued to use cash, **primarily for purchases of property, plant, and equipment and capitalization of software development costs**, **largely in support of 5G products and services**[210](index=210&type=chunk) [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) The company does not engage in any off-balance sheet arrangements - The company **does not engage in any off-balance sheet arrangements**[212](index=212&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses market risks, primarily foreign currency exchange risk from international operations, with Ctrack South Africa divestiture expected to decrease this risk [Foreign Currency Exchange Risk](index=36&type=section&id=Foreign%20Currency%20Exchange%20Risk) Exposed to foreign currency exchange risk from South Africa and Europe operations; 23.6% of H1 2021 revenue in foreign currencies; risk expected to decrease post-Ctrack South Africa divestiture - Sales denominated in foreign currencies **constituted approximately 23.6%** of total revenue for the six months ended June 30, 2021[215](index=215&type=chunk) - A hypothetical **10%** change in foreign functional currency exchange rates **would have increased or decreased revenue by approximately $2.8 million** for H1 2021[215](index=215&type=chunk) - The company **expects its foreign exchange risk to decrease** with the completion of the Ctrack South Africa operations divestiture[215](index=215&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms effectiveness of disclosure controls and procedures as of June 30, 2021, with no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=36&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2021 - The company's disclosure controls and procedures were evaluated and **deemed effective as of June 30, 2021**[218](index=218&type=chunk) [Changes in Internal Control Over Financial Reporting](index=37&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during the three months ended June 30, 2021 - **No material changes in internal control over financial reporting occurred** during the three months ended June 30, 2021[219](index=219&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Incorporates legal proceedings discussion from Note 10, reiterating belief that outcomes will not have a material adverse effect on business - The disclosure on legal proceedings in Note 10 is **incorporated by reference**[221](index=221&type=chunk) - The company believes the **ultimate outcome of its legal actions will not have a material adverse effect** on its business, results of operations, financial condition, or cash flows[222](index=222&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors since prior SEC filings, but existing and unknown risks could still materially affect operations and financial condition - **No material changes** to risk factors have occurred since the previous Form 10-K and other SEC filings[223](index=223&type=chunk) - **Existing and additional unknown risks could materially and adversely affect** the company's results of operations, financial condition, or prospects[223](index=223&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to report - **No information to report** for unregistered sales of equity securities and use of proceeds[224](index=224&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities to report - **No information to report** for defaults upon senior securities[225](index=225&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are **not applicable**[226](index=226&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) No other information to report - **No other information to report**[227](index=227&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed as part of the Form 10-Q, including various agreements, certificates of incorporation, and certifications - The **exhibits include** the Share Purchase Agreement for Ctrack South Africa, Amended and Restated Certificate of Incorporation, and certifications by the Principal Executive Officer and Principal Financial Officer[229](index=229&type=chunk) SIGNATURES Contains signatures of CEO and Principal Financial Officer, certifying the Form 10-Q report - The report is **signed by** Dan Mondor, Chief Executive Officer, and Wei Ding, Vice President & Corporate Controller (Principal Financial Officer)[232](index=232&type=chunk)