Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | INSG | |
Entity Registrant Name | INSEEGO CORP. | |
Entity Central Index Key | 1,022,652 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 73,392,179 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 31,547 | $ 21,198 |
Restricted cash | 61 | 61 |
Accounts receivable, net of allowance for doubtful accounts of $2,664 and $2,683, respectively | 27,418 | 15,674 |
Inventories, net | 13,747 | 20,403 |
Prepaid expenses and other | 6,619 | 9,101 |
Total current assets | 79,392 | 66,437 |
Property, plant and equipment, net of accumulated depreciation of $29,419 and $28,138, respectively | 5,832 | 6,991 |
Rental assets, net of accumulated depreciation of $11,040 and $9,039, respectively | 5,957 | 7,563 |
Intangible assets, net of accumulated amortization of $29,488 and $25,473, respectively | 33,400 | 38,671 |
Goodwill | 33,459 | 37,681 |
Other assets | 869 | 864 |
Total assets | 158,909 | 158,207 |
Current liabilities: | ||
Accounts payable | 31,580 | 29,332 |
Accrued expenses and other current liabilities | 16,407 | 27,558 |
DigiCore bank facilities | 1,583 | 3,075 |
Total current liabilities | 49,570 | 59,965 |
Long-term liabilities: | ||
Convertible senior notes, net | 90,983 | 84,773 |
Term loan, net | 44,673 | 44,055 |
Deferred tax liabilities, net | 4,524 | 5,261 |
Other long-term liabilities | 2,479 | 9,768 |
Total liabilities | 192,229 | 203,822 |
Commitments and Contingencies | ||
Stockholders’ deficit: | ||
Preferred stock, par value $0.001; 2,000,000 shares authorized and none outstanding | 0 | 0 |
Common stock, par value $0.001; 150,000,000 shares authorized, 73,391,361 and 58,644,559 shares issued and outstanding, respectively | 73 | 59 |
Additional paid-in capital | 544,303 | 519,531 |
Accumulated other comprehensive (loss) income | (3,985) | 4,604 |
Accumulated deficit | (573,626) | (569,759) |
Total stockholders’ deficit attributable to Inseego Corp. | (33,235) | (45,565) |
Noncontrolling interests | (85) | (50) |
Total stockholders’ deficit | (33,320) | (45,615) |
Total liabilities and stockholders’ deficit | $ 158,909 | $ 158,207 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 2,664 | $ 2,683 |
Accumulated depreciation, Property, plant and equipment | 29,419 | 28,138 |
Accumulated depreciation, Rental assets | 11,040 | 9,039 |
Accumulated amortization, Intangible assets | $ 29,488 | $ 25,473 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 73,391,361 | 58,644,559 |
Common stock, shares outstanding | 73,391,361 | 58,644,559 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net revenues: | ||||
IoT & Mobile Solutions | $ 34,636 | $ 41,116 | $ 95,257 | $ 123,143 |
Enterprise SaaS Solutions | 15,994 | 16,345 | 51,163 | 49,620 |
Total net revenues | 50,630 | 57,461 | 146,420 | 172,763 |
Cost of net revenues: | ||||
IoT & Mobile Solutions | 26,793 | 35,323 | 75,168 | 102,961 |
Enterprise SaaS Solutions | 6,233 | 5,684 | 20,093 | 18,526 |
Impairment of abandoned product line, net of recoveries | 0 | 82 | 355 | 1,489 |
Total cost of net revenues | 33,026 | 41,089 | 95,616 | 122,976 |
Gross profit | 17,604 | 16,372 | 50,804 | 49,787 |
Operating costs and expenses: | ||||
Research and development | 5,317 | 5,099 | 15,261 | 16,788 |
Sales and marketing | 5,907 | 6,181 | 16,957 | 20,340 |
General and administrative | 5,837 | 7,118 | 18,634 | 27,249 |
Amortization of purchased intangible assets | 869 | 905 | 2,764 | 2,714 |
Extinguishment of acquisition-related liabilities | (17,174) | 0 | (17,174) | 0 |
Restructuring charges, net of recoveries | 245 | 3,446 | 1,165 | 5,698 |
Total operating costs and expenses | 1,001 | 22,749 | 37,607 | 72,789 |
Operating income (loss) | 16,603 | (6,377) | 13,197 | (23,002) |
Other expense: | ||||
Interest expense, net | (5,113) | (5,229) | (15,360) | (14,266) |
Other expense, net | (180) | (1,780) | (554) | (3,408) |
Income (loss) before income taxes | 11,310 | (13,386) | (2,717) | (40,676) |
Income tax provision | 473 | 409 | 1,185 | 1,270 |
Net income (loss) | 10,837 | (13,795) | (3,902) | (41,946) |
Less: Net loss attributable to noncontrolling interests | 6 | 6 | 35 | 33 |
Net income (loss) attributable to Inseego Corp. | $ 10,843 | $ (13,789) | $ (3,867) | $ (41,913) |
Net income (loss) per share: | ||||
Basic ($ per share) | $ 0.16 | $ (0.23) | $ (0.06) | $ (0.72) |
Diluted ($ per share) | $ 0.15 | $ (0.23) | $ (0.06) | $ (0.72) |
Weighted-average shares used in computation of net income (loss) per share: | ||||
Basic (in shares) | 68,480,774 | 59,004,520 | 63,585,229 | 58,157,171 |
Diluted (in shares) | 71,456,346 | 59,004,520 | 63,585,229 | 58,157,171 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ 10,837 | $ (13,795) | $ (3,902) | $ (41,946) |
Foreign currency translation adjustment | (1,797) | (3,224) | (8,589) | 48 |
Total comprehensive income (loss) | $ 9,040 | $ (17,019) | $ (12,491) | $ (41,898) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (3,902) | $ (41,946) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 10,564 | 11,098 |
Provision for bad debts, net of recoveries | 536 | 986 |
Loss on impairment of abandoned product line, net of recoveries | 355 | 1,489 |
Provision for excess and obsolete inventory, net of recoveries | 1,219 | 876 |
Share-based compensation expense | 3,678 | 2,942 |
Amortization of debt discount and debt issuance costs | 7,328 | 7,840 |
Loss on extinguishment of debt, net | 0 | 2,035 |
Loss on disposal of assets | 455 | 648 |
Deferred income taxes | (4) | 9 |
Extinguishment of acquisition-related liabilities | (17,174) | 0 |
Unrealized foreign currency transaction loss (gain), net | 319 | (794) |
Other | 98 | (309) |
Changes in assets and liabilities: | ||
Accounts receivable | (13,038) | 614 |
Inventories | 1,779 | 3,637 |
Prepaid expenses and other assets | 2,423 | (4,071) |
Accounts payable | 879 | 1,968 |
Accrued expenses, income taxes, and other | 616 | (1,813) |
Net cash used in operating activities | (3,869) | (14,791) |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (936) | (1,737) |
Proceeds from the sale of property, plant and equipment | 109 | 182 |
Purchases of intangible assets and additions to capitalized software development costs | (1,527) | (2,256) |
Net cash used in investing activities | (2,354) | (3,811) |
Cash flows from financing activities: | ||
Gross proceeds received from private placement | 19,661 | 0 |
Proceeds from term loans | 0 | 64,917 |
Payment of issuance costs related to term loans | 0 | (905) |
Principal payments on term loans | (500) | (20,000) |
Repurchase of convertible senior notes | 0 | (11,900) |
Net repayment of DigiCore bank and overdraft facilities | (1,203) | (620) |
Principal payments under capital lease obligations | (487) | (613) |
Principal payments on mortgage bond | (241) | (216) |
Proceeds from stock option exercises and employee stock purchase plan, net of taxes paid on vested restricted stock units | 1,022 | (793) |
Net cash provided by financing activities | 18,252 | 29,870 |
Effect of exchange rates on cash, cash equivalents and restricted cash | (1,680) | (1,164) |
Net increase in cash, cash equivalents and restricted cash | 10,349 | 10,104 |
Cash, cash equivalents and restricted cash, beginning of period | 21,259 | 9,894 |
Cash, cash equivalents and restricted cash, end of period | 31,608 | 19,998 |
Cash paid during the year for: | ||
Interest | 6,605 | 4,571 |
Income taxes | 593 | 136 |
Supplemental disclosures of non-cash activities: | ||
Transfer of inventories to rental assets | 3,018 | 4,225 |
Capital expenditures financed through accounts payable | 2,178 | 0 |
Issuance costs financed through accounts payable | 500 | 0 |
Issuance of common stock under settlement agreement | 925 | 0 |
Issuance of common stock under amended earn-out agreement | 0 | 2,638 |
Additional debt discount on exchange of convertible senior notes | 0 | 3,600 |
Term loan debt discount issued in common stock | $ 0 | $ 2,340 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The information contained herein has been prepared by Inseego Corp. (the “Company”) in accordance with the rules of the Securities and Exchange Commission (the “SEC”). The information at September 30, 2018 and the results of the Company’s operations for the three and nine months ended September 30, 2018 and 2017 are unaudited. The condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods presented. These condensed consolidated financial statements and notes hereto should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . The year-end condensed consolidated balance sheet data as of December 31, 2017 was derived from the Company’s audited consolidated financial statements and may not include all disclosures required by accounting principles generally accepted in the United States. Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not affect total revenues, costs and expenses, net income (loss), assets, liabilities or stockholders’ deficit. Except as set forth below, the accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . The results of operations for the interim periods presented are not necessarily indicative of results to be expected for any other interim period or for the year as a whole. The Company has a history of operating and net losses and overall usage of cash from operating and investing activities. During the three months ended September 30, 2018 , the Company continued certain restructuring initiatives that were commenced during the first quarter of 2018. These restructuring initiatives are aimed at reducing the Company’s operating expenses in an effort to increase operating cash flows to eventually be sufficient to offset debt service costs and cash flows from investing activities. On August 6, 2018 , the Company completed a private placement of 12,062,000 shares of common stock and warrants to purchase an additional 4,221,700 shares of common stock, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, to certain accredited investors for gross proceeds of $19.7 million in cash (see Note 8 , Private Placement ). The Company’s management believes that its cash and cash equivalents, together with anticipated cash flows from operations, will be sufficient to meet its cash flow needs for the next twelve months following the filing date of this report. The Company’s ability to attain more profitable operations and continue generating positive cash flow is dependent upon achieving a level and mix of revenues adequate to support its evolving cost structure. If events or circumstances occur such that the Company does not meet its operating plan as expected, or if the Company becomes obligated to pay unforeseen expenditures as a result of ongoing litigation, the Company may be required to raise capital, reduce planned research and development activities, incur additional restructuring charges or reduce other operating expenses which could have an adverse impact on its ability to achieve its intended business objectives. The Company may decide to raise additional funds to accelerate development of new and existing services and products, to respond to competitive pressures or to acquire complementary products, businesses or technologies. There can be no assurance that any required or desired additional financing will be available on terms favorable to the Company, or at all. In addition, in order to obtain additional borrowings, the Company must comply with certain requirements under the Credit Agreement and the Inseego Indenture (each as defined below). If additional funds are raised by the issuance of equity securities, the Company’s stockholders could experience dilution of their ownership interests and securities issued may have rights senior to those of the holders of the Company’s common stock. If additional funds are raised by the issuance of debt securities, the Company may be subject to additional limitations on its operations. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly- and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Segment Information Management has determined that the Company has one reportable segment. The Chief Executive Officer, who is also the Chief Operating Decision Maker, does not manage any part of the Company separately, and the allocation of resources and assessment of performance is based solely on the Company’s consolidated operations and operating results. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ materially from these estimates. Significant estimates include allowance for doubtful accounts receivable, provision for excess and obsolete inventory, valuation of intangible and long-lived assets, valuation of goodwill, valuation of debt obligations, royalty costs, accruals relating to litigation and restructuring, provision for warranty costs, income taxes, share-based compensation expense and the Company’s ability to continue as a going concern. Revenue Recognition Significant changes to the Company’s accounting policies, as a result of the adoption of the new revenue recognition guidance on January 1, 2018, are discussed below. Sources of Revenue The Company generates revenue from a broad range of product sales including intelligent wireless hardware products for the worldwide mobile communications and industrial Internet of Things (“IoT”) markets. The Company’s products principally include intelligent mobile hotspots, wireless routers for IoT applications, USB modems, integrated telematics and mobile tracking hardware devices, which are supported by applications software and cloud services designed to enable customers to easily analyze data insights and configure and manage their hardware. The Company classifies its revenues from the sale of its products and services into two distinct groupings, specifically IoT & Mobile Solutions and Enterprise SaaS Solutions. Both IoT & Mobile Solutions and Enterprise SaaS Solutions revenues include any hardware and software required for the respective solution. Net revenues by product grouping for the three and nine months ended September 30, 2018 and 2017 were as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 IoT & Mobile Solutions $ 34,636 $ 41,116 $ 95,257 $ 123,143 Enterprise SaaS Solutions 15,994 16,345 51,163 49,620 Total $ 50,630 $ 57,461 $ 146,420 $ 172,763 See geographic disaggregation information in Note 9 , Geographic Information and Concentrations of Risk . IoT & Mobile Solutions . The IoT & Mobile Solutions portfolio is comprised of end-to-end edge to cloud solutions including 4G LTE mobile broadband gateways, routers, modems, hotspots, VoLTE based wireless home phones and cloud management software. The solutions are offered under the MiFi brand for consumer and business markets, and under the Skyus brand for industrial IoT markets. Enterprise SaaS Solutions . The Enterprise SaaS Solutions consist of various subscription offerings to gain access to the Company’s Ctrack telematics platforms, which provide fleet vehicle, aviation ground vehicle and asset tracking and performance information, and other telematics applications, and the Company’s Device Management System (“DMS”), a hosted software-as-a-service (“SaaS”) platform that helps organizations manage the selection, deployment and spend of their customer’s wireless assets, helping them save money on personnel and telecom expenses. Contracts with Customers The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (as amended, “ASC 606”), effective January 1, 2018, using the modified retrospective method applied to those contracts which were not substantially completed as of January 1, 2018 . These standards provide guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenues for 2018 are reported under ASC 606, while prior period amounts are not adjusted and continue to be reported under ASC 605, Revenue Recognition . The Company routinely enters into a variety of agreements with customers, including quality agreements, pricing agreements and master supply agreements which outline the general commercial terms and conditions under which the Company does business with a specific customer, including shipping terms and pricing for the products and services that the Company offers. The Company also sells to some customers solely based on purchase orders. The Company has concluded, for the vast majority of its revenues, that its contracts with customers are either a purchase order or the combination of a purchase order with a master supply agreement. The Company determines revenue recognition through the following five steps: 1) identification of the contract, or contracts, with a customer; 2) identification of the performance obligations in the contract; 3) determination of the transaction price; 4) allocation of the transaction price to the performance obligations in the contract; and 5) recognition of revenue when, or as, performance obligations are satisfied. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s performance obligations are established when a customer submits a purchase order notification (in writing, electronically or verbally) for goods and services, and the Company accepts the order. The Company identifies performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order. The Company generally recognizes revenue upon the satisfaction of these criteria when control of the product or service has been transferred to the customer at which time it has an unconditional right to receive payment. The Company’s prices are fixed and have no history of being affected by contingent events that could impact the transaction price. The Company does not offer price concessions and does not accept payment that is less than the price stated when it accepts the purchase order. Revenue Recognition Revenue is recognized upon transfer of control of products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that may include various combinations of products and services which are generally capable of being distinct and accounted for as separate performance obligations. Hardware. Hardware revenue from the sale of the Company’s IoT & Mobile Solutions devices is recognized when the Company transfers control to the customer, typically at the time when the product is delivered, shipped or installed at which time the title passes to the customer, and there are no further performance obligations with regards to the hardware device. SaaS and Other Services. SaaS subscription revenue is recognized over time on a ratable basis over the contract term beginning on the date that its service is made available to the customer. Subscription periods range from monthly to multi-year, with the majority of contracts being one to three years. Telematics includes a device which collects and transmits the information from the vehicle or other asset. The Company’s customers have an option to purchase the monitoring device or lease it over the term of the contract. If the customer purchases the hardware device, the Company recognizes the revenue at a point in time as discussed above in the hardware revenue recognition disclosure. If the customer chooses to lease the monitoring device, the Company recognizes the revenue for the monitoring device over the term of the contract. The Company records such revenue in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 840, Leases (“ASC 840”), as it has determined that they qualify as operating leases (ownership of the device does not transfer to the other party). Maintenance and support services revenue. Periodically, the Company sells separately-priced warranty contracts that extend beyond the Company’s base warranty period. The separately priced service contracts range from 12 months to 36 months. The Company typically receives payment at the inception of the contract and recognizes revenue as earned on a straight-line basis over the term of the contract. Professional services revenue. From time to time, the Company enters into special engineering design service agreements. Revenues from engineering design services are specifically designed to meet specifications of a particular product, and therefore do not create an asset with an alternative use. The Company recognizes revenue based on the achievement of certain applicable milestones and the amount of payment the Company believes it is entitled to at the time. With respect to revenue related to third party product sales or other arrangements that involve the services of another party, for which the Company does not control the sale or service and acts as an agent to the transaction, the Company recognizes revenue on a net basis. The portion of the gross amount billed to customers that is remitted by the Company to another party is not reflected as revenue. Multiple Performance Obligations The Company’s contracts with customers may include commitments to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. When hardware, software and services are sold in various combinations, judgment is required to determine whether each performance obligation is considered distinct and accounted for separately, or not distinct and accounted for together with other performance obligations. In instances where the software elements included within hardware for various products are considered to be functioning together with non-software elements to provide the tangible product’s essential functionality, these arrangements are accounted for as a single distinct performance obligation. Judgment is required to determine the stand-alone selling price (“SSP”) for each distinct performance obligation. When available, the Company uses observable inputs to determine SSP. In instances where SSP is not directly observable, such as when the Company does not sell the product or service separately, it determines the SSP based on a cost-plus model as market and other observable inputs are seldom present based on the proprietary nature of the Company’s products. Contract Liabilities Timing of revenue recognition may differ from the timing of invoicing to customers. If customers are invoiced for subscription services in advance of the service period, deferred revenue liabilities, or contract liabilities, are recorded. Deferred revenue liabilities, or contract liabilities, are also recorded when the Company collects payments in advance of performing the services. Contract Assets The Company capitalizes sales commissions earned by its sales force when they are considered to be incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit. There were no significant amounts of assets recorded related to contract costs as of September 30, 2018 . Applying the practical expedient in paragraph ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses. Significant Judgments in the Application of the Guidance in ASC 606 Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company considered the performance obligations in its customer master supply agreements and determined that, for the majority of its revenue, the Company generally satisfies performance obligations at a point in time upon delivery of the product to the customer. Revenue from the Company’s SaaS subscription services represent a single promise to provide continuous access to its software solutions and their processing capabilities in the form of a service through one of the Company’s or hosted data centers. As each day of providing access to the software is substantially the same, and the customer simultaneously receives and consumes the benefits as access is provided, the Company has determined that its subscription services arrangements include a single performance obligation comprised of a series of distinct services. The Company’s SaaS subscriptions also include an unspecified volume of call center support and any remote system diagnostic and software upgrades as needed. These services are combined with the recurring monthly subscription service since they are highly interrelated and interdependent. Revenue from the Company’s subscription services is recognized over time on a ratable basis over the contract term beginning on the date that the service is made available to the customer. Shipping and Handling Charges Fees charged to customers for shipping and handling of products are included in product revenues, and costs for shipping and handling of products are included as a component of cost of sales. Taxes Collected from Customers Taxes collected on the value of transaction revenue are excluded from product and services revenues and cost of sales and are accrued in current liabilities until remitted to governmental authorities. Transition Disclosures Adoption of the new standards related to revenue recognition did not have a material impact on the Company’s consolidated financial statements. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB, which are adopted by the Company as of the specified date. Unless otherwise discussed, management believes the impact of recently issued standards, some of which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents in the statement of cash flows. The Company implemented this guidance in the first quarter of 2018 using a retrospective transition method for each period presented. The following line items in the Company’s unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2017 have been adjusted to reflect the adoption of this new guidance: As Previously Reported Adjustment As Adjusted Restricted cash $ (411 ) $ 411 $ — Net cash used in operating activities (15,202 ) 411 (14,791 ) Net increase in cash, cash equivalents and restricted cash 9,693 411 10,104 Cash, cash equivalents and restricted cash, end of period 19,587 411 19,998 In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. This guidance results in the Company providing a more faithful representation of the rights and obligations arising from operating and capital leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. Originally, entities were required to adopt ASU 2016-02 using a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application. However, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , which now allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. In July 2018, the FASB also issued ASU 2018-10, Codification Improvements to Topic 842, Leases , which clarifies how to apply certain aspects of ASU 2016-02. The Company has compiled its lease inventory and is currently evaluating the contracts and assessing the impact of this guidance. |
Financial Statement Details
Financial Statement Details | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statement Details | Financial Statement Details Inventories, net Inventories, net, consist of the following (in thousands): September 30, December 31, Finished goods $ 8,820 $ 14,331 Raw materials and components 4,927 6,072 Total inventories, net $ 13,747 $ 20,403 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): September 30, December 31, Royalties $ 1,564 $ 1,558 Payroll and related expenses 2,499 2,870 Professional fees 727 1,789 Accrued interest 1,685 239 Deferred revenue 2,464 1,823 Acquisition-related liabilities 1,000 13,186 Other 6,468 6,093 Total accrued expenses and other current liabilities $ 16,407 $ 27,558 Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands): September 30, December 31, September 30, December 31, Cash and cash equivalents $ 31,547 $ 21,198 $ 19,587 $ 9,894 Restricted cash 61 61 411 — Total cash, cash equivalents and restricted cash $ 31,608 $ 21,259 $ 19,998 $ 9,894 As of September 30, 2018 , restricted cash included collateral requirements related to the Company’s corporate credit card program. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The balances in goodwill and other intangible assets were primarily a result of the Company’s acquisitions of DigiCore Holdings Limited (which has been renamed Ctrack Holdings (Pty) Ltd.) and of R.E.R. Enterprises, Inc. (“RER”) and its wholly-owned subsidiary and principal operating asset, Feeney Wireless, LLC (which has been renamed Inseego North America, LLC) (“FW”). See Note 4, Goodwill and Other Intangible Assets , in the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for a discussion of the components of goodwill and additional information regarding other intangible assets. |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Assets and Liabilities | Fair Value Measurement of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A fair value measurement reflects the assumptions market participants would use in pricing an asset or liability based on the best available information. These assumptions include the risk inherent in a particular valuation technique (such as a pricing model) and the risks inherent in the inputs to the model. The Company classifies inputs to measure fair value using a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) and is defined as follows: Level 1: Pricing inputs are based on quoted market prices for identical assets or liabilities in active markets (e.g., NYSE or NASDAQ). Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs include benchmark yields, trade data, reported trades and broker dealer quotes, two-sided markets and industry and economic events, yield to maturity, Municipal Securities Rule Making Board reported trades and vendor trading platform data. Level 2 includes those financial instruments that are valued using various pricing services and broker pricing information including Electronic Communication Networks and broker feeds. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources, including the Company’s own assumptions. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There have been no transfers of assets or liabilities between fair value measurement classifications during the nine months ended September 30, 2018 . The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis in accordance with the authoritative guidance for fair value measurements as of September 30, 2018 (in thousands): Balance as of Level 1 Assets: Cash equivalents Money market funds $ 15,020 $ 15,020 Total cash equivalents $ 15,020 $ 15,020 The Company had no financial instruments measured at fair value on a recurring basis as of December 31, 2017 . Other Financial Instruments The Company’s financial assets and liabilities are carried at fair value or at amounts that, because of their short-term nature, approximate current fair value, with the exception of its $105.1 million in Convertible Notes (as defined below) (see Note 5 , Debt ). The Company carries its Convertible Notes at amortized cost. The debt and equity components of the Convertible Notes were measured using Level 3 inputs and are not measured on a recurring basis. The fair value of the liability component of the Convertible Notes, which approximates the carrying value of such notes, was $91.0 million and $84.8 million as of September 30, 2018 and December 31, 2017 , respectively. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Previous Credit Agreements On October 31, 2014, the Company entered into a five -year senior secured revolving credit facility in the amount of $25.0 million (the “Revolver”) with Wells Fargo Bank, National Association, as lender. Concurrently with the acquisition of FW, the Company amended the Revolver to include FW as a borrower and Loan Party, as defined by the agreement. On November 17, 2015, the Revolver was amended to increase the maximum borrowing capacity to $48.0 million . On March 20, 2017, at the Company’s request, the financial covenants with respect to liquidity requirements and EBITDA targets, among other things, were amended in order to enable draw-downs by the Company from time to time. In exchange for such accommodations, the aggregate amount available under the Revolver was decreased from $48.0 million to $10.0 million . The Company terminated the Revolver on May 8, 2017, in connection with the execution of a credit agreement between the Company and Lakestar Semi Inc., a private investment fund managed by Soros Fund Management LLC, dated as of May 8, 2017 (the “ Prior Credit Agreement ”). The Prior Credit Agreement provided for a $20.0 million secured term loan with a maturity date of May 8, 2018 . In conjunction with the closing of the Prior Credit Agreement , the Company received proceeds of $18.0 million , net of a $2.0 million debt discount, and paid issuance costs of approximately $0.4 million . On August 23, 2017, upon entering into the Credit Agreement described below, the Company used a portion of the proceeds of the new Term Loan (as defined below) to repay all outstanding amounts under and terminate the Prior Credit Agreement . In connection with the termination of the Prior Credit Agreement , the Company recognized a loss on extinguishment of debt of approximately $1.7 million , which is included in other expense, net, in the condensed consolidated statements of operations. There was no early termination fee paid in connection with the termination of the Prior Credit Agreement. Term Loan On August 23, 2017, the Company and certain of its direct and indirect subsidiaries (the “Guarantors”) entered into a credit agreement (the “Credit Agreement”) with Cantor Fitzgerald Securities, as administrative agent and collateral agent, and certain funds managed by Highbridge Capital Management, LLC, as lenders (the “Lenders”). Pursuant to the Credit Agreement, the Lenders provided the Company with a term loan in the principal amount of $48.0 million (the “Term Loan”) with a maturity date of August 23, 2020 (the “Maturity Date”). In conjunction with the closing of the Term Loan, the Company received proceeds of $46.9 million , $35.0 million of which was funded to the Company in cash on the closing date, net of an original issue discount and commitment fee, and the remaining $11.9 million of which was funded through the Company’s repurchase and cancellation of approximately $14.9 million of its outstanding Inseego Notes (as defined below) pursuant to the terms of the Note Purchase Agreement (as defined below). The Company paid issuance costs of approximately $0.5 million . Additionally, the Company issued shares of its common stock and accrued an exit fee, which, when combined with the original debt discount and commitment fee, resulted in a total debt discount of approximately $4.0 million . The Term Loan is secured by a first priority lien on substantially all of the assets of the Company and the Guarantors, including equity interests in certain of the Company’s direct and indirect subsidiaries, in each case subject to certain customary exceptions and permitted liens. The Credit Agreement includes customary representations and warranties, a material adverse change clause, as well as customary reporting and financial covenants. The Term Loan bears interest at a rate per annum equal to the three-month LIBOR, but in no event less than 1.00% , plus 7.625% . Interest on the Term Loan is payable on the last business day of each calendar month and on the Maturity Date. Principal on the Term Loan is payable on the Maturity Date. As required by the terms of the Credit Agreement, during the three months ended September 30, 2018 , the Company repaid $0.5 million of principal on the Term Loan in connection with the Settlement Agreement, as defined below (see Note 10 , Commitments and Contingencies ). The Term Loan consists of the following (in thousands): September 30, December 31, 2017 Principal $ 47,500 $ 48,000 Less: unamortized debt discount and debt issuance costs (2,827 ) (3,945 ) Net carrying amount $ 44,673 $ 44,055 The effective interest rate on the Term Loan was 13.64% for the nine months ended September 30, 2018 . The following table sets forth total interest expense recognized related to the Term Loan (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Contractual interest expense $ 1,185 $ 435 $ 3,452 $ 435 Amortization of debt discount 332 139 998 139 Amortization of debt issuance costs 40 17 120 17 Total interest expense $ 1,557 $ 591 $ 4,570 $ 591 Convertible Senior Notes Novatel Wireless Notes On June 10, 2015, Novatel Wireless, Inc., a wholly owned subsidiary of Inseego Corp. (“Novatel Wireless”), issued $120.0 million of 5.50% convertible senior notes due 2020 (the “Novatel Wireless Notes”). The Company incurred issuance costs of approximately $3.9 million . The Company used a portion of the proceeds from the offering to finance its acquisition of Ctrack, to pay fees and expenses related to the acquisition, and for general corporate purposes. The Novatel Wireless Notes are governed by the terms of an indenture, dated June 10, 2015 (as amended, the “Novatel Wireless Indenture”), between Novatel Wireless, as issuer, Inseego Corp. and Wilmington Trust, National Association, as trustee. The Novatel Wireless Notes are senior unsecured obligations of Novatel Wireless and bear interest at a rate of 5.50% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2015. The Novatel Wireless Notes will mature on June 15, 2020, unless earlier repurchased or converted. The Novatel Wireless Notes will be convertible into cash, shares of the Company’s common stock, or a combination thereof, at the election of the Company, at an initial conversion price of $5.00 per share of the Company’s common stock. Following the settlement of the exchange offer and consent solicitation described below, approximately $0.2 million aggregate principal amount of Novatel Wireless Notes remain outstanding. Inseego Notes On January 9, 2017, in connection with the settlement of an exchange offer and consent solicitation with respect to the Novatel Wireless Notes, the Company issued approximately $119.8 million aggregate principal amount of 5.50% convertible senior notes due 2022 (the “Inseego Notes” and collectively with the Novatel Wireless Notes, the “Convertible Notes”). The Inseego Notes were issued in exchange for approximately $119.8 million aggregate principal amount of outstanding Novatel Wireless Notes that were validly tendered and accepted for exchange and subsequently canceled. The Inseego Notes are governed by the terms of an indenture, dated January 9, 2017 (the “Inseego Indenture”), between the Company, as issuer, and Wilmington Trust, National Association, as trustee. The Inseego Notes are senior unsecured obligations of the Company and bear interest from, and including, December 15, 2016, at a rate of 5.50% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2017. The Inseego Notes will mature on June 15, 2022, unless earlier converted, redeemed or repurchased. The Inseego Notes will be convertible into cash, shares of the Company’s common stock, or a combination thereof, at the election of the Company, at an initial conversion rate of 212.7660 shares of common stock per $1,000 principal amount of the Inseego Notes, which corresponds to an initial conversion price of $4.70 per share of the Company’s common stock. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of stock dividends and payment of cash dividends. Under certain limited circumstances which are described in the Inseego Indenture, holders may convert their Inseego Notes prior to the close of business on the business day immediately preceding December 15, 2021. On or after December 15, 2021, the holders may convert any of their Inseego Notes at any time prior to the close of business on the business day immediately preceding the maturity date. Under certain limited circumstances which are described in the Inseego Indenture, the Company may redeem all or a portion of the Inseego Notes at its option on or after June 15, 2018, at a redemption price equal to 100% of the principal amount of the Inseego Notes to be redeemed, plus any accrued and unpaid interest on such Inseego Notes. The Inseego Notes are subject to repurchase by the Company at the option of the holders on June 15, 2020 (the “Optional Repurchase Date”) at a repurchase price in cash equal to 100% of the principal amount of the Inseego Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the Optional Repurchase Date. If the Company undergoes a “fundamental change” (as defined in the Inseego Indenture), subject to certain conditions, holders may require the Company to repurchase for cash all or part of their Inseego Notes in principal amounts of $1,000 , or an integral multiple of $1,000 in excess thereof. The fundamental change repurchase price will be equal to 100% of the principal amount of the Inseego Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date, subject to the right of holders as of the close of business on an interest record date to receive the related interest. The Inseego Indenture contains certain covenants, effective until June 15, 2020, that limit the amount of debt, including secured debt, that may be incurred by the Company or its subsidiaries, and that limit the ability of the Company to pay dividends, repurchase its equity securities or make other restricted payments. The Inseego Indenture also provides for customary events of default. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, 100% of the principal and accrued and unpaid interest of the Inseego Notes will automatically become immediately due and payable. Because the exchange of the Novatel Wireless Notes for the Inseego Notes described above was treated as a debt modification in accordance with applicable FASB guidance (it was between a parent and a subsidiary company and for substantially identical notes), the Company did not recognize a gain or loss with respect to the issuance of the Inseego Notes. In accordance with authoritative guidance, the Company recognized $3.6 million as an additional component of debt discount and additional paid-in capital attributed to the increase in the fair value of the embedded conversion feature of the Inseego Notes before and after modification. The Company will amortize the debt discount on the Inseego Notes as a component of interest expense using the effective interest method through June 2020. Note Purchase Agreement On August 23, 2017, in connection with the Credit Agreement described above, the Company and certain of the Lenders entered into a Note Purchase Agreement (the “Note Purchase Agreement”) pursuant to which the Company repurchased approximately $14.9 million of outstanding Inseego Notes from such Lenders in exchange for $11.9 million deemed to have been loaned to the Company pursuant to the Credit Agreement and the accrued and unpaid interest on such notes. In connection with the repurchase of such notes, the Company recognized a loss on extinguishment of debt of approximately $0.3 million , which is included in other expense, net, in the condensed consolidated statements of operations. The Convertible Notes consist of the following (in thousands): September 30, December 31, Liability component: Principal $ 105,125 $ 105,125 Less: unamortized debt discount and debt issuance costs (14,142 ) (20,352 ) Net carrying amount $ 90,983 $ 84,773 Equity component $ 41,905 $ 41,905 The effective interest rate on the liability component of the Convertible Notes was 15.46% for the nine months ended September 30, 2018 . The following table sets forth total interest expense recognized related to the Convertible Notes (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Contractual interest expense $ 1,446 $ 1,564 $ 4,337 $ 4,864 Amortization of debt discount 1,955 2,126 5,866 6,586 Amortization of debt issuance costs 115 125 344 388 Total interest expense $ 3,516 $ 3,815 $ 10,547 $ 11,838 |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-based Compensation The Company included the following amounts for share-based compensation awards in the unaudited condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Cost of revenues $ 153 $ 35 $ 227 $ 130 Research and development 564 225 972 541 Sales and marketing 313 320 761 536 General and administrative 704 214 1,718 1,566 Restructuring — 169 — 169 Total $ 1,734 $ 963 $ 3,678 $ 2,942 Stock Options The following table summarizes the Company’s stock option activity: Outstanding — December 31, 2017 6,566,483 Granted 4,248,142 Exercised (1,172,996 ) Canceled (1,164,750 ) Outstanding — September 30, 2018 8,476,879 Exercisable — September 30, 2018 3,141,297 At September 30, 2018 , total unrecognized compensation expense related to stock options was $4.5 million , which is expected to be recognized over a weighted-average period of 2.97 years . Restricted Stock Units The following table summarizes the Company’s restricted stock unit (“RSU”) activity: Non-vested — December 31, 2017 1,055,977 Granted 919,226 Vested (1,106,238 ) Forfeited (451,954 ) Non-vested — September 30, 2018 417,011 At September 30, 2018 , total unrecognized compensation expense related to RSUs was $0.5 million , which is expected to be recognized over a weighted-average period of 1.69 years . |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income (loss) attributable to Inseego Corp. by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock using the treasury stock method. Potentially dilutive securities (consisting primarily of the Convertible Notes calculated using the if-converted and treasury stock method and warrants, stock options and RSUs calculated using the treasury stock method) are excluded from the diluted EPS computation in loss periods and when the applicable exercise price is greater than the market price on the period end date as their effect would be anti-dilutive. The calculation of basic and diluted EPS was as follows (in thousands, except share and per share data): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net income (loss) attributable to Inseego Corp. $ 10,843 $ (13,789 ) $ (3,867 ) $ (41,913 ) Basic weighted-average common shares outstanding 68,480,774 59,004,520 63,585,229 58,157,171 Dilutive common share equivalents 2,975,572 — — — Diluted weighted-average number of shares outstanding 71,456,346 59,004,520 63,585,229 58,157,171 Basic net income (loss) per share $ 0.16 $ (0.23 ) $ (0.06 ) $ (0.72 ) Diluted net income (loss) per share $ 0.15 $ (0.23 ) $ (0.06 ) $ (0.72 ) For the three months ended September 30, 2018 , the computation of diluted EPS excluded 28,086,624 shares related to the Convertible Notes as their effect would have been anti-dilutive. For the nine months ended September 30, 2018 , the computation of diluted EPS excluded 37,975,693 shares primarily related to the Convertible Notes, warrants, stock options and RSUs as their effect would have been anti-dilutive. |
Private Placement
Private Placement | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Private Placement | Private Placement On August 6, 2018 , the Company completed a private placement of 12,062,000 shares of common stock, par value $0.001 per share, and warrants to purchase an additional 4,221,700 shares of common stock, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, to certain accredited investors for gross proceeds of $19.7 million in cash. Each warrant has an initial exercise price of $2.52 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, will be exercisable at any time on or after February 6, 2019 , and will expire on August 6, 2023 . The warrants may be exercisable on a cashless exercise basis if, and only if, the shares of common stock underlying such warrants cannot be immediately resold pursuant to an effective registration statement or Rule 144 of the Securities Act of 1933, as amended, without volume or manner of sale restrictions. In connection with the private placement, the Company incurred issuance costs of approximately $0.5 million . The Company assessed the terms of the warrants under ASC 815, Derivatives and Hedges . Pursuant to this guidance, the Company has determined that the warrants do not require liability accounting and has classified the warrants as equity. |
Geographic Information and Conc
Geographic Information and Concentrations of Risk | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Geographic Information and Concentrations of Risk | Geographic Information and Concentrations of Risk Geographic Information The following table details the Company’s net revenues by geographic region based on shipping destination (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 United States and Canada $ 35,891 $ 42,056 $ 98,559 $ 125,969 South Africa 9,145 9,754 30,038 29,694 Other 5,594 5,651 17,823 17,100 Total $ 50,630 $ 57,461 $ 146,420 $ 172,763 Concentrations of Risk For the three months ended September 30, 2018 , one customer accounted for 46.9% of net revenues. For the three months ended September 30, 2017 , two customers accounted for 48.0% and 14.9% of net revenues, respectively. For the nine months ended September 30, 2018 , one customer accounted for 46.6% of net revenues. For the nine months ended September 30, 2017 , two customers accounted for 49.6% and 11.4% of net revenues, respectively. As of September 30, 2018 , one customer accounted for 35.9% of accounts receivable, net. As of December 31, 2017 , one customer accounted for 23.9% of accounts receivable, net. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal The Company is, from time to time, party to various legal proceedings arising in the ordinary course of business. For example, the Company is currently named as a defendant or co-defendant in some patent infringement lawsuits in the U.S. and may be required to indirectly participate in other U.S. patent infringement actions pursuant to its contractual indemnification obligations to certain customers. Based on an evaluation of these matters and discussions with the Company’s intellectual property litigation counsel, the Company currently believes that liabilities arising from or sums paid in settlement of these existing matters, if any, would not have a material adverse effect on its consolidated results of operations or financial condition. On May 27, 2015, a patent infringement action was brought against Novatel Wireless by Carucel Investments, L.P. (“Carucel”), a non-practicing entity ( Carucel Investments, L.P. v. Novatel Wireless, Inc., et al., U.S.D.C. S.D. Florida, Civil Action No. 0:15-cv-61116-BB ). The complaint alleged that certain MiFi mobile hotspots manufactured by Novatel Wireless infringed claims of patents owned by Carucel. On April 10, 2017, judgment was entered in favor of Novatel Wireless. Carucel filed to appeal certain orders in the litigation and on July 13, 2018, the U.S. Federal Circuit Court of Appeals affirmed the judgment. On May 11, 2017, the Company initiated a lawsuit against the former stockholders of RER in the Court of Chancery of the State of Delaware seeking recovery of damages for civil conspiracy, fraud in the inducement, unjust enrichment and breach of fiduciary duty. On January 16, 2018, the former stockholders of RER filed an answer and counterclaim in the matter seeking recovery of certain deferred and earn-out payments allegedly owed to them by the Company in connection with the Company’s acquisition of RER. On July 26, 2018 , the Company and the former stockholders of RER entered into a mutual general release and settlement agreement (the “Settlement Agreement”) pursuant to which the parties agreed to release all claims against each other and the Company agreed to (i) pay the former stockholders of RER $1.0 million in cash by August 17, 2018, (ii) immediately issue 500,000 shares of the Company’s common stock to the former stockholders of RER, (iii) within 12 months following the execution of the Settlement Agreement, deliver to the former stockholders of RER an additional $1.0 million in cash, common stock, or a combination thereof, at the Company’s option, (iv) within 24 months following the execution of the Settlement Agreement deliver to the former stockholders of RER an additional $1.0 million in cash, common stock, or a combination thereof, at the Company’s option, and (v) file one or more registration statements with respect to the resale of the shares of the Company’s common stock issued to the former stockholders of RER pursuant to the Settlement Agreement. In connection with the settlement, the Company recognized a gain of $17.2 million , which is included in extinguishment of acquisition-related liabilities in the unaudited condensed consolidated statement of operations for the period ended September 30, 2018 . The Company’s remaining liability under the Settlement Agreement at September 30, 2018 consists of approximately $1.0 million in current liabilities and $1.0 million in long-term liabilities. Indemnification In the normal course of business, the Company periodically enters into agreements that require the Company to indemnify and defend its customers for, among other things, claims alleging that the Company’s products infringe third-party patents or other intellectual property rights. The Company’s maximum exposure under these indemnification provisions cannot be estimated but the Company does not believe that there are any matters individually or collectively that would have a material adverse effect on its consolidated results of operations or financial condition. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s income tax provision of $0.5 million and $0.4 million for the three months ended September 30, 2018 and 2017 , respectively, and $1.2 million and $1.3 million for the nine months ended September 30, 2018 and 2017 , respectively, consists primarily of foreign income taxes at certain of the Company’s international entities and minimum state taxes for its U.S.-based entities. The Company has income tax expense rather than an expected benefit based on statutory rates due primarily to losses at U.S. and international subsidiaries whose net operating losses are fully reserved. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) significantly revised the U.S. corporate income tax law, by among other things, reducing the corporate income tax rate to 21% for tax years beginning in 2018, limiting the deduction for interest expense, implementing a modified territorial system that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries, and creating new taxes on certain foreign sourced earnings. In 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), the Company recorded provisional estimates related to the Tax Act. The Company continues to analyze the Tax Act, and in certain areas, has made estimates of the effects on its unaudited condensed consolidated financial statements and tax disclosures. The ultimate impact may differ from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional Internal Revenue Service guidance that may be issued and actions it may take as a result of the Tax Act. The accounting is expected to be completed during the fourth quarter of 2018. Further, the Tax Act includes U.S. taxation on foreign intangible income, effective January 1, 2018. The FASB allows an entity to make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as foreign intangible income in future years or provide for the tax expense related to the foreign intangible income as a period cost in the year it is incurred. The Company has not recorded any provisional amount for deferred taxes on the foreign intangible income because it is still collecting and analyzing the data needed to make the accounting policy election. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In the third quarter of 2015, the Company approved a restructuring initiative to better position the Company to operate in current market conditions and more closely align operating expenses with revenues, which included employee severance costs and facility exit related costs. In the fourth quarter of 2015, the Company commenced certain initiatives relating to the reorganization of executive level management (collectively, the “2015 Initiatives”). The Company continued these initiatives in 2016 with a reduction-in-force and the completion of the closure of its facility in Richardson, TX. The 2015 Initiatives are expected to cost a total of approximately $6.1 million and be completed when the Richardson, TX lease expires in June 2020. In the first and second quarters of 2017, the Company commenced certain restructuring initiatives intended to continue to improve its strategic focus on its most profitable business lines and consolidate operations of its subsidiaries with those of the Company, including reductions-in-force, further reorganization of executive level management and the consolidation of certain of its facilities (the “2017 Initiatives”). The 2017 Initiatives cost a total of approximately $4.4 million and were completed in May 2018. In the first quarter of 2018, the Company commenced certain restructuring initiatives intended to continue to consolidate operations of its subsidiaries with those of the Company, including reductions-in-force and the consolidation of certain of its facilities (the “2018 Initiatives”). The 2018 Initiatives are expected to cost a total of approximately $1.0 million and to be completed in December 2018. The following table sets forth activity in the restructuring liability for the nine months ended September 30, 2018 (in thousands): Balance at December 31, 2017 Costs Incurred Payments Translation Adjustment Balance at September 30, 2018 Cumulative Costs Incurred to Date 2015 Initiatives Employee Severance Costs $ — $ — $ — $ — $ — $ 4,131 Facility Exit Related Costs 981 91 (345 ) — 727 1,819 2017 Initiatives Employee Severance Costs 287 61 (359 ) 11 — 3,412 Facility Exit Related Costs 106 2 (108 ) — — 285 Other Related Costs 160 20 (180 ) — — 675 2018 Initiatives Employee Severance Costs — 991 (946 ) (32 ) 13 991 Total $ 1,534 $ 1,165 $ (1,938 ) $ (21 ) $ 740 $ 11,313 The balance of the restructuring liability at September 30, 2018 consists of approximately $0.4 million in current liabilities and $0.3 million in long-term liabilities. During the nine months ended September 30, 2018 , the Company wrote down the value of certain inventory by approximately $0.4 million related to the abandonment of certain product lines that management decided to exit. The Company accounted for the adjustment in accordance with the ASC 330, Inventory , and included the adjustment in impairment of abandoned product line, net of recoveries, within cost of net revenues in the unaudited condensed consolidated statements of operations . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The information contained herein has been prepared by Inseego Corp. (the “Company”) in accordance with the rules of the Securities and Exchange Commission (the “SEC”). The information at September 30, 2018 and the results of the Company’s operations for the three and nine months ended September 30, 2018 and 2017 are unaudited. The condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods presented. These condensed consolidated financial statements and notes hereto should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . The year-end condensed consolidated balance sheet data as of December 31, 2017 was derived from the Company’s audited consolidated financial statements and may not include all disclosures required by accounting principles generally accepted in the United States. Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not affect total revenues, costs and expenses, net income (loss), assets, liabilities or stockholders’ deficit. Except as set forth below, the accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . The results of operations for the interim periods presented are not necessarily indicative of results to be expected for any other interim period or for the year as a whole. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly- and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Segment Information | Segment Information Management has determined that the Company has one reportable segment. The Chief Executive Officer, who is also the Chief Operating Decision Maker, does not manage any part of the Company separately, and the allocation of resources and assessment of performance is based solely on the Company’s consolidated operations and operating results. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ materially from these estimates. Significant estimates include allowance for doubtful accounts receivable, provision for excess and obsolete inventory, valuation of intangible and long-lived assets, valuation of goodwill, valuation of debt obligations, royalty costs, accruals relating to litigation and restructuring, provision for warranty costs, income taxes, share-based compensation expense and the Company’s ability to continue as a going concern. |
Revenue Recognition | Revenue Recognition Significant changes to the Company’s accounting policies, as a result of the adoption of the new revenue recognition guidance on January 1, 2018, are discussed below. Sources of Revenue The Company generates revenue from a broad range of product sales including intelligent wireless hardware products for the worldwide mobile communications and industrial Internet of Things (“IoT”) markets. The Company’s products principally include intelligent mobile hotspots, wireless routers for IoT applications, USB modems, integrated telematics and mobile tracking hardware devices, which are supported by applications software and cloud services designed to enable customers to easily analyze data insights and configure and manage their hardware. The Company classifies its revenues from the sale of its products and services into two distinct groupings, specifically IoT & Mobile Solutions and Enterprise SaaS Solutions. Both IoT & Mobile Solutions and Enterprise SaaS Solutions revenues include any hardware and software required for the respective solution. Net revenues by product grouping for the three and nine months ended September 30, 2018 and 2017 were as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 IoT & Mobile Solutions $ 34,636 $ 41,116 $ 95,257 $ 123,143 Enterprise SaaS Solutions 15,994 16,345 51,163 49,620 Total $ 50,630 $ 57,461 $ 146,420 $ 172,763 See geographic disaggregation information in Note 9 , Geographic Information and Concentrations of Risk . IoT & Mobile Solutions . The IoT & Mobile Solutions portfolio is comprised of end-to-end edge to cloud solutions including 4G LTE mobile broadband gateways, routers, modems, hotspots, VoLTE based wireless home phones and cloud management software. The solutions are offered under the MiFi brand for consumer and business markets, and under the Skyus brand for industrial IoT markets. Enterprise SaaS Solutions . The Enterprise SaaS Solutions consist of various subscription offerings to gain access to the Company’s Ctrack telematics platforms, which provide fleet vehicle, aviation ground vehicle and asset tracking and performance information, and other telematics applications, and the Company’s Device Management System (“DMS”), a hosted software-as-a-service (“SaaS”) platform that helps organizations manage the selection, deployment and spend of their customer’s wireless assets, helping them save money on personnel and telecom expenses. Contracts with Customers The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (as amended, “ASC 606”), effective January 1, 2018, using the modified retrospective method applied to those contracts which were not substantially completed as of January 1, 2018 . These standards provide guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenues for 2018 are reported under ASC 606, while prior period amounts are not adjusted and continue to be reported under ASC 605, Revenue Recognition . The Company routinely enters into a variety of agreements with customers, including quality agreements, pricing agreements and master supply agreements which outline the general commercial terms and conditions under which the Company does business with a specific customer, including shipping terms and pricing for the products and services that the Company offers. The Company also sells to some customers solely based on purchase orders. The Company has concluded, for the vast majority of its revenues, that its contracts with customers are either a purchase order or the combination of a purchase order with a master supply agreement. The Company determines revenue recognition through the following five steps: 1) identification of the contract, or contracts, with a customer; 2) identification of the performance obligations in the contract; 3) determination of the transaction price; 4) allocation of the transaction price to the performance obligations in the contract; and 5) recognition of revenue when, or as, performance obligations are satisfied. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s performance obligations are established when a customer submits a purchase order notification (in writing, electronically or verbally) for goods and services, and the Company accepts the order. The Company identifies performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order. The Company generally recognizes revenue upon the satisfaction of these criteria when control of the product or service has been transferred to the customer at which time it has an unconditional right to receive payment. The Company’s prices are fixed and have no history of being affected by contingent events that could impact the transaction price. The Company does not offer price concessions and does not accept payment that is less than the price stated when it accepts the purchase order. Revenue Recognition Revenue is recognized upon transfer of control of products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that may include various combinations of products and services which are generally capable of being distinct and accounted for as separate performance obligations. Hardware. Hardware revenue from the sale of the Company’s IoT & Mobile Solutions devices is recognized when the Company transfers control to the customer, typically at the time when the product is delivered, shipped or installed at which time the title passes to the customer, and there are no further performance obligations with regards to the hardware device. SaaS and Other Services. SaaS subscription revenue is recognized over time on a ratable basis over the contract term beginning on the date that its service is made available to the customer. Subscription periods range from monthly to multi-year, with the majority of contracts being one to three years. Telematics includes a device which collects and transmits the information from the vehicle or other asset. The Company’s customers have an option to purchase the monitoring device or lease it over the term of the contract. If the customer purchases the hardware device, the Company recognizes the revenue at a point in time as discussed above in the hardware revenue recognition disclosure. If the customer chooses to lease the monitoring device, the Company recognizes the revenue for the monitoring device over the term of the contract. The Company records such revenue in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 840, Leases (“ASC 840”), as it has determined that they qualify as operating leases (ownership of the device does not transfer to the other party). Maintenance and support services revenue. Periodically, the Company sells separately-priced warranty contracts that extend beyond the Company’s base warranty period. The separately priced service contracts range from 12 months to 36 months. The Company typically receives payment at the inception of the contract and recognizes revenue as earned on a straight-line basis over the term of the contract. Professional services revenue. From time to time, the Company enters into special engineering design service agreements. Revenues from engineering design services are specifically designed to meet specifications of a particular product, and therefore do not create an asset with an alternative use. The Company recognizes revenue based on the achievement of certain applicable milestones and the amount of payment the Company believes it is entitled to at the time. With respect to revenue related to third party product sales or other arrangements that involve the services of another party, for which the Company does not control the sale or service and acts as an agent to the transaction, the Company recognizes revenue on a net basis. The portion of the gross amount billed to customers that is remitted by the Company to another party is not reflected as revenue. Multiple Performance Obligations The Company’s contracts with customers may include commitments to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. When hardware, software and services are sold in various combinations, judgment is required to determine whether each performance obligation is considered distinct and accounted for separately, or not distinct and accounted for together with other performance obligations. In instances where the software elements included within hardware for various products are considered to be functioning together with non-software elements to provide the tangible product’s essential functionality, these arrangements are accounted for as a single distinct performance obligation. Judgment is required to determine the stand-alone selling price (“SSP”) for each distinct performance obligation. When available, the Company uses observable inputs to determine SSP. In instances where SSP is not directly observable, such as when the Company does not sell the product or service separately, it determines the SSP based on a cost-plus model as market and other observable inputs are seldom present based on the proprietary nature of the Company’s products. Contract Liabilities Timing of revenue recognition may differ from the timing of invoicing to customers. If customers are invoiced for subscription services in advance of the service period, deferred revenue liabilities, or contract liabilities, are recorded. Deferred revenue liabilities, or contract liabilities, are also recorded when the Company collects payments in advance of performing the services. Contract Assets The Company capitalizes sales commissions earned by its sales force when they are considered to be incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit. There were no significant amounts of assets recorded related to contract costs as of September 30, 2018 . Applying the practical expedient in paragraph ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses. Significant Judgments in the Application of the Guidance in ASC 606 Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company considered the performance obligations in its customer master supply agreements and determined that, for the majority of its revenue, the Company generally satisfies performance obligations at a point in time upon delivery of the product to the customer. Revenue from the Company’s SaaS subscription services represent a single promise to provide continuous access to its software solutions and their processing capabilities in the form of a service through one of the Company’s or hosted data centers. As each day of providing access to the software is substantially the same, and the customer simultaneously receives and consumes the benefits as access is provided, the Company has determined that its subscription services arrangements include a single performance obligation comprised of a series of distinct services. The Company’s SaaS subscriptions also include an unspecified volume of call center support and any remote system diagnostic and software upgrades as needed. These services are combined with the recurring monthly subscription service since they are highly interrelated and interdependent. Revenue from the Company’s subscription services is recognized over time on a ratable basis over the contract term beginning on the date that the service is made available to the customer. Shipping and Handling Charges Fees charged to customers for shipping and handling of products are included in product revenues, and costs for shipping and handling of products are included as a component of cost of sales. Taxes Collected from Customers Taxes collected on the value of transaction revenue are excluded from product and services revenues and cost of sales and are accrued in current liabilities until remitted to governmental authorities. Transition Disclosures Adoption of the new standards related to revenue recognition did not have a material impact on the Company’s consolidated financial statements. |
New Accounting Pronouncements | New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB, which are adopted by the Company as of the specified date. Unless otherwise discussed, management believes the impact of recently issued standards, some of which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents in the statement of cash flows. The Company implemented this guidance in the first quarter of 2018 using a retrospective transition method for each period presented. The following line items in the Company’s unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2017 have been adjusted to reflect the adoption of this new guidance: As Previously Reported Adjustment As Adjusted Restricted cash $ (411 ) $ 411 $ — Net cash used in operating activities (15,202 ) 411 (14,791 ) Net increase in cash, cash equivalents and restricted cash 9,693 411 10,104 Cash, cash equivalents and restricted cash, end of period 19,587 411 19,998 In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. This guidance results in the Company providing a more faithful representation of the rights and obligations arising from operating and capital leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. Originally, entities were required to adopt ASU 2016-02 using a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application. However, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , which now allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. In July 2018, the FASB also issued ASU 2018-10, Codification Improvements to Topic 842, Leases , which clarifies how to apply certain aspects of ASU 2016-02. The Company has compiled its lease inventory and is currently evaluating the contracts and assessing the impact of this guidance. |
Fair Value Measurement | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A fair value measurement reflects the assumptions market participants would use in pricing an asset or liability based on the best available information. These assumptions include the risk inherent in a particular valuation technique (such as a pricing model) and the risks inherent in the inputs to the model. The Company classifies inputs to measure fair value using a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) and is defined as follows: Level 1: Pricing inputs are based on quoted market prices for identical assets or liabilities in active markets (e.g., NYSE or NASDAQ). Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs include benchmark yields, trade data, reported trades and broker dealer quotes, two-sided markets and industry and economic events, yield to maturity, Municipal Securities Rule Making Board reported trades and vendor trading platform data. Level 2 includes those financial instruments that are valued using various pricing services and broker pricing information including Electronic Communication Networks and broker feeds. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources, including the Company’s own assumptions. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | Net revenues by product grouping for the three and nine months ended September 30, 2018 and 2017 were as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 IoT & Mobile Solutions $ 34,636 $ 41,116 $ 95,257 $ 123,143 Enterprise SaaS Solutions 15,994 16,345 51,163 49,620 Total $ 50,630 $ 57,461 $ 146,420 $ 172,763 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following line items in the Company’s unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2017 have been adjusted to reflect the adoption of this new guidance: As Previously Reported Adjustment As Adjusted Restricted cash $ (411 ) $ 411 $ — Net cash used in operating activities (15,202 ) 411 (14,791 ) Net increase in cash, cash equivalents and restricted cash 9,693 411 10,104 Cash, cash equivalents and restricted cash, end of period 19,587 411 19,998 |
Financial Statement Details (Ta
Financial Statement Details (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Inventories | Inventories, net, consist of the following (in thousands): September 30, December 31, Finished goods $ 8,820 $ 14,331 Raw materials and components 4,927 6,072 Total inventories, net $ 13,747 $ 20,403 |
Summary of Accrued Expenses | Accrued expenses and other current liabilities consist of the following (in thousands): September 30, December 31, Royalties $ 1,564 $ 1,558 Payroll and related expenses 2,499 2,870 Professional fees 727 1,789 Accrued interest 1,685 239 Deferred revenue 2,464 1,823 Acquisition-related liabilities 1,000 13,186 Other 6,468 6,093 Total accrued expenses and other current liabilities $ 16,407 $ 27,558 |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands): September 30, December 31, September 30, December 31, Cash and cash equivalents $ 31,547 $ 21,198 $ 19,587 $ 9,894 Restricted cash 61 61 411 — Total cash, cash equivalents and restricted cash $ 31,608 $ 21,259 $ 19,998 $ 9,894 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands): September 30, December 31, September 30, December 31, Cash and cash equivalents $ 31,547 $ 21,198 $ 19,587 $ 9,894 Restricted cash 61 61 411 — Total cash, cash equivalents and restricted cash $ 31,608 $ 21,259 $ 19,998 $ 9,894 |
Fair Value Measurement of Ass_2
Fair Value Measurement of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Company's Financial Instruments, Fair Value on a Recurring Basis | The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis in accordance with the authoritative guidance for fair value measurements as of September 30, 2018 (in thousands): Balance as of Level 1 Assets: Cash equivalents Money market funds $ 15,020 $ 15,020 Total cash equivalents $ 15,020 $ 15,020 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Term Loan | The Term Loan consists of the following (in thousands): September 30, December 31, 2017 Principal $ 47,500 $ 48,000 Less: unamortized debt discount and debt issuance costs (2,827 ) (3,945 ) Net carrying amount $ 44,673 $ 44,055 |
Interest Expense Summary | The following table sets forth total interest expense recognized related to the Term Loan (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Contractual interest expense $ 1,185 $ 435 $ 3,452 $ 435 Amortization of debt discount 332 139 998 139 Amortization of debt issuance costs 40 17 120 17 Total interest expense $ 1,557 $ 591 $ 4,570 $ 591 The following table sets forth total interest expense recognized related to the Convertible Notes (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Contractual interest expense $ 1,446 $ 1,564 $ 4,337 $ 4,864 Amortization of debt discount 1,955 2,126 5,866 6,586 Amortization of debt issuance costs 115 125 344 388 Total interest expense $ 3,516 $ 3,815 $ 10,547 $ 11,838 |
Convertible Debt | The Convertible Notes consist of the following (in thousands): September 30, December 31, Liability component: Principal $ 105,125 $ 105,125 Less: unamortized debt discount and debt issuance costs (14,142 ) (20,352 ) Net carrying amount $ 90,983 $ 84,773 Equity component $ 41,905 $ 41,905 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | The Company included the following amounts for share-based compensation awards in the unaudited condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Cost of revenues $ 153 $ 35 $ 227 $ 130 Research and development 564 225 972 541 Sales and marketing 313 320 761 536 General and administrative 704 214 1,718 1,566 Restructuring — 169 — 169 Total $ 1,734 $ 963 $ 3,678 $ 2,942 |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity: Outstanding — December 31, 2017 6,566,483 Granted 4,248,142 Exercised (1,172,996 ) Canceled (1,164,750 ) Outstanding — September 30, 2018 8,476,879 Exercisable — September 30, 2018 3,141,297 |
Summary of Restricted Stock Unit Activity | The following table summarizes the Company’s restricted stock unit (“RSU”) activity: Non-vested — December 31, 2017 1,055,977 Granted 919,226 Vested (1,106,238 ) Forfeited (451,954 ) Non-vested — September 30, 2018 417,011 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The calculation of basic and diluted EPS was as follows (in thousands, except share and per share data): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net income (loss) attributable to Inseego Corp. $ 10,843 $ (13,789 ) $ (3,867 ) $ (41,913 ) Basic weighted-average common shares outstanding 68,480,774 59,004,520 63,585,229 58,157,171 Dilutive common share equivalents 2,975,572 — — — Diluted weighted-average number of shares outstanding 71,456,346 59,004,520 63,585,229 58,157,171 Basic net income (loss) per share $ 0.16 $ (0.23 ) $ (0.06 ) $ (0.72 ) Diluted net income (loss) per share $ 0.15 $ (0.23 ) $ (0.06 ) $ (0.72 ) |
Geographic Information and Co_2
Geographic Information and Concentrations of Risk (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Geographic Concentration of Net Revenues | The following table details the Company’s net revenues by geographic region based on shipping destination (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 United States and Canada $ 35,891 $ 42,056 $ 98,559 $ 125,969 South Africa 9,145 9,754 30,038 29,694 Other 5,594 5,651 17,823 17,100 Total $ 50,630 $ 57,461 $ 146,420 $ 172,763 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Liability | The following table sets forth activity in the restructuring liability for the nine months ended September 30, 2018 (in thousands): Balance at December 31, 2017 Costs Incurred Payments Translation Adjustment Balance at September 30, 2018 Cumulative Costs Incurred to Date 2015 Initiatives Employee Severance Costs $ — $ — $ — $ — $ — $ 4,131 Facility Exit Related Costs 981 91 (345 ) — 727 1,819 2017 Initiatives Employee Severance Costs 287 61 (359 ) 11 — 3,412 Facility Exit Related Costs 106 2 (108 ) — — 285 Other Related Costs 160 20 (180 ) — — 675 2018 Initiatives Employee Severance Costs — 991 (946 ) (32 ) 13 991 Total $ 1,534 $ 1,165 $ (1,938 ) $ (21 ) $ 740 $ 11,313 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) $ in Millions | Aug. 06, 2018USD ($)shares | Sep. 30, 2018Segments |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of shares issued (in shares) | 12,062,000 | |
Number of additional shares from warrants (in shares) | 4,221,700 | |
Gross proceeds | $ | $ 19.7 | |
Number of reportable segments | Segments | 1 |
Basis of Presentation - Disaggr
Basis of Presentation - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||||
IoT & Mobile Solutions Net Revenues | $ 34,636 | $ 41,116 | $ 95,257 | $ 123,143 |
Enterprise SaaS Solutions Net Revenues | 15,994 | 16,345 | 51,163 | 49,620 |
Net revenues | $ 50,630 | $ 57,461 | $ 146,420 | $ 172,763 |
Basis of Presentation - Restric
Basis of Presentation - Restricted Cash (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Restricted cash | $ 0 | |||
Net cash used in operating activities | $ (3,869) | (14,791) | ||
Net increase in cash, cash equivalents and restricted cash | 10,349 | 10,104 | ||
Cash, cash equivalents and restricted cash, end of period | $ 31,608 | 19,998 | $ 21,259 | $ 9,894 |
Scenario, Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Restricted cash | (411) | |||
Net cash used in operating activities | (15,202) | |||
Net increase in cash, cash equivalents and restricted cash | 9,693 | |||
Cash, cash equivalents and restricted cash, end of period | 19,587 | |||
Accounting Standards Update 2016-18 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Restricted cash | 411 | |||
Net cash used in operating activities | 411 | |||
Net increase in cash, cash equivalents and restricted cash | 411 | |||
Cash, cash equivalents and restricted cash, end of period | $ 411 |
Financial Statement Details - S
Financial Statement Details - Summary of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 8,820 | $ 14,331 |
Raw materials and components | 4,927 | 6,072 |
Total inventories, net | $ 13,747 | $ 20,403 |
Financial Statement Details -_2
Financial Statement Details - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Royalties | $ 1,564 | $ 1,558 |
Payroll and related expenses | 2,499 | 2,870 |
Professional fees | 727 | 1,789 |
Accrued interest | 1,685 | 239 |
Deferred revenue | 2,464 | 1,823 |
Acquisition-related liabilities | 1,000 | 13,186 |
Other | 6,468 | 6,093 |
Total accrued expenses and other current liabilities | $ 16,407 | $ 27,558 |
Financial Statement Details -_3
Financial Statement Details - Summary of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 31,547 | $ 21,198 | $ 19,587 | $ 9,894 |
Restricted cash | 61 | 61 | 411 | 0 |
Total cash, cash equivalents and restricted cash | $ 31,608 | $ 21,259 | $ 19,998 | $ 9,894 |
Fair Value Measurement of Ass_3
Fair Value Measurement of Assets and Liabilities - Summary of Company's Financial Instruments, Fair Value on a Recurring Basis (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Convertible Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 105,125,000 | $ 105,125,000 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of cash equivalents | 15,020,000 | |
Fair value of financial instruments | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of cash equivalents | 15,020,000 | |
Fair Value, Measurements, Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt | 91,000,000 | $ 84,800,000 |
Money market funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of cash equivalents | 15,020,000 | |
Money market funds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of cash equivalents | $ 15,020,000 |
Debt - Previous Credit Agreemen
Debt - Previous Credit Agreement (Details) - USD ($) $ in Thousands | Aug. 23, 2017 | May 08, 2017 | Oct. 31, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 20, 2017 | Nov. 17, 2015 |
Debt Instrument [Line Items] | |||||||
Proceeds from term loans | $ 0 | $ 64,917 | |||||
Loss on extinguishment of debt, net | $ 0 | $ 2,035 | |||||
Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Principal | $ 20,000 | ||||||
Proceeds from term loans | 18,000 | ||||||
Debt discount on term loan | 2,000 | ||||||
Debt issuance costs | $ 400 | ||||||
Loss on extinguishment of debt, net | $ 1,700 | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Term of debt instrument | 5 years | ||||||
Maximum amount of credit facility | $ 25,000 | $ 10,000 | $ 48,000 |
Debt - Term Loan (Details)
Debt - Term Loan (Details) - USD ($) $ in Thousands | Aug. 23, 2017 | May 08, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 09, 2017 |
Debt Instrument [Line Items] | ||||||
Proceeds from term loans | $ 0 | $ 64,917 | ||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Principal | $ 20,000 | |||||
Proceeds from term loans | 18,000 | |||||
Debt issuance costs | 400 | |||||
Debt discount on term loan | $ 2,000 | |||||
Secured Debt | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate | 13.64% | 13.64% | ||||
Principal | $ 48,000 | |||||
Proceeds from term loans | 46,900 | |||||
Proceeds from issuance of debt, portion funded in cash | 35,000 | |||||
Debt issuance costs | 500 | |||||
Debt discount on term loan | $ 4,000 | |||||
Repayments of debt | $ 500 | |||||
Secured Debt | Term Loan | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin on interest rate | 7.625% | |||||
Secured Debt | Term Loan | London Interbank Offered Rate (LIBOR) | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate of debt issued | 1.00% | |||||
Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate | 15.46% | 15.46% | ||||
Convertible Debt | Inseego Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal | $ 119,800 | |||||
Proceeds from issuance of debt, portion funded in repurchase and cancellation of debt | $ 11,900 | |||||
Extinguishment of debt, amount | $ 14,900 | |||||
Stated interest rate of debt issued | 5.50% |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal | $ 105,125 | $ 105,125 |
Less: unamortized debt discount and debt issuance costs | (14,142) | (20,352) |
Net carrying amount | 90,983 | 84,773 |
Equity component | 41,905 | 41,905 |
Term Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Principal | 47,500 | 48,000 |
Less: unamortized debt discount and debt issuance costs | (2,827) | (3,945) |
Net carrying amount | $ 44,673 | $ 44,055 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 1,446 | $ 1,564 | $ 4,337 | $ 4,864 |
Amortization of debt discount | 1,955 | 2,126 | 5,866 | 6,586 |
Amortization of debt issuance costs | 115 | 125 | 344 | 388 |
Total interest expense | 3,516 | 3,815 | 10,547 | 11,838 |
Term Loan | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 1,185 | 435 | 3,452 | 435 |
Amortization of debt discount | 332 | 139 | 998 | 139 |
Amortization of debt issuance costs | 40 | 17 | 120 | 17 |
Total interest expense | $ 1,557 | $ 591 | $ 4,570 | $ 591 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 23, 2017 | Jan. 09, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 10, 2015 |
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt, net | $ 0 | $ 2,035 | |||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Effective interest rate | 15.46% | ||||
Convertible Debt | Novatel Wireless Notes | |||||
Debt Instrument [Line Items] | |||||
Principal | $ 200 | $ 120,000 | |||
Stated interest rate of debt issued | 5.50% | ||||
Converted amount | 119,800 | ||||
Conversion price ($ per share) | $ 5 | ||||
Debt issuance costs | $ 3,900 | ||||
Convertible Debt | Inseego Notes | |||||
Debt Instrument [Line Items] | |||||
Principal | $ 119,800 | ||||
Extinguishment of debt, amount | $ 14,900 | ||||
Stated interest rate of debt issued | 5.50% | ||||
Conversion (shares) | 212.7660 | ||||
Conversion price ($ per share) | $ 4.70 | ||||
Redemption price as a percentage of principal amount | 100.00% | ||||
Redemption of principal | 100.00% | ||||
Increase in fair value of equity component | $ 3,600 | ||||
Proceeds from issuance of debt, portion funded in repurchase and cancellation of debt | 11,900 | ||||
Loss on extinguishment of debt, net | $ 300 | ||||
Convertible Debt | Inseego Notes | Debt Instrument, Redemption, Period Three | |||||
Debt Instrument [Line Items] | |||||
Redemption price as a percentage of principal amount | 100.00% |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 1,734 | $ 963 | $ 3,678 | $ 2,942 |
Cost of net revenues | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 153 | 35 | 227 | 130 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 564 | 225 | 972 | 541 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 313 | 320 | 761 | 536 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 704 | 214 | 1,718 | 1,566 |
Restructuring | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 0 | $ 169 | 0 | $ 169 |
Stock Options | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Unrecognized expense | 4,500 | $ 4,500 | ||
Recognition period | 2 years 11 months 18 days | |||
Restricted Stock Units (RSUs) | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Unrecognized expense | $ 500 | $ 500 | ||
Recognition period | 1 year 8 months 10 days |
Share-based Compensation - Tabl
Share-based Compensation - Tables (Details) | 9 Months Ended |
Sep. 30, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding — beginning balance | 6,566,483 |
Granted | 4,248,142 |
Exercised | (1,172,996) |
Canceled | (1,164,750) |
Outstanding — ending balance | 8,476,879 |
Exercisable — September 30, 2018 | 3,141,297 |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested — beginning balance | 1,055,977 |
Granted | 919,226 |
Vested | (1,106,238) |
Forfeited | (451,954) |
Non-vested — ending balance | 417,011 |
Earnings Per Share - Earnings P
Earnings Per Share - Earnings Per Basic and Diluted Share Table (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to Inseego Corp. | $ 10,843 | $ (13,789) | $ (3,867) | $ (41,913) |
Basic weighted-average common shares outstanding (in shares) | 68,480,774 | 59,004,520 | 63,585,229 | 58,157,171 |
Dilutive common share equivalents (in shares) | 2,975,572 | 0 | 0 | 0 |
Diluted weighted-average number of shares outstanding (in shares) | 71,456,346 | 59,004,520 | 63,585,229 | 58,157,171 |
Basic net income (loss) per share ($ per share) | $ 0.16 | $ (0.23) | $ (0.06) | $ (0.72) |
Diluted net income (loss) per share ($ per share) | $ 0.15 | $ (0.23) | $ (0.06) | $ (0.72) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive shares (in shares) | 28,086,624 | 37,975,693 |
Private Placement (Details)
Private Placement (Details) $ / shares in Units, $ in Millions | Aug. 06, 2018USD ($)$ / sharesshares |
Equity [Abstract] | |
Number of shares issued (in shares) | shares | 12,062,000 |
Number of additional shares from warrants (in shares) | shares | 4,221,700 |
Gross proceeds | $ | $ 19.7 |
Initial exercise price of warrants (in dollars per share) | $ / shares | $ 2.52 |
Stock issuance costs | $ | $ 0.5 |
Geographic Information and Co_3
Geographic Information and Concentrations of Risk - Schedule of Geographic Concentration of Net Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenues | $ 50,630 | $ 57,461 | $ 146,420 | $ 172,763 |
United States and Canada | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenues | 35,891 | 42,056 | 98,559 | 125,969 |
South Africa | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenues | 9,145 | 9,754 | 30,038 | 29,694 |
Other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenues | $ 5,594 | $ 5,651 | $ 17,823 | $ 17,100 |
Geographic Information and Co_4
Geographic Information and Concentrations of Risk - Narrative (Details) - Customer Concentration | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Net Revenues | Customer One | |||||
Segment Reporting Information [Line Items] | |||||
Concentration percentage | 46.90% | 48.00% | 46.60% | 49.60% | |
Net Revenues | Customer Two | |||||
Segment Reporting Information [Line Items] | |||||
Concentration percentage | 14.90% | 11.40% | |||
Accounts Receivable | Customer One | |||||
Segment Reporting Information [Line Items] | |||||
Concentration percentage | 35.90% | 23.90% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | Jul. 26, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||||||
Amount awarded to other party in settlement | $ 1,000 | |||||
Issuance of common shares in litigation settlement (in shares) | 500,000 | |||||
Additional amount to be awarded to other party in settlement, within 12 months | $ 1,000 | |||||
Additional amount to be awarded to other party in settlement, within 24 months | $ 1,000 | |||||
Gain recognized | $ 17,174 | $ 0 | $ 17,174 | $ 0 | ||
Acquisition-related liabilities | 1,000 | 1,000 | $ 13,186 | |||
Acquisition-related liabilities, current | 1,000 | 1,000 | ||||
Acquisition-related liabilities, noncurrent | $ 1,000 | $ 1,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 473 | $ 409 | $ 1,185 | $ 1,270 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring liability, current | $ 400 | $ 400 | ||
Restructuring liability, noncurrent | 300 | 300 | ||
Impairment of abandoned product line, net of recoveries | 0 | $ 82 | 355 | $ 1,489 |
2015 Initiatives | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total expected cost | 6,100 | 6,100 | ||
2017 Initiatives | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total expected cost | 4,400 | 4,400 | ||
2018 Initiatives | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total expected cost | $ 1,000 | $ 1,000 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Liability (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2017 | $ 1,534 |
Costs Incurred | 1,165 |
Payments | (1,938) |
Translation Adjustment | (21) |
Balance at September 30, 2018 | 740 |
Cumulative Costs Incurred to Date | 11,313 |
2015 Initiatives | Employee Severance Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2017 | 0 |
Costs Incurred | 0 |
Payments | 0 |
Translation Adjustment | 0 |
Balance at September 30, 2018 | 0 |
Cumulative Costs Incurred to Date | 4,131 |
2015 Initiatives | Facility Exit Related Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2017 | 981 |
Costs Incurred | 91 |
Payments | (345) |
Translation Adjustment | 0 |
Balance at September 30, 2018 | 727 |
Cumulative Costs Incurred to Date | 1,819 |
2017 Initiatives | Employee Severance Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2017 | 287 |
Costs Incurred | 61 |
Payments | (359) |
Translation Adjustment | 11 |
Balance at September 30, 2018 | 0 |
Cumulative Costs Incurred to Date | 3,412 |
2017 Initiatives | Facility Exit Related Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2017 | 106 |
Costs Incurred | 2 |
Payments | (108) |
Translation Adjustment | 0 |
Balance at September 30, 2018 | 0 |
Cumulative Costs Incurred to Date | 285 |
2017 Initiatives | Other Related Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2017 | 160 |
Costs Incurred | 20 |
Payments | (180) |
Translation Adjustment | 0 |
Balance at September 30, 2018 | 0 |
Cumulative Costs Incurred to Date | 675 |
2018 Initiatives | Employee Severance Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2017 | 0 |
Costs Incurred | 991 |
Payments | (946) |
Translation Adjustment | (32) |
Balance at September 30, 2018 | 13 |
Cumulative Costs Incurred to Date | $ 991 |