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Share Name | Share Symbol | Market | Type |
---|---|---|---|
KORE Group Holdings Inc | NYSE:KORE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.0386 | 4.98% | 0.8138 | 0.8621 | 0.78 | 0.81 | 40,434 | 22:27:33 |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 86-3078783 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
3 Ravinia Drive NE, Suite 500 Atlanta, Georgia | 30346 | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common stock, $0.0001 par value per share | KORE | The New York Stock Exchange | ||||||||||||
Warrants to purchase common stock | KORE WS | The New York Stock Exchange |
Large accelerated filer | o | Accelerated filer | o | ||||||||
Non-accelerated filer | x | Smaller reporting company | o | ||||||||
Emerging growth company | x |
Page No. | ||||||||
September 30, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash | $ | 42,925 | $ | 85,976 | |||||||
Accounts receivable, net of allowances for credits and doubtful accounts of $2,757 and $1,800, at September 30, 2022 and December 31, 2021, respectively | 41,237 | 51,304 | |||||||||
Inventories, net | 8,272 | 15,470 | |||||||||
Income taxes receivable | 711 | 954 | |||||||||
Prepaid expenses and other current assets | 13,316 | 7,448 | |||||||||
Total current assets | 106,461 | 161,152 | |||||||||
Non-current assets | |||||||||||
Restricted cash | 358 | 367 | |||||||||
Property and equipment, net | 12,141 | 12,240 | |||||||||
Intangibles assets, net | 201,260 | 203,474 | |||||||||
Goodwill | 425,604 | 381,962 | |||||||||
Operating lease right-of-use assets | 10,430 | — | |||||||||
Deferred tax assets | 566 | — | |||||||||
Other long-term assets | 653 | 407 | |||||||||
Total assets | $ | 757,473 | $ | 759,602 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 18,201 | $ | 16,004 | |||||||
Accrued liabilities | 14,290 | 21,502 | |||||||||
Current portion of operating lease liabilities | 1,872 | — | |||||||||
Income taxes payable | 381 | 467 | |||||||||
Deferred revenue | 7,012 | 6,889 | |||||||||
Current portion of long-term debt and other borrowings, net | 5,319 | 3,326 | |||||||||
Total current liabilities | 47,075 | 48,188 | |||||||||
Non-current liabilities | |||||||||||
Deferred tax liabilities | 29,926 | 36,722 | |||||||||
Warrant liability | 33 | 286 | |||||||||
Non-current portion of operating lease liabilities | 9,501 | — | |||||||||
Long-term debt and other borrowings, net | 414,683 | 399,115 | |||||||||
Other long-term liabilities | 4,794 | 3,148 | |||||||||
Total liabilities | $ | 506,012 | $ | 487,459 | |||||||
Stockholders’ equity | |||||||||||
Common stock, voting; par value $0.0001 per share; 315,000,000 shares authorized, 76,289,741 and 72,027,743 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | $ | 8 | $ | 7 | |||||||
Additional paid-in capital | 432,897 | 413,646 | |||||||||
Accumulated other comprehensive loss | (8,491) | (3,331) | |||||||||
Accumulated deficit | (172,953) | (138,179) | |||||||||
Total stockholders’ equity | 251,461 | 272,143 | |||||||||
Total liabilities and stockholders’ equity | $ | 757,473 | $ | 759,602 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Services | $ | 46,410 | $ | 48,428 | $ | 141,694 | $ | 139,866 | |||||||||||||||
Products | 20,230 | 19,450 | 64,240 | 44,053 | |||||||||||||||||||
Total revenue | 66,640 | 67,878 | 205,934 | 183,919 | |||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||
Cost of services | 16,609 | 17,379 | 50,714 | 51,417 | |||||||||||||||||||
Cost of products | 14,960 | 17,585 | 49,701 | 37,258 | |||||||||||||||||||
Total cost of revenue (exclusive of depreciation and amortization shown separately below) | 31,569 | 34,964 | 100,415 | 88,675 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Selling, general and administrative | 28,841 | 26,001 | 85,883 | 66,525 | |||||||||||||||||||
Depreciation and amortization | 13,709 | 12,440 | 40,679 | 37,947 | |||||||||||||||||||
Total operating expenses | 42,550 | 38,441 | 126,562 | 104,472 | |||||||||||||||||||
Operating loss | (7,479) | (5,527) | (21,043) | (9,228) | |||||||||||||||||||
Interest expense, including amortization of deferred financing costs, net | 8,206 | 5,589 | 22,127 | 16,155 | |||||||||||||||||||
Change in fair value of warrant liability | (120) | (2,898) | (253) | (5,281) | |||||||||||||||||||
Loss before income taxes | (15,565) | (8,218) | (42,917) | (20,102) | |||||||||||||||||||
Income tax expense (benefit) | |||||||||||||||||||||||
Current | 669 | 179 | 3,031 | 569 | |||||||||||||||||||
Deferred | (3,209) | (3,889) | (10,875) | (8,197) | |||||||||||||||||||
Total income tax benefit | (2,540) | (3,710) | (7,844) | (7,628) | |||||||||||||||||||
Net loss | $ | (13,025) | $ | (4,508) | $ | (35,073) | $ | (12,474) | |||||||||||||||
Loss per share: | |||||||||||||||||||||||
Basic | $ | (0.17) | $ | (0.26) | $ | (0.46) | $ | (0.98) | |||||||||||||||
Diluted | $ | (0.17) | $ | (0.26) | $ | (0.46) | $ | (0.98) | |||||||||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||||||
Basic | 76,240,530 | 32,098,715 | 75,514,986 | 31,799,313 | |||||||||||||||||||
Diluted | 76,240,530 | 32,098,715 | 75,514,986 | 31,799,313 | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net loss | $ | (13,025) | $ | (4,508) | $ | (35,073) | $ | (12,474) | |||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Foreign currency translation adjustment | (2,417) | (1,322) | (5,160) | (1,479) | |||||||||||||||||||
Comprehensive loss | $ | (15,442) | $ | (5,830) | $ | (40,233) | $ | (13,953) |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 72,028 | $ | 7 | $ | 413,646 | $ | (3,331) | $ | (138,179) | $ | 272,143 | ||||||||||||||||||||||||
— | — | (11,613) | — | 299 | (11,314) | ||||||||||||||||||||||||||||||
Adjusted opening balance | 72,028 | 7 | 402,033 | (3,331) | (137,880) | 260,829 | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | (184) | — | (184) | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | 2,050 | — | — | 2,050 | |||||||||||||||||||||||||||||
Common stock issued pursuant to acquisition | 4,212 | 1 | 23,294 | — | — | 23,295 | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | (10,907) | (10,907) | |||||||||||||||||||||||||||||
Balance at March 31, 2022 | 76,240 | $ | 8 | $ | 427,377 | $ | (3,515) | $ | (148,787) | $ | 275,083 | ||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | (2,559) | — | (2,559) | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | 2,501 | — | — | 2,501 | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | (11,141) | (11,141) | |||||||||||||||||||||||||||||
Balance at June 30, 2022 | 76,240 | $ | 8 | $ | 429,878 | $ | (6,074) | $ | (159,928) | $ | 263,884 | ||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | (2,417) | — | (2,417) | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | 3,019 | — | — | 3,019 | |||||||||||||||||||||||||||||
Vesting of restricted stock units | 50 | — | — | — | — | — | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | (13,025) | (13,025) | |||||||||||||||||||||||||||||
Balance at September 30, 2022 | 76,290 | $ | 8 | $ | 432,897 | $ | (8,491) | $ | (172,953) | $ | 251,461 |
Series A Preferred Stock | Series A-1 Preferred Stock | Series B Preferred Stock | Series C Convertible Preferred Stock | Total Temporary Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | Shares | Amount | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 (as previously reported) | 43 | $ | 77,562 | 60 | $ | 78,621 | 57 | $ | 90,910 | 17 | $ | 16,802 | $ | 263,895 | 218 | $ | 2 | $ | 135,617 | $ | (1,677) | $ | (113,726) | $ | 20,216 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of stock | 7,713 | — | 7,802 | — | 9,034 | — | 2,549 | — | — | 30,064 | 1 | (1) | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020, effect of reverse recapitalization | 7,756 | $ | 77,562 | 7,862 | $ | 78,621 | 9,091 | $ | 90,910 | 2,566 | $ | 16,802 | $ | 263,895 | 30,282 | $ | 3 | $ | 135,616 | $ | (1,677) | $ | (113,726) | $ | 20,216 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable | 249 | 2,486 | 267 | 2,666 | 224 | 2,241 | — | — | 7,393 | — | — | (7,393) | — | — | (7,393) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | (900) | — | (900) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | 315 | — | — | 315 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (1,081) | (1,081) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | 8,005 | $ | 80,048 | 8,129 | $ | 81,287 | 9,315 | $ | 93,151 | 2,566 | $ | 16,802 | $ | 271,288 | 30,282 | $ | 3 | $ | 128,538 | $ | (2,577) | $ | (114,807) | $ | 11,157 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derecognition of stock | — | — | — | — | — | — | (46) | (300) | (300) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable | 251 | 2,514 | 270 | 2,695 | 232 | 2,323 | — | — | 7,532 | — | — | (7,532) | — | — | (7,532) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | 743 | — | 743 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | 315 | — | — | 315 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (6,885) | (6,885) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 8,256 | $ | 82,562 | 8,399 | $ | 83,982 | 9,547 | $ | 95,474 | 2,520 | $ | 16,502 | $ | 278,520 | $ | 30,282 | $ | 3 | $ | 121,321 | $ | (1,834) | $ | (121,692) | $ | (2,202) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable | 266 | 2,656 | 288 | 2,880 | 236 | 2,361 | — | — | 7,897 | — | — | (7,897) | — | — | (7,897) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | (1,322) | — | (1,322) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | — | — | (3,519) | — | — | (3,519) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to and conversions of preferred stock | (8,522) | (85,218) | (8,687) | (86,862) | (9,783) | (97,835) | (2,520) | (16,502) | (286,417) | 7,120 | 1 | 56,502 | — | — | 56,503 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CTAC shares recapitalized, net of equity issuance costs of $15,912 | — | — | — | — | — | — | — | — | — | 10,356 | 1 | 6,456 | — | — | 6,457 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of KORE warrants | — | — | — | — | — | — | — | — | — | 1,366 | — | 10,663 | — | — | 10,663 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Private offering and merger financing, net of equity issuance costs of $7,718 | — | — | — | — | — | — | — | — | — | 22,686 | 2 | 217,280 | — | — | 217,282 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity portion of convertible debt, net of issuance costs of $224 | — | — | — | — | — | — | — | — | — | — | — | 12,510 | — | — | 12,510 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (4,508) | (4,508) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | — | — | — | — | — | — | — | — | — | 71,810 | $ | 7 | $ | 413,316 | $ | (3,156) | $ | (126,200) | $ | 283,967 |
Nine Months Ended | |||||||||||||||||
September 30, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
Cash flows from operating activities | |||||||||||||||||
Net loss | $ | (35,073) | $ | (12,474) | |||||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | |||||||||||||||||
Depreciation and amortization | 40,679 | 37,947 | |||||||||||||||
Amortization of deferred financing costs | 1,806 | 1,569 | |||||||||||||||
Non-cash reduction to the operating lease right-of-use assets | 1,678 | — | |||||||||||||||
Deferred income taxes | (10,875) | (8,197) | |||||||||||||||
Non-cash foreign currency loss (gain) | 1,566 | (163) | |||||||||||||||
Stock-based compensation | 7,570 | 4,564 | |||||||||||||||
Provision for doubtful accounts | 424 | 117 | |||||||||||||||
Change in fair value of warrant liability | (253) | (5,281) | |||||||||||||||
Change in operating assets and liabilities, net of operating assets and liabilities acquired: | |||||||||||||||||
Accounts receivable | 11,155 | (12,792) | |||||||||||||||
Inventories | 8,192 | (6,461) | |||||||||||||||
Prepaid expenses and other current assets | (1,934) | (5,054) | |||||||||||||||
Accounts payable and accrued liabilities | (3,756) | (2,366) | |||||||||||||||
Deferred revenue | 252 | (911) | |||||||||||||||
Income taxes payable | 144 | 63 | |||||||||||||||
Operating lease liabilities | (1,048) | — | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 20,527 | $ | (9,439) | |||||||||||||
Cash flows used in investing activities | |||||||||||||||||
Additions to intangible assets | (9,027) | (6,626) | |||||||||||||||
Additions to property and equipment | (2,945) | (3,156) | |||||||||||||||
Payments for acquisitions, net of cash acquired | (46,002) | — | |||||||||||||||
Net cash used in investing activities | $ | (57,974) | $ | (9,782) | |||||||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from revolving credit facility | — | 25,000 | |||||||||||||||
Repayments on revolving credit facility | — | (25,000) | |||||||||||||||
Repayment of term loan | (2,364) | (2,373) | |||||||||||||||
Repayment of other borrowings—notes payable | (507) | — | |||||||||||||||
Proceeds from convertible debt | — | 82,351 | |||||||||||||||
Proceeds from equity portion of convertible debt, net of issuance costs | — | 12,510 | |||||||||||||||
Payment of deferred financing costs, relating to convertible debt | — | (1,449) | |||||||||||||||
Repayment of related party note | — | (1,538) | |||||||||||||||
Proceeds from CTAC and PIPE financing, net of issuance costs | — | 223,001 | |||||||||||||||
Settlement of preferred shares | — | (229,915) | |||||||||||||||
Equity financing fees | (126) | — | |||||||||||||||
Payment of deferred financing costs | (452) | — | |||||||||||||||
Payment of financing lease obligations | (150) | — | |||||||||||||||
Payment of capital lease obligations | — | (815) | |||||||||||||||
Net cash (used in) provided by financing activities | $ | (3,599) | $ | 81,772 | |||||||||||||
Effect of exchange rate change on cash | (2,014) | (188) | |||||||||||||||
Change in cash and restricted cash | (43,060) | 62,363 | |||||||||||||||
Cash and restricted cash, beginning of period | 86,343 | 10,693 | |||||||||||||||
Cash and restricted cash, end of period | $ | 43,283 | $ | 73,056 |
Nine Months Ended | |||||||||||||||||
September 30, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
Supplemental cash flow information: | |||||||||||||||||
Interest paid | $ | 22,134 | $ | 14,762 | |||||||||||||
Income taxes paid | 1,587 | — | |||||||||||||||
Non-cash investing and financing activities: | |||||||||||||||||
Fair value of KORE common stock issued pursuant to acquisitions | $ | 23,295 | — | ||||||||||||||
ASU 2020-06 Adoption | 15,163 | — | |||||||||||||||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities upon the adoption of ASC 842 | 9,604 | — | |||||||||||||||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | 3,409 | — | |||||||||||||||
Premium Finance Agreement | 3,621 | — | |||||||||||||||
Capital leases | — | 346 | |||||||||||||||
Equity financing fees accrued | — | 3,025 | |||||||||||||||
Common shares issued to preferred shareholders | — | 56,502 | |||||||||||||||
Equity financing fees settled in common shares | — | 1,863 | |||||||||||||||
Common shares issued to warrant holders | — | 10,663 |
(In thousands, USD) | At December 31, 2021 | Adjustments due to ASC 842 | At January 1 2022 | |||||||||||||||||
Operating lease right-of-use assets | $ | — | $ | 9,278 | $ | 9,278 | ||||||||||||||
Current portion of operating lease liabilities | — | 2,121 | 2,121 | |||||||||||||||||
Non-current portion of operating lease liabilities | — | 7,483 | 7,483 | |||||||||||||||||
Current portion of capital lease liabilities included in Accrued liabilities | 191 | (191) | — | |||||||||||||||||
Current portion of finance lease liabilities included in Accrued liabilities | — | 191 | 191 | |||||||||||||||||
Non-current portion of capital lease liabilities included in Other long-term liabilities | 264 | (264) | — | |||||||||||||||||
Non-current portion of finance lease liabilities included in Other long-term liabilities | — | 264 | 264 | |||||||||||||||||
Accrued liabilities | 21,311 | (326) | 20,985 |
(In thousands, USD) | At December 31, 2021 | Adjustments due to ASU 2020-06 | At January 1, 2022 | |||||||||||||||||
Long-term debt and other borrowings, net | $ | 399,115 | $ | 15,163 | $ | 414,278 | ||||||||||||||
Additional paid-in capital | 413,646 | (11,613) | 402,033 | |||||||||||||||||
Deferred tax liabilities | 36,722 | (3,849) | 32,873 | |||||||||||||||||
Accumulated deficit | (138,179) | 299 | (137,880) |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(In thousands, USD) | September 30, | September 30, | ||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
IoT Connectivity* | $ | 42,911 | $ | 40,738 | $ | 129,714 | $ | 122,444 | ||||||||||||||||||
Hardware Sales | 16,807 | 19,221 | 56,747 | 40,602 | ||||||||||||||||||||||
Hardware Sales—bill-and-hold | 3,423 | 229 | 7,493 | 3,451 | ||||||||||||||||||||||
Deployment services, professional services, and other | 3,499 | 7,690 | 11,980 | 17,422 | ||||||||||||||||||||||
Total | $ | 66,640 | $ | 67,878 | $ | 205,934 | $ | 183,919 | ||||||||||||||||||
(In thousands, USD) | Classification in Statement of operations | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | |||||||||||||||||
Operating lease cost | Selling, general and administrative | $ | 951 | $ | 2,669 | |||||||||||||||
Finance lease cost | ||||||||||||||||||||
Amortization of leased assets | Depreciation and amortization | 93 | 289 | |||||||||||||||||
Interest on lease liabilities | Interest expense | 4 | 14 | |||||||||||||||||
Total lease cost | $ | 1,048 | $ | 2,972 |
(In thousands, USD) | At September 30, 2022 | |||||||
Assets | ||||||||
Finance lease right-of-use assets included in property and equipment, net | $ | 262 | ||||||
Liabilities | ||||||||
$ | 120 | |||||||
142 | ||||||||
Total finance lease liabilities | $ | 262 |
At September 30, 2022 | ||||||||
Weighted average remaining lease term (in years) | ||||||||
Operating leases | 7.80 | |||||||
Finance leases | 2.29 | |||||||
Weighted average discount rate: | ||||||||
Operating leases | 7.5 | % | ||||||
Finance leases | 5.4 | % |
Operating Leases | Finance Leases | |||||||||||||
(In thousands, USD) | Amount | Amount | ||||||||||||
From October 1, 2022 to December 31, 2022 | $ | 637 | $ | 24 | ||||||||||
2023 | 2,532 | 126 | ||||||||||||
2024 | 1,843 | 106 | ||||||||||||
2025 | 1,664 | 23 | ||||||||||||
2026 | 1,370 | — | ||||||||||||
Thereafter | 7,494 | — | ||||||||||||
Total minimum lease payments | 15,540 | 279 | ||||||||||||
Interest expense | (4,167) | (17) | ||||||||||||
Total | $ | 11,373 | $ | 262 |
(In thousands, USD) | Fair Value | ||||
Cash, (net of closing cash of $1,995) and working capital adjustments | $ | 46,002 | |||
Fair value of KORE common stock issued to sellers (4,212,246 shares) | 23,295 | ||||
Total consideration | $ | 69,297 | |||
Assets acquired: | |||||
Accounts receivable | 3,303 | ||||
Inventories | 1,323 | ||||
Prepaid expenses and other receivables | 976 | ||||
Property and equipment | 201 | ||||
Intangible assets | 28,664 | ||||
Total Assets acquired | 34,467 | ||||
Liabilities assumed: | |||||
Deferred tax liabilities | 7,391 | ||||
Accounts payable and accrued liabilities | 2,638 | ||||
Liabilities assumed | 10,029 | ||||
Net identifiable assets acquired | 24,438 | ||||
Goodwill (excess of consideration transferred over net identifiable assets acquired) | $ | 44,859 |
(In thousands, USD) | Amount | |||||||||||||
At December 31, 2021 | $ | 381,962 | ||||||||||||
Acquisitions | 44,859 | |||||||||||||
Currency translation | (1,217) | |||||||||||||
At September 30, 2022 | $ | 425,604 |
(In thousands, USD) | Post ASU 2020-06 At September 30, 2022 | Pre ASU 2020-06 At December 31, 2021 | ||||||||||||
Principal balances outstanding | $ | 120,000 | $ | 120,000 | ||||||||||
Net of unamortized debt issuance costs | 2,560 | 2,458 | ||||||||||||
Net of unamortized equity component costs | — | 15,517 | ||||||||||||
Net carrying amount(1) | $ | 117,440 | $ | 102,025 |
Shares | Percentage | ||||||||||
Pre-combination KORE shareholders | 38,767,500 | 54.0 | % | ||||||||
Public stockholders | 10,356,593 | 14.4 | % | ||||||||
Private offering and merger financing | 22,686,326 | 31.6 | % | ||||||||
Total | 71,810,419 | 100.0 | % |
Number of awards outstanding (in thousands) | Weighted- average grant date fair value (per share) | Aggregate intrinsic value (in thousands) | ||||||||||||||||||
Unvested RSUs at December 31, 2021 | — | $ | — | — | ||||||||||||||||
Granted | 5,789 | 6.24 | 36,101 | |||||||||||||||||
Vested | (50) | 6.88 | (342) | |||||||||||||||||
Forfeited and canceled | (158) | 6.97 | (1,104) | |||||||||||||||||
Unvested RSUs at September 30, 2022 | 5,580 | 34,655 |
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | ||||||||||||||
2022 | 2022 | |||||||||||||
Expected volatility | 57.1%-75.2% | 57.1%-75.2% | ||||||||||||
Risk-free interest rate | 1.37%-2.09% | 1.37%-2.09% |
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | ||||||||||||||
(In thousands, USD) | 2022 | 2022 | ||||||||||||
Total Stock Compensation Expense | $ | 3,019 | 7,570 |
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | |||||||||||||||||
(In thousands, USD) | 2021 | 2021 | |||||||||||||||
Total Stock Compensation Expense | $ | 3,933 | $ | 4,564 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(In thousands, USD, except share and per share amounts) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss attributable to the Company | $ | (13,025) | $ | (4,508) | $ | (35,073) | $ | (12,474) | |||||||||||||||
Less cumulative earnings to preferred shareholder | — | (7,897) | — | (22,822) | |||||||||||||||||||
Add premium on preferred conversion to common shares | — | 4,074 | — | 4,074 | |||||||||||||||||||
Net loss attributable to common stockholders | (13,025) | (8,331) | (35,073) | (31,222) | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average common shares and warrants outstanding* | |||||||||||||||||||||||
Basic (in number) | 76,240,530 | 32,098,715 | 75,514,986 | 31,799,313 | |||||||||||||||||||
Diluted (in number) | 76,240,530 | 32,098,715 | 75,514,986 | 31,799,313 | |||||||||||||||||||
Net loss per unit attributable to common stockholder | |||||||||||||||||||||||
Basic | $ | (0.17) | $ | (0.26) | $ | (0.46) | $ | (0.98) | |||||||||||||||
Diluted | $ | (0.17) | $ | (0.26) | $ | (0.46) | $ | (0.98) |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(Number of shares) | September 30, | September 30, | |||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Common stock issued under the Backstop Agreement | 9,600,031 | — | 9,600,031 | — | |||||||||||||||||||
Restricted stock grants with only service conditions | 3,840,501 | — | 3,468,900 | — |
(In thousands, USD) | September 30, 2022 | December 31, 2021 | ||||||||||||
Prepaid expenses | $ | 11,515 | $ | 6,418 | ||||||||||
Prepaid deposits | 1,801 | 1,030 | ||||||||||||
Total | $ | 13,316 | $ | 7,448 |
Three Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||
Services | $ | 46,410 | 70 | % | $ | 48,428 | 71 | % | $ | (2,018) | (4) | % | |||||||||||||||||||||||
Products | 20,230 | 30 | % | 19,450 | 29 | % | 780 | 4 | % | ||||||||||||||||||||||||||
Total Revenue | $ | 66,640 | 100 | % | $ | 67,878 | 100 | % | $ | (1,238) | (2) | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||
Services | $ | 141,694 | 69 | % | $ | 139,866 | 76 | % | $ | 1,828 | 1 | % | |||||||||||||||||||||||
Products | 64,240 | 31 | % | 44,053 | 24 | % | 20,187 | 46 | % | ||||||||||||||||||||||||||
Total Revenue | $ | 205,934 | 100 | % | $ | 183,919 | 100 | % | $ | 22,015 | 12 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||
IoT Connectivity | $ | 43,377 | 65 | % | $ | 41,542 | 61 | % | $ | 1,835 | 4 | % | |||||||||||||||||||||||
IoT Solutions | 23,263 | 35 | % | 26,336 | 39 | % | (3,073) | (12) | % | ||||||||||||||||||||||||||
Total Revenue | $ | 66,640 | 100 | % | $ | 67,878 | 100 | % | $ | (1,238) | (2) | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||
IoT Connectivity | $ | 133,402 | 65 | % | $ | 125,590 | 68 | % | $ | 7,812 | 6 | % | |||||||||||||||||||||||
IoT Solutions | 72,532 | 35 | % | 58,329 | 32 | % | 14,203 | 24 | % | ||||||||||||||||||||||||||
Total Revenue | $ | 205,934 | 100 | % | $ | 183,919 | 100 | % | $ | 22,015 | 12 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Period End Connections | 15.3 | million | 13.6 | million | 15.3 | million | 13.6 | million | |||||||||||||||
Average Connections Count for the Period | 15.3 | million | 13.5 | million | 15.2 | million | 13.1 | million |
Three Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||
Services | $ | 16,609 | 53 | % | $ | 17,379 | 50 | % | $ | (770) | (4) | % | |||||||||||||||||||||||
Products | 14,960 | 47 | % | 17,585 | 50 | % | (2,625) | (15) | % | ||||||||||||||||||||||||||
Total cost of revenue | $ | 31,569 | 100 | % | $ | 34,964 | 100 | % | $ | (3,395) | (10) | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||
Services | $ | 50,714 | 51 | % | $ | 51,417 | 58 | % | $ | (703) | (1) | % | |||||||||||||||||||||||
Products | 49,701 | 49 | % | 37,258 | 42 | % | 12,443 | 33 | % | ||||||||||||||||||||||||||
Total cost of revenue | $ | 100,415 | 100 | % | $ | 88,675 | 100 | % | $ | 11,740 | 13 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
Gross margin rate | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Services | 64 | % | 64 | % | 64 | % | 63 | % | |||||||||||||||
Products | 26 | % | 10 | % | 23 | % | 15 | % | |||||||||||||||
Total gross margins | 53 | % | 48 | % | 51 | % | 52 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||
IoT Connectivity | $ | 15,350 | 49 | % | $ | 16,111 | 46 | % | $ | (761) | (5) | % | |||||||||||||||||||||||
IoT Solutions | 16,219 | 51 | % | 18,853 | 54 | % | (2,634) | (14) | % | ||||||||||||||||||||||||||
Total cost of revenue | $ | 31,569 | 100 | % | $ | 34,964 | 100 | % | $ | (3,395) | (10) | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||
IoT Connectivity | $ | 47,673 | 47 | % | $ | 48,729 | 55 | % | $ | (1,056) | (2) | % | |||||||||||||||||||||||
IoT Solutions | 52,742 | 53 | % | 39,946 | 45 | % | 12,796 | 32 | % | ||||||||||||||||||||||||||
Total cost of revenue | $ | 100,415 | 100 | % | $ | 88,675 | 100 | % | $ | 11,740 | 13 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
Gross margin rate | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
IoT Connectivity | 65 | % | 61 | % | 64 | % | 61 | % | |||||||||||||||
IoT Solutions | 30 | % | 28 | % | 27 | % | 32 | % | |||||||||||||||
Total gross margins | 53 | % | 48 | % | 51 | % | 52 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||
Selling, general, and administrative | 28,841 | $ | 26,001 | $ | 2,840 | 11 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||
Selling, general, and administrative | 85,883 | $ | 66,525 | $ | 19,358 | 29 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||
Depreciation and amortization | $ | 13,709 | $ | 12,440 | $ | 1,269 | 10 | % |
Nine months ended September 30, | Change | ||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||
Depreciation and amortization | $ | 40,679 | $ | 37,947 | $ | 2,732 | 7 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||
Interest expense, including amortization of deferred financing costs, net | $ | 8,206 | $ | 5,589 | $ | 2,617 | 47 | % | |||||||||||||||
Change in fair value of warrant liability | (120) | (2,898) | 2,778 | (96) | % | ||||||||||||||||||
Total other expense | $ | 8,086 | $ | 2,691 | $ | 5,395 | 200 | % |
Nine months ended September 30, | Change | ||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||
Interest expense, including amortization of deferred financing costs, net | $ | 22,127 | $ | 16,155 | $ | 5,972 | 37 | % | |||||||||||||||
Change in fair value of warrant liability | (253) | (5,281) | 5,028 | (95) | % | ||||||||||||||||||
Total other expense | $ | 21,874 | $ | 10,874 | $ | 11,000 | 101 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||
Income tax benefit | $ | (2,540) | $ | (3,710) | $ | 1,170 | (32) | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | $ | % | |||||||||||||||||||
Income tax benefit | $ | (7,844) | $ | (7,628) | $ | (216) | 3 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands, USD) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net loss | $ | (13,025) | $ | (4,508) | $ | (35,073) | $ | (12,474) | |||||||||||||||
Income tax benefit | (2,540) | (3,710) | (7,844) | (7,628) | |||||||||||||||||||
Interest expense | 8,206 | 5,589 | 22,127 | 16,155 | |||||||||||||||||||
Depreciation and amortization | 13,709 | 12,440 | 40,679 | 37,947 | |||||||||||||||||||
EBITDA | 6,350 | 9,811 | 19,889 | 34,000 | |||||||||||||||||||
Change in Fair value of warrant liability (non-cash) | (120) | (2,898) | (253) | (5,281) | |||||||||||||||||||
Transformation expenses | 2,461 | 2,424 | 5,927 | 6,174 | |||||||||||||||||||
Acquisition and integration-related restructuring costs | 2,604 | 2,772 | 11,688 | 7,290 | |||||||||||||||||||
Stock-based compensation (non-cash) | 3,019 | 3,933 | 7,570 | 4,564 | |||||||||||||||||||
Foreign currency loss (non-cash) | 1,077 | (240) | 1,566 | (163) | |||||||||||||||||||
Other | 180 | 94 | 715 | 390 | |||||||||||||||||||
Adjusted EBITDA | $ | 15,571 | $ | 15,896 | $ | 47,101 | $ | 46,974 |
Exhibit Number | Exhibit Description | ||||
31.1* | |||||
31.2* | |||||
32.1** | |||||
32.2** | |||||
101.INS | Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
KORE Group Holdings, Inc. | ||||||||
Date: November 14, 2022 | By: | /s/ Romil Bahl | ||||||
Romil Bahl | ||||||||
President and Chief Executive Officer (Principal Executive Officer) |
Date: November 14, 2022 | By: | /s/ Paul Holtz | ||||||
Paul Holtz | ||||||||
Executive Vice President Chief Financial Officer and Treasurer (Principal Financial Officer) |
1 Year KORE Chart |
1 Month KORE Chart |
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