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SEQUANS COMMUNICATIONS S.A.
(Registrant) |
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Date: August 1, 2017
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By:
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/s/ Deborah Choate
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Deborah Choate
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Chief Financial Officer
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Exhibit
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Description
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99.1
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Press release dated August 1, 2017
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99.2
|
Amendment to convertible promissory note dated April 15, 2015
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99.3
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Amendment to convertible promissory note dated April 27, 2016
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99.4
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Amendment to convertible promissory note dated April 27, 2016
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NEWS
|
|
|
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Three months ended
|
||||||||||
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(in thousands of US$, except share and per share amounts)
|
June 30,
2017 |
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|
March 31,
2017 |
|
|
June 30,
2016 |
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|||||
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|||||||||||
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||||||
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Revenue :
|
|
|
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|
|
||||||||
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Product revenue
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$
|
10,159
|
|
|
$
|
9,640
|
|
|
$
|
7,699
|
|
|
|
|
Other revenue
|
3,058
|
|
|
2,790
|
|
|
2,185
|
|
||||
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Total revenue
|
13,217
|
|
|
12,430
|
|
|
9,884
|
|
|||||
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Cost of revenue
|
|
|
|
|
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||||||||
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Cost of product revenue
|
7,064
|
|
|
5,989
|
|
|
4,667
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||||
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|
Cost of other revenue
|
591
|
|
|
589
|
|
|
804
|
|
||||
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Total cost of revenue
|
7,655
|
|
|
6,578
|
|
|
5,471
|
|
|||||
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Gross profit
|
5,562
|
|
|
5,852
|
|
|
4,413
|
|
|||||
|
Operating expenses :
|
|
|
|
|
|
||||||||
|
|
Research and development
|
6,254
|
|
|
6,194
|
|
|
6,889
|
|
||||
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|
Sales and marketing
|
2,072
|
|
|
2,496
|
|
|
1,495
|
|
||||
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|
General and administrative
|
1,323
|
|
|
1,411
|
|
|
1,761
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
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Total operating expenses
|
9,649
|
|
|
10,101
|
|
|
10,145
|
|
|||||
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Operating loss
|
(4,087
|
)
|
|
(4,249
|
)
|
|
(5,732
|
)
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|||||
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Financial income (expense):
|
|
|
|
|
|
||||||||
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Interest income (expense), net
|
(1,194
|
)
|
|
(1,038
|
)
|
|
(916
|
)
|
||||
|
|
Other financial expense
|
—
|
|
|
—
|
|
|
(83
|
)
|
||||
|
|
Change in the fair value of convertible debt embedded derivative
|
—
|
|
|
—
|
|
|
1,544
|
|
||||
|
|
Foreign exchange gain (loss)
|
(626
|
)
|
|
(246
|
)
|
|
196
|
|
||||
|
Loss before income taxes
|
(5,907
|
)
|
|
(5,533
|
)
|
|
(4,991
|
)
|
|||||
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Income tax expense (benefit)
|
83
|
|
|
71
|
|
|
70
|
|
|||||
|
Loss
|
$
|
(5,990
|
)
|
|
$
|
(5,604
|
)
|
|
$
|
(5,061
|
)
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||
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Attributable to :
|
|
|
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|
||||||||
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Shareholders of the parent
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(5,990
|
)
|
|
(5,604
|
)
|
|
(5,061
|
)
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||||
|
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Minority interests
|
—
|
|
|
—
|
|
|
—
|
|
||||
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Basic loss per share
|
|
($0.08
|
)
|
|
|
($0.07
|
)
|
|
|
($0.09
|
)
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||
|
Diluted loss per share
|
|
($0.08
|
)
|
|
|
($0.07
|
)
|
|
|
($0.09
|
)
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||
|
Weighted average number of shares used for computing:
|
|
|
|
|
|
||||||||
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— Basic
|
75,896,815
|
|
|
75,043,865
|
|
|
59,280,702
|
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|||||
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— Diluted
|
75,896,815
|
|
|
75,043,865
|
|
|
59,280,702
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30
|
||||||
(in thousands of US$, except share and per share amounts)
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||
Revenue :
|
|
|
|
||||||
|
Product revenue
|
$
|
19,799
|
|
|
$
|
13,111
|
|
|
|
Other revenue
|
5,848
|
|
|
6,058
|
|
|||
Total revenue
|
25,647
|
|
|
19,169
|
|
||||
Cost of revenue
|
|
|
|
||||||
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Cost of product revenue
|
13,053
|
|
|
8,795
|
|
|||
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Cost of other revenue
|
1,180
|
|
|
1,551
|
|
|||
Total cost of revenue
|
14,233
|
|
|
10,346
|
|
||||
Gross profit
|
11,414
|
|
|
8,823
|
|
||||
Operating expenses :
|
|
|
|
||||||
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Research and development
|
12,448
|
|
|
13,616
|
|
|||
|
Sales and marketing
|
4,568
|
|
|
2,996
|
|
|||
|
General and administrative
|
2,734
|
|
|
3,139
|
|
|||
|
|
|
|
|
|
||||
Total operating expenses
|
19,750
|
|
|
19,751
|
|
||||
Operating loss
|
(8,336
|
)
|
|
(10,928
|
)
|
||||
Financial income (expense):
|
|
|
|
||||||
|
Interest income (expense), net
|
(2,232
|
)
|
|
(1,544
|
)
|
|||
|
Other financial expense
|
—
|
|
|
(83
|
)
|
|||
|
Change in the fair value of convertible debt embedded derivative
|
—
|
|
|
(1,583
|
)
|
|||
|
Foreign exchange gain (loss)
|
(872
|
)
|
|
(16
|
)
|
|||
Loss before income taxes
|
(11,440
|
)
|
|
(14,154
|
)
|
||||
Income tax expense (benefit)
|
154
|
|
|
136
|
|
||||
Loss
|
$
|
(11,594
|
)
|
|
$
|
(14,290
|
)
|
||
Attributable to :
|
|
|
|
||||||
|
Shareholders of the parent
|
(11,594
|
)
|
|
(14,290
|
)
|
|||
|
Minority interests
|
—
|
|
|
—
|
|
|||
Basic loss per share
|
|
($0.15
|
)
|
|
|
($0.24
|
)
|
||
Diluted loss per share
|
|
($0.15
|
)
|
|
|
($0.24
|
)
|
||
Weighted average number of shares used for computing:
|
|
|
|
||||||
— Basic
|
75,472,863
|
|
|
59,239,524
|
|
||||
— Diluted
|
75,472,863
|
|
|
59,239,524
|
|
|
|
At June 30,
|
|
|
At December 31,
|
|||
(in thousands of US$)
|
2017
|
|
|
2016
|
|
|||
|
|
|
|
|
||||
ASSETS
|
|
|
|
|||||
|
Non-current assets
|
|
|
|
||||
|
Property, plant and equipment
|
$
|
6,337
|
|
|
$
|
6,659
|
|
|
Intangible assets
|
8,527
|
|
|
7,707
|
|
||
|
Deposits and other receivables
|
370
|
|
|
332
|
|
||
|
Available for sale assets
|
336
|
|
|
310
|
|
||
|
Total non-current assets
|
15,570
|
|
|
15,008
|
|
||
|
Current assets
|
|
|
|
||||
|
Inventories
|
8,528
|
|
|
8,693
|
|
||
|
Trade receivables
|
17,223
|
|
|
15,285
|
|
||
|
Prepaid expenses and other receivables
|
3,895
|
|
|
3,172
|
|
||
|
Recoverable value added tax
|
807
|
|
|
470
|
|
||
|
Research tax credit receivable
|
3,709
|
|
|
1,902
|
|
||
|
Short term deposit
|
345
|
|
|
345
|
|
||
|
Cash and cash equivalents
|
19,126
|
|
|
20,202
|
|
||
|
Total current assets
|
53,633
|
|
|
50,069
|
|
||
Total assets
|
$
|
69,203
|
|
|
$
|
65,077
|
|
|
|
|
|
|
|
||||
EQUITY AND LIABILITIES
|
|
|
|
|||||
|
Equity
|
|
|
|
||||
|
Issued capital, euro 0.02 nominal value, 79,762,386 shares authorized, issued and outstanding at June 30, 2017 (75,030,078 at December 31, 2016)
|
$
|
2,028
|
|
|
$
|
1,923
|
|
|
Share premium
|
204,750
|
|
|
189,029
|
|
||
|
Other capital reserves
|
28,905
|
|
|
28,257
|
|
||
|
Accumulated deficit
|
(221,147
|
)
|
|
(209,553
|
)
|
||
|
Other components of equity
|
(521
|
)
|
|
(796
|
)
|
||
|
Total equity
|
14,015
|
|
|
8,860
|
|
||
|
Non-current liabilities
|
|
|
|
||||
|
Government grant advances, loans and other liabilities
|
5,242
|
|
|
5,144
|
|
||
|
Convertible debt and accrued interest
|
5,620
|
|
|
16,338
|
|
||
|
Provisions
|
1,574
|
|
|
1,306
|
|
||
|
Other Liabilities
|
22
|
|
|
22
|
|
||
|
Deferred revenue
|
1,455
|
|
|
1,940
|
|
||
|
Total non-current liabilities
|
13,914
|
|
|
24,750
|
|
||
|
Current liabilities
|
|
|
|
||||
|
Trade payables
|
14,385
|
|
|
18,358
|
|
||
|
Interest-bearing receivables financing
|
7,370
|
|
|
7,712
|
|
||
|
Government grant advances
|
698
|
|
|
601
|
|
||
|
Convertible debt and accrued interest
|
12,437
|
|
|
—
|
|
||
|
Other current liabilities
|
5,468
|
|
|
4,415
|
|
||
|
Deferred revenue
|
900
|
|
|
335
|
|
||
|
Provisions
|
16
|
|
|
46
|
|
||
|
Total current liabilities
|
41,274
|
|
|
31,467
|
|
||
Total equity and liabilities
|
$
|
69,203
|
|
|
$
|
65,077
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30
|
||||||
(in thousands of US$)
|
2017
|
|
|
2016
|
|
|||||
|
|
|
|
|
|
|
||||
Operating activities
|
|
|
|
|||||||
|
Loss before income taxes
|
$
|
(11,440
|
)
|
|
$
|
(14,154
|
)
|
||
|
Non-cash adjustment to reconcile income before tax to net cash from (used in) operating activities
|
|
|
|
||||||
|
|
Depreciation and impairment of property, plant and equipment
|
1,367
|
|
|
1,582
|
|
|||
|
|
Amortization and impairment of intangible assets
|
1,181
|
|
|
1,001
|
|
|||
|
|
Share-based payment expense
|
648
|
|
|
480
|
|
|||
|
|
Increase in provisions
|
323
|
|
|
3
|
|
|||
|
|
Financial expense (income)
|
2,269
|
|
|
1,552
|
|
|||
|
|
Change in the fair value of convertible debt embedded derivative
|
—
|
|
|
1,583
|
|
|||
|
|
Other financial expense
|
—
|
|
|
83
|
|
|||
|
|
Foreign exchange loss (gain)
|
414
|
|
|
135
|
|
|||
|
Working capital adjustments
|
|
|
|
||||||
|
|
Decrease (Increase) in trade receivables and other receivables
|
(2,614
|
)
|
|
4,624
|
|
|||
|
|
Decrease in inventories
|
165
|
|
|
236
|
|
|||
|
|
Increase in research tax credit receivable
|
(1,807
|
)
|
|
(1,078
|
)
|
|||
|
|
Increase (Decrease) in trade payables and other liabilities
|
(4,125
|
)
|
|
3,587
|
|
|||
|
|
Increase in deferred revenue
|
80
|
|
|
1
|
|
|||
|
|
Increase (Decrease) in government grant advances
|
(693
|
)
|
|
79
|
|
|||
|
Income tax paid
|
(81
|
)
|
|
(130
|
)
|
||||
Net cash flow from (used in) operating activities
|
(14,313
|
)
|
|
(416
|
)
|
|||||
|
|
|
|
|
|
|
||||
Investing activities
|
|
|
|
|||||||
|
Purchase of intangible assets and property, plant and equipment
|
(2,289
|
)
|
|
(2,738
|
)
|
||||
|
Sale (purchase) of financial assets
|
(64
|
)
|
|
(13
|
)
|
||||
|
Sale of short-term deposit
|
—
|
|
|
50
|
|
||||
|
Interest received
|
37
|
|
|
8
|
|
||||
Net cash flow used in investments activities
|
(2,316
|
)
|
|
(2,693
|
)
|
|||||
|
|
|
|
|
|
|
||||
Financing activities
|
|
|
|
|||||||
|
Proceeds from issue of warrants, exercise of stock options/warrants
|
760
|
|
|
246
|
|
||||
|
Public equity offering proceeds, net of transaction costs paid
|
15,313
|
|
|
—
|
|
||||
|
Proceeds from Interest-bearing receivables financing
|
(342
|
)
|
|
(5,138
|
)
|
||||
|
Proceeds from convertible debt, net of transaction cost
|
—
|
|
|
6,932
|
|
||||
|
Repayment of borrowings and finance lease liabilities
|
—
|
|
|
(12
|
)
|
||||
|
Interest paid
|
(187
|
)
|
|
(84
|
)
|
||||
Net cash flows from (used in) financing activities
|
15,544
|
|
|
1,944
|
|
|||||
|
|
|
|
|
|
|
||||
|
Net increase (decrease) in cash and cash equivalents
|
(1,085
|
)
|
|
(1,165
|
)
|
||||
|
Net foreign exchange difference
|
9
|
|
|
(1
|
)
|
||||
|
Cash and cash equivalent at January 1
|
20,202
|
|
|
8,288
|
|
||||
Cash and cash equivalents at end of the period
|
$
|
19,126
|
|
|
$
|
7,122
|
|
(in thousands of US$, except share and per share amounts)
|
Three months ended
|
||||||||||||
June 30,
2017 |
|
|
March 31,
2017 |
|
|
June 30,
2016 |
|
||||||
Net IFRS loss as reported
|
$
|
(5,990
|
)
|
|
$
|
(5,604
|
)
|
|
$
|
(5,061
|
)
|
||
Add back
|
|
|
|
|
|
||||||||
|
Stock-based compensation expense according to IFRS 2
(1)
|
307
|
|
|
341
|
|
|
226
|
|
||||
|
Change in the fair value of convertible debt embedded derivative
|
—
|
|
|
—
|
|
|
(1,544
|
)
|
||||
|
Non-cash interest on Convertible debt and other financing
(2)
|
759
|
|
|
610
|
|
|
556
|
|
||||
Non-IFRS loss adjusted
|
$
|
(4,924
|
)
|
|
$
|
(4,653
|
)
|
|
$
|
(5,823
|
)
|
||
IFRS basic loss per share as reported
|
|
($0.08
|
)
|
|
|
($0.07
|
)
|
|
|
($0.09
|
)
|
||
Add back
|
|
|
|
|
|
||||||||
|
Stock-based compensation expense according to IFRS 2
(1)
|
|
$0.01
|
|
|
|
$0.00
|
|
|
|
$0.01
|
|
|
|
Change in the fair value of convertible debt embedded derivative
|
|
$0.00
|
|
|
|
$0.00
|
|
|
|
($0.03
|
)
|
|
|
Non-cash interest on Convertible debt and other financing
(2)
|
|
$0.01
|
|
|
|
$0.01
|
|
|
|
$0.01
|
|
|
Non-IFRS basic loss per share
|
|
($0.06
|
)
|
|
|
($0.06
|
)
|
|
|
($0.10
|
)
|
||
IFRS diluted loss per share
|
|
($0.08
|
)
|
|
|
($0.07
|
)
|
|
|
($0.09
|
)
|
||
Add back
|
|
|
|
|
|
||||||||
|
Stock-based compensation expense according to IFRS 2
(1)
|
|
$0.01
|
|
|
|
$0.00
|
|
|
|
$0.01
|
|
|
|
Change in the fair value of convertible debt embedded derivative
|
|
$0.00
|
|
|
|
$0.00
|
|
|
|
($0.03
|
)
|
|
|
Non-cash interest on Convertible debt and other financing
(2)
|
|
$0.01
|
|
|
|
$0.01
|
|
|
|
$0.01
|
|
|
Non-IFRS diluted loss per share
|
|
($0.06
|
)
|
|
|
($0.06
|
)
|
|
|
($0.10
|
)
|
||
|
|
|
|
|
|
|
|
||||||
|
(1) Included in the IFRS loss as follows:
|
|
|
|
|
|
|||||||
|
|
Cost of product revenue
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
|
Research and development
|
97
|
|
|
109
|
|
|
96
|
|
|||
|
|
Sales and marketing
|
65
|
|
|
79
|
|
|
35
|
|
|||
|
|
General and administrative
|
143
|
|
|
150
|
|
|
91
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
(2) Related to the difference between contractual and effective interests
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
(in thousands of US$, except share and per share amounts)
|
Six months ended June 30
|
||||||||
2017
|
|
2016
|
|||||||
Net IFRS loss as reported
|
$
|
(11,594
|
)
|
|
$
|
(14,290
|
)
|
||
Add back
|
|
|
|
||||||
|
Stock-based compensation expense according to IFRS 2
(1)
|
648
|
|
|
480
|
|
|||
|
Change in the fair value of convertible debt embedded derivative
|
—
|
|
|
1,583
|
|
|||
|
Non-cash interest on Convertible debt and other financing
(2)
|
1,370
|
|
|
921
|
|
|||
Non-IFRS loss adjusted
|
$
|
(9,576
|
)
|
|
$
|
(11,306
|
)
|
||
IFRS basic loss per share as reported
|
|
($0.15
|
)
|
|
|
($0.24
|
)
|
||
Add back
|
|
|
|
||||||
|
Stock-based compensation expense according to IFRS 2
(1)
|
|
$0.01
|
|
|
|
$0.01
|
|
|
|
Change in the fair value of convertible debt embedded derivative
|
|
$0.00
|
|
|
|
$0.03
|
|
|
|
Non-cash interest on Convertible debt and other financing
(2)
|
|
$0.01
|
|
|
|
$0.01
|
|
|
Non-IFRS basic loss per share
|
|
($0.13
|
)
|
|
|
($0.19
|
)
|
||
IFRS diluted loss per share
|
|
($0.24
|
)
|
|
|
($0.24
|
)
|
||
Add back
|
|
|
|
||||||
|
Stock-based compensation expense according to IFRS 2
(1)
|
|
$0.01
|
|
|
|
$0.01
|
|
|
|
Change in the fair value of convertible debt embedded derivative
|
|
$0.00
|
|
|
|
$0.03
|
|
|
|
Non-cash interest on Convertible debt and other financing
(2)
|
|
$0.01
|
|
|
|
$0.01
|
|
|
Non-IFRS diluted loss per share
|
|
($0.13
|
)
|
|
|
($0.19
|
)
|
||
|
|
|
|
|
|
||||
|
(1) Included in the IFRS loss as follows:
|
|
|
|
|||||
|
|
Cost of product revenue
|
$
|
5
|
|
|
$
|
8
|
|
|
|
Research and development
|
206
|
|
|
204
|
|
||
|
|
Sales and marketing
|
144
|
|
|
74
|
|
||
|
|
General and administrative
|
293
|
|
|
194
|
|
||
|
|
|
|
|
|
||||
|
(2) Related to the difference between contractual and effective interests
|
|
|
|
|||||
|
|
|
|
|
|
1.
|
Amendments to Note
.
|
a.
|
Amendments to Note
.
|
i.
|
Article VI of the Note is hereby amended and restated in its entirety as follows:
|
ii.
|
Section 5.4 of the Note is hereby amended by deleting the last sentence of the Section and replacing it with the following language:
|
2.
|
Miscellaneous
.
|
a.
|
Governing Law
.
The validity, interpretation and performance of this Amendment shall be governed by and construed in accordance with the internal laws of The French Republic (without regard to principles of conflicts of law). The parties agree that the competent courts within the jurisdiction of the Paris Court of Appeal (
Cour d’Appel de Paris
) shall have exclusive jurisdiction (and are deemed to be a convenient forum for each party) as to resolution of any dispute.
|
b.
|
Continuing Effect
. Other than as set forth in this Amendment, all of the terms and conditions of the Note will continue in full force and effect.
|
c.
|
Amendment and Waiver
. No modification of or amendment to this Amendment, nor any waiver of any rights under this Amendment, shall be effective unless in writing signed by the Company and the Purchaser. No delay or failure to require performance of any provision of this Amendment shall constitute a waiver of that provision as to that or any other instance.
|
d.
|
Successors and Assigns
. The terms and conditions of this Amendment shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties.
|
1.
|
Amendments to Note
.
|
a.
|
Amendments to Note
.
|
i.
|
Article VI of the Note is hereby amended and restated in its entirety as follows:
|
ii.
|
Section 5.4 of the Note is hereby amended by deleting the last sentence of the Section and replacing it with the following language:
|
2.
|
Miscellaneous
.
|
a.
|
Governing Law
.
The validity, interpretation and performance of this Amendment shall be governed by and construed in accordance with the internal laws of The French Republic (without regard to principles of conflicts of law). The parties agree that the competent courts within the jurisdiction of the Paris Court of Appeal (
Cour d’Appel de Paris
) shall have exclusive jurisdiction (and are deemed to be a convenient forum for each party) as to resolution of any dispute.
|
b.
|
Continuing Effect
. Other than as set forth in this Amendment, all of the terms and conditions of the Note will continue in full force and effect.
|
c.
|
Amendment and Waiver
. No modification of or amendment to this Amendment, nor any waiver of any rights under this Amendment, shall be effective unless in writing signed by the Company and the Purchaser. No delay or failure to require performance of any provision of this Amendment shall constitute a waiver of that provision as to that or any other instance.
|
d.
|
Successors and Assigns
. The terms and conditions of this Amendment shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties.
|
1.
|
Amendments to Note
.
|
a.
|
Amendments to Note
.
|
i.
|
Article VI of the Note is hereby amended and restated in its entirety as follows:
|
i.
|
Section 5.4 of the Note is hereby amended by deleting the last sentence of the Section and replacing it with the following language:
|
2.
|
Miscellaneous
.
|
a.
|
Governing Law
.
The validity, interpretation and performance of this Amendment shall be governed by and construed in accordance with the internal laws of The French Republic (without regard to principles of conflicts of law). The parties agree that the competent courts within the jurisdiction of the Paris Court of Appeal (
Cour d’Appel de Paris
) shall have exclusive jurisdiction (and are deemed to be a convenient forum for each party) as to resolution of any dispute.
|
b.
|
Continuing Effect
. Other than as set forth in this Amendment, all of the terms and conditions of the Note will continue in full force and effect.
|
c.
|
Amendment and Waiver
. No modification of or amendment to this Amendment, nor any waiver of any rights under this Amendment, shall be effective unless in writing signed by the Company and the Purchaser. No delay or failure to require performance of any provision of this Amendment shall constitute a waiver of that provision as to that or any other instance.
|
d.
|
Successors and Assigns
. The terms and conditions of this Amendment shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties.
|