KORE Group Holdings, Inc. General form of registration statement for all companies including face-amount certificate companies

General form of registration statement for all companies including face-amount certificate companies

SCHEDULE 1 - PARENT ONLY FINANCIAL INFORMATION

SCHEDULE 1 - PARENT ONLY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Schedule I – Parent Company Financial Information

SCHEDULE I – PARENT ONLY FINANCIAL INFORMATION

The following presents condensed parent company only financial information of KORE Group Holdings, Inc.

Condensed Balance Sheet (in thousands USD)


	December 31, 2022		December 31, 2021
Assets
Non-current assets
Investment in subsidiaries	$	192,549	$	256,725
Total non-current assets	192,549		256,725
Total assets	$	192,549	$	256,725
Liabilities and stockholders’ equity
Long-term liabilities
Warrant liability	33		286
Total liabilities	$	33	$	286
Stockholders’ equity
Common stock, voting; par value $0.0001 per share; 315,000,000 shares authorized, 76,292,241 and 72,027,743 shares issued and outstanding at December 31, 2022, and December 31, 2021	8		7
Additional paid-in capital	435,293		401,690
Accumulated other comprehensive loss	(6,390)		(3,463)
Accumulated deficit	(236,394)		(141,795)
Total stockholders’ equity	$	192,517	$	256,439
Total liabilities and stockholders’ equity	$	192,550	$	256,725

Condensed Statements of Loss and Comprehensive Loss (in thousands USD)


For the years ended	December 31, 2022		December 31, 2021
Equity in net loss of unconsolidated subsidiaries	$	(94,759)	$	(29,892)
Change in fair value of warrant liability	(254)		(5,267)
Loss before income taxes	(94,505)		(24,625)
Net loss	$	(94,505)	$	(24,625)
Other comprehensive loss:
Foreign currency translation adjustment	(2,927)		(1,987)
Comprehensive loss	$	(97,432)	$	(26,612)

Condensed Statements of Cash Flows (in thousands USD)


For the years ended	December 31, 2022		December 31, 2021
Cash flows from operating activities
Net loss	$	(94,505)	$	(24,625)
Adjustments to reconcile net loss to net cash provided by operating activities
Equity in net loss of unconsolidated subsidiaries	94,759		29,892
Change in fair value of warrant liability	(254)		(5,267)
Cash provided by operating activities	$	—	$	—
Cash flows from investing activities
Distribution from subsidiary	—		5,947
Cash provided by investing activities	$	—	$	5,947
Issuance of common stock, net of transaction costs	—		223,968
Settlement of preferred stock	—		(229,915)
Cash used in financing activities	$	—	$	(5,947)
Effect of exchange rate change on cash and restricted	—		—
Change in cash and restricted cash	—		—
Cash and restricted cash, beginning of year	—		—
Cash and restricted cash, end of year	$	—	$	—
Non-cash investing and financing activities:
Fair value of KORE common stock issued pursuant to acquisition	$	23,295	$	—
Share-based payment awards issued to employees of subsidiaries	10,296		1,839

Basis of presentation and business combination

On March 12, 2021, Maple Holdings Inc. (“Maple” or “pre-combination KORE”) entered into a definitive merger agreement (the “Business Combination”) with Cerberus Telecom Acquisition Corp. (NYSE: CTAC) (“CTAC”). On September 29, 2021, CTAC held a special meeting, at which CTAC’s shareholders voted to approve the proposals outlined in the proxy statement filed by CTAC with the Securities Exchange Commission (the “SEC”) on August 13, 2021, including, among other things, the adoption of the Business Combination and approval of the other transactions contemplated by the merger agreement. On September 30, 2021 (the “Closing Date”), as contemplated by the merger agreement, (i) CTAC merged with and into King LLC Merger Sub, LLC (“LLC Merger Sub”) (the “Pubco Merger”), with LLC Merger Sub being the surviving entity of the Pubco Merger and King Pubco, Inc. (“Pubco”) as parent of the surviving entity, (ii) immediately prior to the First Merger (as defined below), Cerberus Telecom Acquisition Holdings, LLC (the “Sponsor”) contributed 100% of its equity interests in King Corp Merger Sub, Inc. (“Corp Merger Sub”) to Pubco (the “Corp Merger Sub Contribution”), as a result of which Corp Merger Sub became a wholly owned subsidiary of Pubco, (iii) following the Corp Merger Sub Contribution, Corp Merger Sub merged with and into Maple (the “First Merger”), with Maple being the surviving corporation of the First Merger, and (iv) immediately following the First Merger and as part of the same overall transaction as the First Merger, Maple merged with and into LLC Merger Sub (the “Second Merger” and, together with the First Merger, being collectively referred to as the “Mergers” and, together with the other transactions contemplated by the merger agreement, the “Transactions” and the closing of the Transactions, the Business Combination), with LLC Merger Sub being the surviving entity of the Second Merger and Pubco being the sole member of LLC Merger Sub. In connection with the Business Combination, Pubco changed its name to “KORE Group Holdings, Inc.” (the “Company”). The combined Company remained listed on the NYSE under the new ticker symbol “KORE.”

The Business Combination was accounted for as a reverse recapitalization as pre-combination KORE was determined to be the accounting acquirer and CTAC was treated as the “acquired” company for accounting purposes

under FASB’s ASC Topic 805, Business Combination (“ASC 805”). Pre-combination KORE was determined to be the accounting acquirer based on the evaluation of the following facts and circumstances:

•the equity holders of pre-combination KORE held 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.

Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of pre-combination KORE with the acquisition being treated as the equivalent of pre-combination KORE issuing stock for the net assets of CTAC, accompanied by a recapitalization. The net assets of CTAC were stated at historical cost, with no goodwill or other intangible assets recorded. Pre-combination KORE was deemed to be the predecessor and the consolidated assets and liabilities and results of operations prior to September 30, 2021 are those of pre-combination KORE.

In the condensed parent-company-only financial statements, the Company’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the subsidiaries were originally acquired. The Company’s share of net loss of its subsidiaries is included in the condensed statements of loss and comprehensive loss using the equity method of accounting. These condensed parent-company-only financial statements should be read in connection with the consolidated financial statements and notes thereto of KORE Group Holdings, Inc. and subsidiaries.

As of December 31, 2022, the Company has no purchase commitment, capital commitment and operating lease commitments. The Company is the guarantor of indebtedness for certain of its subsidiaries.

(ii)Restricted Net Assets

Schedule I of Rule 5-04 of Regulation S-X requires the condensed financial information of a registrant to be filed when the restricted net assets of the registrant’s subsidiaries exceed 25 percent of the registrant’s consolidated net assets as of the end of the most recently completed fiscal year. For purposes of this test, restricted net assets of the consolidated subsidiaries means the amount of the registrant’s proportionate share of net assets of the consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party (e.g., lender, regulatory agency, foreign government).

The parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company’s subsidiaries exceed 25% of the Company’s consolidated net assets. The Company is a holding company that conducts substantially all its business operations through its subsidiaries. The Company’s ability to pay dividends on the Company’s common stock is limited by restrictions on the ability of the Company and its subsidiaries to pay dividends or make distributions under the terms of agreements governing the indebtedness of the Company’s subsidiaries. Subject to the full terms and conditions under the agreements governing its indebtedness, the Company and its subsidiaries may be permitted to make dividends and distributions under such agreements if there is no event of default and certain pro-forma financial ratios (as defined by such agreements) are met.