EX-99.1 2 inseego_ex9901.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Exhibit 99.1

 

Unaudited Pro Forma Condensed Consolidated Financial Information

 

On September 16, 2024, Inseego Corp. (the “Company”) and its subsidiary Inseego SA (Pty) Ltd (“Seller”) entered into a Share Purchase Agreement (the “Purchase Agreement”) with Light Sabre SPV Limited (which subsequently novated its benefits and obligations under the Purchase Agreement to Ctrack Holdings (the “Purchaser”)), pursuant to which they agreed to sell its fleet management and telematics solutions business of Inseego, which has operations in the United Kingdom, the European Union, Australia and New Zealand (the “Telematics Business”), to the Purchaser (the “Disposition”). On November 27, 2024, the Company completed the Disposition, which constituted a significant disposition for purposes of Item 2.01 of Form 8-K.

 

The accompanying unaudited pro forma financial information should be read in conjunction with our historical consolidated financial statements and the accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 22, 2024, and Quarterly Report on Form 10-Q for the period ended September 30, 2024, filed with the SEC on November 13, 2024.

 

The below unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2023 and 2022 have been prepared giving effect to the Disposition as if the transaction had occurred on January 1, 2022. The pro forma consolidated statement of operations for the nine months ended September 30, 2024 is not included in this filing as the statement of comprehensive income included within the Quarterly Report on Form 10-Q for the period ended September 30, 2024, filed with the SEC on November 13, 2024, already presents the results of the Telematics Business as discontinued operations, and therefore reflects the impact of the transaction for the period. The below unaudited pro forma condensed consolidated balance sheet gives effect to the Disposition as if the transaction had occurred on September 30, 2024.

 

The unaudited pro forma condensed consolidated financial statements are prepared in accordance with Article 11 of Regulation S-X. The pro forma adjustments are described in the accompanying notes and are based upon information and assumptions available at the time of the filing of this report on Form 8-K.

 

The unaudited pro forma financial information is based on financial statements prepared in accordance with U.S. generally accepted accounting principles, which are subject to change and interpretation. The unaudited pro forma condensed consolidated financial statements were based on and derived from our historical consolidated financial statements, adjusted for those amounts which were determined to be directly attributable to the Disposition, factually supportable, and with respect to the unaudited pro forma condensed consolidated statements of operations, expected to have a continuing impact on our consolidated results. Actual adjustments, however, may differ materially from the information presented. Pro forma adjustments do not include allocations of corporate costs, as those are not directly attributable to the Disposition. In addition, the unaudited pro forma financial information is based upon available information and assumptions that management considers to be reasonable, and such assumptions have been made solely for purposes of developing such unaudited pro forma financial information for illustrative purposes in compliance with the disclosure requirements of the SEC. The unaudited pro forma financial information is not necessarily indicative of what the financial position or income statement results would have actually been had the Disposition occurred on the dates indicated. To note, the unaudited pro forma consolidated statement of operations included within does not include any adjustment to hypothetically reduce interest expense as the use of proceeds as of a hypothetical disposition date of January 1, 2022 is unknown. As a result of the factors above, these unaudited pro forma condensed consolidated financial statements should not be considered to be indicative of our future consolidated financial performance or results.

 

 

 

 

 

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INSEEGO CORP.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2023

(In thousands, except share and per share data)

 

   As Reported   Pro Forma
Adjustments		   Pro Forma
Inseego		 
   (a)   (e)   Corp. 
Revenues:               
Mobile solutions  $80,498   $–   $80,498 
Fixed wireless access solutions   54,900    –    54,900 
Product revenues   135,398    –    135,398 
Services and other   60,290    28,402    31,888 
Total revenues   195,688    28,402    167,286 
Cost of revenues:               
Product   127,157    –    127,157 
Services and other   16,077    11,724    4,353 
Total cost of revenues   143,234    11,724    131,510 
Gross profit   52,454    16,678    35,776 
Operating costs and expenses:               
Research and development   21,513    1,788    19,725 
Sales and marketing   21,504    4,872    16,632 
General and administrative   20,721    4,868    15,853 
Depreciation and amortization   19,759    1,351    18,408 
Impairment of capitalized software   5,239    4,124    1,115 
Total operating costs and expenses   88,736    17,003    71,733 
Operating loss   (36,282)   (325)   (35,957)
Other income (expense):               
Interest (expense) income, net   (9,072)   14    (9,086)
Other income (expense), net   54    (16)   70 
Loss before income taxes   (45,300)   (327)   (44,973)
Income tax provision   885    842    43 
Net loss   (46,185)   (1,169)   (45,016)
Series E preferred stock dividends and deemed dividends   (2,991)   –    (2,991)
Net loss attributable to common stockholders  $(49,176)  $(1,169)  $(48,007)
Per share data:               
Net loss per common share:               
Basic and diluted  $(4.32)       $(4.22)
Weighted-average shares used in computation of net loss per common share:               
Basic and diluted   11,372,069         11,372,069 

 

 

 

 

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INSEEGO CORP.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2022

(In thousands, except share and per share data)

 

   As Reported   Pro Forma
Adjustments		   Pro Forma
Inseego		 
   (a)   (e)   Corp. 
Revenues:               
Mobile solutions  $143,524   $–   $143,524 
Fixed wireless access solutions   43,602    –    43,602 
Product revenues   187,126    –    187,126 
Services and other   58,197    26,922    31,275 
Total revenues   245,323    26,922    218,401 
Cost of revenues:               
Product   161,943    –    161,943 
Services and other   16,471    12,718    3,753 
Total cost of revenues   178,414    12,718    165,696 
Gross profit   66,909    14,204    52,705 
Operating costs and expenses:               
Research and development   38,290    1,886    36,404 
Sales and marketing   32,825    6,634    26,191 
General and administrative   26,208    5,132    21,076 
Depreciation and amortization   24,490    1,390    23,100 
Impairment of capitalized software   3,014    –    3,014 
Total operating costs and expenses   124,827    15,042    109,785 
Operating loss   (57,918)   (838)   (57,080)
Other income (expense):               
Interest (expense) income, net   (8,606)   101    (8,707)
Other income (expense), net   (1,910)   (2,131)   221 
Loss before income taxes   (68,434)   (2,868)   (65,566)
Income tax provision (benefit)   (465)   (585)   120 
Net loss   (67,969)   (2,283)   (65,686)
Series E preferred stock dividends and deemed dividends   (2,736)   –    (2,736)
Net loss attributable to common stockholders  $(70,705)  $(2,283)  $(68,422)
Per share data:               
Net loss per common share:               
Basic and diluted  $(6.59)       $(6.38)
Weighted-average shares used in computation of net loss per common share:               
Basic and diluted   10,726,933         10,726,933 

 

 

 

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INSEEGO CORP.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of September 30, 2024

(In thousands)

 

   As Reported   Pro Forma   Pro Forma
Inseego		 
   (a)   Adjustments   Corp. 
ASSETS               
Current assets:               
Cash and cash equivalents  $11,972   $43,500(b)  $55,472 
Accounts receivable, net   15,612    –    15,612 
Inventories   18,118    –    18,118 
Prepaid expenses and other   3,627    –    3,627 
Current assets held for sale   35,771    (35,771)(c)   – 
Total current assets   85,100    7,729    92,829 
Property, plant and equipment, net   1,303    –    1,303 
Intangible assets, net   19,465    –    19,465 
Goodwill   3,949    –    3,949 
Operating lease right-of-use assets   3,117    –    3,117 
Other assets   456    –    456 
Total assets   113,390    7,729    121,119 
LIABILITIES AND STOCKHOLDERS’ DEFICIT               
Current liabilities:               
Accounts payable   35,457    –    35,457 
Accrued expenses and other current liabilities   31,147    –    31,147 
Short-term loan   6,000    –    6,000 
2025 Convertible Notes, net   106,250    –    106,250 
Current liabilities held for sale   10,000    (10,000)(c)   – 
Total current liabilities   188,854    (10,000)   178,854 
Long-term liabilities:               
Operating lease liabilities   2,979    –    2,979 
Deferred tax liabilities, net   121    –    121 
Other long-term liabilities   6,499    –    6,499 
Total liabilities   198,453    (10,000)   188,453 
Stockholders’ deficit:               
Preferred stock, par value $0.001   –    –    – 
Common stock, par value $0.001   13    –    13 
Additional paid-in capital   825,851    –    825,851 
Accumulated other comprehensive loss   (6,712)   –    (6,712)
Accumulated deficit   (904,215)   17,729(d)   (886,486)
Total stockholders’ deficit   (85,063)   17,729    (67,334)
Total liabilities and stockholders’ deficit  $113,390    7,729    121,119 

 

 

 

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INSEEGO CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

1. Basis of Presentation

 

The unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2023 and 2022 give effect to the Disposition as if it were completed on January 1, 2022. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2024 gives effect to the Disposition as if it were completed on September 30, 2024.

 

The pro forma financial statements have been derived from the historical consolidated financial statements of the Company. The historical consolidated financial statements have been adjusted in the pro forma financial statements to give effect to pro forma events that are (i) directly attributable to the Disposition, (ii) factually supportable and (iii) with respect to the unaudited pro forma condensed consolidated statements of operations, expected to have a continuing impact on the Company’s consolidated operating results.

 

2. Pro Forma Adjustments

 

The following is a summary of the pro forma adjustments reflected in the unaudited pro forma condensed consolidated financial statements based on preliminary estimates, which may change as additional information is obtained.

 

(a)Reflects the Company’s consolidated statement of operations for the years end December 31, 2023 and 2022, as contained in the financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 22, 2024, and the Company’s condensed consolidated balance sheet as of September 30, 2024, as contained in the financial statements presented in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2024, filed with the SEC on November 13, 2024.

 

(b)Reflects the estimated cash proceeds from the Disposition, net of estimated transaction costs and estimated current tax expense due to the recognition of taxable gain on the Disposition, as if the transaction were completed on September 30, 2024. These transaction costs have not been reflected in the unaudited pro forma condensed consolidated statements of operations as they will not have an ongoing impact on the Company.

 

(c)Reflects the acquired assets and liabilities assumed by the Purchaser in the Disposition.

 

(d)Reflects the estimated after-tax gain on the Disposition, which was calculated as follows (in thousands):

 

Estimated proceeds of the Disposition, net of transaction related fees and expenses, taxes, and working capital adjustments  $43,500 
Assets of the Telematics Business   (35,771)
Liabilities of the Telematics Business   10,000 
After-tax gain of the Disposition  $17,729 

 

(e)Reflects the elimination of revenues and expenses representing the historical results of the Telematics Businesses as a result of the Disposition.

 

 

 

 

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