Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 22, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38358 | ||
Entity Registrant Name | INSEEGO CORP. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-3377646 | ||
Entity Address, Address Line One | 12600 Deerfield Parkway, Suite 100 | ||
Entity Address, City or Town | Alpharetta, | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30004 | ||
City Area Code | 858 | ||
Local Phone Number | 812-3400 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | INSG | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 853.3 | ||
Entity Central Index Key | 0001022652 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 105,387,038 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A are incorporated by reference into Part III of this Form 10-K to the extent stated herein. |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Marcum LLP |
Auditor Location | Philadelphia, Pennsylvania |
Auditor Firm ID | 688 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 46,474 | $ 40,015 |
Restricted cash | 3,338 | 0 |
Accounts receivable, net of allowances of $408 and $1,384, respectively | 26,781 | 29,940 |
Inventories | 37,402 | 33,952 |
Prepaid expenses and other | 13,624 | 10,201 |
Total current assets | 127,619 | 114,108 |
Property, plant and equipment, net of accumulated depreciation of $26,692 and $21,715, respectively | 8,102 | 13,699 |
Rental assets, net of accumulated depreciation of $5,392 and $15,754, respectively | 4,575 | 6,109 |
Intangible assets, net of accumulated amortization of $48,404 and $63,020, respectively | 46,995 | 51,487 |
Goodwill | 20,336 | 32,511 |
Right-of-use assets, net | 7,839 | 9,092 |
Other assets | 377 | 388 |
Total assets | 215,843 | 227,394 |
Current liabilities: | ||
Accounts payable | 48,577 | 52,339 |
Accrued expenses and other current liabilities | 26,253 | 23,373 |
Total current liabilities | 74,830 | 75,712 |
Long-term liabilities: | ||
Convertible senior notes, net | 157,866 | 165,147 |
Deferred tax liabilities, net | 852 | 4,505 |
Other long-term liabilities | 7,149 | 9,929 |
Total liabilities | 240,697 | 255,293 |
Commitments and Contingencies | ||
Preferred stock, par value $0.001; 2,000,000 shares authorized: | ||
Series E Preferred stock, par value $0.001; 39,500 shares designated, respectively, 25,000 and 35,000 shares issued and outstanding, respectively, liquidation preference of $1,000 per share (plus any accrued but unpaid dividends) | 0 | 0 |
Common stock, par value $0.001; 150,000,000 shares authorized, 105,380,533 and 99,399,029 shares issued and outstanding, respectively | 105 | 99 |
Additional paid-in capital | 770,619 | 711,487 |
Accumulated other comprehensive loss | (8,531) | (6,972) |
Accumulated deficit | (787,047) | (732,422) |
Total stockholders’ deficit attributable to Inseego Corp. | (24,854) | (27,808) |
Noncontrolling interests | 0 | (91) |
Total stockholders’ deficit | (24,854) | (27,899) |
Total liabilities and stockholders’ deficit | $ 215,843 | $ 227,394 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Allowance on accounts receivable | $ 408 | $ 1,384 |
Property, plant and equipment, accumulated depreciation | 26,692 | 21,715 |
Rental assets - accumulated depreciation | 5,392 | 15,754 |
Intangible assets - accumulated amortization | $ 48,404 | $ 63,020 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 105,380,533 | 99,399,029 |
Common stock, shares outstanding | 105,380,533 | 99,399,029 |
Series E preferred shares | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 39,500 | 39,500 |
Preferred stock, shares issued | 25,000 | 35,000 |
Preferred stock, shares outstanding | 25,000 | 35,000 |
Preferred stock, liquidation preference per share (in dollars per share) | $ 1,000 | $ 1,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net revenues: | |||
Total net revenues | $ 262,399 | $ 313,832 | $ 219,496 |
Cost of net revenues: | |||
Total cost of net revenues | 186,474 | 222,989 | 155,525 |
Gross profit | 75,925 | 90,843 | 63,971 |
Operating costs and expenses: | |||
Research and development | 52,673 | 44,953 | 23,853 |
Sales and marketing | 38,234 | 35,750 | 28,914 |
General and administrative | 28,250 | 30,689 | 27,327 |
Amortization of purchased intangible assets | 2,092 | 3,175 | 3,421 |
Impairment of capitalized software | 1,197 | 1,410 | 0 |
Total operating costs and expenses | 122,446 | 115,977 | 83,515 |
Operating loss | (46,521) | (25,134) | (19,544) |
Other income (expense): | |||
Gain on sale of Ctrack South Africa | 5,262 | 0 | 0 |
Loss on debt conversion and extinguishment, net | (432) | (76,354) | 0 |
Interest expense, net | (6,874) | (9,942) | (20,381) |
Other income, net | 845 | 992 | 351 |
Loss before income taxes | (47,720) | (110,438) | (39,574) |
Income tax provision | 191 | 748 | 536 |
Net loss | (47,911) | (111,186) | (40,110) |
Less: Net income attributable to noncontrolling interests | (214) | (29) | (15) |
Net loss attributable to Inseego Corp. | (48,125) | (111,215) | (40,125) |
Series E preferred stock dividends and deemed dividends from the preferred stock exchange | (4,243) | (2,904) | (361) |
Net loss attributable to common stockholders | $ (52,368) | $ (114,119) | $ (40,486) |
Net loss per common share: | |||
Basic net income (loss) per share (in dollars per share) | $ (0.51) | $ (1.19) | $ (0.52) |
Diluted net income (loss) per share (in dollars per share) | $ (0.51) | $ (1.19) | $ (0.52) |
Weighted-average shares used in computation of net loss per common share: | |||
Weighted-average common shares outstanding, basic (in shares) | 103,246,308 | 96,111,547 | 78,322,496 |
Weighted-average common shares outstanding, diluted (in shares) | 103,246,308 | 96,111,547 | 78,322,496 |
IoT & Mobile Solutions | |||
Net revenues: | |||
Total net revenues | $ 217,984 | $ 261,169 | $ 160,873 |
Cost of net revenues: | |||
Total cost of net revenues | 168,604 | 202,421 | 132,980 |
Enterprise SaaS Solutions | |||
Net revenues: | |||
Total net revenues | 44,415 | 52,663 | 58,623 |
Cost of net revenues: | |||
Total cost of net revenues | $ 17,870 | $ 20,568 | $ 22,545 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (47,911) | $ (111,186) | $ (40,110) |
Foreign currency translation adjustment | (3,167) | (3,093) | 998 |
Release of cumulative foreign currency translation adjustments as a result of the sale of Ctrack South Africa | 1,608 | 0 | 0 |
Total comprehensive loss | (49,470) | (114,279) | (39,112) |
Comprehensive income attributable to noncontrolling interests | (214) | (29) | (15) |
Comprehensive loss attributable to Inseego Corp. | $ (49,684) | $ (114,308) | $ (39,127) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | 2022 Notes | 2025 Notes | Series E preferred shares | Common stock | Preferred Stock | Preferred StockSeries E preferred shares | Common Stock | Common Stock2022 Notes | Common Stock2025 Notes | Common StockCommon stock | Additional Paid-in Capital | Additional Paid-in Capital2022 Notes | Additional Paid-in Capital2025 Notes | Additional Paid-in CapitalSeries E preferred shares | Additional Paid-in CapitalCommon stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests |
Beginning balance at Dec. 31, 2018 | $ (36,525) | $ 0 | $ 74 | $ 546,230 | $ (577,817) | $ (4,877) | $ (135) | ||||||||||||
Beginning balance, shares (in shares) at Dec. 31, 2018 | 0 | 73,980 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Net loss | (40,110) | (40,125) | 15 | ||||||||||||||||
Foreign currency translation adjustment | 998 | 998 | |||||||||||||||||
Exercise of stock options and vesting of restricted stock units | 3,265 | $ 2 | 3,263 | ||||||||||||||||
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan (in shares) | 2,254 | ||||||||||||||||||
Issuance of shares | $ 10,000 | $ 1,439 | $ 10,000 | $ 1,439 | |||||||||||||||
Issuance of shares (in shares) | 10 | 263 | |||||||||||||||||
Taxes withheld on net settled vesting of restricted stock units | (1,269) | (1,269) | |||||||||||||||||
Exercise of warrants | 17,542 | $ 6 | 17,536 | ||||||||||||||||
Exercise of warrants (in shares) | 5,477 | ||||||||||||||||||
Share-based compensation | 7,302 | 7,302 | |||||||||||||||||
Series E preferred stock dividends | 0 | 361 | (361) | ||||||||||||||||
Ending balance at Dec. 31, 2019 | (37,358) | $ 0 | $ 82 | 584,862 | (618,303) | (3,879) | (120) | ||||||||||||
Ending balance, shares (in shares) at Dec. 31, 2019 | 10 | 81,974 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Net loss | (111,186) | (111,215) | 29 | ||||||||||||||||
Foreign currency translation adjustment | (3,093) | (3,093) | |||||||||||||||||
Exercise of stock options and vesting of restricted stock units | 5,422 | $ 2 | 5,420 | ||||||||||||||||
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan (in shares) | 2,081 | ||||||||||||||||||
Issuance of shares | 25,000 | 25,000 | |||||||||||||||||
Issuance of shares (in shares) | 25 | ||||||||||||||||||
Issuance of Series E preferred stock in lieu of interest | 2,330 | 2,330 | |||||||||||||||||
Issuance of Series E preferred stock in lieu of interest (in shares) | 2 | ||||||||||||||||||
Repurchase of Series E preferred stock | $ (2,354) | $ (2,354) | |||||||||||||||||
Repurchase of Series E preferred stock (in shares) | (2) | ||||||||||||||||||
Issuance of common shares in connection with conversion or exchange of notes | $ 66,088 | $ 14,354 | $ 14 | $ 1 | $ 66,074 | $ 14,353 | |||||||||||||
Issuance of common shares in connection with conversion or exchange of notes (in shares) | 13,739 | 1,177 | |||||||||||||||||
Taxes withheld on net settled vesting of restricted stock units | (354) | (354) | |||||||||||||||||
Exercise of warrants | 1,861 | $ 0 | 1,861 | ||||||||||||||||
Exercise of warrants (in shares) | 338 | ||||||||||||||||||
Share-based compensation | 10,419 | 10,419 | |||||||||||||||||
Series E preferred stock dividends | 0 | 2,904 | (2,904) | ||||||||||||||||
Issuance of common shares under settlement agreement | 972 | 972 | |||||||||||||||||
Issuance of common shares under settlement (in shares) | 90 | ||||||||||||||||||
Ending balance at Dec. 31, 2020 | (27,899) | $ 0 | $ 99 | 711,487 | (732,422) | (6,972) | (91) | ||||||||||||
Ending balance, shares (in shares) at Dec. 31, 2020 | 35 | 99,399 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Net loss | (47,911) | (48,125) | 214 | ||||||||||||||||
Foreign currency translation adjustment | (3,167) | (3,167) | |||||||||||||||||
Exercise of stock options and vesting of restricted stock units | 4,765 | $ 2 | 4,763 | ||||||||||||||||
Exercise of stock options, vesting of restricted stock units and stock issued under employee stock purchase plan (in shares) | 2,512 | ||||||||||||||||||
Issuance of shares | $ 29,370 | $ 2 | $ 29,368 | ||||||||||||||||
Issuance of shares (in shares) | 1,516 | ||||||||||||||||||
Issuance of common shares in connection with conversion or exchange of notes | $ 5,382 | $ 0 | $ 5,382 | ||||||||||||||||
Issuance of common shares in connection with conversion or exchange of notes (in shares) | 429 | ||||||||||||||||||
Taxes withheld on net settled vesting of restricted stock units | (1,279) | (1,279) | |||||||||||||||||
Share-based compensation | 16,649 | 16,649 | |||||||||||||||||
Series E preferred stock dividends | 0 | 3,139 | (3,139) | ||||||||||||||||
Divestiture of Ctrack South Africa | (889) | 8 | (2,497) | 1,608 | (8) | ||||||||||||||
Series E preferred stock exchange | 0 | $ 2 | 1,102 | (1,104) | |||||||||||||||
Series E preferred stock exchange (in shares) | (10) | 1,525 | |||||||||||||||||
Net noncontrolling interest acquired | 125 | 240 | (115) | ||||||||||||||||
Ending balance at Dec. 31, 2021 | $ (24,854) | $ 0 | $ 105 | $ 770,619 | $ (787,047) | $ (8,531) | $ 0 | ||||||||||||
Ending balance, shares (in shares) at Dec. 31, 2021 | 25 | 105,381 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Cash flows from operating activities: | ||||
Net loss | $ (47,911) | $ (111,186) | $ (40,110) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization | 25,330 | 27,946 | 18,426 | |
Fair value adjustment on derivative instrument | (3,826) | 597 | 0 | |
Provision for bad debts, net of recoveries | 401 | 512 | 715 | |
Impairment of capitalized software | 1,197 | 1,410 | 0 | |
Provision for excess and obsolete inventory | 657 | 538 | 980 | |
Share-based compensation expense | 16,649 | 10,419 | 7,302 | |
Amortization of debt discount and debt issuance costs | 1,495 | 4,016 | 9,772 | |
Loss on debt conversion and extinguishment, net | 432 | 76,354 | 0 | |
Gain on sale of Ctrack South Africa | (5,262) | 0 | 0 | |
Deferred income taxes | (53) | 659 | (598) | |
Other | 286 | 667 | 840 | |
Changes in assets and liabilities, net of effects of divestiture: | ||||
Accounts receivable | (1,148) | (10,797) | 377 | |
Inventories | (12,494) | (13,336) | (3,077) | |
Prepaid expenses and other assets | (844) | (3,070) | (901) | |
Accounts payable | (3,108) | 27,087 | (12,996) | |
Accrued expenses, income taxes, and other | 2,987 | 8,234 | 1,271 | |
Net cash (used in) provided by operating activities | (25,212) | 20,050 | (17,999) | |
Cash flows from investing activities: | ||||
Acquisition of noncontrolling interest | (116) | 0 | 0 | |
Purchases of property, plant and equipment | (4,928) | (5,736) | (6,621) | |
Proceeds from the sale of property, plant and equipment | 1,338 | 392 | 517 | |
Proceeds from sale of Ctrack South Africa, net of cash divested1 | [1] | 33,689 | 0 | 0 |
Additions to capitalized software development costs and purchases of intangible assets | (23,905) | (29,369) | (22,109) | |
Net cash provided by (used in) investing activities | 6,078 | (34,713) | (28,213) | |
Cash flows from financing activities: | ||||
Gross proceeds received from issuance of Series E preferred stock | 0 | 25,000 | 10,000 | |
Gross proceeds from the issuance of 2025 Notes | 0 | 100,000 | 0 | |
Payment of issuance costs related to 2025 Notes | 0 | (3,645) | 0 | |
Cash paid to investors in private exchange transactions | 0 | (32,062) | 0 | |
Payoff of term loan and related extinguishment costs | 0 | (48,830) | 0 | |
Repurchase of Series E preferred stock | 0 | (2,354) | 0 | |
Proceeds from the exercise of warrants to purchase common stock | 0 | 1,861 | 17,542 | |
Net borrowing of bank and overdraft facilities | 265 | (199) | (1,047) | |
Principal payments under finance lease obligations | (3,200) | (2,756) | (1,022) | |
Proceeds from a public offering, net of issuance costs | 29,370 | 0 | 0 | |
Proceeds from stock option exercises and employee stock purchase plan, net of taxes paid on vested restricted stock units | 3,486 | 5,066 | 1,996 | |
Net cash provided by financing activities | 29,921 | 42,081 | 27,469 | |
Effect of exchange rates on cash | (990) | 523 | (259) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 9,797 | 27,941 | (19,002) | |
Cash, cash equivalents and restricted cash, beginning of period | 40,015 | 12,074 | 31,076 | |
Cash, cash equivalents and restricted cash, end of period | 49,812 | 40,015 | 12,074 | |
Supplemental disclosures of cash flow information: | ||||
Interest | 5,387 | 3,215 | 9,296 | |
Income taxes | 523 | 142 | 939 | |
Supplemental disclosures of non-cash activities: | ||||
Transfer of inventories to rental assets | 5,142 | 4,036 | 3,748 | |
Purchases of property, plant and equipment under capital lease | 0 | 664 | 1,341 | |
Right-of-use assets obtained in exchange for operating leases liabilities | 658 | 7,931 | 4,694 | |
Proceeds related to divestiture of Ctrack South Africa in exchange for settlement of tax liabilities | 421 | 0 | 0 | |
Exchange of Series E Preferred Stock for common stock | 11,982 | 0 | 0 | |
Issuance of common stock in exchange for Series E Preferred Stock | 13,086 | 0 | 0 | |
Deemed dividend on exchange of Series E Preferred Stock for common stock | 1,104 | 0 | 0 | |
Capital expenditures financed through accounts payable or accrued liabilities | 748 | 5,710 | 2,926 | |
Issuance of common stock under Settlement Agreement | 0 | 972 | 1,439 | |
Preferred stock issued in extinguishment of term loan accrued interest | 0 | 2,330 | 0 | |
Debt discount and issuance costs extinguished in notes conversion | 0 | 1,728 | 0 | |
2022 Notes conversion to equity | 0 | 59,907 | 0 | |
Novatel Wireless Notes conversion to equity | 0 | 250 | 0 | |
2025 Notes issued to extinguish 2022 Notes | 0 | 80,375 | 0 | |
2025 Notes conversion, including shares issued in satisfaction of interest-make-whole payment | $ 5,382 | $ 14,353 | $ 0 | |
[1] | The amount for the year ended December 31, 2021 is net of cash divested of $5.0 million |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Statement of Cash Flows [Abstract] | |
Cash deconsolidated as part of sale | $ 5 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Nature of Business and Significant Accounting Policies | Nature of Business and Significant Accounting Policies Inseego Corp. (the “Company” or “Inseego”) is a leader in the design and development of fixed and mobile wireless solutions (advanced 4G and 5G New Radio (“5G NR”)), industrial Internet of Things (“IIoT”) and cloud solutions for large enterprise verticals, service providers and small and medium-sized businesses around the globe. Inseego’s customers include wireless service providers, Fortune 500 enterprises, consumers, governments, and first responders. Product portfolio consists of fixed and mobile device-to-cloud solutions that provide compelling, intelligent, reliable and secure end-to-end IoT services with deep business intelligence. Inseego’s products and solutions, designed and developed in the U.S., power mission critical applications with a “zero unscheduled downtime” mandate, such as 5G fixed wireless access (“FWA”) gateway solutions, 4G and 5G mobile broadband, IIoT applications such as SD WAN failover management, asset tracking and fleet management services. Inseego’s solutions are powered by its key wireless innovations in mobile and FWA technologies, including a suite of products employing the 5G NR standards, and purpose-built SaaS cloud platforms. Inseego is a Delaware corporation formed in 2016 and is the successor to Novatel Wireless, Inc., a Delaware corporation formed in 1996 (“Novatel Wireless”), resulting from an internal reorganization that was completed in November 2016. The Company’s principal executive office is located at 12600 Deerfield Parkway, Suite 100, Alpharetta, GA 30004, its corporate offices are located at 9710 Scranton Road, Suite 200, San Diego CA 92121 and its sales and engineering offices are located throughout the world. Inseego’s common stock trades on the NASDAQ Global Select Market under the trading symbol “INSG”. Liquidity The Company had a net loss attributable to Inseego Corp. of $48.1 million during the year ended December 31, 2021. As of December 31, 2021, the Company had available cash and cash equivalents totaling $46.5 million and working capital of $52.8 million. On July 30, 2021, the Company completed the sale of its Ctrack business operations in Africa, Pakistan and the Middle East (together “Ctrack South Africa”). Initial cash proceeds of approximately $36.6 million were received. Net cash proceeds received were $31.5 million, net of cash divested of $5.0 million. Final cash proceeds were subject to certain post-closing working capital adjustments which totaled $2.6 million, out of which $2.2 million was received on October 29, 2021, and the remaining $0.4 million was offset with the Company’s existing accounts payable balance to an affiliate of Convergence Partners (“Convergence”), an investment management firm in South Africa. On January 25, 2021, the Company entered into an Equity Distribution Agreement with Canaccord Genuity LLC (the “Agent”), pursuant to which the Company may offer and sell, from time to time, through or to the Agent, up to $40.0 million of shares of its common stock (the ”ATM Offering”). In January 2021, the Company sold 1,516,073 shares of common stock, at an average price of $20.11 per share, for net proceeds of $29.4 million, after deducting underwriter fees and discounts of $0.9 million, and other offering fees, pursuant to the ATM Offering. During the quarter ended September 30, 2020, certain holders of the 2025 Notes converted approximately $13.5 million in principal amount of the 2025 Notes into 1,177,156 shares of the Company’s common stock in accordance with the terms of such notes. As of December 31, 2021, the Company’s outstanding debt primarily consisted of $161.9 million in principal amount of 2025 Notes. In the first quarter of 2020, $59.9 million of the Company’s 5.5% convertible senior notes due 2022 (the “2022 Notes” formerly referred to as the “Inseego Notes”) were exchanged for common stock in private exchange transactions. Additionally, in the second quarter of 2020, the Company restructured its outstanding debt by completing a $100.0 million registered public offering (the “Offering”) of 3.25% convertible senior notes due 2025 (the “2025 Notes”) and also entered into privately-negotiated exchange agreements (“Exchange Agreements”), pursuant to which an aggregate of $45.0 million in principal amount of the 2022 Notes were exchanged for an aggregate of $32.0 million in cash and $80.4 million in principal amount of the 2025 Notes (the “Private Exchange Transactions”). The Company also used a portion of the proceeds from the Offering to repay in full its previous term loan. In the third quarter of 2020, the Company redeemed the remaining $2,000 principal amount of the 2022 Notes. On March 6, 2020, the Company issued and sold 25,000 shares of Fixed-Rate Cumulative Perpetual Preferred Stock, Series E, par value $0.001 per share (the “Series E Preferred Stock”), for an aggregate purchase price of $25.0 million. The Company has a history of operating and net losses and overall usage of cash from operating and investing activities. The Company 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 from the filing date of this report. The Company’s ability to attain more profitable operations and continue to generate 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’s liquidity could be impaired if there is any interruption in its business operations, a material failure to satisfy its contractual commitments or a failure to generate revenue from new or existing products. There can be no assurance that any required or desired restructuring or financing will be available on terms favorable to the Company, or at all. Additionally, the Company is uncertain of the full extent to which the COVID-19 pandemic will impact the Company’s business, operations and financial results. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly 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 disclosure of contingent liabilities. Actual results could differ materially from these estimates. Estimates are assessed each period and updated to reflect current information, such as the economic considerations related to the impact that the novel coronavirus pandemic ("COVID-19") could have on our significant accounting estimates. Significant estimates include revenue recognition, capitalized software costs, allowance for credit losses, provision for excess and obsolete inventory, valuation of intangible and long-lived assets, valuation of goodwill, valuation of derivatives, accruals relating to litigation, income taxes, and share-based compensation expense. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include highly liquid investments with original maturities of three months or less. The Company’s cash and cash equivalents are generally held with large financial institutions worldwide to reduce the amount of exposure to any credit risk. Restricted cash consists of Company funds in escrow with a financial institution as collateral for potential future uninsured warranty claims related to the divestiture of Ctrack South Africa. See Note 5. Business Divestiture for additional information about the divestiture of Ctrack South Africa. Cash, cash equivalents and restricted cash are recorded at market value, which approximates cost. Gains and losses associated with the Company’s foreign currency denominated demand deposits are recorded as a component of other income, net, in the consolidated statements of operations. The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the consolidated balance sheets to “Cash, cash equivalents, and restricted cash, end of period” as reported within the consolidated statements of cash flows (in thousands): December 31, 2021 2020 Cash and cash equivalents $ 46,474 $ 40,015 Restricted cash 3,338 — Cash, cash equivalents and restricted cash, end of period $ 49,812 $ 40,015 Revenue Recognition The Company generates revenue from a broad range of product sales including intelligent wireless hardware products for the worldwide mobile communications and industrial 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 years ended December 31, 2021, 2020 and 2019 were as follows (in thousands): Year Ended 2021 2020 2019 IoT & Mobile Solutions $ 217,984 $ 261,169 $ 160,873 Enterprise SaaS Solutions 44,415 52,663 58,623 Total $ 262,399 $ 313,832 $ 219,496 See geographic disaggregation information in Note 13. 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, HD quality VoLTE based wireless home phones, cloud management software and an advanced 5G portfolio of products (currently in various stages of development). The solutions are offered under the MiFi TM brand for consumer and business markets, and under the Skyus brand for industrial IoT markets. IoT & Mobile Solutions also includes Inseego Subscribe TM , a hosted 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. Enterprise SaaS Solutions . The Enterprise SaaS Solutions portfolio consists of various subscription offerings to gain access to the Company’ s Ctrack tel ematics platforms, which provide fleet vehicle, aviation ground vehicle and asset tracking and performance information, and other telematics applications. Contracts with Customers The Company follows Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (as amended, “ASC 606”), which provides 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. 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. Because the Company’s rental asset lease contracts qualify as operating leases under Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) , and the contracts also include services to operate the underlying asset, and to maintain the asset, the Company has elected the practical expedient to combine the lease and the non-lease components because the service is the predominant element in the eyes of the customer and the pattern of service delivery is the same for both elements. The Company recognizes revenue over time on a ratable basis over the term of the contract. Maintenance and support services revenue. Within cost of revenue, the Company records an estimate to reflect its standard warranty obligation to end users to provide for replacement of a defective product. The standard obligation period for most regions is 12 months. Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures. The Company’s estimated allowances for product warranties can vary from actual results and the Company may have to record additional charges to cost of 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 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. 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. 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. 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 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 December 31, 2021 or 2020. Applying the practical expedient in paragraph 40-25-4 of ASC 340, Other Assets and Deferred Costs , 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. 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. As of December 31, 2021 and 2020, the Company had $3.8 million and $3.0 million, respectively, of contract liabilities included within accrued expenses and other current liabilities, and other long-term liabilities on the consolidated balance sheets. 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. Revenues 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 data centers or a hosted data center. 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. Allowance for Credit Losses The Company recognizes an allowance for credit loss at the time a receivable is recorded based on its estimate of expected credit losses and adjusts this estimate over the life of the receivable as needed. The Company evaluates the aggregation and risk characteristics of a receivable pool and develops loss rates that reflect historical collections, current forecasts of future economic conditions over the time horizon the Company is exposed to credit risk, and payment terms or conditions that may materially affect future forecasts. As of December 31, 2021 and 2020, the Company reported $26.8 million and $29.9 million, respectively, of accounts receivable, net of allowances of $0.4 million and $1.4 million, respectively. The Company has not seen significant changes to the recovery rate of its accounts receivable as a result of the COVID-19 pandemic, but it is continuing to actively monitor the impact of the COVID-19 pandemic on its expected credit losses. Inventories and Provision for Excess and Obsolete Inventory Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. Shipping and handling costs are classified as a component of cost of net revenues in the consolidated statements of operations. The Company reviews the components of its inventory and its inventory purchase commitments on a regular basis for excess and obsolete inventory based on estimated future usage and sales. Write-downs in inventory value or losses on inventory purchase commitments depend on various items, including factors related to customer demand, economic and competitive conditions, technological advances or new product introductions by the Company or its customers that vary from its current expectations. Whenever inventory is written down, a new cost basis is established and the inventory is not subsequently written up if market conditions improve. The Company believes that, when made, the estimates used in calculating the inventory provision are reasonable and properly reflect the risk of excess and obsolete inventory. If customer demand for the Company’s inventory is substantially less than its estimates, inventory write-downs may be required, which could have a material adverse effect on its consolidated financial statements. Intangible Assets Intangible assets include purchased finite-lived and indefinite-lived intangible assets resulting from the acquisitions of DigiCore Holdings Limited (“DigiCore” or “Ctrack”) and R.E.R. Enterprises, Inc. (“RER”) and its wholly owned subsidiary and principal operating asset, Feeney Wireless, LLC (which was renamed Inseego North America, LLC) (“INA”), along with the costs of non-exclusive and perpetual worldwide software technology licenses and capitalized software developments costs for both internal and external use. Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets (see Note 3. Goodwill and Other Intangible Assets ). Software Development Costs for External Use Software development costs for external use are expensed as incurred until technological feasibility has been established, at which time those costs are capitalized as intangible assets until the software is available for general release to customers. Capitalized software development costs are amortized on a straight-line basis over the estimated economic life. The straight-line recognition method approximates the manner in which the expected benefit will be derived. At each balance sheet date, the unamortized capitalized software development costs for external use is compared to the net realizable value of that product by analyzing critical inputs such as expected future lifetime revenue. The amount by which unamortized software costs exceed the net realizable value, if any, is recognized as a charge to amortization expense in the period it is determined. Costs incurred to enhance existing software or after the software is available for general release to customers are expensed in the period they are incurred and included in research and development expense in the consolidated statements of operations. Software Development Costs for Internal Use Costs incurred in the preliminary stages of development are expensed as incurred and included in research and development expense in the consolidated statements of operations. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing performed to ensure the product is ready for its intended use. The Company also capitalizes costs related to specific upgrades and enhancements of internal-use software when it is probable that the expenditures will result in additional functionality. Maintenance and training costs are expensed as incurred. Capitalized internal-use software costs are recorded as part of intangible assets and are amortized on a straight-line basis over the estimated useful life of the software, and included in general and administrative expense in the consolidated statement of operations. The Company tests these assets for impairment whenever events or circumstances occur that could impact their recoverability. For the years ended December 31, 2021, 2020, and 2019 the Company recorded $1.2 million, $1.4 million and zero impairment loss, respectively, related to software development costs for internal use. Valuation of Indefinite-Lived Intangible Assets Indefinite-lived intangible assets, including in-process capitalized software development costs, are not amortized; however, they are tested for impairment annually, and between annual tests, if certain events occur indicating that the carrying amounts may be impaired. The Company performs an annual impairment review of indefinite-lived assets during the fourth fiscal quarter of each year, and more frequently if the Company believes indicators of impairment exist. To review for impairment, the Company first assesses qualitative factors to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount. The Company’s qualitative assessment of the recoverability of indefinite-lived assets is based on various macroeconomic, industry-specific, and company specific factors. These factors include: (i) industry or economic trends; (ii) current, historical, or projected financial performance, and; (iii) the Company’s market capitalization. After assessing the totality of events and circumstances, if the Company determines that it is not more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, no further assessment is performed. If the Company determines that it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, the Company calculates the fair value of the reporting unit and compares the fair value to the reporting unit’s net book value. For the years ended December 31, 2021, 2020 and 2019 the Company recorded zero impairment loss related to indefinite-lived intangible assets. Goodwill Goodwill represents the excess purchase price over estimated fair value of net assets of businesses acquired in a business combination. The Company’s goodwill results from the acquisitions of Ctrack and RER. Valuation of Goodwill Indefinite-lived intangible assets, including goodwill, are not amortized; however, they are tested for impairment annually, and between annual tests, if certain events occur indicating that the carrying amounts may be impaired. The Company performs an annual impairment review of indefinite-lived assets during the fourth fiscal quarter of each year, and more frequently if the Company believes indicators of impairment exist. Goodwill is tested for impairment at the reporting unit level by first assessing qualitative factors to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount. The Company’s qualitative assessment of the recoverability of indefinite-lived assets is based on various macroeconomic, industry-specific, and company specific factors. These factors include: (i) industry or economic trends; (ii) current, historical, or projected financial performance, and; (iii) the Company’s market capitalization. After assessing the totality of events and circumstances, if the Company determines that it is not more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, no further assessment is performed. If the Company determines that it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, the Company calculates the fair value of the reporting unit and compares the fair value to the reporting unit’s net book value. The Company identified two reporting units for the purpose of goodwill impairment testing, Ctrack and INA, and performed a qualitative test for goodwill impairment of the two reporting units during the fourth fiscal quarter. Based upon the results of the qualitative testing, the Company believed that it was more-likely-than-not that the fair value of these reporting units were grea |
Financial Statement Details
Financial Statement Details | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statement Details | Financial Statement Details Inventories Inventories consist of the following (in thousands): December 31, 2021 2020 Finished goods $ 33,112 $ 27,009 Raw materials and components 4,290 6,943 $ 37,402 $ 33,952 Prepaid expenses and other Prepaid expenses and other consists of the following (in thousands): December 31, 2021 2020 Rebate receivables $ 6,398 $ 5,992 Receivables from contract manufacturers 2,626 — Software licenses 1,261 707 Insurance 1,269 1,262 Deposits 1,023 1,544 Financed assets 323 218 Other 724 478 $ 13,624 $ 10,201 Property, plant and equipment Property, plant and equipment consists of the following (in thousands): December 31, 2021 2020 Land $ — $ 244 Buildings — 2,213 Test equipment 19,095 16,775 Computer equipment and purchased software 7,618 7,899 Product tooling 4,350 3,125 Furniture and fixtures 1,214 1,310 Vehicles 1,654 2,988 Leasehold improvements 863 860 34,794 35,414 Less—accumulated depreciation and amortization (26,692) (21,715) $ 8,102 $ 13,699 At December 31, 2021, the Company had property, plant and equipment Rental assets Rental assets consist of the following (in thousands): December 31, 2021 2020 Rental assets $ 9,967 $ 21,863 Less—accumulated depreciation (5,392) (15,754) $ 4,575 $ 6,109 Depreciation and amortization Depreciation and amortization expense related to property, plant and equipment, including rental assets and property, plant and equipment under capital leases was $9.8 million, $10.0 million and $8.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. Accrued expenses and other current liabilities Accrued expenses and other current liabilities consist of the following (in thousands): December 31, 2021 2020 Royalties $ 2,243 $ 2,410 Payroll and related expenses 9,326 6,006 Warranty obligations 473 366 Professional fees 502 921 Bank overdrafts 370 160 Accrued interest 877 888 Deferred revenue 3,832 2,853 Operating lease liabilities 1,769 1,619 Accrued contract manufacturing liabilities 927 938 Liabilities related to financed assets 1,593 2,686 Value added tax payables 642 2,039 Other 3,699 2,487 $ 26,253 $ 23,373 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets A summary of the activity in goodwill is presented below (in thousands): Balance at December 31, 2019 $ 33,659 Effect of change in foreign currency exchange rates (1,148) Balance at December 31, 2020 32,511 Effect of Ctrack South Africa divestiture (10,734) Effect of change in foreign currency exchange rates (1,441) Balance at December 31, 2021 $ 20,336 The Company’s intangible assets are comprised of the following (in thousands): December 31, 2021 Weighted-Average Life Gross Carrying Value Accumulated Amortization Net Carrying Value Finite-lived intangible assets: Developed technologies 6.0 $ 8,305 $ (7,100) $ 1,205 Trademarks and trade names 10.0 9,088 (5,920) 3,168 Customer relationships 10.0 11,995 (9,242) 2,753 Capitalized software development costs 3.1 54,581 (24,604) 29,977 Other 3.0 2,885 (1,538) 1,347 Total finite-lived intangible assets $ 86,854 $ (48,404) $ 38,450 Indefinite-lived intangible assets: In-process capitalized software development costs 8,545 Total intangible assets $ 46,995 December 31, 2020 Weighted-Average Life Gross Carrying Value Accumulated Amortization Net Carrying Value Finite-lived intangible assets: Developed technologies 6.0 $ 12,692 $ (10,878) $ 1,814 Trademarks and trade names 10.0 17,823 (9,597) 8,226 Customer relationships 8.5 12,306 (8,703) 3,603 Capitalized software development costs 3.3 47,818 (31,051) 16,767 Other 2.5 3,389 (2,791) 598 Total finite-lived intangible assets $ 94,028 $ (63,020) $ 31,008 Indefinite-lived intangible assets: In-process capitalized software development costs 20,479 Total intangible assets $ 51,487 Amortization expense for the years ended December 31, 2021, 2020 and 2019 was approximately $15.5 million, $18.0 million and $9.7 million, respectively, including approximately $12.2 million, $12.9 million and $4.1 million related to capitalized software development costs for the years ended December 31, 2021, 2020 and 2019, respectively. The Company recorded impairment losses on intangible assets related to internal use capitalized software during the years ended December 31, 2021 and 2020 of $1.2 million and $1.4 million, respectively. No impairment loss was recorded during the year ended December 31, 2019. The following table represents details of the amortization of finite-lived intangible assets that is estimated to be expensed in the future (in thousands): 2022 $ 16,672 2023 11,572 2024 4,458 2025 2,749 2026 1,011 Thereafter 1,988 Total $ 38,450 |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
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 years ended December 31, 2021 or 2020. 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 December 31, 2021 and 2020 (in thousands): December 31, 2021 December 31, 2020 Total Fair Value Level 3 Level 1 Total Fair Value Level 3 Level 1 Assets Cash equivalents Money market funds $ 126 $ — $ 126 $ 126 $ — $ 126 Total assets $ 126 $ — $ 126 $ 126 $ — $ 126 Liabilities 2025 Notes Interest make-whole payment $ 926 $ 926 $ — $ 4,898 $ 4,898 $ — Total liabilities $ 926 $ 926 $ — $ 4,898 $ 4,898 $ — The fair value of the interest make-whole payment derivative liability was determined using a Monte Carlo model with the following key assumptions: December 31, 2021 December 31, 2020 Volatility 50 % 50 % Stock price $5.83 per share $15.47 per share Credit spread 15.93 % 19.25 % Term 3.34 years 4.34 years Dividend yield — % — % Risk-free rate 1.02 % 0.30 % The following table sets forth a summary of changes in the fair value of Level 3 liabilities for the twelve months ended December 31, 2021 (in thousands): Balance as of Additions Conversions Change in fair value Balance as of Liabilities: Interest make-whole payment $ 4,898 $ — $ (146) $ (3,826) $ 926 The Company evaluated the 2025 Notes under ASC 815, Derivatives and Hedging , and identified an embedded derivative that required bifurcation. The embedded derivative is an interest make-whole payment The estimated fair values of the interest make-whole derivative liability at December 31, 2021 and December 31, 2020 were determined using significant assumptions which include an implied credit spread rate for notes with a similar term, the expected volatility and dividend yield of the Company’s common stock and the risk-free interest rate. Changes in the fair value of the interest make-whole payment are included in the Company’s consolidated statement of operations for the current fiscal year within other income (expense), net. During the year ended December 31, 2021, certain holders of the 2025 Notes converted an aggregate of approximately $5.0 million in principal amount of the 2025 Notes into shares of the Company’s common stock in accordance with the terms of such notes and a portion of the embedded derivative was settled in shares of the Company’s common stock resulting in $0.1 million of the derivative liability being extinguished upon conversion. As of December 31, 2021 and 2020 the embedded derivative had a fair value of $0.9 million and $4.9 million, respectively. For the years ended December 31, 2021 and 2020 the Company recorded to other income (expense), net, on the consolidated statement of operations a $3.8 million gain and $0.6 million loss, respectively, on the change in fair value. During the years ended December 31, 2021 and 2020, there were no transfers between the levels within the fair value hierarchy. 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 the 2025 Notes. On May 12, 2020, the Company issued $180.4 million in aggregate principal amount of 2025 Notes, and restructured its outstanding debt as described further in Note 6. Debt |
Business Divestiture
Business Divestiture | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Business Divestiture | Business Divestiture Sale of Ctrack South Africa Operations On February 24, 2021, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Convergence to sell its Ctrack South Africa business operations in an all-cash transaction for 528.9 million South African Rand (“ZAR”) (approximately $36.6 million United States Dollars). The Purchase Agreement provides for an adjustment to the purchase price based on a normalized level of net working capital. On July 30, 2021, the Company completed the sale of Ctrack South Africa. Initial cash proceeds of $36.6 million were received. Net cash proceeds received were $31.5 million, net o f cash divested of $5.0 million. Final cash proceeds were subject to certain post-closing working capital adjustments which totaled $2.6 million, out of which $2.2 million was received on October 29, 2021, and the remaining $0.4 million was offset with the Company’s existing accounts payable balance to Convergence. The Purchase Agreement required the Company to place in escrow 52.9 million ZAR, (approximately $3.3 million United States Dollars), which will be released on July 30, 2022. The funds in escrow will allow for Convergence to submit claims that are deemed to be uninsured warranties as defined in the Purchase Agreement. Such funds in escrow is recorded as restricted cash on the consolidated balance sheet. In evaluating the accounting treatment for this sale, the transaction was considered to be the deconsolidation of a subsidiary, as defined in ASC 810 Consolidation . The gain upon sale is $5.3 million. Such gain has been recognized as gain on sale of Ctrack South Africa in the consolidated results of operations during the year ended December 31, 2021. The Company also recorded $2.2 million of transaction expenses, which were expensed as incurred and included within other income (expense), net, in the consolidated results of operations for the year ended December 31, 2021. The assets and liabilities of Ctrack South Africa that were sold in the transaction as of July 30, 2021, are summarized below: (in thousands) Assets : Cash and cash equivalents $ 5,040 Accounts receivable, net 3,505 Inventory 3,821 Prepaid expenses and other 370 Property, plant and equipment, net 4,545 Rental assets, net 2,448 Intangible assets, net 11,278 Goodwill 10,734 Total assets $ 41,741 Accounts payable $ 3,961 Accrued expenses and other liabilities 1,107 Deferred tax liabilities, net 3,647 Other long-term liabilities 746 Total liabilities 9,461 Net assets $ 32,280 Net proceeds recognized are comprised of the following: (in thousands) Initial purchase consideration received, upon close $ 36,566 Working capital adjustments 2,584 Net proceeds recognized $ 39,150 Net gain on sale is comprised of the following: (in thousands) Gross proceeds recognized $ 39,150 Less: Book value of net assets sold 32,280 Less: Release of cumulative foreign currency translation adjustments related to Ctrack South Africa 1,608 Net gain on sale $ 5,262 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-Term Debt Convertible Notes 2025 Notes On May 12, 2020, the Company completed its registered public Offering of $100.0 million aggregate principal amount of 2025 Notes. On May 12, 2020, the Company also entered into Exchange Agreements with certain related party holders of the 2022 Notes. Pursuant to the Exchange Agreements, these noteholders agreed to exchange the 2022 Notes that they held (representing an aggregate of $45.0 million principal amount of 2022 Notes with an estimated fair value of approximately $112.4 million as of the date of exchange) for an aggregate of $32.0 million in cash and $80.4 million principal amount of 2025 Notes in private placement transactions that closed concurrently with the registered Offering. In connection therewith, the Company recorded $67.2 million in loss on debt conversion and extinguishment, net in the consolidated statement of operations. The 2025 Notes issued in the Private Exchange Transactions are part of the same series as the 2025 Notes issued in the registered Offering. During the year ended December 31, 2021, certain holders of the 2025 Notes converted pursuant to the original terms of the 2025 Notes, an aggregate of approximately $5.0 million in principal amount of the 2025 Notes into 428,669 shares of the Company’s common stock, including 32,221 shares of common stock issued in satisfaction of the interest make-whole payment. In connection therewith, the Company recorded a loss of $0.4 million on debt conversion, net in the consolidated statement of operations. The 2025 Notes are issued under an indenture, dated May 12, 2020 (the “Base Indenture”), between the Company and Wilmington Trust, National Association, as trustee (the “Trustee”), as supplemented by the first supplemental indenture, dated May 12, 2020 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between the Company and the Trustee. The 2025 Notes will mature on May 1, 2025, unless earlier repurchased, redeemed or converted. The 2025 Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 3.25%, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2020. Holders of the 2025 Notes may convert the 2025 Notes into shares of the Company’s common stock (together with cash in lieu of any fractional share), at their option, at any time until the close of business on the scheduled trading day immediately before the maturity date. Upon conversion of the 2025 Notes, the Company will deliver for each $1,000 principal amount of 2025 Notes converted a number of shares of common stock (together with cash in lieu of any fractional share), equal to the conversion rate. The initial conversion rate for the 2025 Notes is 79.2896 shares of common stock per $1,000 principal amount of 2025 Notes, which represents an initial conversion price of approximately $12.61 per share, and is subject to adjustment upon the occurrence of certain events, including, but not limited to, certain stock dividends, splits and combinations, the issuance of certain rights, options or warrants to holders of the common stock, certain distributions of assets, debt securities, capital stock or other property to holders of the common stock, cash dividends on the common stock and certain Company tender or exchange offers. If a fundamental change (as defined in the Indenture) occurs at any time prior to the maturity date, then the noteholders may require the Company to repurchase their 2025 Notes at a cash repurchase price equal to the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. If a make-whole fundamental change (as defined in the Indenture) occurs, then the Company will in certain circumstances increase the conversion rate for a specified period of time. The 2025 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after May 6, 2023 and on or before the scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, as long as the last reported sale price per share of the common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. The Indenture contains customary events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the Trustee, by notice to the Company, or the holders of the 2025 Notes representing at least 25% in aggregate principal amount of the outstanding 2025 Notes, by notice to the Company and the Trustee, may declare 100% of the principal of, and all accrued and unpaid interest on, all of the then outstanding 2025 Notes to be due and payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, 100% of the principal of, and all accrued and unpaid interest on, all of the then outstanding 2025 Notes will automatically become immediately due and payable. Notwithstanding the foregoing, the Indenture provides that, to the extent the Company elects, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture will, for the first 360 days after such event of default, consist exclusively of the right to receive additional interest on the 2025 Notes. Interest make-whole payment The 2025 Notes also include an interest make-whole payment feature whereby if the last reported sale price of the Company’s common stock for each of the five trading days immediately preceding a conversion date is greater than or equal to $10.51, the Company will, in addition to the other consideration payable or deliverable in connection with such conversion, make an interest make-whole payment to the converting holder equal to the sum of the present values of the scheduled payments of interest that would have been made on the 2025 Notes to be converted had such notes remained outstanding from the conversion date through the earlier of (i) the date that is three years after the conversion date and (ii) the maturity date. The present values will be computed using a discount rate equal to 1%. The Company will satisfy its obligation to pay the interest make-whole payment, at its election, in cash or shares of common stock (together with cash in lieu of fractional shares). The Company has determined that this feature is an embedded derivative and has recognized the fair value of this derivative as a liability in the consolidated balance sheets, with subsequent changes to fair value to be recorded at each reporting period on the consolidated statement of operations in other income, net. As of December 31, 2021 and 2020 $161.9 million and $166.9 million, respectively, principal amount of the 2025 Notes was outstanding. As of both December 31, 2021 and 2020, $80.4 million principal amount of 2025 Notes was held by related parties and $0.4 million of accrued interest due to related parties was included within accrued expenses and other current liabilities on the consolidated balance sheets. Assuming no repurchases or conversion of the 2025 Notes prior to May 1, 2025, the entire principal balance of $161.9 million of the 2025 Notes is due on May 1, 2025. The 2025 Notes consist of the following (in thousands): December 31, 2021 2020 Principal $ 161,898 $ 166,898 Add: fair value of embedded derivative 926 4,898 Less: unamortized debt discount (2,761) (3,703) Less: unamortized issuance costs (2,197) (2,946) Net carrying amount $ 157,866 $ 165,147 The effective interest rate of the 2025 Notes was 4.15% and 4.10%, respectively, for the twelve months ended December 31, 2021 and 2020. The following table sets forth total interest expense recognized related to the 2025 Notes (in thousands): Year Ended December 31, 2021 2020 Contractual interest expense $ 5,271 $ 3,434 Amortization of debt discount 829 552 Amortization of debt issuance costs 660 439 Total interest expense $ 6,760 $ 4,425 For the years ended December 31, 2021 and 2020 the contractual interest expense on the 2025 Notes recorded within interest expense, net on the consolidated statements of operations attributable to related parties was $2.6 million and $1.7 million, respectively. 2022 Notes On January 9, 2017, in connection with the Note Exchange (as defined below), the Company issued approximately $119.8 million aggregate principal amount of 2022 Notes. During the three months ended March 31, 2020, the Company entered into privately-negotiated exchange agreements with certain investors holding the 2022 Notes. Pursuant to those exchange agreements, the investors exchanged $59.9 million in aggregate principal amount of outstanding 2022 Notes for 13,688,876 shares of common stock. The investors that participated in such exchange agreements agreed to waive any accrued but unpaid interest on the exchanged 2022 Notes. Included in the 13,688,876 shares of common stock issued in the exchange transactions that took place during the three months ended March 31, 2020 were 942,706 shares valued at $7.9 million on the date of issuance at fair value, which were issued pursuant to the terms of the privately-negotiated exchange agreements and were in excess of the consideration issuable under the original conversion terms of the exchanged 2022 Notes. ASC 470, Debt , requires the recognition through earnings of an inducement charge equal to the fair value of the consideration delivered in excess of the consideration issuable under the original conversion terms. This resulted in a non-cash charge of $7.9 million, which was recorded as inducement expense within loss on debt conversion and extinguishment, net, in the consolidated statement of operations. Pursuant to the Private Exchange Transactions described above, on May 12, 2020, the holders of an aggregate of $45.0 million principal amount of 2022 Notes exchanged their 2022 Notes for a combination of 2025 Notes and cash. As a result of the Private Exchange Transactions, $2,000 in principal amount of the 2022 Notes were outstanding as of June 30, 2020. On July 22, 2020, pursuant to a redemption notice iss ued on May 15, 2020, the Company redeemed the remaining $2,000 principal amount of the 2022 Notes. As of December 31, 2020, no amoun t remained outstanding related to the 2022 Notes. The effective interest rate on the liability component of the 2022 Notes was 12.89% and 13.88%, respectively, for the twelve months ended December 31, 2020 and 2019. The following table sets forth total interest expense recognized related to the 2022 Notes (in thousands): Year Ended December 31, 2020 2019 Contractual interest expense $ 768 $ 5,782 Amortization of debt discount 1,952 7,821 Amortization of debt issuance costs 111 459 Total interest expense $ 2,831 $ 14,062 For the years ended December 31, 2020 and 2019 the contractual interest expense on the 2022 Notes recorded within interest expense, net on the consolidated statements of operations attributable to related parties was $0.8 million and $2.5 million, respectively Novatel Wireless Notes On June 10, 2015, 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, which were governed by the terms of an indenture, dated June 10, 2015, between Novatel Wireless, as issuer, Inseego and Wilmington Trust, National Association, as trustee, as amended by certain supplemental indentures (“the Novatel Indenture”). On January 9, 2017, in connection with the settlement of an exchange offer and consent solicitation with respect to the Novatel Wireless Notes (the “Note Exchange”), approximately $119.8 million aggregate principal amount of outstanding Novatel Wireless Notes were validly tendered and accepted for exchange and subsequently canceled. In February 2020, the holders of the remaining $250,000 of the aggregate principal amount of Novatel Wireless Notes that remained outstanding following the Note Exchange, converted their Novatel Wireless Notes into 50,000 shares of Inseego Corp. common stock, at the conversion price of $5.00 per share, in accordance with the terms of the Novatel Indenture. Accordingly, no Novatel Wireless Notes were outstanding as of December 31, 2020. 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 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 then outstanding 2022 Notes 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. On March 31, 2020, the Company issued 2,330 shares of Series E Preferred Stock to South Ocean Funding L.L.C. (“South Ocean”), the Lender holding all of the aggregate principal amount then outstanding under the Credit Agreement in satisfaction of all then accrued interest under the Credit Agreement. On May 12, 2020, the Company used a portion of the proceeds from the Offering to repay in full the Term Loan and terminate the Credit Agreement. The amounts paid included $47.5 million in outstanding principal, approximately $0.5 million in interest accrued thereon, and prepayment and exit fees of $1.4 million. The Company also used a portion of the proceeds of the Offering to repurchase the 2,330 shares of Series E Preferred Stock that had been issued to South Ocean for $2.4 million. At December 31, 2020 there is no amount outstanding related to the Term Loan. The Term Loan bore interest at a rate per annum equal to the three-month LIBOR, but in no event less than 1.00%, plus 7.625%. The effective interest rate on the Term Loan was 15.19% and 13.50%, respectively, for the twelve months ended December 31, 2020 and 2019. The following table sets forth total interest expense recognized related to the Term Loan, 100% of which was attributable to a related party, during the years ended December 31, 2020 and 2019, respectively (in thousands): Year Ended December 31, 2020 2019 Contractual interest expense $ 1,667 $ 4,789 Amortization of debt discount 859 1,331 Amortization of debt issuance costs 103 161 Total interest expense $ 2,629 $ 6,281 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s loss before income taxes for the years ended December 31, 2021, 2020 and 2019 is comprised of the following (in thousands): Year Ended December 31, 2021 2020 2019 Domestic $ (40,897) $ (109,837) $ (39,187) Foreign (6,823) (601) (387) Loss before income taxes $ (47,720) $ (110,438) $ (39,574) The provision for income taxes for the years ended December 31, 2021, 2020 and 2019 is comprised of the following (in thousands): Year Ended December 31, 2021 2020 2019 Current: Federal $ — $ — $ (49) State 30 (4) 35 Foreign 214 93 1,148 Total current 244 89 1,134 Deferred: Federal 12 12 12 State — — Foreign (65) 647 (610) Total deferred (53) 659 (598) Provision for income taxes $ 191 $ 748 $ 536 The Company’s net deferred tax liabilities consist of the following (in thousands): December 31, 2021 2020 Deferred tax assets: Accrued expenses $ 1,016 $ 1,940 Provision for excess and obsolete inventory 466 2,016 Convertible debt 9,804 13,367 Interest expense limitation 11,113 7,798 Net operating loss and tax credit carryforwards 110,463 108,340 Share-based compensation 2,562 1,911 Right-of-use-asset 1,765 2,059 Unrecognized tax benefits 1,567 1,567 Deferred tax assets 138,756 138,998 Deferred tax liabilities: Operating lease liability (1,830) (2,059) Acquired intangible assets (666) (2,155) Depreciation and amortization (4,376) (5,545) Unrealized foreign currency gains (604) (375) Deferred tax liabilities (7,476) (10,134) Valuation allowance (132,132) (133,369) Net deferred tax liabilities $ (852) $ (4,505) The Company recognizes federal, state and foreign current tax liabilities or assets based on its estimate of taxes payable to or refundable by tax authorities in the current fiscal year. The Company also recognizes federal, state and foreign deferred tax liabilities or assets based on the Company’s estimate of future tax effects attributable to temporary differences and carryforwards. The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized. The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a “more likely than not” realization standard. The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are: (1) future reversals of existing taxable temporary differences (i.e., offset of gross deferred tax assets against gross deferred tax liabilities); (2) taxable income in prior carryback years, if carryback is permitted under the applicable tax law; (3) tax planning strategies; and (4) future taxable income exclusive of reversing temporary differences and carryforwards. During the years ended December 31, 2021, 2020 and 2019, the Company recognized valuation allowances of $6.0 million, $26.4 million and $9.2 million, respectively, related to its deferred tax assets created in those respective years for entities with historical losses and full valuation allowances. In 2021, certain valuation allowances in the amount of $10.0 million were released related to entities included in the divestiture of Ctrack South Africa. The Company also recognized $3.0 million of additional valuation allowance related to true-up of prior year deferred taxes, partially offset by foreign currency loss of $0.2 million in 2021. Based on the Company’s current position on valuation allowance, no net income tax benefits resulted in the Company’s consolidated statements of operations from the operating losses created during those years. The provision for income taxes reconciles to the amount computed by applying the statutory federal income tax rate of 21% in 2021 and 2020 to loss before income taxes as follows (in thousands): Year Ended December 31, 2021 2020 2019 Federal tax benefit, at statutory rate $ (10,021) $ (23,192) $ (8,311) State benefit, net of federal benefit (148) (1,285) 27 Foreign tax rate difference (358) (140) 476 Valuation allowance against future tax benefits 6,029 26,410 9,168 Gain on sale of foreign subsidiaries 3,008 — — Sub-part F income 791 — — Loss on conversion of debt — 2,015 — Research and development credits (1,415) (2,355) (1,456) Share-based compensation (879) (1,134) 341 Non-deductible officers compensation 1,449 — — True-up of prior year provisions 1,681 — — Other 54 429 291 Provision for income taxes $ 191 $ 748 $ 536 At December 31, 2021, the Company had U.S. federal net operating loss carryforwards (“NOLs”) related to tax years 2020 and prior of approximately $439.8 million. Approximately $110.0 million of these NOLs have no expiration date. The remainder begin to expire in 2022, unless previously utilized. Some of these NOLs may be limited by either past or future changes in control events. The Company has California net operating loss carryforwards at December 31, 2021 of approximately $58.9 million, which begin to expire in 2028, unless previously utilized, and foreign net operating losses for its active foreign subsidiaries of approximately $24.3 million, which generally have no expiration date. At December 31, 2021, the Company had federal research and development tax credit carryforwards of approximately $14.2 million, which begin to expire in 2026, unless previously utilized, and California research and development tax credit carryforwards of approximately $15.6 million, which have no expiration date. Pursuant to Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of the Company’s net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a rolling three-year period. An analysis was performed for the period through December 31, 2021 and did not identify any events of cumulative change in ownership during the review period. The Company will continue monitoring any future changes in stock ownership. It is the Company’s intention to reinvest undistributed earnings of its foreign subsidiaries and thereby indefinitely postpone their remittance. Accordingly, no provision has been made for foreign withholding taxes on U.S. income taxes which may become payable if undistributed earnings of the foreign subsidiary were paid as dividends to the Company. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a payment delay of employer payroll taxes during 2020 after the date of enactment. Payments of approximately $1.4 million of employer payroll taxes otherwise due in 2020, were delayed with 50% due and paid by December 31, 2021 and the remaining 50% by December 31, 2022. The CARES Act did not have a material impact on the Company’s consolidated financial statements. The Company follows the accounting guidance related to financial statement recognition, measurement and disclosure of uncertain tax positions. The Company recognizes the impact of an uncertain income tax position on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. No income tax benefit was recognized during the years ended December 31, 2021 and 2020. At December 31, 2021 and 2020, the Company did not have interest expense related to uncertain tax positions or a liability for unrecognized tax benefits. The Company does not expect changes to its uncertain tax position in the next twelve months. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands): Balance at December 31, 2019 $ 37,835 Increases related to current and prior year tax positions 1,796 Balance at December 31, 2020 39,631 Increases related to current and prior year tax positions 1,998 Balance at December 31, 2021 $ 41,629 There are no tax benefits that, if recognized, would affect the effective tax rate that are included in the balances of unrecognized tax benefits at December 31, 2021. The Company and its subsidiaries file U.S., state and foreign income tax returns in jurisdictions with various statutes of limitations. The Company’s tax returns are subject to examination by federal, state and foreign taxing authorities. The Company’s federal and state tax returns are subject to examination for the years beginning in 2018 and 2017, respectively. Net operating loss carryforwards arising prior to these years are also open to examination, if and when utilized. The Company believes appropriate provisions for all outstanding issues have been made for all jurisdictions and all open years. However, because audit outcomes and the timing of audit settlements are subject to significant uncertainty, the Company’s current estimate of the total amounts of unrecognized tax benefits could increase or decrease for all open years. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock On August 6, 2018, the Company completed a private placement of 12,062,000 shares of its common stock and warrants (the “2018 Warrants”) to purchase an additional 4,221,700 shares of its 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 had an initial exercise price of $2.52 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions. On March 28, 2019, the 2018 Warrants were exercised at an exercise price of $2.52 per share, for aggregate cash proceeds to the Company of approximately $10.6 million. In connection with the exercise of the 2018 Warrants, on March 28, 2019, the Company issued additional warrants to purchase 2,500,000 shares of common stock (the “2019 Warrants”) to the accredited investors. Each 2019 Warrant has an initial exercise price of $7.00 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 September 28, 2019, and will expire on June 30, 2022. The 2019 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. During the fourth quarter of 2019, the Company received $6.9 million in net cash proceeds from the exercise of 1,255,129 of the Company’s common stock purchase warrants issued in 2015. The Company assessed the terms of the warrants under ASC 815, Derivatives and Hedging . Pursuant to this guidance, the Company has determined that the warrants do not require liability accounting and has classified the warrants as equity. On January 25, 2021, the Company entered into an Equity Distribution Agreement with Canaccord Genuity LLC (the “Agent”), pursuant to which the Company may offer and sell, from time to time, through or to the Agent, up to $40.0 million of shares of its common stock (the “ATM Offering”). In January 2021, the Company sold 1,516,073 shares of common stock, at an average price of $20.11 per share, for net proceeds of $29.4 million, after deducting underwriter fees and discounts of $0.9 million, and other offering fees, pursuant to the ATM Offering. Preferred Stock The Company has a total of 2,000,000 shares of preferred stock authorized for issuance at a par value of $0.001 per share, 150,000 of which have been designated Series D Preferred Stock and 39,500 of which have been designated Series E Preferred Stock. On August 9, 2019, the Company completed a private placement of 10,000 shares of Series E Preferred Stock for an aggregate purchase price of $10.0 million in accordance with the terms and provisions of a Securities Purchase Agreement, dated August 9, 2019, by and among the Company and certain accredited investors. Each share of Series E Preferred Stock entitles the holder thereof to receive, when, as and if declared by the Company out of assets legally available therefor, cumulative cash dividends at an annual rate of 9.00% payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, beginning on October 1, 2019. If dividends are not declared and paid in any quarter, or if such dividends are declared but holders of the Series E Preferred Stock elect not to receive them in cash, the quarterly dividend will be deemed to accrue and will be added to the Series E Base Amount. The Series E Preferred Stock has no voting rights unless otherwise required by law. The Series E Preferred Stock is perpetual and has no maturity date. However, the Company may, at its option, redeem shares of the Series E Preferred Stock, in whole or in part, on or after July 1, 2022, at a price equal to 110% of the Series E Base Amount plus (without duplication) any accrued and unpaid dividends. The “Series E Base Amount” means $1,000 per share, plus any accrued but unpaid dividends, whether or not declared by the Company’s board of directors, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series E Preferred Stock. In the event of a liquidation, dissolution or winding up of the Company, the holders of the Series E Preferred Stock will be entitled to receive, after satisfaction of liabilities to creditors and subject to the rights of holders of any senior securities, but before any distribution of assets is made to holders of common stock or any other junior securities, the Series E Base Amount plus (without duplication) any accrued and unpaid dividends. On March 6, 2020, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which, among other things, the Company issued and sold to the investor, in a private placement transaction, an aggregate of 25,000 shares of the Company’s Series E Preferred Stock, for a purchase price of $1,000 per share of Series E Preferred Stock, resulting in gross proceeds to the Company of $25.0 million. On September 3, 2021, the Company entered into separate privately-negotiated exchange agreements (the “September Exchange Agreements”) with Golden Harbor Ltd. and North Sound Trading, L.P. (the “Participating Stockholders”), holders of the Company’s outstanding Series E Preferred Stock. Pursuant to each respective September Exchange Agreement, each of the Participating Stockholders agreed to exchange Series E Preferred Stock that they held (representing an aggregate of 10,000 shares of Series E Preferred Stock) for an aggregate of 1,525,207 shares of common stock, of the Company (the “Series E Exchange Transactions”). The Company did not receive any cash proceeds from the Participating Stockholders in connection with the Series E Exchange Transactions. The Company used the Guidance in ASC 470 Debt , regarding the modification of debt instruments and determined that the Series E Exchange Transactions were an extinguishment. If a modification or exchange represents an extinguishment for accounting purposes, it is accounted for as a redemption of the existing equity instrument and the issuance of a new instrument. ASC 260-10-S99-2 (“SEC Staff Announcement: The Effect on the Calculation of Earnings Per Share for a Period That Includes the Redemption or Induced Conversion of Preferred Stock”) provides guidance on the accounting for extinguishments (redemptions) of equity-classified preferred stock. Under that guidance, an SEC registrant compares (1) the fair value of the consideration transferred to the holders of the preferred stock and (2) the carrying amount of the preferred stock immediately before the modification or exchange (net of issuance costs). The difference is treated as a return to (or from) the holder of the preferred stock in a manner similar to dividends paid on preferred stock. Any excess of fair value of the consideration transferred to the holders of the preferred stock over the carrying amount of the preferred stock in the issuer’s balance sheet is treated as a dividend to those holders and charged against retained earnings. The Company determined that the Series E Exchange Transactions resulted in an extinguishment of preferred stock and an issuance of common stock. The difference between the carrying amount of the preferred stock plus accrued dividends, and the fair value of the common stock exchanged for such preferred stock, totaled $1.1 million. The difference was treated as a deemed dividend, and was included within the Series E preferred stock dividends and deemed dividends from the preferred stock exchange, in the consolidated results of operations for the year ended December 31, 2021. There were no dividends declared and $3.1 million and $2.9 million of dividends were accrued as of December 31, 2021, and 2020, respectively. Common Shares Reserved for Future Issuance The Company had reserved shares of common stock for possible future issuance as of December 31, 2021 and 2020 as follows: December 31, 2021 2020 Common stock warrants outstanding 2,500,000 2,500,000 Stock options outstanding 8,085,793 8,479,979 Restricted stock units outstanding 1,247,723 417,105 Shares available for issuance pursuant to Convertible Notes 14,340,786 15,879,948 Shares available for future grants of awards under the 2018 Omnibus Incentive Compensation Plan 3,311,023 2,849,488 Shares available under the 2000 Employee Stock Purchase Plan 170,811 391,201 Total shares of common stock reserved for issuance 29,656,136 30,517,721 |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation During the year ended December 31, 2021, the Company granted awards under the 2018 Omnibus Incentive Compensation Plan, previously named the Amended and Restated 2009 Omnibus Incentive Compensation Plan (the “2018 Plan”), and the 2015 Incentive Compensation Plan (the “2015 Plan”). The Compensation Committee of the Board of Directors administers the plans. Under the 2018 Plan, a maximum of 8,897,084 shares of common stock may be issued upon the exercise of stock options, in the form of restricted stock, or in settlement of RSUs or other awards, including awards with alternative vesting schedules such as performance-based criteria. For the years ended December 31, 2021, 2020 and 2019 the following table presents total share-based compensation expense in each functional line item on the consolidated statements of operations (in thousands): Year Ended December 31, 2021 2020 2019 Cost of revenues $ 2,469 $ 1,583 $ 1,133 Research and development 4,813 2,823 1,548 Sales and marketing 3,704 2,346 1,669 General and administrative 5,663 3,667 2,952 Total $ 16,649 $ 10,419 $ 7,302 During the quarter ended March 31, 2021, the Board of Directors of the Company approved and the Company granted restricted stock units to eligible employees under the 2018 Omnibus Incentive Compensation Plan, previously named the Amended and Restated 2009 Omnibus Incentive Compensation Plan (the “2018 Plan”) that were immediately vested, as fiscal 2020 annual bonus payments. The total charges recorded during the quarter ended March 31, 2021 were $7.0 million. Such bonus payments in fiscal 2020 were paid in the quarter ended June 30, 2020, and total charges related to such bonus payments recorded during the quarter ended June 30, 2020 were $2.7 million. Such bonus payments in fiscal 2019 were paid in the quarter ended September 30, 2019, and total charges related to such bonus payments recorded during the quarter ended September 30, 2019 were $2.4 million. During the year ended December 31, 2021, the Board of Directors of the Company approved, and the Company granted restricted stock units under the 2018 Plan to certain employees that contributed to the completion of the divestiture of Ctrack South Africa. Such grants were immediately vested, and the total charges were $0.6 million. Stock Options The Compensation Committee of the Board of Directors determines eligibility, vesting schedules and exercise prices for stock options granted. Stock options generally have a term of ten years and vest over a three The following table presents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fair value of each stock option granted: Year Ended December 31, 2021 2020 Expected dividend yield — % — % Risk-free interest rate 0.9 % 0.9 % Volatility 73 % 95 % Expected term (in years) 5.4 5.8 The weighted-average fair value of stock option awards granted during the years ended December 31, 2021 and 2020 was $5.41 and $7.11, respectively. The following table summarizes the Company’s stock option activity for the years ended December 31, 2021 and 2020 (dollars in thousands, except per share data): Stock Weighted-Average Weighted-Average Aggregate Outstanding — December 31, 2018 8,796,212 $ 2.10 Granted 2,660,936 5.17 Exercised (1,489,067) 1.69 Canceled (923,777) 3.64 Outstanding — December 31, 2019 9,044,304 $ 2.91 Granted 1,526,000 9.41 Exercised (1,357,620) 3.06 Canceled (732,705) 3.60 Outstanding — December 31, 2020 8,479,979 $ 3.99 Granted 1,929,500 8.86 Exercised (1,315,552) 2.62 Canceled (1,008,134) 8.60 Outstanding — December 31, 2021 8,085,793 $ 4.81 7.16 $ 16,603 Vested and Expected to Vest — December 31, 2021 7,398,958 $ 4.51 6.99 $ 16,464 Exercisable — December 31, 2021 4,816,773 $ 3.00 6.17 $ 15,081 The total intrinsic value of stock options exercised to purchase common stock during the years ended December 31, 2021, 2020 and 2019 was approximately $4.3 million, $11.7 million and $5.6 million, respectively. As of December 31, 2021, total unrecognized share-based compensation expense related to non-vested stock options was $11.3 million, which is expected to be recognized over a weighted-average period of approximately 2.68 years. The Company recognized approximately $6.3 million, $5.8 million and $3.5 million of share-based compensation expense related to the vesting of stock option awards during the years ended December 31, 2021, 2020 and 2019, respectively. Restricted Stock Units Pursuant to the 2018 Plan and the 2015 Plan, the Company may issue RSUs that, upon satisfaction of vesting conditions, allow recipients to receive common stock. Issuances of such awards reduce common stock available under the 2018 Plan and 2015 Plan for stock incentive awards. The Company measures compensation cost associated with grants of RSUs at fair value, which is generally the closing price of the Company’s stock on the date of grant. RSUs generally vest over a three A summary of restricted stock unit activity under all plans for the year ended December 31, 2021 is presented below: Number of Shares Weighted-Average Grant-Date Fair Value Non-vested — December 31, 2018 454,382 $ 2.17 Granted 870,150 $ 5.07 Vested (809,482) $ 4.20 Forfeited (114,735) $ 3.66 Non-vested — December 31, 2019 400,315 $ 3.95 Granted 570,368 $ 10.52 Vested (548,160) $ 7.28 Forfeited (5,418) $ 4.06 Non-vested — December 31, 2020 417,105 $ 8.68 Granted 1,931,263 $ 8.53 Vested (1,019,686) $ 10.20 Forfeited (80,959) $ 10.75 Non-vested — December 31, 2021 1,247,723 $ 7.65 During the years ended December 31, 2021, 2020 and 2019, the total fair value of shares vested was $10.4 million, $5.1 million and $4.0 million, respectively. As of December 31, 2021, there was $5.8 million of unrecognized share-based compensation expense related to non-vested RSUs, which is expected to be recognized over a weighted-average period of 3.45 years. The Company recognized approximately $9.6 million and $4.1 million and $3.5 million of share-based compensation expense related to the vesting of RSUs during the years ended December 31, 2021, 2020 and 2019 respectively. 2000 Employee Stock Purchase Plan The ESPP permits eligible employees of the Company to purchase newly issued shares of common stock, at a price equal to 85% of the lower of the fair market value on (i) the first day of the offering period or (ii) the last day of each six-month purchase period, through payroll deductions of up to 10% of their annual cash compensation. Under the ESPP, a maximum of 5,324,000 shares of common stock may be purchased by eligible employees. During the years ended December 31, 2021 and 2020, the Company issued 220,390 shares and 231,275 shares, respectively, under the ESPP. The Company recognized approximately $0.7 million, $0.6 million and $0.3 million of share-based compensation expense related to the ESPP during the years ended December 31, 2021, 2020 and 2019, respectively. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic EPS excludes dilution and is computed by dividing net loss attributable to common stockholders 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 earnings per share was as follows (in thousands, except share and per share data): Year Ended December 31, 2021 2020 2019 Net loss attributable to common stockholders $ (52,368) $ (114,119) $ (40,486) Weighted-average common shares outstanding 103,246,308 96,111,547 78,322,496 Basic and diluted net loss per share $ (0.51) $ (1.19) $ (0.52) For the year ended December 31, 2021, the computation of diluted EPS excluded 26,318,509 shares, primarily related to convertible notes, warrants, stock options, RSUs and ESPP for which the effect would have been anti-dilutive. The following is a summary of outstanding anti-dilutive potential common stock that was excluded from diluted net loss per share attributable to stockholders in the following periods: Year Ended December 31, (in thousands) 2021 2020 2019 Convertible notes 14,341 14,784 22,314 Warrants 2,500 2,500 2,838 Non-qualified stock options 8,086 8,480 9,027 Restricted stock units 1,248 417 414 Employee Stock Purchase Plan 144 25 98 Rights agreement — — 198 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Noncancellable Purchase Obligations The Company typically enters into commitments with its contract manufacturers that require future purchase of goods or services in the three to four quarters following the balance sheet date. Such commitments are noncancellable (“noncancellable purchase obligations). As of December 31, 2021, future payments under these noncancellable purchase obligations were approximately $165.8 million. Legal The Company is, from time to time, party to various legal proceedings arising in the ordinary course of business. The Company is regularly required to directly or 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 11, 2017, the Company initiated a lawsuit against the former stockholders of R.E.R. Enterprises, Inc. (“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 instruct its transfer agent to permit the transfer or sale of 973,333 shares of the Company’s common stock that the Company had issued to the former stockholders of RER in March 2017, (iii) immediately issue 500,000 shares of the Company’s common stock to the former stockholders of RER, (iv) 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, (v) 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 (vi) 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. On July 24, 2020, the Company issued 89,928 shares of common stock to the former stockholders of RER in satisfaction of all remaining liabilities under the Settlement Agreement. Indemnification |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases Lessee The Company is a lessee in lease agreements for office space, automobiles and certain equipment. Certain of the Company’s leases contain provisions that provide for one or more options to renew at the Company’s sole discretion. The majority of the Company’s leases are comprised of fixed lease payments, with a small percentage of its real estate leases including lease payments subject to a rate or index which may be variable. Certain real estate leases also include executory costs such as common area maintenance (non-lease component). As a practical expedient permitted under ASC 842, the Company has elected to account for the lease and non-lease components, including common area maintenance, as a single lease component. Lease payments, which may include lease components and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. None of the Company’s lease agreements contain any material residual value guarantees or material restrictive covenants. As a result of the Company’s election of the package of practical expedients permitted within ASC 842, which among other things, allows for the carryforward of historical lease classification, all of the Company’s lease agreements in existence at the date of adoption that were classified as operating leases under ASC 840, Leases have been classified as operating leases under ASC 842. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. When the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the lease term and the information available surrounding the Company’s borrowing rates at the lease commencement date in determining the present value of lease payments. The right-of-use asset also includes any lease payments made at or before lease commencement less any lease incentives. As of December 31, 2021 and 2020, the Company had right-of-use assets of $7.8 million and $9.1 million, respectively, and lease liabilities related to its operating leases of $8.9 million and $9.9 million, respectively. Right-of-use assets are included in right-of-use assets, net, on the consolidated balance sheet and lease liabilities related to the Company’s operating leases are included in accrued expenses other long-term liabilities 5.0 years and 5.8 years , respectively, and 9.1% and 9.1% , respectively. During the years ended December 31, 2021, 2020 and 2019, the cash paid for amounts included in the measurement of lease liabilities related to the Company’s operating leases was approximately $2.6 million, $1.9 million and $2.2 million, respectively, which is included as an operating cash outflow within the consolidated statements of cash flows. During the twelve months ended December 31, 2021, 2020 and 2019 the operating lease costs related to the Company’s operating leases were approximately $2.8 million , $2.2 million and $2.4 million, respectively, which is included in operating costs and expenses in the consolidated statements of operations. During the twelve months ended December 31, 2021 and 2020, the Company entered into and renewed various leases for which right-of-use assets of $0.7 million and $7.9 million, respectively, were recorded in exchange for lease liabilities of $0.7 million and $7.9 million, respectively. The future minimum payments under operating leases were as follows at December 31, 2021 (in thousands): 2022 $ 2,500 2023 2,094 2024 1,947 2025 1,689 2026 1,687 Thereafter 1,131 Total minimum operating lease payments 11,048 Less: amounts representing interest (2,167) Present value of net minimum operating lease payments 8,881 Less: current portion (1,769) Long-term portion of operating lease obligations $ 7,112 Lessor Monitoring device leases in which the Company serves as lessor are classified as operating leases. Accordingly, rental devices are carried at historical cost less accumulated depreciation and impairment, if any, and are included in rental assets, net, on the consolidated balance sheets. Since the lease components meet the criteria for an operating lease under ASC 842, the Company has elected the practical expedient to combine the lease and the non-lease components because the service is the predominant element in the eyes of the customer and the pattern of service delivery is the same for both elements. The Company will account for the combined component as a single performance obligation under ASC 606, Revenue from Contracts with Customers . |
Leases | Leases Lessee The Company is a lessee in lease agreements for office space, automobiles and certain equipment. Certain of the Company’s leases contain provisions that provide for one or more options to renew at the Company’s sole discretion. The majority of the Company’s leases are comprised of fixed lease payments, with a small percentage of its real estate leases including lease payments subject to a rate or index which may be variable. Certain real estate leases also include executory costs such as common area maintenance (non-lease component). As a practical expedient permitted under ASC 842, the Company has elected to account for the lease and non-lease components, including common area maintenance, as a single lease component. Lease payments, which may include lease components and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. None of the Company’s lease agreements contain any material residual value guarantees or material restrictive covenants. As a result of the Company’s election of the package of practical expedients permitted within ASC 842, which among other things, allows for the carryforward of historical lease classification, all of the Company’s lease agreements in existence at the date of adoption that were classified as operating leases under ASC 840, Leases have been classified as operating leases under ASC 842. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. When the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the lease term and the information available surrounding the Company’s borrowing rates at the lease commencement date in determining the present value of lease payments. The right-of-use asset also includes any lease payments made at or before lease commencement less any lease incentives. As of December 31, 2021 and 2020, the Company had right-of-use assets of $7.8 million and $9.1 million, respectively, and lease liabilities related to its operating leases of $8.9 million and $9.9 million, respectively. Right-of-use assets are included in right-of-use assets, net, on the consolidated balance sheet and lease liabilities related to the Company’s operating leases are included in accrued expenses other long-term liabilities 5.0 years and 5.8 years , respectively, and 9.1% and 9.1% , respectively. During the years ended December 31, 2021, 2020 and 2019, the cash paid for amounts included in the measurement of lease liabilities related to the Company’s operating leases was approximately $2.6 million, $1.9 million and $2.2 million, respectively, which is included as an operating cash outflow within the consolidated statements of cash flows. During the twelve months ended December 31, 2021, 2020 and 2019 the operating lease costs related to the Company’s operating leases were approximately $2.8 million , $2.2 million and $2.4 million, respectively, which is included in operating costs and expenses in the consolidated statements of operations. During the twelve months ended December 31, 2021 and 2020, the Company entered into and renewed various leases for which right-of-use assets of $0.7 million and $7.9 million, respectively, were recorded in exchange for lease liabilities of $0.7 million and $7.9 million, respectively. The future minimum payments under operating leases were as follows at December 31, 2021 (in thousands): 2022 $ 2,500 2023 2,094 2024 1,947 2025 1,689 2026 1,687 Thereafter 1,131 Total minimum operating lease payments 11,048 Less: amounts representing interest (2,167) Present value of net minimum operating lease payments 8,881 Less: current portion (1,769) Long-term portion of operating lease obligations $ 7,112 Lessor Monitoring device leases in which the Company serves as lessor are classified as operating leases. Accordingly, rental devices are carried at historical cost less accumulated depreciation and impairment, if any, and are included in rental assets, net, on the consolidated balance sheets. Since the lease components meet the criteria for an operating lease under ASC 842, the Company has elected the practical expedient to combine the lease and the non-lease components because the service is the predominant element in the eyes of the customer and the pattern of service delivery is the same for both elements. The Company will account for the combined component as a single performance obligation under ASC 606, Revenue from Contracts with Customers . |
Geographic Information and Conc
Geographic Information and Concentrations of Risk | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Geographic Information and Concentrations of Risk | Geographic Information and Concentrations of Risk Geographic Information The following table details the geographic concentration of the Company’s assets (in thousands): December 31, 2021 2020 United States and Canada $ 176,094 $ 148,485 Europe 35,630 27,277 South Africa — 48,211 Other 4,119 3,421 $ 215,843 $ 227,394 The following table details the Company’s net revenues by geographic region based on shipping destination (in thousands): Year Ended December 31, 2021 2020 2019 United States and Canada $ 215,520 $ 260,009 $ 158,756 South Africa 17,333 28,208 35,001 Other 29,546 25,615 25,739 Total $ 262,399 $ 313,832 $ 219,496 Concentrations of Risk For the year ended December 31, 2021, two customers accounted for 43.9% and 26.4% of net revenues, respectively. For the years ended December 31, 2020 and 2019 one customer accounted for 54.5% and 52.5% of net revenues, respectively. At December 31, 2021, two customers accounted for 61.7% and 12.6% of total accounts receivable, net, respectively. At December 31, 2020, two customers accounted for 33.3% and 17.2% of total accounts receivable, net, respectively. |
Retirement Savings Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Retirement Savings Plan | Retirement Savings PlanThe Company has a defined contribution 401(k) retirement savings plan (the “Plan”). Substantially all of the Company’s U.S. employees are eligible to participate in the Plan after meeting certain minimum age and service requirements. The Company matches 50% of the first 6% of an employee’s designated deferral of their eligible compensation. Employees may make discretionary contributions to the Plan subject to Internal Revenue Service limitations. Employer matching contributions under the Plan amounted to approximately $0.9 million, $0.7 million and $0.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. Employer matching contributions vest immediately. |
Nature of Business and Signif_2
Nature of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly 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 disclosure of contingent liabilities. Actual results could differ materially from these estimates. Estimates are assessed each period and updated to reflect current information, such as the economic considerations related to the impact that the novel coronavirus pandemic ("COVID-19") could have on our significant accounting estimates. Significant estimates include revenue recognition, capitalized software costs, allowance for credit losses, provision for excess and obsolete inventory, valuation of intangible and long-lived assets, valuation of goodwill, valuation of derivatives, accruals relating to litigation, income taxes, and share-based compensation expense. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include highly liquid investments with original maturities of three months or less. The Company’s cash and cash equivalents are generally held with large financial institutions worldwide to reduce the amount of exposure to any credit risk. Restricted cash consists of Company funds in escrow with a financial institution as collateral for potential future uninsured warranty claims related to the divestiture of Ctrack South Africa. See Note 5. Business Divestiture for additional information about the divestiture of Ctrack South Africa. Cash, cash equivalents and restricted cash are recorded at market value, which approximates cost. Gains and losses associated with the Company’s foreign currency denominated demand deposits are recorded as a component of other income, net, in the consolidated statements of operations. The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the consolidated balance sheets to “Cash, cash equivalents, and restricted cash, end of period” as reported within the consolidated statements of cash flows (in thousands): December 31, 2021 2020 Cash and cash equivalents $ 46,474 $ 40,015 Restricted cash 3,338 — Cash, cash equivalents and restricted cash, end of period $ 49,812 $ 40,015 |
Revenue Recognition | Revenue Recognition The Company generates revenue from a broad range of product sales including intelligent wireless hardware products for the worldwide mobile communications and industrial 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 years ended December 31, 2021, 2020 and 2019 were as follows (in thousands): Year Ended 2021 2020 2019 IoT & Mobile Solutions $ 217,984 $ 261,169 $ 160,873 Enterprise SaaS Solutions 44,415 52,663 58,623 Total $ 262,399 $ 313,832 $ 219,496 See geographic disaggregation information in Note 13. 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, HD quality VoLTE based wireless home phones, cloud management software and an advanced 5G portfolio of products (currently in various stages of development). The solutions are offered under the MiFi TM brand for consumer and business markets, and under the Skyus brand for industrial IoT markets. IoT & Mobile Solutions also includes Inseego Subscribe TM , a hosted 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. Enterprise SaaS Solutions . The Enterprise SaaS Solutions portfolio consists of various subscription offerings to gain access to the Company’ s Ctrack tel ematics platforms, which provide fleet vehicle, aviation ground vehicle and asset tracking and performance information, and other telematics applications. Contracts with Customers The Company follows Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (as amended, “ASC 606”), which provides 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. 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. Because the Company’s rental asset lease contracts qualify as operating leases under Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) , and the contracts also include services to operate the underlying asset, and to maintain the asset, the Company has elected the practical expedient to combine the lease and the non-lease components because the service is the predominant element in the eyes of the customer and the pattern of service delivery is the same for both elements. The Company recognizes revenue over time on a ratable basis over the term of the contract. Maintenance and support services revenue. Within cost of revenue, the Company records an estimate to reflect its standard warranty obligation to end users to provide for replacement of a defective product. The standard obligation period for most regions is 12 months. Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures. The Company’s estimated allowances for product warranties can vary from actual results and the Company may have to record additional charges to cost of 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 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. 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. 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. 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 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 December 31, 2021 or 2020. Applying the practical expedient in paragraph 40-25-4 of ASC 340, Other Assets and Deferred Costs , 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. 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. As of December 31, 2021 and 2020, the Company had $3.8 million and $3.0 million, respectively, of contract liabilities included within accrued expenses and other current liabilities, and other long-term liabilities on the consolidated balance sheets. 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. Revenues 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 data centers or a hosted data center. 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 |
Allowance for Credit Losses | Allowance for Credit Losses The Company recognizes an allowance for credit loss at the time a receivable is recorded based on its estimate of expected credit losses and adjusts this estimate over the life of the receivable as needed. The Company evaluates the aggregation and risk characteristics of a receivable pool and develops loss rates that reflect historical collections, current forecasts of future economic conditions over the time horizon the Company is exposed to credit risk, and payment terms or conditions that may materially affect future forecasts. As of December 31, 2021 and 2020, the Company reported $26.8 million and $29.9 million, respectively, of accounts receivable, net of allowances of $0.4 million and $1.4 million, respectively. The Company has not seen significant changes to the recovery rate of its accounts receivable as a result of the COVID-19 pandemic, but it is continuing to actively monitor the impact of the COVID-19 pandemic on its expected credit losses. |
Inventories and Provision for Excess and Obsolete Inventory | Inventories and Provision for Excess and Obsolete Inventory Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. Shipping and handling costs are classified as a component of cost of net revenues in the consolidated statements of operations. The Company reviews the components of its inventory and its inventory purchase commitments on a regular basis for excess and obsolete inventory based on estimated future usage and sales. Write-downs in inventory value or losses on inventory purchase commitments depend on various items, including factors related to customer demand, economic and competitive conditions, technological advances or new product introductions by the Company or its customers that vary from its current expectations. Whenever inventory is written down, a new cost basis is established and the inventory is not subsequently written up if market conditions improve. |
Intangible Assets | Intangible Assets Intangible assets include purchased finite-lived and indefinite-lived intangible assets resulting from the acquisitions of DigiCore Holdings Limited (“DigiCore” or “Ctrack”) and R.E.R. Enterprises, Inc. (“RER”) and its wholly owned subsidiary and principal operating asset, Feeney Wireless, LLC (which was renamed Inseego North America, LLC) (“INA”), along with the costs of non-exclusive and perpetual worldwide software technology licenses and capitalized software developments costs for both internal and external use. Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets (see Note 3. Goodwill and Other Intangible Assets ). Software Development Costs for External Use Software development costs for external use are expensed as incurred until technological feasibility has been established, at which time those costs are capitalized as intangible assets until the software is available for general release to customers. Capitalized software development costs are amortized on a straight-line basis over the estimated economic life. The straight-line recognition method approximates the manner in which the expected benefit will be derived. At each balance sheet date, the unamortized capitalized software development costs for external use is compared to the net realizable value of that product by analyzing critical inputs such as expected future lifetime revenue. The amount by which unamortized software costs exceed the net realizable value, if any, is recognized as a charge to amortization expense in the period it is determined. Costs incurred to enhance existing software or after the software is available for general release to customers are expensed in the period they are incurred and included in research and development expense in the consolidated statements of operations. Software Development Costs for Internal Use Costs incurred in the preliminary stages of development are expensed as incurred and included in research and development expense in the consolidated statements of operations. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing performed to ensure the product is ready for its intended use. The Company also capitalizes costs related to specific upgrades and enhancements of internal-use software when it is probable that the expenditures will result in additional functionality. Maintenance and training costs are expensed as incurred. Capitalized internal-use software costs are recorded as part of intangible assets and are amortized on a straight-line basis over the estimated useful life of the software, and included in general and administrative expense in the consolidated statement of operations. The Company tests these assets for impairment whenever events or circumstances occur that could impact their recoverability. For the years ended December 31, 2021, 2020, and 2019 the Company recorded $1.2 million, $1.4 million and zero impairment loss, respectively, related to software development costs for internal use. Valuation of Indefinite-Lived Intangible Assets Indefinite-lived intangible assets, including in-process capitalized software development costs, are not amortized; however, they are tested for impairment annually, and between annual tests, if certain events occur indicating that the carrying amounts may be impaired. The Company performs an annual impairment review of indefinite-lived assets during the fourth fiscal quarter of each year, and more frequently if the Company believes indicators of impairment exist. To review for impairment, the Company first assesses qualitative factors to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount. The Company’s qualitative assessment of the recoverability of indefinite-lived assets is based on various macroeconomic, industry-specific, and company specific factors. These factors include: (i) industry or economic trends; (ii) current, historical, or projected financial performance, and; (iii) the Company’s market capitalization. After assessing the totality of events and circumstances, if the Company determines that it is not more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, no further assessment is performed. If the Company determines that it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, the Company calculates the fair value of the reporting unit and compares the fair value to the reporting unit’s net book value. For the years ended December 31, 2021, 2020 and 2019 the Company recorded zero impairment loss related to indefinite-lived intangible assets. Goodwill Goodwill represents the excess purchase price over estimated fair value of net assets of businesses acquired in a business combination. The Company’s goodwill results from the acquisitions of Ctrack and RER. Valuation of Goodwill Indefinite-lived intangible assets, including goodwill, are not amortized; however, they are tested for impairment annually, and between annual tests, if certain events occur indicating that the carrying amounts may be impaired. The Company performs an annual impairment review of indefinite-lived assets during the fourth fiscal quarter of each year, and more frequently if the Company believes indicators of impairment exist. Goodwill is tested for impairment at the reporting unit level by first assessing qualitative factors to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount. The Company’s qualitative assessment of the recoverability of indefinite-lived assets is based on various macroeconomic, industry-specific, and company specific factors. These factors include: (i) industry or economic trends; (ii) current, historical, or projected financial performance, and; (iii) the Company’s market capitalization. After assessing the totality of events and circumstances, if the Company determines that it is not more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, no further assessment is performed. If the Company determines that it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, the Company calculates the fair value of the reporting unit and compares the fair value to the reporting unit’s net book value. The Company identified two reporting units for the purpose of goodwill impairment testing, Ctrack and INA, and performed a qualitative test for goodwill impairment of the two reporting units during the fourth fiscal quarter. Based upon the results of the qualitative testing, the Company believed that it was more-likely-than-not that the fair value of these reporting units were greater than their respective carrying values and therefore performing the next step of impairment test for these reporting units was unnecessary. For the years ended December 31, 2021, 2020 and 2019 the Company recorded zero impairment loss related to goodwill. |
Research and development | Research and Development Research and development expense consists primarily of personnel costs for our engineers engaged in the design and development of our products, software and technologies, including salary, bonus and share‐based compensation expense, project material costs, services, depreciation and amortization. Such costs are charged to research and development expense as they are incurred, to the extent not capitalized as software development costs for external or internal use. |
Long-Lived Assets | Long-Lived Assets The Company periodically evaluates the carrying value of the unamortized balances of its long-lived assets, including property, plant and equipment, rental assets and intangible assets, to determine whether impairment of these assets has occurred or whether a revision to the related amortization periods should be made. When the carrying value of an asset exceeds the associated undiscounted expected future cash flows, it is considered to be impaired and is written down to fair value. Fair value is determined based on an evaluation of the assets’ associated undiscounted future cash flows or appraised value . This evaluation is based on management’s projections of the undiscounted future cash flows associated with each class of asset. If management’s evaluation indicates that the carrying values of these assets are impaired, such impairment is recognized by a reduction of the applicable asset carrying value to its estimated fair value and the impairment is expensed as a part of continuing operations. For the years ended December 31, 2021, 2020 and 2019 the Company had zero impairment loss related to long-lived assets, except for the impairment of the capitalized software development costs for internal use, noted above. Property, Plant and Equipment Property, plant and equipment are initially stated at cost and depreciated using the straight-line method. Land is not depreciated. Buildings are depreciated over 50 years. Leasehold improvements are depreciated over the shorter of the related remaining lease period or useful life, not to exceed 5 years. Product tooling is depreciated over 13 months. Computer equipment, purchased software, vehicles, production equipment, and furniture and fixtures, are depreciated over lives ranging from 2 to 7 years. Amortization of equipment under capital leases is included in depreciation expense. Expenditures for repairs and maintenance are expensed as incurred. Expenditures for major renewals and betterments that extend the useful lives of existing property, plant and equipment are capitalized and depreciated. Upon retirement or disposition of property, plant and equipment, any resulting gain or loss is recognized in other income (expense), net, in the consolidated statements of operations. Rental Assets three |
Convertible Debt Instruments | Convertible Debt Instruments The Company evaluates embedded features within convertible debt that will be settled in shares upon conversion under ASC 815, Derivatives and Hedging (“ASC 815”) to determine whether the embedded feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates stock warrants, debt instruments and other contracts to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for under the relevant sections of ASC 815. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as an asset or liability. In the event that the fair value is recorded as an asset or liability, the change in fair value is recorded in the consolidated statements of operations as other income or other expense. Upon conversion, exercise or expiration of a derivative financial instrument, the instrument is marked to fair value. |
Lease Accounting | Lease Accounting Arrangements with Inseego as a Lessee The Company determines if an arrangement is a lease at inception. The Company’s operating lease agreements are primarily for real estate and are included within right-of-use assets, net, accrued expenses and other current liabilities, and other long-term liabilities on the consolidated balance sheet s. The Company elected the practical expedient to combine its lease and related non-lease components for all its leases. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments that do not depend on an index or rate are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. ROU assets also include any lease prepayments made and exclude lease incentives. Many of the Company’s lessee agreements include options to extend the lease, which are not included in the Company’s minimum lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. Arrangements with Inseego as a Lessor The Company serves as lessor for certain monitoring device leases and classifies such arrangements as operating leases. Accordingly, the Company carries rental devices at historical cost less accumulated depreciation and impairment, if any, and are included in rental assets, net, on the consolidated balance sheets. Since the lease components meet the criteria for an operating lease under ASC 842, the Company has elected the practical expedient to combine the lease and the non-lease components because the service is the predominant element in the eyes of the customer and the pattern of service delivery is the same for both elements. The Company accounts for the combined component as a single performance obligation under ASC 606, Revenue from Contracts with Customers . |
Foreign Currency Transactions and Translation | Foreign Currency Transactions Foreign currency transactions are transactions denominated in a currency other than a subsidiary’s functional currency. A change in the exchange rates between a subsidiary’s functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. That increase or decrease in expected functional currency cash flows is reported by the Company as a foreign currency transaction gain (loss). The primary component of the Company’s foreign currency transaction gain (loss) is due to agreements in place with certain subsidiaries in foreign countries regarding intercompany transactions. Based upon historical experience, the Company anticipates repayment of these transactions in the foreseeable future, and recognizes the realized and unrealized gains (losses) on these transactions that result from foreign currency changes in the period in which they occur as foreign currency transaction gain (loss), which is recorded as other income (expense), net, in the consolidated statements of operations. Foreign Currency Translation Assets and liabilities of the Company’s international subsidiaries in which the local currency is the functional currency are translated into U.S. Dollars at period-end exchange rates. Income and expenses are translated into U.S. Dollars at the average exchange rates during the period. The resulting translation adjustments are included in the Company’s consolidated balance sheets as a component of accumulated other comprehensive loss. |
Income Taxes | Income Taxes The Company recognizes federal, state and foreign current tax liabilities or assets based on its estimate of taxes payable to or refundable by tax authorities in the current fiscal year. The Company also recognizes federal, state and foreign deferred tax liabilities or assets based on the Company’s estimate of future tax effects attributable to temporary differences and carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. The Company evaluates deferred income taxes on a quarterly basis to determine if valuation allowances are required by considering available evidence. If the Company is unable to generate sufficient future taxable income in certain tax jurisdictions, or if there is a material change in the actual effective tax rates or time period within which the underlying temporary differences become taxable or deductible, the Company could be required to increase its valuation allowance against its deferred tax assets which could result in an increase in the Company’s effective tax rate and an adverse impact on operating results. The Company will continue to evaluate the necessity of the valuation allowance based on the remaining deferred tax assets. The Company follows the accounting guidance related to financial statement recognition, measurement and disclosure of uncertain tax positions. The Company recognizes the impact of an uncertain income tax position on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Uncertain tax positions are recognized in the first subsequent financial reporting period in which that threshold is met or from changes in circumstances such as the expiration of applicable statutes of limitations. |
Litigation | Litigation The Company is, from time to time, party to various legal proceedings arising in the ordinary course of business. The Company records a loss when information indicates that a loss is both probable and estimable. Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records the minimum estimated liability related to the claim. As additional information becomes available, the Company assesses the potential liability related to the Company’s pending litigation and revises its estimates, if necessary. The Company expenses litigation costs as incurred. |
Share-Based Compensation | Share-Based Compensation The Company has granted stock options and RSUs to employees, non-employee consultants and non-employee members of our Board of Directors. The Company also has an employee stock purchase plan (“ESPP”) for eligible employees. The Company measures the compensation cost associated with all share-based payments based on grant date fair values. The fair value of each stock option and stock purchase right is estimated on the date of grant using an option pricing model that meets certain requirements. The Company generally uses the Black-Scholes option pricing model to estimate the fair value of its stock options and stock purchase rights. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends. For grants of stock options, the Company uses a blend of historical and implied volatility for traded options on its stock in order to estimate the expected volatility assumption required in the Black-Scholes model. The Company’s use of a blended volatility estimate in computing the expected volatility assumption for stock options is based on its belief that while the implied volatility is representative of expected future volatility, the historical volatility over the expected term of the award is also an indicator of expected future volatility. Due to the short duration of stock purchase rights under the Company’s ESPP, the Company utilizes a blended volatility estimate that consists of implied volatility and historical volatility in order to estimate the expected volatility assumption of the Black-Scholes model. The expected term of stock options granted is estimated using historical experience. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected terms of the Company’s stock options and stock purchase rights. The dividend yield assumption is based on the Company’s history and expectation of no dividend payouts. The Company estimates forfeitures at the time of grant and revises these estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates its forfeiture rate assumption for all types of share-based compensation awards based on historical forfeiture rates related to each category of award. Compensation cost associated with grants of restricted stock units are measured at fair value, which has historically been the closing price of the Company’s common stock on the date of grant. The Company recognizes share-based compensation expense over the requisite service period of each individual award, which generally equals the vesting period, using the straight-line method for awards that contain only service conditions. For awards that contain performance conditions, the Company recognizes the share-based compensation expense on a straight-line basis for each vesting tranche. |
Net Loss Per Share Attributable to Inseego Corp. | Net Loss Per Share Attributable to Inseego Corp. The Company computes basic and diluted per share data for all periods for which a statement of operations is presented. Basic net loss per share excludes dilution and is computed by dividing the net loss by the weighted-average number of shares that were outstanding during the period. Diluted earnings per share (“EPS”) reflects the potential dilution that could occur if securities or other contracts to acquire common stock were exercised or converted into common stock. Potential dilutive securities are excluded from the diluted EPS computation in loss periods as their effect would be anti-dilutive. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s fair value measurements relate to its cash equivalents, money market funds and an embedded derivative in the 2025 Notes, which are classified pursuant to authoritative guidance for fair value measurements. The Company places its cash equivalents in instruments that meet credit quality standards, as specified in its investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument. The Company’s financial instruments consist principally of long-term debt. From time to time, the Company may utilize foreign exchange forward contracts. These contracts are valued using pricing models that take into account the currency rates as of the balance sheet date. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of net earnings and foreign currency translation adjustments. |
Recently Adopted Accounting Pronouncements and Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for the Company no later than the first quarter of fiscal 2021. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted the provisions of ASU 2019-12 in the first quarter of fiscal 2021. There was no material impact from the adoption of this pronouncement to the Company’s consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB, which are adopted by the Company as of the specified date. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) . The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that this new guidance will have on its consolidated financial statements. In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity . The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact that this new guidance will have on its consolidated financial statements. |
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. |
Nature of Business and Signif_3
Nature of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the consolidated balance sheets to “Cash, cash equivalents, and restricted cash, end of period” as reported within the consolidated statements of cash flows (in thousands): December 31, 2021 2020 Cash and cash equivalents $ 46,474 $ 40,015 Restricted cash 3,338 — Cash, cash equivalents and restricted cash, end of period $ 49,812 $ 40,015 |
Schedule of Net Revenues by Product Grouping | Net revenues by product grouping for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands): Year Ended 2021 2020 2019 IoT & Mobile Solutions $ 217,984 $ 261,169 $ 160,873 Enterprise SaaS Solutions 44,415 52,663 58,623 Total $ 262,399 $ 313,832 $ 219,496 |
Financial Statement Details (Ta
Financial Statement Details (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Inventories | Inventories consist of the following (in thousands): December 31, 2021 2020 Finished goods $ 33,112 $ 27,009 Raw materials and components 4,290 6,943 $ 37,402 $ 33,952 |
Summary of Prepaid Expenses and Other | Prepaid expenses and other consists of the following (in thousands): December 31, 2021 2020 Rebate receivables $ 6,398 $ 5,992 Receivables from contract manufacturers 2,626 — Software licenses 1,261 707 Insurance 1,269 1,262 Deposits 1,023 1,544 Financed assets 323 218 Other 724 478 $ 13,624 $ 10,201 |
Summary of Property, Plant and Equipment and Rental Assets | Property, plant and equipment consists of the following (in thousands): December 31, 2021 2020 Land $ — $ 244 Buildings — 2,213 Test equipment 19,095 16,775 Computer equipment and purchased software 7,618 7,899 Product tooling 4,350 3,125 Furniture and fixtures 1,214 1,310 Vehicles 1,654 2,988 Leasehold improvements 863 860 34,794 35,414 Less—accumulated depreciation and amortization (26,692) (21,715) $ 8,102 $ 13,699 Rental assets consist of the following (in thousands): December 31, 2021 2020 Rental assets $ 9,967 $ 21,863 Less—accumulated depreciation (5,392) (15,754) $ 4,575 $ 6,109 |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): December 31, 2021 2020 Royalties $ 2,243 $ 2,410 Payroll and related expenses 9,326 6,006 Warranty obligations 473 366 Professional fees 502 921 Bank overdrafts 370 160 Accrued interest 877 888 Deferred revenue 3,832 2,853 Operating lease liabilities 1,769 1,619 Accrued contract manufacturing liabilities 927 938 Liabilities related to financed assets 1,593 2,686 Value added tax payables 642 2,039 Other 3,699 2,487 $ 26,253 $ 23,373 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | A summary of the activity in goodwill is presented below (in thousands): Balance at December 31, 2019 $ 33,659 Effect of change in foreign currency exchange rates (1,148) Balance at December 31, 2020 32,511 Effect of Ctrack South Africa divestiture (10,734) Effect of change in foreign currency exchange rates (1,441) Balance at December 31, 2021 $ 20,336 |
Schedule of Intangible Assets | The Company’s intangible assets are comprised of the following (in thousands): December 31, 2021 Weighted-Average Life Gross Carrying Value Accumulated Amortization Net Carrying Value Finite-lived intangible assets: Developed technologies 6.0 $ 8,305 $ (7,100) $ 1,205 Trademarks and trade names 10.0 9,088 (5,920) 3,168 Customer relationships 10.0 11,995 (9,242) 2,753 Capitalized software development costs 3.1 54,581 (24,604) 29,977 Other 3.0 2,885 (1,538) 1,347 Total finite-lived intangible assets $ 86,854 $ (48,404) $ 38,450 Indefinite-lived intangible assets: In-process capitalized software development costs 8,545 Total intangible assets $ 46,995 December 31, 2020 Weighted-Average Life Gross Carrying Value Accumulated Amortization Net Carrying Value Finite-lived intangible assets: Developed technologies 6.0 $ 12,692 $ (10,878) $ 1,814 Trademarks and trade names 10.0 17,823 (9,597) 8,226 Customer relationships 8.5 12,306 (8,703) 3,603 Capitalized software development costs 3.3 47,818 (31,051) 16,767 Other 2.5 3,389 (2,791) 598 Total finite-lived intangible assets $ 94,028 $ (63,020) $ 31,008 Indefinite-lived intangible assets: In-process capitalized software development costs 20,479 Total intangible assets $ 51,487 |
Schedule of Amortization Expense of Finite-Lived Intangible Assets Expected to be Recognized | The following table represents details of the amortization of finite-lived intangible assets that is estimated to be expensed in the future (in thousands): 2022 $ 16,672 2023 11,572 2024 4,458 2025 2,749 2026 1,011 Thereafter 1,988 Total $ 38,450 |
Fair Value Measurement of Ass_2
Fair Value Measurement of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value on 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 December 31, 2021 and 2020 (in thousands): December 31, 2021 December 31, 2020 Total Fair Value Level 3 Level 1 Total Fair Value Level 3 Level 1 Assets Cash equivalents Money market funds $ 126 $ — $ 126 $ 126 $ — $ 126 Total assets $ 126 $ — $ 126 $ 126 $ — $ 126 Liabilities 2025 Notes Interest make-whole payment $ 926 $ 926 $ — $ 4,898 $ 4,898 $ — Total liabilities $ 926 $ 926 $ — $ 4,898 $ 4,898 $ — |
Schedule of Fair Value Valuation Model and Assumptions | The fair value of the interest make-whole payment derivative liability was determined using a Monte Carlo model with the following key assumptions: December 31, 2021 December 31, 2020 Volatility 50 % 50 % Stock price $5.83 per share $15.47 per share Credit spread 15.93 % 19.25 % Term 3.34 years 4.34 years Dividend yield — % — % Risk-free rate 1.02 % 0.30 % |
Summary of Changes in Fair Value of Level 3 Liabilities | The following table sets forth a summary of changes in the fair value of Level 3 liabilities for the twelve months ended December 31, 2021 (in thousands): Balance as of Additions Conversions Change in fair value Balance as of Liabilities: Interest make-whole payment $ 4,898 $ — $ (146) $ (3,826) $ 926 |
Business Divestiture (Tables)
Business Divestiture (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities Sold | The assets and liabilities of Ctrack South Africa that were sold in the transaction as of July 30, 2021, are summarized below: (in thousands) Assets : Cash and cash equivalents $ 5,040 Accounts receivable, net 3,505 Inventory 3,821 Prepaid expenses and other 370 Property, plant and equipment, net 4,545 Rental assets, net 2,448 Intangible assets, net 11,278 Goodwill 10,734 Total assets $ 41,741 Accounts payable $ 3,961 Accrued expenses and other liabilities 1,107 Deferred tax liabilities, net 3,647 Other long-term liabilities 746 Total liabilities 9,461 Net assets $ 32,280 Net proceeds recognized are comprised of the following: (in thousands) Initial purchase consideration received, upon close $ 36,566 Working capital adjustments 2,584 Net proceeds recognized $ 39,150 Net gain on sale is comprised of the following: (in thousands) Gross proceeds recognized $ 39,150 Less: Book value of net assets sold 32,280 Less: Release of cumulative foreign currency translation adjustments related to Ctrack South Africa 1,608 Net gain on sale $ 5,262 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Net Carrying Amount of Debt | The 2025 Notes consist of the following (in thousands): December 31, 2021 2020 Principal $ 161,898 $ 166,898 Add: fair value of embedded derivative 926 4,898 Less: unamortized debt discount (2,761) (3,703) Less: unamortized issuance costs (2,197) (2,946) Net carrying amount $ 157,866 $ 165,147 |
Schedule of Interest Expense | The following table sets forth total interest expense recognized related to the 2025 Notes (in thousands): Year Ended December 31, 2021 2020 Contractual interest expense $ 5,271 $ 3,434 Amortization of debt discount 829 552 Amortization of debt issuance costs 660 439 Total interest expense $ 6,760 $ 4,425 Year Ended December 31, 2020 2019 Contractual interest expense $ 768 $ 5,782 Amortization of debt discount 1,952 7,821 Amortization of debt issuance costs 111 459 Total interest expense $ 2,831 $ 14,062 Year Ended December 31, 2020 2019 Contractual interest expense $ 1,667 $ 4,789 Amortization of debt discount 859 1,331 Amortization of debt issuance costs 103 161 Total interest expense $ 2,629 $ 6,281 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Summary of Loss before Income Taxes | The Company’s loss before income taxes for the years ended December 31, 2021, 2020 and 2019 is comprised of the following (in thousands): Year Ended December 31, 2021 2020 2019 Domestic $ (40,897) $ (109,837) $ (39,187) Foreign (6,823) (601) (387) Loss before income taxes $ (47,720) $ (110,438) $ (39,574) |
Summary of Provision for Income Taxes | The provision for income taxes for the years ended December 31, 2021, 2020 and 2019 is comprised of the following (in thousands): Year Ended December 31, 2021 2020 2019 Current: Federal $ — $ — $ (49) State 30 (4) 35 Foreign 214 93 1,148 Total current 244 89 1,134 Deferred: Federal 12 12 12 State — — Foreign (65) 647 (610) Total deferred (53) 659 (598) Provision for income taxes $ 191 $ 748 $ 536 |
Summary of Net Deferred Tax Assets | The Company’s net deferred tax liabilities consist of the following (in thousands): December 31, 2021 2020 Deferred tax assets: Accrued expenses $ 1,016 $ 1,940 Provision for excess and obsolete inventory 466 2,016 Convertible debt 9,804 13,367 Interest expense limitation 11,113 7,798 Net operating loss and tax credit carryforwards 110,463 108,340 Share-based compensation 2,562 1,911 Right-of-use-asset 1,765 2,059 Unrecognized tax benefits 1,567 1,567 Deferred tax assets 138,756 138,998 Deferred tax liabilities: Operating lease liability (1,830) (2,059) Acquired intangible assets (666) (2,155) Depreciation and amortization (4,376) (5,545) Unrealized foreign currency gains (604) (375) Deferred tax liabilities (7,476) (10,134) Valuation allowance (132,132) (133,369) Net deferred tax liabilities $ (852) $ (4,505) |
Summary of Provision for Income Taxes Reconciles to Amount Computed by Applying Statutory Federal Income Tax Rate | The provision for income taxes reconciles to the amount computed by applying the statutory federal income tax rate of 21% in 2021 and 2020 to loss before income taxes as follows (in thousands): Year Ended December 31, 2021 2020 2019 Federal tax benefit, at statutory rate $ (10,021) $ (23,192) $ (8,311) State benefit, net of federal benefit (148) (1,285) 27 Foreign tax rate difference (358) (140) 476 Valuation allowance against future tax benefits 6,029 26,410 9,168 Gain on sale of foreign subsidiaries 3,008 — — Sub-part F income 791 — — Loss on conversion of debt — 2,015 — Research and development credits (1,415) (2,355) (1,456) Share-based compensation (879) (1,134) 341 Non-deductible officers compensation 1,449 — — True-up of prior year provisions 1,681 — — Other 54 429 291 Provision for income taxes $ 191 $ 748 $ 536 |
Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands): Balance at December 31, 2019 $ 37,835 Increases related to current and prior year tax positions 1,796 Balance at December 31, 2020 39,631 Increases related to current and prior year tax positions 1,998 Balance at December 31, 2021 $ 41,629 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Summary of Common Shares Reserved for Future Issuance | The Company had reserved shares of common stock for possible future issuance as of December 31, 2021 and 2020 as follows: December 31, 2021 2020 Common stock warrants outstanding 2,500,000 2,500,000 Stock options outstanding 8,085,793 8,479,979 Restricted stock units outstanding 1,247,723 417,105 Shares available for issuance pursuant to Convertible Notes 14,340,786 15,879,948 Shares available for future grants of awards under the 2018 Omnibus Incentive Compensation Plan 3,311,023 2,849,488 Shares available under the 2000 Employee Stock Purchase Plan 170,811 391,201 Total shares of common stock reserved for issuance 29,656,136 30,517,721 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Share-Based Compensation Expense | For the years ended December 31, 2021, 2020 and 2019 the following table presents total share-based compensation expense in each functional line item on the consolidated statements of operations (in thousands): Year Ended December 31, 2021 2020 2019 Cost of revenues $ 2,469 $ 1,583 $ 1,133 Research and development 4,813 2,823 1,548 Sales and marketing 3,704 2,346 1,669 General and administrative 5,663 3,667 2,952 Total $ 16,649 $ 10,419 $ 7,302 |
Share-based Compensation Stock Option Fair Value Assumptions | The following table presents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fair value of each stock option granted: Year Ended December 31, 2021 2020 Expected dividend yield — % — % Risk-free interest rate 0.9 % 0.9 % Volatility 73 % 95 % Expected term (in years) 5.4 5.8 |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity for the years ended December 31, 2021 and 2020 (dollars in thousands, except per share data): Stock Weighted-Average Weighted-Average Aggregate Outstanding — December 31, 2018 8,796,212 $ 2.10 Granted 2,660,936 5.17 Exercised (1,489,067) 1.69 Canceled (923,777) 3.64 Outstanding — December 31, 2019 9,044,304 $ 2.91 Granted 1,526,000 9.41 Exercised (1,357,620) 3.06 Canceled (732,705) 3.60 Outstanding — December 31, 2020 8,479,979 $ 3.99 Granted 1,929,500 8.86 Exercised (1,315,552) 2.62 Canceled (1,008,134) 8.60 Outstanding — December 31, 2021 8,085,793 $ 4.81 7.16 $ 16,603 Vested and Expected to Vest — December 31, 2021 7,398,958 $ 4.51 6.99 $ 16,464 Exercisable — December 31, 2021 4,816,773 $ 3.00 6.17 $ 15,081 |
Summary of Restricted Stock Unit Activity | A summary of restricted stock unit activity under all plans for the year ended December 31, 2021 is presented below: Number of Shares Weighted-Average Grant-Date Fair Value Non-vested — December 31, 2018 454,382 $ 2.17 Granted 870,150 $ 5.07 Vested (809,482) $ 4.20 Forfeited (114,735) $ 3.66 Non-vested — December 31, 2019 400,315 $ 3.95 Granted 570,368 $ 10.52 Vested (548,160) $ 7.28 Forfeited (5,418) $ 4.06 Non-vested — December 31, 2020 417,105 $ 8.68 Granted 1,931,263 $ 8.53 Vested (1,019,686) $ 10.20 Forfeited (80,959) $ 10.75 Non-vested — December 31, 2021 1,247,723 $ 7.65 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Earnings per Share | The calculation of basic and diluted earnings per share was as follows (in thousands, except share and per share data): Year Ended December 31, 2021 2020 2019 Net loss attributable to common stockholders $ (52,368) $ (114,119) $ (40,486) Weighted-average common shares outstanding 103,246,308 96,111,547 78,322,496 Basic and diluted net loss per share $ (0.51) $ (1.19) $ (0.52) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following is a summary of outstanding anti-dilutive potential common stock that was excluded from diluted net loss per share attributable to stockholders in the following periods: Year Ended December 31, (in thousands) 2021 2020 2019 Convertible notes 14,341 14,784 22,314 Warrants 2,500 2,500 2,838 Non-qualified stock options 8,086 8,480 9,027 Restricted stock units 1,248 417 414 Employee Stock Purchase Plan 144 25 98 Rights agreement — — 198 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Future Minimum Payments Under Operating Leases | The future minimum payments under operating leases were as follows at December 31, 2021 (in thousands): 2022 $ 2,500 2023 2,094 2024 1,947 2025 1,689 2026 1,687 Thereafter 1,131 Total minimum operating lease payments 11,048 Less: amounts representing interest (2,167) Present value of net minimum operating lease payments 8,881 Less: current portion (1,769) Long-term portion of operating lease obligations $ 7,112 |
Geographic Information and Co_2
Geographic Information and Concentrations of Risk (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Geographic Concentration of Assets | The following table details the geographic concentration of the Company’s assets (in thousands): December 31, 2021 2020 United States and Canada $ 176,094 $ 148,485 Europe 35,630 27,277 South Africa — 48,211 Other 4,119 3,421 $ 215,843 $ 227,394 |
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): Year Ended December 31, 2021 2020 2019 United States and Canada $ 215,520 $ 260,009 $ 158,756 South Africa 17,333 28,208 35,001 Other 29,546 25,615 25,739 Total $ 262,399 $ 313,832 $ 219,496 |
Nature of Business and Signif_4
Nature of Business and Significant Accounting Policies - Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 29, 2021 | Jul. 30, 2021 | Jul. 22, 2020 | May 12, 2020 | Mar. 06, 2020 | Aug. 09, 2019 | Jan. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 25, 2021 | |
Class of Stock [Line Items] | |||||||||||||||
Net loss attributable to Inseego Corp. | $ 48,125 | $ 111,215 | $ 40,125 | ||||||||||||
Cash and cash equivalents | 46,474 | 40,015 | |||||||||||||
Working capital | 52,800 | ||||||||||||||
Initial cash proceeds | $ 36,566 | ||||||||||||||
Net cash proceeds | [1] | 33,689 | 0 | 0 | |||||||||||
Number of shares issued (in shares) | 1,516,073 | ||||||||||||||
Purchase price (in dollars per share) | $ 20.11 | ||||||||||||||
Proceeds from sale of stock | $ 29,400 | ||||||||||||||
Stock issuance costs | $ 900 | ||||||||||||||
Conversion number of shares | 1,177,156 | ||||||||||||||
2022 Notes conversion to equity | 0 | 59,907 | 0 | ||||||||||||
Gross proceeds from the issuance of 2025 Notes | 0 | 100,000 | 0 | ||||||||||||
Cash paid in exchange transaction | $ 32,000 | $ 32,000 | $ 0 | $ 32,062 | 0 | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||
Gross proceeds received from issuance of Series E preferred stock | $ 0 | $ 25,000 | $ 10,000 | ||||||||||||
Disposed of by sale | Ctrack South Africa | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Initial cash proceeds | 36,600 | ||||||||||||||
Net cash proceeds | 31,500 | ||||||||||||||
Net cash divested | 5,040 | ||||||||||||||
Post-closing working capital adjustments | $ 2,584 | ||||||||||||||
Post-closing working capital adjustments received | $ 2,200 | ||||||||||||||
Receivable related to working capital adjustments | $ 400 | ||||||||||||||
Canaccord Genuity LLC | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Equity Distribution Agreement, maximum aggregate amount authorized for offer or sale | $ 40,000 | ||||||||||||||
2025 Notes | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Value of converted amount | $ 13,500 | $ 5,000 | |||||||||||||
Conversion number of shares | 428,669 | ||||||||||||||
Debt conversion amount | $ 5,000 | ||||||||||||||
Convertible debt | 2022 Notes | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Conversion number of shares | 13,688,876 | ||||||||||||||
Carrying amount of debt | 45,000 | 2 | |||||||||||||
2022 Notes conversion to equity | $ 59,900 | ||||||||||||||
Stated interest rate (percent) | 5.5 | ||||||||||||||
Debt conversion amount | $ 2 | 45,000 | $ 2 | $ 45,000 | $ 59,900 | ||||||||||
Convertible debt | 2025 Notes | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Carrying amount of debt | 180,400 | $ 161,898 | $ 166,898 | ||||||||||||
Stated interest rate (percent) | 3.25 | ||||||||||||||
Gross proceeds from the issuance of 2025 Notes | 100,000 | $ 100,000 | |||||||||||||
Debt issued in exchange transaction | $ 80,400 | $ 80,400 | |||||||||||||
Series E preferred shares | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of shares issued (in shares) | 25,000 | ||||||||||||||
Purchase price (in dollars per share) | $ 1,000 | ||||||||||||||
Number of shares sold | 25,000 | 10,000 | |||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Gross proceeds received from issuance of Series E preferred stock | $ 25,000 | $ 10,000 | |||||||||||||
[1] | The amount for the year ended December 31, 2021 is net of cash divested of $5.0 million |
Nature of Business and Signif_5
Nature of Business and Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 46,474 | $ 40,015 | ||
Restricted cash | 3,338 | 0 | ||
Cash, cash equivalents and restricted cash, end of period | $ 49,812 | $ 40,015 | $ 12,074 | $ 31,076 |
Nature of Business and Signif_6
Nature of Business and Significant Accounting Policies - Net Revenues by Product Grouping (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 262,399 | $ 313,832 | $ 219,496 |
IoT & Mobile Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 217,984 | 261,169 | 160,873 |
Enterprise SaaS Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 44,415 | $ 52,663 | $ 58,623 |
Nature of Business and Signif_7
Nature of Business and Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Nature Of Business And Significant Accounting Policies [Line Items] | |||
Number of reportable segments | segment | 1 | ||
Contract liabilities | $ 3,800,000 | $ 3,000,000 | |
Accounts receivable, net | 26,781,000 | 29,940,000 | |
Allowance on accounts receivable | 408,000 | 1,384,000 | |
Impairment of indefinite-lived intangible assets | 0 | 0 | $ 0 |
Impairment of capitalized software | 1,197,000 | 1,410,000 | 0 |
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Minimum | |||
Nature Of Business And Significant Accounting Policies [Line Items] | |||
General warranty period | 12 months | ||
Maximum | |||
Nature Of Business And Significant Accounting Policies [Line Items] | |||
General warranty period | 36 months | ||
Buildings | |||
Nature Of Business And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment useful lives | 50 years | ||
Leasehold improvements | Maximum | |||
Nature Of Business And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment useful lives | 5 years | ||
Product tooling | |||
Nature Of Business And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment useful lives | 13 months | ||
Computer equipment, purchased software, vehicles, production equipment, and furniture and fixtures | Minimum | |||
Nature Of Business And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment useful lives | 2 years | ||
Computer equipment, purchased software, vehicles, production equipment, and furniture and fixtures | Maximum | |||
Nature Of Business And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment useful lives | 7 years | ||
Rental assets | Minimum | |||
Nature Of Business And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment useful lives | 3 years | ||
Rental assets | Maximum | |||
Nature Of Business And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment useful lives | 4 years |
Financial Statement Details - I
Financial Statement Details - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 33,112 | $ 27,009 |
Raw materials and components | 4,290 | 6,943 |
Total inventory | $ 37,402 | $ 33,952 |
Financial Statement Details - P
Financial Statement Details - Prepaid Expenses and Other (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Rebate receivables | $ 6,398 | $ 5,992 |
Receivables from contract manufacturers | 2,626 | 0 |
Software licenses | 1,261 | 707 |
Insurance | 1,269 | 1,262 |
Deposits | 1,023 | 1,544 |
Financed assets | 323 | 218 |
Other | 724 | 478 |
Total prepaid expenses and other | $ 13,624 | $ 10,201 |
Financial Statement Details -_2
Financial Statement Details - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 34,794 | $ 35,414 |
Less—accumulated depreciation and amortization | (26,692) | (21,715) |
Property, plant and equipment, net | 8,102 | 13,699 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 0 | 244 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 0 | 2,213 |
Test equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 19,095 | 16,775 |
Computer equipment and purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 7,618 | 7,899 |
Product tooling | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 4,350 | 3,125 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,214 | 1,310 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,654 | 2,988 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 863 | $ 860 |
Financial Statement Details - R
Financial Statement Details - Rental Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Rental assets | $ 9,967 | $ 21,863 |
Less—accumulated depreciation | (5,392) | (15,754) |
Total rental assets | $ 4,575 | $ 6,109 |
Financial Statement Details - N
Financial Statement Details - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Depreciation and amortization expense | $ 9.8 | $ 10 | $ 8.8 |
Property, plant and equipment under finance leases, net | 3.1 | 2.6 | |
Property, plant and equipment under finance leases, accumulated amortization | $ 1.3 | $ 1 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net of accumulated depreciation of $26,692 and $21,715, respectively | Property, plant and equipment, net of accumulated depreciation of $26,692 and $21,715, respectively |
Financial Statement Details - A
Financial Statement Details - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Royalties | $ 2,243 | $ 2,410 |
Payroll and related expenses | 9,326 | 6,006 |
Warranty obligations | 473 | 366 |
Professional fees | 502 | 921 |
Bank overdrafts | 370 | 160 |
Accrued interest | 877 | 888 |
Deferred revenue | 3,832 | 2,853 |
Operating lease liabilities | 1,769 | 1,619 |
Accrued contract manufacturing liabilities | 927 | 938 |
Liabilities related to financed assets | 1,593 | 2,686 |
Value added tax payables | 642 | 2,039 |
Other | 3,699 | 2,487 |
Accrued expenses and other current liabilities, total | $ 26,253 | $ 23,373 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | |||
Balance at beginning of period | $ 32,511 | $ 33,659 | |
Effect of Ctrack South Africa divestiture | (10,734) | ||
Effect of change in foreign currency exchange rates | (1,441) | $ (1,148) | |
Balance at end of period | $ 20,336 | $ 32,511 | $ 33,659 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 86,854 | $ 94,028 |
Accumulated Amortization | (48,404) | (63,020) |
Net Carrying Value | 38,450 | 31,008 |
Indefinite-lived intangible assets | 8,545 | 20,479 |
Total intangible assets, net | $ 46,995 | $ 51,487 |
Developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Life (in years) | 6 years | 6 years |
Gross Carrying Value | $ 8,305 | $ 12,692 |
Accumulated Amortization | (7,100) | (10,878) |
Net Carrying Value | $ 1,205 | $ 1,814 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Life (in years) | 10 years | 10 years |
Gross Carrying Value | $ 9,088 | $ 17,823 |
Accumulated Amortization | (5,920) | (9,597) |
Net Carrying Value | $ 3,168 | $ 8,226 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Life (in years) | 10 years | 8 years 6 months |
Gross Carrying Value | $ 11,995 | $ 12,306 |
Accumulated Amortization | (9,242) | (8,703) |
Net Carrying Value | $ 2,753 | $ 3,603 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Life (in years) | 3 years 1 month 6 days | 3 years 3 months 18 days |
Gross Carrying Value | $ 54,581 | $ 47,818 |
Accumulated Amortization | (24,604) | (31,051) |
Net Carrying Value | $ 29,977 | $ 16,767 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Life (in years) | 3 years | 2 years 6 months |
Gross Carrying Value | $ 2,885 | $ 3,389 |
Accumulated Amortization | (1,538) | (2,791) |
Net Carrying Value | $ 1,347 | $ 598 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 15.5 | $ 18 | $ 9.7 |
Impairment loss on intangible assets | 1.2 | 1.4 | 0 |
Capitalized software development costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 12.2 | $ 12.9 | $ 4.1 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Expected Amortization Expense of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Estimated future amortization expense | ||
2022 | $ 16,672 | |
2023 | 11,572 | |
2024 | 4,458 | |
2025 | 2,749 | |
2026 | 1,011 | |
Thereafter | 1,988 | |
Net Carrying Value | $ 38,450 | $ 31,008 |
Fair Value Measurement of Ass_3
Fair Value Measurement of Assets and Liabilities - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Liabilities | ||
Fair value of embedded derivative | $ 900 | $ 4,900 |
Recurring | ||
Assets | ||
Total assets | 126 | 126 |
Liabilities | ||
Total liabilities | 926 | 4,898 |
Recurring | Interest make-whole provision | ||
Liabilities | ||
Fair value of embedded derivative | 926 | 4,898 |
Recurring | Money market funds | ||
Assets | ||
Fair value of cash equivalents | 126 | 126 |
Recurring | Level 1 | ||
Assets | ||
Total assets | 126 | 126 |
Liabilities | ||
Total liabilities | 0 | 0 |
Recurring | Level 1 | Interest make-whole provision | ||
Liabilities | ||
Fair value of embedded derivative | 0 | 0 |
Recurring | Level 1 | Money market funds | ||
Assets | ||
Fair value of cash equivalents | 126 | 126 |
Recurring | Level 3 | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 926 | 4,898 |
Recurring | Level 3 | Interest make-whole provision | ||
Liabilities | ||
Fair value of embedded derivative | 926 | 4,898 |
Recurring | Level 3 | Money market funds | ||
Assets | ||
Fair value of cash equivalents | $ 0 | $ 0 |
Fair Value Measurement of Ass_4
Fair Value Measurement of Assets and Liabilities - Binomial Lattice Model and Assumptions (Details) - Level 3 - Interest make-whole payment | 12 Months Ended | |
Dec. 31, 2021$ / shares | Dec. 31, 2020$ / shares | |
Volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.50 | 0.50 |
Stock price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Stock price | $ 5.83 | $ 15.47 |
Credit spread | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.1593 | 0.1925 |
Term | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Term | 3 years 4 months 2 days | 4 years 4 months 2 days |
Dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0 | 0 |
Risk-free rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.0102 | 0.0030 |
Fair Value Measurement of Ass_5
Fair Value Measurement of Assets and Liabilities - Activity in Level 3 Liabilities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Level 3 Liabilities | |
Beginning balance | $ 4,898 |
Additions | 0 |
Conversions | (146) |
Change in fair value | (3,826) |
Ending balance | $ 926 |
Fair Value Measurement of Ass_6
Fair Value Measurement of Assets and Liabilities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | May 12, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative liability extinguished upon debt conversion | $ 100 | |||
Fair value of embedded derivative | 900 | $ 4,900 | ||
Gain on change in fair value of embedded derivative | 3,800 | |||
Loss on change in fair value of embedded derivative | 600 | |||
2025 Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Value of converted amount | $ 13,500 | 5,000 | ||
2025 Notes | Convertible debt | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of embedded derivative | 926 | 4,898 | ||
Carrying amount of debt | $ 161,898 | $ 166,898 | $ 180,400 |
Business Divestiture - Narrativ
Business Divestiture - Narrative (Details) $ in Thousands, R in Millions | Oct. 29, 2021USD ($) | Jul. 30, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Feb. 24, 2021USD ($) | Feb. 24, 2021ZAR (R) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Initial cash proceeds | $ 36,566 | |||||||
Net cash proceeds | [1] | $ 33,689 | $ 0 | $ 0 | ||||
Cash deconsolidated as part of sale | 5,000 | |||||||
Restricted cash | 3,338 | $ 0 | ||||||
Ctrack South Africa | Disposed of by sale | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Initial cash proceeds | 36,600 | |||||||
Net cash proceeds | 31,500 | |||||||
Post-closing working capital adjustments | 2,584 | |||||||
Post-closing working capital adjustments received | $ 2,200 | |||||||
Receivable related to working capital adjustments | $ 400 | |||||||
Gain recognized during the period | 5,262 | |||||||
Transaction expenses | $ 2,200 | |||||||
Cash and cash equivalents | $ 5,040 | |||||||
Convergence Partners | Ctrack South Africa | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Purchase Agreement, transaction price per agreement | $ 36,600 | R 528.9 | ||||||
Funds placed in escrow | R | R 52.9 | |||||||
[1] | The amount for the year ended December 31, 2021 is net of cash divested of $5.0 million |
Business Divestiture - Assets a
Business Divestiture - Assets and Liabilities Sold (Details) - Disposed of by sale - Ctrack South Africa $ in Thousands | Jul. 30, 2021USD ($) |
Assets: | |
Cash and cash equivalents | $ 5,040 |
Accounts receivable, net | 3,505 |
Inventory | 3,821 |
Prepaid expenses and other | 370 |
Property, plant and equipment, net | 4,545 |
Rental assets, net | 2,448 |
Intangible assets, net | 11,278 |
Goodwill | 10,734 |
Total assets | 41,741 |
Liabilities: | |
Accounts payable | 3,961 |
Accrued expenses and other liabilities | 1,107 |
Deferred tax liabilities, net | 3,647 |
Other long-term liabilities | 746 |
Total liabilities | 9,461 |
Net assets | $ 32,280 |
Business Divestiture - Net Proc
Business Divestiture - Net Proceeds (Details) $ in Thousands | Jul. 30, 2021USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Initial purchase consideration received, upon close | $ 36,566 |
Net proceeds recognized | 39,150 |
Disposed of by sale | Ctrack South Africa | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Initial purchase consideration received, upon close | 36,600 |
Working capital adjustments | $ 2,584 |
Business Divestiture - Net Gain
Business Divestiture - Net Gain on Sale (Details) - Disposed of by sale - Ctrack South Africa $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Gross proceeds recognized | $ 39,150 |
Less: Book value of net assets sold | 32,280 |
Less: Release of cumulative foreign currency translation adjustments related to Ctrack South Africa | 1,608 |
Gain recognized during the period | $ 5,262 |
Debt - Convertible Notes (Detai
Debt - Convertible Notes (Details) | Jul. 22, 2020USD ($) | May 12, 2020USD ($) | Feb. 29, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($)shares | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($)shares | Dec. 31, 2021USD ($)trading_day$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 09, 2017USD ($) | Jun. 10, 2015USD ($) |
Debt Instrument [Line Items] | |||||||||||
Proceeds from completed registered offering | $ 0 | $ 100,000,000 | $ 0 | ||||||||
Cash paid in exchange transaction | $ 32,000,000 | $ 32,000,000 | 0 | 32,062,000 | 0 | ||||||
Loss on debt conversion and extinguishment | 432,000 | 76,354,000 | $ 0 | ||||||||
Conversion (shares) | shares | 1,177,156 | ||||||||||
2025 Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on debt conversion and extinguishment | 400,000 | ||||||||||
Debt conversion amount | $ 5,000,000 | ||||||||||
Conversion (shares) | shares | 428,669 | ||||||||||
Shares in satisfaction of make-whole payment (shares) | shares | 32,221 | ||||||||||
Value of converted amount | $ 13,500,000 | $ 5,000,000 | |||||||||
2022 Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on debt conversion and extinguishment | 67,200,000 | ||||||||||
Convertible debt | 2025 Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from completed registered offering | 100,000,000 | 100,000,000 | |||||||||
Principal amount | 180,400,000 | $ 161,898,000 | $ 166,898,000 | ||||||||
Debt issued in exchange transaction | 80,400,000 | 80,400,000 | |||||||||
Stated interest rate of debt issued | 3.25% | ||||||||||
Principal amount per note | $ 1,000 | ||||||||||
Conversion ratio | 79.2896 | ||||||||||
Conversion price ($ per share) | $ / shares | $ 12.61 | ||||||||||
Threshold percentage of stock price trigger | 130.00% | ||||||||||
Threshold of trading days | trading_day | 20 | ||||||||||
Threshold of consecutive trading days | trading_day | 30 | ||||||||||
Aggregate percentage of holders to declare notes due and payable in default event | 25.00% | ||||||||||
Percentage of principal and accrued interest that may be called in default event | 100.00% | ||||||||||
Percentage of principal and accrued interest that may be called in event of bankruptcy, insolvency or reorganization | 100.00% | ||||||||||
Stock price trigger (in dollars per share) | $ / shares | $ 10.51 | ||||||||||
Interest make-whole payment discount rate | 1.00% | ||||||||||
Notes held by related parties | $ 80,400,000 | ||||||||||
Accrued interest due to related parties | $ 400,000 | ||||||||||
Effective interest rate | 4.15% | 4.10% | |||||||||
Interest expense attributable to related parties | $ 2,600,000 | $ 1,700,000 | |||||||||
Convertible debt | 2022 Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | 45,000,000 | 2,000 | |||||||||
Estimated fair value of convertible debt | 112,400,000 | ||||||||||
Debt conversion amount | $ 2,000 | $ 45,000,000 | $ 2,000 | $ 45,000,000 | $ 59,900,000 | ||||||
Conversion (shares) | shares | 13,688,876 | ||||||||||
Notes outstanding | $ 0 | ||||||||||
Effective interest rate | 12.89% | 13.88% | |||||||||
Interest expense attributable to related parties | $ 800,000 | $ 2,500,000 | |||||||||
Debt aggregate face amount | $ 119,800,000 | ||||||||||
Convertible debt | Privately negotiated exchange agreements | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on debt conversion and extinguishment | $ 7,900,000 | ||||||||||
Conversion (shares) | shares | 942,706 | ||||||||||
Value of converted amount | $ 7,900,000 | ||||||||||
Convertible debt | Novatel Wireless Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt conversion amount | $ 250,000 | ||||||||||
Conversion (shares) | shares | 50,000 | ||||||||||
Stated interest rate of debt issued | 5.50% | ||||||||||
Conversion price ($ per share) | $ / shares | $ 5 | ||||||||||
Notes outstanding | $ 0 | ||||||||||
Debt aggregate face amount | $ 120,000,000 | ||||||||||
Debt issuance costs | $ 3,900,000 |
Debt - Term Loan (Details)
Debt - Term Loan (Details) - USD ($) $ in Thousands | May 12, 2020 | Mar. 31, 2020 | Mar. 06, 2020 | Aug. 09, 2019 | Aug. 23, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 09, 2017 |
Debt Instrument [Line Items] | |||||||||
Payments repurchase of preferred stock | $ 0 | $ 2,354 | $ 0 | ||||||
Series E preferred shares | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares sold | 25,000 | 10,000 | |||||||
Stock repurchased (in shares) | 2,330 | ||||||||
Payments repurchase of preferred stock | $ 2,400 | ||||||||
South Ocean Funding LLC | Series E preferred shares | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares sold | 2,330 | ||||||||
Secured Debt | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt aggregate face amount | $ 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 | ||||||||
Repayment of outstanding principal | 47,500 | ||||||||
Repayment of accrued interest | 500 | ||||||||
Prepayment fee | $ 1,400 | ||||||||
Loan outstanding | $ 0 | ||||||||
Interest rate base minimum (percent) | 1.00% | ||||||||
Effective interest rate | 15.19% | 13.50% | |||||||
Secured Debt | Term Loan | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin on interest rate (percent) | 7.625% | ||||||||
Convertible debt | 2022 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt aggregate face amount | $ 119,800 | ||||||||
Effective interest rate | 12.89% | 13.88% | |||||||
Convertible debt | 2025 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt discount on term loan | $ 2,761 | $ 3,703 | |||||||
Effective interest rate | 4.15% | 4.10% | |||||||
Convertible debt | Inseego Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from issuance of debt, portion funded in repurchase and cancellation of debt | $ 11,900 | ||||||||
Extinguishment of debt | $ 14,900 |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | May 12, 2020 |
Debt Instrument [Line Items] | |||
Fair value of embedded derivative | $ 900 | $ 4,900 | |
2025 Notes | Convertible debt | |||
Debt Instrument [Line Items] | |||
Principal amount | 161,898 | 166,898 | $ 180,400 |
Fair value of embedded derivative | 926 | 4,898 | |
Unamortized debt discount | (2,761) | (3,703) | |
Unamortized issuance costs | (2,197) | (2,946) | |
Net carrying amount | $ 157,866 | $ 165,147 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
2025 Notes | Convertible debt | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | $ 5,271 | $ 3,434 | |
Amortization of debt discount | 829 | 552 | |
Amortization of debt issuance costs | 660 | 439 | |
Total interest expense | $ 6,760 | 4,425 | |
2022 Notes | Convertible debt | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | 768 | $ 5,782 | |
Amortization of debt discount | 1,952 | 7,821 | |
Amortization of debt issuance costs | 111 | 459 | |
Total interest expense | 2,831 | 14,062 | |
Term Loan | Secured Debt | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | 1,667 | 4,789 | |
Amortization of debt discount | 859 | 1,331 | |
Amortization of debt issuance costs | 103 | 161 | |
Total interest expense | $ 2,629 | $ 6,281 |
Income Taxes - Loss before Inco
Income Taxes - Loss before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (40,897) | $ (109,837) | $ (39,187) |
Foreign | (6,823) | (601) | (387) |
Loss before income taxes | $ (47,720) | $ (110,438) | $ (39,574) |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ 0 | $ 0 | $ (49) |
State | 30 | (4) | 35 |
Foreign | 214 | 93 | 1,148 |
Total current | 244 | 89 | 1,134 |
Deferred: | |||
Federal | 12 | 12 | 12 |
State | 0 | 0 | |
Foreign | (65) | 647 | (610) |
Total deferred | (53) | 659 | (598) |
Provision for income taxes | $ 191 | $ 748 | $ 536 |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Accrued expenses | $ 1,016 | $ 1,940 |
Provision for excess and obsolete inventory | 466 | 2,016 |
Convertible debt | 9,804 | 13,367 |
Interest expense limitation | 11,113 | 7,798 |
Net operating loss and tax credit carryforwards | 110,463 | 108,340 |
Share-based compensation | 2,562 | 1,911 |
Right-of-use-asset | 1,765 | 2,059 |
Unrecognized tax benefits | 1,567 | 1,567 |
Deferred tax assets | 138,756 | 138,998 |
Deferred tax liabilities: | ||
Operating lease liability | (1,830) | (2,059) |
Acquired intangible assets | (666) | (2,155) |
Depreciation and amortization | (4,376) | (5,545) |
Unrealized foreign currency gains | (604) | (375) |
Deferred tax liabilities | (7,476) | (10,134) |
Valuation allowance | (132,132) | (133,369) |
Net deferred tax liabilities | $ (852) | $ (4,505) |
Income Taxes - Provision for _2
Income Taxes - Provision for Income Taxes Reconciliation to Statutory Federal Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal tax benefit, at statutory rate | $ (10,021) | $ (23,192) | $ (8,311) |
State benefit, net of federal benefit | (148) | (1,285) | 27 |
Foreign tax rate difference | (358) | (140) | 476 |
Valuation allowance against future tax benefits | 6,029 | 26,410 | 9,168 |
Gain on sale of foreign subsidiaries | 3,008 | 0 | 0 |
Sub-part F income | 791 | 0 | 0 |
Loss on conversion of debt | 0 | 2,015 | 0 |
Research and development credits | (1,415) | (2,355) | (1,456) |
Share-based compensation | (879) | (1,134) | 341 |
Non-deductible officers compensation | 1,449 | 0 | 0 |
True-up of prior year provisions | 1,681 | 0 | 0 |
Other | 54 | 429 | 291 |
Provision for income taxes | $ 191 | $ 748 | $ 536 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance activity | $ 6,000,000 | $ 26,400,000 | $ 9,200,000 |
Employer payroll taxes deferred, CARES Act | 1,400,000 | ||
Income tax benefit recognized related to uncertain tax positions | 0 | 0 | |
Interest expense related to uncertain tax positions | 0 | 0 | |
Liability related to unrecognized tax benefits | 0 | $ 0 | |
Ctrack South Africa divestiture | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance activity | (10,000,000) | ||
True-up of prior year deferred taxes | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance activity | 3,000,000 | ||
Foreign currency | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance activity | (200,000) | ||
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 439,800,000 | ||
Operating loss carryforwards, not subject to expiration | 110,000,000 | ||
Research and development tax credit carryforwards | 14,200,000 | ||
California Franchise Tax Board | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 58,900,000 | ||
Research and development tax credit carryforwards | 15,600,000 | ||
Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 24,300,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized Tax Benefits | ||
Beginning Balance | $ 39,631 | $ 37,835 |
Increases related to current and prior year tax positions | 1,998 | 1,796 |
Ending Balance | $ 41,629 | $ 39,631 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 03, 2021 | Mar. 06, 2020 | Aug. 09, 2019 | Mar. 28, 2019 | Aug. 06, 2018 | Jan. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 25, 2021 |
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 1,516,073 | ||||||||||
Number of additional shares from warrants (in shares) | 1,255,129 | 1,255,129 | |||||||||
Purchase price (in dollars per share) | $ 20.11 | ||||||||||
Proceeds from sale of stock | $ 29,400 | ||||||||||
Proceeds from the exercise of warrants | $ 6,900 | $ 0 | $ 1,861 | $ 17,542 | |||||||
Stock issuance costs | $ 900 | ||||||||||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||
Preferred stock issued during the period | $ 0 | $ 25,000 | 10,000 | ||||||||
Deemed dividend on exchange of Series E Preferred Stock for common stock | 1,104 | 0 | $ 0 | ||||||||
Dividends accrued | $ 3,100 | $ 2,900 | |||||||||
Series E preferred shares | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 25,000 | ||||||||||
Purchase price (in dollars per share) | $ 1,000 | ||||||||||
Preferred stock, shares authorized | 39,500 | 39,500 | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Preferred stock issued during the period | $ 25,000 | $ 10,000 | |||||||||
Dividend rate | 9.00% | ||||||||||
Redemption price | 110.00% | ||||||||||
Liquidation preference per share (in dollars per share) | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||
Number of shares sold | 25,000 | 10,000 | |||||||||
Shares of preferred stock exchanged | 10,000 | ||||||||||
Common stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Common stock issued in exchange for preferred stock | 1,525,207 | ||||||||||
Series D Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized | 150,000 | ||||||||||
Canaccord Genuity LLC | |||||||||||
Class of Stock [Line Items] | |||||||||||
Equity Distribution Agreement, maximum aggregate amount authorized for offer or sale | $ 40,000 | ||||||||||
2018 Warrants | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 12,062,000 | ||||||||||
Number of additional shares from warrants (in shares) | 4,221,700 | ||||||||||
Proceeds from sale of stock | $ 19,700 | ||||||||||
Exercise price per share (in dollars per share) | $ 2.52 | $ 2.52 | |||||||||
Proceeds from the exercise of warrants | $ 10,600 | ||||||||||
2019 Warrants | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of additional shares from warrants (in shares) | 2,500,000 | ||||||||||
Exercise price per share (in dollars per share) | $ 7 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Shares Reserved for Future Issuance (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total shares of common stock reserved for issuance (in shares) | 29,656,136 | 30,517,721 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total shares of common stock reserved for issuance (in shares) | 8,085,793 | 8,479,979 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total shares of common stock reserved for issuance (in shares) | 1,247,723 | 417,105 |
Convertible Notes | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total shares of common stock reserved for issuance (in shares) | 14,340,786 | 15,879,948 |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for future issuance or purchase (in shares) | 170,811 | 391,201 |
Common stock warrants outstanding | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total shares of common stock reserved for issuance (in shares) | 2,500,000 | 2,500,000 |
2018 Omnibus Incentive Compensation Plan | Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for future issuance or purchase (in shares) | 3,311,023 | 2,849,488 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 | Jun. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 16,649 | $ 10,419 | $ 7,302 | |||
Shares issued upon the exercise of stock options | 1,315,552 | 1,357,620 | 1,489,067 | |||
Shares issued under the ESPP | 220,390 | 231,275 | ||||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 6,300 | $ 5,800 | $ 3,500 | |||
Expiration period of stock options granted | 10 years | |||||
Weighted-average fair value of stock option awards granted (per share) | $ 5.41 | $ 7.11 | ||||
Intrinsic value of stock options exercised during period | $ 4,300 | $ 11,700 | 5,600 | |||
Unrecognized share-based compensation expense related to non-vested stock options | $ 11,300 | |||||
Expected recognition period | 2 years 8 months 4 days | |||||
Stock options | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Stock options | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 7,000 | $ 2,700 | $ 2,400 | $ 9,600 | $ 4,100 | $ 3,500 |
Expected recognition period | 3 years 5 months 12 days | |||||
Weighted-average grant-date fair value of RSUs granted (per share) | $ 8.53 | $ 10.52 | $ 5.07 | |||
Total vest date fair value of RSUs vested | $ 10,400 | $ 5,100 | $ 4,000 | |||
Unrecognized share-based compensation expense related to non-vested RSUs | $ 5,800 | |||||
Restricted Stock Units | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Restricted Stock Units | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized under the plan | 5,324,000 | |||||
Share-based compensation expense | $ 700 | $ 600 | $ 300 | |||
Percentage of lower limit value of common stock | 85.00% | |||||
Purchase period duration | 6 months | |||||
Maximum limit of payroll deductions (percent) | 10.00% | |||||
Restricted Stock Units In Divestiture | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 600 | |||||
2018 Omnibus Incentive Compensation Plan | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized under the plan | 8,897,084 |
Share-based Compensation - Shar
Share-based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 16,649 | $ 10,419 | $ 7,302 |
Cost of revenues | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 2,469 | 1,583 | 1,133 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 4,813 | 2,823 | 1,548 |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 3,704 | 2,346 | 1,669 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 5,663 | $ 3,667 | $ 2,952 |
Share-based Compensation - Weig
Share-based Compensation - Weighted-Average Fair Value Assumptions (Details) - Stock options | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 0.90% | 0.90% |
Volatility | 73.00% | 95.00% |
Expected term (in years) | 5 years 4 months 24 days | 5 years 9 months 18 days |
Share-based Compensation - Stoc
Share-based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Options Outstanding | |||
Outstanding — beginning of period | 8,479,979 | 9,044,304 | 8,796,212 |
Granted | 1,929,500 | 1,526,000 | 2,660,936 |
Exercised | (1,315,552) | (1,357,620) | (1,489,067) |
Canceled | (1,008,134) | (732,705) | (923,777) |
Outstanding — end of period | 8,085,793 | 8,479,979 | 9,044,304 |
Vested and Expected to Vest — December 31, 2021 | 7,398,958 | ||
Exercisable — December 31, 2021 | 4,816,773 | ||
Weighted-Average Exercise Price Per Option | |||
Outstanding — beginning of period | $ 3.99 | $ 2.91 | $ 2.10 |
Granted | 8.86 | 9.41 | 5.17 |
Exercised | 2.62 | 3.06 | 1.69 |
Canceled | 8.60 | 3.60 | 3.64 |
Outstanding — end of period | 4.81 | $ 3.99 | $ 2.91 |
Vested and Expected to Vest — December 31, 2021 | 4.51 | ||
Exercisable — December 31, 2021 | $ 3 | ||
Weighted-Average Remaining Contractual Term (Years), Options Outstanding | 7 years 1 month 28 days | ||
Weighted-Average Remaining Contractual Term (Years), Options Vested and Expected to Vest | 6 years 11 months 26 days | ||
Weighted-Average Remaining Contractual Term (Years), Options Exercisable | 6 years 2 months 1 day | ||
Aggregate Intrinsic Value, Options Outstanding | $ 16,603 | ||
Aggregate Intrinsic Value, Options Vested and Expected to Vest | 16,464 | ||
Aggregate Intrinsic Value, Options Exercisable | $ 15,081 |
Share-based Compensation - Rest
Share-based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Units | |||
Non-vested — beginning of period | 417,105 | 400,315 | 454,382 |
Granted | 1,931,263 | 570,368 | 870,150 |
Vested | (1,019,686) | (548,160) | (809,482) |
Forfeited | (80,959) | (5,418) | (114,735) |
Non-vested — end of period | 1,247,723 | 417,105 | 400,315 |
Weighted-Average Grant-Date Fair Value | |||
Non-vested — beginning of period | $ 8.68 | $ 3.95 | $ 2.17 |
Granted | 8.53 | 10.52 | 5.07 |
Vested | 10.20 | 7.28 | 4.20 |
Forfeited | 10.75 | 4.06 | 3.66 |
Non-vested — end of period | $ 7.65 | $ 8.68 | $ 3.95 |
Earnings per Share - Calculatio
Earnings per Share - Calculation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Net loss attributable to common stockholders | $ (52,368) | $ (114,119) | $ (40,486) |
Weighted-average common shares outstanding, basic (in shares) | 103,246,308 | 96,111,547 | 78,322,496 |
Weighted-average common shares outstanding, diluted (in shares) | 103,246,308 | 96,111,547 | 78,322,496 |
Basic net income (loss) per share (in dollars per share) | $ (0.51) | $ (1.19) | $ (0.52) |
Diluted net income (loss) per share (in dollars per share) | $ (0.51) | $ (1.19) | $ (0.52) |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Earnings Per Share [Abstract] | |
Anti-dilutive shares excluded from EPS calculation | 26,318,509 |
Earnings per Share - Antidiluti
Earnings per Share - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from EPS calculation | 26,318,509 | ||
Convertible notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from EPS calculation | 14,341,000 | 14,784,000 | 22,314,000 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from EPS calculation | 2,500,000 | 2,500,000 | 2,838,000 |
Non-qualified stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from EPS calculation | 8,086,000 | 8,480,000 | 9,027,000 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from EPS calculation | 1,248,000 | 417,000 | 414,000 |
Employee Stock Purchase Plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from EPS calculation | 144,000 | 25,000 | 98,000 |
Rights agreement | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from EPS calculation | 0 | 0 | 198,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Jul. 24, 2020 | Jul. 26, 2018 | Mar. 31, 2017 | Dec. 31, 2021 |
Loss Contingencies [Line Items] | ||||
Noncancellable purchase obligations | $ 165.8 | |||
RER | ||||
Loss Contingencies [Line Items] | ||||
Stock issued during period, shares, acquisitions (in shares) | 973,333 | |||
Former stockholder of RER | ||||
Loss Contingencies [Line Items] | ||||
Amount awarded to other party in settlement | $ 1 | |||
Issuance of common shares in litigation settlement (in shares) | 89,928 | 500,000 | ||
Additional amount to be awarded to other party in settlement, within 12 months | $ 1 | |||
Additional amount to be awarded to other party in settlement, within 24 months | $ 1 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Right-of-use assets, net | $ 7,839 | $ 9,092 | |
Operating lease liabilities | $ 8,881 | $ 9,900 | |
Weighted-average remaining lease term | 5 years | 5 years 9 months 18 days | |
Weighted-average discount rate | 9.10% | 9.10% | |
Cash paid for operating leases | $ 2,600 | $ 1,900 | $ 2,200 |
Operating lease costs | $ 2,800 | $ 2,200 | 2,400 |
Operating lease liabilities, current, balance sheet line item | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | |
Operating lease liabilities, noncurrent, balance sheet line item | Other long-term liabilities | Other long-term liabilities | |
Right-of-use assets obtained in exchange for operating leases liabilities | $ 658 | $ 7,931 | $ 4,694 |
Leases - Future Minimum Payment
Leases - Future Minimum Payments Under Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 2,500 | |
2023 | 2,094 | |
2024 | 1,947 | |
2025 | 1,689 | |
2026 | 1,687 | |
Thereafter | 1,131 | |
Total minimum operating lease payments | 11,048 | |
Less: amounts representing interest | (2,167) | |
Present value of net minimum operating lease payments | 8,881 | $ 9,900 |
Less: current portion | (1,769) | $ (1,619) |
Long-term portion of operating lease obligations | $ 7,112 |
Geographic Information and Co_3
Geographic Information and Concentrations of Risk - Geographic Concentration of Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Geographic concentration of assets | ||
Assets | $ 215,843 | $ 227,394 |
United States and Canada | ||
Geographic concentration of assets | ||
Assets | 176,094 | 148,485 |
Europe | ||
Geographic concentration of assets | ||
Assets | 35,630 | 27,277 |
South Africa | ||
Geographic concentration of assets | ||
Assets | 0 | 48,211 |
Other | ||
Geographic concentration of assets | ||
Assets | $ 4,119 | $ 3,421 |
Geographic Information and Co_4
Geographic Information and Concentrations of Risk - Geographic Concentration of Net Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net revenue by geographic region | |||
Total net revenues | $ 262,399 | $ 313,832 | $ 219,496 |
United States and Canada | |||
Net revenue by geographic region | |||
Total net revenues | 215,520 | 260,009 | 158,756 |
South Africa | |||
Net revenue by geographic region | |||
Total net revenues | 17,333 | 28,208 | 35,001 |
Other | |||
Net revenue by geographic region | |||
Total net revenues | $ 29,546 | $ 25,615 | $ 25,739 |
Geographic Information and Co_5
Geographic Information and Concentrations of Risk - Narrative (Details) - Customer Concentration | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Revenues | Customer One | |||
Segment Reporting Information [Line Items] | |||
Concentration percentage | 43.90% | 54.50% | 52.50% |
Net Revenues | Customer Two | |||
Segment Reporting Information [Line Items] | |||
Concentration percentage | 26.40% | ||
Accounts Receivable | Customer One | |||
Segment Reporting Information [Line Items] | |||
Concentration percentage | 61.70% | 33.30% | |
Accounts Receivable | Customer Two | |||
Segment Reporting Information [Line Items] | |||
Concentration percentage | 12.60% | 17.20% |
Retirement Savings Plan (Detail
Retirement Savings Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Percentage of employees contribution matched by employer | 50.00% | ||
Percentage of employees gross pay eligible for employer match | 6.00% | ||
Employer matching contributions | $ 0.9 | $ 0.7 | $ 0.4 |