Inseego (INSG) risk factors, FY2024 10-K

RISKS RELATED TO OUR ABILITY TO GENERATE REVENUES

1. 01We depend upon two customers for a substantial portion of our revenues, and our business would be negatively affected by an adverse change in our dealings with either of these customers
2. 02We may not be able to retain and increase sales to our existing customers, which could negatively impact our financial results
3. 03Loss of, or a significant reduction in business from, one or more significant customers could adversely affect our revenue and profitability
4. 04The FWA market may take longer to materialize than we expect or, if it does materialize rapidly, we may not be able to meet the development schedule and other customer demands
5. 05The marketability of our products may suffer if wireless telecommunications operators do not deliver acceptable wireless services
6. 06If customers do not adopt our software, we may not be able to monetize these software assets and realize a key part of our growth and profitability strategy
7. 07The market for the products and services that we offer is rapidly evolving and highly competitive. We may be unable to compete effectively
8. 08If we fail to develop and maintain strategic relationships, we may not be able to penetrate new markets
9. 09If we fail to develop and timely introduce new products and services or enter new markets for our products and services successfully, we may not achieve our revenue targets, or we may lose key customers or sales and our business could be harmed

RISKS RELATED TO DEVELOPING, MANUFACTURING AND DELIVERING OUR SOLUTIONS

1. 10We rely on third parties to manufacture and warehouse many of our products, which exposes us to a number of risks and uncertainties outside our control
2. 11We depend on sole source suppliers for some components used in our products. The availability and sale of those services would be harmed if any of these suppliers is not able to meet our demand and alternative suitable products are not available on acceptable terms, or at all
3. 12Natural disasters, public health crises, political crises and other catastrophic events or other events outside of our control could damage our facilities or the facilities of third parties on which we depend, and could impact consumer spending
4. 13If disruptions in our transportation network occur or our shipping costs substantially increase, we may be unable to sell or timely deliver our products, and our operating expenses could increase
5. 14We may be unable to adequately control the costs or maintain adequate supply of components and raw materials associated with our operations
6. 15If we do not effectively manage our sales channel inventory and product mix, we may incur costs associated with excess inventory, or lose sales from having too few products
7. 16Product liability, product replacement or recall costs could adversely affect our business and financial performance
8. 17We rely on third-party software and other intellectual property to develop and provide our solutions and significant increases in licensing costs or defects in third-party software could harm our business
9. 18Our solutions integrate with third-party technologies and if our solutions become incompatible with these technologies, our solutions would lose functionality and our customer acquisition and retention could be adversely affected
10. 19Our software may contain undetected errors, defects or other software problems, and if we fail to correct any defect or other software problems, we could lose customers or incur significant costs, which could result in damage to our reputation or harm to our operating results
11. 20Our “over-the-air” transmission of firmware updates could permit a third party to disable our customers’ in-vehicle devices or introduce malware into our customers’ in-vehicle devices, which could expose us to widespread loss of service and customer claims
12. 21Our international operations may increase our exposure to potential liability under anti-corruption, trade protection, tax and other laws and regulations

RISKS RELATED TO OUR OUTSTANDING DEBT

1. 22Our debt service requirements are significant, and we may not have sufficient cash flow from our business to pay our debt
2. 23Our future capital needs are uncertain, and we may need to raise additional funds in the future. We may not be able to raise such additional funds on acceptable terms or at all
3. 24We are required to comply with certain covenants under the terms of our 2029 Senior Secured Notes and, if we fail to meet those covenants or otherwise suffer a default thereunder, our lenders may accelerate the payment of such obligations

LEGAL AND REGULATORY RISKS

1. 25Evolving regulations and changes in applicable laws relating to data privacy may increase our expenditures related to compliance efforts or otherwise limit the solutions we can offer, which may harm our business and adversely affect our financial condition
2. 26Enhanced United States fiscal, tax and trade restrictions and executive and legislative actions could adversely affect our business, financial condition, and results of operations
3. 27The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results
4. 28An assertion by a third party that we are infringing its intellectual property could subject us to costly and time-consuming litigation or expensive licenses and our business could be harmed
5. 29If we are unable to protect our intellectual property and proprietary rights, our competitive position and our business could be harmed

RISKS RELATED TO CORPORATE DEVELOPMENT ACTIVITIES

1. 30We may acquire companies and businesses, and/or divest assets or businesses. The completion of acquisition or divestiture transactions could have an adverse effect on our financial condition
2. 31If our goodwill and acquired intangible assets become impaired, we may be required to record a significant charge to earnings

RISKS RELATED TO OWNING OUR SECURITIES

1. 32Our share price has been highly volatile in the past and could be highly volatile in the future
2. 33Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
3. 34The price of our stock may be vulnerable to manipulation, including through short sales
4. 35Certain provisions in the 2029 Senior Secured Notes Indenture and/or the indenture governing the 2025 Convertible Notes (as amended or supplemented, the “Indenture”) could delay or prevent an otherwise beneficial takeover or takeover attempt of us
5. 36Ownership of our common stock is concentrated, and as a result, certain stockholders may exercise significant influence over the Company
6. 37Our outstanding Series E Preferred Stock or future equity offerings could adversely affect the valuation and/or holders of our common stock
7. 38We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common stock
8. 39Our restated certificate of incorporation and restated bylaws and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock
9. 40If financial or industry analysts do not publish research or reports about our business, or if they issue negative or misleading evaluations of our stock, our stock price and trading volume could be adversely affected
10. 41If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to report our financial results timely and accurately, which could adversely affect investor confidence in us, and in turn, our results of operations and our stock price
11. 42If the accounting estimates we make, and the assumptions on which we rely, in preparing our financial statements prove inaccurate, our actual results may be adversely affected
12. 43Changes to the accounting systems or new accounting system implementations may be ineffective or cause delays in our ability to record transactions and/or provide timely financial results
13. 44Any changes to existing accounting pronouncements or taxation rules or practices may cause adverse fluctuations in our reported results of operations or affect how we conduct our business
14. 45Our quarterly operating results have fluctuated in the past and may fluctuate in the future, which could cause declines or volatility in the price of our common stock
15. 46We may not be able to maintain and expand our business if we are not able to hire, retain and manage additional qualified personnel
16. 47Our business may be adversely affected by unfavorable macroeconomic conditions
17. 48Adverse economic conditions or reduced spending on information technology solutions may adversely impact our revenue and profitability
18. 49We may be exposed to risks related to litigation and administrative proceedings that could materially and adversely affect our business, results of operations and financial condition