Inseego Corp.
02/20/2026 | Press release | Distributed by Public on 02/20/2026 05:03
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our consolidated financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report. This report contains certain forward-looking statements relating to future events or our future financial performance. These statements are subject to risks and uncertainties which could cause actual results to differ materially from those discussed in this report. You are cautioned not to place undue reliance on this information which speaks only as of the date of this report. Except as required by law, we assume no responsibility for updating any forward-looking statements, whether as a result of new information, future events or otherwise. For a discussion of the important risks related to our business and future operating performance, see the discussion under the caption "Item 1A. Risk Factors" and under the caption "Factors Which May Influence Future Results of Operations" below.
Overview
Inseego is a leader in the design and development of cloud-managed wireless wide area network ("WAN") and intelligent edge solutions. Our 5G WAN portfolio is comprised of secure and high-performance mobile broadband and fixed wireless access ("FWA") solutions with associated cloud solutions for real time WAN visibility, monitoring, automation and control with centralized orchestration of network functions. These devices are specifically built for the carrier, enterprise and small and medium business ("SMB") market segments with a focus on performance, scalability, quality and enterprise grade security. We also provide a Communication Service Provider ("CSP") subscriber lifecycle management SaaS solution for carriers' management of their government and complex enterprise customer subscriptions.
Our 5G products and associated cloud solutions are designed in the U.S. and are used in networks where internet reliability and security is of the utmost importance. These products support applications such as business broadband for both mobile and fixed use cases, enterprise networking and software-defined wide area network ("SD-WAN") failover management.
Inseego is at the forefront of providing high speed broadband through state-of-the-art 5G products and services to keep enterprise and SMB customers seamlessly connected. With multiple first-to-market innovations through several generations of 4G and 5G technologies, Inseego has been advancing wireless WAN technology and driving industry transformations for over 30 years. Our products currently operate on all major cellular networks in the US. Our mobile hotspots, sold under the MiFi ™ brand, have been sold to millions of end users and provide secure and convenient high-speed broadband access to the Internet on the go.
Business Segment Reporting
We operate as one business segment. As of December 31, 2024, the Company's Chief Operating Decision Maker ("CODM") was its Executive Chairman. The Company's Executive Chairman left the Company in February 2025, at which point the Company's CODM became its Chief Executive Officer ("CEO"). Neither of these CODMs 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 financial results. As such, our operations constitute a single operating segment and one reportable segment.
Recent Developments
Repurchase of Preferred Stock
On January 14, 2026, the Company entered into an Exchange Agreement with the Holder of all of the outstanding shares of the Company's Preferred Stock.
Pursuant to the Exchange Agreement, on the Closing Date all of the 25,000 outstanding shares of Preferred Stock, which had a liquidation value of $42 million as of December 31, 2025, were surrendered and forfeited by the Holder in exchange for the following consideration, having an aggregate value of approximately $26 million and representing a discount of approximately 38% to the liquidation value: (i) $10 million in cash, one-third of which was paid on the Closing Date and the balance of which will be paid in two equal installments on the six and twelve month anniversaries of the Closing Date; (ii) 767,165 shares of the Company's common stock, and (iii) $8 million in additional principal amount of the Company's existing 2029 Senior Secured Notes. The Common Shares and the 2029 Senior Secured Notes were issued to the Holder on the Closing Date.
The Exchange Agreement provides the Holder with customary registration rights with respect to the Common Shares, pursuant to which, among other things, the Company agreed to file a registration statement with the Securities and Exchange Commission within six months following the Closing Date.
Debt Restructurings
Throughout the year ended December 31, 2024, the Company entered into a series of repurchase and exchange agreements with various holders of the Company's 2025 Convertible Notes (as defined below), some of whom were considered related parties of the Company. In summary, as a result of these repurchase and exchange agreements, the company exchanged $146.9 million of outstanding principal of the 2025 Convertible Notes in exchange for $33.8 million of cash, $40.9 million of principal of the 2029 Senior Secured Notes (as defined below), 2.9 million shares of the Company's common stock, and warrants to purchase an aggregate of approximately 2.5 million shares of the Company's common stock. These exchanges have significantly improved the Company's liquidity position.
The remaining 2025 Convertible Notes matured on May 1, 2025, at which time all outstanding principal of $14.9 million and related accrued interest was repaid.
Divestiture of Telematics Business
As previously noted in Part I. Item 1. Business, on September 16, 2024, the Company and its subsidiary Inseego SA (Pty) Ltd ("Seller") entered into a Share Purchase Agreement (the "Purchase Agreement") with Light Sabre SPV Limited (which subsequently novated its benefits and obligations under the Purchase Agreement to Ctrack Holdings (the "Purchaser")), pursuant to which Inseego agreed to sell to the Purchaser the entire issued share capital of the Company's Inseego International Holdings Limited subsidiary in exchange for approximately $52.0 million in cash, subject to certain adjustments. Upon completion of the sale, which occurred on November 27, 2024, the Purchaser acquired the Company's telematics solutions business (the "Telematics Business"), which had operations in the United Kingdom, the European Union, Australia and New Zealand. The Purchase Agreement provided for a working capital adjustment, which was determined in December 2024 and funded in January 2025, resulting in an increase to the initial purchase consideration of $0.7 million as a result of changes in closing working capital and net debt.
The Company's decision to divest its Telematics Business was based on a review of the strategic fit of the business with the Company's North American-centric 5G wireless solutions business and the Company's previously stated goal to continue to significantly deleverage its capital structure. The sale of the Telematics Business further supports the Company's streamlining of its focus and resources on what it believes to be the strongest growth opportunities around its core product offerings.
The results of operations and cash flows related to the divested Telematics Business have been classified as discontinued operations within the Consolidated Statements of Operations and Comprehensive Income and Consolidated Statements of Cash Flows for all periods presented within the consolidated financial statements included in Part IV, Item 15 of this Form 10-K. All discussion below relates to the Company's continuing operations only, which excludes any results related to the divested Telematics Business, unless noted otherwise.
Factors Which May Influence Future Results of Operations
Revenues.We classify our revenues from the sale of our products and services into two categories: Product Revenue, which consists of our Mobile Solutions and Fixed Wireless Access Solutions, and Software Services and Other. A description of each of the current revenue classifications is as follows:
Mobile solutions: Our mobile broadband devices, sold under the MiFi brand, are actively used by millions of end users to provide secure and convenient high-speed access to corporate, public and personal information through the Internet and enterprise networks. Our mobile portfolio is supported by our cloud offering, Inseego Connect for device management, whose revenues are included inSoftware Services and Otherbelow. Our Mobile Solutions customer base is primarily comprised of mobile operators. These mobile operators include T-Mobile, Verizon Wireless, and AT&T in the United States, Rogers and Telus in Canada, and various companies in other vertical markets.
Fixed wireless access solutions: Our fixed wireless access solutions are deployed by enterprise and SMB customers for their distributed sites and employees as a fully secure and corporate managed wireless WWAN solution. The portfolio consists of indoor, outdoor and industrial routers and gateways supported by our cloud offering - Inseego Connect - for device management. Revenues related to our cloud offerings of Inseego Connect are included within Software Services and Otherbelow. These devices, sold under the Wavemaker brand, are sold by mobile operators such as T-Mobile, Verizon Wireless, and AT&T along with distribution and channel partners.
Software Services and Other: A substantial majority of our software services and other revenue comes from providing a SaaS CSP wireless subscriber lifecycle management solution ("Inseego Subscribe") for carrier's management of their government and complex enterprise customer subscriptions. Software services and other revenue also includes the Company's above mentioned Inseego Connect offering. We also categorize non-recurring engineering services we provide to our customers as software services and other revenue.
We believe that our future revenues may be influenced by a number of factors including:
•deployment of 5G infrastructure equipment;
•adoption of 5G end point products;
•competition in the area of 5G technology;
•acceptance of our products by new vertical markets;
•rate of change to new products;
•economic environment and related market conditions;
•product pricing; and
•changes in technologies.
Our revenues are also significantly dependent upon the availability of materials and components used in our hardware products.
Cost of Revenues.Cost of revenues includes all costs associated with our contract manufacturers, distribution, fulfillment and repair services, delivery of SaaS services, warranty costs, royalties, operations overhead, costs associated with cancellation of purchase orders and costs related to outside services. Also included in cost of revenues are costs related to write downs for excess and obsolete inventory and provisions for contract manufacturer liabilities. Inventory adjustments are impacted primarily by demand for our products, which is influenced by the factors discussed above.
Operating Costs and Expenses. Our operating costs consist of four primary categories: research and development, sales and marketing, general and administrative, and depreciation and amortization costs.
Research and development is at the core of our ability to produce innovative, leading-edge products. These expenses consist primarily of the cost of internal and third-party engineers and technicians who design and test our highly complex products, the cost of testing and certification services, including prototypes, and other necessary expenditures.
Sales and marketing expenses consist primarily of our sales force and product-marketing professionals. In order to maintain strong sales relationships, we provide co-marketing, trade show support and product training. We are also engaged in a variety of marketing activities, such as awareness and lead generation programs as well as product marketing. Other marketing initiatives include public relations, seminars and co-branding with partners.
General and administrative expenses include primarily corporate functions such as accounting, human resources, legal, information technology, and professional fees. This category also includes the expenses needed to operate as a publicly traded company, including compliance with the Sarbanes-Oxley Act of 2002, as amended, SEC filings, stock exchange fees and investor relations expense. Although general and administrative expenses are not directly related to revenue levels, certain expenses such as legal expenses and provisions for bad debts may cause significant volatility in future general and administrative expenses.
Depreciation and amortization expenses. Our depreciation and amortization expenses primarily include amortization of capitalized software projects, depreciation on our property, plant, and equipment, and amortization of intangibles purchased through acquisitions.
Impairment of capitalized software. Impairment expenses can be recorded on capitalized balances related to software intended for internal use and on software intended to be sold. Impairments of capitalized software intended for internal use are recorded when the carrying value of the asset group to which the software belongs is not recoverable and exceeds its fair value. Impairments of capitalized software intended to be sold are recorded when the net realizable value of the asset falls below its carrying value.
Operating Results. Our results are affected by numerous macroeconomic factors including inflation, consumer spending confidence, component costs and global supply chains. The existence of inflation in the U.S. and global economy has resulted in, and may continue to result in, higher interest rates and capital costs, increased costs of labor, fluctuating exchange rates and other similar effects. If the inflation rate increases, it could affect our expenses, especially employee compensation expense. Inflation and related increases in interest rates could also increase our customers' operating costs, which could result in reduced operating budgets. To the extent our products are perceived by customers and potential customers as discretionary, our revenue may be disproportionately affected by delays or reductions in general information technology spending. Such delays or reductions in technology spending are often associated with enhanced budget scrutiny by our customers including additional levels of approvals, cloud optimization efforts and additional time to evaluate and test our products, which can lead to long and
unpredictable sales cycles. Such increases have, and may continue to have, a negative impact on the Company's revenue and profit margins, if the selling prices of products do not increase with the increased costs. Recently, a worldwide shortage of memory chips has occurred, which could impact our operations if we are unable to secure adequate supply of memory chips for our products. In addition our operating results could be impacted if we obtain memory chips at inflated prices and are unable to pass on these price increases to our customers
Results of Operations
The following table sets forth our consolidated statements of operations in dollars (in thousands) and expressed as a percentage of revenues, derived from the accompanying consolidated financial statements for the periods indicated.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Revenues: | |||||||||||||||||
| Mobile solutions | $ | 67,928 | 40.9 | % | $ | 98,930 | 51.7 | % | |||||||||
| Fixed wireless access solutions | 49,751 | 29.9 | 47,649 | 24.9 | |||||||||||||
| Product revenues | 117,679 | 70.8 | 146,579 | 76.6 | |||||||||||||
| Software services and other | 48,509 | 29.2 | 44,665 | 23.4 | |||||||||||||
| Total revenues | 166,188 | 100.0 | 191,244 | 100.0 | |||||||||||||
| Cost of revenues: | |||||||||||||||||
| Product | 89,523 | 53.9 | 115,390 | 60.3 | |||||||||||||
| Software services and other | 5,669 | 3.4 | 7,057 | 3.7 | |||||||||||||
| Total cost of revenues | 95,192 | 57.3 | 122,447 | 64.0 | |||||||||||||
| Gross profit | 70,996 | 42.7 | 68,797 | 36.0 | |||||||||||||
| Operating costs and expenses: | |||||||||||||||||
| Research and development | 19,801 | 11.9 | 20,596 | 10.8 | |||||||||||||
| Sales and marketing | 17,398 | 10.5 | 15,951 | 8.3 | |||||||||||||
| General and administrative | 20,761 | 12.5 | 17,240 | 9.0 | |||||||||||||
| Depreciation and amortization | 8,336 | 5.0 | 12,368 | 6.5 | |||||||||||||
| Impairment of capitalized software | 384 | 0.2 | 927 | 0.5 | |||||||||||||
| Total operating costs and expenses | 66,680 | 40.1 | 67,082 | 35.1 | |||||||||||||
| Operating income | 4,316 | 1,715 | |||||||||||||||
| Other income (expense): | |||||||||||||||||
| Loss on debt restructurings, net | - | (2,851) | |||||||||||||||
| Loss on extinguishment of revolving credit facility | - | (788) | |||||||||||||||
| Interest expense | (3,771) | (10,906) | |||||||||||||||
| Other income (expense), net | 737 | (850) | |||||||||||||||
| Income (loss) before income taxes | 1,282 | (13,680) | |||||||||||||||
| Income tax provision | 44 | 689 | |||||||||||||||
| Income (loss) from continuing operations | 1,238 | (14,369) | |||||||||||||||
|
Income (Loss) from discontinued operations (net of income tax provision of $400 and $1,956, respectively)
|
(400) | 18,941 | |||||||||||||||
| Net income | 838 | 4,572 | |||||||||||||||
| Preferred stock dividends | (3,574) | (3,269) | |||||||||||||||
| Net income (loss) attributable to common stockholders | $ | (2,736) | $ | 1,303 | |||||||||||||
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Revenues. Revenues for the year ended December 31, 2025 were $166.2 million, a decrease of $25.1 million, or 13.1%, compared to the same period in 2024.
The following table summarizes revenues by category (dollars in thousands):
| Year Ended December 31, | Change | |||||||||||||||||||||||||
| Product Category | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Mobile solutions | $ | 67,928 | $ | 98,930 | $ | (31,002) | (31.3) | % | ||||||||||||||||||
| Fixed wireless access solutions | 49,751 | 47,649 | 2,102 | 4.4 | ||||||||||||||||||||||
| Product revenues | 117,679 | 146,579 | (28,900) | (19.7) | ||||||||||||||||||||||
| Software services and other | 48,509 | 44,665 | 3,844 | 8.6 | ||||||||||||||||||||||
| Total | $ | 166,188 | $ | 191,244 | $ | (25,056) | (13.1) | |||||||||||||||||||
Mobile solutions.The $31.0 million decrease in mobile solutions revenues is primarily due to decreased sales with one of our carrier partners due to significant promotional activity in the prior period.
Fixed wireless access solutions. The $2.1 million increase in fixed wireless access solutions revenues is primarily due to increased sales of current generation of fixed wireless access products to one of our carrier partners that launched during the second quarter of 2025, partially offset by decreased sales in our channel program.
Software services and other.The $3.8 million increase in software services and other revenues is primarily due to increased Inseego Subscribe revenues related to the terms of a two-year service contract with a major customer that was executed in April 2024 and subsequently extended through July 2026.
Cost of revenues.Cost of revenues for the year ended December 31, 2025 was $95.2 million, or 57.3% of revenues, compared to $122.4 million, or 64.0% of revenues, for the same period in 2024.
The following table summarizes cost of revenues by category (dollars in thousands):
|
Year Ended December 31, |
Change | |||||||||||||||||||||||||
| Product Category | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Product | $ | 89,523 | $ | 115,390 | $ | (25,867) | (22.4) | % | ||||||||||||||||||
| Software services and other | 5,669 | 7,057 | (1,388) | (19.7) | ||||||||||||||||||||||
| Total | $ | 95,192 | $ | 122,447 | $ | (27,255) | (22.3) | |||||||||||||||||||
Product.The $25.9 million decrease in product cost of revenues is primarily due to decreased product revenues.
Software services and other. The $1.4 million decrease in software services and other cost of revenues is primarily due to decreased outside service costs related to Inseego Subscribe revenues, decreased annual incentive bonus accruals, and decreased non-recurring engineering revenues and the related costs of performing those services.
Gross profit.Gross profit for the year ended December 31, 2025 was $71.0 million, or a gross margin of 42.7%, compared to $68.8 million, or a gross margin of 36.0%, for the same period in 2024. The increase in both gross profit and gross margin is primarily due to increased higher margin Inseego Subscribe service and fixed wireless access solutions product revenues, both in total and as a percentage of total revenues, partially offset by decreased mobile solutions product revenues.
Operating costs and expenses. The following table summarizes operating costs and expenses (dollars in thousands):
|
Year Ended December 31, |
Change | |||||||||||||||||||||||||
| Operating costs and expenses | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Research and development | $ | 19,801 | $ | 20,596 | $ | (795) | (3.9) | % | ||||||||||||||||||
| Sales and marketing | 17,398 | 15,951 | 1,447 | 9.1 | % | |||||||||||||||||||||
| General and administrative | 20,761 | 17,240 | 3,521 | 20.4 | % | |||||||||||||||||||||
| Depreciation and amortization | 8,336 | 12,368 | (4,032) | (32.6) | % | |||||||||||||||||||||
| Impairment of capitalized software | 384 | 927 | (543) | (58.6) | % | |||||||||||||||||||||
| Total | $ | 66,680 | $ | 67,082 | $ | (402) | (0.6) | % | ||||||||||||||||||
Research and development expenses.Research and development expenses for the year ended December 31, 2025 were $19.8 million, or 11.9% of revenues, compared to $20.6 million, or 10.8% of revenues, for the same period in 2024. The decrease in research and development expenses was primarily due to more research and development projects that were capitalizable during the year ended December 31, 2025, which resulted in a less research and development costs being recorded as operating expenses, and decreased annual incentive bonus accruals, partially offset by increased outside services costs and prototype and certification costs related to the Company's increased development efforts for its next line of products.
Sales and marketing expenses.Sales and marketing expenses for the year ended December 31, 2025 were $17.4 million, or 10.5% of revenues, compared to $16.0 million, or 8.3% of revenues, for the same period in 2024. The increase in sales and marketing expenses was primarily due to increased sales personnel-related compensation costs as a result of an increase in overall sales headcount, partially offset by decreased sales commissions as a result of lower sales and decreased annual incentive bonus accruals.
General and administrative expenses.General and administrative expenses for the year ended December 31, 2025 were $20.8 million, or 12.5% of revenues, compared to $17.2 million, or 9.0% of revenues, for the same period in 2024. The increase in general and administrative expense was primarily due to an increase in share-based compensation expense related to awards issued to the Company's CEO who was hired in January 2025, partially offset by decreased annual incentive bonus accruals and a gain on early lease termination recorded during 2025.
Depreciation and amortization expenses.Depreciation and amortization expenses for the year ended December 31, 2025 was $8.3 million, or 5.0% of revenues, compared to $12.4 million, or 6.5% of revenues, for the same period in 2024. The decrease in depreciation and amortization expenses was primarily due to the capitalized costs on the Company's next generation of software intended for sale being capitalized but not amortizable during all or most of the year ended December 31, 2025 and the ending of the useful life of certain amortizable purchased intangibles.
Impairment of capitalized software. For the years ended December 31, 2025 and 2024, we recorded impairments of $0.4 million and $0.9 million, respectively.
Other income (expense).The following table summarizes other income (expense) (dollars in thousands):
|
Year Ended December 31, |
Change | ||||||||||||||||||||||
| Other income (expense) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Loss on debt restructurings, net | - | (2,851) | 2,851 | * | |||||||||||||||||||
| Loss on extinguishment of revolving credit facility | - | (788) | 788 | * | |||||||||||||||||||
| Interest expense | (3,771) | (10,906) | 7,135 | (65.4) | % | ||||||||||||||||||
| Other income (expense), net | 737 | (850) | 1,587 | * | |||||||||||||||||||
| Total | $ | (3,034) | $ | (15,395) | $ | 12,361 | (80.3) | ||||||||||||||||
Interest expense.The $7.1 million decrease in interest expense, net for the year ended December 31, 2025 over the same period in 2024 was primarily a result the Company's various repurchases and exchanges of the 2025 Convertible Notes (as defined below) that occurred during 2024 and the full repayment of the remaining 2025 Convertible Notes on May 1, 2025, resulting in lower coupon interest, partially offset by interest expense on the Company's 2029 Senior Secured Notes (as defined below) that were issued in the fourth quarter of 2024.
Loss on debt restructurings, net The $2.9 million net loss on debt restructurings for the year ended December 31, 2024is a result of the Company's 2025 Convertible Notes restructurings entered into during 2024 as part of our overall capital structure management efforts, as described below.
Loss on extinguishment of revolving credit facility The $0.8 million loss on extinguishment of revolving credit facility for the year ended December 31, 2024relates to the voluntary early termination of the Company's Prior Credit Facility (as defined in Note 6 - Debtin the accompanying condensed consolidated financial statements) in April 2024.
Other income (expense), net.Other income (expense), net for the years ended December 31, 2025 and 2024 was $0.7 million and $(0.9) million, respectively. The increase in other income, net was primarily due to interest income earned on money market fund accounts that the Company began investing in during the first quarter of 2025 and a decrease in other expenses that were incurred during 2024 related to the preliminary stages of the Company's capital structure management efforts.
Income tax provision.Income tax provision for the years ended December 31, 2025and 2024 was a provision of $0.0 million and $0.7 million, respectively.
Income (loss) from discontinued operations, net of tax Income (Loss) from discontinued operations, net of tax for the years ended December 31, 2025and 2024 was $(0.4) million and $18.9 million, respectively. The change in income (loss) from discontinued operations is due to the sale of the Telematics Business in November 2024.
Preferred stock dividends.During the years ended December 31, 2025 and 2024, we recorded dividends of $3.6 million and $3.3 million, respectively, on our Preferred Stock. As mentioned in Part I Item 1 above, in January 2026, all of the outstanding shares of Preferred Stock were exchanged by the Holder for a combination of cash, common stock, and an additional principal amount of the Company's existing 2029 Senior Secured Notes.
Reverse Stock Split
On January 24, 2024, the Company completed a 1-for-10 reverse stock split of its issued and outstanding common stock (the "Reverse Stock Split"). As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to January 24, 2024 were automatically converted into one-tenth (1/10) of a share of common stock. The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock. All outstanding convertible notes, stock options and RSUs entitling their holders to purchase or obtain or convert into shares of our common stock were adjusted, as required by the terms of these securities. All applicable common share and per share amounts have been retrospectively restated to show the effect of the reverse split.
Liquidity and Capital Resources
As of December 31, 2025, the Company had available cash and cash equivalents totaling $24.9 million and maintained positive working capital of $15.6 million. The Company had cash inflows from operative activities of $7.2 million for the year ended December 31, 2025.
On August 5, 2025, the Company entered into a Credit and Security Agreement (the "Working Capital Facility Agreement") with BMO Bank N.A. ("BMO") that provides up to a maximum $15.0 million secured asset-backed revolving credit facility (the "Working Capital Facility"). The facility matures on August 5, 2028 and contains certain financial and non-financial covenants. The Company was in compliance with all covenants under the Working Capital Facility Agreement as of December 31, 2025.
Obligations under the Working Capital Facility are secured by a continuing security interest in substantially all property of Inseego Corp. and certain of its subsidiaries, subject to customary exclusions. Availability under the Working Capital Facility is determined monthly as the excess of a borrowing base ("Borrowing Base"), comprised of a percentage of eligible accounts receivable and eligible inventory, over the total loans outstanding under the Working Capital Facility. If the aggregate outstanding amount of the Working Capital Facility exceeds the Borrowing Base at any time, the excess amount shall be payable on demand by BMO.
Loans made under the Working Capital Facility bear interest at a Term Secured Overnight Financing Rate ("SOFR"), as defined in the Working Capital Facility Agreement, plus an applicable margin ranging from 1.00-2.50%, subject to certain exceptions. Interest on loans made under the Working Capital Facility are paid in cash, in arrears, on a semi-annual basis.
As of December 31, 2025, there were no outstanding borrowings and availability to borrow under the Working Capital Facility was $14.5 million.
The Company's 3.25% convertible notes due in 2025 (the "2025 Convertible Notes") had a principal balance of $14.9 million as of December 31, 2024 and matured on May 1, 2025, at which time all outstanding principal and related accrued interest was paid-off in full. The Company's 9.0% senior secured notes due in 2029 (the "2029 Senior Secured Notes") had a principal balance of $40.9 million as of December 31, 2025 and mature on May 1, 2029. As noted above, January 14, 2026, the
Company issued an additional $8.0 million in principal amount of the 2029 Senior Secured Notes in connection with the repurchase of the Preferred Stock.
While the Company's liquidity and financial results had several positive developments in 2024 and 2025, the Company has a history of operating and net losses and overall usage of cash from operating and investing activities. The Company's ability to maintain profitable operations and continue to generate positive cash flows 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, the Company may be required to raise capital, reduce planned research and development activities, incur additional restructuring charges or reduce other operating expenses and capital expenditures, which could have an adverse impact on the Company's ability to achieve its intended business objectives.
Our liquidity could be compromised if there is any interruption in our business operations, a material failure to satisfy our contractual commitments, a failure to retain our key existing customers or a failure to generate revenue from new or existing products. If additional funds are raised by the issuance of equity securities, or in connection with any additional debt restructurings or refinancing, Company's stockholders could experience significant dilution of their ownership interests and securities issued may have rights senior to those of the holders of the Company's common stock.
Contractual Obligations and Commitments
As of December 31, 2025, our material contractual obligations consisted of the following:
•To mitigate the risk of material shortages and price increases, we enter into non-cancellable purchase obligations with certain key contract manufacturers for the purchase of goods and services in the three to four quarters following the balance sheet date. Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2025, our future payments under these noncancellable purchase obligations were approximately $101.2 million.
•$40.9 million in outstanding borrowings under the 2029 Senior Secured Notes; see Part IV Item 15 Note 6 - Debt; and
•Operating lease liabilities that are included on our consolidated balance sheet; see Part IV Item 15 Note 12 - Leases.
Historical Cash Flows
The following table summarizes our consolidated statements of cash flows for the periods indicated (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating cash flows from continuing operations | $ | 8,103 | $ | 26,657 | |||||||
| Operating cash flows from discontinued operations | (908) | 6,862 | |||||||||
| Net cash provided by operating activities | 7,195 | 33,519 | |||||||||
| Investing cash flows from continuing operations | (9,277) | (5,061) | |||||||||
| Investing cash flows from discontinued operations | 710 | 48,092 | |||||||||
| Net cash provided by (used in) investing activities | (8,567) | 43,031 | |||||||||
| Financing cash flows from continuing operations | (13,431) | (38,781) | |||||||||
| Financing cash flows from discontinued operations | - | - | |||||||||
| Net cash used in financing activities | (13,431) | (38,781) | |||||||||
| Effect of exchange rates on cash | 93 | (582) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (14,710) | 37,187 | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 39,596 | 2,409 | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 24,886 | $ | 39,596 | |||||||
Operating activities.
Net cash provided by operating activities for the year ended December 31, 2025 is comprised of cash flows from continuing operations of $8.1 million and cash outflows from discontinued operations of $0.9 million. The cash inflows from
continuing operations were primarily related to net income from continuing operations of $1.2 million and non-cash charges, including depreciation and amortization of $8.4 million and share-based compensation expense of $7.4 million, partially offset by net cash used for working capital of $7.4 million.
Net cash provided by operating activities for the year ended December 31, 2024 is comprised of cash flows from continuing operations of $26.7 million and cash flows from discontinued operations of $6.9 million. The cash inflows from continuing operations were primarily related to net cash provided by working capital of $15.5 million and a net loss from continuing operations of $14.4 million that was fully offset by non-cash charges, including depreciation and amortization of $12.5 million, amortization of debt discount and issuance costs of $4.4 million, share-based compensation expense of $3.8 million, loss on debt restructurings of $2.9 million, non-cash operating lease expense of $1.0 million, capitalized software impairments of $0.9 million, and a loss on extinguishment of our revolving credit facility of $0.8 million.
Investing activities.
Net cash used in investing activities during the year ended December 31, 2025 is primarily comprised of $8.6 million of cash outflows related to the development of software in support of our products and services.
Net cash provided by investing activities during the year ended December 31, 2024 was primarily comprised of cash flows from discontinued operations of $48.1 million related to the divestiture of the Telematics Business, partially offset by $5.0 million of cash outflows related to the development of software in support of our products and services and $0.1 million of property, plant and equipment purchases.
Financing activities.
Net cash used in financing activities during the year ended December 31, 2025 is primarily comprised of the repayment of the remaining $14.9 million 2025 Convertible Notes principal balance, partially offset by $1.0 million of cash received from exercises of common stock warrants.
Net cash used in financing activities during the year ended December 31, 2024 is primarily comprised of cash outflows of $33.8 million from the repurchases of a portion of our convertible notes, $19.5 million from the full repayment of the Company's Short-Term Loan and $4.9 million from the voluntary early termination and repayment of our revolving credit facility, partially offset by cash inflows of $19.4 million from the issuance of the Short-Term Loan, net of debt issuance costs.
Critical Accounting Estimates
Management's discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements which are prepared in accordance with accounting principles that are generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, related disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates and judgments, the most critical of which are those related to capitalization and subsequent valuation of externally marketed software development costs and inventory valuation. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known.
We believe that the following accounting estimates we have identified as critical involve a greater degree of judgment and complexity than our other accounting estimates. Accordingly, these are the estimates we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations. Refer to Note 1 - Nature of Business and Significant Accounting Policiesto our consolidated financial statements included elsewhere in this report for a summary of each of the related accounting policies.
Capitalization and Subsequent Valuation of Externally Marketed Software Development Costs
Estimates in the capitalization and subsequent valuation of externally marketed software development costs involve a significant level of estimation uncertainty include our estimates of what costs are capitalizable and when they're capitalizable, the proper useful life to amortize capitalized costs over, and the proper valuation of such capitalizable costs at each balance sheet date. These estimates are sensitive to determinations of project progress, expectations of the period over which the software will be sold, as well as forecasts of future demand for the externally marketed software. Any changes to such estimates, for example changes in the expected period over which the software will be sold, impact our consolidated financial results in periods subsequent to determining those estimates.
Inventory Valuation
Estimates in the valuation of inventory that involve a significant level of estimation uncertainty include our estimates of excess and obsolete inventory based on forecasts of future demand for our products in inventory. Any changes to such estimates, for example differences in actual sales versus our estimates of demand, or conversely, the ultimate sell-through of fully reserved inventory for which we did not anticipate any future demand, impact our consolidated financial results in periods subsequent to recording those estimates. Other than our forecasts of future demand, there are no assumptions inherent in our estimates in the valuation of inventory that would result in sensitivity of reported amounts to such assumptions.
Inseego Corp. published this content on February 20, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 20, 2026 at 11:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]