In the current market session today, Inseego Corp. (NASDAQ: INSG) shares are illustrating a notable ascent, surging by 24.34% to attain $3.01 as of the last check. This positive momentum in INSG's stock valuation across US stock indices follows news of its proactive debt reduction strategy.
Inseego (INSG) has officially announced its decision to voluntarily settle and terminate its asset-backed loan facility ("ABL Facility") with Siena Lending Group, citing enhanced liquidity and financial performance as impetuses. Under the terms of the ABL Facility, Inseego has been obligated to make monthly payments, including fees and interest expenses, on a principal sum of $8.5 million, regardless of the actual borrowing amount.
Notably, throughout 2023, Inseego incurred interest expenses and fees totaling $1.9 million associated with the ABL Facility. With the complete settlement and cessation of the ABL Facility, Inseego stands devoid of any outstanding loan balance and will no longer bear interest expenses under the facility.
Additionally, the encumbrance on all its assets linked with the ABL Facility is set to be lifted. Bolstered by its strides in revenue growth, financial performance, and efficient cash management, Inseego is now well-equipped with the requisite liquidity to address its working capital requirements moving forward.
During the week commencing April 15, 2024, Inseego duly notified Siena and settled the outstanding balance alongside associated termination fees on the ABL Facility, amounting to approximately $3.0 million. Furthermore, Inseego is obligated to remit an exit fee totaling $400,000 to South Ocean Funding, LLC, and North Sound Ventures, LP.
According to a Participation Agreement between the Participants and Siena Lending Group, the Participants' $4.0 million last-out subordinated participation stake in the Loan and Security Agreement was prematurely redeemed, resulting in this liability.
Additionally, Inseego intends to release its financial results for the first quarter of 2024, which ends on March 31, 2024, after the financial markets close on May 9, 2024. The business will post a press release and quarterly financial statements on its website. Additionally, Inseego will conduct a webcast and conference call on the same day to deliberate on its results and future prospects.