Scott Searle: Got you. And Steve, any — was there any benefit from previously written off inventory or reclaimed at this point in time?
Steven Gatoff: Yes, good question. There was no benefit from the previous reserves, the large one obviously we took last quarter. There is some older inventory that we would look to sell if we can, but obviously we think the value is zero, so there is no benefit.
Scott Searle: Got you. And Steve, I just want to clarify this. I thought I heard positive cash flow generation in the first quarter, and it sounds like you’re expecting that for calendar 2024 as well as we started to hit the bottom. And even with getting a little bit into growth mode, you’re expecting to be cash flow positive, Is that correct?
Steven Gatoff: That’s right.
Scott Searle: Okay. And Phil, I know this is probably unfair, but since you are a wireless veteran, I’m wondering as you look at the business today, you’ve talked about some of the things that you found exciting about the company. But there are a lot of dynamics that are ongoing. Mobile hotspots have been basically in a sequential decline for an extended period of time. And I guess if you remove the pandemic, it’s been over a decade where there’s been headwinds related to mobile hotspots. Does that go away in terms of the business as you start to think about things strategically over the next two to three years. And as you look out over the time period, what is Inseego. Is two, three years from now is Inseego 70% of its sales from a recurring nature, are you converting a lot of that fixed wireless access more to a recurring kind of cradle point model? How are you kind of at a high level thinking about it with the understanding I know it’s day one? So my apologies.
Philip Brace: So yes, I guess I’m going to caveat my answer by saying I deserve the right to change my answer. But I guess the way I think about it Scott is, like when I kind of zoom out and when I think about Inseego, I think it’s providing 5G wireless connectivity solutions for both mobile and fixed capabilities. Certainly the fixed wireless access is the area of growth now because, as you pointed out, the mobile or mobile hotspot I would say is going away. I’m not sure — or at least declining, I’m not sure. The way that we’ve thought about mobile hotspot before is, I mean maybe if you open your aperture a little bit and think about mobile solutions. I’m not entirely sure it’s going to go to zero. I do think, and I’m not sure we want it to either, because I think there is a market for connectivity for this nature that moves around and I think mobile workforce and things like that.
But I’m not sure it’s going to go to zero, but I do think the focus of the company is going to be on the fixed wireless access. I think it’s just a higher end solution. It’s more targeted enterprise. There’s more opportunities to add some value there. And I think the other thing that we frankly have just barely started on is the idea to actually drive some software monetization and some software solutions above where we are now, whether it’s just simple like device management or network management or a lot of things you need to do to manage and operate the devices. So we’re definitely going to be moving in that direction. It’s hard to say what that will look like in the outer years, but you’re on the right track in that area.
Scott Searle: Got you. Very helpful. And if I could, Steve, just to quickly follow up on the recapitulation, it sounds like you’re in multiple dialogues. I’m not sure if you could provide any additional color. It sounds like the timeline of the process here is going to take a bit. I think the convert doesn’t go current until May. But it sounds like you guys are trying to get out ahead of it. Is there anything else you can kind of provide in terms of what you think is the optimal capital structure or otherwise kind of going forward? It’s obviously a big impediment that’s kind of hanging over the company, but once you were able to deal with that, it seems like there’s a lot of opportunity for investors here to come back and revisit the name. Just kind of wonder if there’s any additional thoughts that you could provide on that front.
Steven Gatoff: Yes, it’s a great question and it’s obviously a huge focus for all of us. But we are — as you said, Scott, you hit all the right dates and kind of the highlights of what we’re looking at and looking to figure out what the right construct is because we’re obviously bullish on the enterprise value and then how that filters through on a go-forward basis, looking at recapitalizing the debt, how much debt, right, when we look forward, we’ll have some amount of debt. If you think about it conceptually, we have some amount of debt that you would presume would convert to equity, some amount of debt that would continue on. So when we look at our EBITDA profile, what cash and liquidity we have available to us to pay down certain amounts of debt.
And so that would be the combinations that we’re talking with folks about now and figuring out what that looks like and what are the trade-offs. And then how much of that enterprise value obviously accrues down to the equity holders, which is obviously an important focus of ours.
Scott Searle: Okay, great. Thanks so much for taking the questions. Congrats on the quarter and Phil, congrats on coming on board. Thanks guys.
Steven Gatoff: Thank you.
Philip Brace: Thanks, Scott.
Unidentified Analyst: And it looks like we have a follow-up question from [indiscernible] line with Stifel. Please go ahead with your follow-up.
Unidentified Analyst: Yes. Just question in terms of the OpEx. Is the Q4 run rate — that $18.7 million, what we can expect going forward? And just thinking about your investments that you may need to make going after the channel market? And maybe how much you’re reinvesting in terms of R&D on the mobile side? Just balancing all that together, can you give us some high-level view of OpEx?
Steven Gatoff: Yes, good, it’s a good question, Jeremy, thanks. Someone’s got to do the model, right? So the short answer is, yes, that’s probably not an unreasonable benchmark to use, certainly for Q1 in so far as figuring out what the run rate could, should, what might be for the short term. In the longer term, for the kind of — as we move through the year, it’s a combination of increases in spend, but with a higher marginal contribution. So we expect to increase spend less than we generate revenue. So dollars might go up, but an increasing contribution. But for the near term, that is probably a good spend level to use model with.
Unidentified Analyst: Great. Thank you very much.
Steven Gatoff: Yes, likewise.
Philip Brace: Thanks, Jeremy.
Operator: And this concludes our question-and-answer session, and will also conclude today’s call. Thank you very much for attending the presentation today, and you may now disconnect your lines.
