Inseego (NASDAQ:INSG) Corp., a communications equipment company with a market capitalization of $167.2 million and an impressive year-to-date return of 408%, announced today that it has filed two registration statements with the Securities and Exchange Commission (SEC). The filings aim to register shares of common stock related to recent capital structure transactions and incentive plans. According to InvestingPro analysis, the stock currently trades at $11.18 and appears to be slightly undervalued based on their proprietary Fair Value model.
The company, based in San Diego, California, filed a Form S-1 registration statement to meet obligations regarding shares of common stock issued to noteholders. These shares were part of an exchange in connection with the company's efforts to reduce debt, which is particularly significant given that InvestingPro data shows the company's short-term obligations currently exceed its liquid assets.
Specifically, the move involves repurchasing or exchanging outstanding 3.25% convertible notes due in 2025. The Form S-1 is not yet effective and will be reviewed by the SEC. The company plans to issue a final prospectus once the registration statement becomes effective.
Additionally, Inseego filed a Form S-8 registration statement to register additional shares for its 2018 Omnibus Incentive Compensation Plan and Amended and Restated 2000 Employee Stock Purchase Plan. These plans were approved by stockholders on September 23, 2024.
The company clarified that the registration statements do not increase the number of currently outstanding shares, which was 14,959,594 as of December 11, 2024. The information provided in the SEC filing is considered furnished and not filed for purposes of liabilities under the Exchange Act, and not incorporated by reference into the company’s filings under the Securities Act or the Exchange Act.
The common stock of Inseego is traded on the Nasdaq Global Select Market under the ticker symbol INSG. While the company is not currently profitable, InvestingPro analysts project profitability this year, with an EPS forecast of $0.03. The company's Chief Financial Officer, Steven Gatoff, signed off on the SEC filing dated today. The information is based on a press release statement. For deeper insights into Inseego's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Inseego Corp completed the sale of its global telematics business to Ctrack Holdings for $52 million, a move aligned with the company's strategy to focus on its core 5G offerings. The company has also reported robust growth in its Q3 revenue, marking a substantial 27% increase to reach $61.9 million, driven by strong carrier promotions and the expansion of its SaaS management platform.
Inseego managed to reduce its long-term senior debt from over $160 million to $41 million, a significant stride in restructuring its financial position. Analysts at TD Cowen maintained a Hold rating on Inseego but lowered the price target from $20.00 to $16.00 due to concerns about the company's growth prospects. However, Roth/MKM upgraded Inseego's stock rating from Neutral to Buy, citing a significant reduction in net debt and robust growth in the company's core products.
Inseego is in the process of appointing a new CEO, a decision expected to be finalized in Q1 of 2025. Despite a merger involving a major U.S. carrier customer causing sales pressure in its fixed wireless segment, Inseego managed to improve its gross margin to approximately 38%. The company is focusing on diversifying its revenue base and improving gross margins.
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