Company pays-down $9.5 million, or 49%, of
short-term loan to further reduce debt and improve Balance Sheet;
Company also signs agreement to exchange additional $5 million of
Convertible Notes into long-term debt and equity
Inseego Corp. (Nasdaq: INSG) (the “Company” or “Inseego”), a
technology leader in 5G mobile and fixed wireless solutions for
mobile network operators, Fortune 500 enterprises, and SMBs, is
continuing to improve its capital structure and reduce its total
debt. Today, Inseego announced that it has (i) voluntarily
paid-down an aggregate of $9.5 million, or approximately 49%, of
the Company’s outstanding short-term loan, and (ii) entered into a
binding agreement (the “Exchange Term Sheet”) with another holder
of $5 million in principal amount of the Company’s outstanding
3.25% convertible notes due 2025 (the “2025 Convertible Notes”) to
exchange the 2025 Convertible Notes into long-term debt and
equity.
“We’re executing on our commitment to reduce our total debt and
improve our capital structure,” said Inseego Chief Financial
Officer, Steven Gatoff. “The business is generating strong cash
flow and with the improved liquidity, we’re glad to be able to pay
down total debt. The Company continues to engage with convertible
bondholders and right-size the capital structure through these
exchanges.”
The Company has also voluntarily prepaid, at no premium, an
aggregate of $9.5 million to-date of the Company’s obligations
under the Loan and Security Agreement, dated June 28, 2024 (the
“Loan Agreement”), among the Company, South Ocean Funding, LLC
(“South Ocean,” an affiliate of Tavistock Group), certain
participant lenders (the “Participating Lenders”) and certain
subsidiaries of the Company. As a result of these repayments, the
amount outstanding under the Loan Agreement has been reduced to $10
million.
Pursuant to the Exchange Term Sheet, the convertible note holder
agreed to exchange its 2025 Convertible Notes for (i) $4.25 million
in principal amount of new long-term senior secured notes (the “New
Notes”), and (ii) warrants (the “Exchange Warrants”) to purchase an
aggregate of 370,000 shares of the Company’s common stock.
The New Notes and the Exchange Warrants to be issued pursuant to
the Exchange Term Sheet will be the same as the new long-term
senior secured notes and warrants, respectively, to be issued
pursuant to the separate binding exchange term sheets previously
entered into between the Company and certain other holders of 2025
Convertible Notes, as described in the current report filed by the
Company on July 1, 2024, except that the exercise price of the
Exchange Warrants will be $13.77. The Exchange Term Sheet expires
on December 31, 2024, and it is anticipated that the transactions
contemplated by the Exchange Term Sheet will be consummated by that
time.
To date, the Company has repurchased or entered into binding
agreements to repurchase and/or exchange approximately $147
million, or 91%, of face value of the outstanding 2025 Convertible
Notes. As a result, the remaining balance of the 2025 Convertible
Notes that are not subject to an exchange agreement is
approximately $14.9 million, which the Company expects to repay or
refinance by May 2025.
As previously disclosed, affiliates of South Ocean and North
Sound Ventures, LP, one of the Participating Lenders, may be deemed
to beneficially own more than 5% of the Company’s outstanding
Common Stock, and Philip Brace, the Company’s Executive Chairman,
is the other Participating Lender. James B. Avery, a member of the
Company’s Board of Directors, currently serves as Senior Managing
Director of Tavistock Group, an affiliate of Lender.
About Inseego Corp.
Inseego Corp. (Nasdaq: INSG) is the industry leader in 5G
Enterprise cloud WAN solutions, with millions of end customers and
thousands of enterprise and SMB customers on its 4G, 5G, and cloud
platforms. Inseego's 5G Edge Cloud combines the industry's best 5G
technology, rich cloud networking features, and intelligent edge
applications. Inseego powers new business experiences by connecting
distributed sites and workforces, securing enterprise data, and
improving business outcomes with intelligent operational
visibility---all over a 5G network. For more information on
Inseego, visit www.inseego.com #Putting5GtoWork
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
the planned exchange of a portion of our 2025 Convertible Notes and
other statements that are not purely historical facts are
forward-looking. These forward-looking statements are based on
management’s current expectations, assumptions, estimates, and
projections. They are subject to significant risks and
uncertainties that could cause 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 Company’s ability
to negotiate, execute and complete exchange transactions with
respect to its convertible notes, (2) the Company’s ability to make
payments on or to refinance its indebtedness; (3) the Company’s
dependence on a small number of customers for a substantial portion
of our revenues; (4) the future demand for wireless broadband
access to data and asset management software and services and our
ability to accurately forecast; (5) the growth of wireless
wide-area networking and asset management software and services;
(6) 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; (7) our ability to
develop sales channels and to onboard channel partners; (8)
increased competition and pricing pressure from participants in the
markets in which the Company is engaged; (9) dependence on
third-party manufacturers and key component suppliers worldwide;
(10) the impact of fluctuations of foreign currency exchange rates;
(11) the impact of supply chain challenges on our ability to source
components and manufacture our products; (12) unexpected
liabilities or expenses; (13) 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; (14) litigation, regulatory and IP
developments related to our products or components of our products;
(15) the Company’s ability to raise additional financing when the
Company requires capital for operations or to satisfy corporate
obligations; (16) 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; (17) the global
semiconductor shortage and any related price increases or supply
chain disruptions, (18) the potential impact of COVID-19 or other
global public health emergencies on the business, (19) the impact
of high rates of inflation and rising interest rates, and (20) the
impact of geopolitical instability on our 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 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, even if new
information becomes available or other events occur in the future,
except as otherwise required under applicable law and our ongoing
reporting obligations under the Securities Exchange Act of 1934, as
amended.
©2024. Inseego Corp. All rights reserved. Inseego is a trademark
of Inseego Corp. Other Company, product, or service names mentioned
herein are the trademarks of their respective owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20240911809046/en/
Inseego Corp. Jodi Ellis pr@inseego.com
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