Inseego Corp. (Nasdaq: INSG) (the “Company”), a pioneer in 5G and intelligent IoT device-to-cloud solutions, today announced that it has commenced an underwritten public offering (the “Offering”), subject to market and other conditions, of an aggregate of $100.0 million in principal amount of its convertible senior notes due 2025 (the “Notes”). The Company expects to grant the underwriters a 30-day option to purchase up to an additional $15.0 million in aggregate principal amount of the Notes in connection with the Offering, solely to cover over-allotments.
The Notes will be senior unsecured obligations of the Company and will accrue interest payable semi-annually in arrears. The Notes will mature on May 1, 2025, unless earlier repurchased, redeemed or converted. Holders of the Notes will be able to convert their Notes into shares of our common stock at their option, at any time, until the close of business on the scheduled trading day immediately before the maturity date. Under certain circumstances, the Notes will be redeemable, in whole or in part, for cash at our 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. The interest rate, initial conversion rate and other terms of the Notes will be determined at the time of the pricing of the Offering. Immediately following the Offering, the Company intends to exchange approximately $44.8 million principal amount of its existing 5.50% convertible senior notes due 2022 for a combination of cash and $75.0 million principal amount of Notes in concurrent private placement transactions (the “Private Exchange Transactions”). Notes issued in the Private Exchange Transactions will be part of the same series as the Notes issued in the Offering, but will be subject to certain transfer restrictions that will not be applicable to the Notes issued in the Offering. The Offering is not conditioned upon the closing of the Private Exchange Transactions, but the Private Exchange Transactions are conditioned upon the closing of the Offering.
The Company intends to use a portion of the net proceeds from the Offering (i) to repay in full and terminate its existing credit agreement, which currently carries interest at a rate of 9.24% per annum, and (ii) to pay the cash consideration due in connection with the Private Exchange Transactions. The Company intends to use the remainder of the net proceeds from the Offering for general corporate purposes.
Stifel is acting as the sole book-running manager for the Offering.
The Offering will be conducted pursuant to an automatic shelf registration statement (including a base prospectus) that was filed by the Company with the Securities Exchange Commission (the “SEC”) on May 7, 2020 and became immediately effective, and a preliminary prospectus supplement related to the Offering that has been or will be filed with the SEC. The preliminary prospectus supplement and the accompanying prospectus relating to and describing the terms of the proposed offering are or will be available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to the Offering may also be obtained, when available, by contacting Stifel, Nicolaus & Company, Incorporated at Stifel, Nicolaus & Company, Incorporated, Attn: Syndicate, One Montgomery Street, Suite 3700, San Francisco, CA 94104, by telephone at 415-364-2720 or by email at syndprospectus@stifel.com. We also intend to file a final prospectus supplement related to the Offering with the SEC. Before investing in the Notes, investors should read the prospectus supplement and the accompanying prospectus carefully, including the documents incorporated by reference therein.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
