insg-20210804
0001022652false00010226522020-11-052020-11-0500010226522021-02-282021-03-010001022652us-gaap:CommonClassAMember2020-11-052020-11-050001022652insg:PreferredStockPurchaseRightsMember2020-11-052020-11-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________

FORM 8-K
____________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 4, 2021
____________________
INSEEGO CORP.
(Exact Name of Registrant as Specified in its Charter)
____________________
Delaware001-3835881-3377646
(State or other jurisdiction
of incorporation)
(Commission file number)
(I.R.S. Employer
identification number)
12600 Deerfield Parkway, Suite 100
Alpharetta, Georgia 30004
(Address of principal executive offices) (Zip Code)
(858) 812-3400
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareINSGNasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
        Emerging growth company    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 



Item 2.02.    Results of Operations and Financial Condition.
The information in “Item 2.02 Results of Operations and Financial Condition” of this Current Report on Form 8-K and in Exhibit 99.1, attached hereto, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. It may be incorporated by reference in a filing under the Exchange Act or the Securities Act of 1933, as amended, only if such subsequent filing specifically references such disclosure in this Form 8-K.
On August 4, 2021, Inseego Corp. issued a press release containing preliminary financial results for the quarter ended June 30, 2021.
Item 9.01.    Financial Statements and Exhibits.
(d)    Exhibits.
99.1    Press release, dated August 4, 2021, containing Inseego Corp. preliminary financial results for the quarter ended June 30, 2021.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 4, 2021
Inseego Corp.
By:/s/ Wei Ding
Wei Ding
Vice President & Corporate Controller

Document

Exhibit 99.1
https://cdn.kscope.io/d256883b32fb3c3ab65d45150a7ba222-inseegologoa24.jpg

Inseego Reports Second Quarter 2021 Financial Results
Significant 5G revenue growth of 182% year-over-year
New generation 5G and cloud solutions reflect 49% of total revenue
Completion of Ctrack South Africa divestiture
SAN DIEGO—August 4, 2021—Inseego Corp. (Nasdaq: INSG) (the “Company”), a leader in 5G and intelligent IoT device-to-cloud solutions, today reported its results for the second quarter ended June 30, 2021. The Company reported second quarter net revenue of $65.7 million, GAAP operating loss of $10.5 million, GAAP net loss of $13.9 million, GAAP net loss of $0.14 per share, negative adjusted EBITDA of $0.1 million, and non-GAAP net loss of $0.08 per share. Cash and cash equivalents at quarter end was $40.4 million, including restricted cash as well as cash and cash equivalents classified as held-for-sale.
"Inseego delivered a very strong second quarter with revenue up 14% sequentially to $65.7 million, well ahead of consensus," said Dan Mondor, chairman and CEO of Inseego Corp. "The strength in the second quarter was driven by continued growth in the sell-through of our suite of 5G hardware and software solutions, now representing almost 29% of total revenue, an increase of 182% over the second quarter of last year.  This remarkable growth reflects the growing customer adoption of Inseego’s 5G carrier and enterprise solutions.”
Corporate Highlights
Q2 revenue of $65.7 million, up 14.1% sequentially
Cash balance of $40.4 million, including restricted cash as well as cash classified as held-for-sale
GAAP Q2 gross margin was 31.0%, up 3.7% year-over-year, and Non-GAAP Q2 gross margin was 32.1%, up 3.4% year-over-year
Completed sale of Ctrack South Africa with net proceeds of $36.6 million, subsequent to the quarter end
Ashish Sharma promoted to President, Inseego Corp.
Stephanie Bowers appointed to the Board of Directors
Business Highlights
5G revenue up 182% year-over-year
Cloud software revenue up 49% year-over-year and subscriptions up 139% year-over-year
Significant expansion of 5G fixed wireless enterprise opportunity pipeline with Fortune 1000 companies through global channel and carrier partners
Multiple 5G fixed wireless access (FWA) products certified by T-Mobile and Verizon
Increased uptake of Inseego 5G solutions with global mobile network operators

“Our transformation into a 5G solutions and software company has improved our overall margin profile and we approached EBITDA break-even in the quarter,” said Bob Barbieri, interim CFO for Inseego. “We have seen a significant expansion of our sales pipeline with carriers and enterprises following the launch of our FWA products, and as a result, remain confident to reiterate the second half of the year will be stronger than the first half.  In addition, we expect to see IoT & Mobile grow sequentially for the rest of the fiscal year.”

Conference Call Information

Inseego will host a conference call and live webcast for analysts and investors today at 5:00 p.m. ET. A Q&A session with analysts will be held live directly after the prepared remarks. To access the conference call:

Online, visit http://investor.inseego.com

Phone-only participants can pre-register by navigating to https://dpregister.com/sreg/10156627/e8a619caf7

Those without internet access or unable to pre-register may dial-in by calling:
1




In the United States, call 1-844-763-8274

International parties can access the call at 1-412-717-9224

An audio replay of the conference call will be available beginning one hour after the call through August 18, 2021. To hear the replay, parties in the United States may call 1-877-344-7529 and enter access code 10156627 followed by the # key. International parties may call 1-412-317-0088. In addition, the Inseego Corp. press release will be accessible from the Company's website before the conference call begins.

About Inseego Corp.

Inseego Corp. (Nasdaq: INSG) is an industry leader in smart device-to-cloud solutions that extend the 5G network edge, enabling broader 5G coverage, multi-gigabit data speeds, low latency and strong security to deliver highly reliable internet access. Our innovative mobile broadband, fixed wireless access (FWA) solutions, and software platform incorporate the most advanced technologies (including 5G, 4G LTE, Wi-Fi 6 and others) into a wide range of products that provide robust connectivity indoors, outdoors and in the harshest industrial environments. Designed and developed in the USA, Inseego products and SaaS solutions build on the company’s patented technologies to provide the highest quality wireless connectivity for service providers, enterprises, and government entities worldwide. www.inseego.com #Putting5GtoWork

©2021. Inseego Corp. All rights reserved. The Inseego name and logo, MiFi and Inseego Wavemaker are registered trademarks and trademarks of Inseego Corp. Other company, product or service names mentioned herein are the trademarks of their respective owners.

Cautionary Note Regarding Forward-Looking Statements

Some of the information presented in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address expected future business and financial performance and often contain words such as “may,” “estimate,” “anticipate,” “believe,” “expect,” “intend,” “plan,” “project,” “will” and similar words and phrases indicating future results. The information presented in this news release related to our future business outlook, the future demand for our products, as well as other statements that are not purely statements of historical fact, are forward-looking in nature. These forward-looking statements are made on the basis of management’s current expectations, assumptions, estimates and projections and are subject to significant risks and uncertainties that could cause actual results to differ materially from those anticipated in such forward-looking statements. We therefore cannot guarantee future results, performance or achievements. Actual results could differ materially from our expectations.

Factors that could cause actual results to differ materially from the Company’s expectations include: (1) the future demand for wireless broadband access to data and asset management software and services; (2) the growth of wireless wide-area networking and asset management software and services; (3) customer and end-user acceptance of the Company’s current product and service offerings and market demand for the Company’s anticipated new product and service offerings; (4) increased competition and pricing pressure from participants in the markets in which the Company is engaged; (5) dependence on third-party manufacturers and key component suppliers worldwide; (6) the impact that new or adjusted tariffs may have on the cost of components or our products, and our ability to sell products internationally; (7) the impact of fluctuations of foreign currency exchange rates; (8) the impact of geopolitical instability on our ability to source components and manufacture our products; (9) unexpected liabilities or expenses; (10) the Company’s ability to introduce new products and services in a timely manner, including the ability to develop and launch 5G products at the speed and functionality required by our customers; (11) litigation, regulatory and IP developments related to our products or components of our products; (12) dependence on a small number of customers for a significant portion of the Company’s revenues; (13) the Company’s ability to raise additional financing when the Company requires capital for operations or to satisfy corporate obligations; (14) the Company’s plans and expectations relating to acquisitions, divestitures, strategic relationships, international expansion, software and hardware developments, personnel matters, and cost containment initiatives, including restructuring activities and the timing of their implementations; (15) the global semiconductor shortage and any related price increases or supply chain disruptions, and (16) the potential impact of COVID-19 on the business.

These factors, as well as other factors set forth as risk factors or otherwise described in the reports filed by the Company with the SEC (available at www.sec.gov), could cause actual results to differ materially from those expressed in the Company’s forward-looking statements. The Company assumes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future, except as otherwise required pursuant to applicable law and our on-going reporting obligations under the Securities Exchange Act of 1934, as amended.

Non-GAAP Financial Measures
2




Inseego Corp. has provided financial information in this news release that has not been prepared in accordance with GAAP. Adjusted EBITDA, non-GAAP net loss, non-GAAP net loss per share and non-GAAP operating costs and expenses exclude share-based compensation expense, amortization of intangible assets purchased through acquisitions, amortization of discount and issuance costs related to the Company’s convertible senior notes, loss on debt conversion and extinguishment relating to convertible senior notes, and fair value adjustments on derivative instruments. Adjusted EBITDA also excludes interest, taxes, depreciation and amortization (unrelated to acquisitions, the convertible senior notes), transaction costs incurred in connection with Ctrack South Africa divestiture, and foreign currency transaction gains and losses.

Adjusted EBITDA, non-GAAP net loss, non-GAAP net loss per share and non-GAAP operating costs and expenses are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. These non-GAAP financial measures have limitations as an analytical tool and are not intended to be used in isolation or as a substitute for operating expenses, net loss, net loss per share or any other performance measure determined in accordance with GAAP. We present these non-GAAP financial measures because we consider each to be an important supplemental measure of our performance.

Management uses these non-GAAP financial measures to make operational decisions, evaluate the Company’s performance, prepare forecasts and determine compensation. Further, management believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance when planning, forecasting and analyzing future periods. Share-based compensation expenses are expected to vary depending on the number of new incentive award grants issued to both current and new employees, the number of such grants forfeited by former employees, and changes in the Company’s stock price, stock market volatility, expected option term and risk-free interest rates, all of which are difficult to estimate. In calculating non-GAAP financial measures, management excludes certain non-cash and one-time items in order to facilitate comparability of the Company’s operating performance on a period-to-period basis because such expenses are not, in management’s view, related to the Company’s ongoing operating performance. Management uses this view of the Company’s operating performance for purposes of comparison with its business plan and individual operating budgets and in the allocation of resources.

The Company further believes that these non-GAAP financial measures are useful to investors in providing greater transparency to the information used by management in its operational decision-making. The Company believes that the use of these non-GAAP financial measures also facilitates a comparison of our underlying operating performance with that of other companies in our industry, which use similar non-GAAP financial measures to supplement their GAAP results.
In the future, the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items in the presentation of our non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. The limitations of relying on non-GAAP financial measures include, but are not limited to, the fact that other companies, including other companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting their usefulness as a comparative tool.

Investors and potential investors are encouraged to review the reconciliation of our non-GAAP financial measures contained within this news release with our GAAP financial results.





Inseego Corp.
Media Contact:
Anette Gaven
+1 (619) 993-3058
Anette.Gaven@inseego.com
or
Investor Relations Contact:
Joo-Hun Kim
MKR Group
+1 (212) 868-6760
joohunkim@mkrir.com



3





4



INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Net revenues:
IoT & Mobile Solutions$51,836 $69,314 $94,795 $111,729 
Enterprise SaaS Solutions13,857 11,375 28,495 25,800 
Total net revenues65,693 80,689 123,290 137,529 
Cost of net revenues:
IoT & Mobile Solutions39,740 54,240 73,178 88,279 
Enterprise SaaS Solutions5,604 4,449 11,288 10,023 
Total cost of net revenues45,344 58,689 84,466 98,302 
Gross profit20,349 22,000 38,824 39,227 
Operating costs and expenses:
Research and development11,773 10,540 26,328 18,764 
Sales and marketing9,821 8,648 20,825 17,403 
General and administrative7,414 7,396 16,058 14,558 
Amortization of purchased intangible assets664 753 1,130 1,579 
Impairment of capitalized software1,197 — 1,197 — 
Total operating costs and expenses30,869 27,337 65,538 52,304 
Operating loss(10,520)(5,337)(26,714)(13,077)
Other income (expense):
Loss on debt conversion and extinguishment, net— (67,241)(432)(75,174)
Interest expense, net(1,678)(3,160)(3,523)(6,540)
Other income (expense), net(617)787 1,117 1,765 
Loss before income taxes(12,815)(74,951)(29,552)(93,026)
Income tax provision (benefit)228 (115)449 (24)
Net loss(13,043)(74,836)(30,001)(93,002)
Less: Net loss (income) attributable to noncontrolling interests — (214)(26)
Net loss attributable to Inseego Corp. (13,043)(74,830)(30,215)(93,028)
Series E preferred stock dividends(886)(835)(1,753)(1,227)
Net loss attributable to common stockholders $(13,929)$(75,665)$(31,968)$(94,255)
Per share data:
Net loss per common share:
Basic and diluted$(0.14)$(0.78)$(0.31)$(1.01)
Weighted-average shares used in computation of net loss per common share:
Basic and diluted102,935,213 96,487,344 102,157,146 93,680,846 
5



INSEEGO CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 June 30,
2021
December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents$30,841 $40,015 
Accounts receivable, net19,983 29,940 
Inventories27,544 33,952 
Assets held for sale142,450 — 
Prepaid expenses and other8,088 10,201 
Total current assets128,906 114,108 
Restricted cash3,693 — 
Property, plant and equipment, net 9,330 13,699 
Rental assets, net4,761 6,109 
Intangible assets, net 47,192 51,487 
Goodwill22,175 32,511 
Right-of-use assets, net8,294 9,092 
Other assets389 388 
Total assets$224,740 $227,394 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable$31,182 $52,339 
Accrued expenses and other current liabilities22,874 23,373 
Liabilities related to assets held for sale1
11,132 — 
Total current liabilities65,188 75,712 
Long-term liabilities:
2025 Notes, net159,120 165,147 
Deferred tax liabilities, net888 4,505 
Other long-term liabilities8,450 9,929 
Total liabilities233,646 255,293 
Stockholders’ deficit:
Preferred stock— — 
Common stock
103 99 
Additional paid-in capital761,412 711,487 
Accumulated other comprehensive loss(6,279)(6,972)
Accumulated deficit(764,150)(732,422)
Total stockholders’ deficit attributable to Inseego Corp.(8,914)(27,808)
Noncontrolling interests(91)
Total stockholders’ deficit(8,906)(27,899)
Total liabilities and stockholders’ deficit$224,740 $227,394 
1 Assets and liabilities held for sale relate to the expected sale of our Ctrack South Africa operations.
6



INSEEGO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Cash flows from operating activities:
Net loss$(13,043)$(74,836)$(30,001)$(93,002)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization6,821 5,192 13,051 9,692 
Provision for bad debts, net of recoveries165 59 266 74 
Provision for excess and obsolete inventory669 147 496 180 
Share-based compensation expense2,307 4,428 11,405 5,981 
Amortization of debt discount and debt issuance costs372 1,548 746 3,245 
Fair value adjustment on derivative instrument128 (826)(1,823)(826)
Impairment of capitalized software1,197 — 1,197 — 
Loss on debt conversion and extinguishment, net— 67,241 432 75,174 
Deferred income taxes(288)38 10 
Other(66)672 553 158 
Changes in assets and liabilities:
Accounts receivable3,815 (12,908)6,483 (21,498)
Inventories4,580 (6,151)(834)2,725 
Prepaid expenses and other assets(40)(4,315)1,158 (5,298)
Accounts payable(14,079)20,413 (16,015)22,334 
Accrued expenses, income taxes, and other(5,543)3,662 818 5,713 
Net cash (used in) provided by operating activities(13,005)4,334 (12,030)4,662 
Cash flows from investing activities:
Acquisition of noncontrolling interest11 — (116)— 
Purchases of property, plant and equipment(1,142)(2,264)(2,455)(2,831)
Proceeds from the sale of property, plant and equipment485 72 506 235 
Additions to capitalized software development costs and purchases of intangible assets(7,392)(6,184)(15,369)(10,637)
Net cash used in investing activities(8,038)(8,376)(17,434)(13,233)
Cash flows from financing activities:
Gross proceeds from the issuance of 2025 Notes— 100,000 — 100,000 
Payment of issuance costs related to 2025 Notes— (2,544)— (2,544)
Payoff of term loan and related extinguishment costs— (48,830)— (48,830)
Cash paid to investors in private exchange transactions— (32,062)— (32,062)
Gross proceeds received from issuance of Series E preferred stock— — — 25,000 
Repurchase of Series E preferred stock— (2,354)— (2,354)
Proceeds from the exercise of warrants to purchase common stock— — 1,861 
Net borrowing of bank and overdraft facilities35 (30)295 104 
Principal payments under finance lease obligations(936)(805)(2,173)(1,462)
Proceeds from a public offering, net of issuance costs(59)— 29,369 — 
Proceeds from stock option exercises and employee stock purchase plan, net of taxes paid on vested restricted stock units924 1,455 2,020 1,431 
Net cash (used in) provided by financing activities(36)14,830 29,511 41,144 
Effect of exchange rates on cash1,912 771 321 (2,547)
Net increase in cash, cash equivalents and restricted cash(19,167)11,559 368 30,026 
Cash, cash equivalents and restricted cash, beginning of period59,550 30,541 40,015 12,074 
Cash, and cash equivalents, end of period$40,383 $42,100 $40,383 $42,100 
7



INSEEGO CORP.
Reconciliation of GAAP Net Loss Attributable to Common Shareholders to Non-GAAP Net Loss
(In thousands, except per share data)
(Unaudited)
Three Months Ended
June 30, 2021
Six Months Ended
June 30, 2021
Net LossNet Loss Per ShareNet LossNet Loss Per Share
GAAP net loss attributable to common shareholders$(13,929)$(0.14)$(31,968)$(0.31)
Adjustments:
Preferred stock dividends(a)
886 0.01 1,753 0.02 
Net income attributable to noncontrolling interests(b)
— — 214 — 
Share-based compensation expense(c)
2,307 0.02 11,405 0.10 
Purchased intangibles amortization(d)
1,151 0.01 2,103 0.02 
Debt discount and issuance costs amortization (e)
372 0.01 746 0.01 
Non-recurring costs (f)
396 0.01 761 0.01 
Fair value adjustment on derivative instrument(g)
128 — (1,823)(0.02)
Loss on debt conversion and extinguishment (e)
— — 432 0.01 
Non-GAAP net loss$(8,689)$(0.08)$(16,377)$(0.16)

(a)     Includes accrued dividends on Series E Preferred Stock.
(b)    Includes net income attributable to noncontrolling interests at Ctrack South Africa.
(c)    Includes share-based compensation expense recorded under ASC Topic 718.
(d)    Includes amortization of intangible assets purchased through acquisitions.
(e)    Includes the debt discount and issuance costs amortization related to the 2025 Notes.
(f) Includes transaction costs related to the sale of Ctrack South Africa and non-recurring legal expenses.
(g) Includes the fair value adjustment related to the Company’s interest make-whole derivative instrument.
(h) Includes the loss on debt conversion and extinguishment of the 2025 Notes.




See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

8



INSEEGO CORP.
Reconciliation of GAAP Operating Costs and Expenses to Non-GAAP Operating Costs and Expenses
Three Months Ended June 30, 2021
(In thousands)
(Unaudited)
GAAP
Share-based compensation expense
(a)
Purchased intangibles amortization
(b)
Non-recurring costs
(c)
Non-GAAP
Cost of net revenues
$45,344 $235 $487 $— $44,622 
Operating costs and expenses:
Research and development
11,773 535 — — 11,238 
Sales and marketing
9,821 558 — — 9,263 
General and administrative
7,414 979 — 150 6,285 
Amortization of purchased intangible assets
664 — 664 — — 
Impairment of purchased intangible assets
1,197 — — — 1,197 
Total operating costs and expenses
$30,869 $2,072 $664 $150 $27,983 
Total
$2,307 $1,151 $150 
(a)    Includes share-based compensation expense recorded under ASC Topic 718.
(b)    Includes amortization of intangible assets purchased through acquisitions.
(c) Includes non-recurring legal settlement costs.





See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.



9



INSEEGO CORP.
Reconciliation of GAAP Operating Costs and Expenses to Non-GAAP Operating Costs and Expenses
Six Months Ended June 30, 2021
(In thousands)
(Unaudited)
GAAP
Share-based compensation expense
(a)
Purchased intangibles amortization
(b)
Non-recurring costs
(c)
Non-GAAP
Cost of net revenues
$84,466 $1,812 $973 $— $81,681 
Operating costs and expenses:
Research and development
26,328 3,763 — — 22,565 
Sales and marketing
20,825 2,547 — — 18,278 
General and administrative
16,058 3,283 — 150 12,625 
Amortization of purchased intangible assets
1,130 — 1,130 — — 
Impairment of purchased intangible assets
1,197 — — — 1,197 
Total operating costs and expenses
$65,538 $9,593 $1,130 $150 $54,665 
Total
$11,405 $2,103 $150 
(a)    Includes share-based compensation expense recorded under ASC Topic 718.
(b)    Includes amortization of intangible assets purchased through acquisitions.
(c) Includes non-recurring legal settlement costs.




10






See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.


INSEEGO CORP.
Reconciliation of GAAP Net Loss Attributable to Common Shareholders to Adjusted EBITDA
(In thousands)
(Unaudited)
Three Months Ended
June 30, 2021
Six Months Ended June 30, 2021
GAAP net loss attributable to common shareholders$(13,929)$(31,968)
Preferred stock dividends(a)
886 1,753 
Income tax provision(b)
228 449 
Net income attributable to noncontrolling interests(c)
— (214)
Depreciation and amortization(d)
6,821 13,051 
Share-based compensation expense(e)
2,307 11,405 
Non-recurring costs(f)
1,341 1,767 
Loss on debt conversion and extinguishment(g)— 432 
Interest expense, net(h)
1,678 3,523 
Other expense (income), net(i)
617 (1,117)
Adjusted EBITDA
$(51)$(919)

(a)    Includes accrued dividends on Series E Preferred Stock.
(b)    Includes the provision for income taxes.
(c)    Includes net income attributable to non-controlling interests at Ctrack South Africa.
(d)     Includes depreciation and amortization charges, including amortization of intangible assets purchased through acquisitions.
(e) Includes share-based compensation expense recorded under ASC Topic 718.
(f)    Includes impairment of capitalized software and non-recurring legal expenses.
(g)    Includes the loss on debt conversion and extinguishment of the 2025 Notes.
(h)    Includes interest expense including debt discount and issuance costs amortization related to the 2025 Notes.
(i)    Includes the transaction costs related to the sale of Ctrack South Africa, fair value adjustment related to the Company's interest make-whole derivative instrument, and foreign currency transaction gains and losses.




See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

11



INSEEGO CORP.
Quarterly Net Revenues by Product Grouping
(In thousands)
(Unaudited)
Three Months Ended
 June 30, 2021March 31, 2021December 31, 2020September 30, 2020June 30, 2020
IoT & Mobile Solutions (a)
$51,836 $42,959 $72,098 $77,342 $69,314 
Enterprise SaaS Solutions13,857 14,638 13,965 12,898 11,375 
Total net revenues$65,693 $57,597 $86,063 $90,240 $80,689 

(a)    Effective in the third quarter ended on September 30, 2020, IoT & Mobile Solutions now includes the Company’s Device Management System revenue stream, rebranded as Inseego Subscribe™, and all prior period balances have been reclassified from Enterprise SaaS Solutions.
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