☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 86-3078783 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
Atlanta, Georgia | ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common stock, $0.0001 par value per share | KORE | The New York Stock Exchange | ||
Warrants to purchase common stock | KORE WS | The New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |||
Emerging growth company | ☒ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 As of May 11, 2022, there were 76,239,989 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding. |
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- FINANCIAL INFORMATION | 2 | |||||||||
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35 | ||||||||||
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38 | ||||||||||
Item 1. | 38 | |||||||||
38 | ||||||||||
38 | ||||||||||
Item 5. | 38 | |||||||||
38 |
Item 1. | Financial Statements (Unaudited) |
March 31 2022 | December 31 2021 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets | �� | |||||||
Cash and cash equivalents | $ | 31,914 | $ | 85,976 | ||||
Accounts receivable, net of allowances for credits and doubtful accounts of $2,417 and $1,800, at March 31, 2022 and December 31, 2021, respectively | 57,073 | 51,304 | ||||||
Inventories, net | 12,069 | 15,470 | ||||||
Income taxes receivable | 1,239 | 954 | ||||||
Prepaid expenses and other receivables | 7,661 | 7,448 | ||||||
Total current assets | 109,956 | 161,152 | ||||||
Non-current assets | ||||||||
Restricted cash | 370 | 367 | ||||||
Property and equipment, net | 12,167 | 12,240 | ||||||
Intangibles assets, net | 222,759 | 203,474 | ||||||
Goodwill | 426,700 | 381,962 | ||||||
Operating lease right-of-use | 9,050 | 0 | ||||||
Other long-term assets | 401 | 407 | ||||||
Total assets | $ | 781,403 | $ | 759,602 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 19,901 | $ | 16,004 | ||||
Accrued liabilities | 11,424 | 21,502 | ||||||
Current portion of operating lease liabilities | 2,027 | 0 | ||||||
Income taxes payable | 959 | 467 | ||||||
Deferred revenue | 7,020 | 6,889 | ||||||
Current portion of long-term debt and other borrowings, net | 3,206 | 3,326 | ||||||
Total current liabilities | 44,537 | 48,188 | ||||||
Non-current liabilities | ||||||||
Deferred tax liabilities | 36,443 | 36,722 | ||||||
Warrant liability | 259 | 286 | ||||||
Non-current portion of operating lease liabilities | 7,430 | 0 | ||||||
Long-term debt and other borrowings, net | 414,026 | 399,115 | ||||||
Other long-term liabilities | 3,624 | 3,148 | ||||||
Total liabilities | $ | 506,319 | $ | 487,459 | ||||
Commitments and contingencies | ||||||||
Stockholders’ equity | ||||||||
Common stock, voting; par value $0.0001 per share; 315,000,000 shares authorized, 76,239,989 and 72,027,743 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | $ | 8 | $ | 7 | ||||
Additional paid-in capital | 427,378 | 413,646 | ||||||
Accumulated other comprehensive loss | (3,515 | ) | (3,331 | ) | ||||
Accumulated deficit | (148,787 | ) | (138,179 | ) | ||||
Total stockholders’ equity | 275,084 | 272,143 | ||||||
Total liabilities and stockholders’ equity | $ | 781,403 | $ | 759,602 | ||||
For the three months ended March 31, | ||||||||
2022 | 2021 | |||||||
Revenue | ||||||||
Services | $ | 47,506 | $ | 45,062 | ||||
Products | 21,435 | 10,235 | ||||||
Total revenue | 68,941 | 55,297 | ||||||
Cost of revenue | ||||||||
Cost of services | 17,529 | 16,211 | ||||||
Cost of products | 17,443 | 8,161 | ||||||
Total cost of revenue (exclusive of depreciation and amortization shown separately below) | 34,972 | 24,372 | ||||||
Operating expenses | ||||||||
Selling, general and administrative | 27,628 | 17,521 | ||||||
Depreciation and amortization | 13,196 | 13,114 | ||||||
Total operating expenses | 40,824 | 30,635 | ||||||
Operating income (loss) | (6,855 | ) | 290 | |||||
Interest expense, including amortization of deferred financing costs, net | 6,624 | 5,059 | ||||||
Change in fair value of warrant liability | (27 | ) | (2,424 | ) | ||||
Loss before income taxes | (13,452 | ) | (2,345 | ) | ||||
Income tax expense (benefit) | ||||||||
Current | 1,306 | 102 | ||||||
Deferred | (3,851 | ) | (1,366 | ) | ||||
Total income tax benefit | (2,545 | ) | (1,264 | ) | ||||
Net loss attributable to the Company | $ | (10,907 | ) | $ | (1,081 | ) | ||
Loss per share: | ||||||||
Basic | $ | (0.15 | ) | $ | (0.27 | ) | ||
Diluted | $ | (0.15 | ) | $ | (0.27 | ) | ||
Weighted average number of shares outstanding: | ||||||||
Basic | 74,040,261 | 31,647,131 | ||||||
Diluted | 74,040,261 | 31,647,131 |
For the three months ended | ||||||||
March 31, | ||||||||
2022 | 2021 | |||||||
Net loss | $ | (10,907 | ) | $ | (1,081 | ) | ||
Other comprehensive loss: | ||||||||
Foreign currency translation adjustment | (184 | ) | (900 | ) | ||||
Comprehensive loss | $ | (11,091 | ) | $ | (1,981 | ) | ||
June 30, 2021 (unaudited) | March 31, 2021 | |||||||
Assets | ||||||||
Total assets | $ | 0— | $ | 0— | ||||
Liabilities and Stockholder’s Equity | ||||||||
Total liabilities | $ | 0— | $ | 0— | ||||
Commitments and contingencies | 0 | 0 | ||||||
Stockholder’s equity: | ||||||||
Common stock, $0.01 par value; 1,000 shares authorized; 1,000 shares issued and outstanding as of June 30, 2021 and March 31, 2021 | 10 | 10 | ||||||
Due from stockholder | (10 | ) | (10 | ) | ||||
Total stockholder’s equity | 0— | 0— | ||||||
Total liabilities and stockholder’s equity | $ | 0— | $ | 0— | ||||
Common Stock | Additional paid-in capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||
Shares | Amount | Amount | Amount | Amount | Amount | |||||||||||||||||||
Balance at December 31, 2021 | 72,027,743 | $ | 7 | $ | 413,646 | $ | (3,331 | ) | $ | (138,179 | ) | $ | 272,143 | |||||||||||
Opening balance sheet adjustment | — | — | (11,612 | ) | — | 299 | (11,313 | ) | ||||||||||||||||
Adjusted opening balance | 72,027,743 | 7 | 402,034 | (3,331 | ) | (137,880 | ) | 260,830 | ||||||||||||||||
Foreign currency translation adjustment | — | — | — | (184 | ) | — | (184 | ) | ||||||||||||||||
Stock-based compensation | — | — | 2,050 | — | — | 2,050 | ||||||||||||||||||
Common stock issued pursuant to acquisition | 4,212,246 | 1 | 23,294 | — | — | 23,295 | ||||||||||||||||||
Net loss | — | — | — | — | (10,907 | ) | (10,907 | ) | ||||||||||||||||
Balance at March 31, 2022 | 76,239,989 | $ | 8 | $ | 427,378 | $ | (3,515 | ) | $ | (148,787 | ) | $ | 275,084 | |||||||||||
Series A Preferred Stock | Series A-1 Preferred Stock | Series B Preferred Stock | Series C Convertible Preferred Stock | Total Temporary Equity | ||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | ||||||||||||||||||||||||||||
Balance at December 31, 2020 (as previously reported) | 43 | $ | 77,562 | 60 | $ | 78,621 | 57 | $ | 90,910 | 17 | $ | 16,802 | $ | 263,895 | ||||||||||||||||||||||
Conversion of stock | 7,713 | — | 7,802 | — | 9,034 | — | 2,549 | — | — | |||||||||||||||||||||||||||
Balance at December 31, 2020, effect of reverse recapitalization | 7,756 | $ | 77,562 | 7,862 | $ | 78,621 | 9,091 | $ | 90,910 | 2,566 | $ | 16,802 | $ | 263,895 | ||||||||||||||||||||||
Accrued dividends payable | 249 | 2,486 | 267 | 2,666 | 224 | 2,241 | — | — | 7,393 | |||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Balance at March 31, 2021 | 8,005 | $ | 80,048 | 8,129 | $ | 81,287 | 9,315 | $ | 93,151 | 2,566 | $ | 16,802 | $ | 271,288 | ||||||||||||||||||||||
Common Stock | Additional paid-in capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||
Shares | Amount | Amount | Amount | Amount | Amount | |||||||||||||||||||
Balance at December 31, 2020 (as previously reported) | 218 | $ | 2 | $ | 135,617 | $ | (1,677 | ) | $ | (113,726 | ) | $ | 20,216 | |||||||||||
Conversion of stock | 30,064 | 1 | (1 | ) | — | — | — | |||||||||||||||||
Balance at December 31, 2020, effect of reverse recapitalization | 30,282 | $ | 3 | $ | 135,616 | $ | (1,677 | ) | $ | (113,726 | ) | $ | 20,216 | |||||||||||
Accrued dividends payable | — | — | (7,393 | ) | — | — | (7,393 | ) | ||||||||||||||||
Foreign currency translation adjustment | — | — | — | (900 | ) | — | (900 | ) | ||||||||||||||||
Stock-based compensation | — | — | 315 | — | — | 315 | ||||||||||||||||||
Net loss | — | — | — | — | (1,081 | ) | (1,081 | ) | ||||||||||||||||
Balance at March 31, 2021 | 30,282 | $ | 3 | $ | 128,538 | $ | (2,577 | ) | $ | (114,807 | ) | $ | 11,157 | |||||||||||
For the three months ended | ||||||||
March 31, | ||||||||
2022 | 2021 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (10,907 | ) | $ | (1,081 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Depreciation and amortization | 13,196 | 13,114 | ||||||
Amortization of deferred financing costs | 587 | 524 | ||||||
Non-cash reduction to the operating lease right-of-use assets | 587 | 0 | ||||||
Deferred income taxes | (3,851 | ) | (1,366 | ) | ||||
Non-cash foreign currency loss | (3 | ) | (70 | ) | ||||
Share-based compensation | 2,050 | 315 | ||||||
Provision for doubtful accounts | 55 | (18 | ) | |||||
Change in fair value of warrant liability | (27 | ) | (2,424 | ) | ||||
Change in operating assets and liabilities, net of operating assets and liabilities acquired: | ||||||||
Accounts receivable | (2,580 | ) | (1,855 | ) | ||||
Inventories | 4,714 | (878 | ) | |||||
Prepaid expenses and other receivables | 806 | (5,375 | ) | |||||
Accounts payable and accrued liabilities | (8,428 | ) | (13,311 | ) | ||||
Deferred revenue | 132 | (81 | ) | |||||
Income taxes payable | 199 | 186 | ||||||
Operating lease liabilities | (510 | ) | 0 | |||||
Net cash used in operating activities | $ | (3,980 | ) | $ | (12,320 | ) | ||
Cash flows used in investing activities | ||||||||
Additions to intangible assets | (2,790 | ) | (2,302 | ) | ||||
Additions to property and equipment | (635 | ) | (789 | ) | ||||
Payments for acquisitions, net of cash acquired | (45,078 | ) | 0 | |||||
Net cash used in investing activities | $ | (48,503 | ) | $ | (3,091 | ) | ||
Cash flows from financing activities | ||||||||
Proceeds from revolving credit facility | 0 | 20,000 | ||||||
Repayment of term loan | (788 | ) | (797 | ) | ||||
Repayment of other borrowings—notes payable | (118 | ) | 0 | |||||
Equity financing fees | (126 | ) | (445 | ) | ||||
Payment of deferred financing costs | (452 | ) | (79 | ) | ||||
Payment of financing lease obligations | (66 | ) | 0 | |||||
Payment of capital lease obligations | 0 | (388 | ) | |||||
Net cash provided by/(used in) financing activities | $ | (1,550 | ) | $ | 18,291 | |||
Effect of Exchange Rate Change on Cash and Cash Equivalents | (26 | ) | (67 | ) | ||||
Change in Cash and Cash Equivalents and Restricted Cash | (54,059 | ) | 2,813 | |||||
Cash and Cash Equivalents and Restricted Cash, beginning of period | 86,343 | 10,693 | ||||||
Cash and Cash Equivalents and Restricted Cash, end of period | $ | 32,284 | $ | 13,506 | ||||
Supplemental cash flow information: | ||||||||
Interest paid | $ | 7,717 | $ | 4,549 | ||||
Taxes paid | 317 | — | ||||||
Non-cash investing and financing activities: | ||||||||
Fair value of KORE common stock issued pursuant to acquisitions | $ | 23,295 | $ | — | ||||
ASU 2020-06 Adoption | 15,163 | — | ||||||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities upon the adoption of ASC 842 | 9,604 | |||||||
Operating lease right-of-use | 420 | — | ||||||
Equity financing fees accrued | — | 1,590 |
(in ‘000 USD) | At December 31, 2021 | Adjustments due to Topic 842 | At January 1 2022 | |||||||||
Operating lease right-of-use | $ | 0 | $ | 9,278 | $ | 9,278 | ||||||
Current operating lease liabilities | 0 | 2,121 | 2,121 | |||||||||
Non-current operating lease liabilities | 0 | 7,483 | 7,483 | |||||||||
Current portion of capital lease liabilities | 191 | (191 | ) | 0 | ||||||||
Current portion of finance lease liabilities | 0 | 191 | 191 | |||||||||
Non-current portion of capital leaseliabilities | 264 | (264 | ) | 0 | ||||||||
Non-current portion of finance leaseliabilities | 0 | 264 | 264 | |||||||||
Accrued liabilities | 21,502 | (326 | ) | 21,176 |
(in ‘000 USD) | At December 31, 2021 | Adjustments due to ASU 2020-06 | At January 1 2022 | |||||||||
Long-term debt and other borrowings, net | $ | 399,115 | $ | 15,163 | $ | 414,278 | ||||||
Additional paid-in capital | 413,646 | (11,612 | ) | 402,034 | ||||||||
Deferred tax | 36,722 | (3,847 | ) | 32,875 | ||||||||
Retained earnings | (138,179 | ) | 299 | (137,880 | ) |
(in ‘000 USD) | For the three months ended March 31, | |||||||
2022 | 2021 | |||||||
Connectivity* | $ | 43,016 | $ | 40,591 | ||||
Hardware Sales | 19,012 | 7,796 | ||||||
Hardware Sales—bill-and-hold | 2,422 | 2,439 | ||||||
Deployment services, professional services, and other | 4,491 | 4,471 | ||||||
Total | $ | 68,941 | $ | 55,297 | ||||
* | Includes connectivity-related revenues from Connectivity services and IoT Solutions services |
Shares | Percentage | |||||||
Pre-combination KORE shareholders | 38,767,500 | 54.0 | % | |||||
Public stockholders | 10,356,593 | 14.4 | % | |||||
Private offering and merger financing | 22,686,326 | 31.6 | % | |||||
Total | 71,810,419 | 100.0 | % |
(in 000’ USD) | Classification in Statement of operations | Three Months Ended March 31, 2022 | ||||||
Operating lease cost | Selling, general and administrative | $ | 844 | |||||
Finance lease cost | ||||||||
Amortization of leased assets | Depreciation and amortization | 98 | ||||||
Interest on lease liabilities | Interest expense | 5 | ||||||
Total net lease cost | $ | 947 | ||||||
(in 000’ USD) | As of March 31, 2022 | |||
Assets | ||||
Finance lease right-of-use assets included in property and equipment, net | $ | 386 | ||
Liabilities | ||||
Current portion of finance lease liabilities | $ | 158 | ||
Non-current portion of finance lease liabilities | 228 | |||
Total finance lease liabilities | $ | 386 | ||
At March 31, 2022 | ||||
Weighted average remaining lease term (in years) | ||||
Operating leases | 6.4 | |||
Finance leases | 2.5 | |||
Weighted average discount rate: | ||||
Operating leases | 7.1 | % | ||
Finance leases | 5.2 | % |
Operating Leases | Finance Leases | |||||||
(in ‘000 USD) | Amount | Amount | ||||||
From April 1, 2022 to December 31, 2022 | $ | 1,969 | $ | 130 | ||||
2023 | 2,189 | 141 | ||||||
2024 | 1,476 | 118 | ||||||
2025 | 1,313 | 25 | ||||||
2026 | 1,041 | 0 | ||||||
Thereafter | 4,141 | 0 | ||||||
Total minimum lease payments | 12,129 | 414 | ||||||
Interest expense | (2,672 | ) | (28 | ) | ||||
Total | $ | 9,457 | $ | 386 | ||||
Cash, (net of closing cash of $1,995) and working capital adjustments | $ | 45,078 | ||
Fair value of KORE common stock issued to sellers (4,212,246 shares) | 23,295 | |||
Total consideration | $ | 68,373 | ||
Assets acquired: | ||||
Accounts receivable | 3,303 | |||
Inventories | 1,323 | |||
Prepaid expenses and other receivables | 976 | |||
Property and equipment | 201 | |||
Intangible assets | 28,664 | |||
Total Assets acquired | 34,467 | |||
Liabilities assumed: | ||||
Deferred tax liabilities | 7,391 | |||
Accounts payable and accrued liabilities | 3,562 | |||
Liabilities assumed | 10,953 | |||
Net identifiable assets acquired | 23,514 | |||
Goodwill (excess of consideration transferred over net identifiable assets acquired) | $ | 44,859 | ||
Post ASU 2020-06 As of March 31, | Pre ASU 2020-06 As of December 31, | |||||||
(in ‘000 USD) | 2022 | 2021 | ||||||
Principal balances outstanding | $ | 120,000 | $ | 120,000 | ||||
Net of unamortized debt issuance costs | 2,744 | 2,458 | ||||||
Net of unamortized equity component costs | 0 | 15,517 | ||||||
Net carrying amount(1) | $ | 117,256 | $ | 102,025 | ||||
(in ‘000 USD) | Series A | Series A-1 | Series B | |||||||||
Accumulated and unpaid, December 31, 2020 | $ | 34,812 | $ | 18,608 | $ | 33,910 | ||||||
Accumulated | 2,486 | 2,666 | 2,241 | |||||||||
Distributed | 0 | 0 | 0 | |||||||||
Accumulated and unpaid, March 31, 2021 | $ | 37,298 | $ | 21,274 | $ | 36,151 | ||||||
Number of Options | Weighted Average Grant Date Fair Value per Option (Amount) | Weighted Average Exercise Price (Amount) | Weighted Average Remaining Contractual Term (Years) | |||||||||||||
Balance, December 31, 2020 | 432,500 | $ | 15.45 | $ | 141.53 | 7.7 | ||||||||||
Granted | 0 | 0 | 0 | — | ||||||||||||
Exercised | — | — | — | — | ||||||||||||
Forfeited | 0 | 0 | 0 | — | ||||||||||||
Expired | — | — | — | — | ||||||||||||
Balance, March 31, 2021 | 432,500 | $ | 15.45 | $ | 141.53 | 7.7 | ||||||||||
For the three months ended | ||||||||
March 31, | ||||||||
(in ‘000 USD) | 2022 | 2021 | ||||||
Total Stock Compensation Expense | $ | 0 | $ | 315 | ||||
Unrecognized Compensation Cost | 0 | 3,100 | ||||||
Weighted-average remaining recognition period (in years) | — | 2.4 |
(in 000’ USD, except shares) | Number of Awards outstanding | Weighted- Average grant date fair value (per share) | Aggregate Intrinsic Value (in Thousands) | |||||||||
Unvested RSUs at December 31, 2021 | 0 | $ | 0 | 0 | ||||||||
Granted | 4,763 | 6.84 | 32,587 | |||||||||
Vested | 0 | 0 | 0 | |||||||||
Forfeited and canceled | (35 | ) | 6.97 | (245 | ) | |||||||
Unvested RSUs at March 31, 2022 | 4,728 | $ | $ | 32,342 | ||||||||
Three months ended | March 31, | |||
(in ‘000 USD) | 2022 | |||
Expected volatility | 57.1%-75.2% | |||
Risk-free interest rate | 1.37%-2.09% |
For the three months ended | ||||||||
March 31, | ||||||||
(in ‘000 USD) | 2022 | 2021 | ||||||
Total Stock Compensation Expense | $ | 2,050 | $ | 0 | ||||
Unrecognized Compensation Cost | 30,292 | 0 | ||||||
Weighted-average remaining recognition period (in years) | 3.53 | — |
For the three months ended | ||||||||
March 31, | ||||||||
(in 000’ USD, except share and per share amounts) | 2022 | 2021 | ||||||
Numerator: | ||||||||
Net loss attributable to the Company | $ | (10,907 | ) | $ | (1,081 | ) | ||
Less cumulative earnings to preferred shareholder | 0 | (7,393 | ) | |||||
Net loss attributable to common stockholders | (10,907 | ) | (8,474 | ) | ||||
Denominator: | ||||||||
Weighted average common shares and warrants outstanding | ||||||||
Basic (in number) | 74,040,261 | 31,647,131 | ||||||
Diluted (in number) | 74,040,261 | 31,647,131 | ||||||
Net loss per unit attributable to common stockholder | ||||||||
Basic | $ | (0.15 | ) | $ | (0.27 | ) | ||
Diluted | $ | (0.15 | ) | $ | (0.27 | ) |
For the three months ended | ||||||||
(Number of shares) | March 31, | |||||||
2022 | 2021 | |||||||
Series C Convertible Preferred Stock | 0 | 2,566,186 | ||||||
Stock Options | 0 | 432,500 | ||||||
Common stock issued under the Backstop Agreement | 9,600,031 | 0 | ||||||
Restricted stock grants with only service conditions | 3,108,277 | 0 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three months ended March 31, | Change March 31, 2022 | |||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||
Services | $ | 47,506 | 69 | % | $ | 45,062 | 81 | % | $ | 2,444 | 5 | % | ||||||||||||
Products | 21,435 | 31 | % | 10,235 | 19 | % | 11,200 | 109 | % | |||||||||||||||
Total Revenue | $ | 68,941 | 100 | % | $ | 55,297 | 100 | % | $ | 13,644 | 25 | % | ||||||||||||
Three months ended March 31, | Change March 31, 2022 | |||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||
IoT Connectivity | $ | 44,098 | 64 | % | $ | 40,720 | 74 | % | $ | 3,378 | 8 | % | ||||||||||||
IoT Solutions | 24,843 | 36 | % | 14,577 | 26 | % | 10,266 | 70 | % | |||||||||||||||
Total Revenue | $ | 68,941 | 100 | % | $ | 55,297 | 100 | % | $ | 13,644 | 25 | % | ||||||||||||
For three months ended March 31, | ||||||||
2022 | 2021 | |||||||
Period End Connections | 15.3 million | 12.9 million | ||||||
Average Connections Count for the Period | 15.1 million | 12.7 million |
Three months ended March 31, | Change March 31, 2022 | |||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||
Cost of services | $ | 17,529 | 50 | % | $ | 16,211 | 67 | % | $ | 1,318 | 8 | % | ||||||||||||
Cost of products | 17,443 | 50 | % | 8,161 | 33 | % | 9,282 | 114 | % | |||||||||||||||
Total cost of revenue | $ | 34,972 | 100 | % | $ | 24,372 | 100 | % | $ | 10,600 | 43 | % | ||||||||||||
For three months ended March 31, | ||||||||
Gross margin rate | 2022 | 2021 | ||||||
Cost of services | 63 | % | 64 | % | ||||
Cost of products | 19 | % | 20 | % | ||||
Total gross margins | 49 | % | 56 | % |
Three months ended March 31, | Change March 31, 2022 | |||||||||||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||||||||||
Cost of IoT Connectivity | $ | 16,870 | 48 | % | $ | 15,332 | 63 | % | $ | 1,538 | 10 | % | ||||||||||||
Cost of IoT Solutions | 18,102 | 52 | % | 9,040 | 37 | % | 9,062 | 100 | % | |||||||||||||||
Total cost of revenue | $ | 34,972 | 100 | % | $ | 24,372 | 100 | % | $ | 10,600 | 43 | % | ||||||||||||
Three months ended March 31, | ||||||||
Gross margin rate | 2022 | 2021 | ||||||
IoT Connectivity | 62 | % | 62 | % | ||||
IoT Solutions | 27 | % | 38 | % | ||||
Total gross margins | 49 | % | 56 | % |
Three months ended March 31, | Change | |||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||
Selling, general, and administrative | $ | 27,628 | $ | 17,521 | $ | 10,107 | 58 | % |
Three months ended March 31, | Change | |||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||
Depreciation and amortization | $ | 13,196 | $ | 13,114 | $ | 82 | 1 | % |
Three months ended March 31, | Change | |||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||
Interest expense, including amortization of deferred financing costs, net | $ | 6,624 | $ | 5,059 | $ | 1,565 | 31 | % | ||||||||
Change in fair value of warrant liability | (27 | ) | (2,424 | ) | 2,397 | (99 | )% | |||||||||
Total other expense | $ | 6,597 | $ | 2,635 | $ | 3,962 | 150 | % | ||||||||
Three months ended March 31, | Change | |||||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ | % | ||||||||||||
Income tax benefit | $ | (2,545 | ) | $ | (1,264 | ) | $ | (1,281 | ) | 101 | % |
For the three months ended | ||||||||||||
March 31, | ||||||||||||
(in ‘000 USD) | 2022 | 2021 | $ Change | |||||||||
Cash flows from operating activities | ||||||||||||
Net loss | $ | (10,907 | ) | $ | (1,081 | ) | (9,826 | ) | ||||
Net cash used in operating activities | (3,980 | ) | (12,320 | ) | 8,340 | |||||||
Net cash used in investing activities | (48,503 | ) | (3,091 | ) | (45,412 | ) | ||||||
Net cash provided by/(used in) financing activities | (1,550 | ) | 18,291 | (19,841 | ) | |||||||
Effect of Exchange Rate Change on Cash and Cash Equivalents | (26 | ) | (67 | ) | 41 | |||||||
Change in Cash and Cash Equivalents and Restricted Cash | (54,059 | ) | 2,813 | (56,872 | ) | |||||||
Cash and Cash Equivalents and Restricted Cash, beginning of period | 86,343 | 10,693 | 75,650 | |||||||||
Cash and Cash Equivalents and Restricted Cash, end of period | $ | 32,284 | $ | 13,506 | 18,778 |
For the three Months Ended March 31, | ||||||||
(in ‘000 USD) | 2022 | 2021 | ||||||
Net loss | $ | (10,907 | ) | $ | (1,081) | |||
Income tax benefit | (2,545 | ) | (1,264 | ) | ||||
Interest expense | 6,624 | 5,059 | ||||||
Depreciation and amortization | 13,196 | 13,114 | ||||||
EBITDA | 6,368 | 15,828 | ||||||
Change in Fair value of warrant liabilities (non-cash) | (27 | ) | (2,424 | ) | ||||
Transformation expenses | 1,565 | 1,803 | ||||||
Acquisition and integration-related restructuring costs | 5,293 | 851 | ||||||
Stock-based compensation (non-cash) | 2,050 | 315 | ||||||
Foreign currency loss (non-cash) | (3 | ) | (70 | ) | ||||
Other | 395 | 115 | ||||||
Adjusted EBITDA | $ | 15,641 | $ | 16,418 | ||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Item 5. | Other Information. |
Incorporated by Reference | Filed/ | |||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Furnished Herewith | ||||||
2.1 | Agreement and Plan of Merger, dated as of March 12, 2021, as amended on July 27, 2021 and September 21, 2021, by and among CTAC, Pubco, Corp Merger Sub, LLC Merger Sub and KORE | S-4 | 333-255121 | 2.1 | 08/11/2021 | |||||||
3.1 | Amended and Restated Certificate of Incorporation of King Pubco, Inc. | S-4 | 333-255121 | 3.1 | 08/11/2021 | |||||||
3.2 | Amended and Restated Bylaws of King PubCo, Inc. | S-4 | 333-255121 | 3.2 | 08/11/2021 | |||||||
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). | * | ||||||||||
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). | * | ||||||||||
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. | ** | ||||||||||
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. | ** |
Item 6. | Exhibits. |
* | Filed herewith. |
** | Furnished herewith. |
Date: | By: | /s/ | ||||
President and Chief Executive Officer (Principal Executive Officer) |
Date: May 16, 2022 | By: | /s/ Paul Holtz | ||||
Executive Vice President Chief Financial Officer | ||||||
(Principal Financial Officer) |