Cambium Networks Corp

Note 1. Description of Business and Summary of Significant Accounting Policies

Cambium Networks Corporation (“Cambium” or “Cambium Networks” or the “Company”), incorporated under the laws of the Cayman Islands, is a holding company whose principal operating entities are Cambium Networks, Ltd. (UK), Cambium Networks, Inc. (USA), and Cambium Networks Private Limited (India). On June 26, 2019, the Company completed an Initial Public Offering and the Company’s ordinary shares began trading on the Nasdaq Global Markets.

Cambium Networks Corporation and its wholly owned subsidiaries design, develop, and manufacture fixed wireless and fiber broadband and enterprise networking infrastructure solutions that are used by businesses, governments, and service providers in urban, suburban and rural environments. Cambium's products simplify and automate the design, deployment, optimization, and management of broadband and Wi-Fi access networks through intelligent automation.

The Company operates on a calendar year ending December 31. As such, all references to 2023 and 2024 contained within these notes relate to the calendar year, unless otherwise indicated.

Basis of Presentation

The Company’s consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Cambium Networks Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

Going Concern

In accordance with the accounting guidance related to the presentation of financial statements, when preparing financial statements for each annual and interim reporting period, management evaluates whether there are conditions or events that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In making its assessment, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and conditional and unconditional obligations due over the next twelve months, as well as other factors including the markets in which the Company competes and the current customer demand for the Company’s products.

As of September 30, 2024, the Company was not in compliance with its quarterly EBITDA covenant under its Amended Credit Agreement, as of October 31, 2024 and November 30, 2024, the Company was not in compliance with its monthly liquidity covenant, and as of December 31, 2024, the Company was not in compliance with its quarterly fixed charge coverage ratio and quarterly consolidated leverage ratio covenants. These defaults continue throughout 2025 and into 2026. Such defaults afford the lender the right to declare the amounts outstanding immediately due and payable, and although the Company continues regular discussions with the lender, it has not been able to obtain a waiver of the defaults, or otherwise refinance such indebtedness. If the lender were to accelerate the maturity of the Company's indebtedness under the Amended Credit Agreement, the Company would not be able to repay the debt, and therefore, there is substantial uncertainty the Company would be able to continue as a going concern. The Company’s obligations under the Amended Credit Agreement mature and become due and payable on November 17, 2026, absent acceleration by the lender. As of December 31, 2024, the Company has made all required principal and interest payment obligations under the Amended Credit Agreement, but ceased payment of principal and interest on the term loan and payment of interest under the revolving credit facility as of June, 2025. The Company was in compliance with its monthly liquidity covenant for all measurement periods through September 30, 2024.

As the covenant violations afford the lender the right to declare the amounts outstanding immediately due and payable, the term loan facility and the associated deferred debt issuance costs and the revolving credit facility are classified as a current liability and the deferred debt issuance costs associated with the revolving credit facility are classified as a current asset in the accompanying consolidated balance sheet as of December 31, 2024. Please refer to Note 7. Debt, regarding the Company’s debt outstanding under its credit facilities with Bank of America.

The Company continues to take actions to improve its profitability and focus on operating efficiency and reducing discretionary spending, deferring capital expenditures and implementing cost reductions to align its cost structure with current and expected revenue levels.

Based on the Company’s current forecast, it is projecting future noncompliance with its financial covenants within the next twelve months in addition to the covenant noncompliance described above. If the lender were to accelerate the maturity of the Company's indebtedness under the Amended Credit Agreement, there is substantial uncertainty the Company would be able to secure capital resources to repay the amounts due. Due to these uncertainties and given the debt matures on November 17, 2026, management concluded that substantial doubt exists with respect to the Company's ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Use of Accounting Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates these estimates, including those related to the provision for excess and obsolete inventory, the carrying amount of estimated inventory returns, the estimated amount expected to be refunded to customers in respect of inventory returns and customer rebates, estimate of the allowance for credit losses, estimate associated with the measurement of asset values for impairment, fair value of equity awards granted to employees and the associated forfeiture rates, leases, provision for income taxes, and recoverability of deferred tax assets. The Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Segments

Management has determined that it operates asone operating segment as it only reports financial information on an aggregated and consolidated basis to its Chief Executive Officer, who is the Company’s chief operating decision maker ("CODM"). Decisions about resource allocation or operating performance assessments are not made below a total company level.

Recognition of revenues

Revenues consist primarily of revenues from the sale of hardware products. Revenues also include amounts for software products, extended warranty on hardware products and software subscription services. Substantially all products are sold through distributors and other channel partners, such as resellers and systems integrators.

The Company recognizes revenue to reflect the transfer of control of promised products or services to a customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for products or services.

The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company considers orders placed by its customers, which in most cases are governed by master distributor agreements, or customer purchase orders to be the contracts with the customer.

For each contract, the Company identifies its distinct performance obligations under each contract. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. Hardware products with essential embedded software, software products, extended warranty on hardware products and software subscriptions have been identified as separate performance obligations.

The Company accounts for shipping and handling costs as fulfillment costs which are recorded in Cost of product revenues in the consolidated statement of operations. This includes shipping and handling costs incurred after control has transferred to the customer as the Company has elected the practical expedient in ASC Topic 606.

The Company recognizes revenue when, or as, it satisfies a performance obligation when control of a promised product or service transfers to a customer. Revenue from hardware products with embedded software is typically recognized at the time of shipment, which is when the customer has the ability to direct the use of and obtain substantially all of the remaining benefit from the asset. Software revenue consists of perpetual license software and is recognized at the point in time the customer obtains control of the software and is able to use or benefit from the software. Extended warranty is available for purchase on hardware products and is a performance obligation that is satisfied over time, beginning on the effective date of the warranty term and ending on the expiration of the warranty term. The Company recognizes revenue on extended warranties on a straight-line basis over the warranty period. Revenue from subscription services is recognized ratably over the term in which the services are provided and our performance obligation is satisfied.

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring products or services to a customer. The Company allocates the transaction price to each performance obligation on a relative standalone selling price basis for each distinct product or service in the contract. The best evidence of standalone selling price is the observable price of a product or service when the Company sells that product or service separately in similar circumstances and to similar customers. If a standalone selling price is not directly observable, the Company estimates the transaction price allocated to each performance obligation using the expected costs plus a margin approach.

In determining the transaction price, stock rotation rights and customer incentives are considered to be forms of variable consideration. Stock rotation rights grant the distributor the ability to return certain specified amounts of inventory and meets the definition of a right of return. Certain criteria must be met to rotate stock and the customer is also required to place an additional order. The Company estimates variable consideration for stock rotations using the value of inventory being held by its distributors ("channel inventory"), historical returns experience and a qualitative adjustment to consider fluctuations in ending channel inventory balance and actual returns being process in both historical and subsequent periods. The Company records a reduction to revenue at the selling price of the products expected to be returned and a liability for the estimated amount expected to be refunded to the customer as well as a reduction to costs of revenues and an asset at the cost of the estimated inventory to be returned. The Company also provides customer incentives in the form of rebates. The Company estimates variable consideration for rebates using the expected value method. The estimate incorporates all reasonably available information, including historical rebate experience, current channel inventory levels, macroeconomic indicators and observable changes in customer demand.

Cash

The Company maintains cash balances at financial institutions that at times exceed federally insured limits. The Company has not experienced any losses on such accounts and believes it is not exposed to any significant credit risk on cash. Our cash consists primarily of U.S. dollar denominated demand accounts.

Receivables and concentration of credit risk

Trade accounts receivable are recorded at invoiced amounts, net of the allowance for credit losses. The Company considers the credit risk of all customers and regularly monitors credit risk exposure in its trade receivables. The Company’s standard credit terms with their customers are generally net 30 to 60 days. The Company hadone customer representing more than 10% of trade receivables at December 31, 2023 and at December 31, 2024. The Company hadtwo customers representing more than 10% of revenues for the years ended December 31, 2023 and December 31, 2024.

The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The allowance is determined by using the loss-rate method, which requires an estimation of loss rates based on historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivable. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables, and credit and liquidity indicators for individual customers.

Inventory

The Company’s inventories are primarily finished goods for resale and, to a lesser extent, raw materials. Inventories are stated at the lower of cost or net realizable value. In determining the cost of raw materials, consumables and goods purchased for resale, the average purchase price is used. For finished goods, cost is computed as production cost including capitalized inbound freight costs.

The valuation of inventory also requires the Company to estimate excess or obsolete inventory. The determination of excess or obsolete inventory is based on a comparison of the quantity and cost of inventory on hand versus the Company's forecast of remaining lifetime demand, consideration of historical sales or usage and management's judgment. The Company also considers the rate at which new products will be accepted in the marketplace and how quickly customers will transition from older products to newer products. Any adjustments to the valuation of inventory are included in cost of revenues.

The Company also records a liability for firm, noncancelable, and unconditional purchase commitments with contract manufacturers and suppliers for quantities in excess of its future demand forecasts consistent with the valuation of its excess and obsolete inventory. Any adjustments to recognize a loss on supplier commitments are included in cost of revenues.

Property and equipment

Property and equipment is stated at cost less accumulated depreciation and impairment charges. The Company calculates depreciation expense using the straight-line method over the estimated useful lives of each asset based on its asset class. Leasehold improvements are amortized over the shorter of their useful lives or the lease term. See Note 4. Property and equipment for the useful lives for each asset class.

Upon retirement or disposition, the asset cost and related accumulated depreciation are removed with any gain or loss recognized in operating expense in the consolidated statements of operations. For the years ended 2023 and 2024, the loss recognized was immaterial for any retirements or dispositions.

Software

Software may be purchased or developed internally for internal use. Costs are expensed as incurred during the preliminary project stage of an internal use software project and are capitalized once the project has been approved by management and is in the application development stage. Post implementation/operation costs, such as maintenance and training costs, are expensed as incurred. Any costs incurred to provide upgrades or enhancements are capitalized only if they provide additional functionality that did not previously exist.

Amortization of internal use software begins when the software is ready for internal use and is amortized over its estimated useful life. The amortization expense for internal use software is computed using the straight-line method over three toseven years.

Software may also be developed internally for external sale. Costs related to certain software available for sale are capitalized when the resulting product reaches technological feasibility. The Company generally determines technological feasibility when it has a detailed program design that takes product function, feature and technical requirements to their most detailed, logical form and the product is ready for coding. The Company does not typically capitalize costs related to the development of first-generation product offerings as technological feasibility generally coincides with general availability of the software.

Amortization of software costs to be sold or marketed externally begins when the product is available for sale to customers and is amortized using the straight-line method over its estimated useful life ofthree years.

For capitalized software costs related to software available for sale, the Company completes an impairment analysis at each reporting date comparing the net realizable value of any product to its net book value. See Note 5. Software for further details.

Impairment of long-lived assets

The Company evaluates its long-lived assets, including property and equipment, internal-use software, right-of-use assets, and definite-lived intangible assets for impairment by completing a quarterly qualitative assessment and whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. An impairment loss is recognized when the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to the assets or asset group. If impairment is indicated, the asset is written down to its estimated fair value. See Notes 4. Property and equipment, Note 5. Software and Note 6. Goodwill and intangible assets and Note 16. Leases for further details.

Goodwill

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired in a business combination. Goodwill is measured at cost and is not amortized. Intangible assets acquired, either individually or with a group of assets, are initially recognized and measured at fair value. The Company uses third-party specialists to assist management to determine fair values and estimated useful lives for intangible assets acquired in business combinations. Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives of between 3 and 18 years. The Company has no intangible assets with indefinite lives.

The Company assesses goodwill for impairment at least annually on December 31 and whenever events or circumstances that would more likely than not, reduce the fair value below its carrying value.

Annual impairment testing is completed at the reporting unit level. Management has concluded the Company operates asone reporting unit andone operating segment for annual impairment testing.

In completing its impairment evaluations, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. In performing this qualitative assessment, the Company assesses relevant events and changes in circumstances, including industry and market conditions, operating results, business plans, and entity-specific events that would affect the fair value or the carrying amount of a reporting unit. If it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company determines the fair value of the reporting unit and compares the fair value to its carrying value. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired and no further steps are required.

Leases

The Company has both cancelable and noncancelable operating leases for office space, vehicles, and office equipment. The Company records a right-of-use asset and lease liability on its consolidated balance sheet for all leases that qualify. The operating lease liability represents the present value of the future minimum lease payments over the lease term using either the rate implicit in the lease or the Company’s incremental borrowing rate at the lease commencement date. The right-of-use asset reflects adjustments for the derecognition of deferred rent and prepaid rent. Leases with an initial term of 12 months or less are not recorded on the Company’s consolidated balance sheet, and are expensed on a straight-line basis over the lease term. The Company does not include any renewal periods in the lease term for its leases as sufficient economic factors do not exist that would compel it to continue to use the underlying asset beyond the initial non-cancelable term. The Company has elected to combine the lease and non-lease components into a single lease component for all of its leases. See Note 16. Leases for further details.

Product warranties

The Company provides a standard warranty on its products, with the term depending on the product, and records a liability for the estimated future costs associated with potential warranty claims. Provisions for warranty claims are recorded at the time products are sold based on historical experience factors including product failure rates, material usage, and service delivery cost incurred in correcting product failures. These provisions are reviewed and adjusted by management periodically to reflect actual and anticipated experience. The warranty costs are reflected in the Company’s consolidated statements of operations within cost of revenues. In certain circumstances, the Company may have recourse from its contract manufacturers for replacement cost of defective products, which it also factors into its warranty liability assessment.

Income taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in its financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement carrying amount and the tax basis of assets and liabilities using enacted income tax rates in effect for the year in which the differences are expected to be recovered or settled. The effect of a change in income tax rates on deferred tax assets and liabilities is recognized in the income tax provision in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized and adjusts the valuation allowances accordingly. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

The Company historically asserted that earnings of its foreign subsidiaries are indefinitely reinvested outside the United States. As of December 31, 2023, the Company continued to indefinite reinvestment and had not made a provision for taxes on the undistributed earnings of any foreign subsidiaries. As of March 31, 2024, conditions existed that raised substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued. As a result, the Company can no longer assert indefinite reinvestment with respect to earnings of foreign subsidiaries. Accordingly, the Company recorded a deferred tax liability for the outside basis difference of its foreign affiliates and estimated future tax consequences associated with the potential sale of its foreign investments, including applicable foreign withholding taxes and other incremental taxes. The actual tax costs may differ from the amounts recorded due to changes in tax laws, foreign exchange rates, and other factors, including the timing and manner of repatriation.

The Company may be subject to income tax audits in all of the jurisdictions in which it operates and, as a result, must also assess exposures to any potential issues arising from current or future audits of current and prior years’ tax returns. Accordingly, the Company must assess such potential exposures and, where necessary, provide for any expected loss. The Company would recognize the benefit of a tax position if it is more likely than not to be sustained. Recognized tax positions are measured at the largest amount more likely than not to be realized upon settlement. To the extent that the Company establishes a liability, its income tax expense would be increased. If the Company ultimately determines that payment of these amounts is unnecessary, it would reverse the liability and recognize an income tax benefit during the period in which new information becomes available indicating that the liability is no longer necessary. The Company would record an additional income tax expense in the period in which new information becomes available indicating that the income tax liability is greater than its original estimate. The Company did not record such an adjustment for the years ended December 31, 2023 or 2024.

Share-based compensation

The Company accounts for share-based compensation by measuring and recognizing compensation expense for all share-based payments based on estimated grant date fair values for equity settled awards. The Company's policy is to recognize compensation expense on a straight-line basis over the requisite service period of the award, adjusted for an estimate of expected forfeitures.

Awards are granted under the 2019 Share Incentive Plan. The 2019 Share Incentive Plan provides for the grant of incentive share options, nonqualified share options, share appreciation rights, restricted share awards, restricted share units, or other share-based awards and performance awards.

The Company also issues shares under its Employee Share Purchase Plan ("ESPP"). The first offering period or purchase period under the ESPP began on January 1, 2021. The Company offers two offering periods of six months each per year. Under the ESPP, the purchase price of the Company's shares is 85% of the lower of the fair market value of the shares on the first trading date of each offering period or on the purchase date. Effective January 1, 2025, management has temporarily suspended the ESPP plan.

Contingencies

The Company periodically evaluates all pending or threatened contingencies and any commitments, if any, that are reasonably likely to have a material adverse effect on its results of operations, financial position or cash flows. Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Foreign currency translation

The reporting currency of the Company is the U.S. dollar and the functional currency for each operating subsidiary is the local currency of the operating subsidiary other than for Cambium Networks, Ltd. (UK) for which the functional currency is the U.S. dollar. Local currency denominated monetary assets and liabilities are translated at exchange rates in effect at the balance sheet date, and revenues, cost of revenues and expenses are translated at the average exchange rate in effect during the applicable period. The Company recognizes foreign exchange gains and losses in other expense on its consolidated statements of operations and accumulated other comprehensive income (loss) on its consolidated balance sheets.

Research and development costs

Research and development expenses consist primarily of salary and benefit expenses for employees and contractors engaged in research, design and development activities, and costs for prototypes, travel costs and shared facility and IT costs. The Company also incurs research and development costs associated with the development of software for both internal use and to be marketed externally. Research and development costs, other than those associated with the development of software that meet the criteria for capitalization, are expensed as incurred.

Recently adopted accounting standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendment requires disclosures of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit of loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment's profit or loss and assets. The new guidance also requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this update and all existing segment disclosures. The Company adopted ASU 2023-07 during the year ended December 31, 2024. See Note 12. Segment information in the accompanying notes to the consolidated financial statements for further detail.

Recently issued accounting standards not yet adopted

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to disclose standard categories in the tax rate reconciliation, additional information for reconciling items that meet a quantitative threshold and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Adoption of this ASU should be applied prospectively, but may be applied retrospectively to all prior periods presented in the financial statements. The Company plans to adopt this ASU on a prospective basis during the year ended December 31, 2025. The adoption of this standard will not have a material impact on the Company's consolidated financial statements, but will result in incremental income tax disclosures.

In October 2023, the FASB issued ASU 2023-06 Disclosure Improvements: Codification Amendments in Response to the Securities and Exchange Commission's ("SEC") Disclosure Update and Simplification Initiative. The amendments in this update require modification of certain disclosure and presentation requirements for a variety of ASU topics in response to the SEC's Release No. 33-10532. The effective date for each amended topic in the ASU is the date on which the SEC's removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendment will be removed from the Codification and not become effective. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

In November 2024, the FASB issued 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses. The amendment requires disclosures of a) purchases of inventory, b) employee compensation, c) depreciation, d) intangible asset amortization and e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities ("DD&A") included in each relevant expense caption. The amendment also requires that certain amounts that are already required to be disclosed under generally accepted accounting principles ("GAAP") be included in the same disclosure as the other disaggregation requirements. The new guidance also requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Upon adoption, this guidance may be applied prospectively or retrospectively to all prior periods presented. The Company is currently evaluating this ASU to determine its impact on the Company's disclosuresand expects the ASU will increase disclosures in the Company's annual and interim reporting when adopted.

Restatement of previously issued consolidated financial statements

This Comprehensive Form 10-K presents the Company's restated consolidated financial statements for the year ended December 31, 2023. See Note 2. Restatement of consolidated annual financial statements for further information and the restated consolidated annual financial statements contained within this Comprehensive Form 10-K.

Additionally, the Company has restated its previously filed unaudited interim consolidated financial statements for the periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024. See Note 19. Restatement of previously issued unaudited interim consolidated financial statements for further information and the unaudited consolidated financial statements contained within this Comprehensive Form 10-K.

Note 2. Restatement of consolidated annual financial statements

In connection with the preparation of its consolidated financial statements for the year ended December 31, 2024, the Company determined that its previously issued audited consolidated financial statements for the year ended December 31, 2023 contained errors in the application of GAAP as summarized below.

In accordance with SEC Staff Accounting Bulletin No. 99, "Materiality", and SEC Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements", the Company evaluated the corrections and has determined that the related impact was material to the previously filed consolidated statements that contained the errors as of and for the year ended December 31, 2023. Therefore, the Company, in consultation with the Audit Committee of the Company's Board of Directors, concluded that the previously filed financial statements as of and for the year ended December 31, 2023 should be restated to present the identified adjustments discussed below. The Company has not filed, and does not intend to file, an amendment to the previously filed Annual Report on Form 10-K for the fiscal year ended December 31, 2023, but instead is restating the previously filed financial statements in this Comprehensive Form 10-K.

In connection with the preparation of the Company's financial statements for the fiscal year ended December 31, 2024, management identified material errors in its previously issued annual consolidated financial statements as a result of material weaknesses in its internal control over financial reporting as of December 31, 2024. Specifically, the Company did not appropriately (i) estimate variable consideration for customer incentives, (ii) estimate variable consideration for sales returns, (iii) estimate the allowance for credit losses, (iv) estimate excess and obsolete inventory, (v) recognize revenue on a non-standard contract, (vi) timely recognize an impairment of its long-lived assets and goodwill, (vii) timely recognize a valuation allowance on deferred tax assets and (viii) classify certain supplier prepayments made and loss on supplier commitments liability as current or non-current.

Additionally, as part of the Restatement, the Company corrected for (b) previously identified uncorrected misstatements related to out-of-period adjustments, (c) previously recorded amounts reclassifying accounts receivable credit balances and (d) classification of property and equipment transactions on the statement of cash flows.

The financial statement line items impacted by the respective adjustments are labeled in the tables below based on the identifiers from the paragraphs above.

The effects of the restatement on the Company's previously filed consolidated balance sheet for the year ended December 31, 2023 are as follows:

The effects of the adjustments made to the Company's previously filed consolidated statements of operations for the year ended December 31, 2023 as a result of these matters are shown in the table below.

The effects of the restatements on the Company's consolidated statement of shareholders' equity for the year ended December 31, 2023 were only to the amounts recorded for accumulated equity (deficit) due to the change in net loss for the period and is noted in the consolidated statement of operations and consolidated balance sheet shown above.

The effects of the restatements on the Company's consolidated statement of cash flows for the year ended December 31, 2023 is as follows:

The following table sets forth the effects of the restatement adjustments on revenues, (loss) income before income taxes and net (loss) income in the consolidated statements of operations for the year ended December 31, 2023.

The following include descriptions of the significant adjustments to the Company's financial position and results of operations from the previously reported annual consolidated financial statements for the year ended December 31, 2023.

•

Estimate of variable consideration for customer incentives - We determined that the model that was used to estimate variable consideration arising from customer incentives was not designed to sufficiently include information that was readily available at each reporting date, such as rebate programs, pricing arrangements, sales trends and other relevant inputs, were timely incorporated into the estimation of variable consideration. Further, we concluded that retrospective analysis was not sufficiently applied to evaluate the relative precision of the estimated variable consideration and that such retrospective analysis would have revealed opportunities to improve the estimates produced by the model. The Company recorded adjustments to increase revenues by $0.3 million and reduce accrued liabilities by $0.3 million in 2023.

•

Estimate of variable consideration for sales returns - We determined that the model that was used to estimate variable consideration arising from sales returns were not designed to sufficiently include information that was readily available at each reporting date, such as the level of inventory held by our distributors, the current trend of returns relative to the inventory held by our distributors, the frequency of granting customer exceptions to our stock rotation policy, and the historical lag time between the original sales transaction and the related subsequent return transaction. Further we concluded that retrospective analysis was not sufficiently considered to evaluate the relative precision of the estimated variable consideration and that such retrospective analysis would have revealed opportunities to improve the estimates produced by the model. The Company recorded adjustments to increase revenues by $10.4 million in 2023 and an increase to cost of revenues by $2.2 million, with a net increase to gross profit of $8.2 million. The impact on the consolidated balance sheets was a decrease to other current assets of $2.2 million and decrease to accrued liabilities of $10.4 million.

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Estimate of inventory excess and obsolescence reserves - We determined that the model that was used to estimate excess and obsolete inventory for finished goods and component inventory did not appropriately evaluate current demand forecasts, product life cycles, customer requirements, and technological changes and did not use reasonable and supportable assumptions, including consideration of historical sales or usage and remaining lifetime demand. As a result, the Company recognized a charge to cost of revenues of $2.6 million to increase the Company's excess and obsolete inventory reserves resulting in a decrease of $2.6 million to inventories, net.

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Improper revenue recognition on a non-standard contract - We determined that we had incorrectly recognized revenue on a non-standard contract prior to the customer obtaining control of the product. Under the specific arrangement, control did not transfer to the distributor and consequently revenue should not have been recognized. The Company recorded an adjustment to reduce revenues by $3.8 million in 2023 and cost of revenues by $1.4 million. The adjustments resulted in decreaseto gross profit of $2.4 million. The impact on the consolidated balance sheet was a decrease to accounts receivable, net of $3.8 million and increase to inventories, net of $1.4 million.

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Timely recognition of a valuation allowance on deferred tax assets -We determined that all positive and negative evidence relevant to the realizability of deferred tax assets was not appropriately identified, evaluated and monitored on a timely basis. We did not timely consider changes in facts and circumstances affecting the need for and the amount of, a valuation allowance, or that resulting deferred tax balances were recorded in the appropriate reporting period. As a result, the Company did not recognize a valuation allowance against its deferred tax assets in the appropriate reporting period and recognized a valuation allowance by an increase of deferred tax expense of $3.7 million and reduced its deferred tax assets, net by $3.7 million.

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Classification of supplier prepayments and loss on supplier liability - We determined that certain supplier prepayments and loss on supplier commitment liabilities were incorrectly classified on the consolidated balance sheet. As a result, the Company increased current prepaid expenses by $3.2 million and decreased noncurrent assets by $3.2 million related to the supplier prepayments and decreased current accrued liabilities by $11.4 million and increased other noncurrent liabilities by $11.4 million for the loss on supplier commitment liability.

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Estimate of the allowance for credit losses - We determined that certain adjustments to accounts receivable were not recorded on a timely basis driven by poor collection efforts and ineffective dispute resolution. These circumstances delayed the recognition of bad debt expense. As a result, the Company recognized a charge of $0.7 million to increase the Company's bad debt expense in 2023 and $0.1 million to reduce revenue, resulting in a $0.8 million reduction to receivables, net.

In addition to the above, the Company identified other errors that have been corrected in conjunction with the Restatement, as follows:

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Correction for previously identified uncorrected misstatements associated with out-of-period adjustments or reclassification adjustments related to:

o

Correction of loss on supplier commitment increased expense by $0.3 million and increased accrued loss on supplier commitment by $0.3 million

o

Variable incentive compensation increased sales and marketing expenses by $0.3 million and increased employee compensation accrual of $0.3 million

o

Derecognition of revenue on hardware for network as a service (NaaS) decreased revenue by $0.1 million and decreased accounts receivable, net by $0.1 million

o

Over accrual of 401(K) employer contribution true-up decreased general and administrative expenses by $0.1 million and decreased employee compensation accrual by $0.1 million

o

Under accrual of other manufacturing costs increased cost of revenues by $0.1 million and increased accrued liabilities by $0.1 million

o

Reverse freight charged to customers decreased revenues by $0.1 million and decreased cost of revenues by $0.1 million

•

Correct cash flow presentation for (a) property and equipment accruals previously reported in accounts payable to accrued liabilities, (b) property and equipment payments previously reported as unpaid and included in accounts payable and (c) movement in excess and obsolete reserve previously reported as inventory

Pre-2023 restatement adjustments

Retained earnings as of December 31, 2022 were decreased by $23.1 million to correct for the cumulative effect of errors in 2022. The errors primarily related to the same errors identified above and resulted in the following charges:

•

Estimate of variable consideration for customer incentives decreased revenues by $5.9 million

•

Estimate of variable consideration for sales returns decreased revenues by $17.2 million and decreased cost of revenues by $3.8 million

•

Estimate of excess and obsolete inventory increased cost of revenues by $2.7 million

•

Estimate of allowance for credit losses decreased revenue by $0.1 million and increased general and administrative expenses by $1.5 million

•

Over accrual of variable incentive compensation decreased selling and marketing expenses by $0.3 million

•

Recognition of revenue on hardware for NaaS increased revenues by $0.1 million

•

Reclassification of prepaid supplier payments and accrual for loss on supplier commitments between current and noncurrent (no impact on retained earnings)

Note 3. Balance sheet components

Receivables, net

The Company’s accounts receivable arise from sales on credit to customers. The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The estimate is determined by using the loss-rate method, which requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivables. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables and credit and liquidity indicators for individual customers.

The components of Receivable, net are as follows (in thousands):

The Allowance for credit losses activity was as follows (in thousands):

The amounts written-off include receivables that were deemed uncollectible and were previously reserved for.

Inventories, net

Inventories, net consisted of the following (in thousands):

The following table reflects the activity in the Company’s Inventory excess and obsolete provision (in thousands):

Inventory reserves are established for estimated excess and obsolete inventory equal to the difference between the cost of the inventory and the estimated net realizable value of the inventory based on historical usage, known trends, inventory age and market conditions and judgment about the consumption and our ability to sell the inventory.

Other noncurrent assets

Other noncurrent assets consisted of the following (in thousands):

The supplier prepayments represent payments made to our component suppliers for goods to be received beyond one year.

Accrued liabilities

Accrued liabilities consisted of the following (in thousands):

Accrued loss on supplier commitments reflects accrued loss on purchase obligations with its suppliers for component inventory expected to be scrapped.

Accrued warranty

Provision for warranty claims is primarily related to our hardware products and recorded at the time products are sold. The change to accrued warranty was as follows (in thousands):

At December 31, 2023, $1.2 million is included in Other current liabilities and $0.3 million is included in Other noncurrent liabilities on the Company’s consolidated balance sheet. At December 31, 2024, $1.3 million is included in Other current liabilities and$0.1 million is included in Other noncurrent liabilities on the Company’s consolidated balance sheet.

Other current liabilities

Other current liabilities consisted of the following (in thousands):

Other noncurrent liabilities

Other noncurrent liabilities consisted of the following (in thousands):

Note 4. Property and equipment

Property and equipment, net consisted of the following (in thousands):

Total depreciation expense was $4.3 million and $4.2 million for the years ended December 31,2023 and 2024, respectively.

As a result of the impairment triggers identified during the year ended December 31, 2024, the Company completed a quantitative assessment on the Company's long-lived assets for recoverability. Based on the quantitative assessment performed, management concluded that the assets were not recoverable. The Company completed a full review of its assets using the cost approach, considering economic obsolescence, and recorded an impairment charge of$8.8 million as of September 30, 2024, consisting of $4.9 million for equipment and tooling, $3.2 million for leasehold improvements, $0.6 million for computer equipment and $0.1 million for furniture and fixtures. Refer to Note 6. Goodwill and intangible assets for additional information.

Note 5. Software

Software consisted of the following (in thousands):

Amortization of acquired and internal use software is computed using the straight-line method over an estimated useful life of generally three toseven years. Amortization expense recognized on acquired and internal use software is reflected in depreciation and amortization in the consolidated statements of operations. Amortization expense was $0.4 million and $0.4 million for the years ended December 31, 2023 and 2024, respectively.

Amortization expense recognized on software to be marketed for external sale was $2.8 million and $3.9 million for the years ended December 31,2023 and 2024, respectively, and is included in cost of revenues on the consolidated statements of operations.

As a result of the impairment triggers identified during the period ended September 30, 2024, the Company completed a quantitative assessment on the Company's long-lived assets for recoverability. As part of the restatement, the Company completed a quantitative assessment of the Company's long-lived assets using the cost approach, considering economic obsolescence, and recognized a$0.5 million impairment on its internal use software as of September 30, 2024 and is included in Impairment expense on the consolidated statement of operations. Refer to Note 2. Restatement of consolidated annual financial statements for additional information on the errors identified and refer to Note 19. Restatement of previously issued unaudited consolidated financial statements for the impact on the Company's previously issued unaudited consolidated interim financial statements as of September 30, 2024.

The Company completed the net realizable value test on its software to be marketed for external sale and compares the unamortized capitalized costs of each computer software product to its net realizable value of that product at each reporting period. The amount by which the unamortized capitalized costs of the computer software product exceeds the net realizable value of that assets shall be written off. The net realizable value was estimated using future gross revenues from that product and was reduced by the estimated future costs of completing and disposing of the product, including the costs of performing maintenance and customer support required to satisfy the Company's responsibility set forth at the time of sale. As a result of the net realizable value test, the Company identified one product where the net realizable value was below the unamortized capitalized costs of that product and recognized a $0.6 million impairment as of December 31, 2024. This amount is included in Impairment expense for the year ended December 31, 2024 on the consolidated statements of operations.

Based on capitalized software assets at December 31, 2024, after recognition of the above noted impairment, estimated amortization expense in future fiscal years is as follows (in thousands):

Note 6. Goodwill and intangible assets

The changes in the carrying amount of goodwill for the years ended December 31,2023 and 2024 were as follows:

The Company tests goodwill for impairment annually on December 31 and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or asset group below its carrying amount and tests intangible assets if an indicator suggests that the carrying amount may not be recoverable.

For 2023, the Company completed a qualitative triggering events assessment which considered significant events and circumstances such as the reporting unit’s historical and current results, assumptions regarding future performance, operating income or cash flows, strategic initiatives and overall economic factors, including significant negative industry or economic trends and macro-economic developments, and sustained declines in the Company's share price or market capitalization. These factors were considered in both absolute terms and relative to peers, to determine whether any of these factors may indicate that it is more likely than not that the fair value of the reporting unit or intangible asset is less than its carrying value. If indicators of impairment are identified, a quantitative impairment test is performed. The qualitative assessments performed for 2023 included an assessment of excess inventories, supply chain constraints, and macroeconomic considerations. Based on the operating results for 2023 and these other considerations, the Company concluded that it was more likely than not that the enterprise value for its one reporting unit and the fair value of intangibles was still greater than their carrying values.

During the third quarter of 2024, the Company experienced a debt covenant breach and a decline in its market capitalization as a result of a sustained decrease in the trading price of the Company's ordinary shares, each of which represented a triggering event causing management to perform a qualitative goodwill impairment test as of September 30, 2024. The impairment analysis as of September 30, 2024 resulted in an impairment of goodwill, long-lived assets, customer relationships intangible assets and right-of-use lease assets for the period ended September 30, 2024. Refer to Note 19. Restatement of previously issued unaudited interim consolidated financial statements for the impact on the Company's previously issued unaudited consolidated financial statements as of September 30, 2024.

The following reflects the activities performed by the Company as part of the quantitative assessment of impairment of goodwill, long-lived assets, definite-lived intangibles, including software, and right-of-use operating lease assets.

For the assessment of goodwill, management determined it operates asone reporting unit and compared the fair value of itsone reporting unit to its carrying value. The Company used an income approach in determining the fair value of the reporting unit. The income approach, or discounted cash flow method, utilized the Company's forecast based on management's estimates of revenue, expenses, capital expenditures and working capital projections. The residual value was captured utilizing the Gordon Growth method and the discount rate was determined based on the Company's weighted average cost of capital. Based on the results of the quantitative assessments, the fair value of the Company's one reporting unit was determined to be below its carrying value. Goodwill was impaired as of September 30, 2024 and the Company recorded an impairment loss of $9.0 million. This is included in Impairment expense on the consolidated statements of operations. As of December 31, 2024, the Company'ssingle reporting unit had a negative carrying value and no further impairment was recorded.

The Company also considered its long-lived assets (including intangible assets with definite useful lives), which are amortized over their estimated useful lives. These assets are reviewed for impairment only when facts or circumstances indicate that the carrying values may not be recoverable. As of September 30, 2024, the breach of covenants under the Amended Credit Agreement, as well as the decline in the Company's market capitalization driven by a sustained decrease in the trading price of the Company's ordinary shares, and the Company's history of operating losses and cash flow losses together with forecasted operating losses and cash flow losses, were additional factors considered as triggering events causing long-lived assets to be reviewed for impairment. Management concluded the asset group is at the same level as the Company's reporting unit, the primary asset of the asset group was determined to be the Company's customer relationships, with the remaining useful life of the customer relationships estimated to be approximately 58 months. The undiscounted cash flows of the asset group was estimated on a pre-tax basis over the life of the primary asset. Since the asset group constitutes a reporting unit or a business, a residual value was included to capture the approximate proceeds from the eventual disposition of the business. A terminal value approach was used to determine the residual value of the business. The carrying value of the asset group was determined to be the Company's invested capital less debt plus equity. The asset group's recoverability was determined by comparing the carrying value of the asset group to the sum of the undiscounted cash flows of the asset group. Based on the results of the assessment, the Company determined that the undiscounted cash flows were less than the carrying value of the asset group, and the asset group was unrecoverable as of September 30, 2024.

The income approach was used to determine the fair value of the operating lease right-of-use assets. Current market rents were calculated by investigating the market for lease rates for facilities comparable to the subject properties. The market rents, less any incentives received, are the net effective market rents. The net effective market rents were projected through the end of the current terms for each location and discounted back to present value using a real estate rate of return based on the property to determine the fair values of each location. These fair values were then compared to the carrying value of the operating lease right-of-use asset values as of September 30, 2024. The carrying value was higher than the computed fair value for five of the eleven locations, resulting in a total impairmentof $0.1 million. The Company recorded this impairment as of September 30, 2024 and the loss is included in Impairment expense on the consolidated statements of operations and comprehensive loss.

For the long-lived assets classified as property and equipment, including leasehold improvements on certain operating leases, and internal use software, the assets were valued using a cost approach. A replacement cost was estimated by applying age and asset-type specific indices to the assets' original cost. That replacement cost was then depreciated for physical wear and tear by applying a straight-line method with lives based on the book depreciation lives for property and equipment and internal use software, and lives based on the lesser of the physical life and the life of the property lease for leasehold improvements. The resulting depreciated replacement cost was then reduced further for economic obsolescence. After completing a business enterprise valuation, the Company determined that earnings were insufficient to support the values of the assets and an adjustment was made. As a result, the Company determined that the carrying values were higher than the computed fair values for most of the assets, resulting in an impairment loss of$8.8 million. The Company recorded this impairment as of September 30, 2024 and the loss is included in Impairment expense on the consolidated statements of operations and comprehensive loss.

The useful life, gross carrying value, accumulated amortization, and net balance for each major class of definite-lived intangible assets at each balance sheet date were as follows (in thousands):

Intangible assets are amortized over their expected useful life and none are expected to have a significant residual value. Intangible assets amortization expense was $1.5 million and $1.1 million for the years ended December 31,2023 and 2024, respectively.

As part of the Company's review of its long-lived assets, the Company completed an assessment of the customer relationship intangible at September 30, 2024 to determine its fair value. The excess earnings method was utilized to value the customer relationships intangible. Based on the results of its assessment, the Company determined that fair value of its customer relationship intangible was negative and the entire value was impaired, resulting in an impairment loss of $6.6 million. As part of the restatement, the Company recorded this impairment as of September 30, 2024 and the loss is included in Impairment expense on the consolidated statements of operations and comprehensive loss.

Note 7. Debt

As of December 31, 2024, the Company had $22.8 million outstanding under its term loan facility and $45.0 million in borrowings under its revolving credit facility. The Company hasno available borrowing capacity under its revolving credit facility.

As of December 31, 2023, the Company had $25.4 million outstanding under its term loan facility and $0.0 million in borrowings under its revolving credit facility. The Company had available $45.0 million under its revolving credit facility.

The following table reflects the current and noncurrent portions of the debt facilities at December 31, 2023 and December 31, 2024 (in thousands):

Secured credit agreements

On December 29, 2023, the Company entered into the Second Amendment to Credit Agreement (the “Second Amendment”), which amended the credit agreement, dated as of November 17, 2021 (the “Credit Agreement”, the Credit Agreement as amended, the “Existing Credit Agreement,” and the Existing Credit Agreement, as amended by the Second Amendment, the “Amended Credit Agreement”) by and among, inter alios, Cambium Networks, Ltd. as the borrower (the “Borrower”), the Company as a guarantor, Cambium (US), L.L.C., as a guarantor, certain other subsidiaries of the Company party thereto as guarantors (with the Borrower and each guarantor being, individually, a “Loan Party” and collectively, the “Loan Parties”), Bank of America, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”), a Lender, Swingline Lender and an L/C Issuer and the other Lenders party thereto from time to time. Capitalized terms used but not otherwise defined herein shall have the meanings as assigned to such terms in the Second Amendment and Amended Credit Agreement as previously filed as Exhibit 10.47 and incorporated by reference in this Comprehensive Form 10-K.

The Second Amendment amended the Existing Credit Agreement by, among other things, establishing a covenant relief period, which began on December 31, 2023 and ended on November 30, 2024 (“Covenant Relief Period”) during which time the Company was (a) required to maintain certain Liquidity, (b) required to maintain certain levels of Consolidated EBITDA, (c) required to provide certain additional financial reporting to the Administrative Agent and (d) not required to meet (or, during such period, test) its Consolidated Leverage Ratio or Consolidated Fixed Charge Coverage Ratio. Additionally, the Second Amendment provided that, during the Covenant Relief Period, (x) the Applicable Rate of interest being incurred on any outstanding Loans is increased to 3.25% per annum for Term SOFR Loans and 2.25% per annum for Base Rate Loans, (y) the commitment fee for undrawn commitments is increased to 0.35% and (z) the ability of the Loan Parties to make certain Investments, Dispositions and Restricted Payments, in each case, as more fully set forth in the Amended Credit Agreement.

At December 31, 2024, the applicable margin was 2.25% and the effective interest rate on the term loan facility was 10.24%. The weighted-average interest rate on the revolving credit facility was 8.73% for the year ended December 31, 2024. In addition to the interest charged on the term loan facility and the revolving credit facility, as a result of the covenant violations, the bank converted the term loan and revolving credit facilities to Base Rate loans on the default date and has imposed an additional 2% interest penalty on all outstanding amounts until the events of default are cured.

The maturity date of the term loan facility and the revolving credit facility, with all amounts outstanding becoming due and payable in full, is November 17, 2026.

Obligations under the Second Amendment are guaranteed by the Loan Parties and secured by Collateral, in each case, as set forth in the Existing Credit Agreement, including a lien on all assets owned by the Borrower (subject to agreed security principles, but providing for a customary qualifying floating charge over all of the Company's assets, with certain customary exceptions). The Second Amendment also required the Borrower and its Subsidiaries to transition certain of their primary principal disbursement services, payroll services and primary operating customer deposit services to Bank of America, N.A.

Loan covenants and violations

The Amended Credit Agreement is subject to financial covenants, including covenants which require the Company to meet key financial ratios and customary affirmative and negative covenants. The Company was not in compliance with its quarterly consolidated EBITDA covenant as of September 30, 2024, its monthly liquidity covenant as of October 31, 2024 and November 30, 2024 and its quarterly consolidated fixed ratio covenant and consolidated leverage ratio covenant as of December 31, 2024. These events of default afford the lender the right to declare the entire outstanding $22.8 million principal and interest immediately due and payable as well as the $45 million outstanding under the revolving credit facility. Although the Company continues regular discussions with the lender to address its noncompliance of the covenants, it has been unable to obtain a waiver of the defaults from the lender, or otherwise refinance the indebtedness. There can be no assurances that the lender will provide a waiver and could declare the Company in default and accelerate all amounts due under the term loan facility and the revolving credit facility.

As the covenant violations give the lender the right to require immediate repayment of the amounts outstanding, the entire $22.8 million outstanding on the term loan facility and the $45.0 million outstanding under the revolving credit facility are classified as current and included in Current portion of long-term debt, net on the consolidated balance sheets as of December 31, 2024. Further, the $0.2 million of unamortized debt issuance cost associated with the term loan facility is classified as current and included in Current portion of long-term debt, net and $0.4 million of unamortized debt issuance costs associated with the revolving credit facility is classified as current and included in Other current assets on the consolidated balance sheets as of December 31 2024. If the lender requires immediate repayment of the outstanding term loan facility and revolving credit facility, the Company would be required to write-off the unamortized debt issuance costs upon extinguishment of the debt.

Interest expense, net

Net Interest expense, including bank charges and amortization of debt issuance costs, was $2.5 million and $5.8 million for the years ended December 31,2023 and 2024, respectively. The increase in interest expense is primarily due to the addition of interest on the revolving credit facility against amounts borrowed in the first half of 2024 and an increase in the interest rate due to the events of default noted above. For the year ended December 31, 2024, the Company also expensed $0.6 million of fees related to an aborted amendment to our secured credit agreement.

Note 8. Employee benefit plans

The Company’s significant employee benefit plans currently consist of a defined contribution plan in the United States and a separate defined contribution plan in the UK. The Company does not offer any other elective postretirement benefit plans, such as retiree medical and dental benefits or deferred compensation agreements to its employees or officers.

U.S. plan

U.S. regular, full-time employees are eligible to participate in the Cambium Networks, Inc. 401(k) Plan, which is a qualified defined contribution plan under section 401(k) of the Internal Revenue Service Code. Under the Cambium Networks, Inc. 401(k) Plan, the Company contributes a dollar-for-dollar match of the first 4% an employee contributes to the plan. Employees are eligible to participate on the first day of the month following their date of hire and begin receiving company contributions three-months after they become eligible to participate in the plan. Company matching contributions are made each pay period, but the funds do not vest until the employee’s second anniversary of employment with the Company. Employees are always fully vested in their own contributions. All contributions, including the Company match, are made in cash and invested in accordance with the participants’ investment elections. Contributions made by the Company under the Cambium Networks, Inc. 401(k) Plan were $1.4 million and$0.8 million for the years ended December 31, 2023 and 2024, respectively.

UK plan

Regular, full-time UK employees are eligible to participate in the Cambium Networks Ltd. Stakeholder Pension Scheme, which is a qualified defined contribution plan. Employees are eligible to participate on the first of the month following receipt of their enrollment form, and eligible employees are automatically enrolled in the plan at a default employee contribution rate of 3% and a company contribution rate of 5% of the employee’s basic salary. The Company contribution rate increases by 1% for each additional 1% that the employee contributes up to a maximum of 7%. Company matching contributions vest immediately and employees are always vested in their own contributions. All contributions, including the Company match, are made in cash and deposited in the participant’s account each pay period. The total contributed by the Company under this plan was $0.4 million and$0.4 million for the years ended December 31, 2023 and 2024, respectively.

Note 9. Other expense, net

Other expense, netwas expense of $0.3 million and expense of $0.1 million for the years ended December 31, 2023 and 2024, respectively, and represents foreign exchange losses.

Note 10. Shareholders' equity

Ordinary Shares

As of December 31, 2023 and December 31, 2024, the Company's articles of association authorized the Company to issue up to 500,000,000 ordinary shares. Each holder of the Company's ordinary shares is entitled to one vote for each share on all matters submitted to a vote of the shareholders, including the election of directors.

As of December 31, 2024, no dividends have been declared or paid.

2019 Share incentive plan

In June 2019, the Company’s Board of Directors adopted, and its shareholders approved, the 2019 Share Incentive Plan (“2019 Plan”). The 2019 Plan provides for the grant of incentive share options, nonqualified share options, share appreciation rights, restricted share awards (“RSAs”), restricted share units (“RSUs”), other share-based awards and performance awards. The share reserve under the 2019 Plan will be automatically increased on the first day of each fiscal year, beginning with the fiscal year ended December 31, 2020 and will continue until, and including, the fiscal year ending December 31, 2029. The number of shares added annually will be equal to the lowest of 1,320,000 shares,5% of the number of the Company’s shares outstanding on the first day of such fiscal year, or an amount determined by the Board of Directors. On March 1, 2023, the Company registered 1,320,000 additional shares that may be issued under the 2019 plan. On March 18, 2024 the Company registered 1,320,000 additional shares that may be issued under the 2019 Plan.

The Company’s employees, officers, directors, consultants, and advisors are eligible to receive awards under the 2019 Plan. Incentive share options, however, may only be granted to its employees.

The following table summarizes changes in the number of shares available for grant under the Company’s equity incentive plan during the years ended December 31, 2023 and December 31, 2024:

The Company expects to satisfy the exercise of share options and future distributions of shares for restricted share units and restricted share awards by issuing new ordinary shares which have been reserved under the 2019 Plan.

The Company uses the Black-Scholes option pricing model to estimate the fair value of share options. The Company utilized a forfeiture rate of 8.2% for the year ended December 31, 2023 and 11.4% during the year ended December 31, 2024 for estimating the forfeitures of share options and restricted share units granted.

Share options

Share options typically have a contractual term often years from grant date. The following is a summary of option activity for the Company’s share incentive plans for year ended December 31, 2024:

1 Options granted includes the time-based share options and the performance-based share options for which a grant date has been established, as described below.

The intrinsic value for share options outstanding and exercisable is defined as the difference between the market value of the Company’s ordinary shares as of the end of the period and the grant price. At December 31, 2023 and 2024, the aggregate intrinsic value of options exercisable under the Company’s share incentive plans was $0.0 million and $0.0 million, respectively, as determined as of the date of grant. The Company had 59,800 and 0 options exercised during the years ended December 31,2023 and 2024, respectively. The cash received from the share options exercised in 2023 and 2024 was $0.5 million and $0.0 million, respectively.

At December 31, 2024, there was $9.1 million in unrecognized pre-tax share-based compensation expense, net of estimated forfeitures, related to unvested time-based share option awards. The unrecognized share-based compensation expense is expected to be recognized over aweighted-average period of 2.6 years.

The Company estimates the fair value of share options using the Black-Scholes option pricing model. The fair value of share options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of share options is estimated using the following weighted-average assumptions:

Restricted shares

The following is a summary of restricted shares activity for the Company’s share incentive plans for the year ended December 31, 2024:

1 Includes the time-based RSUs and the performance-based RSUs for which a grant date has been established, as described below.

During 2023 and 2024,225,338 and 1,044,920 RSUs were granted under the 2019 Plan, respectively. The Company withheld 50,775 and 12,735 shares to pay the employees’ portion of the minimum payroll withholding taxes on the RSUs that vested in 2023 and 2024, respectively.

At December 31, 2024, there was $4.7 million in unrecognized pre-tax compensation expense, net of estimated forfeitures, related to unvested time-based share awards. The unrecognized compensation expense is expected to be recognized over a weighted average period of 2.3 years.

Performance-based share awards

In May 2023, performance-based share awards were awarded to select executive officers of the Company. The awards contained a performance-based vesting criteria and included 60,000 share options and 135,000 restricted share units. The performance-based awards had two separate annual performance periods, with 50% of the performance-based awards vesting over each of the annual performance periods ended December 31, 2023 ("First Performance Period") and December 31, 2024 ("Second Performance Period") if the performance goal was met. If the performance goal for that performance period was not met, the performance-based awards did not vest and were forfeited. The performance goal was based on the Company's adjusted earnings per share, as publicly reported by the Company, for each performance period. The method used to measure the fair value of the performance-based awards is consistent with the methods and assumptions used to measure the fair value of time-based share options and RSUs, as described above.

For performance-based awards that vest during the First Performance Period, the Company's Compensation Committee retained the ability to modify the applicable adjusted earnings per share metric. Due to this discretion, the Company determined that the grantee does not have a mutual understanding of the key terms and conditions of the performance-based awards in the First Performance Period, and a grant date will not exist until the Compensation Committee approves the adjusted earnings per share metric for the First Performance Period. As of December 31, 2023, based on the total potential shares that could be earned, there were 62,500 RSUs outstanding for which there is no accounting grant date. Accordingly, no grant date fair value was established and the weighted average grant date fair values calculated above excludes these performance-based share options and performance-based RSUs. The Company remeasured the fair value of the awards at each reporting date until a grant date is achieved, as the service inception date precedes the grant date. As of December 31, 2023, there was $0.4 million in unrecognized pre-tax compensation expense, net of estimated forfeitures, related to unvested performance-based share awards for the First Performance Period, which would have been potentially recognized through the first quarter of 2024 upon achievement of the performance goal. As the performance goal was not met for 2023, these performance shares were forfeited as of January 29, 2024.

Unlike the performance-based awards in the First Performance Period, the Compensation Committee did not have the discretion to modify the applicable adjusted earnings per share metric for performance-based awards that vest during the Second Performance Period. As such, a mutual understanding of the key terms and conditions, and thus a grant date, existed on the date that the performance-based awards were issued by the Company. As of December 31, 2023, based on the total potential shares that could be earned, there were 62,500 RSUs granted. A grant date fair value was established, and the weighted average grant date fair values calculated in the above tables include these performance-based share options and performance-based RSUs. The Company has not recognized any compensation expense on these performance-based awards since the achievement of the performance goal was not probable. As of December 31, 2024, there was $0.5 million in unrecognized pre-tax compensation expense, net of estimated forfeitures, related to these unvested performance-based share awards for the Second Performance Period. As the performance goal was not met for 2024, these performance shares were forfeited as of February 4, 2025.

Employee share purchase plan

In June 2019, the Company’s Board of Directors adopted, and its shareholders approved, the Employee Share Purchase Plan (“ESPP”). The ESPP was effective on June 25, 2019 and the offering period or purchase period under the ESPP began on January 1,

2021. A total of 1,334,427 shares are available under the ESPP, which includes 550,000 shares originally available,256,730 additional shares registered on March 24, 2020,260,345 additional shares registered on March 1, 2021,267,352 additional shares registered on February 25, 2022,273,133 additional shares registered on March 1, 2023 and 275,000 additional shares registered on March 18, 2024. The number of shares that will be available for sale under the ESPP will be increased annually on the first day of each fiscal year beginning in 2020, and will be equal to the lowest of:275,000 shares;1% of the outstanding shares as of the last day of the immediately preceding fiscal year, or such other amount as the administrator may determine. The purchase price of the shares will be 85% of the lower of the fair market value of our shares on the first trading day of each offering period or on the purchase date.

For the year ended December 31, 2023, the Company recognized $0.9 million of share-based compensation expense related to the ESPP. There were 88,290 and 113,218 shares issued under the ESPP during the six-month offering periods that ended on June 30, 2023 and December 31, 2023, respectively. For the year ended December 31, 2024, the Company recognized $0.6 million of share-based compensation expense related to the ESPP. There were 279,403 and 341,107 shares issued under the ESPP during the six-month offering periods that ended on June 30, 2024 and December 31, 2024, respectively.

Effective January 1, 2025, management has temporarily suspended the ESPP program.

Note 11. Loss per share

Basic net earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted net earnings (loss) per share is computed by giving effect to all potentially dilutive ordinary share equivalents outstanding for the period. For purposes of this calculation, share options, RSUs, and ESPP awards are considered to be ordinary share equivalents but are excluded from the calculation of diluted earnings (loss) per share when including them would have an anti-dilutive effect. Performance-based share awards are only included in the calculation of diluted earnings (loss) per share if the performance metric would have been achieved as of December 31, 2024 if that had been the end of the contingency period. The following table sets forth the computation of basic and diluted net earnings (loss) per share (in thousands, except for share and per share data):

In the computation of diluted loss per share for the years ended December 31, 2023 and 2024, no ordinary share equivalents were excluded because their inclusion would have been antidilutive.

Note 12. Segment Information

The Company operates in asingle reportable operating segment providing fixed wireless broadband and Wi-Fi networking infrastructure solutions. This segment generates revenue primarily from the sale of hardware products, but also includes revenues from software products, extended warranty and subscription services. The accounting policies for this segment are the same as those described in Note 1. Summary of significant accounting policies.

In its operation of the business, management, including our chief operating decision maker ("CODM"), who is also our Chief Executive Officer ("CEO"), reviews financial information regularly at the consolidated level. Net income (loss) is used as the metric for purposes of allocating resources and evaluating performance. The CODM monitors forecast versus actual net income (loss) for purposes of determining the general health of the Company and assessing the performance of the Company as compared to management's expectations. The Company does not have any intra-entity sales or transfers. Significant expenses reviewed by the CODM include those that are presented in the consolidated statements of operations and comprehensive loss.

See Note 15. Revenues from contracts with customers for additional information about the Company's revenues by product category and geography.

As the Company operates solely withinone segment, total assets, property and equipment, net and software, net are reported at the consolidated level on the consolidated balance sheets. The Company's assets include both current and long-lived assets. As of

December 31, 2023 and 2024, segment assets were equal to total consolidated assets included on the consolidated balance sheets of $209.1 million and $173.7 million, respectively.

The Company's long-lived assets, including the Company's property and equipment, software, goodwill, operating lease right-of-use assets and noncurrent assets, but excluding deferred tax assets and investment in subsidiary, recognized on the consolidated balance sheets were located as follows (in thousands):

Depreciation and amortization, impairment, property and equipment additions and capital software additions are reported at the consolidated level on the consolidated statements of cash flows. Additional significant non-cash items include the following (in thousands):

Note 13. Income taxes

For the years ended December 31, 2023 and 2024, income (loss) before income taxes includes the following components (in thousands):

For the years ended December 31, 2023 and 2024, the provision for income taxes consists of the following (in thousands):

In applying the statutory tax rate in the effective income tax rate reconciliation, the Company used the statutory U.S. federal income tax rate of 21% rather than the Cayman Islands zero percent rate. The table below reconciles the Company's tax (benefit) provision for income taxes based on the statutory U.S. federal income tax rate to its effective tax rate for the years ended December 31, 2023 and 2024 (in thousands):

Foreign rate differential represents the non-U.S. jurisdictions. The country having the greatest impact on the tax rate adjustment line shown in the above table as “foreign rate differential” for the years ended December 31, 2023 and 2024 is the UK where the statutory income tax rate was 23.5% for 2023, and was 25% for 2024.

The Company recorded income tax provision of $17.5 million and a benefit of $1.9 million for the years ended December 31, 2023 and 2024, with an effective tax rate of (30.9)% and 2.4%, respectively. For the year ended December 31, 2023, the Company's effective tax rate was (30.9)%. The effective tax rate differed from the U.S. statutory rate of 21.0% primarily due toa pretax loss, the net increase in the valuation allowance of $37.3 million, a tax benefit on Foreign Derived Intangible Income of $2.9 million, and a benefit on research and development credits of $2.4 million. For the year ended December 31, 2024, the Company's effective tax rate was 2.4%. The effective tax rate differed from the U.S. statutory rate of 21.0% primarily due to a pretax loss, the net increase in the valuation allowance of $12.3 million, a foreign tax rate differential of $(2.5) million, $2.7 million return to provision adjustment primarily due to a tax method change in the U.S. 2023 tax return related to the tax capitalization of our research and development expenditures, $1.5 million for establishment of a deferred tax liability for withholding tax on non-permanent investment in subsidiaries, a $1.2 million tax expense related to share-based compensation, and a benefit on research and development credits of $(0.3) million.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities at December 31, 2023 and 2024 were as follows (in thousands):

For the years ended December 31, 2023 and 2024, the following table reflects the activity in the Company’s valuation allowance on deferred tax assets (in thousands):

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. The Company considers projected future taxable income, reversing taxable temporary differences, carryback opportunities, and tax-planning strategies in making this assessment.

As of each reporting date, management considers new evidence, both positive and negative, to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets before they otherwise expire. Cumulative losses are objective evidence that limit the ability to consider other subjective evidence such as the Company’s projections for future growth. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as the Company’s projections for growth.

During the third quarter of 2023, management determined that it was more likely than not that its worldwide deferred tax assets will not be realizable due to the Company generating net operating losses and being in a three-year cumulative loss position. This resulted in sufficient negative evidence when evaluating the realizability of deferred tax assets and the Company recorded a full valuation allowance against its worldwide deferred tax assets as of September 30, 2023.

At December 31, 2023, the Company recorded a full valuation allowance of $38.6 million on its worldwide deferred tax assets. Due to continued losses in 2024, the Company maintained its full valuation allowance position and recorded a valuation allowance of $51.0 million on its deferred tax assets as of December 31, 2024.

The Company historically asserted that earnings of its foreign subsidiaries are indefinitely reinvested outside the United States. As of December 31, 2023, the cumulative amount of undistributed earnings was approximately $32.0 million. The Company had not made a provision for taxes on the undistributed earnings of foreign subsidiaries as it was not practicable to estimate the unrecognized deferred tax liability due to the complexity of the tax calculation. As of March 31, 2024, conditions existed that raised substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued. As a result, the Company can no longer assert indefinite reinvestment with respect to earnings of foreign subsidiaries. Accordingly, the Company recorded a deferred tax liability for the outside basis difference of its foreign affiliates and estimated future tax consequences associated with the potential sale of its foreign investments, including applicable foreign withholding taxes and other incremental taxes. As of December 31, 2024, the Company had approximately $28.0 million of undistributed earnings of foreign subsidiaries for which the Company does not assert indefinite reinvestment. As a result, the Company recognized a deferred tax liability of$1.5 million, which was included in income tax expense for 2024. The actual tax costs may differ from the amounts recorded due to changes in tax laws, foreign exchange rates, and other factors, including the timing and manner of repatriation.

The Company has gross income tax NOL carryforwards related to its U.S. and international operations.

The Company has tax credit carryforwards related to research and development.

The Company has gross corporate interest restriction (“CIR”) disallowance carryforwards related to its UK operations.

The Company files income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions and many foreign jurisdictions. The U.S., UK, and India are the main taxing jurisdictions in which the Company operates. Open tax years subject to audit vary depending on the tax jurisdiction. In the U.S., as of December 31, 2024, the Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2021. In the UK, as of December 31, 2024, the tax returns that are open are for the tax years 2023 and 2024. In India, the tax returns that are open are for India assessment years 2018 through 2024.

The Company believes its tax positions comply with applicable tax law and intends to vigorously defend its position. However, differing positions on certain issues could be upheld by tax authorities, which could adversely affect the Company’s financial condition and results of operations. The Company doesnot have any unrecognized tax positions as of December 31, 2023 and 2024.

Note 14. Commitments and contingencies

The Company recognizes the fair value for guarantee and indemnification arrangements it issues or modifies, if these arrangements are within the scope of authoritative accounting guidance. In addition, the Company must continue to monitor the conditions that are subject to the guarantees and indemnifications in order to identify if a loss has been incurred. If the Company determines it is probable that a loss has occurred, then any such estimated loss would be recognized under those guarantees and indemnifications and would be recognized in the Company’s consolidated statements of operations and corresponding consolidated balance sheets during that period.

Amended credit agreement

Our Amended Credit Agreement contains customary provisions with respect to the consequences of a “Default” or “Event of Default” as defined therein, including a restriction on the ability to access further borrowings as well as other customary rights and remedies available to the lender upon a Default or Event of Default. These include the ability to impose a default rate interest rate, prohibiting us from reinvesting asset sale proceeds, limiting repayment of intercompany debt and investment in non-loan party subsidiaries, limiting acquisitions, certain asset sales and assumption of indebtedness, and acceleration of the outstanding obligations and exercise of other remedies under the Amended Credit Agreement, among other customary restrictions.

Purchase commitments with contract manufacturers and suppliers

The Company purchase components from a variety of suppliers and use contract manufacturers to provide manufacturing services for our products and issue purchase orders for these products and services. As of December 31, 2024, the Company had $14.7 million of open purchase orders with its suppliers and contract manufacturers, all to be procured within the next year. In addition, during the normal course of business, in order to manage manufacturing lead times and help ensure adequate component supply, we enter into agreements with contract manufacturers and suppliers that allow them to procure inventory based upon criteria as defined by us, such as forecasted demand. The Company may be liable to purchase excess product or aged material from our suppliers following reasonable mitigation efforts. The Company establishes a loss on purchase commitment liability for all product the supplier has procured for which the Company does not expect it will sell. Such loss on purchase commitment liability is included in Accrued liabilities and Other noncurrent liabilities on the Company's consolidated balance sheets, based on the timing of when the liability is expected to be resolved. The Company recorded losses on purchase commitments of $13.1 million and $7.4 million for the years ended December 31, 2023 and 2024, respectively. Including the $14.7 million of open purchase orders noted above, as of December 31, 2024 the Company has $98.4 million of purchase obligations with its suppliers and contract manufacturers, of which $81.6 million is expected to be procured within the next year and $16.8 million within the next five years thereafter.

Warranties

The Company offers a standard warranty on its products, with the term depending on the product, and records a liability for the estimated future costs associated with potential warranty claims. The Company’s responsibility under its standard warranty is the repair or replacement of in-warranty defective product, or to credit the purchase price of the defective product, at its discretion, without charge to the customer. The Company’s estimate of future warranty costs is largely based on historical experience factors including product failure rates, material usage, and service delivery cost incurred in correcting product failures. The standard warranty is included in either Other current liabilities or Other noncurrent liabilities on the Company’s consolidated balance sheets, depending on the time period covered by the warranty. The Company also offers an extended warranty for purchase that represents a future performance obligation for the Company. The extended warranty is included in deferred revenues (both current and noncurrent) on the consolidated balance sheets and recognized on a straight-line basis over the term of the extended warranty. The warranty costs are reflected in the Company’s consolidated statements of operations within cost of revenues.

Indemnification

The Company generally indemnifies its distributors against claims brought by a third party to the extent any such claim alleges that the Company’s product infringes a patent, copyright or trademark or violates any other proprietary rights of that third party. Although the Company generally tries to limit the maximum amount of potential future liability under its indemnification obligations, in certain agreements this liability may be unlimited. The maximum potential amount of future payments the Company may be required to make under these indemnification agreements is not estimable. The Company did not make any payments under indemnification agreements in 2023 or 2024.

The Company indemnifies its directors and officers and select key employees, including key employees serving as directors or officers of the Company’s subsidiaries, for certain events or occurrences, subject to certain limits, while the director or officer is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the director’s or officer’s term of service. The Company may terminate the indemnification agreements with its directors, officers or key employees upon the termination of their services as directors or officers of the Company or its subsidiaries, or the termination of activities for which indemnification has been provided, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that limits its exposure. The Company believes the fair value of these indemnification agreements is minimal.

Third parties may from time to time assert legal claims against the Company. The Company records accruals for loss contingencies to the extent that it concludes it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. The Company evaluates, on a regular basis, developments in legal proceedings and other matters that could cause a change in amounts recorded. Due to the inherent uncertainty involving legal matters, the ultimate resolution could differ from amounts recorded. There is no pending or threatened legal proceedings to which the Company is a party to, and in the Company’s opinion, is likely to have a material adverse effect on its financial condition or results of operations.

Shareholder lawsuit

On May 22, 2024, a putative shareholder class action complaint was filed in the United States District Court for the Northern District of Illinois (Hamby v. Cambium Networks Corporation et al, Case No. 1:24-cv-04240) against us and three of our current or former officers. The complaint purported to assert claims under Section 10(b) of the Exchange Act, Exchange Act Rule 10b-5, and Section 20(a) of the Exchange Act, on behalf of persons and entities who acquired our ordinary shares between May 8, 2023 and January 18, 2024 ("Class Period"). The complaint alleged that, during the Class Period, the Company and certain of its executive officers made false and misleading statements and failed to disclose material adverse facts about its business, operations, and prospects in violation of Sections 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Exchange Act. The plaintiffs sought damages in an unspecified amount. On July 22, 2024, motions were filed on behalf of purported class member shareholders seeking to serve as lead plaintiff. On October 21, 2024, the court approved the appointment of lead plaintiff. On December 4, 2024, plaintiffs filed a voluntary dismissal of the action without prejudice.

Note 15. Revenue from contracts with customers

Disaggregation of revenues

Revenues by product category were as follows (in thousands, except percentages):

The Company’s products are predominately distributed through a third-party logistics provider in the United States, Netherlands and Vietnam. The Company has determined the geographical distribution of product revenues based upon the ship-to destinations.

Revenue by geography were as follows (in thousands, except percentages):

The following country had revenues greater than 10% of total revenues:

•

United States -$136.7 million for 2023 (Restated) and $88.6 million for 2024

Customers with an accounts receivable balance of 10% or greater of total accounts receivable and customers with net revenues of 10% or greater of total revenues are presented below for the periods indicated:

Contract Balances

The following table summarizes contract balances as of December 31, 2023 and 2024:

Trade accounts receivable include amounts currently due from customers. Amounts are in accordance with contractual terms and are recorded at face amount less an allowance for estimated credit losses.

Deferred revenue consists of amounts due or received from customers in advance of the Company satisfying performance obligations under contractual arrangements, such as software subscriptions and extended warranty. Deferred revenue is classified as current or noncurrent based on the timing of when revenue will be recognized.

Accrued sales returns is the estimated amount expected to be returned by customer in relation to product exchanges made as part of the Company’s stock rotation program. This amount is included within Other current liabilities in the consolidated balance sheets.

Remaining performance obligations

Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations included in a contract that are unsatisfied, or partially satisfied, as of the end of a period. As of December 31, 2024, the Company’s remaining performance obligations of $22.6 million, of which $9.8 million is expected to be recognized in 2025, $11.0 million to be recognized between 2026 and 2028, $1.4 million to be recognized between 2029 and 2031, with the remaining $0.5 million to be recognized by 2034.

Revenue recognized during the year ended December 31, 2024 which was previously included in deferred revenues as of December 31, 2023 was $8.6 million. Revenue recognized during the year ended December 31, 2023 which was previously included in deferred revenues as of December 31, 2022 was $8.7 million.

Cost to obtain a contract

Sales commissions are incremental costs of obtaining a contract. The Company haselected to recognize these expenses as incurred due to the amortization period of these costs being one year or less.

Note 16. Leases

The Company has operating leases for offices, vehicles, and office equipment. Leases with a term of 12 months or less are not recorded on the consolidated balance sheets, and are expensed on a straight-line basis over the lease term.

Right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company’s lease payments are typically fixed or contain fixed escalators. The Company’s leases typically include certain lock-in periods and renewal options to extend the lease, but when determining the lease term, the Company does not consider options to extend a lease it is not reasonably certain to exercise. The Company elected the practical expedient to not separate the lease and non-lease components of its leases and currently has no leases with options to purchase the leased property.

The components of lease expense were as follows (in thousands):

Supplemental balance sheet information related to leases were as follows (in thousands, except lease term and discount rate):

For the year ended December 31, 2024, as part of the Company's impairment review of its long-lived assets (refer to Note 5 - Goodwill and intangible assets for more information), the Company recorded an impairment of its right-of-use operating lease assets of $0.1 million as of September 30, 2024. For the year ended December 31, 2023, there wasno impairment of the right-of-use operating lease assets.

Supplemental cash flow information related to leases were as follows (in thousands):

The Company’s current lease terms range fromone tothirteen years and may include optionsto extend the lease byone tofive years.

Remaining maturities on lease liabilities at December 31, 2024 is as follows (in thousands):

Note 17. Related party transactions

A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal.

For the years ended December 31, 2023 and 2024, Vector Capital Management, LP charged $0.6 million and $0.1 million for professional services fees and reimbursement of expenses. The amount due to Vector Capital Management, LP at December 31,2023 was $3 thousand and was included in Accounts payable in the Company's consolidated balance sheets. No amount was due to Vector Capital Management, LP at December 31, 2024.

Note 18. Restructuring

In 2023, the Company announced and initiated two corporate cost reductions plans, the first in August 2023 and the second in November 2023, to better align Cambium's cost structure with current economic conditions and position the Company to achieve near-term and long-term targets to maintain profitability, improve cash flow and maintain a strong balance sheet.

Under the August 2023 restructuring plan, the Company expected and incurred $1.0 million of costs in the three-month period ended September 30, 2023. These costs were all paid by December 31, 2023, and the restructuring plan was completed.

Under the November 2023 restructuring plan, the Company expected to incur between $1.5 - $2.5 million of costs, consisting mostly of one-time involuntary employee termination costs. Cost reductions under the November 2023 plan began in the fourth quarter of 2023 and were completed during 2024, and all costs have been incurred by the end of 2024. For the year ended December 31, 2023, the Company incurred $1.2 million of costs, of which $0.8 million was paid by December 31, 2023. As of December 31, 2023, the Company had a restructuring liability of $0.4 million which was included in Accrued liabilities on the Company's consolidated balance sheet.

During the year ended December 31, 2024, the Company incurred additional restructuring charges under the November 2023 plan of approximately $1.1 million, which are included incost of revenues and all operating expense lines in the Company's consolidated statements of operations. Through December 31, 2024, the Company paid $1.4 million, which consists of the $0.4 million outstanding at December 31, 2023 plus an additional $1.1 million of costs incurred during the year ended December 31, 2024. As of December 31, 2024, the Company has a restructuring liability of $0.1 million, which is included in Accrued liabilities in the Company's consolidated balance sheet and was paid in the first quarter of 2025.

The following table reflects the restructuring liability activity for the years ended December 31, 2023 and December 31, 2024 (in thousands):

Note 19. Restatement of previously issued unaudited interim consolidated financial statements (Unaudited)

As described in Note 1. Description of business and summary of significant accounting policies, in connection with the preparation of its consolidated financial statements for the year ended December 31, 2024, the Company determined that its previously issued unaudited interim consolidated financial statements for the periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024 contained errors in the application of GAAP as summarized below.

In accordance with SEC Staff Accounting Bulletin No. 99, "Materiality", and SEC Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Qualifying Misstatements in Current Year Financial Statements", the Company evaluated the corrections and has determined that the related impact was material to the previously filed unaudited interim consolidated financial statements that contained errors in the quarterly periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024 (the "Affected Quarterly Periods"). Therefore, the Company, in consultation with the Audit Committee of the Company's Board of Directors, concluded that the Affected Quarterly Periods should be restated to present the identified adjustments discussed below. The Company has not filed, and does not intend to file, amendments to the previously filed Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024, but instead is restating its unaudited interim financial statements in this Comprehensive Form 10-K.

The restatement adjustments identified in the Affected Quarterly Periods were similar in nature to those described in Note 2. Restatement of annual financial statements and arose during the preparation of the Company's consolidated financial statements for the year ended December 31, 2024. Specifically, the Company did not appropriately (i)estimate variable consideration for customer incentives, (ii)estimate variable consideration for sales returns, (iii)estimate the allowance for credit losses, (iv)estimate excess and obsolete inventory, (v)recognize revenue on a non-standard contract, (vi)timely recognize an impairment of its goodwill and long lived assets, (vii)timely recognize a valuation allowance on deferred tax assets; and (viii)reclassify certain prepayments made to suppliers and loss on supplier commitments liability as current or non-current.

Additionally, as part of the Restatement, the Company corrected for (b)previously identified uncorrected misstatements related to out-of-period adjustments,(c) previously recorded amounts reclassifying accounts receivable credit balances and (d)classification of property and equipment transactions on the statement of cash flows.

Effects of Restatement

The following tables sets forth the effects of the restatement adjustments on revenues, income (loss) before income taxes and net income (loss) in the consolidated statements of operations and comprehensive income (loss) for the Affected Quarterly Periods:

These amounts are presented herein as originally reported in the previously issued financial statements for transparency and consistency. The restatement corrects these errors and reflects the appropriate adjustments.

The financial statement line items impacted by the respective adjustments are labeled in the tables below based on the identifiers from the paragraph above. Below are the Company's restated consolidated balance sheets, statements of operations and other comprehensive income (loss) and statements of cash flows with the adjustments for the periods stated in the tables below. The consolidated statements of shareholders equity (deficit) have been excluded from the financial statement presented below as they were only impacted by adjustments to net income which is presented below in the consolidated statements of operations and other comprehensive income (loss) and consolidated balance sheets.

The impact of the restatement on the Affected Quarterly Period as of and for the three months ended March 31, 2023 is presented in the following tables:

The impact of the restatement on the Affected Quarterly Period as of and for the three and six month periods ended June 30, 2023 is presented in the following tables:

The impact of the restatement on the Affected Quarterly Period as of and for the three and nine month periods ended September 30, 2023 is presented in the following tables:

The impact of the restatement on the Affected Quarterly Period as of and for the three month period ended March 31, 2024 is presented in the following tables:

The impact of the restatement on the Affected Quarterly Period as of and for the three and six month periods ended June 30, 2024 is presented in the following tables:

The impact of the restatement on the Affected Quarterly Period as of and for the three and nine month periods ended September 30, 2024 is presented in the following tables:

Note 20. Subsequent events

Corporate Restructuring

On February 24, 2025, the Company approved a corporate restructuring plan designed to reduce operating costs including a reduction in the Company's workforce and other cost savings initiatives. The decision to execute the plan was made to better align Cambium's cost structure and business activities with the weaker market demand it has been experiencing and to take active measures to accelerate its margin recovery. Through December 31, 2025, the Company incurred charges under the plan, mostly for severance payments of $1.8 million. Through December 31, 2025, the Company paid all $1.8 million.

Credit Agreement Default

The Company continues to be out of compliance with financial and other covenants under the Amended Credit Agreement with Bank of America, and such defaults continued through 2025 and are expected to continue through 2026. In addition, the Company ceased payment of required quarterly principal and periodic interest on the term loan facility and quarterly interest on the revolving credit facility as of June 2025, providing an additional payment default under the Amended Credit Agreement. Although such defaults afford the lender the right to declare the amounts outstanding immediately due and payable, the Company continues to have regular discussions with the lender. If the lender were to accelerate the maturity of the Company's indebtedness under the Amended Credit Agreement, the Company would not be able to repay the debt, and therefore, there is substantial uncertainty the Company would be able to continue as a going concern. Absent acceleration, the Amended Credit Agreement reaches maturity on November 17, 2026. Absent an infusion of capital from financing or divestiture, the Company will be unable to repay the indebtedness under the Credit Agreement when it comes due. Refer to Note 7. Debt, for additional information.

Nasdaq Noncompliance

On March 25, 2026, the Company received a written notice that the Nasdaq Hearings Panel (the “Hearings Panel”) had determined to delist the Company's ordinary shares from The Nasdaq Global Market due to the Company's failure to comply with the terms of the Hearings Panel's prior decision. Trading in the Company's ordinary shares was suspended at the open of trading on March 27, 2026. Trading in the Company's ordinary shares under the symbol "CMBMF" on the OTC Expert Market began on March 30, 2026.

The Company had previously received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) on April 10, 2025, notifying the Company that, it had failed to comply with the $1.00 per share minimum bid price requirement for continued inclusion on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Rule”). The Company received additional deficiency letters from the Staff on April 16, 2025, May 22, 2025, August 25, 2025 and November 25, 2025, notifying the Company that it was not in compliance with the requirements of Nasdaq Listing Rule 5250(c)(1) (the "Filing Rule") for failure to timely file its Form 10-K for the year ended December 31, 2024 and its Quarterly reports on Form 10-Q for the periods ended March 31, 2025, June 30, 2025 and September 30, 2025, respectively (the “Delinquent Filing”).

On November 11, 2025, the Company presented its plan of compliance before the Nasdaq Hearings Panel and requested a continued stay of its delisting pending achieving full compliance by filing the Delinquent Filings within the time requested under the plan of compliance. On December 3, 2025, the Company received a decision (the “Decision Letter”) from the Hearings Panel granting the Company’s request for continued listing of the Company’s ordinary shares, subject to the Company demonstrating compliance with the Bid Price Rule and the Filing Rule, on or before April 16, 2026, but subject to interim filing dates as set forth in the decision.

On December 12, 2025, the Company received a partial compliance letter from the Hearings Panel confirming the Company is in compliance with the Bid Price Rule, although it remained non-compliant with the Filing Rule.

On January 9, 2026, the Company received a further determination letter stating that because the Company did not hold an annual meeting of shareholders within twelve months from the Company's prior fiscal year end as required by Nasdaq Listing Rule 5620(a), the resulting non-compliance serves as an additional basis for delisting the Company's securities.

The Company was unable to meet the interim filing deadlines set forth in the Decision Letter, and requested extensions to the February 6, 2026 interim deadline, with additional extensions requested to March 16, 2026 and to March 23, 2026 were granted by the Hearing Panel.