XML 24 R12.htm IDEA: XBRL DOCUMENT v3.25.1
Debt
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Debt Debt
2029 Senior Secured Notes
On November 6, 2024, the Company issued to multiple noteholders approximately $40.9 million in principal amount of new senior secured notes due in 2029 (the “2029 Senior Secured Notes”). The 2029 Senior Secured Notes bear interest at 9.0% per annum, to be paid in cash, in arrears, on a semi-annual basis, and have a maturity date of May 1, 2029. The Company may, subject to certain provisions, issue additional principal amounts of the 2029 Senior Secured Notes with the same terms as the notes issued on November 6, 2024, with the exception of the first date on which interest expense begins to accrue.
The 2029 Senior Secured Notes are secured by a first priority lien on substantially all of the Company’s assets. The Company may redeem all or part of the 2029 Senior Secured Notes at any time prior to May 1, 2029 at a redemption price equal to 100% of the principal amount of the 2029 Senior Secured Notes to be redeemed, plus the present value of the sum of all required interest payments from such redemption date through May 1, 2029 at such redemption date, plus accrued and unpaid interest on such 2029 Senior Secured Notes to, but excluding, the redemption date.
As of March 31, 2025, $40.9 million of principal of the 2029 Senior Secured Notes was outstanding, $31.8 million of which was held by related parties.
The 2029 Senior Secured Notes, net consists of the following (in thousands):
March 31,
2025		December 31,
2024
Principal gross amount$40,879 $40,879 
Add: unamortized debt premium1,527 1,621 
Less: unamortized issuance costs(631)(670)
Net carrying amount$41,775 $41,830 
2025 Convertible Notes
In 2020, the Company completed both a registered public offering and a privately negotiated exchange agreement that resulted in the issuance of 3.25% convertible senior notes due in 2025 (the “2025 Convertible Notes”).
The 2025 Convertible Notes matured on May 1, 2025. The 2025 Convertible Notes were senior unsecured obligations of the Company and bore interest at an annual rate of 3.25%, which was payable semi-annually in arrears on May 1 and November 1 of each year.
Repurchases and Exchanges of 2025 Convertible Note
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, 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, 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.
As of both March 31, 2025 and December 31, 2024, $14.9 million of principal amount of the 2025 Convertible Notes was outstanding, none of which was held by related parties.
The 2025 Convertible Notes consist of the following (in thousands):
March 31,
2025		December 31,
2024
Principal$14,949 $14,949 
Add: fair value of embedded derivative — $— 
Less: unamortized debt discount (6)$(25)
Less: unamortized issuance costs(5)$(19)
Net carrying amount$14,938 $14,905 
The 2025 Convertible Notes reached maturity and were repaid in full, including all accrued interest, on May 1, 2025.
Asset-backed Revolving Credit Facility
In August 2022, the Company entered into a Loan and Security Agreement (as subsequently amended, the “Credit Agreement”), by and among Siena Lending Group LLC, as lender (“Lender”), Inseego Wireless, Inc., a Delaware corporation (“Inseego Wireless”), a subsidiary of the Company, and Inseego North America LLC, an Oregon limited liability company and indirect subsidiary of the Company, as borrowers (together with Inseego Wireless, the “Borrowers”), and the Company, as guarantor (together with the Borrowers, the “Credit Facility Parties”).
The Credit Agreement established a secured asset-backed revolving credit facility which was comprised of a maximum $50 million revolving credit facility (“Credit Facility”), with a minimum borrowing amount for interest calculations of $4.5 million upon execution of the Credit Agreement. Availability under the Credit Facility was determined monthly by a borrowing base comprised of a percentage of eligible accounts receivable and eligible inventory of the Borrowers. Outstanding amounts exceeding the borrowing base were to be repaid immediately. The Borrowers’ obligations under the Credit Agreement were guaranteed by the Company. The Credit Facility Parties’ obligations under the Credit Agreement were secured by a continuing security interest in all property of each Credit Facility Party, subject to certain Excluded Collateral (as defined in the Credit Agreement).
On May 2, 2023, (1) two related parties, South Ocean Funding, LLC and North Sound Ventures, LP (collectively, the “Credit Facility Participants”) collectively purchased a $4.0 million last-out subordinated participation interest in the Credit Agreement (the “Credit Facility Participation Interest”) from the Lender, and (2) the Borrowers entered into an amendment to the Credit Agreement which increased the borrowing base under the Credit Facility by $4.0 million, increased the minimum borrowing amount for interest calculations to $8.5 million, and modified certain covenants. In connection with the purchase of the Credit Facility Participation Interest, we agreed to pay the Credit Facility Participants an aggregate exit fee (the “Exit Fee”) ranging from 7.5% to 12.5% of the amount of the Credit Facility Participation Interest, payable upon the earlier to occur of (a) the maturity date of the Credit Facility, (b) termination of the Lender’s commitment to make revolving loans prior to the scheduled maturity date of the Credit Facility, and (c) the early redemption of the Credit Facility Participation Interest, as applicable. Further, the purchase of the Credit Facility Participation Interest granted an option for the Credit Facility Participants to purchase the subject revolving loan or to redeem its Credit Facility Participation Interest under certain circumstances. The Credit Facility Participants are each affiliates of beneficial holders of greater than five percent of our outstanding common stock.
Effective April 18, 2024, the Company exercised its right to voluntarily pay-off and terminate the Credit Facility.
Interest Expense, Summary
The following table sets forth total interest expense, annualized effective interest rate, and interest expense related to related parties, if applicable, for each of the debt instruments detailed above (in thousands, except for percentages):
Three Months Ended
March 31,
20252024
2029 Senior Secured Notes
Contractual interest expense$920 $— 
Amortization of debt issuance costs38 — 
Amortization of debt discount/premium(93)— 
Total interest expense$865 $— 
Related party interest expense$672 $— 
2025 Convertible Notes
Contractual interest expense$121 $1,315 
Amortization of debt issuance costs15 165 
Amortization of debt discount/premium18 207 
Total interest expense$154 $1,687 
Related party interest expense$— $209 
Credit Facility
Contractual interest expense$— $222 
Accretion of exit fee— 75 
Amortization of debt issuance costs— 117 
Total interest expense$— $414 
Other interest expense$7 $78 
Consolidated interest expense$1,026 $2,179 
The annualized effective interest rates, including the impact of non-cash interest expense, for the 2029 Senior Secured Notes and 2025 Convertible Notes for the three months ended March 31, 2025 was 8.5% and 4.1%, respectively. The annualized effective interest rates, including the impact of non-cash interest expense, for the 2025 Convertible Notes and Credit Facility for the three months ended March 31, 2024 was 4.2% and 29.7%, respectively.