UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number: 001-38952

CAMBIUM NETWORKS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Cayman Islands	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
c/o Cambium Networks, Inc.
2000 Center Drive, Suite East A401 Hoffman Estates, Illinois 60192	(345) 814-7600
(Address of principal executive offices, including zip code)	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, $0.0001 par value	CMBM	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 6, 2024 , the registrant had 27,895,741 shares of ordinary shares, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Statements of Shareholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION	32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
Signatures		34

i

Note regarding forward-looking statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, forward-looking statements may be identified by terms such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this quarterly report and are subject to a number of risks, uncertainties and assumptions. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, they should not be relied upon as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include:

•the unpredictability of our operating results;

•our ability to successfully comply with or obtain a waiver of compliance with the financial covenants under our secured credit facilities;

•the sufficiency of our cash resources and needs for additional financing;

•our ability to predict and respond to emerging technological trends and network operators' changing needs;

•our ability to forecast future demand or the level of inventory in our channel, which could adversely affect our commitments to our suppliers and our channel partners' ability to effectively manage inventory of our products, timely resell our products or estimate expected future demand;

•our ability to manage inventory and the risk of excess or obsolete inventory in our channel;

•the impact of competitive pressures on the development of new products;

•risks caused by political tensions around the world including the current war in Ukraine as well as tensions between the United States and China and events in Israel and Gaza;

•the strength of the United States dollar and the impact on the cost of our products globally;

•current or future unfavorable economic conditions, both domestically and in our foreign markets, including the risk of a global or localized recessions;

•our limited or sole source suppliers' inability to acquire or produce third-party components to build our products and the impact of supply shortages, extended lead times or changes in supply of components and other parts required to manufacture our products;

•our reliance on third-party manufacturers, which subjects us to risks of product delivery delays and reduced control over product costs and quality;

•our reliance on distributors and value-added resellers for the substantial majority of our sales;

•the inability of our third-party logistics and warehousing providers to deliver products to our channel partners and network operators in a timely manner;

•our distributors' and channel partners' inability to attract new network operators or sell additional products to network operators that currently use our products;

•the technological complexity of our products, which may contain undetected hardware defects or software bugs or subject our products to the risks of ransomware or malware or other cyber attacks;

•our channel partners' inability to effectively manage inventory of our products, timely resell our products or estimate expected future demand;

•credit risk of our channel partners, which could adversely affect their ability to purchase or pay for our products;

•the impact of any material weaknesses in and our ability to maintain an effective system of internal controls, produce timely and accurate financial statements or comply with applicable regulations;

•the impact of actual or threatened health epidemics and other outbreaks;

•our reliance on the availability of third-party licenses; and

ii

•our inability to obtain intellectual property protections for our products.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Cambium Networks Corporation

Condensed Consolidated Balance Sheets

(in thousands, except for share and per share data)

	December 31,			March 31,
	2023			2024
				(Unaudited)
ASSETS
Current assets
Cash	$	18,710		$	38,711
Receivables, net of credit losses of $283 and $860		64,103			58,157
Inventories, net		66,878			55,593
Income taxes receivable		222			300
Prepaid expenses		6,589			12,752
Other current assets		6,069			6,334
Total current assets		162,571			171,847
Noncurrent assets
Property and equipment, net		12,879			13,741
Software, net		11,985			12,220
Operating lease assets		7,894			7,327
Intangible assets, net		7,675			7,300
Goodwill		9,842			9,842
Deferred tax assets, net		3,694			—
Other noncurrent assets		1,335			1,280
TOTAL ASSETS	$	217,875		$	223,557
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	19,120		$	15,783
Accrued liabilities		47,069			42,511
Employee compensation		5,071			4,229
Current portion of long-term debt, net		3,186			2,514
Deferred revenues		8,765			8,510
Other current liabilities		13,117			13,734
Total current liabilities		96,328			87,281
Noncurrent liabilities
Long-term debt, net		21,926			61,315
Deferred revenues		10,473			10,074
Noncurrent operating lease liabilities		6,595			6,409
Other noncurrent liabilities		1,619			1,688
Total liabilities		136,941			166,767
Shareholders' equity
Share capital; $0.0001 par value; 500,000,000 shares authorized at December 31, 2023 and March 31, 2024; 28,095,144 shares issued and 27,834,908 outstanding at December 31, 2023 and 28,158,001 shares issued and 27,892,848 outstanding at March 31, 2024		3			3
Additional paid in capital		152,768			155,137
Treasury shares, at cost, 260,236 shares at December 31, 2023 and 265,153 shares at March 31, 2024		(5,624	)		(5,646	)
Accumulated deficit		(64,598	)		(91,045	)
Accumulated other comprehensive loss		(1,615	)		(1,659	)
Total shareholders' equity		80,934			56,790
TOTAL LIABILITIES AND EQUITY	$	217,875		$	223,557

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

Cambium Networks Corporation

Condensed Consolidated Statements of Operations

(in thousands, except for share and per share data)

(unaudited)

	Three Months Ended March 31,
	2023		2024
Revenues	$	77,401	$	42,337
Cost of revenues		37,741		33,652
Gross profit		39,660		8,685
Operating expenses
Research and development		14,262		10,799
Sales and marketing		11,670		9,721
General and administrative		6,667		7,510
Depreciation and amortization		1,496		1,633
Total operating expenses		34,095		29,663
Operating income (loss)		5,565		(20,978	)
Interest expense, net		597		881
Other expense, net		154		59
Income (loss) before income taxes		4,814		(21,918	)
Provision for income taxes		538		4,529
Net income (loss)	$	4,276	$	(26,447	)
Earnings (loss) per share
Basic	$	0.16	$	(0.95	)
Diluted	$	0.15	$	(0.95	)
Weighted-average number of shares outstanding to compute net earnings (loss) per share
Basic		27,341,013		27,849,604
Diluted		28,452,855		27,849,604

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

Cambium Networks Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2023		2024
Net income (loss)	$	4,276	$	(26,447	)
Other comprehensive loss
Foreign currency translation adjustment		86		(44	)
Comprehensive income (loss)	$	4,362	$	(26,491	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

Cambium Networks Corporation

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands)

(unaudited)

	Three Months Ended March 31, 2023
	Share Capital
	Shares			Amount		Additional paid in capital		Treasury shares			Accumulated equity			Accumulated other comprehensive loss			Total shareholders' equity
Balance at December 31, 2022		27,313		$	3	$	138,997	$	(4,922	)	$	12,822		$	(1,527	)	$	145,373
Net income		—			—		—		—			4,276			—			4,276
Share-based compensation		—			—		2,625		—			—			—			2,625
Issuance of vested shares		45			—		—		—			—			—			—
Treasury shares withheld for net settlement		(12	)		—		—		(211	)		—			—			(211	)
Proceeds from exercise of share options		51			—		387		—			—			—			387
Foreign currency translation		—			—		—		—			—			86			86
Balance at March 31, 2023		27,397		$	3	$	142,009	$	(5,133	)	$	17,098		$	(1,441	)	$	152,536
	Three Months Ended March 31, 2024
	Share Capital
	Shares			Amount		Additional paid in capital		Treasury shares			Accumulated deficit			Accumulated other comprehensive loss			Total shareholders' equity
Balance at December 31, 2023		27,835		$	3	$	152,768	$	(5,624	)	$	(64,598	)	$	(1,615	)	$	80,934
Net loss		—			—		—		—			(26,447	)		—			(26,447	)
Share-based compensation		—			—		2,369		—			—			—			2,369
Issuance of vested shares		63			—		—		—			—			—			—
Treasury shares withheld for net settlement		(5	)		—		—		(22	)		—			—			(22	)
Foreign currency translation		—			—		—		—			—			(44	)		(44	)
Balance at March 31, 2024		27,893		$	3	$	155,137	$	(5,646	)	$	(91,045	)	$	(1,659	)	$	56,790

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

Cambium Networks Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2023			2024
Cash flows from operating activities:
Net income (loss)	$	4,276		$	(26,447	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		1,058			1,149
Amortization of software and intangible assets		1,037			1,387
Amortization of debt issuance costs		75			77
Share-based compensation		2,875			2,586
Deferred income taxes		(1,519	)		3,694
Provision for inventory excess and obsolescence		1,336			6,175
Other		(231	)		687
Change in assets and liabilities:
Receivables		(8,973	)		2,385
Inventories		(12,601	)		5,110
Prepaid expenses		1,069			(6,161	)
Accounts payable		(1,474	)		(3,581	)
Accrued employee compensation		(584	)		(1,018	)
Accrued liabilities		3,738			(1,571	)
Other assets and liabilities		3,959			(119	)
Net cash used in operating activities		(5,959	)		(15,647	)
Cash flows from investing activities:
Purchases of property and equipment		(1,569	)		(1,767	)
Purchases of software		(1,537	)		(1,250	)
Net cash used in investing activities		(3,106	)		(3,017	)
Cash flows from financing activities:
Proceeds from issuance of revolver debt		—			40,000
Repayment of term loan		(656	)		(1,313	)
Taxes paid from shares withheld		(148	)		(15	)
Proceeds from share option exercises		387			—
Net cash (used in) provided by financing activities		(417	)		38,672
Effect of exchange rate on cash		16			(7	)
Net (decrease) increase in cash		(9,466	)		20,001
Cash, beginning of period		48,162			18,710
Cash, end of period	$	38,696		$	38,711
Supplemental disclosure of cash flow information:
Income taxes paid	$	204		$	116
Interest paid	$	412		$	1,030

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

Cambium Networks Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1. Business and significant accounting policies

Business

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 Market.

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.

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of Cambium Networks Corporation and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The condensed consolidated financial statements as of March 31, 2024, and for the three-month periods ended March 31, 2023 and 2024, and the related notes are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements, and, in the opinion of management, reflect all adjustments, which comprise only normal recurring adjustments necessary to state fairly the Company’s financial position as of March 31, 2024 and results of operations for the three-month periods ended March 31, 2023 and 2024 and cash flows for the three-month periods ended March 31, 2023 and 2024. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. The condensed consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and related notes thereto for the year ended December 31, 2023 included in the Company’s annual report on Form 10-K and filed with the SEC on March 15, 2024. The results of operations for the three-month period ended March 31, 2024 are not necessarily indicative of the operating results to be expected for the full year.

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 March 31, 2024 and through the date of filing this Quarterly Report, the Company was in compliance with all of its payment obligations and the financial covenants under its Amended Credit Agreement. The Company’s obligations under the Amended Credit Agreement do not mature and become due and payable until November 17, 2026. Please refer to Note 6. Debt, regarding the Company’s debt outstanding under its credit facilities with Bank of America.

The Company is actively taking actions to improve its profitability and ensure future compliance with applicable financial covenants, including acceleration of collection of receivables, deferral of expenditures, cost reductions to align the Company’s cost structure with current revenue levels and sales of excess inventory. In addition, the Company continues to focus on operating efficiency and reducing discretionary spending. The Company believes these actions, together with its existing cash balances, provide it with the financial flexibility needed to meet its obligations as they come due over the next twelve months. However, this conclusion depends in part on the Company’s expectations regarding macro-conditions in the markets in which it competes, customer acceptance and purchases of the Company’s products, buying decisions by the Company’s distributors and other factors that are not within the Company’s control. Based on the Company’s current forecasts, the Company is projecting future noncompliance with its financial covenants within the next twelve months, which would result in a non-payment event of default under the Amended Credit Agreement. Such a default would afford the lenders thereunder the right to declare the amounts outstanding thereunder immediately due and payable, and the Company may not be able to obtain a waiver of such a default or otherwise refinance such indebtedness. Due to these uncertainties, 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 condensed consolidated financial statements are issued.

6

The accompanying condensed 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 condensed 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.

Update to Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies disclosed in the 2023 Form 10-K, Part II, Item 8.

Recently issued accounting standards not yet adopted

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required in an entity's income tax rate reconciliation table and requires disclosure of income taxes paid in both U.S. and foreign jurisdictions. The amendments are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

In November 2023, the FASB issued 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 amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Upon adoption, this guidance should be applied retrospectively to all prior periods presented. The Company is currently evaluating this ASU to determine its impact on the Company's 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 ASC 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.

7

Note 2. Balance sheet components

Inventories, net

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

	December 31,			March 31,
	2023			2024
				(unaudited)
Finished goods	$	69,428		$	64,312
Raw materials		21,271			21,141
Gross inventory		90,699			85,453
Less: Excess and obsolescence reserve		(23,821	)		(29,860	)
Inventories, net	$	66,878		$	55,593

The decrease in gross inventory was primarily in our PMP and Enterprise products. 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, and market conditions and judgment about the anticipated consumption and our ability to sell the inventory. At December 31, 2023 and March 31, 2024, excess and obsolescence reserves were $23.8 million and $29.9 million, respectively. The increase in the reserve in the first quarter of 2024 was mostly driven by lower demand, mostly for PMP products.

Accrued liabilities

Accrued liabilities consisted of the following (in thousands):

	December 31,		March 31,
	2023		2024
			(unaudited)
Accrued goods and services	$	7,787	$	6,479
Accrued loss on supplier commitments		12,949		13,667
Accrued inventory purchases		2,768		3,385
Accrued customer rebates		23,052		18,784
Other		513		196
Accrued liabilities	$	47,069	$	42,511

Accrued warranty

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

	Year ended December 31,			Three Months ended March 31,
	2023			2024
				(unaudited)
Beginning balance	$	1,651		$	1,484
Fulfillment of assumed acquisition warranty		(178	)		(3	)
Provision increase, net		11			113
Ending balance	$	1,484		$	1,594

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

8

Note 3. Property and equipment

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

		December 31,			March 31,
	Useful Life	2023			2024
					(unaudited)
Equipment and tooling	3 to 5 years	$	37,678		$	39,554
Computer equipment	3 to 5 years		5,546			5,671
Furniture and fixtures	5 to 10 years		853			856
Leasehold improvements	2 to 3 years		518			518
Total cost			44,595			46,599
Less: Accumulated depreciation			(31,716	)		(32,858	)
Property and equipment, net		$	12,879		$	13,741

Total depreciation expense was $1.1 million and $1.1 million for the three-month periods ended March 31, 2023 and 2024, respectively.

Note 4. Software

Software consisted of the following (in thousands):

		December 31, 2023							March 31, 2024
									(unaudited)
	Useful Life	Gross carrying amount		Accumulated amortization			Net balance		Gross carrying amount		Accumulated amortization			Net balance
Acquired and Software for internal use	3 to 7 years	$	16,814	$	(15,696	)	$	1,118	$	16,886	$	(15,804	)	$	1,082
Software marketed for external sale	3 years		17,563		(6,696	)		10,867		18,737		(7,599	)		11,138
Total		$	34,377	$	(22,392	)	$	11,985	$	35,623	$	(23,403	)	$	12,220

Amortization of acquired and software for internal use is computed using the straight-line method over an estimated useful life of generally three to seven years. Amortization expense recognized on acquired and software for internal use is reflected in depreciation and amortization in the condensed consolidated statements of operations. Amortization expense was $0.1 million and $0.1 million for the three-month periods ended March 31, 2023 and 2024, respectively.

Amortization expense recognized on software to be sold or marketed externally was $0.6 million and $0.9 million for the three-month periods ended March 31, 2023 and 2024, respectively, and is included in cost of revenues on the condensed consolidated statements of operations.

Based on capitalized software assets at March 31, 2024, estimated amortization expense in future fiscal years is as follows (unaudited and in thousands):

Year ending December 31,	Acquired and internal use software		Software marketed for external use		Total
2024 (April - December)	$	348	$	2,914	$	3,262
2025		416		3,795		4,211
2026		301		2,797		3,098
2027		17		1,314		1,331
2028		—		318		318
Thereafter		—		—		—
Total amortization	$	1,082	$	11,138	$	12,220

9

Note 5. Goodwill and Intangible Assets

There was no change in the carrying amount of goodwill or intangible assets during the three-month period ended March 31, 2024 (unaudited).

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. Accordingly, the Company completes a quarterly qualitative triggering events assessment which considers significant events and circumstances such as a 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, considered in both absolute terms and relative to peers, to determine whether any of these may indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying value. If an impairment trigger is identified, a quantitative impairment test is performed.

The qualitative assessment performed for the three-month period ended March 31, 2024 included an assessment of excess inventories, supply chain constraints, and macroeconomic conditions and did not indicate the existence of an impairment trigger that would more likely than not reduce the fair value of our reporting unit below its carrying amount nor indicators suggesting that the carrying amount of intangible assets may not be recoverable. As of December 31, 2023 and March 31, 2024, the Company's market capitalization exceeded its net assets by 106% and 112%, respectively. The Company continues to monitor market capitalization and assess potential goodwill impairment triggering events, including continued impact of slower demand, higher channel inventory and sustained decrease in its share price. If triggering events occur, the Company will perform a goodwill impairment assessment that may indicate impairment in a future period.

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):

		December 31, 2023							March 31, 2024
									(unaudited)
	Useful Life	Gross carrying  amount		Accumulated amortization			Net balance		Gross carrying  amount		Accumulated amortization			Net balance
Customer relationships	5 to 18 years	$	19,300	$	(11,625	)	$	7,675	$	19,300	$	(12,000	)	$	7,300
Total		$	19,300	$	(11,625	)	$	7,675	$	19,300	$	(12,000	)	$	7,300

Intangible assets are amortized over their expected useful life and none are expected to have a significant residual value at the end of their useful life. Intangible assets amortization expense was $0.4 million and $0.4 million for the three-month periods ended March 31, 2023 and 2024, respectively.

Based on capitalized intangible assets as of March 31, 2024, estimated amortization expense amounts in future fiscal years are as follows (unaudited and in thousands):

Year ending December 31,	Amortization
2024 (April - December)	$	1,123
2025		1,498
2026		1,498
2027		1,498
2028		1,498
Thereafter		185
Total amortization	$	7,300

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Note 6. Debt

As of March 31, 2024, the Company had $24.1 million outstanding under its term loan facility and $40.0 million outstanding under its revolving credit facility. As of March 31, 2024, the Company had available $5.0 million under its revolving credit facility (unaudited).

The following table reflects the current and noncurrent portions of the term loan and revolving credit facilities at December 31, 2023 and March 31, 2024 (in thousands):

	December 31,			March 31,
	2023			2024
				(unaudited)
Term loan facility	$	25,406		$	24,094
Revolving credit facility		—			40,000
Less debt issuance costs		(294	)		(265	)
Total debt		25,112			63,829
Less: current portion of term facility		(3,281	)		(2,625	)
Current portion of debt issuance costs		95			111
Total long-term debt, net	$	21,926		$	61,315

As of December 31, 2023, the effective interest rate on the term loan facility was 7.69%. As of March 31, 2024, the effective interest rate on the term loan facility was 9.15% (unaudited). The increase in the interest rate is being driven by the higher applicable margin as a result of the amendment completed on December 29, 2023.

The Company borrowed $40.0 million against its revolving credit facility during the first quarter of 2024. The funds will be used for working capital and normal operations. As of March 31, 2024, the weighted-average interest rate for borrowings outstanding under the revolving credit facility was 8.67% (unaudited).

Both the term loan facility and revolving credit facility mature on November 17, 2026. Maturities on the debt, which includes both the term loan facility and the revolver credit facility, outstanding at March 31, 2024 is as follows (unaudited and in thousands):

Year ending December 31,
2024 (April - December)	$	1,969
2025		2,625
2026		59,500
Total	$	64,094

As of March 31, 2024, the Company was in compliance with all affirmative and negative covenants, which included its monthly liquidity covenant at each liquidity measurement date and its quarterly Consolidated EBITDA covenant (unaudited).

Net interest expense, including bank charges and amortization of debt issuance costs on the debt, was $0.6 million and $0.9 million for the three-month periods ended March 31, 2023 and 2024, respectively (unaudited). The increase in interest expense is mostly due to the increase in interest rate on the term loan facility and the addition of interest expense on the revolving credit facility.

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Note 7. Employee benefit plans

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

U.S. plan

U.S. employees that satisfy certain eligibility requirements, including requirements related to age and length of service, are eligible to participate in the Cambium Networks, Inc. 401(k) Plan. The plan is intended to qualify as a tax-qualified 401(k) plan so that contributions to the 401(k) plan, and income earned on such contributions, are not taxable to participants until withdrawn or distributed from the 401(k) plan. Under the 401(k) plan, each employee is fully vested in his or her deferred salary contributions. Employee contributions are held and invested by the plan’s trustee as directed by participants. Under the Cambium Networks, Inc. 401(k) Plan, the Company matches 100% of employee contributions to the 401(k) plan up to a maximum amount of 4% of eligible wages, which matching contributions are subject to vesting in equal annual increments over two years of service. All contributions, including the Company match, are made in cash. Contributions made by the Company under the Cambium Networks, Inc. 401(k) Plan were $0.4 million and $0.2 million for the three-month periods ended March 31, 2023 and 2024, respectively.

UK plan

UK employees who satisfy certain eligibility requirements 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% of eligible compensation 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 $0.1 million and $0.1 million for the three-month periods ended March 31, 2023 and 2024, respectively.

Note 8. Shareholders' equity

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 is automatically increased on the first day of each fiscal year, beginning with the fiscal year ended December 31, 2020 and continuing until, and including, the fiscal year ending December 31, 2029. The number of shares added annually is 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 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 the Company's employees.

For the three-month periods ended March 31, 2023 and 2024, the Company recorded corresponding income tax benefits of $0.1 million and $0.0 million, respectively.

Share-based compensation

The following table shows total share-based compensation expense for the three-month periods ended March 31, 2023 and 2024 (unaudited and in thousands):

	Three Months Ended March 31,
	2023		2024
Cost of revenues	$	56	$	33
Research and development		1,269		945
Sales and marketing		700		508
General and administrative		850		1,100
Total share-based compensation expense	$	2,875	$	2,586

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Share options

The Company's time-based share options typically have a contractual term of ten years from grant date and typically vest over a four-year period. The Company recognized compensation expense associated with its time-based share options on a straight-line basis over the requisite service period.

The following is a summary of option activity for the Company’s share incentive plans for the three-month period ended March 31, 2024 (unaudited):

	Options		Weighted average exercise price		Weighted Average remaining contractual term (years)		Aggregate intrinsic value
Outstanding at December 31, 2023		4,689,916	$	11.98		7.5	$	617,623
Options granted		775,625	$	4.26		—