Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of ~~November 11, 2022,~~August 4, 2023, there were ~~76,289,741~~86,552,595 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

KORE GROUP HOLDINGS, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to statements regarding our future results of operations and financial position, industry and business trends, equity compensation, business strategy, plans, market growth and our objectives for future operations.

The forward-looking statements in this Quarterly Report on Form 10-Q are only current expectations and predictions. The Company has based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statement. The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. The Company qualifies all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

(In thousands, ~~USD,~~except share data)


	June 30, 2023		December 31, 2022
ASSETS
Current assets
Cash	$	22,916	$	34,645
Accounts receivable, net	47,031		44,538
Inventories, net	7,368		10,051
Income taxes receivable	400		502
Prepaid expenses and other current assets	11,121		13,484
Total current assets	88,836		103,220
Non-current assets
Restricted cash	582		362
Property and equipment, net	12,901		11,899
Intangible assets, net	185,173		192,504
Goodwill	373,085		369,706
Operating lease right-of-use assets	9,988		10,019
Deferred tax assets	54		55
Other long-term assets	651		971
Total assets	$	671,270	$	688,736
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	21,600	$	17,835
Accrued liabilities	16,375		15,793
Current portion of operating lease liabilities	1,515		1,811
Income taxes payable	977		207
Deferred revenue	8,695		7,817
Current portion of long-term debt and other borrowings, net	4,817		5,345
Total current liabilities	53,979		48,808
Non-current liabilities
Deferred tax liabilities	19,418		25,248
Warrant liability	33		33
Non-current portion of operating lease liabilities	9,567		9,275
Long-term debt and other borrowings, net	412,853		413,910
Other long-term liabilities	12,389		10,790
Total liabilities	$	508,239	$	508,064

Commitments and Contingencies

Stockholders’ equity
Common stock, voting; par value $0.0001 per share; 315,000,000 shares authorized, 86,552,595 and 76,292,241 shares issued and outstanding as of June 30, 2023, and December 31, 2022, respectively	$	9	$	8
Additional paid-in capital	455,381		435,292
Accumulated other comprehensive loss	(6,132)		(6,390)
Accumulated deficit	(286,227)		(248,238)
Total stockholders’ equity	163,031		180,672
Total liabilities and stockholders’ equity	$	671,270	$	688,736

See accompanying notes to the unaudited condensed consolidated financial statements

KORE Group Holdings, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(In thousands, except share and per share ~~amounts)~~data)

September 30,
2022 December 31,
2021
Assets
Current assets
Cash $ 42,925 $ 85,976
Accounts receivable, net of allowances for credits and doubtful accounts of $2,757 and $1,800, at September 30, 2022 and December 31, 2021, respectively 41,237 51,304
Inventories, net 8,272 15,470
Income taxes receivable 711 954
Prepaid expenses and other current assets 13,316 7,448
Total current assets 106,461 161,152
Non-current assets
Restricted cash 358 367
Property and equipment, net 12,141 12,240
Intangibles assets, net 201,260 203,474
Goodwill 425,604 381,962
Operating lease right-of-use assets 10,430 —
Deferred tax assets 566 —
Other long-term assets 653 407
Total assets $ 757,473 $ 759,602
Liabilities and stockholders’ equity
Current liabilities
Accounts payable $ 18,201 $ 16,004
Accrued liabilities 14,290 21,502
Current portion of operating lease liabilities 1,872 —
Income taxes payable 381 467
Deferred revenue 7,012 6,889
Current portion of long-term debt and other borrowings, net 5,319 3,326
Total current liabilities 47,075 48,188
Non-current liabilities
Deferred tax liabilities 29,926 36,722
Warrant liability 33 286
Non-current portion of operating lease liabilities 9,501 —
Long-term debt and other borrowings, net 414,683 399,115
Other long-term liabilities 4,794 3,148
Total liabilities $ 506,012 $ 487,459
Stockholders’ equity
Common stock, voting; par value $0.0001 per share; 315,000,000 shares authorized, 76,289,741 and 72,027,743 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively $ 8 $ 7
Additional paid-in capital 432,897 413,646
Accumulated other comprehensive loss (8,491) (3,331)
Accumulated deficit (172,953) (138,179)
Total stockholders’ equity 251,461 272,143
Total liabilities and stockholders’ equity $ 757,473 $ 759,602


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Revenue
Services	$	51,023	$	47,805	$	98,573	$	95,348
Products	18,513		23,116		36,938		44,551
Total revenue	69,536		70,921		135,511		139,899
Cost of revenue
Cost of services	18,068		16,610		34,611		34,159
Cost of products	13,648		17,018		27,422		34,741
Total cost of revenue (exclusive of depreciation and amortization shown separately below)	31,716		33,628		62,033		68,900
Operating expenses
Selling, general and administrative	32,892		29,407		63,092		57,125
Depreciation and amortization	14,512		13,753		28,637		26,928
Total operating expenses	47,404		43,160		91,729		84,053
Operating loss	(9,584)		(5,867)		(18,251)		(13,054)
Interest expense, including amortization of deferred financing costs, net	10,407		7,297		20,602		13,921
Change in fair value of warrant liability	3		(106)		—		(133)
Loss before income taxes	(19,994)		(13,058)		(38,853)		(26,842)
Income tax benefit	(495)		(2,268)		(864)		(4,480)
Net loss	$	(19,499)	$	(10,790)	$	(37,989)	$	(22,362)
Loss per share:
Basic and diluted	$	(0.24)	$	(0.14)	$	(0.49)	$	(0.30)

Weighted average number of shares outstanding:
Basic and diluted	79,849,299		76,239,989		78,196,201		75,146,201


Comprehensive loss
Net loss	$	(19,499)	$	(10,790)	$	(37,989)	$	(22,362)
Other comprehensive loss:
Foreign currency translation adjustment	130		(2,373)		258		(2,496)
Comprehensive loss	$	(19,369)	$	(13,163)	$	(37,731)	$	(24,858)

See accompanying notes to the unaudited condensed consolidated financial statements

KORE Group Holdings, Inc. ~~and Subsidiaries~~

Condensed Consolidated Statements of ~~Operations~~Changes in Stockholders’ Equity (Unaudited)

(In thousands, ~~USD,~~ except share ~~and per share amounts)~~data)

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Revenue
Services $ 46,410 $ 48,428 $ 141,694 $ 139,866
Products 20,230 19,450 64,240 44,053
Total revenue 66,640 67,878 205,934 183,919
Cost of revenue
Cost of services 16,609 17,379 50,714 51,417
Cost of products 14,960 17,585 49,701 37,258
Total cost of revenue (exclusive of depreciation and amortization shown separately below) 31,569 34,964 100,415 88,675
Operating expenses
Selling, general and administrative 28,841 26,001 85,883 66,525
Depreciation and amortization 13,709 12,440 40,679 37,947
Total operating expenses 42,550 38,441 126,562 104,472
Operating loss (7,479) (5,527) (21,043) (9,228)
Interest expense, including amortization of deferred financing costs, net 8,206 5,589 22,127 16,155
Change in fair value of warrant liability (120) (2,898) (253) (5,281)
Loss before income taxes (15,565) (8,218) (42,917) (20,102)
Income tax expense (benefit)
Current 669 179 3,031 569
Deferred (3,209) (3,889) (10,875) (8,197)
Total income tax benefit (2,540) (3,710) (7,844) (7,628)
Net loss $ (13,025) $ (4,508) $ (35,073) $ (12,474)
Loss per share:
Basic $ (0.17) $ (0.26) $ (0.46) $ (0.98)
Diluted $ (0.17) $ (0.26) $ (0.46) $ (0.98)
Weighted average number of shares outstanding:
Basic 76,240,530 32,098,715 75,514,986 31,799,313
Diluted 76,240,530 32,098,715 75,514,986 31,799,313


Three Months Ended June 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Amount		Amount		Amount		Amount
Balance as of March 31, 2023	76,552,595	$	8	$	437,677	$	(6,262)	$	(266,728)	$	164,695
Foreign currency translation adjustment	—	—		—		130		—		130
Stock-based compensation expense	—	—		3,005		—		—		3,005
Common stock issued pursuant to acquisition	10,000,000	1		14,699		—		—		14,700
Net loss	—	—		—		—		(19,499)		(19,499)
Balance as of June 30, 2023	86,552,595	$	9	$	455,381	$	(6,132)	$	(286,227)	$	163,031


Three Months Ended June 30, 2022
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Amount		Amount		Amount		Amount
Balance as of March 31, 2022	76,239,989	$	8	$	427,046	$	(3,586)	$	(153,610)	$	269,858
Foreign currency translation adjustment	—	—		—		(2,373)		—		(2,373)
Stock-based compensation expense	—	—		2,501		—		—		2,501
Net loss	—	—		—		—		(10,790)		(10,790)
Balance as of June 30, 2022	76,239,989	$	8	$	429,547	$	(5,959)	$	(164,400)	$	259,196


Six Months Ended June 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Amount		Amount		Amount		Amount
Balance as of December 31, 2022	76,292,241	$	8	$	435,292	$	(6,390)	$	(248,238)	$	180,672
Foreign currency translation adjustment	—	—		—		258		—		258
Stock-based compensation expense	—	—		5,575		—		—		5,575
Shares withheld related to net share settlement	(134,713)	—		(185)		—		—		(185)
Vesting of restricted stock units	395,067	—		—		—		—		—
Common stock issued pursuant to acquisition	10,000,000	1		14,699		—		—		14,700
Net loss	—	—		—		—		(37,989)		(37,989)
Balance as of June 30, 2023	86,552,595	$	9	$	455,381	$	(6,132)	$	(286,227)	$	163,031


Six Months Ended June 30, 2022
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Amount		Amount		Amount		Amount
Balance as of December 31, 2021	72,027,743	$	7	$	401,702	$	(3,463)	$	(142,038)	$	256,208
Foreign currency translation adjustment	—	—		—		(2,496)		—		(2,496)
Stock-based compensation expense	—	—		4,551		—		—		4,551
Common stock issued pursuant to acquisition	4,212,246	1		23,294		—		—		23,295
Net loss	—	—		—		—		(22,362)		(22,362)
Balance as of June 30, 2022	76,239,989	$	8	$	429,547	$	(5,959)	$	(164,400)	$	259,196

See accompanying notes to the unaudited condensed consolidated financial statements

KORE Group Holdings, Inc. ~~and Subsidiaries~~

Condensed Consolidated Statements of ~~Comprehensive Loss~~Cash Flows (Unaudited)

(In ~~thousands USD)~~thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Net loss $ (13,025) $ (4,508) $ (35,073) $ (12,474)
Other comprehensive loss:
Foreign currency translation adjustment (2,417) (1,322) (5,160) (1,479)
Comprehensive loss $ (15,442) $ (5,830) $ (40,233) $ (13,953)


	Six Months Ended
	June 30,
	2023		2022



















Net cash provided by operating activities	$	1,303	$	10,691

Cash flows from investing activities
Additions to intangible assets	(7,653)		(5,610)
Additions to property and equipment	(2,592)		(1,589)
Payments for acquisitions, net of cash acquired	—		(46,002)
Net cash used in investing activities	$	(10,245)	$	(53,201)
Cash flows from financing activities


Repayment of term loan	(1,576)		(1,576)
Repayment of other borrowings—notes payable	(1,078)		(148)
Equity financing fees	—		(126)
Payment of deferred financing costs	—		(453)
Payment of financing lease obligations	—		(151)
Net cash used in financing activities	$	(2,654)	$	(2,454)
Effect of exchange rate changes on cash	87		(575)
Change in cash and restricted cash	$	(11,509)	$	(45,539)
Cash and restricted cash, beginning of period	35,007		86,343
Cash and restricted cash, end of period	$	23,498	$	40,804

See accompanying notes to the unaudited condensed consolidated financial statements

KORE Group Holdings, Inc. ~~and Subsidiaries~~

~~Consolidated Statements of Stockholders’ Equity (Unaudited)~~

~~(In thousands, USD)~~

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 72,028 $ 7 $ 413,646 $ (3,331) $ (138,179) $ 272,143
Opening balance sheet adjustment — — (11,613) — 299 (11,314)
Adjusted opening balance 72,028 7 402,033 (3,331) (137,880) 260,829
Foreign currency translation adjustment — — — (184) — (184)
Stock-based compensation — — 2,050 — — 2,050
Common stock issued pursuant to acquisition 4,212 1 23,294 — — 23,295
Net loss — — — — (10,907) (10,907)
Balance at March 31, 2022 76,240 $ 8 $ 427,377 $ (3,515) $ (148,787) $ 275,083
Foreign currency translation adjustment — — — (2,559) — (2,559)
Stock-based compensation — — 2,501 — — 2,501
Net loss — — — — (11,141) (11,141)
Balance at June 30, 2022 76,240 $ 8 $ 429,878 $ (6,074) $ (159,928) $ 263,884
Foreign currency translation adjustment — — — (2,417) — (2,417)
Stock-based compensation — — 3,019 — — 3,019
Vesting of restricted stock units 50 — — — — —
Net loss — — — — (13,025) (13,025)
Balance at September 30, 2022 76,290 $ 8 $ 432,897 $ (8,491) $ (172,953) $ 251,461

~~See accompanying notes to the unaudited condensed consolidated financial statements~~

~~KORE Group Holdings, Inc. and Subsidiaries~~

~~Consolidated Statements of Temporary Equity and Stockholders' Equity - Continued (Unaudited)~~

~~(In thousands, USD)~~

Series A
Preferred Stock Series A-1
Preferred Stock Series B
Preferred Stock Series C Convertible
Preferred Stock Total
Temporary
Equity Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Loss Accumulated
Deficit Total
Stockholders’
Equity
Shares Amount Shares Amount Shares Amount Shares Amount Amount Shares Amount Amount Amount Amount Amount
Balance at December 31, 2020 (as previously reported) 43 $ 77,562 60 $ 78,621 57 $ 90,910 17 $ 16,802 $ 263,895 218 $ 2 $ 135,617 $ (1,677) $ (113,726) $ 20,216
Conversion of stock 7,713 — 7,802 — 9,034 — 2,549 — — 30,064 1 (1) — — —
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 30,282 $ 3 $ 135,616 $ (1,677) $ (113,726) $ 20,216
Accrued dividends payable 249 2,486 267 2,666 224 2,241 — — 7,393 — — (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 8,005 $ 80,048 8,129 $ 81,287 9,315 $ 93,151 2,566 $ 16,802 $ 271,288 30,282 $ 3 $ 128,538 $ (2,577) $ (114,807) $ 11,157
Derecognition of stock — — — — — — (46) (300) (300) — — — — — —
Accrued dividends payable 251 2,514 270 2,695 232 2,323 — — 7,532 — — (7,532) — — (7,532)
Foreign currency translation adjustment — — — — — — — — — — — — 743 — 743
Stock-based compensation — — — — — — — — — — — 315 — — 315
Net loss — — — — — — — — — — — — — (6,885) (6,885)
Balance at June 30, 2021 8,256 $ 82,562 8,399 $ 83,982 9,547 $ 95,474 2,520 $ 16,502 $ 278,520 $ 30,282 $ 3 $ 121,321 $ (1,834) $ (121,692) $ (2,202)
Accrued dividends payable 266 2,656 288 2,880 236 2,361 — — 7,897 — — (7,897) — — (7,897)
Foreign currency translation adjustment — — — — — — — — — — — — (1,322) — (1,322)
Share-based compensation — — — — — — — — — — — (3,519) — — (3,519)
Distributions to and conversions of preferred stock (8,522) (85,218) (8,687) (86,862) (9,783) (97,835) (2,520) (16,502) (286,417) 7,120 1 56,502 — — 56,503
CTAC shares recapitalized, net of equity issuance costs of $15,912 — — — — — — — — — 10,356 1 6,456 — — 6,457
Conversion of KORE warrants — — — — — — — — — 1,366 — 10,663 — — 10,663
Private offering and merger financing, net of equity issuance costs of $7,718 — — — — — — — — — 22,686 2 217,280 — — 217,282
Equity portion of convertible debt, net of issuance costs of $224 — — — — — — — — — — — 12,510 — — 12,510
Net loss — — — — — — — — — — — — — (4,508) (4,508)
Balance at September 30, 2021 — — — — — — — — — 71,810 $ 7 $ 413,316 $ (3,156) $ (126,200) $ 283,967

~~See accompanying notes to the unaudited condensed consolidated financial statements~~

~~KORE Group Holdings, Inc. and Subsidiaries~~

~~Consolidated Statements of Cash Flows (Unaudited)~~

~~(In thousands USD)~~
Nine Months Ended
September 30,
2022 2021
Cash flows from operating activities
Net loss $ (35,073) $ (12,474)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization 40,679 37,947
Amortization of deferred financing costs 1,806 1,569
Non-cash reduction to the operating lease right-of-use assets 1,678 —
Deferred income taxes (10,875) (8,197)
Non-cash foreign currency loss (gain) 1,566 (163)
Stock-based compensation 7,570 4,564
Provision for doubtful accounts 424 117
Change in fair value of warrant liability (253) (5,281)
Change in operating assets and liabilities, net of operating assets and liabilities acquired:
Accounts receivable 11,155 (12,792)
Inventories 8,192 (6,461)
Prepaid expenses and other current assets (1,934) (5,054)
Accounts payable and accrued liabilities (3,756) (2,366)
Deferred revenue 252 (911)
Income taxes payable 144 63
Operating lease liabilities (1,048) —
Net cash provided by (used in) operating activities $ 20,527 $ (9,439)
Cash flows used in investing activities
Additions to intangible assets (9,027) (6,626)
Additions to property and equipment (2,945) (3,156)
Payments for acquisitions, net of cash acquired (46,002) —
Net cash used in investing activities $ (57,974) $ (9,782)
Cash flows from financing activities
Proceeds from revolving credit facility — 25,000
Repayments on revolving credit facility — (25,000)
Repayment of term loan (2,364) (2,373)
Repayment of other borrowings—notes payable (507) —
Proceeds from convertible debt — 82,351
Proceeds from equity portion of convertible debt, net of issuance costs — 12,510
Payment of deferred financing costs, relating to convertible debt — (1,449)
Repayment of related party note — (1,538)
Proceeds from CTAC and PIPE financing, net of issuance costs — 223,001
Settlement of preferred shares — (229,915)
Equity financing fees (126) —
Payment of deferred financing costs (452) —
Payment of financing lease obligations (150) —
Payment of capital lease obligations — (815)
Net cash (used in) provided by financing activities $ (3,599) $ 81,772
Effect of exchange rate change on cash (2,014) (188)
Change in cash and restricted cash (43,060) 62,363
Cash and restricted cash, beginning of period 86,343 10,693
Cash and restricted cash, end of period $ 43,283 $ 73,056

~~See accompanying notes to the unaudited condensed consolidated financial statements~~

~~KORE Group Holdings, Inc. and Subsidiaries~~

~~Consolidated Statements of Cash Flows - Continued~~

~~(In thousands USD) (unaudited)~~

Nine Months Ended
September 30,
2022 2021
Supplemental cash flow information:
Interest paid $ 22,134 $ 14,762
Income taxes paid 1,587 —
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 assets obtained in exchange for new operating lease liabilities 3,409 —
Premium Finance Agreement 3,621 —
Capital leases — 346
Equity financing fees accrued — 3,025
Common shares issued to preferred shareholders — 56,502
Equity financing fees settled in common shares — 1,863
Common shares issued to warrant holders — 10,663

~~See accompanying notes to the unaudited condensed consolidated financial statements~~

~~KORE Group Holdings, Inc. and Subsidiaries~~

Notes to the Condensed Consolidated Financial Statements (Unaudited)

~~(In thousands USD, except share amounts)~~

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

KORE Group Holdings, Inc. (together with its subsidiaries, “KORE,” or the “Company”) provides advanced connectivity services, location-based services, device solutions, managed and ~~Principles~~professional services used in the development and support of ~~Consolidation~~the “internet of things” (“IoT”) technology for the machine-to-machine market. The Company’s IoT platform is delivered in partnership with the world’s largest mobile network operators and provides secure, reliable, wireless connectivity to mobile and fixed devices. This technology enables the Company to expand its global technology platform by transferring capabilities across new and existing vertical markets and delivers complimentary products to channel partners and resellers worldwide.

The Company is incorporated in the state of Delaware and has wholly-owned operating subsidiaries located in Australia, Belgium, Brazil, Canada, Dominican Republic, Ireland, Malta, Mexico, the Netherlands, New Zealand, Switzerland, the United Kingdom, and the United States. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company is traded on the New York Stock Exchange under the ticker symbol “KORE”.

Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in ~~accordance~~conformity with the instructions to Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America (“~~U.S.~~ GAAP”) ~~and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim~~for complete financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

~~KORE Group Holdings, Inc. and Subsidiaries (“the Company”) uses the same accounting policies in preparing quarterly and annual financial statements. Therefore, these~~statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2022, included in the Company’s Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2022 (“Annual Report on Form 10-K”).

~~All significant intercompany balances and transactions have been eliminated.~~ In the opinion of management, the accompanying condensed consolidated financial statements ~~reflect~~contain all adjustments, consisting of normal recurring adjustments, necessary ~~to present fairly~~for a fair presentation of the ~~financial position,~~ results ~~of operations, comprehensive loss and stockholders’ equity and cash flows~~ for the interim periods ~~but are~~presented. Such operating results may not ~~necessarily~~be indicative of the expected results for any other interim periods or the entire year.

Use of ~~operations to be anticipated for the full year 2022 or any future period.~~

~~Stock-Based Compensation~~Estimates

The preparation of financial statements requires the Company ~~has had several stock-based compensation plans, which are more fully described~~to make a number of significant estimates. These include estimates of revenue recognition, fair value measurements of assets acquired and liabilities assumed in ~~“Note 9, Stock-Based Compensation”, to~~business combinations, assessments of indicators of impairment regarding various assets including goodwill, calculation of capitalized software costs, accounting for uncertainties in income tax positions, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the condensed consolidated financial ~~statements. Stock-based compensation is generally recognized as an expense following straight-line attribution method over~~statements and the ~~requisite service period. The fair value~~reported amounts of ~~stock-based compensation is measured on~~certain revenues and expenses during the ~~grant date based on~~reported periods. Changes in these estimates may occur in the ~~grant-date fair value of the awards.~~

~~Leases~~

At the beginning of the first quarter of fiscal 2022, the Company adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), and additional ASUs issued to clarify and update the guidance in ASU 2016-02 (collectively, the “new leases standard”).

The Company leases real estate, computer hardware and vehicles for use in our operations under both operating and finance leases. The Company assesses whether an arrangement is a lease or contains a lease at inception. For arrangements considered leases or that contain a lease that is accounted for separately, we determine the classification and initial measurement of the right-of-use asset and lease liability at the lease commencement date, which is the date that the underlying asset becomes available for use.

For both operating and finance leases, we recognize a right-of-use asset, which represents our right to use the underlying asset for the lease term, and a lease liability, which represents the present value of our obligation to make payments arising over the leasenear term. The ~~present value of our obligation to make payments is calculated using~~Company’s estimates are inherently subjective in nature and actual results could differ from the ~~incremental borrowing rate for operating~~Company’s estimates and ~~finance leases. The incremental borrowing rate is determined using a portfolio approach based on~~ the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. Management uses the unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate, which willdifferences could be ~~updated on an annual basis for the measurement of new lease liabilities.~~

In those circumstances where the Company is the lessee, we have elected to account for non-lease components associated with our leases (e.g., common area maintenance costs) and lease components as a single lease component for all of our asset classes.

Operating lease cost for operating leases is recognized on a straight-line basis over the term of the lease and is included in selling, general and administrative expense in our consolidated statements of operations, based on the use of the facility on which rent is being paid. Operating leases with a term of 12 months or less are not recorded on the balance sheet; we recognize a rent expense for these leases on a straight-line basis over the lease term.

The Company recognizes the amortization of the right-of-use asset for our finance leases on a straight-line basis over the shorter of the term of the lease or the useful life of the right-of-use asset in depreciation and amortization expense in our consolidated statements of operations. The interest expense related to finance leases is recognized using the effective interest method based on the discount rate determined at lease commencement and is included within interest expense in our consolidated statements of operations.

material.

Recently Adopted and Recently Issued Accounting Pronouncements

The Company considers the potential applicability and ~~impact~~effect of all ~~ASUs~~Accounting Standards Updates (“ASUs”) issued by the ~~FASB. ASUs not listed below were assessed and determined to be either not applicable or did not have a material impact on the Company's condensed consolidated financial statements.~~ Financial Accounting Standards Board (“FASB”).

The following ~~ASUs have been~~ASU was adopted by the Company ~~since~~subsequent to the ~~Company’s last~~issuance of its Annual Report on Form ~~10-K.~~10-K:

ASU ~~2016-02, ASU 2018-10, ASU 2018-11, ASU 2020-03 and ASU 2020-05, Leases~~2022-04, Liabilities—Supplier Finance Programs (Topic ~~842)~~405-50) - Disclosure of Supplier Finance Program Obligations

In ~~February 2016,~~September 2022, the FASB issued ASU ~~2016-02, Leases,~~No. 2022-04, “Liabilities—Supplier Finance Programs (Topic 405-50) - Disclosure of Supplier Finance Program Obligations,” to ~~increase~~enhance the transparency of supplier finance programs used by an entity in connection with the purchase of goods and ~~comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018,~~services. ASU 2018-10, Codification Improvements to ASC 2016-02, Leases, was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Furthermore, in July 2018, the FASB issued ASU 2018-11, Leases: Targeted Improvements, which provides an optional transition method in addition to the existing modified retrospective transition method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Furthermore, on June 3, 2020, the FASB deferred by one year the effective date of the new leases standard for private companies, private

not-for-profits and public not-for-profits that have not yet issued (or made available for issuance) financial statements reflecting the new standard. Additionally, in March 2020, ASU 2020-03, Codification Improvements to Financial Instruments, Leases, was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Furthermore, in June 2020, ASU 2020-05, Revenue from Contracts with Customers and Leases, was issued to defer effective dates of adoption of the new leasing standard beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. These new leasing standards (collectively “ASC 842” or “the new standard”) areNo. 2022-04 is effective for ~~the Company beginning after December 15, 2021, and interim periods within~~all companies for fiscal years beginning after December 15, 2022, ~~with early adoption permitted.~~

A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. We early adopted the new standard on January 1, 2022, which is the date as of our date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods ending before January 1, 2022.

~~The cumulative after-tax effect of the changes made to our condensed consolidated balance sheet for the adoption of ASC 842 were as follows:~~

(In thousands, USD) At December 31, 2021 Adjustments
due to
ASC 842 At
January 1
2022
Operating lease right-of-use assets $ — $ 9,278 $ 9,278
Current portion of operating lease liabilities — 2,121 2,121
Non-current portion of operating lease liabilities — 7,483 7,483
Current portion of capital lease liabilities included in Accrued liabilities 191 (191) —
Current portion of finance lease liabilities included in Accrued liabilities — 191 191
Non-current portion of capital lease liabilities included in Other long-term liabilities 264 (264) —
Non-current portion of finance lease liabilities included in Other long-term liabilities — 264 264
Accrued liabilities 21,311 (326) 20,985

In addition to the increase to the operating lease liabilities and right-of-use assets, ASC 842 also resulted in reclassifying the presentation of accrued liabilities and deferred rent to operating lease right-of-use assets.

We elected the package of practical expedients permitted under the transition guidance within the new standard. Accordingly, we have adopted these practical expedients and did not reassess: (1) whether an expired or existing contract is a lease or contains an embedded lease; (2) lease classification of an expired or existing lease; or (3) capitalization of initial direct costs for an expired or existing lease.

~~See Note 3 for additional information related to leases,~~ including ~~disclosure required under ASC 842.~~

~~ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40)~~

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective for fiscal years, and interim periods within those fiscal years, except for the required rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption ~~is permitted, for~~was permitted. During the fiscal ~~years (including~~year of adoption, ASU 2022-04 requires information on the key terms of the program(s) and the balance sheet presentation of the program obligations, which are annual disclosure requirements, to be disclosed in each interim ~~periods) beginning after December 15, 2020.~~

period. The Company ~~early~~ adopted ASU ~~2020-06~~2022-04, on January 1, ~~2022, using~~2023.

In each annual reporting period, the Company is required to disclose the following information:

1. The key terms of the program, including a ~~modified retrospective transition approach. Consequently, financial information will not be updated,~~description of the payment terms (including payment timing and ~~the disclosures required under the new standard will not be~~basis for its determination) and assets pledged as security or other forms of guarantees provided for ~~dates and periods ending before January 1, 2022. Refer to “Note 6 –Short Term and Long-Term Debt”,~~the committed payment to the ~~condensed consolidated financial statements for further detail.~~

~~The cumulative after-tax effect of the changes made to our condensed consolidated balance sheet for the adoption of ASU 2020-06 were as follows:~~

(In thousands, 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 (11,613) 402,033
Deferred tax liabilities 36,722 (3,849) 32,873
Accumulated deficit (138,179) 299 (137,880)
finance provider or intermediary.

~~ASU 2021-04, Issuer’s Accounting for Certain Modifications~~2. For the obligations that the Company has confirmed as valid to the finance provider or ~~Exchanges~~intermediary:

KORE Group Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

a. The amount outstanding that remains unpaid by the Company as of ~~Freestanding Equity-Classified Written Call Options~~the end of the annual period (the “outstanding confirmed amount”);

b. A description of where those obligations are presented in the balance sheet;

c. A rollforward of those obligations during the annual period, including the amount of obligations confirmed and the amount of obligations subsequently paid.

In ~~May 2021,~~each interim reporting period (subject to the ~~FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications~~applicable transition guidance as described above in the initial year of adoption), the Company is required to disclose the amount of obligations outstanding that it has confirmed as valid to the finance provider or Exchanges of Freestanding Equity-Classified Written Call Options, which provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of another Topic. An entity should treat a modificationintermediary as of the ~~terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange~~end of the ~~original instrument for a new instrument and provides further guidance on measuring~~interim period.

The guidance does not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs, but rather, had the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 also provides guidance on the recognition of the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. ASU 2021-04 was effective for the Company beginning on January 1, 2022, and we will apply the amendments prospectively through December 31, 2022. There was no impact to our condensed consolidated financial statements for the current period as a result of adopting this standard update.

requiring additional disclosures. See Note 5—
Premium Finance Agreement.

Recently Issued Accounting Pronouncements

~~The Company considers~~There were no significant changes in recently issued accounting pronouncements pending adoption from those disclosed in the ~~applicability and impact of all ASUs issued by~~Company’s Annual Report on Form 10-K. Recent accounting pronouncements pending adoption not discussed in the ~~FASB. ASUs not listed below were assessed and determined to be~~Annual Report on Form 10-K are either not applicable or are not expected to have a material impact on the ~~Company's~~Company’s consolidated financial ~~statements.~~

~~ASU 2016-13, Financial Instruments—Credit Losses: Measurement~~condition, results of ~~Credit Losses on Financial Instruments~~

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires the use of a new current expected credit loss (“CECL”) model in estimating allowances for doubtful accounts with respect to accounts receivable and notes receivable. Receivables from revenue transactions,operations, or trade receivables, are recognized when the corresponding revenue is recognized under ASC 606, Revenue from Contracts with Customers. The CECL model requires that the Company estimate its lifetime expected credit loss with respect to these receivables and record allowances when deducted from the balance of the receivables, which represent the estimated net amounts expected to be collected. Given the

~~generally short-term nature of trade receivables, the Company does not expect to apply a discounted~~ cash flow methodology. However, the Company will consider whether historical loss rates are consistent with expectations of forward-looking estimates for its trade receivables. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses to clarify that operating lease receivables recorded by lessors are explicitly excluded from the scope of ASU 2016-13. This ASU (collectively “ASC 326”) is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. ~~The Company does not expect adoption of this ASU to have a material impact on the condensed consolidated financial statements.~~

~~ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, to provide guidance on easing the potential burden in accounting for reference rate reform on financial reporting. ASU 2020-04 is effective from March 12, 2020 and may be applied prospectively throug~~h December 31, 2022. The Company does not expect adoption of this ASU to have a material impact on the condensed consolidated financial statements.~~

~~ASU 2020-03, Codification Improvements to Financial Instruments~~

~~In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which clarifies specific issues raised by stakeholders. Specifically, the ASU:~~

•~~Clarifies that all entities are required to provide the fair value option disclosures in ASC 825, Financial Instruments.~~

•~~Clarifies that the portfolio exception in ASC 820, Fair Value Measurement, applies to nonfinancial items accounted for as derivatives under ASC 815, Derivatives and Hedging.~~

•Clarifies that for purposes of measuring expected credit losses on a net investment in a lease in accordance with ASC 326, Financial Instruments—Credit Losses, the lease term determined in accordance with ASC 842, Leases, should be used as the contractual term.

•~~Clarifies that when an entity regains control of financial assets sold, it should recognize an allowance for credit losses~~ ~~in accordance with ASC 326.~~

•Aligns the disclosure requirements for debt securities in ASC 320, Investments—Debt Securities, with the corresponding requirements for depository and lending institutions in ASC 942, Financial Services—Depository and Lending.

~~The amendments in the ASU have various effective dates and transition requirements, some depending on whether an entity has previously adopted ASU 2016-13 about measurement of expected credit losses.~~ ~~The Company will adopt the guidance in ASU 2020-03 as it adopts the related ASUs effected by these codification improvements.~~flows.

NOTE 2 – REVENUE RECOGNITION

Contract Balances

Deferred revenue as set forth on the Company’s condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022 primarily relates to revenue that is recognized over time for IoT ~~Connectivity~~connectivity monthly recurring charges, with reductions in the ~~changes in~~ balance ~~of which are~~ related to the satisfaction or partial satisfaction of these contracts. The balance also contains a deferral for goods that are ~~in-transit~~in transit at the period end for which control transfers to the customer upon delivery. ~~The deferred revenue balance as of December 31, 2021 was recognized as revenue during the three months ended March 31, 2022.~~

Disaggregated Revenue Information

The Company has presented the disaggregated disclosures below which are useful to understand the composition of the Company’s revenue during the respective reporting periods shown below:


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
(In thousands, USD)		September 30,				September 30,
($ in thousands)										($ in thousands)	June 30,				June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
IoT Connectivity*	IoT Connectivity*	$	42,911	$	40,738	$	129,714	$	122,444	IoT Connectivity*	$	47,699	$	43,814	$	90,943	$	86,867
Hardware Sales	Hardware Sales	16,807		19,221		56,747		40,602		Hardware Sales	16,499		21,469		32,943		40,481
Hardware Sales—bill-and-hold	Hardware Sales—bill-and-hold	3,423		229		7,493		3,451		Hardware Sales—bill-and-hold	2,273		1,646		4,470		4,070
Deployment services, professional services, and other		3,499		7,690		11,980		17,422
Deployment services, professional services, referral services and other										Deployment services, professional services, referral services and other	3,065		3,992		7,155		8,481
Total	Total	$	66,640	$	67,878	$	205,934	$	183,919	Total	$	69,536	$	70,921	$	135,511	$	139,899

*Includes connectivity-related revenues from IoT Connectivity services and IoT Solutions services

KORE Group Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Customer Concentrations

The Company ~~has one~~did not have any customer ~~representing 6.5% and 28.0% of the Company’s total~~concentrations in revenue for the three months ended ~~September~~June 30, ~~2022 and September~~2023. For the six months ended June 30, ~~2021, respectively. The Company has~~2023, one customer, ~~representing 12.0%~~a large multinational medical device and ~~21.0%~~healthcare company, represented approximately 10% of the Company’s total ~~revenue for~~revenue.

For the ~~nine~~three and six months ended ~~September~~June 30, 2022, the same customer as described above represented approximately 11% and ~~September~~15%, respectively, of the Company’s total revenue.

Geographic Concentrations

For the three months ended June 30, ~~2021, respectively.~~2023 and 2022, approximately 82% and 79%, respectively, of the Company’s revenue was generated in the United States. For the six months ended June 30, 2023 and 2022, approximately 79% and 78%, respectively, of the Company’s revenue was generated in the United States.


	Three Months Ended				Six Months Ended
($ in thousands)	June 30,				June 30,
	2023		2022		2023		2022
United States	$	56,709	$	55,875	$	106,759	$	108,833
Other countries	12,827		15,046		28,752		31,066
Total	$	69,536	$	70,921	$	135,511	$	139,899

NOTE 3 – ~~RIGHT-OF USE ASSETS AND LEASE LIABILITIES~~ACQUISITIONS

~~The~~Business Acquisitions Completed in 2023

On June 1, 2023, the Company ~~leases real estate, computer hardware~~completed the purchase of certain assets of Twilio Inc. including a carved-out workforce of over 50 employees and ~~vehicles for use in our operations under both operating~~certain technology and ~~finance leases. Our leases have remaining lease terms ranging from 1 year to 10 years, some of which include options to extend the term for up to 10 years,~~customer relationships, and ~~some of which include options to terminate the leases. The Company includes options to extend or terminate the lease when it is reasonably~~assumed certain that we will exercise that option. For the majority of leases entered into during the current period, we have concluded it is not reasonably certain that we would exercise the options to extend the lease or terminate the lease early. Therefore, as of the lease commencement date, our lease terms generally do not include these options. Leasehold improvements are depreciated using the straight-line method over the shorter of the estimated useful life or the remaining term of the lease. Our leasehold improvements have lives ranging from 1 year to 10 years. Operating and finance lease cost for the three and nine months ended September 30, 2022 were as follows:

(In thousands, USD) Classification in
Statement of operations Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022
Operating lease cost Selling, general and administrative $ 951 $ 2,669
Finance lease cost
Amortization of leased assets Depreciation and amortization 93 289
Interest on lease liabilities Interest expense 4 14
Total lease cost $ 1,048 $ 2,972

~~Rent expense for the three and nine months ended September 30, 2021, was $0.6 million and $2.0 million, respectively.~~

~~Supplemental disclosure for the balance sheet~~liabilities related to ~~finance leases were~~those assets, primarily related to accrued commissions and benefits owed to the acquired employees. The acquisition was accounted for as ~~follows:~~


~~(In thousands, USD)~~	~~At September 30, 2022~~
~~Assets~~
~~Finance lease right-of-use assets included in property and equipment, net~~	$	~~262~~
~~Liabilities~~
~~Current portion of finance lease liabilities included in accrued liabilities~~	$	~~120~~
~~Non-current portion of finance lease liabilities included in other long-term liabilities~~	~~142~~
~~Total finance lease liabilities~~	$	~~262~~

~~The weighted-average remaining lease term and the weighted-average discount rate~~an acquisition of ~~our leases were as follows:~~


	~~At September 30, 2022~~
~~Weighted average remaining lease term (in years)~~
~~Operating leases~~	~~7.80~~
~~Finance leases~~	~~2.29~~
~~Weighted average discount rate:~~
~~Operating leases~~	~~7.5~~	%
~~Finance leases~~	~~5.4~~	%

~~The future minimum lease payments under operating and finance leases at September 30, 2022 for the next five years are as follows:~~

Operating
Leases Finance
Leases
(In thousands, USD) Amount Amount
From October 1, 2022 to December 31, 2022 $ 637 $ 24
2023 2,532 126
2024 1,843 106
2025 1,664 23
2026 1,370 —
Thereafter 7,494 —
Total minimum lease payments 15,540 279
Interest expense (4,167) (17)
Total $ 11,373 $ 262

~~NOTE 4 – ACQUISITIONS AND DIVESTITURES~~

~~BMP Business Combination~~

~~On February 16, 2022, the Company acquired 100% of the outstanding share capital of Business Mobility Partners, Inc. and Simon~~a business (“Twilio’s IoT LLC ("Simon IoT"), collectively, the “Acquired Companies” or “BMP Acquisition” which are industry-leading mobility service providers, to expand the Company’s services and solutions within the healthcare and life sciences industries (the “BMP Business Combination Agreement”Business”).

The transaction was funded by ~~available cash and the~~an issuance of the Company’s ~~shares.~~shares of stock, as set forth in the table below. Transaction costs for legal consulting, accounting, and other related costs incurred in connection with the acquisition were approximately $0.8 million and $1.8 million for the three and six months ended June 30, 2023, respectively, which are included in selling, general, and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive loss for those periods.

The following table sets forth a summary of the ~~Acquired Companies were~~ ~~$1.7 million. Included~~allocation of the consideration transferred, including the identified assets acquired and liabilities assumed as of the acquisition date:

KORE Group Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)


($ in thousands)	Fair Value
Fair value of KORE common stock issued to sellers (10,000,000 shares)	$	14,700
Total consideration	$	14,700
Assets acquired:
Inventory	$	326
Property and equipment	36
Intangible assets	11,500
Total assets acquired	$	11,862
Liabilities assumed:
Accrued liabilities	$	405
Total liabilities assumed	$	405
Net identifiable assets acquired	11,457
Goodwill (excess of consideration transferred over net identifiable assets acquired)	$	3,243

Goodwill represents the future economic benefits that the Company expects to achieve as a result of the acquisition of the human capital and assets acquired. The goodwill resulting from this acquisition is deductible for tax purposes.

Consideration of disclosure of unaudited pro forma information

GAAP requires that a publicly traded entity disclose unaudited pro forma information regarding a business acquisition unless the disclosure of such information is impracticable. This disclosure involves a retrospective application of financial information to create factually supportable unaudited pro forma financial information as of the reporting date, as if the acquisition had taken place at the beginning of the year prior to that of acquisition.

The Company believes that the disclosure of pro forma financial information regarding this acquisition is impracticable because the acquisition was a carve-out of assets and no internally generated financial statements were made available to the Company. The Company considers any potential for retrospectively presented information regarding revenue and net income to require assumptions of significant amounts and about Twilio management’s intent in prior periods that cannot be objectively determined or independently substantiated.

The financial results of this acquisition are included in the Company’s condensed consolidated statements of operations and comprehensive loss from the date of acquisition and the revenue and net loss so included were not deemed material.

Business Acquisitions Completed in 2022

On February 16, 2022, the Company acquired 100% of the outstanding share capital (the “BMP Business Combination”) of Business Mobility Partners, Inc. and Simon IoT LLC (collectively, the “Acquired Companies”).

The transaction was funded by available cash and an issuance of the Company’s shares of stock. Transaction costs for legal, consulting, accounting, and other related costs incurred in connection with the acquisition were $1.7 million, of which $0.3 million was incurred prior to 2022. Included in each of the three and ~~nine~~six months ended ~~September~~June 30, 2022 were ~~$0 million and~~ $1.4 million ~~respectively,~~ of transaction costs, which were included in selling, general, and administrative expenses in the ~~Company's~~Company’s condensed consolidated statements of ~~operations.~~operations and comprehensive loss for those periods.

The following table ~~summarizes~~sets forth a summary of the allocation of the consideration transferred for the Acquired Companies, including the identified assets acquired and liabilities assumed as of the acquisition ~~date. The purchase price allocation is preliminary and is subject~~date:

KORE Group Holdings, Inc.

Notes to ~~revision as additional information about~~ the ~~fair value of the assets acquired and liabilities assumed, including certain working capital and income taxes, become available.~~Condensed Consolidated Financial Statements (Unaudited)


(In$ in thousands ~~USD)~~unless otherwise noted)	Fair Value
Cash, (net of closing cash of ~~$1,995)~~approximately $2.0 million) and working capital adjustments	$	46,002
Fair value of KORE common stock issued to sellers (4,212,246 shares)	23,295
Total consideration	$	69,297
Assets acquired:
Accounts receivable	$	3,303
~~Inventories~~Inventory	1,323
Prepaid expenses and other receivables	976
Property and equipment	201
Intangible assets	28,664
Total ~~Assets~~assets acquired	$	34,467
Liabilities assumed:
Deferred tax liabilities	$	7,391
Accounts payable and accrued liabilities	2,638
~~Liabilities~~Total liabilities assumed	$	10,029
Net identifiable assets acquired	24,438
Goodwill (excess of consideration transferred over net identifiable assets acquired)	$	44,859

~~During the nine months ended September 30, 2022, the Company paid a working capital adjustment of $0.9 million.~~

Goodwill represents the future economic benefits that ~~we expect~~the Company expects to achieve as a result of the ~~acquisition of the Acquired Companies.~~acquisition. A portion of the goodwill resulting from the acquisition is deductible for tax purposes.

The ~~BMP Business Combination Agreement contains~~acquisition agreement included customary indemnification terms. ~~Under~~In accordance with the ~~BMP Business Combination Agreement, a portion~~acquisition agreement, approximately $3.5 million of the cash purchase price ~~approximately $3.45 million~~ ~~was~~ paid at closing ~~is to be~~was held in escrow for a maximum of 18 months from the closing date, to guarantee the performance of general representations and warranties regarding closing amounts and to indemnify the Company against any future claims. ~~During the three months ended September 30, 2022, $0.6 million of the $3.45 million was paid to the seller~~Payments from the escrow account ~~that~~ did not result in any adjustments to the purchase price. Substantially all cash had been paid from the escrow account as of June 30, 2023.

The financial results of the Acquired Companies are included in the Company’s condensed consolidated statements of operations and comprehensive loss from the date of acquisition. For the three months ended ~~September~~June 30, 2022, the amounts of revenue and net income included in the Company’s condensed consolidated statements of operations and comprehensive loss were ~~$14.6~~$15.0 million and ~~$3.9~~$3.2 million, respectively. For the ~~nine~~six months ended ~~September~~June 30, 2022, the amounts of revenue and net income included in the Company’s condensed consolidated statements of operations and comprehensive loss were ~~$35.4~~$20.8 million and ~~$8.5~~$4.7 million, respectively.

Unaudited pro forma information

Had the ~~acquisition of the Acquired Companies~~BMP Business Combination been completed on January 1, 2021, net revenue would have been ~~$66.6 million and~~ ~~$74.6~~$145.6 million and the net loss would have been ~~$13.0~~$20.6 million for the six months ended June 30, 2022. The pro forma net loss for the six months ended June 30, 2022

includes a non-recurring pro forma adjustment relating to the acquisition-related costs of $1.4 million. Net revenue and ~~$4.2 million~~net loss for the three months ended ~~September~~June 30, 2022 ~~and 2021, respectively.~~

~~Had the acquisition of the Acquired Companies been completed on January 1, 2021, net revenue~~ would have been ~~$211.7 million and $203.6 million and~~unaffected by any pro forma adjustments, as the ~~net loss would have been $33.4 million and $11.8 million for~~BMP Business Combination was completed in the ~~nine months ended September 30, 2022 and 2021, respectively.~~first quarter of 2022.

~~This~~The unaudited pro forma financial information presented above is not necessarily indicative of what the operating results actually would have been ifhad the acquisition ~~had~~ taken place on January 1, 2021, nor is it indicative of future operating results. The pro forma amounts include the historical operating results of the Company prior to the acquisition, with adjustments factually supportable and directly attributable to the acquisition, primarily related to transaction costs and the amortization of intangible assets.

KORE Group Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

NOTE 4 – ACCOUNTS RECEIVABLE

The ~~pro forma net loss~~following table sets forth the details of the Company’s accounts receivable balances and allowance for credit losses as of June 30, 2023, and December 31, 2022:


($ in thousands)	June 30, 2023		December 31, 2022
Accounts receivable	$	47,417	$	45,097
Allowance for credit losses	(386)		(559)
Accounts receivable, net	$	47,031	$	44,538

The Company generally does not require collateral from its customers, although it may require letters of credit in certain instances to limit its credit risk.

One customer, a large multinational medical device and healthcare company, represented over 10% of the Company’s accounts receivable balances as of both June 30, 2023 and December 31, 2022. The same customer represented approximately 10% of the Company’s revenue during the six months ended June 30, 2023 and over 10% of the Company’s revenue for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021 includes~~2022 (see also Note 2—Revenue Recognition).

The Company accounts for credit losses under the current expected credit loss model using a ~~non-recurring adjustment of $1.7 million~~“loss rate methodology,” which considers historical loss rates on its trade accounts receivable balances, adjusted for ~~acquisition related costs.~~current conditions, along with reasonable and supportable forecasts regarding collections and delinquencies on trade accounts receivable.

NOTE 5 – ~~GOODWILL~~

~~The Company’s goodwill consists of following:~~

~~(In thousands, USD)~~

~~Amount~~

~~At December 31, 2021~~

~~381,962~~

~~Acquisitions~~

~~44,859~~

~~Currency translation~~

~~(1,217)~~

~~At September 30, 2022~~

~~425,604~~

~~NOTE 6 – SHORT-TERM AND LONG-TERM DEBT~~

~~Senior Secured Term Loan —UBS~~

~~On December 21, 2018, the Company entered into a credit agreement with UBS that consisted of a term loan as well as a senior secured revolving credit facility.~~

The term loan agreement limits cash dividends and other distributions from the Company’s subsidiaries to the Company and restricts the Company’s ability to pay cash dividends to its shareholders. The term loan agreement contains, among other things, financial covenants related to maximum total debt to adjusted EBITDA ratio and a minimum total leverage ratio. The Company was in compliance with these covenants as of September 30, 2022 and December 31, 2021. The credit agreement is substantially secured by all the Company’s assets.

~~The Company’s principal outstanding balances on the Senior Secured UBS Term Loan were $303.4 million and $305.8 million as of September 30, 2022 and December 31, 2021, respectively.~~

~~Senior Secured Revolving Credit Facility —UBS~~

~~On December 21, 2018, the Company entered into a $30.0 million senior secured revolving credit facility with UBS.~~

~~As of September 30, 2022, and December 31, 2021, no amounts were drawn on the revolving credit facility.~~

~~Bank Overdraft Facility—BNP Paribas Fortis N.V.~~

~~On October 8, 2018, a Belgium subsidiary of the Company entered into a €250,000 bank overdraft facility with BNP Paribas Fortis.~~

~~As of September 30, 2022, and December 31, 2021, no amounts were drawn on the bank overdraft facility.~~

~~Backstop Agreement~~

On September 30, 2021, KORE Wireless Group Inc. issued $95.1 million in senior unsecured exchangeable notes due in 2028 (the “Backstop Notes”) to affiliates of Fortress Credit Corp. (“Fortress”) pursuant to the terms of the backstop agreement (the “Backstop Agreement”), dated July 27, 2021, by and among KORE Wireless Group Inc. and Fortress. The Backstop Notes were issued pursuant to an indenture (the “Indenture”), dated September 30, 2021, by and among the Company, KORE Wireless Group Inc. and Wilmington Trust, National Association, as trustee, as amended and restated on November 15, 2021. On October 28, 2021, KORE Wireless Group Inc. issued an additional $24.9 million in additional notes (the “Additional Notes” and together with the Backstop Notes, the “Notes”) to Fortress, pursuant to the terms of an exchangeable notes purchase agreement, dated October 28, 2021, by and among KORE Wireless Group Inc., the Company and Fortress. The Additional Notes were issued pursuant to the Indenture and contains identical terms to the Backstop Notes.

Prior to the implementation of ASU 2020-06, since the Company could use the Company option to potentially settle all or part of the Notes for the cash equivalent of the fair value of the common stock for which the Notes may be exchanged, a portion of the proceeds of the Notes were required to be allocated to equity, based on the estimated fair value of the Notes had they not contained the exchange features. ASU 2020-06, simplifies and amends the cash conversion guidance so that the Company is no longer required to allocate to equity the estimated fair value of the Notes had they not contained the exchange features. The unamortized discount and

issuance costs will be amortized through September 30, 2028. The effective interest rates after the adoption of ASU 2020-06 for the Backstop Notes and the Additional Notes are 5.9% and 6.1% respectively.

~~The table below outlines the principal balances and net carrying amounts outstanding of the Notes:~~

(In thousands, USD) Post ASU 2020-06
At
September 30, 2022 Pre ASU 2020-06
At
December 31, 2021
Principal balances outstanding $ 120,000 $ 120,000
Net of unamortized debt issuance costs 2,560 2,458
Net of unamortized equity component costs — 15,517
Net carrying amount(1) $ 117,440 $ 102,025

~~(1)~~PREMIUM FINANCE AGREEMENTDue to the adoption of ASU 2020-06 the net carrying amount of the Notes changed. Refer to “Note 1-Summary of Significant Accounting policies – Recently Adopted Accounting Pronouncements” to the condensed consolidated financial statements for a summary of the effects of the adoption of ASU 2020-06.

The Indenture contains, among other things, financial covenants related to maximum total debt to adjusted EBITDA ratio. The Company was in compliance with these covenants as of September 30, 2022 and December 31, 2021.

~~Premium Finance Agreement~~

The Company entered into an agreement with a ~~Premium~~financing company (the “Premium Finance ~~Agreement (“Premium~~ Agreement”) on August 3, 2022, to finance the purchase of a ~~two year term~~ directors and officers liability insurance ~~policy.~~policy, which insurance policy had an initial two-year term at its inception on July 15, 2022. The initial principal amount financed under the Premium Finance Agreement ~~is for~~was $3.6 million, atwith a fixed interest rate of 4.6% per annum, amortized over a term of twenty months. The Premium Finance Agreement requires twenty~~twenty~~ fixed monthly principal and interest payments of ~~$0.19~~$0.2 million from August 15, 2022 to March 15, 2024.

The ~~Company’s principal outstanding balance on~~basis for the ~~Premium Agreement was $3.3 million as~~determination of ~~September 30, 2022.~~

~~NOTE 7 – INCOME TAXES~~

~~The Company determines its estimated annual effective tax rate at~~ the ~~end of each interim period based on estimated pre-tax income (loss) and facts known at that time. The estimated annual effective tax rate is applied~~payment timing to the ~~year-to-date pre-tax income (loss) at~~financing company generally relates to the end of each interim period with certain adjustments. The tax effects of significant unusual or extraordinary items are reflected as discrete adjustments in the periods in which they occur. The Company’s estimated annual effective tax rate can change based on the mix of jurisdictional pre-tax income (loss) and other factors. However, if the Company is unable to make a reliable estimate of its annual effective tax rate, then the actual effective tax rate for the year-to-date period may be the best estimate. For the three and nine months ended September 30, 2022, and 2021, the Company determined that its annual effective tax rate approach would provide for a reliable estimate and therefore used this method to calculate its tax provision.

The Company’s effective income tax rate was 16.3% and 45.1% for the three months ended September 30, 2022, and 2021, respectively. The Company’s effective income tax rate was 18.3% and 38.0% for the nine months ended September 30, 2022, and 2021, respectively. The effective income tax rate for the three and nine months ended September 30, 2022, and 2021 differed from the federal statutory rate primarilymonthly amounts due to the geographical mix of earnings and related foreign tax rate differential, permanent differences, research and development tax credits, and the valuation allowance maintained against certain deferred tax assets.

The Company’s income tax benefit was $2.5 million and $3.7 million for the three months ended September 30, 2022, and 2021, respectively. The Company’s income tax benefit was $7.8 million and $7.6 million for the nine months ended September 30, 2022, and 2021, respectively. The change in the income tax benefit for the nine months ended September 30, 2022 compared to the nine months ended 2021 was primarily due to changes in the jurisdictional mix of earnings and the impact of the change in fair value of warrant liability which is not taxable.

~~NOTE 8 – REVERSE RECAPITALIZATION~~

The Company operates subject to the terms and conditions of the Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) dated September 30, 2021. On March 12, 2021, Maple Holdings Inc. (“Maple” or “pre-combination KORE”) entered into a definitive merger agreement (the “Business Combination Agreement”) with Cerberus Telecom Acquisition Corp. (“CTAC”) ("the Business Combination”).

On September 30, 2021, pre-combination KORE and CTAC consummated the merger contemplated by the Business Combination Agreement. The Business Combination was accounted for as a reverse recapitalization whereby pre-combination KORE was determined to be the accounting acquirer and CTAC was treated as the “acquired”insurance company for ~~accounting purposes.~~ ~~Accordingly, for accounting purposes, the financial statements~~insurance premiums. All assets of the Company ~~represent a continuation~~serve as collateral under the Premium Finance Agreement in the event of default.

The outstanding principal balance of the ~~financial statements~~remaining Premium Finance Agreement included in “current portion of pre-combination KORE with the acquisition being treated as the equivalent of pre-combination KORE issuing stock for the net assets of CTAC, accompanied by a recapitalization. The net assets of CTAC were stated at historical cost, with no goodwill orlong-term debt and other intangible assets recorded. Pre-combination KORE was deemed to be the predecessor and the consolidated assets and liabilities and results of operations prior to September 30, 2021 are those of pre-combination KORE. Reported shares and earnings per share available to common stockholders, prior to the Business Combination, have been retroactively restated to reflect the exchange ratio established in the Business Combination Agreement. The number of shares of preferred stock was also retroactively restated basedborrowings, net” on ~~the exchange ratio.~~

The most significant change in the post-combination Company’s reported financial position and results was an increase in cash, net of transactions costs paid at close, of $63.2 million including: $225.0 million in gross proceeds from the private placements (the “PIPE”), $20.0 million in proceeds from CTAC after redemptions, $95.1 million in proceeds from the Backstop Notes, and payments of $229.9 million to KORE’s preferred shareholders. Additionally, on the closing date, the Company repaid the senior secured revolving credit facility with UBS of $25.0 million. The Company also repaid the outstanding related party loans of $1.6 million.

~~The Company incurred $24.2 million in transaction costs relating to the Business Combination on the closing date, of which $24.1 million has been recorded against additional paid-in capital in~~ the condensed consolidated balance ~~sheet~~sheets as of June 30, 2023 and December 31, ~~2021.~~

Upon closing of the Business Combination, the shareholders of CTAC, including CTAC founders, were issued 10,356,593 shares of common stock of the Company. In connection with the closing, holders of 22,240,970 shares of common stock of CTAC were redeemed at a price per share of $10.00. In connection with the Closing, 22,500,000 shares of the Company were issued to PIPE investors at a price per share of $10.00.

~~The number of shares of Class A common stock issued immediately following the consummation of the Business Combination were:~~

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 %

~~Additionally, there were outstanding public~~2022 was $1.7 million and ~~private placement warrants to purchase 8,638,966 and 272,779 shares of common stock,~~$2.8 million, respectively. ~~Refer to “Note 10 – Warrants on Common Stock” to the condensed consolidated financial statements.~~

Prior to the Business Combination, pre-combination KORE had a different capital structure comprised of several classes of preferred stock and warrants. As a result of the Business Combination, these were settled for cash or shares of common stock of the Company in lieu of cash.

NOTE 96 – ~~STOCK-BASED COMPENSATION~~FAIR VALUE MEASUREMENTS

~~Restricted Stock Units~~

~~2021 Long-Term Stock Incentive Plan~~

~~On September 29, 2021, the board of directors (the “Board”) approved the KORE Group Holdings, Inc. 2021 Long-Term Stock Incentive Plan (the “2021 Plan”) to promote the interests of~~For financial reporting purposes, the Company ~~and its stockholders by (i) attracting and retaining employees and directors of, and consultants to, the Company and its subsidiaries; (ii) motivating such individuals by means of~~

performance-related incentives to achieve longer-range performance goals; and (iii) enabling such individuals to participate in the long-term growth and financial success of the Company. The 2021 Plan allows for the grant of share-based payment awards to employees, directors of the Board, and consultants to the Company. The 2021 Plan is administered by the Compensation Committee of the Board. On December 8, 2021, the Compensation Committee of the Board approved the future grants of certain Restricted Stock Unit Awards ("RSUs"), the effectiveness of which were contingent upon the filing and effectiveness of the Form S-8 Registration Statement of the common stock, which occurred on January 4, 2022.

~~A RSU is~~follows a ~~contractual right to receive one share of our common stock in the future, and the~~ fair value ~~of the RSU~~hierarchy established under GAAP that is based on our share price on the grant date. The Company’s time-based RSUs generally vest one-quarter on each of the second and third anniversaries of the Business Combination date and the remaining one-half on the fourth anniversary of the Business Combination date; however, certain special retention awards may have different vesting terms. In addition, grants of RSUs to our non-employee directors and certain executive officers contain provisions as part of the respective employment agreements that accelerate the vesting of RSU grants in the event of a termination by the Company or a departure by a director or executive officers.

The Company also grants performance-based RSUs that vest subject to the achievement of specified performance goals within a specified time-frame. The performance-based RSUs contain provisions that increase or decrease the number of RSUs that ultimately vest, depending upon the level of performance achieved.

The Company has also granted RSUs that vest based upon the price of our common stock, which is a market condition. The fair value of awards that contain a market-based condition is estimated using a lattice model to analyze the fair value of the subject shares. The lattice model utilizes multiple stock paths, which are analyzedused to determine the fair value of financial instruments. This hierarchy prioritizes relevant market inputs in order to determine an “exit price” at the ~~subject shares.~~measurement date, or the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale. Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2 inputs are observable inputs other than quoted prices for an asset or liability that are obtained through corroboration with observable market data. Level 3 inputs are unobservable inputs (e.g., the Company’s data or assumptions) that are used when there is little, if any, relevant market activity for the asset or liability required to be measured at fair value.

~~The following table summarizes RSUs activity during~~In certain cases, inputs used to measure fair value fall into different levels of the ~~reporting periods shown below:~~

Number of
awards
outstanding
(in thousands) Weighted-
average
grant date
fair value
(per share) Aggregate
intrinsic
value
(in thousands)
Unvested RSUs at December 31, 2021 — $ — —
Granted 5,789 6.24 36,101
Vested (50) 6.88 (342)
Forfeited and canceled (158) 6.97 (1,104)
Unvested RSUs at September 30, 2022 5,580 34,655

~~During~~fair value hierarchy. In such cases, the ~~three and nine months ended September 30, 2022, respectively~~level at which the ~~Company granted 21.1 thousand and 4.0 million RSUs that vest~~fair value measurement falls is determined based on the ~~passage of time.~~

lowest level input that is significant to the fair value measurement. The ~~actual number of performance-based RSUs that could vest will range from 0% to 150%~~Company’s assessment of the ~~1.7 million unvested RSUs granted, depending upon our level~~significance of ~~achievement with respect~~a particular input requires judgment and considers factors specific to the ~~performance goals. During the three and nine months ended September~~asset or liability being measured.

As of June 30, ~~2022, respectively, the Company granted 10.6 thousand and 1.7 million, respectively, of performance based RSUs.~~

~~During the nine months ended September 30, 2022, the Company granted approximately 0.2 million RSUs, which vest based on~~2023, the Company’s ~~stock price attaining~~valuation policy and processes had not changed from those described in the consolidated financial statements for the year ended December 31, 2022 included in the Annual Report on Form 10-K. Included in Note 2 — Summary of Significant Accounting Policies to the Consolidated Financial Statements for the year ended December 31, 2022 included in the Annual Report on Form 10-K is a ~~closing price equal~~detailed description of our financial instruments measured at fair value and their significant inputs, as well as the general classification of such instruments pursuant to ~~or greater than $13, $15, or $18 per share over any 20 trading days within any 30 consecutive trading day period.~~ the Level 1, Level 2, and Level 3 valuation hierarchy.

The fair value of ~~these RSUs is estimated using a lattice model. Significant inputs used in our valuation~~cash, restricted cash, accounts receivable and payable, premium finance agreement, accrued liabilities, and other such assets and liabilities approximate their carrying values due to the short-term nature of these ~~RSUs included the following:~~

Three Months Ended Nine Months Ended
September 30,
2022 2022
Expected volatility 57.1%-75.2% 57.1%-75.2%
Risk-free interest rate 1.37%-2.09% 1.37%-2.09%
assets and liabilities.

KORE Group Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Private Placement Warrants - Measured at Fair Value

The ~~following is a summary of the~~ Company’s ~~share-based compensation expense related to RSUs during the reporting periods shown below:~~

Three Months Ended Nine Months Ended
September 30,
(In thousands, USD) 2022 2022
Total Stock Compensation Expense $ 3,019 7,570

~~As of September 30, 2022, the total unrecognized compensation costs related to outstanding RSUs were $27.4 million, which is expected to be recognized over a weighted-average period of~~ ~~2.6 years~~.

~~Pre-Combination Kore 2014 Equity Incentive Plan~~

Stock options had an exercise price equal to the fair market value of the shares on the date of grant and generally expired 10 years from the date of grant. The plan was terminated on September 30, 2021 in conjunction with the Business Combination.

~~The following is a summary of the Company’s share-based compensation expense related to stock options during the reporting periods shown below~~:

Three Months Ended Nine Months Ended
September 30,
(In thousands, USD) 2021 2021
Total Stock Compensation Expense $ 3,933 $ 4,564

~~The plan was terminated on September 30, 2021 in conjunction with the Business Combination.~~ ~~As of September 30, 2021, there were no stock options or any unrecognized compensation costs outstanding.~~

~~NOTE 10 – WARRANTS ON COMMON STOCK~~

~~As part of CTAC’s initial public offering (the “CTAC IPO”) in 2020, CTAC issued~~private placement warrants to third party investors, and each whole warrant entitles the holder to purchase one share of the Company’s common stock at an exercise price of $11.50 per share (the “Public Warrants”). The Public Warrants were initially recordedare measured quarterly at fair value. The fair value of the ~~Public Warrants as~~liability for these warrants is considered to be “Level 2” in the fair value hierarchy. The inputs for the fair value of ~~September 30, 2021,~~the liability for these warrants is based on reference to the closing price of KORE.WS ~~was closed to additional paid-in capital and~~(the “Public Warrants”), with an insignificant adjustment for short-term marketability restrictions, as the private placement warrants have substantially the same terms as the Public ~~Warrants will not need~~Warrants.

As of each of June 30, 2023 and December 31, 2022, 272,779 private placement warrants remained outstanding with a fair value based on a price of $0.12 per warrant.

Financial Instruments Held at Amortized Cost — Fair Value Disclosure

The Company is a party to two financial instruments, the Senior Secured UBS Term Loan and Backstop Notes, for which fair value is required to be ~~remeasured in subsequent reporting periods. Subsequent to the Business Combination, 8,638,966 Public Warrants remained outstanding as of September 30, 2022.~~

~~Private Placement Warrants~~

~~As part of CTAC’s IPO in 2020, CTAC completed the private sale of warrants (“Private Placement Warrants”), and each Private Placement Warrant allows the holder to purchase one share~~disclosed on a quarterly basis. The fair value of the Company’s ~~common stock at $11.50 per share. Subsequent~~Senior Secured UBS Term Loan is considered to be “Level 2” in the ~~Business Combination, 272,779 Private Placement Warrants remained outstanding as of September 30, 2022.~~

~~The Private Placement Warrants are measured quarterly at~~ fair value ~~on a recurring basis based on~~hierarchy, and the ~~closing price of KORE.WS. As of September 30, 2022,~~Backstop Notes are considered to be “Level 3” in the ~~aggregate~~fair value hierarchy.

To determine the fair value of the ~~Private Placement Warrants was $32.7 thousand~~Company’s Senior Secured UBS Term Loan, the Company used a valuation technique based on observable market prices for similar instruments. To determine the ~~closing price~~fair value of ~~KORE.WS~~the Backstop Notes, the Company used a valuation technique based primarily on a binomial lattice model with a number of time steps (each considered a “node”), which are points by which the Company examined the value of the notes to a holder to understand the investment decision that ~~date~~would occur at each node, modeling the decision to convert or hold by considering the maximum of ~~$0.12.~~the conversion or hold values at every node of the lattice in which the Backstop Notes are convertible, and choosing the action that maximizes the return to the Backstop Notes’ holders.

The table below sets forth the amortized cost and fair value of the Company’s Senior Secured UBS Term Loan and Backstop Notes as of June 30, 2023 and December 31, 2022. The fair value of this debt is not indicative of the amounts at which the Company could settle this debt.


Financial Instrument and Fair Value Level	Measurement	June 30, 2023		December 31, 2022
		(in thousands)
Senior Secured UBS Term Loan (Level 2)	Amortized cost	$	298,306	$	298,956
	Fair value	$	281,660	$	283,612

Backstop Notes (Level 3)	Amortized cost	$	117,700	$	117,545
	Fair value	$	97,674	$	92,900

Additional disclosures regarding Level 3 unobservable inputs - Backstop Notes

We use a third‑party valuation firm who utilizes proprietary methodologies to value our Backstop Notes. This firm uses a lattice modeling technique to determine the fair value of this Level 3 liability. Use of this technique requires determination of relevant inputs and assumptions, some of which represent significant unobservable inputs such as credit spreads and equity volatility based on guideline companies, as well as other valuation assumptions. Accordingly, a significant increase or decrease in any of these inputs in isolation may result in a significantly lower or higher fair value measurement. The following table sets forth information regarding the Company’s significant Level 3 inputs as of June 30, 2023 and December 31, 2022:

Financial Instrument disclosed as Level 3

Input

June 30, 2023

December 31, 2022

($ in thousands, except stock price)

Backstop Notes

Principal amount

$120,000

Term to maturity date

5.25 years

5.75 years

Stock price

$1.22

$1.26

Credit spreads

673 bps

759 bps

Selected equity volatility

92.8

85.6

KORE Group Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

NOTE 117 – NET LOSS PER SHARE

Presented in the table below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share (“EPS”) calculations for the periods ended:

Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands, USD, except share and per share amounts) 2022 2021 2022 2021
Numerator:
Net loss attributable to the Company $ (13,025) $ (4,508) $ (35,073) $ (12,474)
Less cumulative earnings to preferred shareholder — (7,897) — (22,822)
Add premium on preferred conversion to common shares — 4,074 — 4,074
Net loss attributable to common stockholders (13,025) (8,331) (35,073) (31,222)
Denominator:
Weighted average common shares and warrants outstanding*
Basic (in number) 76,240,530 32,098,715 75,514,986 31,799,313
Diluted (in number) 76,240,530 32,098,715 75,514,986 31,799,313
Net loss per unit attributable to common stockholder
Basic $ (0.17) $ (0.26) $ (0.46) $ (0.98)
Diluted $ (0.17) $ (0.26) $ (0.46) $ (0.98)

* The KORE warrants have been treated as outstanding common stock in the weighted average common shares and warrants outstanding for the three months and nine months ended September 30, 2021.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands, except share and per share amounts)	2023		2022		2023		2022
Numerator:
Net loss	$	(19,499)	$	(10,790)	$	(37,989)	$	(22,362)


Net loss attributable to common stockholders	$	(19,499)	$	(10,790)	$	(37,989)	$	(22,362)
Denominator:
Weighted average common shares outstanding
Basic and diluted (in number)	79,849,299		76,239,989		78,196,201		75,146,201

Net loss per share
Basic and diluted	$	(0.24)	$	(0.14)	$	(0.49)	$	(0.30)

The following securities were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive:

Three Months Ended Nine Months Ended
(Number of shares) September 30, September 30,
2022 2021 2022 2021
Common stock issued under the Backstop Agreement 9,600,031 — 9,600,031 —
Restricted stock grants with only service conditions 3,840,501 — 3,468,900 —


	Three Months Ended		Six Months Ended
(Number of shares)	June 30,		June 30,
	2023	2022	2023	2022
Common stock issued under the backstop agreement	9,600,031	9,600,031	9,600,031	9,600,031
Grants of restricted stock units	6,049,919	3,441,651	5,332,210	3,275,885
Private placement warrants	272,779	272,779	272,779	272,779

NOTE 128 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

The ~~Company's prepaid~~following table sets forth the details of “prepaid expenses and other current ~~assets consists~~assets” included on the condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022:


($ in thousands)	June 30, 2023		December 31, 2022
Prepaid expenses	$	8,400	$	8,362

Prepaid deposits	1,121		2,864
Indirect sales taxes receivable	941		1,735
Other current assets	659		523
Total prepaid expenses and other current assets	$	11,121	$	13,484

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Purchase Commitments

As of June 30, 2023, the Company had $21.3 million in purchase commitments relating to contractually committed carrier spend for the remainder of the ~~following:~~2023 fiscal year, and $34.2 million in purchase commitments relating to contractually committed carrier spend for the fiscal years 2024 through 2027.

(In thousands, USD) September 30, 2022 December 31, 2021
Prepaid expenses $ 11,515 $ 6,418
Prepaid deposits 1,801 1,030
Total $ 13,316 $ 7,448
Legal Contingencies

From time to time, the Company may be party to litigation relating to claims arising in the normal course of business. As of June 30, 2023, the Company was not aware of any legal claims that could materially impact its financial condition.

KORE Group Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

NOTE 10 – RELATED PARTY TRANSACTIONS

Office Lease and Professional Services Agreement

A wholly-owned subsidiary of the Company located in Brazil maintained an office lease and professional services agreement with a company controlled by a key member of the subsidiary’s management team.

Aggregate expenses for these transactions were $0.2 million and $0.3 million for the three and six months ended June 30, 2023, respectively, and $0.1 million and $0.1 million for the three and six months ended June 30, 2022, respectively. These amounts are recorded in selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive loss.

The office lease and professional services agreement with this affiliate were terminated on June 29, 2023.

NOTE 11 – SUPPLEMENTAL CASH FLOW INFORMATION

The following table sets forth the details of supplemental cash flow information for the six months ended June 30, 2023 and 2022:


	Six Months Ended June 30,
($ in thousands)	2023		2022



Non-cash investing and financing activities:
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 assets obtained in exchange for new operating lease liabilities	$	1,031	$	420
Non-cash consideration (stock) issued for acquisition	$	14,700	$	23,295

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~KORE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

The following discussion and analysis of the financial condition and results of operations of KORE Group Holdings, Inc. should be read together with ~~our audited condensed consolidated financial statements as of December 31, 2021, and 2020 and for~~ the ~~years ended December 31, 2021, 2020 and 2019~~Annual Report on Form 10-K and unaudited interim condensed consolidated financial statements as of and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023, and ~~September~~June 30, ~~2021,~~2022, together with related notes thereto. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those projected in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors”. Unless the context otherwise requires, all references in this section to “the Company” “KORE,” “us,” ~~“our”~~“our,” or “we” refer to ~~Maple Holdings, Inc. prior to the Business Combination, and to~~ KORE Group Holdings, Inc. ~~following~~

Cautionary Note Regarding Forward-Looking Statements

This section and other parts of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. For example, statements in this Form 10-Q regarding the potential future impact of macroeconomic conditions on the Company’s business and results of operations are forward-looking statements. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, under the heading “Risk Factors.” The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Factors that could have a material adverse effect on future results and performance relative to those set forth in or implied by the related forward-looking statements, as well as on our business, financial condition, liquidity, results of operations and prospects, include, but are not limited to:

•our ability to manage the businesses we have acquired, and to integrate and manage any future acquisitions of businesses;

•fluctuations in demand, including due to seasonality or broader economic factors, for our platforms and solutions;

•changes in pricing by us in response to competitive pricing actions;

•the ability of our hardware vendors to continue to manufacture high-quality products and to supply sufficient components and products to meet our demands;

•the timing and success of introductions of new solutions, products or upgrades by us or our competitors and the entrance of new competitors;

•changes in our business and pricing policies or those of our competitors;

•our ability to control costs, including our operating expenses and the costs of the hardware we purchase;

•changes in U.S. trade policies, including new or potential tariffs or penalties on imported products;

•competition, including entry into the industry by new competitors and new offerings by existing competitors;

•issues related to introductions of new or improved products such as supply chain disruptions or shortages of prior generation products or short-term decreased demand for next generation products;

•perceived or actual problems with the security, privacy, integrity, reliability, quality or compatibility of our solutions, including those related to security breaches in our systems, our subscribers’ systems, unscheduled downtime, or outages;

•the amount and timing of expenditures, including those related to expanding our operations, including through acquisitions, increasing research and development, introducing new solutions or paying litigation expenses;

•the ability to effectively manage growth within existing and new markets domestically and abroad;

•changes in the payment terms for our platforms and solutions;

•collectability of receivables due from customers and other third parties;

•the strength of regional, national and global economies; and

•the impact of natural disasters such as earthquakes, hurricanes, fires, power outages, floods, epidemics, pandemics and public health crises, including COVID-19, and other catastrophic events or man-made problems such as terrorism, civil unrest, and actual or threatened armed conflict, or global or regional economic, political and social conditions.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this report and in the Annual Report on Form 10-K. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our management’s views only as of the date such statements are made. The risks summarized under Item 1A. “Risk Factors” in the Annual Report on Form 10-K could cause actual results and performance to differ materially from those set forth in or implied by our forward-looking statements. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us.

We provide advanced connectivity services, location-based services, device solutions, managed and professional services used in the development and support of the “internet of things” (“IoT”) technology for the machine-to-machine market. Our IoT platform is delivered in partnership with the world’s largest mobile network operators and provides secure, reliable, wireless connectivity to mobile and fixed devices. This technology enables us to expand our global technology platform by transferring capabilities across new and existing vertical markets and delivers complimentary products to channel partners and resellers worldwide.

Trends and Recent Developments

Overall macroeconomic environment and its effect on us


Delaware	86-3078783
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3 Ravinia Drive NE, Suite 500 , Atlanta, Georgia 30346		~~30346~~
(Address of principal executive ~~offices)~~		(offices and Zip Code)


		Page No.
PART I - FINANCIAL INFORMATION		Page No.

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2

~~Item 1.~~Condensed Consolidated Statements of Changes in Stockholders’ Equity	~~Financial Statements (Unaudited)~~	23
	Condensed Consolidated Statements of Cash Flows	4
	Notes to the Condensed Consolidated Financial Statements
	Note 1 - Summary of Significant Accounting Policies	5
	Note 2 - Revenue Recognition	6
	Note 3 - Acquisitions	7
	Note 4 - Accounts Receivable	10
	Note 5 - Premium Finance Agreement	10
	Note 6 - Fair Value Measurements	10
	Note 7 - Net Loss Per Share	12
	Note 8 - Prepaid Expenses and Other Current Assets	12
	Note 9 - Commitments and Contingencies	12
	Note 10 - Related Party Transactions	13
	Note 11 - Supplemental Cash Flow Information	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2214

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3125

Item 4.	Controls and Procedures	3125

PART II - OTHER INFORMATION		3326

Item 1.	Legal Proceedings	3326

Item 1A.	Risk Factors	3326

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3326

Item 5.	Other Information	3326

Item 6.	Exhibits	3327

Signatures		28


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	September 30, 2022		December 31, 2021

Assets
Current assets
Cash	$	42,925	$	85,976
Accounts receivable, net of allowances for credits and doubtful accounts of $2,757 and $1,800, at September 30, 2022 and December 31, 2021, respectively	41,237		51,304
Inventories, net	8,272		15,470
Income taxes receivable	711		954
Prepaid expenses and other current assets	13,316		7,448
Total current assets	106,461		161,152
Non-current assets
Restricted cash	358		367
Property and equipment, net	12,141		12,240
Intangibles assets, net	201,260		203,474
Goodwill	425,604		381,962
Operating lease right-of-use assets	10,430		—
Deferred tax assets	566		—
Other long-term assets	653		407
Total assets	$	757,473	$	759,602
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	18,201	$	16,004
Accrued liabilities	14,290		21,502
Current portion of operating lease liabilities	1,872		—
Income taxes payable	381		467
Deferred revenue	7,012		6,889
Current portion of long-term debt and other borrowings, net	5,319		3,326
Total current liabilities	47,075		48,188
Non-current liabilities
Deferred tax liabilities	29,926		36,722
Warrant liability	33		286
Non-current portion of operating lease liabilities	9,501		—
Long-term debt and other borrowings, net	414,683		399,115
Other long-term liabilities	4,794		3,148
Total liabilities	$	506,012	$	487,459
Stockholders’ equity
Common stock, voting; par value $0.0001 per share; 315,000,000 shares authorized, 76,289,741 and 72,027,743 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	$	8	$	7
Additional paid-in capital	432,897		413,646
Accumulated other comprehensive loss	(8,491)		(3,331)
Accumulated deficit	(172,953)		(138,179)
Total stockholders’ equity	251,461		272,143
Total liabilities and stockholders’ equity	$	757,473	$	759,602


	Series A Preferred Stock			Series A-1 Preferred Stock			Series B Preferred Stock			Series C Convertible Preferred Stock			Total Temporary Equity		Common Stock				Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Amount		Shares		Amount		Amount		Amount		Amount		Amount
Balance at December 31, 2020 (as previously reported)	43	$	77,562	60	$	78,621	57	$	90,910	17	$	16,802	$	263,895	218		$	2	$	135,617	$	(1,677)	$	(113,726)	$	20,216
Conversion of stock	7,713	—		7,802	—		9,034	—		2,549	—		—		30,064		1		(1)		—		—		—
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	30,282		$	3	$	135,616	$	(1,677)	$	(113,726)	$	20,216
Accrued dividends payable	249	2,486		267	2,666		224	2,241		—	—		7,393		—		—		(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	8,005	$	80,048	8,129	$	81,287	9,315	$	93,151	2,566	$	16,802	$	271,288	30,282		$	3	$	128,538	$	(2,577)	$	(114,807)	$	11,157
Derecognition of stock	—	—		—	—		—	—		(46)	(300)		(300)		—		—		—		—		—		—
Accrued dividends payable	251	2,514		270	2,695		232	2,323		—	—		7,532		—		—		(7,532)		—		—		(7,532)
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		—		—		743		—		743
Stock-based compensation	—	—		—	—		—	—		—	—		—		—		—		315		—		—		315
Net loss	—	—		—	—		—	—		—	—		—		—		—		—		—		(6,885)		(6,885)
Balance at June 30, 2021	8,256	$	82,562	8,399	$	83,982	9,547	$	95,474	2,520	$	16,502	$	278,520	$	30,282	$	3	$	121,321	$	(1,834)	$	(121,692)	$	(2,202)
Accrued dividends payable	266	2,656		288	2,880		236	2,361		—	—		7,897		—		—		(7,897)		—		—		(7,897)
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		—		—		(1,322)		—		(1,322)
Share-based compensation	—	—		—	—		—	—		—	—		—		—		—		(3,519)		—		—		(3,519)
Distributions to and conversions of preferred stock	(8,522)	(85,218)		(8,687)	(86,862)		(9,783)	(97,835)		(2,520)	(16,502)		(286,417)		7,120		1		56,502		—		—		56,503
CTAC shares recapitalized, net of equity issuance costs of $15,912	—	—		—	—		—	—		—	—		—		10,356		1		6,456		—		—		6,457
Conversion of KORE warrants	—	—		—	—		—	—		—	—		—		1,366		—		10,663		—		—		10,663
Private offering and merger financing, net of equity issuance costs of $7,718	—	—		—	—		—	—		—	—		—		22,686		2		217,280		—		—		217,282
Equity portion of convertible debt, net of issuance costs of $224	—	—		—	—		—	—		—	—		—		—		—		12,510		—		—		12,510
Net loss	—	—		—	—		—	—		—	—		—		—		—		—		—		(4,508)		(4,508)
Balance at September 30, 2021	—	—		—	—		—	—		—	—		—		71,810		$	7	$	413,316	$	(3,156)	$	(126,200)	$	283,967


(In thousands, USD)	At December 31, 2021		Adjustments due to ASC 842		At January 1 2022
Operating lease right-of-use assets	$	—	$	9,278	$	9,278
Current portion of operating lease liabilities	—		2,121		2,121
Non-current portion of operating lease liabilities	—		7,483		7,483
Current portion of capital lease liabilities included in Accrued liabilities	191		(191)		—
Current portion of finance lease liabilities included in Accrued liabilities	—		191		191
Non-current portion of capital lease liabilities included in Other long-term liabilities	264		(264)		—
Non-current portion of finance lease liabilities included in Other long-term liabilities	—		264		264
Accrued liabilities	21,311		(326)		20,985


(In thousands, 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		(11,613)		402,033
Deferred tax liabilities	36,722		(3,849)		32,873
Accumulated deficit	(138,179)		299		(137,880)


(In thousands, USD)	Classification in Statement of operations	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Operating lease cost	Selling, general and administrative	$	951	$	2,669
Finance lease cost
Amortization of leased assets	Depreciation and amortization	93		289
Interest on lease liabilities	Interest expense	4		14
Total lease cost		$	1,048	$	2,972


	Operating Leases		Finance Leases
(In thousands, USD)	Amount		Amount
From October 1, 2022 to December 31, 2022	$	637	$	24
2023	2,532		126
2024	1,843		106
2025	1,664		23
2026	1,370		—
Thereafter	7,494		—
Total minimum lease payments	15,540		279
Interest expense	(4,167)		(17)
Total	$	11,373	$	262


(In thousands, USD)	Post ASU 2020-06 At September 30, 2022		Pre ASU 2020-06 At December 31, 2021
Principal balances outstanding	$	120,000	$	120,000
Net of unamortized debt issuance costs	2,560		2,458
Net of unamortized equity component costs	—		15,517
Net carrying amount(1)	$	117,440	$	102,025


	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	%


	Number of awards outstanding (in thousands)	Weighted- average grant date fair value (per share)		Aggregate intrinsic value (in thousands)
Unvested RSUs at December 31, 2021	—	$	—	—
Granted	5,789	6.24		36,101
Vested	(50)	6.88		(342)
Forfeited and canceled	(158)	6.97		(1,104)
Unvested RSUs at September 30, 2022	5,580			34,655


(In thousands, USD)	September 30, 2022		December 31, 2021
Prepaid expenses	$	11,515	$	6,418
Prepaid deposits	1,801		1,030
Total	$	13,316	$	7,448


		Three Months Ended September 30,								Change					Three Months Ended June 30,								Change
(In thousands, USD)		2022				2021				$		%
($ in thousands)														($ in thousands)	2023				2022				$		%
Services	Services	$	46,410	70	%	$	48,428	71	%	$	(2,018)	(4)	%	Services	$	51,023	73	%	$	47,805	67	%	$	3,218	7	%
Products	Products	20,230		30	%	19,450		29	%	780		4	%	Products	18,513		27	%	23,116		33	%	(4,603)		(20)	%
Total Revenue	Total Revenue	$	66,640	100	%	$	67,878	100	%	$	(1,238)	(2)	%	Total Revenue	$	69,536	100	%	$	70,921	100	%	$	(1,385)	(2)	%


	Nine Months Ended September 30,								Change
(In thousands, USD)	2022				2021				$		%
Services	$	141,694	69	%	$	139,866	76	%	$	1,828	1	%
Products	64,240		31	%	44,053		24	%	20,187		46	%
Total Revenue	$	205,934	100	%	$	183,919	100	%	$	22,015	12	%


	Three Months Ended September 30,				Nine Months Ended September 30,
Gross margin rate	2022		2021		2022		2021
IoT Connectivity	65	%	61	%	64	%	61	%
IoT Solutions	30	%	28	%	27	%	32	%
Total gross margins	53	%	48	%	51	%	52	%


			Drawn Amount (1)
Financing arrangement	Base Interest Rate (2)	Interest rate pricing spread	June 30, 2023		December 31, 2022
			($ in thousands)
Senior Secured UBS Term Loan	Term SOFR + 5.50%	0.10%	$	298,306	$	298,956
Senior Secured Revolving Credit Facility - UBS	Term SOFR + 5.50%	0.10%	—		—
Backstop Notes	5.50%	—	117,700		117,545
Premium Finance Agreement	4.60%	—	1,664		2,754
Bank Overdraft Facility	9.40%	2.00%	N/A		—
Total			$	417,670	$	419,255


Exhibit Number		Exhibit Description

31.1*3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement filed on Form S-1 on December 20, 2021).
3.2		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement filed on Form S-1 on December 20, 2021).
10.1	†	Employment Agreement by and between Jason Dietrich, the Company, and KORE Wireless Group, Inc. dated June 12, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 12, 2023)
10.2	† *	KORE Group Holdings, Inc. Omnibus Amendment to Restricted Stock Unit Award Agreements by and between KORE Group Holdings, Inc. and Romil Bahl, dated June 9, 2023
10.3	† *	KORE Group Holdings, Inc. 2021 Long Term Stock Incentive Plan Form of Director Restricted Stock Unit Award Agreement
10.4	† *	KORE Group Holdings, Inc. 2021 Long Term Stock Incentive Plan Form of Employee Restricted Stock Unit Award Agreement
31.1	*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/~~15d-14(a~~15d-14(a))
31.2
31.2**	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
32.1
32.1***	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
32.2
32.2***	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350

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	KORE Group Holdings, Inc.

Date: ~~November 14, 2022~~August 9, 2023	By:	/s/ Romil Bahl
		Romil Bahl
		President and Chief Executive Officer (Principal Executive Officer)


Date: ~~November 14, 2022~~August 9, 2023	By:	/s/ Paul Holtz
		Paul Holtz
		Executive Vice President Chief Financial Officer and Treasurer (Principal Financial Officer)