Inseego (INSG) - 2025 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements of Inseego Corp. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations and comprehensive loss, stockholders' deficit, and cash flows, along with detailed notes explaining significant accounting policies, discontinued operations, debt, share-based compensation, and other financial details Condensed Consolidated Balance Sheets (Unaudited) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Cash and cash equivalents | $13,221 | $39,596 | | Accounts receivable, net | $24,070 | $13,803 | | Inventories | $15,045 | $13,575 | | Total current assets | $56,183 | $72,900 | | Total assets | $83,072 | $99,999 | | Total current liabilities | $46,242 | $63,471 | | Total liabilities | $93,568 | $112,857 | | Total stockholders' deficit | $(10,496) | $(12,858) | Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) Condensed Consolidated Statements of Operations and Comprehensive Loss Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Total revenues | $40,223 | $51,620 | $71,896 | $89,125 | | Gross profit | $16,515 | $18,809 | $31,498 | $32,053 | | Operating income (loss) | $1,280 | $1,854 | $856 | $(1,091) | | Net income (loss) | $507 | $624 | $(1,063) | $(3,831) | | Net income (loss) attributable to common stockholders | $(376) | $(184) | $(2,810) | $(5,429) | | Basic and diluted earnings (loss) per share | $(0.03) | $(0.02) | $(0.19) | $(0.46) | Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) Condensed Consolidated Statements of Stockholders' Deficit Highlights (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Additional Paid-in Capital | $897,591 | $816,002 | | Accumulated Deficit | $(908,435) | $(912,357) | | Total Stockholders' Deficit | $(10,496) | $(101,763) | | Net income (loss) | $507 | $624 | | Share-based compensation | $1,654 | $869 | | Preferred stock dividends | $(883) | $(808) | Condensed Consolidated Statements of Cash Flows (Unaudited) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in (provided by) operating activities | $(7,936) | $32,889 | | Net cash used in investing activities | $(3,881) | $(2,376) | | Net cash used in (provided by) financing activities | $(14,677) | $9,970 | | Net decrease (increase) in cash and cash equivalents | $(26,375) | $40,274 | | Cash and cash equivalents, end of period | $13,221 | $42,683 | Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1. Nature of Business and Significant Accounting Policies This note outlines the basis of presentation for the unaudited condensed consolidated financial statements, confirming adherence to GAAP and SEC rules, detailing the divestiture of the Telematics Business, its classification as discontinued operations, and the impact of a 1-for-10 reverse stock split on January 24, 2024, with the Company operating as one reportable segment - Divestiture of Telematics Business completed on November 27, 2024, for $52.0 million cash, classified as discontinued operations[20][21] - A 1-for-10 reverse stock split was completed on January 24, 2024, with all common share and per-share amounts retroactively restated[29][30] - The Company operates as one reportable segment, with the CEO serving as the Chief Operating Decision Maker (CODM) since February 2025[31] Note 2. Discontinued Operations and Held for Sale This note provides detailed financial results for the Telematics Business, which was sold on November 27, 2024, and is reported as discontinued operations, with no revenues or gross profit from discontinued operations for the six months ended June 30, 2025, but a net loss of $(400) thousand due to income tax provisions related to deregistration - The sale of the Telematics Business was completed on November 27, 2024[35] Income (Loss) from Discontinued Operations, Net of Tax (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Services and other revenues | $— | $7,529 | $— | $15,033 | | Gross profit from discontinued operations | $— | $4,231 | $— | $8,379 | | Operating income from discontinued operations | $— | $495 | $— | $1,754 | | Income (loss) from discontinued operations, net of tax | $— | $545 | $(400) | $1,606 | Note 3. Financial Statement Details This note provides a breakdown of key balance sheet accounts, including inventories, prepaid expenses and other, accrued expenses and other current liabilities, and other long-term liabilities, highlighting changes between June 30, 2025, and December 31, 2024 Inventories (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Finished goods | $15,045 | $13,531 | | Raw materials and components | $— | $44 | | Total inventories | $15,045 | $13,575 | Prepaid Expenses and Other (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Rebate receivables | $1,470 | $3,495 | | Software licenses | $1,227 | $1,034 | | Other | $1,150 | $1,397 | | Total prepaid expenses and other | $3,847 | $5,926 | Accrued Expenses and Other Current Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Deferred revenue | $8,890 | $9,245 | | Payroll and related expenses | $4,631 | $7,997 | | Accrued contract manufacturing liabilities | $4,527 | $4,772 | | Operating lease liabilities | $1,433 | $1,346 | | Royalties | $627 | $954 | | Accrued interest | $899 | $926 | | Other | $2,831 | $4,893 | | Total accrued expenses and other current liabilities | $23,838 | $30,1