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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware |
86-3078783 | |
(State incorporation) |
(I.R.S. Employer Identification No.) | |
3700 Mansell Road, Suite 300 Alpharetta, |
30022 | |
(Adress of principal executive office) |
(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 |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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• |
“Backstop Agreement” are to that certain backstop agreement dated July 27, 2021 between KORE Wireless Group, Inc., a wholly owned subsidiary of KORE, and Drawbridge Special Opportunities Fund LP, an affiliate of Fortress Credit Corp., in connection with the Backstop Financing, as amended November 15, 2021; |
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“Backstop Financing” are to the backstop financing to be provided by an affiliate of Fortress Credit Corp. pursuant to the Backstop Agreement and the Commitment Letter; |
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“Backstop Notes” are to the senior unsecured convertible notes in an aggregate principal amount of $120,000,000 issued by KORE Wireless Group, Inc. pursuant to the Backstop Financing and the Commitment Letter; |
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“Business Combination” are to the Pubco Merger, First Merger and Second Merger; |
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“CaaS” are to Connectivity-as-a-Service; |
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“CEaaS” are to Connectivity Enablement-as-a-Service; |
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“Closing” are to the consummation of the Transactions; |
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“Code” are to the Internal Revenue Code of 1986, as amended; |
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“Commitment Letter” are to that certain commitment letter dated as of September 21, 2021, and countersigned on October 1, 2021, by and among an affiliate of Fortress Credit Corp., KORE, Corp Merger Sub and LLC Merger Sub; |
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“Commitment Letter Financing” are to the financing under the Commitment Letter; |
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“Corp Merger Sub” are to King Corp Merger Sub, Inc.; |
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“COVID-19” are to SARS-CoV-2 COVID-19, any evolution or variations existing as of or following the date of the Merger Agreement, or any epidemics, pandemics or disease outbreaks; |
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“DGCL” are to the Delaware General Corporation Law, as amended; |
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“eSIM” or embedded subscriber identity module, is a form of programmable SIM. It provides the capability to store multiple network profiles that can be provisioned and managed over-the-air; |
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“eUICC” or embedded universal integrated circuit card is a form of programmable SIM card, often referred to as eSIM. It provides the capability to store multiple network profiles that can be provisioned and managed over-the-air; |
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“Exchange Act” are to the Securities Exchange Act of 1934, as amended; |
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“GAAP” are to generally accepted accounting principles in the United States; |
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“GNSS Receiver” are to a global navigation satellite system receiver which is integral to an electronic device that receives and digitally processes the signals from a navigation satellite constellation in order to allow the functioning of GPS systems and other location based devices; |
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“Incentive Plan” are to the KORE 2021 Incentive Award Plan; |
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“IoT” are to Internet of Things; |
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“KORE Common Stock” are to the shares of common stock of KORE, par value $0.0001 per share; |
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“KORE Wireless” are to KORE Wireless Group Inc., a Delaware corporation and wholly owned and principal operating subsidiary of KORE; |
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“LLC Merger Sub” are to King LLC Merger Sub, LLC; |
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“LTE” Long-Term Evolution is a standard for wireless broadband communication for mobile devices and data terminals, based on the GSM/EDGE and UMTS/HSPA standards; |
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“Merger Agreement” are to that certain Agreement and Plan of Merger, dated as of March 12, 2021, as amended on July 27, 2021 and September 21, 2021, by and among CTAC, KORE, Corp Merger Sub, LLC Merger Sub and Maple Holdings Inc.; |
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“Mergers” are to the First Merger and Second Merger, collectively; |
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“NYSE” is to the New York Stock Exchange; |
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“mPERS” are to mobile Personal Emergency Response System; |
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“PIPE” are to Private Investment in Public Equity; |
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“PIPE Investment” are to the private placement pursuant to which CTAC entered into subscription agreements (containing commitments to funding that are subject only to conditions that generally align with the conditions set forth in the Merger Agreement) with certain investors whereby such investors agreed to purchase an aggregate of 22,500,000 shares of KORE Common Stock at a purchase price of $10.00 per share for an aggregate commitment of $225,000,000; |
• |
“PIPE Investors” are to the investors participating in the PIPE Investment; |
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“SaaS” are to software-as-a-service; |
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“SEC” are to the United States Securities and Exchange Commission; |
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“Shareholder Representative” are to ABRY Partners VII, L.P., or such other person or entity who is identified as the replacement Shareholder Representative by the then existing Shareholder Representative giving prior written notice to KORE; |
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“Sponsor” are to Cerberus Telecom Acquisition Holdings, LLC, a Delaware limited liability company; |
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“Subscription Agreements” are to the subscription agreements entered into by and between CTAC and the PIPE Investors, in each case, dated as of March 12, 2021 in connection with the PIPE Investment; |
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“Transactions” are to, collectively, the Business Combination and the other transactions contemplated by the Merger Agreement and the other related transaction agreements; |
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“Treasury Regulations” are to the regulations promulgated under the Code; and |
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“Warrant Agreement” are to a certain warrant agreement entered into by and between CTAC and Continental Stock Transfer & Trust Company, dated as of October 26, 2020. |
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our ability to develop and introduce new products and services successfully; |
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our ability to compete in the market in which we operate; |
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our ability to meet the price and performance standards of the evolving 5G New Radio products and technologies; |
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our ability to expand our customer reach/reduce customer concentration; |
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our ability to grow the IoT and mobile portfolio outside of North America; |
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our ability to make scheduled payments on or to refinance our indebtedness; |
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our ability to introduce and sell new products that comply with current and evolving industry standards and government regulations; |
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our ability to develop and maintain strategic relationships to expand into new markets; |
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our ability to properly manage the growth of our business to avoid significant strains on our management and operations and disruptions to our business; |
• |
our reliance on third parties to manufacture components of our solutions; |
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our ability to accurately forecast customer demand and timely delivery of sufficient product quantities; |
• |
our reliance on sole source suppliers for some products, services and devices used in our solutions; |
• |
the continuing impact of uncertain global economic conditions on the demand for our products; |
• |
the impact of geopolitical instability on our business; |
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the emergence of global public health emergencies, such as the outbreak of the 2019 novel coronavirus, now known as “COVID-19,” which could extend lead times in our supply chain and lengthen sales cycles with our customers; |
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direct and indirect effects of COVID-19 on our employees, customers and supply chain and the economy and financial markets; |
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the impact that new or adjusted tariffs may have on the costs of components or our products, and our ability to sell products internationally; |
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our ability to be cost competitive while meeting time-to-market |
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our ability to meet the product performance needs of our customers in wireless broadband data access markets; |
• |
demand for software-as-a-service |
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our dependence on wireless telecommunication operators delivering acceptable wireless services; |
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the outcome of any pending or future litigation, including intellectual property litigation; |
• |
infringement claims with respect to intellectual property contained in our solutions; |
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our continued ability to license necessary third-party technology for the development and sale of our solutions; |
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the introduction of new products that could contain errors or defects; |
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conducting business abroad, including foreign currency risks; |
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the pace of 5G wireless network rollouts globally and their adoption by customers; |
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our ability to make focused investments in research and development; |
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our ability to identify suitable acquisition candidates or to successfully integrate and realize the benefits of our past or future strategic acquisitions or investments, including our acquisitions of Business Mobility Partners Inc. and SIMON IoT LLC; |
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our ability to hire, retain and manage additional qualified personnel to maintain and expand our business; |
• |
the potential liquidity and trading of public securities; and |
• |
the ability to raise financing in the future. |
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The 5G market may take longer to materialize than KORE expects or, if it does materialize rapidly, KORE may not be able to meet the development schedule and other customer demands. |
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KORE’s development and investments in new technologies, may not generate operating income or contribute to future results of operations that meet its expectations. |
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If KORE is unable to support customers with low latency and/or high throughput IoT use cases, its revenue growth and profitability will be harmed. |
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If KORE is unable to effectively manage its increasingly diverse and complex businesses and operations, its ability to generate growth and revenue from new or existing customers may be adversely affected. |
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The loss of KORE’s largest customers, particularly its single largest customer, could significantly impact its revenue and profitability. |
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KORE’s products are highly technical and may contain undetected errors, product defects, security vulnerabilities, or software errors. |
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If there are interruptions or performance problems associated with the network infrastructure used to provide KORE’s services, customers may experience service outages, which may impact KORE’s reputation and future sales. |
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KORE’s inability to adapt to rapid technological change in its markets could impair its ability to remain competitive and adversely affect its results of operations. |
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The market for the products and services that KORE offers is rapidly evolving and highly competitive. KORE may be unable to compete effectively. |
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If KORE is unable to protect its intellectual property and proprietary rights, its competitive position and its business could be harmed. |
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Failure to maintain the security of KORE’s information and technology networks, including information relating to its customers and employees, could adversely affect KORE. |
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KORE’s internal and customer-facing systems, and systems of third parties they rely upon, may be subject to cybersecurity breaches, disruptions, or delays. |
• |
KORE is subject to evolving privacy laws that are subject to potentially differing interpretations in the United States as well as other jurisdictions that can adversely impact its business and require that it incur substantial costs. |
• |
KORE’s technology contains third-party open-source software components and failure to comply with the terms of the underlying open-source software licenses could restrict KORE’s ability to provide its platform. |
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KORE faces risks inherent in conducting business internationally, including compliance with international as well as U.S. laws and regulations that apply to its international operations. |
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KORE may be subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm its business, financial condition and results of operations. |
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KORE may be affected by fluctuations in currency exchange rates. |
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KORE’s management has identified internal control deficiencies that have resulted in material weaknesses in its internal control over financial reporting. |
• |
KORE’s future capital needs are uncertain, and KORE may need to raise additional funds in the future, but may not be able to raise such additional funds on acceptable terms or at all. |
• |
KORE has a history of losses and may not be able to achieve or sustain profitability in the future. |
ITEM 1. |
BUSINESS |
December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenue |
$ |
248,217 |
$ |
213,760 |
$ |
169,152 |
||||||
Net loss |
(24,453 |
) |
(35,201 |
) |
(23,443 |
) | ||||||
Adjusted EBITDA |
59,754 |
57,819 |
50,885 |
• |
Connected Health: Remote patient monitoring and telemedicine enabled by connected medical devices, IoT device enabled clinical drug trials, mPERS connected emergency devices, connected medical equipment diagnostics, electronic visit verification. |
• |
Fleet Management: Stolen vehicle recovery location tracking, connected cameras for tracking vehicle driving conditions and driver behavior, connected route optimization, fuel consumption optimization, connected preventive maintenance, usage-based insurance, connected cars. |
• |
Asset Monitoring: Home/business security sensor and camera solutions, offender tracking through ankle bracelets, tank monitoring, supply chain inventory and asset tracking, fuel pipeline flow monitoring. |
• |
Communication Services: IoT and consumer service providers, carrier IoT business units, enterprise connectivity / failsafe, private networking—KORE may provide CEaaS for some of these customers. |
• |
Industrial IoT: Smart utilities / meters, smart cities / buildings, smart factories, field service automation, manufacturers of smart or connected products. |
Product line |
Products |
Product description |
Primary pricing method | |||
IoT Connectivity 68% and 74% of full year 2021 and 2020 revenue, respectively |
IoT Connectivity as a Service (CaaS) |
• IoT Connectivity services offered through our market leading IoT platform ‘KORE One’ ™ • Our connectivity solutions allow devices to seamlessly and securely connect anywhere in the world across any connected network, which we call our multiple devices, multiple locations, multiple carriers CaaS multi-value proposition • IoT Connectivity Management Platform as a Service (or individual KORE One engine) • Cellular Core Network as a Service (Cloud Native Evolved Packet Core “EPC”) |
Per subscriber per month for lifetime of device (7-10 years and growing)Multi-year contracts with automatic renewals | |||
IoT Connectivity Enablement as a Service (CEaaS) | ||||||
IoT Solutions 32% and 26% of full year 2021 and 2020 revenue, respectively |
IoT Device Management Services |
• Outsourced platform-enabled services (e.g., logistics, configuration, device management) Sourcing of third-party devices globally, device design and selection services |
Upfront fee per device or per device per month | |||
IoT Security Location Based Services (LBS) |
• KORE’s SecurityPro ® SaaS platform• KORE’s PositionLogic ® SaaS platform and LBS APIs |
Per subscriber per month | ||||
• |
IoT Device Management Services: outsourced platform enabled services (logistics, configuration, device management). Among other logistics services, KORE offers access to a global supply chain and a global supply base at competitive prices which may include custom device design and manufacture; |
• |
Location Based Services: KORE’s SaaS cloud-based APIs (Position Logic ® ) platform for location and asset tracking; and |
• |
IoT Security (SecurityPro ® ): KORE’s SaaS platform for deep-network behavior-mining IoT device security. |
• |
Massive TAM and Disruptive End-Market Use Cases. KORE believes that 5G adoption will result in an addressable market of $13.2 trillion globally by 2035. Market growth is expected to be driven by key segments including smart manufacturing, mobile, smart city, intelligent retail, construction and mining, connected healthcare, and precision agriculture. |
• |
KORE Touchpoints. KORE expects to be the leading enabler of 5G adoption across 5G IoT, 5G broadband, and 5G ultra reliable segments because it: |
• |
Provides 5G connectivity and simplified management with 5G-ready eSIM and eUICC technology and multi-value proposition enabled by the proprietary KORE One platform. |
• |
Enables seamless transition to 5G with its strength in carrier relationships and experience in managing network transitions. |
• |
Accelerates 5G use cases with pre-configured solutions and an industry-specific IoT Managed Services portfolios. |
• |
Enables edge deployments with a roadmap for a fully virtualized multi-carrier gateway on the Edge (KORE Anywhere). |
• |
Enables private network deployments with a fully virtualized core network (Cloud Native Evolved Packet Core “EPC”). |
• |
Leveraging eSIMs coupled with eUICC Technology. eSIMs coupled with eUICC technologies are next-generation technologies driving rapid adoption of Enterprise IoT Connectivity. According to Ericsson, there is a massive growth of new IoT-connected devices expected to come online, with approximately 25 billion devices by 2025. One of the bigger challenges to achieving this growth is current SIM card technology. Today, the vast majority of cellular connected devices are using SIM cards which are locked into a specific cellular carrier. eSIMs and eUICC technology offers several benefits over traditional SIM card technology, including: |
• |
Enables devices to store multiple operator profiles on a device simultaneously and switch between them remotely. |
• |
Allows remote updates. |
• |
Permits remote SIM provisioning of any mobile device. |
• |
Delivers an effective way to significantly increase data security. |
• |
Offers protection from evolving network technologies, such as the retirement of legacy services like 2G and 3G. In some cases, eSIM technology plays a critical role providing secure out-of-the |
• |
For IoT Connectivity services: telecom carriers such as T-Mobile and Vodafone; Mobile Virtual Network Operators such as Aeris, Wireless Logic; and Twilio, Inc. |
• |
For IoT Solutions and Analytics: device management services providers such as Velocitor Solutions and Futura Mobility, fleet management SaaS providers such as Fleetmatics and GPS Trackit, and analytics services providers such as Galooli and Intellisite. |
• |
Significant organic volume growth from existing customer base: Leveraging strong IoT industry momentum with the average customer growing at double digit growth rates, maintaining high customer retention, and leveraging eSIMs to gain wallet share and market share. |
• |
Cross-sell and upsell KORE’s growing portfolio of IoT Solutions to our large base of IoT Connectivity services only customers: 23 of KORE’s top 30 customers are IoT Connectivity services-only customers and do not yet buy the IoT Solutions that KORE has developed over the past two years. |
• |
Deepening our presence in focused industry sectors: Leverage KORE’s presence in Connected Health and Fleet Management, deepening its presence in other verticals in the next 12 to 18 months, and deploying pre-configured industry solutions. |
• |
Enhance “AIoT” (Artificial Intelligence + IoT) and Edge Analytics capabilities in target industries. |
• |
Drive growth through strategic, accretive acquisitions, which add key capabilities. |
• |
KORE’s IoT Connectivity Services: |
• |
CaaS TM ® , KORE eSIM, and Cloud Native Evolved Packet Core “EPC” |
• |
CEaaS ® |
• |
KORE’s IoT Solutions and Analytics are supported by KORE’s proprietary intellectual property and technologies which work together as illustrated below: |
1. |
KORE One ™ Platform |
2. |
KORE eSIM |
3. |
Cloud Native Evolved Packet Core “EPC” (Cellular Network as a Service) |
4. |
IoT Network and Application Services |
a. |
ConnectivityPro ® |
b. |
SecurityPro ® |
c. |
PositionLogic TM : in-vehicle video, cargo monitoring, safety & security etc. |
ITEM 1A. |
RISK FACTORS |
• |
retaining key customers, key employees and key business relationships after the acquisition; |
• |
managing a larger combined company and consolidating corporate and administrative infrastructures successfully; |
• |
the inability to realize expected synergies and cost-savings; |
• |
difficulties in managing geographically dispersed operations, including risks associated with entering markets in which we have no or limited prior experience; |
• |
underperformance of any acquired business relative to our expectations and the price we paid; |
• |
negative near-term impacts on financial results after an acquisition, including acquisition-related earnings charges; |
• |
the assumption or incurrence of additional debt obligations or expenses, or use of substantial portions of our cash; |
• |
the issuance of equity securities to finance or as consideration for any acquisitions that dilute the ownership of our stockholders; |
• |
claims by terminated employees and shareholders of acquired companies or other third parties related to the transaction; |
• |
problems maintaining uniform procedures, controls and policies with respect to our financial accounting systems; |
• |
unanticipated issues in integrating information technology, communications, billing platforms, operational support systems and other systems; and |
• |
risks associated with acquiring intellectual property, including potential disputes regarding acquired companies’ intellectual property. |
• |
unexpected increases in manufacturing costs; |
• |
interruptions in shipments if a third-party manufacturer is unable to complete production in a timely manner; |
• |
inability to control quality of finished products; |
• |
inability to control delivery schedules; |
• |
inability to control production levels and to meet minimum volume commitments to our customers; |
• |
inability to control manufacturing yield; |
• |
inability to maintain adequate manufacturing capacity; and |
• |
inability to secure adequate volumes of acceptable components at suitable prices or in a timely manner. |
• |
the success of competitive services or technologies; |
• |
developments related to our existing or any future collaborations; |
• |
regulatory or legal developments in the United States and other countries; |
• |
developments or disputes concerning our intellectual property or other proprietary rights; |
• |
the recruitment or departure of key personnel; |
• |
actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; |
• |
variations in our financial results or those of companies that are perceived to be similar to us; |
• |
general economic, industry and market conditions; and |
• |
the other factors described in this “Risk Factors” section. |
• |
a limited availability of market quotations for our securities; |
• |
a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock; |
• |
a limited amount of analyst coverage; and |
• |
a decreased ability to issue additional securities or obtain additional financing in the future. |
ITEM 1B. |
UNRESOLVED STAFF COMMENTS |
ITEM 2. |
PROPERTIES |
ITEM 3. |
LEGAL PROCEEDINGS |
ITEM 4. |
MINE SAFETY DISCLOSURES |
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
ITEM 6. |
RESERVED |
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• |
Connected Health |
• |
Fleet Management |
• |
Asset Monitoring |
• |
Communication Services: |
• |
Industrial IoT: |
• |
Lack of readily available in-house IoT resources and expertise; |
• |
Significant time required to get to market; |
• |
High failure rate of IoT initiatives; |
• |
A highly fragmented vendor landscape; |
• |
An ecosystem that is quickly evolving and changing rapidly; |
• |
Substantial and increasing regulatory/compliance issues; |
• |
Interoperability and compatibility with assorted technologies. |
• |
We believe KORE One is now an industry leading platform for IoT subscription and network management, and which provides us with a competitive edge in the market. |
• |
Amongst industry analysts, KORE has continued to establish and improve its position as the only pure play IoT enabler. Recognized in 2019 by Gartner as the only independent service provider to be named a “Leader” in the Magic Quadrant for Managed IoT Connectivity Services, KORE continued its upward momentum in 2020 as it improved upon its position to be ranked among the top global services providers within the same category. |
• |
KORE’s product portfolio has expanded significantly. A few years ago, KORE was primarily IoT Connectivity Services focused while today its product portfolio includes IoT Solutions such as IoT Deployment Services and Security Software and Services. KORE’s IoT Connectivity Services have also become richer through the addition of the eSIMs and “Connectivity Enablement as a Service” to the IoT Connectivity Services product portfolio. |
• |
IoT Solutions has increased as a proportion of KORE’s total revenue each year since 2018. For the years ended December 31, 2021, and 2020, respectively, IoT Solutions represented 32% and 26% of KORE’s total revenue. |
• |
For IoT Connectivity —telecom carriers such as T-Mobile and Vodafone; Mobile Virtual Network Operators such as Aeris and Wireless Logic; and |
• |
For IoT Solutions and Analytics |
• |
Organic volume growth – leveraging the strong IoT industry growth expressed in terms of our customers’ revenue, device and data usage growth, while continuing to maintain high customer retention. |
• |
Cross-sell and upsell – selling KORE’s growing portfolio of IoT Solutions developed during the prior two years and going-forward, to our large base of connectivity services only customers. |
• |
Deepening our presence in focused industry sectors – developing more of a vertical orientation in our business and deepening industry domain knowledge that will in turn allow the development and deployment of pre-configured industry solutions. |
• |
Enhancing AIoT (Artificial Intelligence + IoT) and Edge Analytics capabilities. |
• |
Strategic acquisitions that will allow KORE to expand our IoT Solutions and advanced IoT connectivity capabilities while ensuring a highly disciplined use of capital for such acquisitions. |
• |
The number of carrier integrations (44) |
• |
KORE One platform (7 engines) |
• |
ConnectivityPro service and related APIs |
• |
eSIM technology stack/ proprietary IP |
• |
Hypercore technology |
• |
Deep industry vertical knowledge and experience (e.g., in Connected Health through FDA, HIPAA, ISO 9001/13485 compliance) |
• |
Breadth of solutions and analytics services |
• |
3,300+ connectivity-only customers provides us a unique opportunity to cross-sell and upsell our existing connectivity-only customers |
Years Ended December 31, |
Change 2021 |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Services |
$ |
187,962 |
$ |
172,845 |
$ |
15,117 |
9 |
% | ||||||||
Products |
60,255 |
40,915 |
19,340 |
47 |
% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue |
$ |
248,217 |
$ |
213,760 |
$ |
34,457 |
16 |
% | ||||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
Change 2021 |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
IoT Connectivity |
$ |
168,804 |
$ |
158,748 |
$ |
10,056 |
6 |
% | ||||||||
IoT Solutions |
79,413 |
55,012 |
24,401 |
44 |
% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue |
$ |
248,217 |
$ |
213,760 |
$ |
34,457 |
16 |
% | ||||||||
|
|
|
|
|
|
|
|
December 31, |
||||||||
2021 |
2020 |
|||||||
Period End Connections |
14.6 million |
11.8 million |
||||||
Average Connections Count for the Period |
13.4 million |
10.7 million |
Years Ended December 31, |
Change 2021 |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Cost of services |
$ |
69,867 |
$ |
64,520 |
$ |
5,347 |
8 |
% | ||||||||
Cost of products |
52,357 |
33,410 |
18,947 |
57 |
% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
$ |
122,224 |
$ |
97,930 |
$ |
24,294 |
25 |
% | ||||||||
|
|
|
|
|
|
|
|
Years Ended |
||||||||
December 31, |
||||||||
Gross margin rate |
2021 |
2020 |
||||||
Cost of services |
62.8 |
% |
62.7 |
% | ||||
Cost of products |
13.1 |
% |
18.3 |
% | ||||
Total gross margins |
50.8 |
% |
54.2 |
% |
Years Ended |
||||||||||||||||
December 31, |
Change 2021 |
|||||||||||||||
Cost of revenue |
2021 |
2020 |
$ |
% |
||||||||||||
Cost of IoT Connectivity |
$ |
66,567 |
$ |
63,706 |
$ |
2,861 |
4 |
% | ||||||||
Cost of IoT Solutions |
55,657 |
34,224 |
21,433 |
63 |
% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
$ |
122,224 |
$ |
97,930 |
$ |
24,294 |
25 |
% | ||||||||
|
|
|
|
|
|
|
|
Years Ended |
||||||||
Gross margin rate |
2021 |
2020 |
||||||
IoT Connectivity |
60.6 |
% |
59.9 |
% | ||||
IoT Solutions |
29.9 |
% |
37.8 |
% | ||||
Total gross margins |
50.8 |
% |
54.2 |
% |
Years Ended |
||||||||||||||||
December 31, |
Change 2021 |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Selling, general, and administrative |
$ |
91,733 |
$ |
72,883 |
$ |
18,850 |
26 |
% |
Years Ended |
||||||||||||||||
December 31, |
Change 2021 |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Depreciation and amortization |
$ |
50,414 |
$ |
52,488 |
$ |
(2,074 |
) |
(4 |
)% |
Years Ended |
||||||||||||||||
December 31, |
Change 2021 |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Interest expense, including amortization of deferred financing costs, net |
$ |
23,260 |
$ |
23,493 |
$ |
(233 |
) |
(1 |
)% | |||||||
Change in fair value of warrant liability |
(5,267 |
) |
7,485 |
(12,752 |
) |
(170 |
)% | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Other (Income) Expense |
$ |
17,993 |
$ |
30,978 |
$ |
(12,985 |
) |
(42 |
)% | |||||||
|
|
|
|
|
|
|
|
December 31, |
Change 2021 |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Income tax benefit |
$ |
(9,694 |
) |
$ |
(5,318 |
) |
$ |
(4,376 |
) |
82 |
% |
• |
The Company closed the Business Combination on September 30, 2021, resulting in a net increase in cash of $63.2 million and a recapitalization of the Company’s equity structure. |
• |
The Company used $14.9 million for the year ended December 31, 2021 and provided $26.5 million of cash flows from operating activities for the year ended December 31, 2020. |
• |
The Company’s investment activity used $13.1 million and $11.6 million for the years ended December 31, 2021 and 2020, respectively, resulting primarily from capital expenditures during the period related to technology equipment, software licenses, and internally developed software. |
• |
During the year ended December 31, 2021, the Company drew and repaid $25.0 million on its revolving credit facility. During the year ended December 31, 2020, the Company repaid $8.3 million of its revolving credit facility. |
For the Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Net loss |
$ |
(24,453 |
) |
$ |
(35,201 |
) | ||
Income tax expense (benefit) |
(9,694 |
) |
(5,318 |
) | ||||
Interest expense |
23,260 |
23,493 |
||||||
Depreciation and amortization |
50,414 |
52,488 |
||||||
EBITDA |
39,527 |
35,462 |
||||||
Change in Fair value of warrant liabilities (non-cash) |
(5,267 |
) |
7,485 |
|||||
Transformation expenses |
8,937 |
7,354 |
||||||
Acquisition and integration-related restructuring costs |
11,287 |
5,709 |
||||||
Stock-based compensation (non-cash) |
4,564 |
1,161 |
||||||
Other income tax liability reversal (non-cash) |
— |
80 |
||||||
Foreign currency loss (non-cash) |
344 |
233 |
||||||
Other |
478 |
335 |
||||||
|
|
|
|
|||||
Adjusted EBITDA |
$ |
59,870 |
$ |
57,819 |
||||
|
|
|
|
Customer Relationships |
10-13 years | |
Technology |
5-9 years | |
Carrier Contracts |
10 years | |
Trademarks |
9-10 years | |
Non-compete agreements |
3 years | |
Internally developed and computer acquired software |
3-5 years |
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
56 |
||||
57 |
||||
59 |
||||
60 |
||||
61 |
||||
62 |
||||
64 |
||||
95 |
||||
95 |
December 31, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ |
85,976 | $ |
10,321 | ||||
Accounts receivable, net of allowances for credits and doubtful accounts of $1,800 and $2,804, at December 31, 2021, and 2020, respectively |
51,304 | 40,661 | ||||||
Inventories, net |
15,470 | 5,842 | ||||||
Income taxes receivable |
954 | — |
||||||
Prepaid expenses and other receivables |
7,448 | 5,429 | ||||||
|
|
|
|
|||||
Total current assets |
161,152 |
62,253 |
||||||
Non-current assets |
||||||||
Restricted cash |
367 | 372 | ||||||
Property and equipment, net |
12,240 | 13,709 | ||||||
Intangibles assets, net |
203,474 | 240,203 | ||||||
Goodwill |
381,962 | 382,749 | ||||||
Deferred tax assets |
— |
122 | ||||||
Other long-term assets |
407 | 611 | ||||||
|
|
|
|
|||||
Total assets |
$ |
759,602 |
$ |
700,019 |
||||
|
|
|
|
|
||||
Liabilities, temporary equity and stockholders’ equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ |
16,004 | $ |
22,978 | ||||
Accrued liabilities |
21,311 | 17,209 | ||||||
Income taxes payable |
467 | 244 | ||||||
Current portion of capital lease obligations |
191 | 856 | ||||||
Deferred revenue |
6,889 | 7,772 | ||||||
Current portion of long-term debt and other borrowings, net |
3,326 | 3,161 | ||||||
|
|
|
|
|||||
Total current liabilities |
48,188 |
52,220 |
||||||
Non-current liabilities |
||||||||
Deferred tax liabilities |
36,722 | 42,840 | ||||||
Due to related parties |
— |
1,615 | ||||||
Warrant liability |
286 | 15,944 | ||||||
Capital lease obligations |
264 | 508 | ||||||
Long-term debt and other borrowings, net |
399,115 | 298,404 | ||||||
Other long-term liabilities |
2,884 | 4,377 | ||||||
|
|
|
|
|||||
Total liabilities |
$ |
487,459 |
$ |
415,908 |
||||
|
|
|
|
|||||
Commitments and contingencies (note 1 1 ) |
December 31, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Temporary equity |
||||||||
Series A Preferred Stock; par value $1,000 per share; none authorized, issued and outstanding at December 31, 2021; 7,765,229 shares authorized, and 7,756,158 shares issued and outstanding at December 31, 2020 |
$ |
— |
$ |
77,562 | ||||
Series A-1 Preferred Stock; par value $1,000 per share; none authorized, issued and outstanding at December 31, 2021; 10,480,538 shares authorized, 7,862,107 shares issued and outstanding at December 31, 2020 |
— |
78,621 | ||||||
Series B Preferred Stock; par value $1,000 per share; none authorized, issued and outstanding at December 31, 2021; 9,090,975 shares authorized, 9,090,975 shares issued and outstanding at December 31, 2020 |
— |
90,910 | ||||||
Series C Convertible Preferred Stock; par value $1,000 per share; none authorized, issued and outstanding at December 31, 2021; 6,872,894 shares authorized, 2,566,186 shares issued and outstanding at December 31, |
— |
16,802 | ||||||
Total temporary equity |
$ |
— |
$ |
263,895 |
||||
Stockholders’ equity |
||||||||
Common stock, voting; par value $0.0001 per share; 315,000,000 shares authorized, 72,027,743 shares issued and outstanding at December 31, 2021; 55,659,643 shares authorized, 30,281,520 shares issued and outstanding at December 31, 2020 |
$ |
7 | $ |
3 | ||||
Additional paid-in capital |
413,646 | 135,616 | ||||||
Accumulated other comprehensive loss |
(3,331 | ) |
(1,677 | ) | ||||
Accumulated deficit |
(138,179 | ) |
(113,726 | ) | ||||
Total stockholders’ equity |
272,143 |
20,216 |
||||||
Total liabilities, temporary equity and stockholders’ equity |
$ |
759,602 |
$ |
700,019 |
||||
For the years ended |
December 31, |
December 31, |
December 31, |
|||||||||
2021 |
2020 |
2019 |
||||||||||
Revenue |
||||||||||||
Services |
$ |
187,962 | $ |
172,845 | $ |
159,425 | ||||||
Products |
60,255 | 40,915 | 9,727 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
248,217 |
213,760 |
169,152 |
|||||||||
Cost of revenue |
||||||||||||
Cost of services |
69,867 | 64,520 | 57,621 | |||||||||
Cost of products |
52,357 | 33,410 | 6,044 | |||||||||
|
|
|
|
|
|
|||||||
Total cost of revenue (exclusive of depreciation and amortization shown separately below) |
122,224 |
97,930 |
63,665 |
|||||||||
|
|
|
|
|
|
|||||||
Operating expenses |
||||||||||||
Selling, general and administrative |
91,733 | 72,883 | 65,298 | |||||||||
Depreciation and amortization |
50,414 | 52,488 | 48,131 | |||||||||
Intangible asset impairment loss |
— |
— |
3,892 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
142,147 |
125,371 |
117,321 |
|||||||||
|
|
|
|
|
|
|||||||
Operating loss |
(16,154 |
) |
(9,541 |
) |
(11,834 |
) | ||||||
Interest expense, including amortization of deferred financing costs, net |
23,260 | 23,493 | 24,785 | |||||||||
Change in fair value of warrant liability |
(5,267 | ) |
7,485 | (235 | ) | |||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
(34,147 |
) |
(40,519 |
) |
(36,384 |
) | ||||||
Income tax expense (benefit) |
||||||||||||
Current |
177 | 1,051 | (1,450 | ) | ||||||||
Deferred |
(9,871 | ) |
(6,369 | ) |
(11,491 | ) | ||||||
|
|
|
|
|
|
|||||||
Total income tax benefit |
(9,694 |
) |
(5,318 |
) |
(12,941 |
) | ||||||
|
|
|
|
|
|
|||||||
Net loss attributable to the Company |
$ |
(24,453 |
) |
$ |
(35,201 |
) |
$ |
(23,443 |
) | |||
|
|
|
|
|
|
|||||||
Loss per share: |
||||||||||||
Basic |
$ |
(1.03 | ) |
$ |
(1.96 | ) |
$ |
(1.45 | ) | |||
Diluted |
$ |
(1.03 | ) |
$ |
(1.96 | ) |
$ |
(1.45 | ) | |||
Weighted average shares outstanding (in Number): |
||||||||||||
Basic |
41,933,050 | 31,650,173 | 31,169,435 | |||||||||
Diluted |
41,933,050 | 31,650,173 | 31,169,435 |
For the years ended |
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
|||||||||
Net loss |
|
$ |
(24,453 |
) |
|
$ |
(35,201 |
) |
|
$ |
(23,443 |
) |
Other comprehensive income (loss): |
||||||||||||
Foreign currency translation adjustment |
(1,654 |
) |
2,116 |
517 |
||||||||
|
|
|
|
|
|
|||||||
Comprehensive loss |
$ |
(26,107 |
) |
$ |
(33,085 |
) |
$ |
(22,926 |
) | |||
|
|
|
|
|
|
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 Income (Loss) |
Accumulated Deficit |
Total Stockholders’ Equity |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Amount |
Shares |
Amount |
Amount |
Amount |
Amount |
Amount |
||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 (as previously reported) |
42,750 | $ |
60,270 | 60,013 | $ |
61,444 | 57,000 | $ |
76,832 | 16,802 | $ |
16,802 | $ |
215,348 | 213,756 | $ |
2 | $ |
174,601 | $ |
(4,310 | ) |
$ |
(55,082 | ) |
$ |
115,211 | |||||||||||||||||||||||||||||||||
Conversion of Stock |
5,984,277 | — |
6,084,419 | — |
7,626,175 | — |
2,549,384 | — |
— |
29,530,231 | 1 | (1 | ) |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018, effect of reverse recapitalization |
6,027,027 | $ |
60,270 | 6,144,432 | $ |
61,444 | 7,683,175 | $ |
76,832 | 2,566,186 | $ |
16,802 | $ |
215,348 | 29,743,987 | $ |
3 | $ |
174,600 | $ |
(4,310 | ) |
$ |
(55,082 | ) |
$ |
115,211 | |||||||||||||||||||||||||||||||||
Issuance of stock |
— |
— |
— |
— |
— |
— |
— |
— |
— |
573,016 | — |
7,000 | — |
— |
7,000 | |||||||||||||||||||||||||||||||||||||||||||||
Repurchase and cancellation of stock |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(7,653 | ) |
— |
(80 | ) |
— |
— |
(80 | ) | ||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable |
808,976 | 8,090 | 805,092 | 8,051 | 550,599 | 5,506 | — |
— |
21,647 | — |
— |
(21,647 | ) |
— |
— |
(21,647 | ) | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
517 | — |
517 | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
1,682 | — |
— |
1,682 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(23,443 | ) |
(23,443 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
6,836,003 | $ |
68,360 | 6,949,524 | $ |
69,495 | 8,233,774 | $ |
82,338 | 2,566,186 | $ |
16,802 | $ |
236,995 | 30,309,350 | $ |
3 | $ |
161,555 | $ |
(3,793 | ) |
$ |
(78,525 | ) |
$ |
79,240 | |||||||||||||||||||||||||||||||||
Repurchase and cancellation of stock |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(27,830 | ) |
— |
(200 | ) |
— |
— |
(200 | ) | ||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable |
920,155 | 9,202 | 912,583 | 9,126 | 857,201 | 8,572 | — |
— |
26,900 | — |
— |
(26,900 | ) |
— |
— |
(26,900 | ) | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
2,116 | — |
2,116 | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
1,161 | — |
— |
1,161 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(35,201 | ) |
(35,201 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
7,756,158 | $ |
77,562 | 7,862,107 | $ |
78,621 | 9,090,975 | $ |
90,910 | 2,566,186 | $ |
16,802 | $ |
263,895 | 30,281,520 | $ |
3 | $ |
135,616 | $ |
(1,677 | ) |
$ |
(113,726 | ) |
$ |
20,216 | |||||||||||||||||||||||||||||||||
Derecognition of shares |
— |
— |
— |
— |
— |
— |
(45,818 | ) |
(300 | ) |
(300 | ) |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
Accrued dividends payable |
765,609 | 7,656 | 824,076 | 8,241 | 692,543 | 6,925 | — |
— |
22,822 | — |
— |
(22,822 | ) |
— |
— |
(22,822 | ) | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(1,654 | ) |
— |
(1,654 | ) | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
— |
— |
— |
— |
200,426 | — |
(1,856 | ) |
— |
— |
(1,856 | ) | |||||||||||||||||||||||||||||||||||||||||||
Distributions to and conversions of preferred stock |
(8,521,767 | ) |
(85,218 | ) |
(8,686,183 | ) |
(86,862 | ) |
(9,783,518 | ) |
(97,835 | ) |
(2,520,368 | ) |
(16,502 | ) |
(286,417 | ) |
7,120,368 | 1 | 56,502 | — |
— |
56,503 | ||||||||||||||||||||||||||||||||||||
CTAC shares recapitalized, net of equity issuance costs of $15,943 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
10,373,491 | 1 | 6,428 | — |
— |
6,460 | |||||||||||||||||||||||||||||||||||||||||||||
Conversion of KORE warrants |
— |
— |
— |
— |
— |
— |
— |
— |
— |
1,365,612 | — |
10,663 | — |
— |
10,663 | |||||||||||||||||||||||||||||||||||||||||||||
Private offering and merger financing, net of equity issuance costs of $8,123 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
22,686,326 | 2 | 216,875 | — |
— |
217,126 | |||||||||||||||||||||||||||||||||||||||||||||
Equity portion of convertible debt, net of deferred financing costs of $ 384 , net of sponsor shares of $683, net of deferred tax liability of $3,999 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
12,240 | — |
— |
11,960 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
(24,453 | ) |
(24,453 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
— |
72,027,743 |
$ |
7 |
$ |
413,646 |
$ |
(3,331 |
) |
$ |
(138,179 |
) |
$ |
272,143 |
|||||||||||||||||||||||||||||||||
For the years ended |
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
|||||||||
Cash flows from operating activities |
||||||||||||
Net loss |
$ |
(24,453 | ) |
$ |
(35,201 | ) |
$ |
(23,443 | ) | |||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities |
||||||||||||
Depreciation and amortization |
50,414 | 52,488 | 48,131 | |||||||||
Intangible asset impairment loss |
— |
— |
3,892 | |||||||||
Amortization of deferred financing costs |
2,097 | 2,313 | 2,063 | |||||||||
Amortization of discount on Backstop Notes |
424 | — |
— |
|||||||||
Deferred income taxes |
(9,871 | ) |
(6,178 | ) |
(11,419 | ) | ||||||
Non-cash foreign currency loss |
344 | 233 | 1,440 | |||||||||
Share-based compensation |
4,564 | 1,161 | 1,682 | |||||||||
Provision for doubtful accounts |
322 | 640 | 905 | |||||||||
Change in fair value of warrant liability |
(5,267 | ) |
7,485 | (235 | ) | |||||||
Settlement gain on carrier commitment liability |
— |
— |
(2,269 | ) | ||||||||
Change in operating assets and liabilities, net of operating assets and liabilities acquired: |
|
|||||||||||
Accounts receivable |
(11,884 | ) |
(6,072 | ) |
860 | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories |
(9,875 | ) |
(3,027 | ) |
(566 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses and other receivables |
(1,700 | ) |
(2,020 | ) |
169 | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
(8,371 | ) |
13,100 | (2,458 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred revenue |
(805 | ) |
1,583 | (44 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes payable |
(697 | ) |
(34 | ) |
(1,158 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in minimum carrier commitment liability |
— |
— |
(3,297 | ) | ||||||||
|
|
|
|
|
|
|||||||
Cash (used in) provided by operating activities |
$ |
(14,758 |
) |
$ |
26,471 |
$ |
14,253 |
|||||
|
|
|
|
|
|
|||||||
Cash flows used in investing activities |
||||||||||||
Additions to intangible assets |
(9,247 | ) |
(10,135 | ) |
(10,491 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property and equipment |
(4,172 | ) |
(1,834 | ) |
(2,391 | ) | ||||||
Acquisition of Integron LLC, net of cash acquired |
— |
366 | (37,488 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
$ |
(13,419 |
) |
$ |
(11,603 |
) |
$ |
(50,370 |
) | |||
|
|
|
|
|
|
|||||||
Cash flows from financing activities |
||||||||||||
Proceeds from revolving credit facility |
25,000 | — |
8,135 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment on revolving credit facility |
(25,000 | ) |
(8,300 | ) |
— |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of term loan |
(3,161 | ) |
(3,526 | ) |
(2,888 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of other borrowings - notes payable |
(173 |
) |
— |
— |
||||||||
Proceeds from term loan |
— |
— |
35,000 |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from convertible debt |
104,167 | — |
— | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from equity portion of convertible debt, net of issuance costs |
15,697 | — |
— |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of deferred financing costs |
(1,579 | ) |
— |
(2,089 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of related party note |
(1,538 | ) |
— |
— |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of common stock |
— |
(200 | ) |
(80 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from CTAC and PIPE financing, net of issuance costs |
223,688 | — |
— |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlements of preferred shares |
(229,915 | ) |
— |
— |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of capital lease obligations |
(828 | ) |
(692 | ) |
(1,080 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of stock option share employee withholding taxes |
(2,305 | ) |
— |
— |
||||||||
|
|
|
|
|
|
|||||||
Cash provided by/(used in) financing activities |
$ |
104,053 |
$ |
(12,718 |
) |
$ |
36,998 |
|||||
|
|
|
|
|
|
|||||||
Effect of Exchange Rate Change on Cash and Cash Equivalents |
(226 | ) |
(149 | ) |
(162 | ) | ||||||
Change in Cash and Cash Equivalents and Restricted Cash |
75,650 | 2,001 | 719 | |||||||||
Cash and Cash Equivalents and Restricted Cash, beginning of period |
10,693 | 8,692 | 7,973 | |||||||||
|
|
|
|
|
|
|||||||
Cash and Cash Equivalents and Restricted Cash, end of period |
$ |
86,343 |
$ |
10,693 |
$ |
8,692 |
For the years ended |
2021 |
2020 |
2019 |
|||||||||
Non-cash investing and financing activities: |
||||||||||||
Equity issued for acquisition of Integron LLC |
$ |
— |
$ |
— |
$ |
7,000 | ||||||
Equity financing fees accrued |
3,602 | — |
— |
|||||||||
Capital leases |
— | 622 | 1,120 | |||||||||
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 | — |
— |
|||||||||
Common shares issued to option holders pursuant to the Cancellation Agreements |
1,072 |
— |
— |
|||||||||
Sponsor shares distributed to lender under Backstop Agreement |
683 | — |
— |
|||||||||
Supplemental cash flow information: |
||||||||||||
Interest paid |
$ |
19,874 | $ |
21,544 | $ |
23,977 | ||||||
Taxes paid (net of refunds) |
957 | 379 | 417 |
• |
the equity holders of pre-combination KORE hold the majority (54%) of voting rights in the Company; |
• |
the senior management of pre-combination KORE became the senior management of the Company; |
• |
in comparison with CTAC, pre-combination KORE has significantly more revenues and total assets and a larger net loss; and |
• |
the operations of pre-combination KORE comprise the ongoing operations of the Company, and the Company assumed pre-Combination KORE’s headquarters. |
• |
Exemption to not disclose the unfulfilled performance obligation balance for contracts with an original length of one year or less. |
• |
Practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. |
• |
Election to present revenue net of sales taxes and other similar taxes. |
• |
Election from recognizing shipping and handling activities as a separate performance obligation. |
• |
Practical expedient not requiring the entity to adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. |
Computer hardware and software |
30 | % | ||
Networking equipment |
20 | % | ||
Furniture and fixtures |
20 | % |
Customer relationships |
10-13 years | |
Technology |
5-9 years | |
Carrier contracts |
10 years | |
Trademarks |
9 -10 years | |
Non-compete agreements |
3 years | |
Internally developed computer software |
3 -5 years |
Previous Filings |
After Correction |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|||||||||||||
Three months Ended September 30, |
||||||||||||||||
Net loss attributable to common shareholders |
$ |
(8,331 | ) |
$ |
(12,787 | ) |
$ |
(8,331 | ) |
$ |
(12,787 | ) | ||||
Loss per share: |
||||||||||||||||
Basic |
$ |
(0.27 |
) |
$ |
(0.42 |
) |
$ |
(0.26 |
) |
$ |
(0.40 |
) | ||||
Diluted |
$ |
(0.27 |
) |
$ |
(0.42 |
) |
$ |
(0.26 |
) |
$ |
(0.40 |
) | ||||
Weighted-average shares outstanding: |
||||||||||||||||
Basic |
30,732,921 | 30,281,520 | 32,098,715 | 31,647,131 | ||||||||||||
Diluted |
30,732,921 | 30,281,520 | 32,098,715 | 31,647,131 |
Previous Filings |
After Correction |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|||||||||||||
Nine months Ended September 30, |
||||||||||||||||
Net loss attributable to common shareholders |
$ |
(31,222 | ) |
$ |
(39,966 | ) |
$ |
(31,222 | ) |
$ |
(39,966 | ) | ||||
Net loss per share |
||||||||||||||||
Basic |
$ |
(1.03 |
) |
$ |
(1.32 |
) |
$ |
(0.98 |
) |
$ |
(1.26 |
) | ||||
Diluted |
$ |
(1.03 |
) |
$ |
(1.32 |
) |
$ |
(0.98 |
) |
$ |
(1.26 |
) | ||||
Weighted-average shares outstanding: |
||||||||||||||||
Basic |
30,433,641 | 30,285,684 | 31,799,313 | 31,651,295 | ||||||||||||
Diluted |
30,433,641 | 30,285,684 | 31,799,313 | 31,651,295 |
• |
Risk -free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock-based awards; |
• |
Expected term. The expected term represents the period that the stock-based awards are expected to be outstanding. The Company uses the simplified calculation of expected term, which reflects the weighted-average of time-to-vesting; |
• |
Expected dividend. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock; and |
• |
Expected volatility. The expected volatility is derived from an average of the historical volatilities of the common stock of the Company and several other entities with characteristics similar to those of the Company, such as the size and operational and economic similarities to the Company’s principal business operations. |
• |
Clarifies that all entities are required to provide the fair value option disclosures in ASC 825, Financial Instruments |
• |
Clarifies that the portfolio exception in ASC 820, Fair Value Measurement , applies to nonfinancial items accounted for as derivatives under ASC 815, Derivatives and Hedging . |
• |
Clarifies that for purposes of measuring expected credit losses on a net investment in a lease in accordance with ASC 326, Financial Instruments - Credit Losses , the lease term determined in accordance with ASC 842, Leases , should be used as the contractual term. |
• |
Clarifies that when an entity regains control of financial assets sold, it should recognize an allowance for credit losses in accordance with ASC 326. |
• |
Aligns the disclosure requirements for debt securities in ASC 320, Investments - Debt Securities , with the corresponding requirements for depository and lending institutions in ASC 942, Financial Services - Depository and Lending . |
Year ended December 31, |
||||||||||||
(in ‘000) |
2021 |
2020 |
2019 |
|||||||||
Connectivity* |
$ |
164,392 | $ |
152,996 | $ |
147,927 | ||||||
Hardware Sales |
54,898 | 29,601 | 8,767 | |||||||||
Hardware Sales - bill-and-hold |
5,357 | 11,314 | 960 | |||||||||
Deployment services, professional services, and other |
23,570 | 19,849 | 11,498 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ |
248,217 |
$ |
213,760 |
$ |
169,152 |
* |
Includes connectivity-related revenues from IoT Connectivity and IoT Solutions |
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 |
% | |||||
|
|
|
|
(in ‘000) |
Amount |
|||
Cash paid to sellers |
$ |
37,500 | ||
Common stock issued to sellers |
7,000 | |||
|
|
|||
Total consideration |
$ |
44,500 |
||
Cash |
12 | |||
Accounts receivable |
7,776 | |||
Inventories |
489 | |||
Prepaid expenses and other receivables |
341 | |||
Property and equipment |
458 | |||
Identifiable intangible assets |
32,000 | |||
Deferred tax liabilities |
(1,285 | ) | ||
Accounts payable and accrued liabilities |
(1,818 | ) | ||
|
|
|||
Net identifiable assets acquired |
37,973 |
|||
|
|
|||
Goodwill (excess of consideration transferred over net identifiable assets acquired) |
$ |
6,527 |
||
|
|
(in ‘000) |
December 31, 2021 |
December 31, 2020 |
||||||
Computer hardware |
$ |
15,747 | $ |
13,634 | ||||
Computer software |
9,023 | 8,211 | ||||||
Furniture and fixtures |
2,242 | 2,284 | ||||||
Networking equipment |
8,089 | 8,151 | ||||||
Leasehold improvements |
2,793 | 2,803 | ||||||
|
|
|
|
|||||
Total property and equipment |
37,894 |
35,083 |
||||||
Less: accumulated depreciation |
(25,654 | ) |
(21,374 | ) | ||||
|
|
|
|
|||||
Property and equipment (net) |
$ |
12,240 |
$ |
13,709 |
||||
|
|
|
|
(in ‘000) |
Amount |
|||
December 31, 2019 |
$ |
382,247 |
||
Measurement period adjustment — Integron |
(366 | ) | ||
Currency translation |
868 | |||
|
|
|||
December 31, 2020 |
$ |
382,749 |
||
|
|
|||
Currency translation |
(787 | ) | ||
|
|
|||
December 31, 2021 |
$ |
381,962 |
||
|
|
(in ‘000) |
Carrying Gross Amount |
Accumulated Amortization |
Net Carrying Value |
|||||||||
Customer relationships |
$ |
306,732 | $ |
(168,679 | ) |
$ |
138,053 | |||||
Technology |
45,983 | (37,529 | ) |
8,454 | ||||||||
Carrier contracts |
65,700 | (40,488 | ) |
25,212 | ||||||||
Trademarks |
15,733 | (9,221 | ) |
6,512 | ||||||||
Internally developed computer software |
59,906 | (34,663 | ) |
25,243 | ||||||||
|
|
|
|
|
|
|||||||
Total as of December 31, 2021 |
$ |
494,054 |
$ |
(290,580 |
) |
$ |
203,474 |
|||||
|
|
|
|
|
|
(in ‘000) |
Carrying Gross Amount |
Accumulated Amortization |
Net Carrying Value |
|||||||||
Customer relationships |
$ |
307,356 | $ |
(143,230 | ) |
$ |
164,126 | |||||
Technology |
46,229 | (33,394 | ) |
12,835 | ||||||||
Carrier contracts |
65,700 | (33,918 | ) |
31,782 | ||||||||
Trademarks |
15,828 |
(7,608 |
) |
8,220 |
||||||||
Internally developed computer software |
45,148 |
(21,908 |
) |
23,240 |
||||||||
|
|
|
|
|
|
|||||||
Total as of December 31, 2020 |
$ |
480,261 |
$ |
(240,058 |
) |
$ |
240,203 |
|||||
|
|
|
|
|
|
Years |
||||
Customer relationships |
5.8 | |||
Technology |
3.1 | |||
Carrier contracts |
4.0 | |||
Trademarks |
5.1 | |||
Internally developed computer software |
4.0 |
Amount |
||||
2022 |
$ |
46,788 | ||
2023 |
43,223 | |||
2024 |
39,132 | |||
2025 |
36,359 | |||
2026 |
22,350 | |||
Thereafter |
15,622 | |||
|
|
|||
Total |
$ |
203,474 | ||
|
|
(in ‘000) |
December 31, 2021 |
December 31, 2020 |
||||||
Accrued payroll and related |
$ |
13,103 |
$ |
10,657 |
||||
Accrued cost of revenue |
1,641 |
2,142 |
||||||
Accrued other expenses |
5,198 |
3,845 |
||||||
Sales and other taxes payable |
1,369 |
565 |
||||||
|
|
|
|
|||||
Total accrued liabilities |
$ |
21,311 |
$ |
17,209 |
||||
|
|
|
|
(in ‘000) |
December 31, 2021 |
December 31, 2020 |
||||||
Term Loan – UBS |
$ |
305,807 | $ |
308,959 | ||||
Term Loan – BNP Paribas |
— |
9 | ||||||
Notes under the Backstop Agreement |
120,000 | — |
||||||
Other Borrowings |
|
|
173 |
|
|
|
— |
|
|
|
|
|
|||||
Total |
425,980 |
308,968 |
||||||
Less — current portion |
3,326 | 3,161 | ||||||
Less — equity component, net of accumulated amortization |
15,517 | — |
||||||
Less—debt issuance cost, net of accumulated amortization of $6.1 million and $3.7 million, respectively |
8,022 | 7,403 | ||||||
|
|
|
|
|||||
Total notes and debentures |
399,115 |
298,404 |
||||||
Other Borrowings—Notes payable |
— |
— |
||||||
|
|
|
|
|||||
Total Long-term debt and other borrowings |
$ |
399,115 |
$ |
298,404 |
||||
|
|
|
|
(in ‘000) |
Amount |
|||
2022 |
$ |
3,326 |
||
2023 |
3,153 | |||
2024 |
299,501 | |||
2025 |
— |
|||
2026 |
— |
|||
Thereafter |
120,000 | |||
|
|
|||
Total |
$ |
425,980 |
||
|
|
For the Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(in thousands) |
||||||||||||
United States |
$ |
(13,326 | ) |
$ |
(25,283 | ) |
$ |
(27,728 | ) | |||
Foreign |
(20,821 | ) |
(15,236 | ) |
(8,656 | ) | ||||||
|
|
|
|
|
|
|||||||
Total loss before income taxes |
$ |
(34,147 |
) |
$ |
(40,519 |
) |
$ |
(36,384 |
) | |||
|
|
|
|
|
|
For the Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Current: |
(in thousands) |
|||||||||||
Federal |
$ |
— |
$ |
— |
$ |
(1,136 | ) | |||||
State |
420 | 546 | (44 | ) | ||||||||
Foreign |
(243 | ) |
505 | (270 | ) | |||||||
|
|
|
|
|
|
|||||||
Total current provision (benefit) |
177 | 1,051 | (1,450 | ) | ||||||||
|
|
|
|
|
|
|||||||
Deferred: |
||||||||||||
Federal |
(6,213 | ) |
(7,120 | ) |
(8,626 | ) | ||||||
State |
(784 | ) |
2,285 | (2,117 | ) | |||||||
Foreign |
(2,874 | ) |
(1,534 | ) |
(748 | ) | ||||||
|
|
|
|
|
|
|||||||
Total deferred benefit |
(9,871 | ) |
(6,369 | ) |
(11,491 | ) | ||||||
|
|
|
|
|
|
|||||||
Total benefit |
$ |
(9,694 |
) |
$ |
(5,318 |
) |
$ |
(12,941 |
) | |||
|
|
|
|
|
|
For the Years Ended December 31, |
||||||||||||||||||||||||
2021 |
2020 |
2019 |
||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Benefit for income taxes at 21% rate |
$ |
(7,171 | ) |
21.0 | % |
$ |
(8,509 | ) |
21.0 | % |
$ |
(7,641 | ) |
21.0 | % | |||||||||
State taxes, net of federal benefit |
(1,227 | ) |
3.5 | % |
(947 | ) |
2.3 | % |
(2,161 | ) |
6.0 | % | ||||||||||||
Change in valuation allowance |
975 | -2.9 | % |
1,016 | -2.5 | % |
— |
0.0 | % | |||||||||||||||
Rate change |
775 | -2.3 | % |
2,856 | -7.0 | % |
— |
0.0 | % | |||||||||||||||
Credits |
(602 | ) |
1.8 | % |
(811 | ) |
2.0 | % |
(541 | ) |
1.5 | % | ||||||||||||
Permanent differences and other |
47 | -0.1 | % |
307 | -0.8 | % |
(41 | ) |
0.1 | % | ||||||||||||||
Revaluation of warrants |
(1,106 | ) |
3.2 | % |
1,572 | -3.9 | % |
(49 | ) |
0.1 | % | |||||||||||||
Uncertain tax positions |
9 | 0.0 | % |
226 | -0.6 | % |
(984 | ) |
2.7 | % | ||||||||||||||
Foreign withholding tax |
116 | -0.3 | % |
420 | -1.0 | % |
— |
0.0 | % | |||||||||||||||
Foreign rate differential |
(1,573 | ) |
4.6 | % |
(1,448 | ) |
3.6 | % |
(1,524 | ) |
4.2 | % | ||||||||||||
Executive compensation expense |
1,517 | -4.4 | % |
— |
0.0 | % |
— |
0.0 | % | |||||||||||||||
Transaction related expense |
(1,454 | ) |
4.3 | % |
— |
0.0 | % |
— |
0.0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Benefit for income taxes |
$ |
(9,694 |
) |
28.4 |
% |
$ |
(5,318 |
) |
13.1 |
% |
$ |
(12,941 |
) |
35.6 |
% | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Deferred tax assets: |
||||||||
Net operating loss carry-forward |
$ |
11,081 | $ |
10,604 | ||||
Credit carry-forward |
2,802 | 2,468 | ||||||
Interest expense limitation carry-forward |
10,997 | 7,811 | ||||||
Non-deductible reserves |
374 | 520 | ||||||
Accruals and other temporary differences |
1,046 | 1,047 | ||||||
Stock compensation |
— |
698 | ||||||
Property and equipment |
1,018 | 1,089 | ||||||
|
|
|
|
|||||
Gross deferred tax assets |
27,318 | 24,237 | ||||||
Less Valuation allowance |
(7,731 | ) |
(7,164 | ) | ||||
|
|
|
|
|||||
Total deferred tax assets (after valuation allowance) |
19,587 | 17,073 | ||||||
Deferred tax liabilities: |
||||||||
Property and equipment |
(4,151 | ) |
(4,089 | ) | ||||
Intangible assets |
(40,754 | ) |
(49,461 | ) | ||||
Goodwill |
(7,432 | ) |
(6,241 | ) | ||||
Debt discount |
(3,972 | ) |
— |
|||||
|
|
|
|
|||||
Total deferred tax liabilities |
(56,309 | ) |
(59,791 | ) | ||||
|
|
|
|
|||||
Net deferred tax liabilities |
$ |
(36,722 |
) |
$ |
(42,718 |
) | ||
|
|
|
|
For the Year s Ended December 31, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Unrecognized tax benefits at the beginning of the year |
$ |
3,867 | $ |
3,658 | ||||
Additions for tax positions of current year |
— |
— |
||||||
Additions for tax positions of prior years |
— |
209 | ||||||
Reductions for tax positions of prior years |
— |
— |
||||||
Expirations statutes of limitation |
— |
— |
||||||
|
|
|
|
|||||
Unrecognized tax benefits at the end of the year |
$ |
3,867 | $ |
3,867 |
(in ‘000) |
Amount |
|||
2022 |
$ |
2,924 | ||
2023 |
1,904 | |||
2024 |
1,495 | |||
2025 |
1,170 | |||
2026 |
958 | |||
Thereafter |
3,412 | |||
|
|
|||
Total |
$ |
11,863 |
||
|
|
(in ‘000) |
Amount |
|||
2022 |
$ |
207 | ||
2023 |
143 | |||
2024 |
119 | |||
2025 |
26 | |||
2026 |
— |
|||
|
|
|||
Total minimum lease payments |
$ |
495 |
||
Interest expense |
(40 | ) | ||
|
|
|||
Total |
$ |
455 |
||
|
|
(in ‘000) |
Amount |
|||
2022 |
$ |
21,144 |
||
2023 |
9,446 |
|||
2024 |
1,245 |
|||
2025 |
1,245 |
|||
2026 |
— |
|||
Thereafter |
— |
|||
|
|
|||
Total |
$ |
33,080 |
||
|
|
(in ‘000) |
December 31, 2021 |
December 31, 2020 |
||||||
Prepaid deposits |
$ |
1,030 | $ |
1,734 | ||||
Prepaid expenses |
6,418 | 3,695 | ||||||
Other receivables |
— |
— |
||||||
|
|
|
|
|||||
Total Prepaid expenses and other receivables |
$ |
7,448 | $ |
5,429 | ||||
|
|
|
|
Amount (in ‘000) |
Series A |
Series A-1 |
Series B |
|||||||||
Accumulated and unpaid, December 31, 2019 |
$ |
25,610 |
$ |
8,794 |
$ |
25,338 |
||||||
Accumulated |
9,202 | 9,814 | 8,572 | |||||||||
Distributed |
— |
— |
— |
|||||||||
|
|
|
|
|
|
|||||||
Accumulated and unpaid, December 31, 2020 |
$ |
34,812 |
$ |
18,608 |
$ |
33,910 |
||||||
Accumulated |
7,656 | 8,241 | 6,925 | |||||||||
Distributed |
(42,468 | ) |
(26,849 | ) |
(40,835 | ) | ||||||
|
|
|
|
|
|
|||||||
Accumulated and unpaid, December 31, 2021 |
$ |
— |
$ |
— |
$ |
— |
||||||
|
|
|
|
|
|
Number of Options |
Weighted Average Grant Date Fair Value per Option (Amount) |
Weighted Average Exercise Price (Amount) |
Weighted Average Remaining Contractual Term (Years) |
|||||||||||||
Balance, December 31, 2018 |
414,434 |
$ |
15.80 |
$ |
141.53 |
9.3 |
||||||||||
Granted |
52,083 | 15.91 | 141.53 | |||||||||||||
Exercised |
— |
— |
— |
|||||||||||||
Forfeited |
(67,366 | ) |
15.80 | 141.53 | ||||||||||||
Expired |
— |
— |
— |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2019 |
399,151 |
$ |
15.82 |
141.53 |
8.4 |
|||||||||||
Granted |
64,064 | 13.50 | 141.53 | |||||||||||||
Exercised |
— |
— |
— |
|||||||||||||
Forfeited |
(30,715 | ) |
15.80 | 141.53 | ||||||||||||
Expired |
— |
— |
— |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2020 |
432,500 |
$ |
15.45 |
$ |
141.53 |
7.7 |
||||||||||
|
|
|
|
|
|
|
|
|||||||||
Granted |
— |
— |
— |
|||||||||||||
Exercised |
— |
— |
— |
|||||||||||||
Forfeited |
— |
— |
— |
|||||||||||||
Expired |
— |
— |
— |
|||||||||||||
Cancelled |
(432,500 | ) |
(15.45 | ) |
(141.53 | ) |
(7.7 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2021 |
— |
$ |
— |
$ |
— |
— |
||||||||||
|
|
|
|
|
|
|
|
(in ‘000) |
December 31, 2021 |
December 31, 2020 |
||||||
Total Stock Compensation Expense |
$ |
4,564 | $ |
1,161 | ||||
Unrecognized Compensation Cost |
— |
3,416 | ||||||
Remaining recognition period (in years) |
— |
2.7 |
December 31, 2021 |
December 31, 2020 |
|||||||
Range of Exercise Prices |
— |
$ |
80.87 -$202.18 |
|||||
Number |
— |
153,898 | ||||||
Weighted Average Remaining Contractual Term (in years) |
— |
7.3 | ||||||
Weighted Average Exercise Price |
$ |
— |
$ |
141.53 |
(in ‘000) |
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
|||||||||
Numerator: |
||||||||||||
Net loss attributable to the Company |
$ |
(24,453 | ) $ |
(35,201 | ) $ |
(23,443 | ) | |||||
Less cumulative earnings to preferred |
(22,822 | ) |
(26,900 | ) |
(21,647 | ) | ||||||
Add premium on preferred conversion to common shares |
4,074 | — |
— |
|||||||||
|
|
|
|
|
|
|||||||
Net income (loss) attributable to common stockholders |
(43,201 |
) |
(62,101 |
) |
(45,090 |
) | ||||||
Denominator: |
||||||||||||
Weighted average common shares and warrants outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic (in number) |
41,933,050 | 31,650,173 | 31,169,435 | |||||||||
Diluted (in number) |
41,933,050 |
31,650,173 |
31,169,435 |
|||||||||
Net loss per unit attributable to common stockholder |
||||||||||||
Basic |
$ |
(1.03 |
) |
$ |
(1.96 |
) |
$ |
(1.45 |
) | |||
Diluted |
$ |
(1.03 |
) |
$ |
(1.96 |
) |
$ |
(1.45 |
) |
For the years ended (number of shares) |
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
|||||||||
Series C Convertible Preferred Stock |
2,566,186 | 2,566,186 | 2,566,186 | |||||||||
Stock Options |
432,500 | 432,500 | 399,151 | |||||||||
Common stock issued under the Backstop Agreement |
9,600,031 | — |
— |
(in ‘000) |
December 31, 2021 |
December 31, 2020 |
||||||
Interfusion B.V. |
— |
985 | ||||||
T-Fone B.V. |
— |
630 |
December 31, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Non-current assets |
||||||||
Investment in subsidiaries |
$ |
261,012 | $ |
300,055 | ||||
Total non-current assets |
261,012 | 300,055 | ||||||
Total assets |
$ |
261,012 |
$ |
300,055 |
||||
Liabilities, temporary equity and stockholders’ equity |
||||||||
Long-term liabilities |
||||||||
Warrant liability |
$ |
286 | $ |
15,944 | ||||
Total liabilities |
286 |
15,944 |
||||||
Temporary equity |
||||||||
Series A Preferred Stock; par value $1,000 per share; none authorized, issued and outstanding at December 31, 2021; 7,765,229 shares authorized, and 7,756,158 shares issued and outstanding at December 31, 2020 |
— |
77,562 | ||||||
Series A-1 Preferred Stock; par value $1,000 per share; none authorized, issued and outstanding at December 31, 2021; 10,480,538 shares authorized, 7,862,107 shares issued and outstanding at December 31, 2020 |
— |
78,621 | ||||||
Series B Preferred Stock; par value $1,000 per share; none authorized, issued and outstanding at December 31, 2021; 9,090,975 shares authorized, 9,090,975 shares issued and outstanding at December 31, 2020 |
— |
90,910 | ||||||
Series C Convertible Preferred Stock; par value $1,000 per share; none authorized, issued and outstanding at December 31, 2021; 6,872,894 shares authorized, 2,566,186 shares issued and outstanding at December 31, 2020 |
— |
16,802 | ||||||
Total temporary equity |
— |
263,895 |
||||||
Stockholders’ equity |
||||||||
Common stock, voting; par value $0.0001 per share; 315,000,000 shares authorized, 72,027,743 shares issued and outstanding at December 31, 2021; 55,659,643 shares authorized, 30,281,520 shares issued and outstanding at December 31, 2020 |
7 | 3 | ||||||
Additional paid-in capital |
401,688 | 135,616 | ||||||
Accumulated other comprehensive loss |
(3,331 | ) |
(1,677 | ) | ||||
Accumulated deficit |
(137,638 | ) |
(113,726 | ) | ||||
Total stockholders’ equity |
260,726 |
20,216 |
||||||
Total liabilities, temporary equity and stockholders’ equity |
$ |
261,012 |
$ |
300,055 |
||||
For the years ended |
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
|||||||||
Equity in net loss of unconsolidated subsidiaries |
$ |
(29,177 | ) |
$ |
(27,716 | ) |
$ |
(23,678 | ) | |||
Change in fair value of warrant liability |
(5,267 | ) |
7,485 | (235 | ) | |||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
(23,910 |
) |
(35,201 |
) |
(23,443 |
) | ||||||
|
|
|
|
|
|
|||||||
Net loss |
$ |
(23,910 |
) |
$ |
(35,201 |
) |
$ |
(23,443 |
) | |||
|
|
|
|
|
|
|||||||
Other comprehensive loss: |
||||||||||||
Foreign currency translation adjustment |
(1,654 | ) |
2,116 | 517 | ||||||||
|
|
|
|
|
|
|||||||
Comprehensive loss |
$ |
(25,564 |
) |
$ |
(33,085 |
) |
$ |
(22,926 |
) | |||
|
|
|
|
|
|
For the years ended |
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
|||||||||
Cash flows from operating activities |
||||||||||||
Net loss |
$ |
(23,910 | ) |
$ |
(35,201 | ) |
$ |
(23,443 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities |
— |
— |
||||||||||
Equity in net loss of unconsolidated subsidiaries |
29,177 | 27,716 | 23,678 | |||||||||
Change in fair value of warrant liability |
(5,267 | ) |
7,485 | (235 | ) | |||||||
|
|
|
|
|
|
|||||||
Cash provided by operating activities |
$ |
— |
$ |
— |
$ |
— |
||||||
|
|
|
|
|
|
|||||||
Cash flows from investing activities |
||||||||||||
Distribution from subsidiary |
5,947 | 200 | 80 | |||||||||
|
|
|
|
|
|
|||||||
Cash provided by investing activities |
$ |
5,947 |
$ |
200 |
$ |
80 |
||||||
Cash flows from financing activities |
||||||||||||
Repurchase of common stock |
— |
(200 | ) |
(80 | ) | |||||||
Issuance of common stock, net of transaction costs |
223,968 | — |
— |
|||||||||
Settlement of preferred stock |
(229,915 | ) |
— |
— |
||||||||
|
|
|
|
|
|
|||||||
Cash used in financing activities |
$ |
(5,947 |
) |
$ |
(200 |
) |
$ |
(80 |
) | |||
Effect of exchange rate change on cash and cash equivalents |
— |
— |
— |
|||||||||
|
|
|
|
|
|
|||||||
Change in cash and cash equivalents and restricted cash |
— |
— |
— |
|||||||||
Cash and cash equivalents and restricted cash, beginning of |
— |
— |
— |
|||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents and restricted cash, end of year |
$ |
— |
$ |
— |
$ |
— |
||||||
|
|
|
|
|
|
|||||||
Non-cash investing and financing activities: |
||||||||||||
Equity issued for acquisition of Integron, LLC |
$ |
— |
$ |
— |
$ |
7,000 | ||||||
|
|
|
|
|
|
|||||||
Share-based payment awards issued to employees of subsidiaries |
$ |
1,839 | $ |
1,161 | $ |
1,682 | ||||||
|
|
|
|
|
|
(i) |
Basis of presentation and business combination |
• |
the equity holders of pre-combination KORE hold the majority (54%) of voting rights in the Company; |
• |
the senior management of pre-combination KORE became the senior management of the Company; |
• |
in comparison with CTAC, pre-combination KORE has significantly more revenues and total assets and a larger net loss; and |
• |
the operations of pre-combination KORE comprise the ongoing operations of the Company, and the Company assumed pre-Combination KORE’s headquarters. |
(ii) |
Restricted Net Assets |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. |
CONTROLS AND PROCEDURES |
• |
Entity-Level Controls - |
• |
Financial Close Process |
• |
Non-routine and Complex Transactions non-routine and/or complex aspects of financial reporting. Specifically, management did not design and maintain effective (i) controls over the identification, accounting, and review of non-routine and complex transactions, and (ii) management review controls over complex areas of accounting such as revenue, income taxes, and complex financial instruments, at an appropriate level of precision to detect a material misstatement and sufficient appropriate evidence was not maintained to support the execution and evaluation of the controls performed, including the review of the completeness and accuracy of the source data utilized and the appropriateness of assumptions used by the control owner. |
• |
Procure to pay – . |
• |
Information Technology General Controls – |
• |
We hired additional qualified accounting resources and outside resources to segregate key functions within our financial and information technology processes supporting our internal controls over financial reporting and to provide appropriate oversight and accountability over the performance of our internal controls. |
• |
We are in the process of reassessing and formalizing the design of certain accounting and information technology policies relating to security and change management controls. |
• |
We engaged an outside firm to assist management with (i) reviewing our current processes, procedures, and systems and assessing the design of controls to identify opportunities to enhance the design of controls that would address relevant risks identified by management, and (ii) enhancing and implementing protocols to retain sufficient documentary evidence to support the operating effectiveness of such controls. |
• |
We plan to implement an application solution to enhance controls over inventory management and reporting. |
• |
Continuing to enhance and formalize our accounting, business operations, and information technology policies, procedures, and controls to achieve complete, accurate, and timely financial accounting, reporting and disclosures. |
• |
Continuing to hire additional qualified accounting resources and utilize outside resources, where necessary. |
• |
Completing the implementation of new financial processing systems to replace legacy systems and establish effective general controls over these systems to ensure that our automated process level controls and information produced and maintained in our IT systems is relevant and reliable. |
• |
Designing and implementing controls that address the completeness and accuracy of underlying data used in the performance of controls over accounting transactions and disclosures. |
• |
Developing monitoring controls and protocols that will allow us to timely assess the design and the operating effectiveness of controls over financial reporting and make necessary changes to the design of controls, if any. |
• |
Reviewing the existing procure to pay cycle and implementing design enhancements to make the process more efficient and effective. |
ITEM 9B. |
OTHER INFORMATION |
ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. |
EXECUTIVE COMPENSATION |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
Exhibit Number |
Description | |
2.1 |
||
2.2 |
||
2.3 |
||
3.1 |
||
3.2 |
||
4.1 |
||
4.2 |
||
4.3 |
||
4.4 |
||
10.1 |
||
10.2 |
||
10.3 |
||
10.4 |
||
10.5 |
||
10.6 |
||
10.7 |
KORE GROUP HOLDINGS, INC. | ||
By: |
/s/ Romil Bahl | |
Romil Bahl | ||
President, Chief Executive Officer and Director |
Signature |
Title |
Date | ||
/s/ Romil Bahl |
President, Chief Executive Officer and Director |
March 29, 2022 | ||
Romil Bahl |
(Principal Executive Officer) |
|||
/s/ Paul Holtz |
EVP, Chief Financial Officer and Treasurer |
March 29, 2022 | ||
Paul Holtz |
(Principal Financial Officer and Principal Accounting Officer) |
|||
/s/ Cheemin Bo-Linn |
Director |
March 29, 2022 | ||
Cheemin Bo-Linn |
||||
/s/ Timothy Donahue |
Director |
March 29, 2022 | ||
Timothy Donahue |
||||
/s/ H. Paulett Eberhart |
Director |
March 29, 2022 | ||
H. Paulett Eberhart |
||||
/s/ James Geisler |
Director |
March 29, 2022 | ||
James Geisler |
||||
/s/ Robert P. MacInnis |
Director |
March 29, 2022 | ||
Robert P. MacInnis |
||||
/s/ Mark Neporent |
Director |
March 29, 2022 | ||
Mark Neporent |
||||
/s/ Michael K. Palmer |
Director |
March 29, 2022 | ||
Michael K. Palmer |
||||
/s/ Tomer Yosef-Or |
Director |
March 29, 2022 | ||
Tomer Yosef-Or |
Exhibit 4.4
DESCRIPTION OF THE REGISTRANTS SECURITIES REGISTERED PURSUANT TO
SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
The following description of the capital stock of KORE Group Holdings, Inc. (the Company, we, us, and our) and certain provisions of our amended and restated certificate of incorporation (the Charter), bylaws (the Bylaws), Warrant Agreement, dated as of October 26, 2020, between Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent, and Cerberus Telecom Acquisition Corp., a Cayman Islands exempted company (the Warrant Agreement) and Investor Rights Agreement, dated as of September 30, 2021 by and among the Company and the other parties thereto (the Investor Rights Agreement), are summaries and are qualified in their entirety by reference to the full text of the Charter, Bylaws, Warrant Agreement and Investor Rights Agreement, copies of which have been filed with the Securities and Exchange Commission, and applicable provisions of the General Corporation Law of the State of Delaware (the DGCL). As of December 31, 2021, we had two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act): common stock, $0.0001 par value per share (Class A common stock) and warrants to purchase shares of common stock.
Our authorized capital stock consists of:
(a) 315,000,000 shares of common stock;
(b) 35,000,000 shares of preferred stock, par value $0.0001 per share.
All shares of our common stock outstanding are fully paid and non-assessable.
Common Stock
Voting Power
Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, under the amended and restated certificate of incorporation, the holders of common stock shall be entitled to vote on each matter submitted to a vote of stockholders and shall be entitled to one vote for each share of common stock held of record by such holder as of the record date for determining stockholders entitled to vote on such matter, including the election or removal of directors. The holders of common stock will at all times vote together as one class on all matters submitted to a vote of common stock under the amended and restated certificate of incorporation.
Dividends
Subject to applicable law and the rights and preferences of any holders of any outstanding shares of preferred stock, under the amended and restated certificate of incorporation, dividends and distributions may be declared and paid ratably on the common stock out of our assets that are legally available for this purpose at such times and in such amounts as our Board in its discretion shall determine.
Liquidation, Dissolution and Winding Up
Subject to applicable law and the rights and preferences of any holders of any shares of any outstanding series of preferred stock, in the event of any liquidation, dissolution, or winding-up, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the company and subject to the rights, if any, of the holders of any outstanding series of preferred stock or any class or series of stock having a preference over or the right to participate with the common stock with respect to the distribution of assets upon such dissolution, liquidation or winding up of the company, the holders of common stock will be entitled to receive all the remaining assets of the company available for distribution to stockholders, ratably in proportion to the number of shares of common stock held by each such holder.
Preemptive or Other Rights
The holders of common stock do not have preemptive or other subscription rights and there will be no sinking fund or redemption provisions applicable to common stock.
Warrants
Each whole warrant entitles the registered holder to purchase one share of our common stock at a price of $11.50 per share, subject to adjustment as discussed below. Pursuant to the terms of the Warrant Agreement, a warrant holder may exercise its warrants only for a whole number of shares of our common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The warrants will expire five years after the completion of the Business Combination at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We are not obligated to deliver any shares of our common stock pursuant to the exercise of a warrant and have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of our common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of common stock is available, subject to our satisfying our obligations described below with respect to registration. No warrant will be exercisable for cash or on a cashless basis (unless permitted by us in certain circumstances specified in the Warrant Agreement), and we are not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of our common stock underlying such unit.
Redemption of Warrants for Cash when the price per share of our common stock equals or exceeds $10.00
Once the warrants become exercisable, we may call the warrants for redemption:
| in whole and not in part; |
| at $0.10 per warrant upon a minimum of 30 days prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the fair market value of shares of our common stock except as otherwise described below; and |
| if, and only if, the closing price of our common stock equals or exceeds $10.00 per public share (as adjusted for stock splits, stock recapitalizations, reorganizations, recapitalizations and the like) for any twenty (20) trading days within the thirty (30)-trading day period ending three trading days before we send the notice of redemption to the warrant holders. |
Beginning on the date the notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of shares of our common stock that a warrant holder will receive upon such cashless exercise in connection with a redemption by us pursuant to this redemption feature, based on the fair market value of shares of our common stock on the corresponding redemption date (assuming holders elect to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on volume weighted average price of shares of our common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, each as set forth in the table below. We will provide warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
The share prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable upon exercise of a warrant or the exercise price of a warrant is adjusted as set forth under the heading Anti-Dilution Adjustments below. If the number of shares issuable upon exercise of a warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such
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adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a warrant. If the exercise price of a warrant is adjusted, (a) in the case of an adjustment pursuant to the fifth paragraph under the heading Anti-Dilution Adjustments below, the adjusted share prices in the column headings will equal the unadjusted share price multiplied by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price as set forth under the heading Anti-Dilution Adjustments and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to the second paragraph under the heading Anti-Dilution Adjustments below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price of a warrant pursuant to such exercise price adjustment.
Redemption Date | Fair Market Value of Our Common Stock | |||||||||||||||||||||||||||||||||||
(period to expiration of warrants) | $10.00 | $11.00 | $12.00 | $13.00 | $14.00 | $15.00 | $16.00 | $17.00 | $18.00 | |||||||||||||||||||||||||||
60 months |
0.261 | 0.281 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months |
| | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of shares of our common stock to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as applicable. For example, if the volume weighted average price of shares of our common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $11.00 per share, and at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.277 shares of our common stock for each whole warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume weighted average price of shares of our common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $13.50 per share, and at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.298 shares of our common stock for each whole warrant. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 shares of our common stock per warrant (subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature, since they will not be exercisable for any shares of our common stock.
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This redemption feature differs from the typical warrant redemption features used in many other blank check offerings, which typically only provide for a redemption of warrants for cash (other than the private placement warrants) when the trading price for the Class A ordinary shares exceeds $18.00 per share for a specified period of time. This redemption feature is structured to allow for all of the outstanding warrants to be redeemed when the shares of our common stock are trading at or above $10.00 per public share, which may be at a time when the trading price of shares of our common stock is below the exercise price of the warrants. This redemption feature provides flexibility to redeem the warrants without the warrants having to reach the $18.00 per share threshold set forth above under Redemption of Warrants for Cash when the price per share of our common stock equals or exceeds $18.00. Holders choosing to exercise their warrants in connection with a redemption pursuant to this feature will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility input as of the of the CTAC initial public offering. This redemption right provides us with an additional mechanism by which to redeem all of the outstanding warrants, and therefore have certainty as to our capital structure as the warrants would no longer be outstanding and would have been exercised or redeemed. We will be required to pay the applicable redemption price to warrant holders if we choose to exercise this redemption right and it will allow us to quickly proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such, we would presumably redeem the warrants in this manner when we believes it is in our best interest to update its capital structure to remove the warrants and pay the redemption price to the warrant holders.
As stated above, we can redeem the warrants when the shares of our common stock are trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will presumably provide certainty with respect to our capital structure and cash position while providing warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares. If we choose to redeem the warrants when the shares of our common stock are trading at a price below the exercise price of the warrants, this could result in the warrant holders receiving fewer shares of our common stock than they would have received if they had chosen to wait to exercise their warrants for shares of common stock if and when such shares of our common stock were trading at a price higher than the exercise price of $11.50.
No fractional shares of our common stock will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of our common stock to be issued to the holder. We will use commercially reasonable efforts to register under the Securities Act the shares of our common stock issuable upon the exercise of the warrants.
Redemption Procedures
A holder of a warrant may notify us in writing in the event we elect to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such persons affiliates), to the warrant agents actual knowledge, would beneficially own in excess of 9.8% (or other amount as specified by the holder) of the shares of our common stock outstanding immediately after giving effect to such exercise.
Anti-Dilution Adjustments
If the number of outstanding shares of our common stock is increased by a capitalization or stock dividend payable in shares of our common stock or by a split-up of shares of our common stock or other similar event, then, on the effective date of such capitalization, stock dividend, split-up or similar event, the number of shares of our common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of our common stock. A rights offering made to all or substantially all holders of our common stock entitling holders to purchase shares of our common stock at a price less than the historical fair market value (as defined below) will be deemed a stock dividend of a number of shares of our common stock equal to the product of (1) the number of shares of our common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for our common stock) multiplied by (2) one minus the quotient of (x) the price per share of our common stock paid in such rights offering and (y) the historical fair market value. For these purposes (1) if the rights offering is for securities convertible into or exercisable for our common stock, in determining the price payable for our common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (2) historical fair market value means the volume weighted average price per share of our common stock as reported during the ten trading day period ending on the trading day prior to the first date on which the shares of our common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
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In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of our common stock on account of such shares of our common stock (or other securities of our capital stock into which the warrants are convertible), other than (a) as described above or (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the shares of our common stock during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that result in an adjustment to the exercise price or to the number of shares of our common stock issuable on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share,, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of our common stock in respect of such event.
If the number of outstanding shares of our common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of our common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of our common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of our common stock.
Whenever the number of shares of our common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of our common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of our common stock so purchasable immediately thereafter.
In addition, if (x) we issue additional shares of our common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination, at an issue price or effective issue price of less than $9.20 per share of our common stock (with such issue price or effective issue price to be determined in good faith by our board of directors), (the Newly Issued Price) (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our common stock during the 20 trading day period starting on the trading day after the day on which we consummate our initial business combination (such price, the Market Value) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
In case of any reclassification or reorganization of the outstanding shares of our common stock (other than those described above or that solely affects the par value of such shares of our common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of our common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of our common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will
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become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding shares of our common stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the shares of our common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustment (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the Warrant Agreement. Additionally, if less than 70% of the consideration receivable by the holders of our common stock in such a transaction is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty (30) days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the Warrant Agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the Warrant Agreement) of the warrant. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants.
The warrants were issued in registered form under the Warrant Agreement, which in connection with the Business Combination, CTAC assigned and KORE assumed the obligations and rights set forth therein. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in the CTAC prospectus, or defective provision, (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 65% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders.
The warrant holders do not have the rights or privileges of holders of shares of our common stock and any voting rights until they exercise their warrants and receive shares of our common stock. After the issuance of shares of our common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by our stockholders.
No fractional warrants will be issued upon separation of the units and only whole warrants will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number shares of our common stock to be issued to the warrant holder. The parties to the Warrant Agreement have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and such parties irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.
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Exclusive Forum
Our amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or stockholders to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or our bylaws, (iv) any action arising pursuant to any provision of the DGCL, our bylaws or the amended and restated certificate of incorporation or (v) any action asserting a claim against us or any current or former director, officer or stockholder governed by the internal affairs doctrine will have to be brought in a state court located within the state of Delaware (or if no state court of the State of Delaware has jurisdiction, the federal district court for the District of Delaware), in all cases subject to the courts having personal jurisdiction over the indispensable parties named as defendants. The foregoing provision will not apply to claims arising under the Securities Act, the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. Unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act and the Exchange Act.
Anti-Takeover Effects of Provisions of our Amended and Restated Certificate of Incorporation and Bylaws
The provisions of the our amended and restated certificate of incorporation and bylaws and of the DGCL summarized below may have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that you might consider in your best interest, including an attempt that might result in your receipt of a premium over the market price for your shares of common stock.
The amended and restated certificate of incorporation and bylaws contain certain provisions that are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and that may have the effect of delaying, deferring or preventing a future takeover or change in control of us, unless such takeover or change in control is approved by our board of directors.
These provisions include:
Business Combination:
| We have elected not to be governed by Section 203 of the DGCL, which prohibits a corporation that has voting stock traded on a national security exchange from engaging in certain business combinations with an interested stockholder (defined as the owner of 15% or more of the corporations voting stock), or an interested stockholders affiliates or associates, for a three-year period unless, among other exceptions, certain board approvals are received. |
| Our amended and restated certificate of incorporation generally prohibits us from engaging in any business combination with any interested stockholder for a period of three years following the time that such stockholder became an interested stockholder, unless: |
| Prior to such time, the board approved the transaction that resulted in the stockholder becoming an interested stockholder; |
| Upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the outstanding voting stock at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); |
| At or subsequent to such time, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder; or |
| The stockholder became an interested stockholder inadvertently and (i) as soon as practicable divested itself of ownership of sufficient shares so that the stockholder ceased to be an interested stockholder and (ii) was not, at any time within the 3-year period immediately prior to a business combination between us and such stockholder, an interested stockholder but for the inadvertent acquisition of ownership. |
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No Written Consent: Any action required or permitted to be taken by the stockholders must be effected at an annual or special meeting of the stockholders, and shall not be taken by written consent in lieu of a meeting.
Amendments: For a period of seven years following closing of this offering, a substantial portion of the provisions under the amended and restated certificate of incorporation may not be amended without the affirmative vote of the holders of at least 66 2/3% of the total voting power of all the then outstanding shares of stock entitled to vote thereon, voting together as a single class.
Stockholder Proposals:
| Our bylaws establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders. Our bylaws provide that the only business that may be conducted at an annual meeting of stockholders is business that is (i) specified in the notice of such meeting (or any supplement thereto) given by or at the direction of our board of directors, (ii) otherwise properly brought before such meeting by the our board of directors or the chairperson of the board, or (iii) otherwise properly brought before such meeting by a stockholder present in person who (A) (1) was a record owner of shares both at the time of giving the notice and at the time of such meeting, (2) is entitled to vote at such meeting, and (3) has complied with notice procedures specified in our bylaws in all applicable respects or (B) properly made such proposal in accordance with Rule 14a-8 under the Exchange Act. To be timely for our annual meeting of stockholders, a stockholders notice must be delivered to, or mailed and received at, the principal executive offices of the corporation not less than 90 days nor more than 120 days prior to the one-year anniversary of the preceding years annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the 90th day prior to such annual meeting or, if later, the 10th day following the day on which public disclosure of the date of such annual meeting was first made by the corporation. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of timely notice as described above. |
| We currently anticipate the 2022 annual meeting of stockholders of will be held no later than September 2022. Nominations and proposals also must satisfy other requirements set forth in our bylaws. |
| Under Rule 14a-8 of the Exchange Act, a stockholder proposal to be included in the proxy statement and proxy card for the 2022 annual general meeting pursuant to Rule 14a-8 must be received at our principal office a reasonable time before we begin to print and send its proxy materials and must comply with Rule 14a-8. |
Limitations on Liability and Indemnification of Officers and Directors
Our amended and restated certificate of incorporation limits the liability of our directors to the fullest extent permitted by the DGCL and provides that we will provide them with customary indemnification and advancement of expenses. We have entered into customary indemnification agreements with each of our executive officers and directors that provide them, in general, with customary indemnification in connection with their service to us or on our behalf.
Our Transfer Agent and Warrant Agent
The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any claims and losses due to any gross negligence or intentional willful misconduct or bad faith of the indemnified person or entity.
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Listing of Common Stock and Warrants
Our common stock trades on the New York Stock Exchange (the NYSE) under the ticker symbol KORE and our warrants trade on the NYSE under the ticker symbol KORE WS.
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Exhibit 21.1
LIST OF SUBSIDIARIES
Name of Subsidiary |
Jurisdiction of Incorporation or Organization | |
Aspider Holding B.V. |
Netherlands | |
Aspider International Inc. |
Massachusetts | |
Aspider M2M Ltd. |
Malta | |
Aspider Solutions Global Holdings Ltd. |
Malta | |
Aspider Solutions International Holdings Ltd. |
Malta | |
Aspider Solutions Ireland Ltd. |
Ireland | |
Aspider Solutions Malta Ltd. |
Malta | |
Aspider Solutions Nederland B.V. |
Netherlands | |
BMP Simon Holdings, LLC |
Delaware | |
Business Mobility Partners, Inc. |
Delaware | |
Indico Individual and Organizational Development S.R.L |
Dominican Republic | |
Integron B.V. |
Netherlands | |
Integron LLC |
Delaware | |
King LLC Merger Sub, LLC |
Delaware | |
KORE TM Data Processamento De Dados LTDA |
Brazil | |
KORE Wireless Canada Inc. |
Canada | |
KORE Wireless GmbH |
Switzerland | |
KORE Wireless Group Inc. |
Delaware | |
KORE Wireless Inc. |
Delaware | |
KORE Wireless Mexico S. de R.L. de C.V. |
Mexico | |
KORE Wireless Nederland B.V. |
Netherlands | |
KORE Wireless Pty Ltd. |
Australia | |
KORE Wireless Singapore Pte. Ltd. |
Singapore | |
KORE Wireless UK PLC |
United Kingdom | |
Maple Intermediate Holdings Inc. |
Delaware | |
Maple Senior Intermediate Holdings Inc. |
Delaware | |
Nest Generation Innovations BVBA |
Belgium | |
Next Generation Innovations Ltd. |
New Zealand | |
NGA Holding B.V. |
Netherlands | |
Position Logic, LLC |
Florida | |
Raco Holdings, LLC |
Delaware | |
Raco Wireless LLC |
Ohio | |
Simon IoT LLC |
New York | |
Wyless Connect, LLC |
Massachusetts | |
Wyless, Inc. |
Delaware |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
KORE Group Holdings, Inc.
Alpharetta, Georgia
We hereby consent to the incorporation by reference in the Registration Statements on Form S-1 (No. 333-260288 and No. 333-261464) and Form S-8 (No. 333-262001) of KORE Group Holdings, Inc. of our report dated March 29, 2022, relating to the consolidated financial statements and schedule, which appears in this Form 10-K.
/s/ BDO USA, LLP
Atlanta, Georgia
March 29, 2022
Exhibit 31.1
CERTIFICATION
I, Romil Bahl, certify that:
1. I have reviewed this Annual Report on Form 10-K of KORE Group Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) [Omitted];
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: March 29, 2022
By: | /s/ Romil Bahl | |
Romil Bahl | ||
President and Chief Executive Officer | ||
(principal executive officer) |
2
Exhibit 31.2
CERTIFICATION
I, Paul Holtz, certify that:
1. I have reviewed this Annual Report on Form 10-K of KORE Group Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) [Omitted];
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: March 29, 2022
By: | /s/ Paul Holtz | |
Paul Holtz | ||
EVP, Chief Financial Officer and Treasurer | ||
(Principal Financial Officer and Principal Accounting Officer) |
2
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of KORE Group Holdings, Inc. (the Company) for the period ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 29, 2022
By: | /s/ Romil Bahl | |
Romil Bahl | ||
President and Chief Executive Officer | ||
(principal executive officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of KORE Group Holdings, Inc. (the Company) for the period ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 29, 2022
By: | /s/ Paul Holtz | |
Paul Holtz | ||
EVP, Chief Financial Officer and Treasurer | ||
(Principal Financial Officer and Principal Accounting Officer) |