Inseego Corp. (Nasdaq: INSG) (the “Company”), a pioneer in 5G and intelligent IoT device-to-cloud solutions, today announced that it has commenced an underwritten public offering (the “Offering”), subject to market and other conditions, of an aggregate of $100.0 million in principal amount of its convertible senior notes due 2025 (the “Notes”).
The Company expects to grant the underwriters a 30-day option to purchase up to an additional $15.0 million in aggregate principal amount of the Notes in connection with the Offering, solely to cover over-allotments.The Notes will be senior unsecured obligations of the Company and will accrue interest payable semi-annually in arrears.
Immediately following the Offering, the Company intends to exchange approximately $44.8 million principal amount of its existing 5.50% convertible senior notes due 2022 for a combination of cash and $75.0 million principal amount of Notes in concurrent private placement transactions (the “Private Exchange Transactions”).
Notes issued in the Private Exchange Transactions will be part of the same series as the Notes issued in the Offering, but will be subject to certain transfer restrictions that will not be applicable to the Notes issued in the Offering.
The Offering is not conditioned upon the closing of the Private Exchange Transactions, but the Private Exchange Transactions are conditioned upon the closing of the Offering.The Company intends to use a portion of the net proceeds from the Offering (i) to repay in full and terminate its existing credit agreement, which currently carries interest at a rate of 9.24% per annum, and (ii) to pay the cash consideration due in connection with the Private Exchange Transactions.
The Company intends to use the remainder of the net proceeds from the Offering for general corporate purposes.Stifel is acting as the sole book-running manager for the Offering.The Offering will be conducted pursuant to an automatic shelf registration statement (including a base prospectus) that was filed by the Company with the Securities Exchange Commission (the “SEC”) on May 7, 2020 and became immediately effective, and a preliminary prospectus supplement related to the Offering that has been or will be filed with the SEC.