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¨
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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SEQUANS COMMUNICATIONS S.A.
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Title of each class
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Symbol
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Name of each exchange on which registered
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American Depositary Shares, each representing four ordinary shares, nominal value €0.02 per share
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SQNS
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New York Stock Exchange
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Ordinary shares, nominal value €0.02 per share
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New York Stock Exchange*
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*
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Not for trading, but only in connection with the registration of American Depositary Shares.
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U.S. GAAP ¨
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International Financial Reporting Standards as issued
by the International Accounting Standards Board þ
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Other ¨
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 4A.
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Item 5.
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Item 6.
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Item 7.
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Item 8.
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Item 9.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16A.
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Item 16B.
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Item 16C.
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Item 16D.
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Item 16E.
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Item 16F.
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Item 16G.
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Item 16H.
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Item 17.
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Item 18.
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Item 19.
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•
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the contraction or lack of growth of markets in which we compete and in which our products are sold;
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•
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unexpected increases in our expenses, including manufacturing expenses;
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•
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our inability to adjust spending quickly enough to offset any unexpected revenue shortfall;
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•
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delays or cancellations in spending by our customers;
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•
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unexpected average selling price reductions;
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•
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the significant fluctuation to which our quarterly revenue and operating results are subject due to cyclicality in the wireless communications industry and transitions to new process technologies;
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•
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our inability to anticipate the future market demands and future needs of our customers;
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•
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our inability to achieve new design wins or for design wins to result in shipments of our products at levels and in the timeframes we currently expect;
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•
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our inability to enter into and execute on strategic alliances;
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•
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our ability to meet performance milestones and financing obligations under strategic license and development services agreements;
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•
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the impact of natural disasters or pandemics on our sourcing operations and supply chain;
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•
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our ability to remediate material weaknesses in our internal controls relating to the accounting for certain revenue transactions;
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•
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the potential impact of the COVID-19 coronavirus on the production of our products in China and elsewhere, our ability to operate remotely during government shelter-in-place orders, or demand for our products by customers whose supply chain is impacted or whose demand is curtailed thereby reducing demand for our products; and
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•
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other factors detailed in documents we file from time to time with the Securities and Exchange Commission.
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At December 31,
|
||||||||||||||
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2015 (1) (2)
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2016 (1) (2)
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2017 (1) (2)
|
2018 (2)
|
2019
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||||||||||
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(in thousands)
|
||||||||||||||
Consolidated Statements of Financial Position Data:
|
|
|
|
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|||||||||||
Cash, cash equivalents and short-term deposit
|
$
|
8,681
|
|
$
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20,547
|
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$
|
3,295
|
|
$
|
12,086
|
|
$
|
14,098
|
|
Total current assets
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35,819
|
|
50,069
|
|
39,747
|
|
43,163
|
|
37,025
|
|
|||||
Total assets
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48,856
|
|
65,077
|
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57,056
|
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62,574
|
|
63,315
|
|
|||||
Current and non-current loans and borrowings (1)
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26,482
|
|
29,310
|
|
30,655
|
|
48,834
|
|
58,645
|
|
|||||
Total current liabilities
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29,132
|
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31,467
|
|
27,938
|
|
27,197
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38,064
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|||||
Total equity (deficit)
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(1,248
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)
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8,860
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4,148
|
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(5,019
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)
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(29,561
|
)
|
|
Year ended December 31,
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||||||||||||||
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2015 (1) (2)
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2016 (1) (2)
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2017 (1) (2)
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2018 (2)
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2019
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||||||||||
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(in thousands)
|
||||||||||||||
Consolidated Statements of Cash Flow Data:
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|
|
|
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|||||||||||
Net cash flow from (used in) operating activities
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$
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(16,401
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)
|
$
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(15,589
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)
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$
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(28,626
|
)
|
$
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(22,838
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)
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$
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5,093
|
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Net cash flow used in investing activities
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(5,345
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)
|
(5,270
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)
|
(6,477
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)
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(8,766
|
)
|
(9,101
|
)
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|||||
Net cash flow from financing activities
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17,710
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32,778
|
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17,838
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40,744
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6,019
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|||||
Net foreign exchange difference
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(5
|
)
|
(5
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)
|
11
|
|
(2
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)
|
1
|
|
|||||
Cash and cash equivalents at January 1
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12,329
|
|
8,288
|
|
20,202
|
|
2,948
|
|
12,086
|
|
|||||
Cash and cash equivalents at December 31
|
8,288
|
|
20,202
|
|
2,948
|
|
12,086
|
|
14,098
|
|
|
Year ended December 31,
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||||||||||||||
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2015
|
2016
|
2017
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2018
|
2019
|
||||||||||
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(in thousands)
|
||||||||||||||
Cost of revenue
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$
|
17
|
|
$
|
11
|
|
$
|
7
|
|
$
|
8
|
|
$
|
10
|
|
Operating expenses
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850
|
|
1,111
|
|
1,631
|
|
1,804
|
|
1,787
|
|
|||||
Share-based compensation
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$
|
867
|
|
$
|
1,122
|
|
$
|
1,638
|
|
$
|
1,812
|
|
$
|
1,797
|
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•
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accurate prediction of the size and growth of the 4G markets, and in particular the market for 4G-only, also referred to as single-mode 4G, products where no fall back to 2G or 3G technology is required, and the market for the variants of 4G optimized for the Internet of Things (the narrow band versions referred to as Cat M and Cat NB);
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•
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accurate prediction of the size and growth of the 5G market;
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•
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accurate prediction of changes in device manufacturer requirements, technology, industry standards or consumer expectations, demands and preferences;
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•
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accurate prediction of the growth of the Internet of Things markets and the adoption of industry standards allowing devices to connect and communicate with each other;
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•
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accurate prediction of the timing of commercial availability of 4G and 5G networks, including the network operators' deployment of Cat M and Cat NB);
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•
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timely and efficient completion of process design and transfer to manufacturing, assembly and testing, and securing sufficient manufacturing capacity to allow us to continue to timely and cost-effectively deliver products to our customers;
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•
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market acceptance, adequate consumer demand and commercial production of the products in which our semiconductor solutions are incorporated;
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•
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the quality, performance, functionality and reliability of our products as compared to competing products and technologies; and
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•
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effective marketing, sales and customer service.
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Customer
|
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% of total revenues for the year ended December 31,
|
|
% of our trade receivable at
December 31,
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||||||||
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2017
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2018
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2019
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2019
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||||
A
|
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16
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%
|
|
32
|
%
|
|
27
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%
|
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16
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%
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B
|
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—
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%
|
|
—
|
%
|
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22
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%
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32
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%
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C
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—
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%
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Less than 10%
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|
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10
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%
|
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21
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%
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D
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Less than 10%
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|
|
13
|
%
|
|
Less than 10%
|
|
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—
|
%
|
E
|
|
17
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%
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Less than 10%
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Less than 10%
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2
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%
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•
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constraints in or unavailability of manufacturing capacity;
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•
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limited control over delivery schedules, quality assurance and control, manufacturing yields and production costs; and
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•
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the unavailability of, or potential delays in obtaining access to, key process technologies.
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•
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our ability to anticipate market and technology trends and successfully develop products that meet market needs;
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•
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our ability to deliver products in large volume on a timely basis at competitive prices;
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•
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our success in identifying and penetrating new markets, applications and customers;
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•
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our ability to accurately understand the price points and performance metrics of competing products in the market;
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•
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our products’ performance and cost-effectiveness relative to those of our competitors;
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•
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our ability to develop and maintain relationships with key customers, wireless carriers, OEMs and ODMs;
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•
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our ability to secure sufficient high-quality supply for our products;
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•
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our ability to conform to industry standards while developing new and proprietary technologies to offer products and features previously not available in the 4G and 5G markets;
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•
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our ability to develop or acquire complementary technologies or to partner with others to bring to market products with enhanced functionalities; and
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•
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our ability to recruit design and application engineers with expertise in wireless broadband communications technologies and sales and marketing personnel.
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•
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recruit, hire, train and manage additional qualified engineers for our research and development activities, especially in the positions of design engineering, product and test engineering, and applications engineering;
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•
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add additional sales personnel and expand sales offices;
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•
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add additional finance and accounting personnel;
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•
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implement and improve our administrative, financial and operational systems, procedures and controls; and
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•
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enhance our information technology support for enterprise resource planning and design engineering by adapting and expanding our systems and tool capabilities, and properly training new hires as to their use.
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•
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stop selling products or using technology that contain the allegedly infringing intellectual property;
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•
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abandon the opportunity to license our technology to others or to collect royalty payments;
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•
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incur significant legal expenses;
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•
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pay substantial damages to the party whose intellectual property rights we may be found to be infringing;
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•
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redesign those products that contain the allegedly infringing intellectual property; or
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•
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attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all.
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•
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the longer payment cycles associated with many foreign customers;
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•
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the typically longer periods from placement of orders to revenue recognition in certain international and emerging markets;
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•
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currency fluctuations;
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•
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the difficulties in interpreting or enforcing our agreements and collecting receivables through many foreign countries’ legal systems;
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•
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unstable regional political and economic conditions or changes in restrictions on trade among countries;
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•
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changes in the political, regulatory, safety or economic conditions in a country or region;
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•
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the imposition by governments of additional taxes, tariffs, global economic sanctions programs or other restrictions on foreign trade, including recent U.S. and Chinese tariffs;
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•
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any inability to comply with export or import laws and requirements or any violation of sanctions regulations, which may result in enforcement actions, civil or criminal penalties and restrictions on exports;
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•
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any increase in the cost of trade compliance functions to comply with changes to regulatory requirements; and
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•
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the possibility that it may be more difficult to protect our intellectual property in foreign countries.
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•
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reductions in orders or cancellations by our customers;
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•
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changes in customer mix, the mix of products and services sold and the mix of geographies in which our products and services are sold;
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•
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reduced visibility into our customers’ spending plans and associated revenue;
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•
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current and potential customer, partner and supplier consolidation and concentration;
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•
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changes in the size, growth or growth prospects of the LTE and IoT markets;
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•
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changes in the competitive dynamics of our market, including new entrants or pricing pressures, and our ability to compete in the LTE and IoT markets;
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•
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timing and success of commercial deployments of and upgrades to 4G wireless networks and the next generation 5G wireless networks;
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•
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timely availability, at a reasonable cost, of adequate manufacturing capacity with the sole foundry that manufactures our products;
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•
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our ability to successfully define, design and release new products in a timely manner that meet our customers’ needs;
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•
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timing and growth rate of revenues from the LTE and IoT markets;
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•
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changes in manufacturing costs, including wafer, test and assembly costs, mask costs and manufacturing yields;
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•
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the timing of product announcements by competitors or us;
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•
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costs associated with litigation, especially related to intellectual property and securities class actions;
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•
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costs associated with any violation of the U.S. Foreign Corrupt Practices Act, the United Kingdom Bribery Act, or other similar foreign laws;
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•
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impairment of our ability to transact business in the European Union and uncertainty as to national laws and regulations, including intellectual property rights, following the United Kingdom’s exit from the European Union;
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•
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the effects of a widespread outbreak of contagious disease, including the recent outbreak of respiratory illness caused by a novel COVID-19 first identified in Wuhan, Hubei Province, China;
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•
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changing economic and political conditions at a global or local level;
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•
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how well we execute on our strategy and operating plans and the impact of changes in our business model that could result in significant restructuring changes; and
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•
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our ability to achieve targeted cost reductions.
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•
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our shares are in registered form only, and we must be notified of any transfer of our shares in order for such transfer to be validly registered;
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•
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our by-laws provide for directors to be elected for three-year terms, and we intend to elect one third of the directors every year;
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•
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our shareholders may grant our board of directors, broad authorizations to increase our share capital;
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•
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our board of directors has the right to appoint directors to fill a vacancy created by the resignation, death or removal of a director, subject to the approval by the shareholders of such appointment at the next shareholders’ meeting, which prevents shareholders from having the sole right to fill vacancies on our board of directors;
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•
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our board of directors can only be convened by its chairman except when no board meeting has been held for more than two consecutive months;
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•
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our board of directors' meetings can only be regularly held if at least half of the directors attend either physically or by way of secured telecommunications;
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•
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approval of at least a majority of the shares entitled to vote at an ordinary shareholders’ general meeting is required to remove directors with or without cause;
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•
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advance notice is required for nominations for election to the board of directors or for proposing matters that can be acted upon at a shareholders’ meeting; and
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•
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the sections of the by-laws relating to the number of directors and election and removal of a director from office may only be modified by a resolution adopted by 66 2/3% of our shareholders present or represented at the meeting.
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A.
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History and Development of the Company
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B.
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Business Overview
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•
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Execution Challenges. The rapid evolution of wireless protocols, such as 4G LTE, 4G LTE Advanced and 5G NR, requires sustained product development excellence and ongoing collaboration with carriers to meet market technology needs. Subscriber demand and carriers’ push to increase revenues by providing new and higher performance devices have driven OEM and ODM product life cycles to become shorter and require semiconductor solution providers to adhere to quick time-to-market schedules while providing fast and efficient transition from design-in to volume production. Typical design cycles range from six months for consumer electronics devices up to two years for industrial or automotive applications. In addition, wireless carriers require semiconductor solutions to undergo extensive certification qualification and interoperability testing prior to mass production.
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•
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Technology Challenges. In order to increase throughput with minimal cost, wireless carriers require more efficient use of spectrum through the implementation of complex signal processing algorithms, such as OFDMA with always higher modulation schemes, advanced MIMO, carrier aggregation, that require a significant amount of system-level and software expertise in addition to IC design knowledge. In addition, OEM and ODM customers’ desire for continuous improvements in power efficiency, reduced form factor and lower cost require rapid design cycles employing increasingly advanced silicon processes, improved RF transceiver performance and integration of additional features.
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•
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A strong track record of execution in 4G, that we are leveraging for 5G. We believe we are well positioned in the 4G LTE market, with approximately 60 customers having already launched or in the development phase of products using Sequans LTE chipsets, and in particular we have become recognized as a market leader in LTE for IoT chipsets. We have released eight generations of 4G semiconductor solutions - including five generations of 4G LTE - that have been deployed in a variety of devices including smartphones, USB dongles, tablets, mobile routers, broadband access CPEs, in-car telematics devices, industrial and consumer IoT devices. In early 2020, we announced the increase of the size of our 5G design center in Israel to continue developing our 5G portfolio, leveraging our expertise in 4G. In the past five years, we have accomplished the following milestones:
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•
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announced in December 2014 that Verizon selected Sequans for Ellipsis JetPack hotspot, a design win that continues to ship in 2020;
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•
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announced in January 2015 Calliope, the first Cat 1 LTE chipset solution;
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•
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announced in July 2015 Calliope Cat 1 chipset platform certified by Verizon Wireless and collaboration with Gemalto on IoT beginning with Cat 1;
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•
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introduced in February 2016 Monarch, first LTE-M chipset and extended Gemalto partnership to LTE-M;
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•
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announced in January 2017 that Verizon had certified Sequans' Monarch Cat M chip in December 2016, making it the world's first carrier-certified Cat M chip;
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•
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in February 2018, announced two new IoT products: the Monarch SiP, in collaboration with Skyworks, and Monarch N, our NB-IoT only platform;
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•
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in April 2018, announced Monarch LTE chip is validated for Cat M1 on SoftBank network;
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•
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disclosed in May 2018, that Verizon certified Sequans Cat M/NB-IoT Monarch SiP;
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•
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Sequans, Gemtek, and Telrad delivered in September 2018 new LTE solutions for the 3.5 GHz CBRS spectrum band;
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•
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in January 2019, collaborated with Polymer Logistics and Sequans on Cat M smart IoT tracker for pallet tracking or use on USA networks;
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•
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announced in February 2019, Sequans worked with STMicroelectronics to deliver Cat M/NB-IoT connected MCU solutions;
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•
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introduced in February 2019, Monarch 2: the second generation of the world’s most advanced LTE for IoT chip platform;
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•
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announced in February 2019, new Cat M module for Orange’s live booster program is powered by Sequans Monarch Technology;
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•
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announced in February 2019, Monarch Cat M technology is certified for use on Telstra;
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•
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partnered in March 2019, with Deutsche Telekom on integrated SIM for IoT;
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•
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announced in March 2019, collaborating with Lockheed Martin on world-first LTE over satellite solution;
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•
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introduced in June 2109, new LTE Cat 4 and Cat 6 modules for CBRS spectrum;
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•
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announced in July 2019, Monarch certified by KDDI for Cat-M and validated by SoftBank for NB-IoT;
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•
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announced in October 2019, three largest mobile operators in Japan certified Monarch SiP and module
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•
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introduced in October 2019, first module based on Monarch N with integrated SIM capability
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•
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announced in November 2019, Monarch module certified in South Korea;
|
•
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announced in December 2019 Monarch chip and module certified by T-Mobile for NB-IoT network
|
•
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in January 2020, Monarch platform certified by Deutsche Telekom, Monarch module validated by Telus, and Monarch SiP and module certified by Sprint
|
•
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announced in February 2020, Monarch Go, embedded with an optimized LTE antenna and pre-installed ThingSpace IoT SIM, is certified by Verizon as an end device;
|
•
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announced in February 2020, global distribution agreements executed with Richardson RFPD and Avnet; and
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•
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announced in March 2020, collaboration agreements with Microchip and with NXP.
|
•
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Understanding of wireless system-level architecture and expertise in signal processing. We have an end-to-end understanding of wireless system-level architectures and networks based on our team’s experience in a broad range of wireless technologies including 2G, 3G, Wi-Fi, WiMAX, 4G LTE, and 5G. This enables us to serve as a trusted advisor to wireless carriers, OEMs and infrastructure vendors to optimize the performance of their 4G and 5G devices and networks. For example, our solutions offer improved standby-mode battery life in wireless devices as a result of our in-depth understanding of the interactions between the device and the network and of our implementation of advanced power-saving techniques in our solutions. For instance, we have implemented a proprietary technique called Dynamic Power Management in our Monarch chip that assures the longest possible battery life for IoT devices by dynamically adapting the chip’s deep-sleep implementation to the traffic patterns of various IoT use cases. We have also implemented another proprietary technique called eco-Paging that allows very low power consumption while maintaining a good level of reachability for the IoT device. In addition, we are now leveraging our years developing 5G essential technology, through a partnership with TCL from 2015 to 2019, for development of our 5G NR Taurus product.
|
•
|
High performance solutions for 4G and 5G applications. Our solutions offer high performance for use in a wide array of wireless devices. The key performance characteristics of our solutions include:
|
•
|
high throughput with peak downlink data transfer rates of 150 Mbps and 300 Mbps in our 4G LTE and LTE-Advanced solutions, which is now evolving to up to 5 Gbps in our 5G Taurus chipset platform which will support 5G NR with fallback to high-category 4G LTE;
|
•
|
high power efficiency in both active and idle modes using our patented idle mode optimization algorithms that improve standby time and help maximize device battery life;
|
•
|
inclusion of LTE broadcast support in our LTE solutions using a feature called evolved multimedia broadcast multicast service, or eMBMS, which enables carriers to deliver new multimedia services in an economical and spectrally efficient manner;
|
•
|
support for LTE-Advanced features, including carrier aggregation, a capability of creating a single virtual wide channel from two or more different narrower channels, resulting in higher throughput;
|
•
|
integration of complete on-chip support for Voice over LTE (VoLTE), including support for high-definition voice using wideband codecs;
|
•
|
support for LTE-Advanced technology band 48 for CBRS solutions available through two of our new LTE modules;
|
•
|
support of integrated secure element function and iSiM for better end-to-end security and built-in MNO/MVNO data plans
|
•
|
support of location positioning via software enabling indoor and outdoor positioning service and reducing the need of a power-hungry GNSS function
|
•
|
integrated RF and Baseband functions in single die optimizing power consumption and reducing solution cost and size
|
•
|
development and integration of specific high doppler tolerant algorithms to allow for in-plane connectivity; and
|
•
|
efficient LTE-to-satellite communication schemes for breakthrough in mobility and connectivity for satellite services.
|
•
|
Highly optimized 4G and 5G solutions. We have successfully produced and ramped into commercial production eight generations of 4G system-on-chip, or SoC, semiconductor solutions. This experience has resulted in what we believe to be one of the industry’s most efficient implementations, providing high performance at low cost and low power consumption. Some of our solutions have integrated the baseband processor and the RF transceiver into a single die, resulting in extremely high integration, small footprint and low cost. With the introduction of our Monarch Cat M/NB-IoT chip in 2016, we delivered a very high level of integration, providing baseband, RF transceiver, power management and memory all in a single chip In February 2018, we announced our Monarch SiP, an all-in-one solution integrating all components needed around Monarch to support ultra-compact and tiny IoT devices, and Monarch N, our chip optimized for Cat NB1/NB2 single-mode and integrated power amplifier and all RF and baseband functions in a single die. In February 2019, we announced our second generation Category M chipset, the Monarch 2 that provides another major improvement in power and cost with many new advanced features. In October 2019, we announced our first module optimized for 5G Massive IoT, the NB02S, which is based on our recent Monarch N platform, leveraging our EAL5+ capable secure element to provide an integrated UICC (iUICC) solution. Furthermore, our comprehensive software solutions help our customers get to market quickly with an optimized, mature and field proven solution. Our highly optimized solutions offer key advantages for both ourselves and our end customers:
|
•
|
Lower overall system cost for our end customers, coupled with higher functionality and smaller form factor. Our ability to integrate digital and RF functions into a single device also allows us to maintain higher product margins as we believe device manufacturers are willing to pay a premium for our integrated 4G solutions, while also enabling us to reduce our manufacturing costs for wafer fabrication, assembly and testing.
|
•
|
The implementation of advanced “known good die” and wafer-level chip-scale packaging (WLCSP) technology, which reduces chip cost and design footprint, enables the creation of very small and cost-effective LTE modules.
|
•
|
Simplified product design for device manufacturers, as our solutions incorporate all key components required for a 4G device in a single die or package. For instance, our Monarch chip incorporates baseband processor, RF transceiver, power management and memory in a single 6.5 x 8 mm package. Our Monarch N chip incorporates, in a single die, all these functions in addition to the power amplifier. We believe these advantages enable our products to be incorporated into leading edge devices that offer a high-quality user experience, as well as accelerate our end customers’ time-to-market.
|
•
|
Proprietary embedded protocol software that has been exhaustively tested with major base station vendors’ equipment to ensure reliable performance in the field. We also offer host software that facilitates rapid development of high performance device drivers, connection managers and other key application-layer software functionality.
|
•
|
Provide lowest power consumption with 1µA PSM and eco-Paging™ for optimized Extended Discontinuous Reception (eDRX), a feature that allows IoT devices to remain inactive for longer periods.
|
•
|
Optimized network selection Cat M/NB-IoT with the proprietary feature IoT-Select™
|
•
|
VoLTE support for integrated voice
|
•
|
Long-term relationships with wireless carriers. We have developed close relationships with wireless carriers around the world, helping them to test their new networks and specific features of those networks. We believe these relationships are critical to being able to certify our products quickly and to help our customers to certify and deploy their products efficiently.
|
•
|
Identifying and optimally serving 4G and 5G market segments. As the cellular market grows and matures, and as operators aggressively build out their 4G LTE and 5G NR networks and refarm their 2G and 3G spectrum to support demand for data capacity, we expect to see significant growth in the demand for 4G LTE-only, 5G and 5G with 4G fallback devices. In our estimation, this demand is expected to come from three areas:
|
1)
|
Massive IoT devices: Massive IoT refers to the universe of connected objects that together result in very large number of connections, small data volumes, low-cost devices and stringent requirements on energy consumption. While a large number of IoT connections are expected to use WiFi, Bluetooth or some other local-area or personal-area networking technology, there are many applications for wide-area connectivity which can be addressed by cellular networks. Applications for cellular connectivity include smart utility meters, asset tracking, industrial automation and monitoring, retail, smart cities, consumer wearables, agriculture and environmental monitoring, mobile/remote healthcare, security and more. This trend toward the use of 4G LTE in the Massive IoT market began with the arrival of cost- and power-optimized Category 1 LTE solutions in 2015, and is accelerating with the arrival of machine type communications (MTC)-optimized 3GPP Release 13/14/15 LTE solutions, which define Cat M and Cat NB user equipment categories. Our Massive IoT product family is composed of our world-first Calliope Category 1 LTE chipset platform, announced in January 2015, certified and shipping in commercial products. Monarch, the world’s first Cat M/NB chip, was announced in February 2016, certified in 2017 and is shipping in devices for Verizon, AT&T, as well as carriers in Japan, Europe, Australia, and Canada. More carrier approvals are expected in 2020. Monarch 2 and Monarch N, 5G-ready Cat M/NB as subsequent evolutions of our Monarch flagship platform, are expected to contribute to developing our Massive IoT offering with additional benefits in terms of cost, power saving, and integrated features.
|
2)
|
Broadband and Critical IoT devices: Broadband IoT adopts the capabilities of Mobile Broadband connectivity for IoT by providing much higher data rates and lower latencies than Massive IoT, while optimizing the technology for non-smartphone devices. Mobile routers, also called mobile hotspots, provide convenient, on-the-go Internet access via WiFi for users in homes, offices, hotel rooms, vehicles and outdoor locations. Fixed-location (non-mobile) routers (also sometimes generically called broadband wireless CPE, or customer premise equipment) provide broadband Internet access for residential and industrial applications. Critical IoT refers to Ultra-Reliable Low- Latency Communications (URLLC) introduced by the 3GPP standard in the scope of the 5G and that we plan to support in our Taurus platform. Here the promise is to reduce latency as an important feature for both residential and industrial applications, such as gaming and robotic. The Ericsson Mobility Report released in November 2019 projects that, together, shipments of Broadband and Critical IoT devices will exceed 1.2 billion units from 2019 to 2024. Solutions from our Cassiopeia LTE-Advanced platform, our CBRS modules, and our future modules based on our 5G Taurus platform are optimized to address these device types.
|
3)
|
Vertical Markets: Many applications in vertical markets, such as satellite, public safety and avionic, are interested to leverage the cellular 3GPP technology to enable connectivity in extreme situations, like satellite or ground-to-aircraft broadband or connectivity in emergency situations with ultra-low latency, and secure data access. Using our existing chipset platforms developed for our regular Massive, Broadband and Critical IoT devices, our strategy is to provide services to our customers to adapt such platforms to the specific requirements of these vertical markets. We have projects in this space with customers such as Thales and Lockheed Martin.
|
•
|
Accelerating our, and our customers’, time to market and reducing our customers’ development costs. By packaging our LTE semiconductor solutions in a complete, turnkey module form factor and certifying them with key wireless carriers, we have been catalyzing the market for cellular devices, speed time to market for customers wishing to incorporate connectivity in their devices and reduce the cost and complexity for our customers. In February 2018, we announced Monarch SiP, a highly integrated system-in-package that combines Monarch with a front-end radio module from Skyworks to create an all-in-one design that simplifies the design process and shorten development time. In addition, in 2019, we announced our new generation of chipsets, Monarch 2 and Monarch N, expected to be commercially available in the fourth and second quarters of 2020, respectively, further simplifying the design effort for IoT devices makers, compared to Monarch, thanks to the integration of additional functionalities like an application CPU, a secure enclave to facilitate the addition of the connectivity.
|
•
|
Leveraging our multiple generations of 4G chip design experience to become a leader in advanced 4G and 5G technology and cost efficiency. The cost and power efficiency achieved from our eight generations of 4G modem design has enabled us to deliver our family of products at attractive price points, enabling LTE connectivity to be embedded in a wide range of cost-sensitive IoT applications in both consumer and machine-to-machine applications. The most recent members of our Massive IoT family are our fifth generations 4G/5G chips, Monarch 2, and Monarch N - with increasing level of integration and features.
|
•
|
Partnering with other leading technology companies to complement our technology offerings. We regularly collaborate with ecosystem partners who provide complementary technology or strengthen our capabilities to address customer needs and competitive pressure. For instance, in March 2018 announced the Monarch SiP combining the Skyworks RF front-end module with our Monarch chipset. We have collaborated with microcontroller vendors like STMicroelectronics, Microchip and NXP, to develop IoT design kits that help customers to easily integrate our Monarch LTE-M/NB-IoT platform with a range of STMicroelectronics, Microchip and NXP microcontrollers. We believe these collaborations will allow us to address the mass market in an effective way and acquire customers which were not yet cellular connected but were integrating Bluetooth and WiFi connectivity. We are also partnering with MVNOs to enable new potential customers using multi-region coverage. We have signed worldwide distribution contracts with Avnet and RFPD. This will facilitate access to our technology through the distributors’ wide go-to-market presence.
|
Platform Name
Chipset ID
Family
|
|
Description
|
|
|
|
|
|||||||||
|
|
Critical IoT
|
|
Broadband IoT
|
|
Massive IoT
|
|
|
Key Features
|
|
|||||
Monarch
SQN3330
|
|
LTE Release 13/14
BB+RF+ PMIC+RAM
|
|
|
|
|
|
*
|
|
|
LTE UE Category M1 and NB1 supported; Baseband, RF transceiver, memory and power management integrated in a single package; power-optimized for IoT and M2M applications requiring lower throughput. Modules based on this chipset: GM01Q
|
|
|||
Monarch 2
SQN3430
|
LTE Release 14/15 dual-mode LTE-M/NB-IoT
|
|
|
|
*
|
Highly integrated chip with extremely low power consumption, supporting power class 3 (23 dBm) and lower (20, 14 dBm), with an integrated MCU with Sensor-Hub Mode and Emb. Voice Proc., Secure element & iUICC, EAL5+ security government grade, On-modem VoLTE.
Modules based on this chipset: GM02S
|
|
||||||||
Monarch N
SQN3410
|
LTE Release 14/15 NB-IoT
|
|
|
|
*
|
Highly integrated chip with extremely low power consumption, supporting power class 5 (20 dBm) and lower (14 dBm), with an integrated MCU with Sensor-Hub Mode, Secure element & iUICC, EAL5+ security government grade
Modules based on this chipset: NB02S
|
|
||||||||
MonarchSiP
SQN66430
|
LTE Release 13/14 dual-mode LTE M1/NB1
|
|
|
|
*
|
Ultra-compact complete LTE System in Package; integrated baseband, RF, pSRAM, power management, front-end and passives; eco-Paging™ for optimized eDRX; power class options 20 and 23dBm; supporting bands 1,2,3,4,5,8,12,13,14,17,18,19,20,25,26,28,
66,85
|
|
||||||||
Monarch Go
|
LTE Release 13/14 LTE-M
|
|
|
|
*
|
Comprehensive modem component offering device makers the shortest possible route to market and lowest total cost of ownership (TCO) to develop a cellular-IoT connected device - Connected by Verizon
|
|
||||||||
Calliope
SQN3223
|
|
LTE Release 9/10
BB
|
|
|
|
|
|
*
|
|
|
40nm technology, 10Mbps CAT1 peak throughput, USB and HS UART interfaces, integrated processor, cost- and power-optimized for IoT and M2M applications requiring lower throughput. WLCSP.
Modules based on this chipset: SP150Q, US130Q , VZ120Q
|
|
|||
Colibri / Calliope
SQN3241
|
|
LTE
RF
|
|
|
|
*
|
|
*
|
|
|
Supports 700-900MHz and 1.8-2.7GHz, up to 20 MHz bandwidth. WLCSP.
Modules based on this chipset: VZ22Q
|
|
|||
Cassiopeia
SQN3220/ SQN3220sc
|
|
LTE-Advanced Release 10 BB
|
|
*
|
|
|
|
|
|
|
Carrier aggregation up to 20 + 20 MHz
Modules based on this chipset:CB410 L/CB610L
|
|
|||
Mont Blanc/ Cassiopeia
SQN3240/SQN3242/SQN3244
|
|
LTE RF
|
|
*
|
|
*
|
|
*
|
|
|
Supports FDD and TDD 700 MHz - 2.7 GHz, up to 20 MHz bandwidth
Modules based on this chipset: VZ20Q/VZ20M
|
|
•
|
functionality, form factor and cost;
|
•
|
product performance, as measured by network throughput, signal reach, latency and power consumption;
|
•
|
software maturity and carrier certification coverage
|
•
|
track record of providing high-volume deployments in the industry; and
|
•
|
systems knowledge helping customers to optimize their products.
|
C.
|
Organizational Structure
|
Name
|
|
Country of
incorporation
|
|
Year of
incorporation
|
|
% equity
interest
|
|
Sequans Communications Ltd.
|
|
United Kingdom
|
|
2005
|
|
100
|
|
Sequans Communications Inc.
|
|
United States
|
|
2008
|
|
100
|
|
Sequans Communications Ltd. Pte.
|
|
Singapore
|
|
2008
|
|
100
|
|
Sequans Communications (Israel) Ltd.
|
|
Israel
|
|
2010
|
|
100
|
|
D.
|
Property, Plants and Equipment
|
Customer
|
Customer Location
|
|
% of total revenue for the year ended
December 31,
|
||||
|
|
|
2017
|
|
2018
|
|
2019
|
A
|
Taiwan
|
|
16%
|
|
32%
|
|
27%
|
B
|
Korea
|
|
—%
|
|
—%
|
|
22%
|
C
|
Taiwan
|
|
—%
|
|
Less than 10%
|
|
10%
|
D
|
China
|
|
Less than 10%
|
|
13%
|
|
Less than 10%
|
E
|
Taiwan
|
|
17%
|
|
Less than 10%
|
|
Less than 10%
|
A.
|
Operating Results
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017(1)
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Asia:
|
|
|
|
|
|
|
||||||
Taiwan
|
|
$
|
8,126
|
|
|
$
|
16,704
|
|
|
$
|
11,387
|
|
Korea
|
|
373
|
|
|
261
|
|
|
6,813
|
|
|||
China (including Hong-Kong)
|
|
21,819
|
|
|
11,638
|
|
|
2,139
|
|
|||
Rest of Asia
|
|
2,291
|
|
|
1,911
|
|
|
106
|
|
|||
Total Asia
|
|
32,609
|
|
|
30,514
|
|
|
20,445
|
|
|||
United States of America
|
|
11,282
|
|
|
7,042
|
|
|
9,221
|
|
|||
Rest of world
|
|
4,372
|
|
|
2,694
|
|
|
1,198
|
|
|||
Total revenue
|
|
$
|
48,263
|
|
|
$
|
40,250
|
|
|
$
|
30,864
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017(1)
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Product
|
|
$
|
37,353
|
|
|
$
|
28,938
|
|
|
$
|
21,947
|
|
License
|
|
2,838
|
|
|
2,707
|
|
|
2,578
|
|
|||
Development and other services
|
|
8,072
|
|
|
8,605
|
|
|
6,339
|
|
|||
Total revenue
|
|
$
|
48,263
|
|
|
$
|
40,250
|
|
|
$
|
30,864
|
|
|
|
Year ended December 31,
|
|
Change
|
|||||||
|
|
2018 (1)
|
|
2019
|
|
%
|
|||||
|
|
(in thousands)
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|||||
Product revenue
|
|
$
|
28,938
|
|
|
$
|
21,947
|
|
|
(24
|
)%
|
Other revenue
|
|
11,312
|
|
|
8,917
|
|
|
(21
|
)
|
||
Total revenue
|
|
40,250
|
|
|
30,864
|
|
|
(23
|
)
|
||
Cost of revenue:
|
|
|
|
|
|
|
|||||
Cost of product revenue
|
|
21,957
|
|
|
16,703
|
|
|
(24
|
)
|
||
Cost of other revenue
|
|
2,405
|
|
|
1,782
|
|
|
(26
|
)
|
||
Total cost of revenue
|
|
24,362
|
|
|
18,485
|
|
|
(24
|
)
|
||
Gross profit
|
|
15,888
|
|
|
12,379
|
|
|
(22
|
)
|
||
Operating expenses:
|
|
|
|
|
|
|
|||||
Research and development
|
|
27,909
|
|
|
23,799
|
|
|
(15
|
)
|
||
Sales and marketing
|
|
9,411
|
|
|
7,968
|
|
|
(15
|
)
|
||
General and administrative
|
|
10,085
|
|
|
8,570
|
|
|
(15
|
)
|
||
Total operating expenses
|
|
47,405
|
|
|
40,337
|
|
|
(15
|
)
|
||
Operating income (loss)
|
|
(31,517
|
)
|
|
(27,958
|
)
|
|
(11
|
)
|
||
Financial income (expense):
|
|
|
|
|
|
|
|||||
Interest income (expense), net
|
|
(5,376
|
)
|
|
(9,593
|
)
|
|
78
|
|
||
Other financial expense
|
|
(400
|
)
|
|
—
|
|
|
(100
|
)
|
||
Convertible debt amendments
|
|
(265
|
)
|
|
—
|
|
|
(100
|
)
|
||
Foreign exchange gain (loss)
|
|
366
|
|
|
71
|
|
|
(81
|
)
|
||
Profit (Loss) before income taxes
|
|
(37,192
|
)
|
|
(37,480
|
)
|
|
|
|||
Income tax expense (benefit)
|
|
(968
|
)
|
|
(783
|
)
|
|
(19
|
)
|
||
Profit (Loss)
|
|
$
|
(36,224
|
)
|
|
$
|
(36,697
|
)
|
|
|
|
|
Year ended
December 31,
|
||||
|
|
2018 (1)
|
|
2019
|
||
|
|
(% of total revenue)
|
||||
Revenue:
|
|
|
|
|
||
Product revenue
|
|
72
|
|
|
71
|
|
Other revenue
|
|
28
|
|
|
29
|
|
Total revenue
|
|
100
|
|
|
100
|
|
Cost of revenue:
|
|
|
|
|
||
Cost of product revenue
|
|
55
|
|
|
54
|
|
Cost of other revenue
|
|
6
|
|
|
6
|
|
Total cost of revenue
|
|
61
|
|
|
60
|
|
Gross profit
|
|
39
|
|
|
40
|
|
Operating expenses:
|
|
|
|
|
||
Research and development
|
|
69
|
|
|
77
|
|
Sales and marketing
|
|
23
|
|
|
26
|
|
General and administrative
|
|
25
|
|
|
28
|
|
Total operating expenses
|
|
117
|
|
|
131
|
|
Operating income (loss)
|
|
(78
|
)
|
|
(91
|
)
|
Financial income (expense):
|
|
|
|
|
||
Interest income (expense), net
|
|
(13
|
)
|
|
(31
|
)
|
Other financial expense
|
|
(1
|
)
|
|
—
|
|
Convertible debt amendments
|
|
(1
|
)
|
|
—
|
|
Foreign exchange gain (loss)
|
|
1
|
|
|
—
|
|
Profit (Loss) before income taxes
|
|
(92
|
)
|
|
(122
|
)
|
Income tax expense (benefit)
|
|
(2
|
)
|
|
(3
|
)
|
Profit (Loss)
|
|
(90
|
)
|
|
(119
|
)
|
|
|
Year ended December 31,
|
|
Change
|
|||||||
|
|
2017(1) (2)
|
|
2018 (2)
|
|
%
|
|||||
|
|
(in thousands)
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|||||
Product revenue
|
|
$
|
37,353
|
|
|
$
|
28,938
|
|
|
(23
|
)%
|
Other revenue
|
|
10,910
|
|
|
11,312
|
|
|
4
|
|
||
Total revenue
|
|
48,263
|
|
|
40,250
|
|
|
(17
|
)
|
||
Cost of revenue:
|
|
|
|
|
|
|
|||||
Cost of product revenue
|
|
24,725
|
|
|
21,957
|
|
|
(11
|
)
|
||
Cost of other revenue
|
|
2,397
|
|
|
2,405
|
|
|
—
|
|
||
Total cost of revenue
|
|
27,122
|
|
|
24,362
|
|
|
(10
|
)
|
||
Gross profit
|
|
21,141
|
|
|
15,888
|
|
|
(25
|
)
|
||
Operating expenses:
|
|
|
|
|
|
|
|||||
Research and development
|
|
25,202
|
|
|
27,909
|
|
|
11
|
|
||
Sales and marketing
|
|
8,785
|
|
|
9,411
|
|
|
7
|
|
||
General and administrative
|
|
6,679
|
|
|
10,085
|
|
|
51
|
|
||
Total operating expenses
|
|
40,666
|
|
|
47,405
|
|
|
17
|
|
||
Operating income (loss)
|
|
(19,525
|
)
|
|
(31,517
|
)
|
|
61
|
|
||
Financial income (expense):
|
|
|
|
|
|
|
|||||
Interest income (expense), net
|
|
(4,612
|
)
|
|
(5,376
|
)
|
|
17
|
|
||
Other financial expense
|
|
—
|
|
|
(400
|
)
|
|
100
|
|
||
Convertible debt amendments
|
|
(322
|
)
|
|
(265
|
)
|
|
(18
|
)
|
||
Foreign exchange gain (loss)
|
|
(1,401
|
)
|
|
366
|
|
|
(126
|
)
|
||
Profit (Loss) before income taxes
|
|
(25,860
|
)
|
|
(37,192
|
)
|
|
|
|||
Income tax expense (benefit)
|
|
300
|
|
|
(968
|
)
|
|
(423
|
)
|
||
Profit (Loss)
|
|
$
|
(26,160
|
)
|
|
$
|
(36,224
|
)
|
|
|
|
|
Year ended
December 31,
|
||||
|
|
2017(1) (2)
|
|
2018 (2)
|
||
|
|
(% of total revenue)
|
||||
Revenue:
|
|
|
|
|
||
Product revenue
|
|
77
|
|
|
72
|
|
Other revenue
|
|
23
|
|
|
28
|
|
Total revenue
|
|
100
|
|
|
100
|
|
Cost of revenue:
|
|
|
|
|
||
Cost of product revenue
|
|
51
|
|
|
55
|
|
Cost of other revenue
|
|
5
|
|
|
6
|
|
Total cost of revenue
|
|
56
|
|
|
61
|
|
Gross profit
|
|
44
|
|
|
39
|
|
Operating expenses:
|
|
|
|
|
||
Research and development
|
|
52
|
|
|
69
|
|
Sales and marketing
|
|
18
|
|
|
23
|
|
General and administrative
|
|
14
|
|
|
25
|
|
Total operating expenses
|
|
84
|
|
|
117
|
|
Operating income (loss)
|
|
(40
|
)
|
|
(78
|
)
|
Financial income (expense):
|
|
|
|
|
||
Interest income (expense), net
|
|
(10
|
)
|
|
(13
|
)
|
Other financial expense
|
|
—
|
|
|
(1
|
)
|
Convertible debt amendments
|
|
(1
|
)
|
|
(1
|
)
|
Foreign exchange gain (loss)
|
|
(3
|
)
|
|
1
|
|
Profit (Loss) before income taxes
|
|
(54
|
)
|
|
(92
|
)
|
Income tax expense (benefit)
|
|
1
|
|
|
(2
|
)
|
Profit (Loss)
|
|
(55
|
)
|
|
(90
|
)
|
|
|
Three months ended
|
||||||||||||||||||||||||||||||
|
|
March 31,
2018 |
|
June 30,
2018 |
|
Sept. 30, 2018
|
|
Dec. 31, 2018
|
|
March 31,
2019 |
|
June 30,
2019 |
|
Sept. 30, 2019
|
|
Dec. 31, 2019
|
||||||||||||||||
|
|
(in thousands) (unaudited)
|
||||||||||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Product revenue
|
|
$
|
7,635
|
|
|
$
|
9,921
|
|
|
$
|
7,526
|
|
|
$
|
3,856
|
|
|
$
|
4,111
|
|
|
$
|
6,774
|
|
|
$
|
6,008
|
|
|
$
|
5,054
|
|
Other revenue
|
|
3,599
|
|
|
2,737
|
|
|
2,759
|
|
|
2,217
|
|
|
2,357
|
|
|
1,136
|
|
|
1,312
|
|
|
4,112
|
|
||||||||
Total revenue
|
|
11,234
|
|
|
12,658
|
|
|
10,285
|
|
|
6,073
|
|
|
6,468
|
|
|
7,910
|
|
|
7,320
|
|
|
9,166
|
|
||||||||
Cost of revenue(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of product revenue
|
|
5,861
|
|
|
7,127
|
|
|
6,026
|
|
|
2,943
|
|
|
3,575
|
|
|
4,443
|
|
|
4,159
|
|
|
4,526
|
|
||||||||
Cost of other revenue
|
|
689
|
|
|
549
|
|
|
664
|
|
|
503
|
|
|
574
|
|
|
482
|
|
|
394
|
|
|
332
|
|
||||||||
Total cost of revenue
|
|
6,550
|
|
|
7,676
|
|
|
6,690
|
|
|
3,446
|
|
|
4,149
|
|
|
4,925
|
|
|
4,553
|
|
|
4,858
|
|
||||||||
Gross profit
|
|
4,684
|
|
|
4,982
|
|
|
3,595
|
|
|
2,627
|
|
|
2,319
|
|
|
2,985
|
|
|
2,767
|
|
|
4,308
|
|
||||||||
Operating expenses(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Research and development
|
|
7,519
|
|
|
7,152
|
|
|
6,750
|
|
|
6,488
|
|
|
6,157
|
|
|
5,773
|
|
|
6,205
|
|
|
5,664
|
|
||||||||
Sales and marketing
|
|
2,485
|
|
|
2,518
|
|
|
2,229
|
|
|
2,179
|
|
|
2,221
|
|
|
2,026
|
|
|
1,857
|
|
|
1,864
|
|
||||||||
General and administrative
|
|
1,971
|
|
|
2,276
|
|
|
2,545
|
|
|
3,294
|
|
|
1,913
|
|
|
2,038
|
|
|
2,245
|
|
|
2,374
|
|
||||||||
Total operating expenses
|
|
11,975
|
|
|
11,946
|
|
|
11,524
|
|
|
11,961
|
|
|
10,291
|
|
|
9,837
|
|
|
10,307
|
|
|
9,902
|
|
||||||||
Operating income (loss)
|
|
(7,291
|
)
|
|
(6,964
|
)
|
|
(7,929
|
)
|
|
(9,334
|
)
|
|
(7,972
|
)
|
|
(6,852
|
)
|
|
(7,540
|
)
|
|
(5,594
|
)
|
||||||||
Financial income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest income (expense), net
|
|
(1,227
|
)
|
|
(1,240
|
)
|
|
(1,278
|
)
|
|
(1,631
|
)
|
|
(1,976
|
)
|
|
(2,214
|
)
|
|
(2,293
|
)
|
|
(3,110
|
)
|
||||||||
Other financial expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Convertible debt amendments
|
|
—
|
|
|
—
|
|
|
(685
|
)
|
|
420
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign exchange gain (loss)
|
|
(212
|
)
|
|
188
|
|
|
58
|
|
|
332
|
|
|
322
|
|
|
(303
|
)
|
|
874
|
|
|
(822
|
)
|
||||||||
Profit (Loss) before income taxes
|
|
(8,730
|
)
|
|
(8,016
|
)
|
|
(9,834
|
)
|
|
(10,613
|
)
|
|
(9,626
|
)
|
|
(9,369
|
)
|
|
(8,959
|
)
|
|
(9,526
|
)
|
||||||||
Income tax expense (benefit)
|
|
19
|
|
|
74
|
|
|
78
|
|
|
(1,139
|
)
|
|
(17
|
)
|
|
(213
|
)
|
|
(179
|
)
|
|
(374
|
)
|
||||||||
Profit (Loss)
|
|
$
|
(8,749
|
)
|
|
$
|
(8,090
|
)
|
|
$
|
(9,912
|
)
|
|
$
|
(9,474
|
)
|
|
$
|
(9,609
|
)
|
|
$
|
(9,156
|
)
|
|
$
|
(8,780
|
)
|
|
$
|
(9,152
|
)
|
(1)
|
Includes share-based compensation as follows:
|
|
|
Three months ended
|
||||||||||||||||||||||||||||||
|
|
March 31,
2018 |
|
June 30,
2018 |
|
Sept. 30, 2018
|
|
Dec. 31, 2018
|
|
March 31,
2019 |
|
June 30,
2019 |
|
Sept. 30, 2019
|
|
Dec. 31, 2019
|
||||||||||||||||
|
|
(in thousands) (unaudited)
|
||||||||||||||||||||||||||||||
Cost of revenue
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Operating expenses
|
|
529
|
|
|
523
|
|
|
444
|
|
|
308
|
|
|
486
|
|
|
426
|
|
|
360
|
|
|
515
|
|
||||||||
Share-based compensation
|
|
$
|
532
|
|
|
$
|
526
|
|
|
$
|
446
|
|
|
$
|
308
|
|
|
$
|
488
|
|
|
$
|
429
|
|
|
$
|
362
|
|
|
$
|
518
|
|
|
|
Three months ended
|
||||||||||||||||||||||
|
|
March 31,
2018 |
|
June 30,
2018 |
|
Sept. 30, 2018
|
|
Dec. 31, 2018
|
|
March 31,
2019 |
|
June 30,
2019 |
|
Sept. 30, 2019
|
|
Dec. 31, 2019
|
||||||||
|
|
(% of revenue) (unaudited)
|
||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Product revenue
|
|
68
|
|
|
78
|
|
|
73
|
|
|
63
|
|
|
64
|
|
|
86
|
|
|
82
|
|
|
55
|
|
Other revenue
|
|
32
|
|
|
22
|
|
|
27
|
|
|
37
|
|
|
36
|
|
|
14
|
|
|
18
|
|
|
45
|
|
Total revenue
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of product revenue
|
|
52
|
|
|
56
|
|
|
59
|
|
|
48
|
|
|
55
|
|
|
56
|
|
|
57
|
|
|
49
|
|
Cost of other revenue
|
|
6
|
|
|
5
|
|
|
6
|
|
|
8
|
|
|
9
|
|
|
6
|
|
|
5
|
|
|
4
|
|
Total cost of revenue
|
|
58
|
|
|
61
|
|
|
65
|
|
|
57
|
|
|
64
|
|
|
62
|
|
|
62
|
|
|
53
|
|
Gross profit
|
|
42
|
|
|
39
|
|
|
35
|
|
|
43
|
|
|
36
|
|
|
38
|
|
|
38
|
|
|
47
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Research and development
|
|
67
|
|
|
57
|
|
|
66
|
|
|
107
|
|
|
95
|
|
|
73
|
|
|
85
|
|
|
62
|
|
Sales and marketing
|
|
22
|
|
|
20
|
|
|
22
|
|
|
36
|
|
|
34
|
|
|
26
|
|
|
25
|
|
|
20
|
|
General and administrative
|
|
18
|
|
|
18
|
|
|
24
|
|
|
54
|
|
|
30
|
|
|
26
|
|
|
30
|
|
|
26
|
|
Total operating expenses
|
|
107
|
|
|
94
|
|
|
112
|
|
|
197
|
|
|
159
|
|
|
125
|
|
|
141
|
|
|
108
|
|
Operating income (loss)
|
|
(65
|
)
|
|
(55
|
)
|
|
(77
|
)
|
|
(154
|
)
|
|
(123
|
)
|
|
(87
|
)
|
|
(103
|
)
|
|
(61
|
)
|
Financial income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income (expense), net
|
|
(11
|
)
|
|
(10
|
)
|
|
(12
|
)
|
|
(27
|
)
|
|
(31
|
)
|
|
(28
|
)
|
|
(31
|
)
|
|
(34
|
)
|
Other financial expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Convertible debit amendments
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Foreign exchange gain (loss)
|
|
(2
|
)
|
|
1
|
|
|
1
|
|
|
5
|
|
|
5
|
|
|
(4
|
)
|
|
12
|
|
|
(9
|
)
|
Profit (Loss) before income taxes
|
|
(78
|
)
|
|
(64
|
)
|
|
(95
|
)
|
|
(176
|
)
|
|
(149
|
)
|
|
(119
|
)
|
|
(122
|
)
|
|
(104
|
)
|
Income tax expense (benefit)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(19
|
)
|
|
—
|
|
|
(3
|
)
|
|
(2
|
)
|
|
(4
|
)
|
Profit (Loss)
|
|
(78
|
)
|
|
(64
|
)
|
|
(96
|
)
|
|
(156
|
)
|
|
(149
|
)
|
|
(116
|
)
|
|
(120
|
)
|
|
(100
|
)
|
B.
|
Liquidity and Capital Resources
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Net cash from (used in) operating activities
|
|
$
|
(28,626
|
)
|
|
$
|
(22,838
|
)
|
|
$
|
5,093
|
|
Net cash used in investing activities
|
|
$
|
(6,477
|
)
|
|
$
|
(8,766
|
)
|
|
$
|
(9,101
|
)
|
Net cash from financing activities
|
|
$
|
17,838
|
|
|
$
|
40,744
|
|
|
$
|
6,019
|
|
Net increase (decrease) in cash and cash equivalents
|
|
$
|
(17,265
|
)
|
|
$
|
9,140
|
|
|
$
|
2,011
|
|
•
|
our ability to generate cash from operations or to minimize the cash used in operations;
|
•
|
our ability to control our costs;
|
•
|
the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights, or participating in litigation-related activities;
|
•
|
the impact of the COVID-19 coronavirus on our business; and
|
•
|
the acquisition of businesses, products and technologies.
|
C.
|
Research and Development, Patents and Licenses, etc.
|
D.
|
Trend Information
|
E.
|
Off-Balance Sheet Arrangements
|
F.
|
Contractual Obligations
|
|
|
Payments due by period
|
||||||||||||||||||
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
||||||||||||||
Research project financing
|
|
6,032
|
|
|
739
|
|
|
4,853
|
|
|
440
|
|
|
—
|
|
|||||
Government loans
|
|
1,173
|
|
|
478
|
|
|
695
|
|
|
—
|
|
|
—
|
|
|||||
Convertible debt
|
|
40,779
|
|
|
7,863
|
|
|
32,916
|
|
|
|
|
|
—
|
|
|||||
Venture debt
|
|
14,435
|
|
|
6,042
|
|
|
6,042
|
|
|
2,351
|
|
|
|
||||||
Lease contracts
|
|
6,204
|
|
|
1,147
|
|
|
832
|
|
|
2,918
|
|
|
1,307
|
|
|||||
Trade payables
|
|
10,307
|
|
|
9,057
|
|
|
1,000
|
|
|
250
|
|
|
—
|
|
|||||
Interest-bearing receivables financing
|
|
4,068
|
|
|
4,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other current liabilities
|
|
4,540
|
|
|
4,540
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
87,538
|
|
|
$
|
33,934
|
|
|
$
|
46,338
|
|
|
$
|
5,959
|
|
|
$
|
1,307
|
|
Off-balance sheet commitments:
|
|
|
|
|
|
|
||||||||||||||
Engineering team acquired (See note 23)
|
|
1,580
|
|
|
150
|
|
|
—
|
|
|
1,430
|
|
|
—
|
|
|||||
Inventory component and equipment purchase commitments
|
|
3,465
|
|
|
3,465
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
5,045
|
|
|
$
|
3,615
|
|
|
$
|
—
|
|
|
$
|
1,430
|
|
|
$
|
—
|
|
A.
|
Directors and Senior Management
|
Name
|
|
Age
|
|
|
Position(s)
|
Executive Officers
|
|
|
|
|
|
Dr. Georges Karam
|
|
58
|
|
|
Chairman of the Board and Chief Executive Officer
|
Deborah Choate
|
|
56
|
|
|
Chief Financial Officer
|
Bertrand Debray
|
|
55
|
|
|
Chief Operating Officer
|
Didier Dutronc
|
|
60
|
|
|
Chief Marketing Officer
|
Nikhil Taluja
|
|
48
|
|
|
Vice President Worldwide Sales
|
Directors
|
|
|
|
|
|
Wesley Cummins
|
|
42
|
|
|
Director
|
Mailys Ferrere
|
|
57
|
|
|
Director
|
Yves Maitre
|
|
57
|
|
|
Director
|
Richard Nottenburg
|
|
66
|
|
|
Director
|
Hubert de Pesquidoux
|
|
54
|
|
|
Director
|
Dominique Pitteloud
|
|
58
|
|
|
Director
|
Alok Sharma
|
|
55
|
|
|
Director
|
Zvi Slonimsky
|
|
70
|
|
|
Director
|
B.
|
Compensation
|
Attendance fees
|
$
|
20,000
|
|
Attendance fees for lead independent director
|
$
|
20,000
|
|
Attendance fees for board committee chairperson
|
|
||
Audit committee
|
$
|
12,000
|
|
Compensation committee
|
$
|
9,000
|
|
Nominating and corporate governance committee
|
$
|
5,000
|
|
Attendance fees for board committee members
|
|
||
Audit committee
|
$
|
6,000
|
|
Compensation committee
|
$
|
4,500
|
|
Nominating and corporate governance committee
|
$
|
2,500
|
|
Annual award for continuing board members(1)(2)
|
Warrants to purchase 9,000 ADSs
|
(1)
|
The annual equity award for continuing board members has an exercise price equal to the fair market value of the ADSs on the date of grant and will fully vest on the earlier of (a) the three year anniversary of the date of grant of the award and (b) the date immediately preceding the date of the annual meeting of our shareholders for the third year following the year of grant for the award, subject to the non-employee director’s continued service to us through the vesting date.
|
(2)
|
All such awards will become fully vested upon a change of control.
|
|
|
Restricted Shares (1)
|
|
Options
|
||||||||
Name (Title)
|
|
Number Unvested
|
|
Number Vested, Trading Restricted
|
|
Grant Date Fair Value
|
|
Number
|
|
Exercise
Price
|
|
Expiration Date
|
Dr. Georges Karam, Chairman and Chief Executive Officer
|
|
56,254
|
|
—
|
|
$1.73
|
|
500,000
|
|
€6.26 ($6.89)
|
|
Mar. 8, 2021
|
|
|
56,253
|
|
—
|
|
$3.67
|
|
50,000
|
|
$2.04
|
|
Dec. 13, 2022
|
|
|
175,003
|
|
—
|
|
$1.73
|
|
150,000
|
|
$1.90
|
|
Dec. 12, 2023
|
|
|
343,750
|
|
156,250
|
|
$0.95
|
|
170,000
|
|
$1.58
|
|
July 22, 2024
|
|
|
800,000
|
|
|
|
$0.73
|
|
130,000
|
|
$1.25
|
|
Dec. 11, 2024
|
|
|
|
|
|
|
|
|
98,000
|
|
$1.94
|
|
Apr. 21, 2025
|
|
|
|
|
|
|
|
|
170,000
|
|
$1.55
|
|
July 20, 2025
|
|
|
|
|
|
|
|
|
100,000
|
|
$1.97
|
|
Dec. 14, 2025
|
Bertrand Debray, Chief Operating Officer
|
|
5,361
|
|
—
|
|
$1.73
|
|
150,000
|
|
€6.26 ($6.89)
|
|
Mar. 8, 2021
|
|
|
13,131
|
|
—
|
|
$1.78
|
|
24,000
|
|
$2.04
|
|
Dec. 13, 2022
|
|
|
55,000
|
|
5,000
|
|
$0.95
|
|
24,000
|
|
$1.90
|
|
Dec. 12, 2023
|
|
|
8,500
|
|
|
|
$1.15
|
|
50,000
|
|
$1.58
|
|
July 22, 2024
|
|
|
240,000
|
|
|
|
$0.73
|
|
28,000
|
|
$1.25
|
|
Dec. 11, 2024
|
|
|
|
|
|
|
|
|
50,000
|
|
$1.55
|
|
July 20, 2025
|
|
|
|
|
|
|
|
|
24,000
|
|
$1.97
|
|
Dec. 14, 2025
|
C.
|
Board Practices
|
Name
|
|
Current
position
|
|
Year of
appointment
|
|
Term
expiration
year
|
Georges Karam
|
|
Chairman
|
|
2003
|
|
2021
|
Wesley Cummins
|
|
Director
|
|
2018
|
|
2021
|
Mailys Ferrere
|
|
Director
|
|
2017
|
|
2020
|
Yves Maitre
|
|
Director
|
|
2014
|
|
2020
|
Richard Nottenburg
|
|
Director
|
|
2016
|
|
2022
|
Hubert de Pesquidoux
|
|
Director
|
|
2011
|
|
2020
|
Dominique Pitteloud
|
|
Director
|
|
2005
|
|
2022
|
Alok Sharma
|
|
Director
|
|
2011
|
|
2022
|
Zvi Slonimsky
|
|
Director
|
|
2006
|
|
2021
|
Mailys Ferrere
|
|
Director
|
|
2017
|
|
2020
|
•
|
Presiding at all meetings of the board at which the chairman is not present, including executive sessions of the independent directors.
|
•
|
Calling meetings of the independent directors.
|
•
|
Serving as liaison between the independent directors and the chairman and chief executive officer.
|
•
|
Collecting feedback from the board members in order to help the chairman finalize the meeting agendas.
|
•
|
Based on feedback from the other board members, recommending to the chairman that a special board of directors meeting be called focused on a specific agenda.
|
•
|
If a shareholder requests to talk with an independent director and not to the chairman and/or the chief executive officer, representing the board of directors for such communication in coordination with the chairman.
|
D.
|
Employees
|
|
|
At December 31,
|
|||||||
|
|
2017
|
|
2018
|
|
2019
|
|||
Department:
|
|
|
|
|
|
|
|||
Research and development
|
|
185
|
|
|
176
|
|
|
159
|
|
Sales and marketing
|
|
26
|
|
|
24
|
|
|
23
|
|
General and administration
|
|
19
|
|
|
21
|
|
|
19
|
|
Operations
|
|
8
|
|
|
6
|
|
|
7
|
|
Total
|
|
238
|
|
|
227
|
|
|
208
|
|
Geography:
|
|
|
|
|
|
|
|||
Europe, Middle East, Africa
|
|
188
|
|
|
185
|
|
|
168
|
|
Asia
|
|
31
|
|
|
24
|
|
|
24
|
|
Americas
|
|
19
|
|
|
18
|
|
|
16
|
|
Total
|
|
238
|
|
|
227
|
|
|
208
|
|
E.
|
Share Ownership
|
A.
|
Major Shareholders
|
•
|
each person, or group of affiliated persons, known by us to own beneficially more than 5% of our outstanding ADSs or ordinary shares;
|
•
|
each of our executive officers;
|
•
|
each of our directors; and
|
•
|
all of our executive officers and directors as a group.
|
|
|
Ordinary Shares
Beneficially Owned
|
ADSs Beneficially Owned
|
|
|
|||
|
|
Number
|
Number
|
|
Percent
|
|||
5% Shareholders
|
|
|
|
|
|
|||
Bpifrance Participations(1)
|
|
12,085,560
|
|
3,021,390
|
|
|
12.6
|
%
|
Nokomis Capital, L.L.C.(2)
|
|
9,721,413
|
|
2,430,353
|
|
|
10.2
|
%
|
AWM Investment Co. Inc.(3)
|
|
9,596,004
|
|
2,399,001
|
|
|
10.0
|
%
|
Divisar Capital Management LLC(4)
|
|
7,715,808
|
|
1,928,952
|
|
|
8.1
|
%
|
North Sound Trading, LP (5)
|
|
6,400,000
|
|
1,600,000
|
|
|
6.7
|
%
|
Dr. Georges Karam(6)
|
|
4,796,026
|
|
1,199,007
|
|
|
4.9
|
%
|
Executive Officers and Directors
|
|
|
|
|
|
|||
Dr. Georges Karam(6)
|
|
4,796,026
|
|
1,199,007
|
|
|
4.9
|
%
|
Deborah Choate(7)
|
|
410,500
|
|
102,625
|
|
|
*
|
|
Wesley Cummins(8)
|
|
10,000
|
|
2,500
|
|
|
*
|
|
Bertrand Debray(9)
|
|
1,248,728
|
|
312,182
|
|
|
1.3
|
%
|
Didier Dutronc(10)
|
|
228,266
|
|
57,067
|
|
|
*
|
|
Mailys Ferrere
|
|
-
|
|
-
|
|
|
-
|
|
Yves Maitre(11)
|
|
226,360
|
|
56,590
|
|
|
*
|
|
Richard Nottenburg(12)
|
|
670,007
|
|
167,502
|
|
|
*
|
|
Hubert de Pesquidoux(13)
|
|
149,400
|
|
37,350
|
|
|
*
|
|
Dominique Pitteloud(14)
|
|
203,000
|
|
50,750
|
|
|
*
|
|
Alok Sharma(15)
|
|
137,180
|
|
34,295
|
|
|
*
|
|
Zvi Slonimsky(16)
|
|
187,388
|
|
46,847
|
|
|
*
|
|
Nikhil Taluja(17)
|
|
238,019
|
|
59,505
|
|
|
*
|
|
All executive officers and directors as a group (13 persons)(18)
|
|
8,504,874
|
|
2,126,219
|
|
|
8.6
|
%
|
(1)
|
Based on a Schedule 13D/A filed with the SEC on January 18, 2018 and information provided to the Company. Includes 12,085,560 shares (the equivalent of 3,021,390 ADSs) held by Bpifrance Participations S.A., or Bpifrance. Bpifrance is the wholly owned subsidiary of Bpifrance S.A. (formerly BPI-Groupe) (bpifrance), or BPI. Caisse des Dépôts ( formerly Caisse des Dépôts et Consignations), or CDC, and EPIC Bpifrance (formerly EPIC BPI-Groupe), or EPIC, each hold 50% of the share capital of BPI and jointly control BPI. None of BPI, CDC, or EPIC holds any shares directly. BPI may be deemed to be the beneficial owner of 12,085,560 shares, indirectly through its sole ownership of Bpifrance. CDC and
|
(2)
|
Based on a Schedule 13D/A filed with the SEC on November 25, 2019. Nokomis Capital, L.L.C., a Texas limited liability company (“Nokomis Capital”), serves as the investment adviser to the accounts of certain private funds (collectively, the “Nokomis Accounts”) and may direct the vote and dispose of the 9,721,413 ordinary shares (the equivalent of 2,430,353 ADSs) held by the Nokomis Accounts or which the Nokomis Accounts have a right to acquire. As the principal of Nokomis Capital, Mr. Brett Hendrickson, the principal of Nokomis Capital, may direct the vote and disposition of the 9,721,413 ordinary shares (the equivalent of 2,430,353 ADSs) held by the Nokomis Accounts or which the Nokomis Accounts have a right to acquire from the conversion of convertible notes issued by the Company. The Nokomis Accounts hold an aggregate par value of $35,894,810.12 of the convertible notes, which contain a blocker provision that prohibits the conversion such that holdings would exceed 9.99% beneficial ownership of the number of outstanding ordinary shares of the Company at any time. The address of Nokomis Capital is 2305 Cedar Springs Rd., Suite 420, Dallas, TX 75201.
|
(3)
|
Based on a Schedule 13G/A filed with the SEC on February 12, 2020. Includes 9,721,413 ordinary shares (represented by 2,399,001 ADSs) held by AWM Investment Company, Inc., a Delaware corporation (“AWM”), that is the investment adviser to Special Situations Cayman Fund, L.P., a Cayman Island limited partnership ("CAYMAN"), Special Situations Fund III QP, L.P., a Delaware limited partnership ("SSFQP") Special Situations Private Equity Fund, L.P., a Delaware limited partnership ("SSPE"), Special Situations Technology Fund, L.P., a Delaware limited partnership ("TECH") and Special Situations Technology Fund II, L.P., a Delaware limited partnership ("TECH II"), (CAYMAN, SSFQP, SSPE, TECH and TECH II, will hereafter be referred to as the “Funds”). As the investment adviser to the Funds, AWM holds sole voting and investment power over 909,780 ordinary shares (227, 445 ADSs) held by CAYMAN, 2,682,508 ordinary shares (670,627 ADSs) held by SSFQP, 953,536 ordinary shares (238,384 ADSs) held by SSPE, 746,544 ordinary shares held (186,636 ADSs) by TECH and 4,303,636 ordinary shares (1,075,909 ADSs) held by TECH II. Austin W. Marxe ("Marxe"), David M. Greenhouse ("Greenhouse") and Adam C. Stettner ("Stettner") are members of: SSCayman, L.L.C., a Delaware limited liability company ("SSCAY"), the general partner of CAYMAN; MGP Advisers Limited Partnership, a Delaware limited partnership ("MGP"), the general partner of SSFQP; MG Advisers, L.L.C., a New York limited liability company ("MG"), the general partner of SSPE; and SST Advisers, L.L.C., a Delaware limited liability company ("SSTA"), the general partner of TECH and TECH II. Marxe, Greenhouse and Stettner are also controlling principals of AWM. The principal business address for AWM is c/o Special Situations Funds, 527 Madison Avenue, Suite 2600, New York, NY 10022.
|
(4)
|
Based on a Schedule 13G/A filed with the SEC on February 14, 2020. Includes 1,767,858 ADSs (representing 7,071,432 ordinary shares) beneficially owned by Divisar Partners QP, LP. Divisar Capital Management LLC is an investment advisor that is registered under the Investment Advisors Act of 1940. Divisar Capital Management LLC, which serves as the general partner and investment manager to each of Divisar Partners QP, L.P. and Divisar Partners, L.P., (collectively "the Funds"), may be deemed to be the beneficial owner of all shares held by the Funds. Mr. Steven Baughman, as Managing Member of Divisar Capital Management LLC, with the power to exercise investment and voting discretion, may be deemed to be the beneficial owner of all shares held by the Funds. Pursuant to Rule 13d-4 under the Securities Exchange Act of 1934, as amended, each of the Funds expressly disclaims beneficial ownership over any of the securities reported in this statement, and the filing of this statement shall not be construed as an admission that either of the Funds are the beneficial owner of any of the securities reported herein.
|
(5)
|
Based on a Schedule 13D filed with the SEC on March 19, 2020. North Sound Trading, LP, a Delaware limited partnership (“NS Trading”), North Sound Management, Inc., a Delaware corporation ("NS Manager") and Brian Miller, a United States citizen ("Mr. Miller" and, together with NS Trading and NS Manager, the "Reporting Persons"). Mr. Miller is the sole shareholder of NS Manager, the general partner of NS Trading. NS Trading was formed in order to engage in the acquiring, holding and disposing of investments in various companies. NS Manager was formed to act as the general partner of NS Trading, to make investments through NS Trading and to fulfill such other purposes as may be determined by NS Manager and Mr. Miller from time to time. Mr. Miller is the sole shareholder of NS Manager. Accordingly, pursuant to the regulations promulgated under Section 13(d) of the Securities Exchange Act of 1934, NS Manager and Mr. Miller each may be deemed to be a beneficial owner of the ADSs held by NS Trading. The principal business address for each of the Reporting Persons is c/o North Sound Management, Inc., 115 East Putnam Avenue, Greenwich, CT 06830.
|
(6)
|
Includes 1,399,244 ordinary shares subject to options that are exercisable and restricted shares that vest within 60 days of March 20, 2020.
|
(7)
|
Includes 307,700 ordinary shares subject to options that are exercisable and restricted shares that vest within 60 days of March 20, 2020.
|
(8)
|
Includes 10,000 ordinary shares subject to warrants that are exercisable within 60 days of March 20, 2020.
|
(9)
|
Includes 91,200 ordinary shares held by Mr. Debray as custodian for his sons. Includes 358,500 ordinary shares subject to options that are exercisable and restricted shares that vest within 60 days of March 20, 2020.
|
(10)
|
Includes 91,000ordinary shares subject to options that are exercisable and restricted shares that vest within 60 days of March 20, 2020.
|
(11)
|
Includes 85,000 ordinary shares subject to warrants that are exercisable within 60 days of March 20, 2020.
|
(12)
|
Includes 70,000 ordinary shares subject to warrants that are exercisable within 60 days of March 20, 2020.
|
(13)
|
Includes 107,000 ordinary shares subject to warrants that are exercisable within 60 days of March 20, 2020.
|
(14)
|
Includes 107,000 ordinary shares subject to warrants that are exercisable within 60 days of March 20, 2020.
|
(15)
|
Includes 107,000 ordinary shares subject to warrants that are exercisable within 60 days of March 20, 2020.
|
(16)
|
Includes 107,000 ordinary shares subject to warrants that are exercisable within 60 days of March 20, 2020.
|
(17)
|
Includes 170,832 ordinary shares subject to options that are exercisable and restricted shares that vest within 60 days of March 20, 2020.
|
(18)
|
Includes 2,920,276 ordinary shares subject to options and warrants that are exercisable and restricted shares that vest within 60 days of March 20, 2020.
|
B.
|
Related Party Transactions
|
C.
|
Interests of Experts and Counsel
|
A.
|
Consolidated Statements and Other Financial Information
|
B.
|
Significant Changes
|
A.
|
Listing Details
|
B.
|
Plan of Distribution
|
C.
|
Markets
|
D.
|
Selling Shareholders
|
E.
|
Dilution
|
F.
|
Expenses of the Issue
|
A.
|
Share Capital
|
B.
|
Memorandum and Articles of Association
|
C.
|
Material Contracts
|
D.
|
Exchange Controls
|
E.
|
Taxation
|
•
|
financial institutions or insurance companies;
|
•
|
real estate investment trusts, regulated investment companies or grantor trusts;
|
•
|
dealers or traders in securities or currencies;
|
•
|
tax-exempt entities;
|
•
|
certain former citizens or former long-term residents of the United States;
|
•
|
persons that received the ADSs as compensation for the performance of services;
|
•
|
persons that will hold the ADSs as part of a “hedging” or “conversion” transaction or as a position in a “straddle” for United States federal income tax purposes;
|
•
|
holders that will hold the ADSs through a partnership or other pass-through entity;
|
•
|
U.S. Holders, as defined below, whose “functional currency” is not the United States dollar; or
|
•
|
holders that own, directly, indirectly or through attribution, 10.0% or more of the voting power or value of our shares.
|
•
|
a citizen or resident of the United States;
|
•
|
a corporation or other entity treated as a corporation for United States federal income tax purposes, created or organized in or under the laws of the United States or any state thereof, including the District of Columbia;
|
•
|
an estate the income of which is subject to United States federal income taxation regardless of its source; or
|
•
|
a trust if such trust has validly elected to be treated as a United States person for United States federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more United States persons have the authority to control all of the substantial decisions of such trust.
|
•
|
such gain is effectively connected with your conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base); or
|
•
|
you are an individual and have been present in the United States for 183 days or more in the taxable year of such sale or exchange and certain other conditions are met.
|
•
|
at least 75% of its gross income is “passive income”; or
|
•
|
at least 50% of the average value of its gross assets is attributable to assets that produce “passive income” or are held for the production of passive income.
|
•
|
the U.S. Holder owns, directly, indirectly or constructively, less than 10% of the Company capital and dividend rights;
|
•
|
the U.S. Holder is entitled to the benefits of the U.S. Treaty (including under the “limitations on benefits” article of the U.S. Treaty);
|
•
|
the U.S. Holder does not hold the ADSs through a permanent establishment or a fixed base in France;
|
•
|
the U.S. Holder is not multi-resident;
|
•
|
the U.S. Holder does not hold the ADSs through a non-U.S. based pass-through entity; and
|
•
|
the U.S. Holder does not receive dividend, capital gains or other payments on the ADSs on an account located in a Non-cooperative State as defined in Article 238-0 A of the French General Tax Code and as mentioned in a list published by the French tax authorities as amended from time to time (on January 1st of each year).
|
F.
|
Dividends and Paying Agents
|
G.
|
Statement by Experts
|
H.
|
Documents on Display
|
I.
|
Subsidiary Information
|
A.
|
Debt Securities
|
B.
|
Warrants and Rights
|
C.
|
Other Securities
|
D.
|
American Depositary Shares
|
|
|
|
Persons depositing or withdrawing ordinary shares or ADS holders must pay:
|
|
For:
|
|
|
|
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
|
|
• Issue of ADSs, including issues resulting from a distribution of ordinary shares or rights or other property
• Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
|
|
|
|
$0.05 (or less) per ADS
|
|
• Any cash distribution to ADS holders
|
|
|
|
A fee equivalent to the fee that would be payable if securities distributed to you had been ordinary shares and the shares had been deposited for issue of ADSs
|
|
• Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders
|
|
|
|
$0.05 (or less) per ADSs per calendar year
|
|
• Depositary services
|
|
|
|
Registration or transfer fees
|
|
• Transfer and registration of ordinary shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares
|
|
|
|
Expenses of the depositary
|
|
• Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)
• converting foreign currency to U.S. dollars
|
|
|
|
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes
|
|
• As necessary
|
|
|
|
Any charges incurred by the depositary or its agents for servicing the deposited securities
|
|
• As necessary
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of the Company’s assets that could have a material effect on the financial statements.
|
|
|
2018
|
|
2019
|
||||
|
|
(euros in thousands)
|
||||||
Audit Fees
|
|
€
|
484
|
|
|
€
|
485
|
|
Audit-Related Fees
|
|
—
|
|
|
—
|
|
||
Tax Fees
|
|
—
|
|
|
—
|
|
||
All Other Fees
|
|
—
|
|
|
—
|
|
||
Total
|
|
€
|
484
|
|
|
€
|
485
|
|
•
|
Audit Committee—Our audit committee is responsible for organizing for selecting our statutory auditors and making a recommendation to our board of directors regarding their chose and terms of compensation. As required by French law, the actual appointment of the statutory auditors is made by our shareholders at a general meeting of the shareholders. According to the Audit Committee Charter, our audit committee has the authority to engage advisors and determine appropriate funding for payment of compensation to an independent auditor or other advisors necessary or appropriate to aid the committee in carrying out its responsibilities.
|
•
|
Executive Sessions/Communications with Independent Directors—French law does not require (and we do not currently provide) for our independent directors to meet regularly without management, nor does it require the independent directors to meet alone in executive session at least once a year. However, if our independent directors decide to do so, they may do so. In addition, French law does not require (and we do not currently provide) a method for interested parties to communication with our independent directors.
|
•
|
Equity Compensation Plans—Under French law, we must obtain shareholder approval at a general meeting of the shareholders in order to adopt an equity compensation plan. Generally, the shareholders then delegate to our board of directors the authority to decide on the specific terms of the granting of equity compensation, within the limits of the shareholders’ authorization.
|
•
|
Corporate Governance Guidelines—We have adopted a Board Internal Charter as required by French law that sets forth certain corporate governance practices of our board under French law. This Board Internal Charter does not cover all items required by the NYSE Listed Company Manual for U.S. companies listed on the NYSE.
|
Exhibit
Number
|
Description of Exhibit
|
1.1*
|
By-laws (statuts) of Sequans Communications S.A. effective December 17, 2019 (English translation)
|
Form of Deposit Agreement among Sequans Communications S.A., The Bank of New York Mellon and owners and holders of American Depositary Shares (incorporated by reference to Exhibit 4.2 to Registration No. 333-173001, filed with the SEC on May 2, 2018)
|
|
Form of American Depositary Receipt (included in Exhibit 2.2)
|
|
Stock Option Subscription Plans—2010-1, 2010-2, 2010-1-2, 2011-1, 2011-2 (incorporated by reference to Exhibit 10.1 to Registration No. 333-173001, filed with the SEC on March 22, 2011)
|
|
Stock Option Subscription Plan—2012-1 (incorporated by reference to Exhibit 4.1(b) to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed with the SEC on March 29, 2013)
|
|
Stock Option Subscription Plan—2013-1 (incorporated by reference to Exhibit 4.1(c) to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed with the SEC on March 31, 2014)
|
|
Stock Option Subscription Plan—2014-1 (incorporated by reference to Exhibit 4.1(d) to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2014, filed with the SEC on April 21, 2015)
|
|
Stock Option Subscription Plan—2015-1 (incorporated by reference to Exhibit 4.1(e) to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2015, filed with the SEC on April 29, 2016)
|
|
Stock Option Subscription Plan—2016-1 (incorporated by reference to Exhibit 99.1 to Registration No. 333-214444, filed with the SEC on November 4, 2016)
|
|
Stock Option Subscription Plan—2017-1 (incorporated by reference to Exhibit 99.1 to Registration No. 333-219430, filed with the SEC on July 24, 2017)
|
|
Stock Option Subscription Plan—2018 (incorporated by reference to Exhibit 99.1 to Registration No. 333-226458, filed with the SEC on July 31, 2018)
|
|
Stock Option Subscription Plan 2019 (incorporated by reference to Exhibit 99.1 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-233473, filed with the SEC on August 27, 2019)
|
|
BSA Subscription Plans—2009-1, 2009-2, 2010-1, 2010-2, 2010-1-2, 2010-2-2, 2011-1, 2011-2 (incorporated by reference to Exhibit 10.2 to Registration No. 333-173001, filed with the SEC on March 22, 2011)
|
|
BSA Subscription Plan—2012-2 (incorporated by reference to Exhibit 4.2(b) to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed with the SEC on March 29, 2013)
|
|
BSA 2013-1 (Warrants) Issuance Agreement (incorporated by reference to Exhibit 4.2(c) to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed with the SEC on March 31, 2014)
|
|
BSA Subscription Plan—2014-1 (incorporated by reference to Exhibit 4.2(d) to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2014, filed with the SEC on April 21, 2015)
|
|
BSA (Warrants) Issuance Agreement, dated January 11th, 2011 (incorporated by reference to Exhibit 4.4 to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on March 30, 2012)
|
|
BSA (Warrants) Issuance Agreement, dated March 8th, 2011 (incorporated by reference to Exhibit 4.5 to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on March 30, 2012)
|
Exhibit
Number
|
Description of Exhibit
|
BSA (Warrants) Issuance Agreement, dated June 26, 2012 (6,000 BSA) (incorporated by reference to Exhibit 4.6 to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed with the SEC on March 29, 2013)
|
|
BSA (Warrants) Issuance Agreement, dated June 26, 2012 (25,000 BSA) (incorporated by reference to Exhibit 4.7 to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed with the SEC on March 29, 2013)
|
|
BSA (Warrants) Issuance Agreement, dated June 25, 2013 (incorporated by reference to Exhibit 4.8 to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed with the SEC on March 31, 2014)
|
|
BSA (Warrants) Issuance Agreement, dated June 26, 2014 (incorporated by reference to Exhibit 4.12 to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2014, filed with the SEC on April 21, 2015)
|
|
BSA (Warrants) Issuance Agreement, dated June 29, 2015 (incorporated by reference to Exhibit 4.17 to Sequans Communications S.A.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2015, filed with the SEC on April 29, 2016)
|
|
BSA (Warrants) Subscription Plan 2016-1 (incorporated by reference to Exhibit 99.3 to Registration No. 333-214444, filed with the SEC on November 4, 2016)
|
|
BSA (Warrants) Subscription Plan 2016-2 (incorporated by reference to Exhibit 99.4 to Registration No. 333-214444, filed with the SEC on November 4, 2016)
|
|
BSA (Warrants) Issuance Agreement, dated June 28, 2016 (incorporated by reference to Exhibit 99.5 to Registration No. 333-214444, filed with the SEC on November 4, 2016)
|
|
BSA (Warrants) Subscription Plan 2017-1 (incorporated by reference to Exhibit 99.5 to Registration No. 333-219430)
|
|
BSA (Warrants) Subscription Plan 2017-2 (incorporated by reference to Exhibit 99.6 to Registration No. 333-219430, filed with the SEC on July 24, 2017)
|
|
BSA (Warrants) Issuance Agreement, dated June 30, 2017 (incorporated by reference to Exhibit 99.5 to Registration No. 333-219430, filed with the SEC on July 24, 2017)
|
|
BSA 2018-1 (Warrants) Issuance Agreement (incorporated by reference to Exhibit 99.4 to Registration No. 333-226458, filed with the SEC on July 31, 2018)
|
|
BSA 2018-2 (Warrants) Issuance Agreement (incorporated by reference to Exhibit 99.5 to Registration No. 333-226458, filed with the SEC on July 31, 2018)
|
|
BSA (Warrants) Issuance Agreement, dated June 29, 2018 (incorporated by reference to Exhibit 99.6 to Registration No. 333-226458, filed with the SEC on July 31, 2018)
|
|
BSA 2019-1 (Warrants) Issuance Agreement (incorporated by reference to Exhibit 99.4 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-233473, filed with the SEC on August 27, 2019)
|
|
BSA 2019-2 (Warrants) Issuance Agreement (incorporated by reference to Exhibit 99.5 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-233473, filed with the SEC on August 27, 2019)
|
|
BSA (Warrants) Issuance Agreement, dated July 1, 2019 (incorporated by reference to Exhibit 99.6 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-233473, filed with the SEC on August 27, 2019)
|
|
Restricted Share Award Plan 2016-1 (incorporated by reference to Exhibit 99.2 to Registration No. 333-214444, filed with the SEC on November 4, 2016)
|
|
Restricted Share Award Plan 2016-2 (incorporated by reference to Exhibit 99.1 to Registration No. 333-215911, filed with the SEC on February 2, 2017)
|
|
Restricted Share Award Plan 2017-1 (incorporated by reference to Exhibit 99.2 to Registration No. 333-219430, filed with the SEC on July 24, 2017)
|
|
Restricted Share Award Plan 2017-2 (incorporated by reference to Exhibit 99.3 to Registration No. 333-219430, filed with the SEC on July 24, 2017)
|
|
Restricted Share Award Plan 2017-3 (incorporated by reference to Exhibit 99.4 to Registration No. 333-219430, filed with the SEC on July 24, 2017)
|
|
Restricted Share Award Plan 2018-1 (incorporated by reference to Exhibit 99.2 to Registration No. 333-226458, filed with the SEC on July 31, 2018)
|
Exhibit
Number
|
Description of Exhibit
|
Restricted Share Award Plan 2018-2 (incorporated by reference to Exhibit 99.3 to Registration No. 333-226458, filed with the SEC on July 31, 2018)
|
|
Restricted Share Award Plan 2018-4 (incorporated by reference to Exhibit 99.7 to Registration No. 333-226458 as amended, filed with the SEC on April 23, 2019)
|
|
Restricted Share Award Plan 2019-1 (incorporated by reference to Exhibit 99.2 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-233473, filed with the SEC on August 27, 2019)
|
|
Restricted Share Award Plan 2019-2 (incorporated by reference to Exhibit 99.3 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-233473, filed with the SEC on August 27, 2019)
|
|
Loan Agreement by and between Bpifrance Financement and Sequans Communications S.A., dated September 14, 2015 (English translation) (incorporated by reference to Exhibit 4.15 to Sequans Communications S.A.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2015, filed with the SEC on April 29, 2016)
|
|
Interest-Free Innovation Loan Agreement by and between Bpifrance Financement and Sequans Communications S.A., dated August 17, 2015 (English translation) (incorporated by reference to Exhibit 4.16 to Sequans Communications S.A.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2015, filed with the SEC on April 29, 2016)
|
|
Convertible Note Agreement by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP, dated April 14, 2015 (incorporated by reference to Exhibit 4.1 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on April 15, 2015)
|
|
Convertible Promissory Note issued by Sequans Communications S.A. to Nokomis Capital Master Fund, LP on April 14, 2015 (incorporated by reference to Exhibit 4.2 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on April 15, 2015)
|
|
Convertible Note Agreement by and between Sequans Communications S.A. and the purchasers signatory thereto, dated April 27, 2016 (including the Form of Convertible Promissory Note attached thereto as Exhibit B) (incorporated by reference to Exhibit 4.18 to Sequans Communications S.A.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2015, filed with the SEC on April 29, 2016)
|
|
Amendment No 1 to the Convertible Note Agreement dated April 14, 2015 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated June 30, 2017 (incorporated by reference to Exhibit 99.2 to the Form 6-K filed with the SEC on August 1, 2017)
|
|
|
Amendment No 1 to the Convertible Note Agreement dated April 27, 2016 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated June 30, 2017 (incorporated by reference to Exhibit 99.3 to the Form 6-K filed with the SEC on August 1, 2017)
|
|
Amendment No 1 to the Convertible Note Agreement dated April 27, 2016 by and between Sequans Communications S.A. and Manatuck Hill Scout Fund, LP dated June 30, 2017 (incorporated by reference to Exhibit 99.4 to the Form 6-K filed with the SEC on August 1, 2017)
|
Amendment No 2 to the Convertible Note Agreement dated April 14, 2015 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated October 30, 2017 (incorporated by reference to Exhibit 99.2 to the Form 6-K filed with the SEC on October 31, 2017)
|
|
Amendment No 2 to the Convertible Note Agreement dated April 27, 2016 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated October 30, 2017 (incorporated by reference to Exhibit 99.3 to the Form 6-K filed with the SEC on October 31, 2017)
|
|
Amendment No 2 to the Convertible Note Agreement dated April 27, 2016 by and between Sequans Communications S.A. and Manatuck Hill Scout Fund, LP dated October 30, 2017 (incorporated by reference to Exhibit 99.4 to the Form 6-K filed with the SEC on October 31, 2017)
|
|
Amendment No 3 to the Convertible Note Agreement dated April 14, 2015 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated September 27, 2018 (incorporated by reference to Exhibit 4.1 to the Form 6-K filed with the SEC on October 30, 2018)
|
|
|
Amendment No 3 to the Convertible Note Agreement dated April 27, 2016 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated September 27, 2018 (incorporated by reference to Exhibit 4.2 to the Form 6-K filed with the SEC on October 30, 2018)
|
|
Amendment No 4 to the Convertible Note Agreement dated April 14, 2015 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated October 26, 2018 (incorporated by reference to Exhibit 4.5 to the Form 6-K filed with the SEC on October 30, 2018)
|
Exhibit
Number
|
Description of Exhibit
|
|
Amendment No 4 to the Convertible Note Agreement dated April 27, 2016 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated October 26, 2018 (incorporated by reference to Exhibit 4.6 to the Form 6-K filed with the SEC on October 30, 2018)
|
Warrant Agreement by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP, dated September 27, 2018 (incorporated by reference to Exhibit 4.4 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on October 30, 2018)
|
|
Convertible Note Agreement by and between Sequans Communications S.A. and the purchasers signatory thereto, dated September 27, 2018 (including the Form of Convertible Promissory Note attached thereto as Exhibit B) (incorporated by reference to Exhibit 4.3 to the Form 6-K filed with the SEC on October 30, 2018)
|
|
Amendment No 1 to the Convertible Note Agreement by and between Sequans Communications S.A. and the purchasers signatory thereto, dated October 26, 2018 (including the Form of Convertible Promissory Note attached thereto as Exhibit B) (incorporated by reference to Exhibit 4.7 to the Form 6-K filed with the SEC on October 30, 2018)
|
|
|
Board Observer Rights agreement dated October 30, 2017 by and among Sequans Communications S.A and Nokomis Capital Master Fund, LP (incorporated by reference to Exhibit 99.5 to the Form 6-K filed with the SEC on October 31, 2017)
|
|
Standstill Agreement by and among Sequans Communications S.A and Nokomis Capital Master Fund, LP (incorporated by reference to Exhibit 99.6 to the Form 6-K filed with the SEC on October 31, 2017)
|
Convertible Note Agreement by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP, dated May 7, 2019 (incorporated by reference to Exhibit 4.1 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on May 9, 2019)
|
|
Convertible Promissory Note issued by Sequans Communications S.A. to Nokomis Capital Master Fund, LP on May 7, 2019 (incorporated by reference to Exhibit 4.2 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on May 9, 2019)
|
|
Convertible Note Agreement by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP, dated August 16, 2019 (incorporated by reference to Exhibit 4.1 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on August 21, 2019)
|
|
Convertible Promissory Note issued by Sequans Communications S.A. to Nokomis Capital Master Fund, LP on August 16, 2019 (incorporated by reference to Exhibit 4.2 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on August 21, 2019)
|
|
Amendment No 5 to the Convertible Note Agreement dated April 27, 2016 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated February 10, 2020 (incorporated by reference to Exhibit 4.1 to the Form 6-K filed with the SEC on February 12, 2020)
|
|
Amendment No 5 to the Convertible Note Agreement dated April 14, 2015 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated March 20, 2020
|
|
Amendment No 6 to the Convertible Note Agreement dated April 27, 2016 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated March 20, 2020
|
|
Amendment No 2 to the Convertible Note Agreement dated September 27, 2018 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated March 20, 2020
|
|
Amendment No 1 to the Convertible Note Agreement dated May 7, 2019 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated March 20, 2020
|
|
Amendment No 1 to the Convertible Note Agreement dated August 16, 2019 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated March 20, 2020
|
|
Amendment No 1 to the Warrant Agreement dated September 27, 2018 by and between Sequans Communications S.A. and Nokomis Capital Master Fund, LP dated March 20, 2020
|
|
Harbert Bond Issue Agreement by and between Sequans Communications S.A. and Harbert European Specialty Lending Company II S.à r.l. (incorporated by reference to Exhibit 4.8 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on October 30, 2018)
|
|
Warrant Issue Agreement by and between Sequans Communications S.A. and Harbert European Growth Capital Fund II, SCSp (incorporated by reference to Exhibit 4.9 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on October 30, 2018)
|
|
Form of Letter Agreement by and between Sequans Communications S.A. and Board Nominee (incorporated by reference to Exhibit 10.7 to Registration No. 333-173001)
|
|
List of Subsidiaries
|
Exhibit
Number
|
Description of Exhibit
|
12.1*
|
Certificate of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002
|
12.2*
|
Certificate of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002
|
13.1*
|
Certificate of Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002
|
13.2*
|
Certificate of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002
|
15.1*
|
Consent of Ernst & Young Audit, independent registered public accounting firm
|
*
|
Filed herewith.
|
|
|
Sequans Communications S.A.
|
|
|
|
By:
|
/s/ Dr. Georges Karam
|
|
Name: Dr. Georges Karam
|
|
Title: Chief Executive Officer and Chairman
|
|
|
|
Year ended December 31,
|
||||||||||
|
Note
|
|
2017 (1) (2)
|
|
2018 (2)
|
|
2019
|
||||||
|
|
|
(in thousands, except share and per share amounts)
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||
Product revenue
|
|
|
$
|
37,353
|
|
|
$
|
28,938
|
|
|
$
|
21,947
|
|
Other revenue
|
|
|
10,910
|
|
|
11,312
|
|
|
8,917
|
|
|||
Total revenue
|
3
|
|
48,263
|
|
|
40,250
|
|
|
30,864
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||
Cost of product revenue
|
|
|
24,725
|
|
|
21,957
|
|
|
16,703
|
|
|||
Cost of other revenue
|
|
|
2,397
|
|
|
2,405
|
|
|
1,782
|
|
|||
Total cost of revenue
|
4.2
|
|
27,122
|
|
|
24,362
|
|
|
18,485
|
|
|||
Gross profit
|
|
|
21,141
|
|
|
15,888
|
|
|
12,379
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Research and development
|
4.4
|
|
25,202
|
|
|
27,909
|
|
|
23,799
|
|
|||
Sales and marketing
|
|
|
8,785
|
|
|
9,411
|
|
|
7,968
|
|
|||
General and administrative
|
|
|
6,679
|
|
|
10,085
|
|
|
8,570
|
|
|||
Total operating expenses
|
4.2
|
|
40,666
|
|
|
47,405
|
|
|
40,337
|
|
|||
Operating income (loss)
|
|
|
(19,525
|
)
|
|
(31,517
|
)
|
|
(27,958
|
)
|
|||
Financial income (expense):
|
|
|
|
|
|
|
|
||||||
Interest expense
|
4.1
|
|
(4,672
|
)
|
|
(5,447
|
)
|
|
(9,643
|
)
|
|||
Interest income
|
4.1
|
|
60
|
|
|
71
|
|
|
50
|
|
|||
Other financial expense
|
4.1
|
|
—
|
|
|
(400
|
)
|
|
—
|
|
|||
Convertible debt amendments
|
4.1
|
|
(322
|
)
|
|
(265
|
)
|
|
—
|
|
|||
Foreign exchange gain (loss), net
|
4.1
|
|
(1,401
|
)
|
|
366
|
|
|
71
|
|
|||
Profit (Loss) before income taxes
|
|
|
(25,860
|
)
|
|
(37,192
|
)
|
|
(37,480
|
)
|
|||
Income tax expense (benefit)
|
5
|
|
300
|
|
|
(968
|
)
|
|
(783
|
)
|
|||
Profit (Loss)
|
|
|
$
|
(26,160
|
)
|
|
$
|
(36,224
|
)
|
|
$
|
(36,697
|
)
|
Attributable to:
|
|
|
|
|
|
|
|
||||||
Shareholders of the parent
|
|
|
$
|
(26,160
|
)
|
|
$
|
(36,224
|
)
|
|
$
|
(36,697
|
)
|
Non-controlling interests
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Basic earnings (loss) per ordinary share
|
6
|
|
$
|
(0.34
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.39
|
)
|
Diluted earnings (loss) per ordinary share
|
6
|
|
$
|
(0.34
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.39
|
)
|
Weighted average number of shares used for computing:
|
|
|
|
|
|
|
|
||||||
Basic per ordinary share
|
|
|
77,668,404
|
|
|
93,767,005
|
|
|
95,008,518
|
|
|||
Diluted per ordinary share
|
|
|
77,668,404
|
|
|
93,767,005
|
|
|
95,008,518
|
|
|||
Basic earnings (loss) per ADS*
|
|
|
$
|
(1.35
|
)
|
|
$
|
(1.55
|
)
|
|
$
|
(1.54
|
)
|
Diluted earnings (loss) per ADS*
|
|
|
$
|
(1.35
|
)
|
|
$
|
(1.55
|
)
|
|
$
|
(1.54
|
)
|
Weighted average number of ADS used for computing:
|
|
|
|
|
|
|
|
||||||
Basic per ADS*
|
|
|
19,417,101
|
|
|
23,441,751
|
|
|
23,752,130
|
|
|||
Diluted per ADS*
|
|
|
19,417,101
|
|
|
23,441,751
|
|
|
23,752,130
|
|
|
Year ended December 31,
|
||||||||||
|
2017(1) (2)
|
|
2018 (2)
|
|
2019
|
||||||
|
(in thousands)
|
||||||||||
Profit (Loss) for the year
|
$
|
(26,160
|
)
|
|
$
|
(36,224
|
)
|
|
$
|
(36,697
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent years :
|
|
|
|
|
|
||||||
Net gain (loss) on cash flow hedge
|
195
|
|
|
(69
|
)
|
|
57
|
|
|||
Exchange differences on translation of foreign operations
|
212
|
|
|
(53
|
)
|
|
49
|
|
|||
Net other comprehensive income (loss) to be reclassified to profit or loss in subsequent years
|
407
|
|
|
(122
|
)
|
|
106
|
|
|||
Other comprehensive income (loss) not to be reclassified to profit or loss in subsequent years :
|
|
|
|
|
|
||||||
Re-measurement gains (losses) on defined benefit plans
|
(46
|
)
|
|
(47
|
)
|
|
(108
|
)
|
|||
Net other comprehensive income (loss) not to be reclassified to profit or loss in subsequent years
|
(46
|
)
|
|
(47
|
)
|
|
(108
|
)
|
|||
Total other comprehensive income (loss)
|
361
|
|
|
(169
|
)
|
|
(2
|
)
|
|||
Total comprehensive income (loss)
|
$
|
(25,799
|
)
|
|
$
|
(36,393
|
)
|
|
$
|
(36,699
|
)
|
Attributable to:
|
|
|
|
|
|
||||||
Shareholders of the parent
|
$
|
(25,799
|
)
|
|
$
|
(36,393
|
)
|
|
$
|
(36,699
|
)
|
Non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
|
At December 31,
|
|||||||||||
|
Note
|
2017(1) (2)
|
|
2018 (2)
|
|
2019
|
|||||||
|
(in thousands)
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|||||||
Non-current assets:
|
|
|
|
|
|
|
|||||||
Property, plant and equipment
|
7
|
|
$
|
6,992
|
|
|
$
|
6,271
|
|
|
$
|
8,858
|
|
Intangible assets
|
8
|
|
9,562
|
|
|
12,409
|
|
|
16,696
|
|
|||
Deposits and other receivables
|
19
|
|
402
|
|
|
394
|
|
|
401
|
|
|||
Other non-current financial assets
|
19
|
|
353
|
|
|
337
|
|
|
335
|
|
|||
Total non-current assets
|
|
17,309
|
|
|
19,411
|
|
|
26,290
|
|
||||
Current assets:
|
|
|
|
|
|
|
|||||||
Inventories
|
9
|
|
7,376
|
|
|
8,243
|
|
|
6,664
|
|
|||
Trade receivables
|
10
|
|
17,814
|
|
|
13,177
|
|
|
8,390
|
|
|||
Contract assets
|
10
|
|
3,112
|
|
|
2,707
|
|
|
1,587
|
|
|||
Prepaid expenses and other receivables
|
|
4,214
|
|
|
3,237
|
|
|
2,556
|
|
||||
Recoverable value added tax
|
|
688
|
|
|
565
|
|
|
598
|
|
||||
Research tax credit receivable
|
4.4
|
|
3,248
|
|
|
3,148
|
|
|
3,132
|
|
|||
Deposit
|
|
347
|
|
|
—
|
|
|
—
|
|
||||
Cash and cash equivalents
|
11
|
|
2,948
|
|
|
12,086
|
|
|
14,098
|
|
|||
Total current assets
|
|
39,747
|
|
|
43,163
|
|
|
37,025
|
|
||||
Total assets
|
|
$
|
57,056
|
|
|
$
|
62,574
|
|
|
$
|
63,315
|
|
|
EQUITY (DEFICIT) AND LIABILITIES
|
|
|
|
|
|
|
|||||||
Equity (deficit):
|
|
|
|
|
|
|
|||||||
Issued capital, euro 0.02 nominal value, 95,587,146 ordinary shares issued and outstanding at December 31, 2019 (94,732,539 and 80,024,707 at December 31, 2018 and 2017, respectively)(3)
|
12
|
|
$
|
2,031
|
|
|
$
|
2,384
|
|
|
$
|
2,403
|
|
Share premium
|
12
|
|
204,952
|
|
|
225,470
|
|
|
233,720
|
|
|||
Other capital reserves
|
13
|
|
33,313
|
|
|
39,768
|
|
|
43,656
|
|
|||
Accumulated deficit
|
|
(235,712
|
)
|
|
(272,036
|
)
|
|
(308,733
|
)
|
||||
Other components of equity
|
|
(436
|
)
|
|
(605
|
)
|
|
(607
|
)
|
||||
Total equity (deficit)
|
|
4,148
|
|
|
(5,019
|
)
|
|
(29,561
|
)
|
||||
Non-current liabilities:
|
|
|
|
|
|
|
|||||||
Government grant advances and loans
|
16
|
|
5,030
|
|
|
5,674
|
|
|
6,150
|
|
|||
Venture debt
|
14
|
|
—
|
|
|
11,811
|
|
|
7,071
|
|
|||
Convertible debt
|
14
|
|
17,063
|
|
|
19,723
|
|
|
23,342
|
|
|||
Lease liabilities
|
15
|
|
—
|
|
|
—
|
|
|
3,204
|
|
|||
Provisions
|
17
|
|
1,532
|
|
|
1,689
|
|
|
1,905
|
|
|||
Trade payables
|
19
|
|
—
|
|
|
—
|
|
|
1,139
|
|
|||
Deferred tax liabilities
|
19
|
|
52
|
|
|
691
|
|
|
429
|
|
|||
Contract liabilities
|
19
|
|
1,293
|
|
|
808
|
|
|
11,572
|
|
|||
Total non-current liabilities
|
|
24,970
|
|
|
40,396
|
|
|
54,812
|
|
||||
Current liabilities:
|
|
|
|
|
|
|
|||||||
Trade payables
|
18
|
|
13,023
|
|
|
9,412
|
|
|
8,834
|
|
|||
Interest-bearing financing of receivables
|
14
|
|
7,413
|
|
|
10,295
|
|
|
4,068
|
|
|||
Venture debt
|
14
|
|
—
|
|
|
823
|
|
|
5,109
|
|
|||
Convertible debt
|
14
|
|
—
|
|
|
—
|
|
|
7,329
|
|
|||
Lease liabilities
|
15
|
|
—
|
|
|
—
|
|
|
900
|
|
|||
Government grant advances and loans
|
16
|
|
1,592
|
|
|
688
|
|
|
1,472
|
|
|||
Other current liabilities
|
18
|
|
5,138
|
|
|
4,654
|
|
|
4,540
|
|
|||
Contract liabilities
|
18
|
|
740
|
|
|
973
|
|
|
5,812
|
|
|||
Provisions
|
17
|
|
32
|
|
|
352
|
|
|
—
|
|
|||
Total current liabilities
|
|
27,938
|
|
|
27,197
|
|
|
38,064
|
|
||||
Total equity and liabilities
|
|
$
|
57,056
|
|
|
$
|
62,574
|
|
|
$
|
63,315
|
|
|
Attributable to the shareholders of the parent
|
|||||||||||||||||||||||||||||
|
Ordinary shares (1)
|
|
Share
premium
|
|
Other
capital
reserves
|
|
Accumulated
deficit
|
|
Cumulative
translation
adjustments
|
|
Accumulated other comprehensive income (loss)
|
|
Total
equity
(deficit)
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||
|
(Note 12)
|
|
(Note 12)
|
|
(Note 12)
|
|
(Note 13)
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
(in thousands, except share and per share amounts)
|
|||||||||||||||||||||||||||||
At January 1, 2017
|
75,030,078
|
|
|
$
|
1,923
|
|
|
$
|
189,029
|
|
|
$
|
28,257
|
|
|
$
|
(209,552
|
)
|
|
$
|
(527
|
)
|
|
$
|
(270
|
)
|
|
$
|
8,860
|
|
Loss for the year
|
|
|
|
|
|
|
|
|
(26,160
|
)
|
|
|
|
|
|
(26,160
|
)
|
|||||||||||||
Re-measurement gains (losses) on defined benefit plans
|
|
|
|
|
|
|
|
|
|
|
|
|
(46
|
)
|
|
(46
|
)
|
|||||||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
212
|
|
|
|
|
212
|
|
|||||||||||||
Net gain on cash flow hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
195
|
|
|
195
|
|
|||||||||||||
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
(26,160
|
)
|
|
212
|
|
|
149
|
|
|
(25,799
|
)
|
|||||||||||
Issue of shares in connection with the exercise of options and warrants, and vesting of restricted shares awards
|
618,871
|
|
|
10
|
|
|
956
|
|
|
|
|
|
|
|
|
|
|
966
|
|
|||||||||||
Issue of shares in connection with the public offering of June 2017 (Note 12)
|
4,312,500
|
|
|
96
|
|
|
16,291
|
|
|
|
|
|
|
|
|
|
|
16,387
|
|
|||||||||||
Transaction costs
|
|
|
|
|
(1,489
|
)
|
|
|
|
|
|
|
|
|
|
(1,489
|
)
|
|||||||||||||
Conversion of convertible debt (Note 12)
|
63,258
|
|
|
2
|
|
|
165
|
|
|
|
|
|
|
|
|
|
|
167
|
|
|||||||||||
Convertible debt amendments (Note 14.1)
|
|
|
|
|
|
|
3,418
|
|
|
|
|
|
|
|
|
3,418
|
|
|||||||||||||
Share-based payments
|
|
|
|
|
|
|
1,638
|
|
|
|
|
|
|
|
|
1,638
|
|
|||||||||||||
At December 31, 2017
|
80,024,707
|
|
|
$
|
2,031
|
|
|
$
|
204,952
|
|
|
$
|
33,313
|
|
|
$
|
(235,712
|
)
|
|
$
|
(315
|
)
|
|
$
|
(121
|
)
|
|
$
|
4,148
|
|
Effect of adoption of new accounting standard - IFRS 15 (2)
|
|
|
|
|
|
|
|
|
(100
|
)
|
|
|
|
|
|
(100
|
)
|
|||||||||||||
At January 1, 2018
|
80,024,707
|
|
|
$
|
2,031
|
|
|
$
|
204,952
|
|
|
$
|
33,313
|
|
|
$
|
(235,812
|
)
|
|
$
|
(315
|
)
|
|
$
|
(121
|
)
|
|
$
|
4,048
|
|
Loss for the year
|
|
|
|
|
|
|
|
|
(36,224
|
)
|
|
|
|
|
|
(36,224
|
)
|
|||||||||||||
Re-measurement gains (losses) on defined benefit plans
|
|
|
|
|
|
|
|
|
|
|
|
|
(47
|
)
|
|
(47
|
)
|
|||||||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
(53
|
)
|
|
|
|
(53
|
)
|
|||||||||||||
Net loss on cash flow hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
(69
|
)
|
|
(69
|
)
|
|||||||||||||
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
(36,224
|
)
|
|
(53
|
)
|
|
(116
|
)
|
|
(36,393
|
)
|
|||||||||||
Issue of shares in connection with the exercise of options and warrants, and vesting of restricted shares awards
|
332,832
|
|
|
—
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|||||||||||
Issue of shares in connection with the public offering of January 2018 (Note 12)
|
14,375,000
|
|
|
353
|
|
|
22,648
|
|
|
|
|
|
|
|
|
|
|
23,001
|
|
|||||||||||
Transaction costs
|
|
|
|
|
(2,160
|
)
|
|
|
|
|
|
|
|
|
|
(2,160
|
)
|
|||||||||||||
Issuance of convertible debt (Note 14.1)
|
|
|
|
|
|
|
1,346
|
|
|
|
|
|
|
|
|
1,346
|
|
|||||||||||||
Convertible debt amendments (Note 14.1)
|
|
|
|
|
|
|
4,296
|
|
|
|
|
|
|
|
|
4,296
|
|
|||||||||||||
Warrants attached with the venture debt (Note 14.2)
|
|
|
|
|
|
|
819
|
|
|
|
|
|
|
|
|
819
|
|
|||||||||||||
Deferred tax effect of debt instruments with equity components (Note 17)
|
|
|
|
|
|
|
(1,818
|
)
|
|
|
|
|
|
|
|
(1,818
|
)
|
Share-based payments
|
|
|
|
|
|
|
1,812
|
|
|
|
|
|
|
|
|
1,812
|
|
|||||||||||||
At December 31, 2018
|
94,732,539
|
|
|
$
|
2,384
|
|
|
$
|
225,470
|
|
|
$
|
39,768
|
|
|
$
|
(272,036
|
)
|
|
$
|
(368
|
)
|
|
$
|
(237
|
)
|
|
$
|
(5,019
|
)
|
Loss for the year
|
|
|
|
|
|
|
|
|
(36,697
|
)
|
|
|
|
|
|
(36,697
|
)
|
|||||||||||||
Re-measurement gains (losses) on defined benefit plans
|
|
|
|
|
|
|
|
|
|
|
|
|
(108
|
)
|
|
(108
|
)
|
|||||||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
49
|
|
|
|
|
49
|
|
|||||||||||||
Net gain on cash flow hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
57
|
|
|
57
|
|
|||||||||||||
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
(36,697
|
)
|
|
49
|
|
|
(51
|
)
|
|
(36,699
|
)
|
|||||||||||
Issue of shares in connection with the exercise of options and warrants, and vesting of restricted shares awards
|
854,607
|
|
|
19
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||
Warrants issued to a strategic partner in February 2019 (Note 12)
|
|
|
|
|
|
8,360
|
|
|
|
|
|
|
|
|
|
|
8,360
|
|
||||||||||||
Transaction costs
|
|
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
(91
|
)
|
|||||||||||||
Issuance of convertible debt (Note 14)
|
|
|
|
|
|
|
2,864
|
|
|
|
|
|
|
|
|
2,864
|
|
|||||||||||||
Deferred tax effect of debt instruments with equity components (Note 17)
|
|
|
|
|
|
|
(773
|
)
|
|
|
|
|
|
|
|
(773
|
)
|
|||||||||||||
Share-based payments
|
|
|
|
|
|
|
1,797
|
|
|
|
|
|
|
|
|
1,797
|
|
|||||||||||||
At December 31, 2019
|
95,587,146
|
|
|
$
|
2,403
|
|
|
$
|
233,720
|
|
|
$
|
43,656
|
|
|
$
|
(308,733
|
)
|
|
$
|
(319
|
)
|
|
$
|
(288
|
)
|
|
$
|
(29,561
|
)
|
|
|
|
Year ended December 31,
|
|||||||||
|
Note
|
|
2017(1) (2)
|
2018 (2)
|
2019
|
|||||||
|
|
|
(in thousands)
|
|||||||||
Operating activities:
|
|
|
|
|
|
|||||||
Profit (Loss) before income taxes
|
|
|
$
|
(25,860
|
)
|
$
|
(37,192
|
)
|
$
|
(37,480
|
)
|
|
Non-cash adjustment to reconcile profit (loss) before tax to net cash used in operating activities:
|
|
|
|
|
|
|||||||
Amortization and impairment of property, plant and equipment
|
7
|
|
|
2,760
|
|
3,060
|
|
4,126
|
|
|||
Amortization and impairment of intangible assets
|
8
|
|
|
2,815
|
|
3,103
|
|
4,279
|
|
|||
Share-based payment expense
|
4.3
|
|
|
1,638
|
|
1,812
|
|
1,797
|
|
|||
Increase (Decrease) in provisions
|
|
|
165
|
|
431
|
|
(244
|
)
|
||||
Interest expense, net
|
|
|
4,612
|
|
5,376
|
|
9,593
|
|
||||
Convertible debt amendments
|
14.1
|
|
|
322
|
|
265
|
|
—
|
|
|||
Other financial expenses
|
|
|
—
|
|
400
|
|
—
|
|
||||
Foreign exchange loss (gain)
|
|
|
561
|
|
(497
|
)
|
(420
|
)
|
||||
Loss on disposal of property, plant and equipment
|
|
|
—
|
|
13
|
|
(22
|
)
|
||||
Bad debt expense
|
10
|
|
|
183
|
|
1,782
|
|
515
|
|
|||
Working capital adjustments:
|
|
|
|
|
|
|||||||
Decrease (Increase) in trade receivables and other receivables
|
|
|
(7,267
|
)
|
4,003
|
|
6,546
|
|
||||
Decrease (Increase) in inventories
|
|
|
1,317
|
|
(867
|
)
|
1,579
|
|
||||
Decrease (Increase) in research tax credit receivable
|
|
|
(1,087
|
)
|
559
|
|
622
|
|
||||
Decrease in trade payables and other liabilities
|
|
|
(5,939
|
)
|
(3,899
|
)
|
(705
|
)
|
||||
Increase (Decrease) in contract liabilities
|
|
|
(242
|
)
|
(252
|
)
|
14,984
|
|
||||
Increase (Decrease) in government grant advances
|
|
|
(2,271
|
)
|
(857
|
)
|
288
|
|
||||
Income tax paid
|
|
|
(333
|
)
|
(78
|
)
|
(365
|
)
|
||||
Net cash flow from (used in) operating activities
|
|
|
$
|
(28,626
|
)
|
$
|
(22,838
|
)
|
$
|
5,093
|
|
|
Investing activities:
|
|
|
|
|
|
|||||||
Purchase of intangible assets and property, plant and equipment
|
7-8
|
|
|
$
|
(4,232
|
)
|
$
|
(5,373
|
)
|
$
|
(3,520
|
)
|
Capitalized development expenditures
|
|
|
(2,190
|
)
|
(3,835
|
)
|
(5,626
|
)
|
||||
Sale (Purchase) of financial assets
|
|
|
(113
|
)
|
24
|
|
(5
|
)
|
||||
Decrease (Increase) of short-term deposit
|
|
|
(2
|
)
|
347
|
|
—
|
|
||||
Interest received
|
|
|
60
|
|
71
|
|
50
|
|
||||
Net cash flow used in investments activities
|
|
|
$
|
(6,477
|
)
|
$
|
(8,766
|
)
|
$
|
(9,101
|
)
|
|
Financing activities:
|
|
|
|
|
|
|||||||
Public equity offering proceeds, net of transaction costs paid
|
|
|
$
|
14,898
|
|
$
|
20,841
|
|
$
|
—
|
|
|
Proceeds from issue of warrants to a strategic partner, net of transaction costs paid
|
|
|
—
|
|
—
|
|
8,269
|
|
||||
Proceeds from issue of warrants and exercise of stock options/warrants granted under share-based payment plans, net of transaction costs
|
|
|
966
|
|
30
|
|
—
|
|
||||
Proceeds from (repayment of) interest-bearing receivables financing
|
14.3
|
|
|
(299
|
)
|
2,882
|
|
(6,227
|
)
|
|||
Proceeds from interest-bearing research project financing
|
15.2
|
|
|
2,716
|
|
1,574
|
|
1,126
|
|
|||
Proceeds from issuance of venture debt, net of transaction cost
|
14.2
|
|
|
—
|
|
13,595
|
|
—
|
|
|||
Proceeds from convertible debt, net of transaction cost
|
14.1
|
|
|
—
|
|
4,388
|
|
7,967
|
|
|||
Repayment of venture debt
|
14.2
|
|
|
—
|
|
—
|
|
(801
|
)
|
|||
Repayment of government loans
|
15.3
|
|
|
(116
|
)
|
(589
|
)
|
(447
|
)
|
|||
Repayment of convertible debt and accrued interest
|
14.1
|
|
|
—
|
|
(1,186
|
)
|
—
|
|
|||
Repayment of interest-bearing research project financing
|
15.2
|
|
|
—
|
|
—
|
|
(168
|
)
|
|||
Payment of lease liabilities
|
|
|
—
|
|
—
|
|
(1,299
|
)
|
||||
Interest paid
|
|
|
(327
|
)
|
(791
|
)
|
(2,401
|
)
|
||||
Net cash flows from financing activities
|
|
|
$
|
17,838
|
|
$
|
40,744
|
|
$
|
6,019
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(17,265
|
)
|
9,140
|
|
2,011
|
|
||||
Net foreign exchange difference
|
|
|
11
|
|
(2
|
)
|
1
|
|
||||
Cash and cash equivalents at January 1
|
|
|
20,202
|
|
2,948
|
|
12,086
|
|
||||
Cash and cash equivalents at period end
|
11
|
|
|
$
|
2,948
|
|
$
|
12,086
|
|
$
|
14,098
|
|
Name
|
|
Country of
incorporation
|
|
Year of
incorporation
|
|
%
equity
interest
|
Sequans Communications Ltd.
|
|
United Kingdom
|
|
2005
|
|
100
|
Sequans Communications Inc.
|
|
United States
|
|
2008
|
|
100
|
Sequans Communications Ltd. Pte.
|
|
Singapore
|
|
2008
|
|
100
|
Sequans Communications Israel (2009) Ltd.
|
|
Israel
|
|
2010
|
|
100
|
•
|
IFRS 16 - Leases
|
|
|
(in thousands)
|
||
Operating lease commitments as at December 31, 2018
|
|
$
|
2,058
|
|
Weighted-average discount rate as at January 1, 2019
|
|
14.2
|
%
|
|
Discounted operating lease commitments as at January 1, 2019
|
|
1,951
|
|
|
Add:
|
|
|
||
Lease payments relating to renewal periods not included in operating lease commitments as at December 31, 2018
|
|
2,352
|
|
|
Non lease components
|
|
318
|
|
|
Other
|
|
2
|
|
|
Lease liabilities as at January 1, 2019
|
|
4,623
|
|
•
|
Amendments to IAS 28: Investments in associates and joint ventures which was effective as of January 1, 2019 had no impact on the Consolidated Financial Statements.
|
•
|
Annual Improvements to IFRS (2015-2017), including amendments to IFRS 3: Business Combinations, amendments to IAS 12 : Income Taxes, and amendments to IAS 23 : Borrowing Costs, are applicable from annual periods commencing on or after January 1, 2019. Adoption of these improvements had no impact on the Consolidated Financial Statements.
|
|
|
USD/EUR
|
|
USD/GBP
|
|
USD/SGD
|
|
USD/NIS
|
||||
December 31, 2017
|
|
|
|
|
|
|
|
|
||||
Average rate
|
|
1.1293
|
|
|
1.2885
|
|
|
0.7244
|
|
|
0.2780
|
|
Closing rate
|
|
1.1993
|
|
|
1.3518
|
|
|
0.7484
|
|
|
0.2880
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
||||
Average rate
|
|
1.1815
|
|
|
1.3356
|
|
|
0.7416
|
|
|
0.2782
|
|
Closing rate
|
|
1.1450
|
|
|
1.2800
|
|
|
0.7344
|
|
|
0.2665
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
||||
Average rate
|
|
1.1196
|
|
|
1.2758
|
|
|
0.7331
|
|
|
0.2806
|
|
Closing rate
|
|
1.1234
|
|
|
1.3204
|
|
|
0.7434
|
|
|
0.2892
|
|
•
|
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
|
•
|
its intention to complete the asset and use or sell it;
|
•
|
its ability to use or sell the asset;
|
•
|
how the asset will generate future economic benefits;
|
•
|
the availability of adequate resources to complete the development and to use or sell the asset; and
|
•
|
the ability to measure reliably the expenditure during development.
|
•
|
interest expense related to venture debt, accounts receivable financing, the debt component of convertible debt and government loans, lease contracts, upfront payments, financing components of customer contracts and a supplier payable with extended payment terms;
|
•
|
other expenses paid to financial institutions for financing operations;
|
•
|
foreign exchange gains and losses
|
•
|
impact of convertible debt amendments; and
|
•
|
impact of convertible debt reimbursement.
|
•
|
where the value added tax incurred on a purchase of assets or services is not recoverable from the tax authorities, in which case the value added tax is recognized as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
|
•
|
receivables and payables that are stated with the amount of value added tax included.
|
Machinery and equipment
|
|
3 to 5 years
|
Building and leasehold improvements
|
|
Lesser of 6 years or the life of the lease
|
Computer equipment
|
|
3 years
|
Furniture and office equipment
|
|
5 years
|
•
|
On the date of issue, the fair value of the embedded derivative is estimated based on a Black-Scholes valuation model. The debt component equals the present value of future contractual cash flows for a similar instrument with the same conditions (maturity, cash flows) excluding any option or any obligation for conversion or redemption in shares.
|
•
|
Subsequently, the debt component is accounted for based on amortized cost, using the effective interest rate calculated at the date of issue and the embedded derivative is accounted as a financial liability, with changes in fair value recognized in the statement of operations until the date when the conversion rate is fixed. At this date, the fair value of the derivative - if not exercised - is reclassified in equity.
|
•
|
an asset representing a right-of-use of the asset leased during the lease term of the contract; and
|
•
|
a liability related to the payment obligation.
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017(1)
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Asia :
|
|
|
|
|
|
|
||||||
Taiwan
|
|
$
|
8,126
|
|
|
$
|
16,704
|
|
|
$
|
11,387
|
|
Korea
|
|
373
|
|
|
261
|
|
|
6,813
|
|
|||
China (including Hong-Kong)
|
|
21,819
|
|
|
11,638
|
|
|
2,139
|
|
|||
Rest of Asia
|
|
2,291
|
|
|
1,911
|
|
|
106
|
|
|||
Total Asia
|
|
32,609
|
|
|
30,514
|
|
|
20,445
|
|
|||
United States of America
|
|
11,282
|
|
|
7,042
|
|
|
9,221
|
|
|||
Rest of world
|
|
4,372
|
|
|
2,694
|
|
|
1,198
|
|
|||
Total revenue
|
|
$
|
48,263
|
|
|
$
|
40,250
|
|
|
$
|
30,864
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017(1)
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Broadband and Critical IoT
|
|
$
|
27,900
|
|
|
$
|
11,657
|
|
|
$
|
10,431
|
|
Massive IoT
|
|
11,568
|
|
|
19,679
|
|
|
12,816
|
|
|||
Vertical
|
|
8,795
|
|
|
8,914
|
|
|
7,617
|
|
|||
Total revenue
|
|
$
|
48,263
|
|
|
$
|
40,250
|
|
|
$
|
30,864
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017(1)
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Product
|
|
$
|
37,353
|
|
|
$
|
28,938
|
|
|
$
|
21,947
|
|
License
|
|
2,838
|
|
|
2,707
|
|
|
2,578
|
|
|||
Development and other services
|
|
8,072
|
|
|
8,605
|
|
|
6,339
|
|
|||
Total revenue
|
|
$
|
48,263
|
|
|
$
|
40,250
|
|
|
$
|
30,864
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2018
|
|
2019
|
||||||
|
(in thousands)
|
||||||||||
Income from short-term investments and term deposits and other finance revenue
|
$
|
60
|
|
|
$
|
71
|
|
|
$
|
50
|
|
Foreign exchange gain
|
2,027
|
|
|
1,774
|
|
|
2,116
|
|
|||
Total financial income
|
$
|
2,087
|
|
|
$
|
1,845
|
|
|
$
|
2,166
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2018
|
|
2019
|
||||||
|
(in thousands)
|
||||||||||
Interest on loans
|
$
|
4,153
|
|
|
$
|
4,971
|
|
|
$
|
7,864
|
|
Interest on lease contracts (see Note 15)
|
—
|
|
|
—
|
|
|
622
|
|
|||
Interest on financing component of long term development services agreement (see note 18)
|
—
|
|
|
—
|
|
|
619
|
|
|||
Interest on supplier payable with extended payment terms
|
213
|
|
|
—
|
|
|
—
|
|
|||
Other bank fees and financial charges
|
306
|
|
|
476
|
|
|
538
|
|
|||
Other financial expenses
|
—
|
|
|
400
|
|
|
—
|
|
|||
Convertible debt amendments
|
322
|
|
|
265
|
|
|
—
|
|
|||
Foreign exchange loss
|
3,428
|
|
|
1,408
|
|
|
2,045
|
|
|||
Total financial expenses
|
$
|
8,422
|
|
|
$
|
7,520
|
|
|
$
|
11,688
|
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
Note
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
|
|
(in thousands)
|
||||||||||
Included in cost of revenue:
|
|
|
|
|
|
|
|
|
||||||
Cost of components
|
|
|
|
$
|
22,137
|
|
|
$
|
19,058
|
|
|
$
|
14,039
|
|
Depreciation and impairment
|
|
7
|
|
1,037
|
|
|
1,088
|
|
|
959
|
|
|||
Amortization of intangible assets
|
|
8
|
|
157
|
|
|
158
|
|
|
159
|
|
|||
Wages and benefits
|
|
|
|
2,233
|
|
|
2,368
|
|
|
1,780
|
|
|||
Share-based payment expense
|
|
13
|
|
7
|
|
|
8
|
|
|
10
|
|
|||
Assembly services, royalties and other
|
|
|
|
1,551
|
|
|
1,682
|
|
|
1,538
|
|
|||
|
|
|
|
$
|
27,122
|
|
|
$
|
24,362
|
|
|
$
|
18,485
|
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
Note
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
|
|
(in thousands)
|
||||||||||
Included in operating expenses (between gross profit and operating result):
|
|
|
|
|
|
|
|
|
||||||
Depreciation and impairment
|
|
7
|
|
$
|
1,723
|
|
|
$
|
1,972
|
|
|
$
|
3,167
|
|
Amortization of intangible assets
|
|
8
|
|
2,658
|
|
|
2,945
|
|
|
4,120
|
|
|||
Wages and benefits
|
|
|
|
26,044
|
|
|
27,616
|
|
|
25,052
|
|
|||
Share-based payment expense
|
|
13
|
|
1,631
|
|
|
1,804
|
|
|
1,787
|
|
|||
Foreign exchange gains and losses related to hedges of euro
|
|
|
|
99
|
|
|
(27
|
)
|
|
71
|
|
|||
Other, net
|
|
|
|
8,511
|
|
|
13,095
|
|
|
6,140
|
|
|||
|
|
|
|
$
|
40,666
|
|
|
$
|
47,405
|
|
|
$
|
40,337
|
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
Note
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
|
|
(in thousands)
|
||||||||||
Wages and salaries
|
|
|
|
$
|
21,535
|
|
|
$
|
22,501
|
|
|
$
|
19,953
|
|
Social security costs and other payroll taxes
|
|
|
|
6,584
|
|
|
7,286
|
|
|
6,748
|
|
|||
Other benefits
|
|
|
|
58
|
|
|
125
|
|
|
161
|
|
|||
Pension costs
|
|
|
|
100
|
|
|
72
|
|
|
25
|
|
|||
Share-based payment expenses
|
|
13
|
|
1,638
|
|
|
1,812
|
|
|
1,797
|
|
|||
Total employee benefits expense
|
|
|
|
$
|
29,915
|
|
|
$
|
31,796
|
|
|
$
|
28,684
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Research and development costs
|
|
$
|
33,318
|
|
|
$
|
34,969
|
|
|
$
|
31,113
|
|
Research tax credit
|
|
(3,345
|
)
|
|
(3,027
|
)
|
|
(3,123
|
)
|
|||
Government and other grants
|
|
(3,072
|
)
|
|
(1,104
|
)
|
|
(247
|
)
|
|||
Development costs capitalized (*)
|
|
(1,931
|
)
|
|
(3,376
|
)
|
|
(5,020
|
)
|
|||
Amortization of capitalized development costs
|
|
232
|
|
|
447
|
|
|
1,076
|
|
|||
Total research and development expense
|
|
$
|
25,202
|
|
|
$
|
27,909
|
|
|
$
|
23,799
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Consolidated Statement of Operations
|
|
|
|
|
|
|
||||||
Current income tax expense
|
|
$
|
273
|
|
|
$
|
210
|
|
|
$
|
251
|
|
Deferred income tax expense (benefit)
|
|
27
|
|
|
(1,178
|
)
|
|
(1,034
|
)
|
|||
Income tax expense (benefit) reported in the Consolidated Statement of Operations
|
|
$
|
300
|
|
|
$
|
(968
|
)
|
|
$
|
(783
|
)
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Profit (loss) before income taxes
|
|
$
|
(25,860
|
)
|
|
$
|
(37,192
|
)
|
|
$
|
(37,480
|
)
|
At France’s statutory income tax rate of 28% (34.43% in 2017)
|
|
(8,904
|
)
|
|
(10,269
|
)
|
|
(10,494
|
)
|
|||
Non-deductible share-based payment expense
|
|
564
|
|
|
507
|
|
|
503
|
|
|||
Tax credits
|
|
(1,152
|
)
|
|
(848
|
)
|
|
(874
|
)
|
|||
Permanent differences and other
|
|
(329
|
)
|
|
(596
|
)
|
|
39
|
|
|||
Unrecognized benefit of tax losses carryforward
|
|
10,121
|
|
|
10,238
|
|
|
10,043
|
|
|||
Income tax expense (income) reported in the Consolidated Statement of Operations
|
|
$
|
300
|
|
|
$
|
(968
|
)
|
|
$
|
(783
|
)
|
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
At January 1st
|
|
$
|
22
|
|
|
$
|
52
|
|
|
$
|
691
|
|
Tax expense (income) during the year recognized in Profit or Loss
|
|
27
|
|
|
(1,178
|
)
|
|
(1,034
|
)
|
|||
Tax expense during the year recognized in equity (1)
|
|
—
|
|
|
1,818
|
|
|
773
|
|
|||
Effect of foreign exchange
|
|
3
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
At December 31st
|
|
$
|
52
|
|
|
$
|
691
|
|
|
$
|
429
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands, except share and per share data)
|
||||||||||
Profit (Loss)
|
|
$
|
(26,160
|
)
|
|
$
|
(36,224
|
)
|
|
$
|
(36,697
|
)
|
Weighted average number of shares outstanding for basic EPS
|
|
77,668,404
|
|
|
93,767,005
|
|
|
95,008,518
|
|
|||
Net effect of dilutive stock options
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net effect of dilutive warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net effect of vesting of restricted stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net effect of conversion of convertible notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average number of shares outstanding for diluted EPS
|
|
77,668,404
|
|
|
93,767,005
|
|
|
95,008,518
|
|
|||
Basic earnings (loss) per share
|
|
$
|
(0.34
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.39
|
)
|
Diluted earnings (loss) per share
|
|
$
|
(0.34
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.39
|
)
|
ADS outstanding for basic and diluted earnings (loss) per ADS
|
|
19,417,101
|
|
|
23,441,751
|
|
|
23,752,130
|
|
|||
Basic earnings (loss) per ADS
|
|
$
|
(1.35
|
)
|
|
$
|
(1.55
|
)
|
|
$
|
(1.54
|
)
|
Diluted earnings (loss) per ADS
|
|
$
|
(1.35
|
)
|
|
$
|
(1.55
|
)
|
|
$
|
(1.54
|
)
|
|
|
Leasehold
improvements
|
|
Plant and
equipment
|
|
IT and office
equipment
|
|
Right of use
|
|
Total
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At January 1, 2017
|
|
$
|
1,303
|
|
|
$
|
27,150
|
|
|
$
|
3,749
|
|
|
—
|
|
|
$
|
32,202
|
|
|
Additions
|
|
9
|
|
|
2,979
|
|
|
58
|
|
|
—
|
|
|
3,046
|
|
|||||
Disposals
|
|
(87
|
)
|
|
(4,327
|
)
|
|
(81
|
)
|
|
—
|
|
|
(4,495
|
)
|
|||||
Exchange difference
|
|
17
|
|
|
111
|
|
|
35
|
|
|
—
|
|
|
163
|
|
|||||
At December 31, 2017
|
|
1,242
|
|
|
25,913
|
|
|
3,761
|
|
|
—
|
|
|
30,916
|
|
|||||
Additions
|
|
34
|
|
|
2,248
|
|
|
80
|
|
|
—
|
|
|
2,362
|
|
|||||
Disposals
|
|
(30
|
)
|
|
(70
|
)
|
|
(203
|
)
|
|
—
|
|
|
(303
|
)
|
|||||
Reclassification
|
|
14
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|||||
Exchange difference
|
|
(7
|
)
|
|
(64
|
)
|
|
(16
|
)
|
|
—
|
|
|
(87
|
)
|
|||||
At December 31, 2018
|
|
1,253
|
|
|
28,027
|
|
|
3,608
|
|
|
—
|
|
|
32,888
|
|
|||||
Effect of adoption of new accounting standard - IFRS 16
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,556
|
|
|
4,556
|
|
|||||
At January 1, 2019
|
|
1,253
|
|
|
28,027
|
|
|
3,608
|
|
|
4,556
|
|
|
37,444
|
|
|||||
Additions
|
|
15
|
|
|
1,274
|
|
|
30
|
|
|
847
|
|
|
2,166
|
|
|||||
Disposals
|
|
—
|
|
|
(130
|
)
|
|
(15
|
)
|
|
—
|
|
|
(145
|
)
|
|||||
Exchange difference
|
|
3
|
|
|
32
|
|
|
11
|
|
|
—
|
|
|
46
|
|
|||||
At December 31, 2019
|
|
$
|
1,271
|
|
|
$
|
29,203
|
|
|
$
|
3,634
|
|
|
$
|
5,403
|
|
|
$
|
39,511
|
|
Depreciation and impairment:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At January 1, 2017
|
|
783
|
|
|
21,158
|
|
|
3,602
|
|
|
—
|
|
|
25,543
|
|
|||||
Depreciation charge for the year
|
|
226
|
|
|
2,405
|
|
|
129
|
|
|
—
|
|
|
2,760
|
|
|||||
Disposals
|
|
(87
|
)
|
|
(4,327
|
)
|
|
(81
|
)
|
|
—
|
|
|
(4,495
|
)
|
|||||
Reclassification
|
|
275
|
|
|
326
|
|
|
(601
|
)
|
|
—
|
|
|
—
|
|
|||||
Exchange difference
|
|
16
|
|
|
60
|
|
|
40
|
|
|
—
|
|
|
116
|
|
|||||
At December 31, 2017
|
|
1,213
|
|
|
19,622
|
|
|
3,089
|
|
|
—
|
|
|
23,924
|
|
|||||
Depreciation charge for the year
|
|
188
|
|
|
2,705
|
|
|
167
|
|
|
—
|
|
|
3,060
|
|
|||||
Disposals
|
|
(18
|
)
|
|
(70
|
)
|
|
(203
|
)
|
|
—
|
|
|
(291
|
)
|
|||||
Reclassification
|
|
(418
|
)
|
|
—
|
|
|
418
|
|
|
—
|
|
|
—
|
|
|||||
Exchange difference
|
|
(8
|
)
|
|
(55
|
)
|
|
(13
|
)
|
|
—
|
|
|
(76
|
)
|
|||||
At December 31, 2018
|
|
957
|
|
|
22,202
|
|
|
3,458
|
|
|
—
|
|
|
26,617
|
|
|||||
Depreciation charge for the year
|
|
190
|
|
|
2,430
|
|
|
96
|
|
|
1,354
|
|
|
4,070
|
|
|||||
Impairment
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
Disposals
|
|
—
|
|
|
(120
|
)
|
|
(15
|
)
|
|
—
|
|
|
(135
|
)
|
|||||
Exchange difference
|
|
4
|
|
|
30
|
|
|
11
|
|
|
—
|
|
|
45
|
|
|||||
At December 31, 2019
|
|
$
|
1,151
|
|
|
$
|
24,598
|
|
|
$
|
3,550
|
|
|
1,354
|
|
|
$
|
30,653
|
|
|
Net book value:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At January 1, 2017
|
|
$
|
520
|
|
|
$
|
5,992
|
|
|
$
|
147
|
|
|
—
|
|
|
$
|
6,659
|
|
|
At December 31, 2017
|
|
29
|
|
|
6,291
|
|
|
672
|
|
|
—
|
|
|
6,992
|
|
|||||
At December 31, 2018
|
|
296
|
|
|
5,825
|
|
|
150
|
|
|
—
|
|
|
6,271
|
|
|||||
At December 31, 2019
|
|
$
|
120
|
|
|
$
|
4,605
|
|
|
$
|
84
|
|
|
4,049
|
|
|
$
|
8,858
|
|
|
Capitalized development costs
|
|
Licenses
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Cost:
|
|
|
|
|
|
||||||
At January 1, 2017
|
$
|
409
|
|
|
$
|
17,706
|
|
|
$
|
18,115
|
|
Additions
|
1,931
|
|
|
2,710
|
|
|
4,641
|
|
|||
Disposals
|
—
|
|
|
(64
|
)
|
|
(64
|
)
|
|||
Exchange difference
|
—
|
|
|
23
|
|
|
23
|
|
|||
At December 31, 2017
|
2,340
|
|
|
20,375
|
|
|
22,715
|
|
|||
Additions
|
3,377
|
|
|
2,576
|
|
|
5,953
|
|
|||
Disposals
|
—
|
|
|
(3,834
|
)
|
|
(3,834
|
)
|
|||
Exchange difference
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
|||
At December 31, 2018
|
5,717
|
|
|
19,104
|
|
|
24,821
|
|
|||
Additions
|
5,020
|
|
|
3,752
|
|
|
8,772
|
|
|||
Disposals
|
—
|
|
|
(2,045
|
)
|
|
(2,045
|
)
|
|||
Exchange difference
|
—
|
|
|
7
|
|
|
7
|
|
|||
At December 31, 2019
|
$
|
10,737
|
|
|
$
|
20,818
|
|
|
$
|
31,555
|
|
Depreciation and impairment:
|
|
|
|
|
|
||||||
At January 1, 2017
|
—
|
|
|
10,408
|
|
|
10,408
|
|
|||
Amortization
|
233
|
|
|
2,582
|
|
|
2,815
|
|
|||
Disposals
|
—
|
|
|
(64
|
)
|
|
(64
|
)
|
|||
Exchange difference
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
|||
At December 31, 2017
|
233
|
|
|
12,920
|
|
|
13,153
|
|
|||
Amortization
|
447
|
|
|
2,656
|
|
|
3,103
|
|
|||
Disposals
|
—
|
|
|
(3,834
|
)
|
|
(3,834
|
)
|
|||
Exchange difference
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|||
At December 31, 2018
|
680
|
|
|
11,732
|
|
|
12,412
|
|
|||
Amortization
|
1,075
|
|
|
3,204
|
|
|
4,279
|
|
|||
Disposals
|
—
|
|
|
(1,838
|
)
|
|
(1,838
|
)
|
|||
Exchange difference
|
—
|
|
|
6
|
|
|
6
|
|
|||
At December 31, 2019
|
$
|
1,755
|
|
|
$
|
13,104
|
|
|
$
|
14,859
|
|
Net book value:
|
|
|
|
|
|
||||||
At January 1, 2017
|
409
|
|
|
$
|
7,298
|
|
|
$
|
7,707
|
|
|
At December 31, 2017
|
2,107
|
|
|
7,455
|
|
|
9,562
|
|
|||
At December 31, 2018
|
5,037
|
|
|
7,372
|
|
|
12,409
|
|
|||
At December 31, 2019
|
$
|
8,982
|
|
|
$
|
7,714
|
|
|
$
|
16,696
|
|
|
|
At December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Components
|
|
$
|
2,964
|
|
|
$
|
4,242
|
|
|
$
|
2,645
|
|
Finished goods
|
|
5,035
|
|
|
4,502
|
|
|
4,702
|
|
|||
Total inventories at cost
|
|
$
|
7,999
|
|
|
$
|
8,744
|
|
|
$
|
7,347
|
|
Depreciation of components
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Depreciation of finished goods
|
|
593
|
|
|
501
|
|
|
681
|
|
|||
Total depreciation
|
|
$
|
623
|
|
|
$
|
501
|
|
|
$
|
683
|
|
Components, net
|
|
$
|
2,934
|
|
|
$
|
4,242
|
|
|
$
|
2,643
|
|
Finished goods, at the lower of cost and net realizable value
|
|
4,442
|
|
|
4,001
|
|
|
4,021
|
|
|||
Total net inventories
|
|
$
|
7,376
|
|
|
$
|
8,243
|
|
|
$
|
6,664
|
|
|
|
At December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Trade receivables
|
|
$
|
18,754
|
|
|
$
|
16,758
|
|
|
$
|
11,957
|
|
Contract assets
|
|
3,112
|
|
|
2,707
|
|
|
1,587
|
|
|||
Unbilled revenue
|
|
355
|
|
|
105
|
|
|
—
|
|
|||
Unissued credit notes
|
|
(485
|
)
|
|
(1,094
|
)
|
|
(848
|
)
|
|||
Provisions on trade receivables
|
|
(810
|
)
|
|
(2,592
|
)
|
|
(2,719
|
)
|
|||
Net trade receivables
|
|
$
|
20,926
|
|
|
$
|
15,884
|
|
|
$
|
9,977
|
|
|
|
December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
At January 1,
|
|
$
|
628
|
|
|
$
|
810
|
|
|
$
|
2,592
|
|
Charge for the year
|
|
182
|
|
|
1,782
|
|
|
515
|
|
|||
Utilized amounts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(388
|
)
|
At year end
|
|
$
|
810
|
|
|
$
|
2,592
|
|
|
$
|
2,719
|
|
|
|
Total
|
|
Neither past
due nor
Impaired
|
|
Past due but not impaired
|
||||||||||||||||||
|
|
|
|
|
|
<30 days
|
|
30-60 days
|
|
60-120 days
|
|
>120 days
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||
At December 31, 2017
|
|
$
|
20,926
|
|
|
$
|
12,746
|
|
|
$
|
4,771
|
|
|
$
|
1,036
|
|
|
$
|
1,673
|
|
|
$
|
700
|
|
At December 31, 2018
|
|
$
|
15,884
|
|
|
$
|
7,421
|
|
|
$
|
5,155
|
|
|
$
|
49
|
|
|
$
|
471
|
|
|
$
|
2,788
|
|
At December 31, 2019
|
|
$
|
9,977
|
|
|
$
|
6,265
|
|
|
$
|
2,125
|
|
|
$
|
130
|
|
|
$
|
371
|
|
|
$
|
1,086
|
|
|
|
At December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Cash at banks
|
|
$
|
2,039
|
|
|
$
|
4,577
|
|
|
$
|
2,591
|
|
Cash equivalents
|
|
909
|
|
|
7,509
|
|
|
11,507
|
|
|||
Cash and cash equivalents
|
|
$
|
2,948
|
|
|
$
|
12,086
|
|
|
$
|
14,098
|
|
|
|
At December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
U.S. dollar denominated accounts
|
|
$
|
1,343
|
|
|
$
|
4,411
|
|
|
$
|
13,702
|
|
Euro denominated accounts
|
|
1,503
|
|
|
7,545
|
|
|
301
|
|
|||
GBP denominated accounts
|
|
30
|
|
|
30
|
|
|
37
|
|
|||
SGP denominated accounts
|
|
16
|
|
|
53
|
|
|
12
|
|
|||
NIS denominated accounts
|
|
11
|
|
|
21
|
|
|
19
|
|
|||
RMB denominated accounts
|
|
21
|
|
|
7
|
|
|
11
|
|
|||
Other currencies denominated accounts
|
|
24
|
|
|
19
|
|
|
16
|
|
|||
Cash and cash equivalents
|
|
$
|
2,948
|
|
|
$
|
12,086
|
|
|
$
|
14,098
|
|
|
|
At December 31,
|
|||||||||||||||||||
|
|
2017
|
|
2018
|
|
2019
|
|||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|||||||||
|
|
(in thousands, except for share data)
|
|||||||||||||||||||
Ordinary shares
|
|
80,024,707
|
|
|
€
|
1,597
|
|
|
94,732,539
|
|
|
€
|
1,895
|
|
|
95,587,146
|
|
|
€
|
1,912
|
|
Converted to U.S. dollars at historical exchange rates
|
|
|
|
$
|
2,031
|
|
|
|
|
$
|
2,384
|
|
|
|
|
$
|
2,403
|
|
|
|
December 31,
|
|||||||||||||||||||
|
|
2017
|
|
2018
|
|
2019
|
|||||||||||||||
|
|
Number
|
|
WAEP
|
|
Number
|
|
WAEP
|
|
Number
|
|
WAEP
|
|||||||||
Outstanding at January 1,
|
|
7,177,500
|
|
|
$
|
3.55
|
|
|
6,197,848
|
|
|
$
|
3.59
|
|
|
5,983,452
|
|
|
$
|
3.50
|
|
Granted during the year
|
|
230,000
|
|
|
$
|
3.39
|
|
|
250,000
|
|
|
$
|
1.93
|
|
|
312,000
|
|
|
$
|
0.89
|
|
Forfeited during the year
|
|
(336,365
|
)
|
|
$
|
4.75
|
|
|
(269,082
|
)
|
|
$
|
2.84
|
|
|
(452,992
|
)
|
|
$
|
2.56
|
|
Exercised during the year(1)
|
|
(431,790
|
)
|
|
$
|
2.28
|
|
|
(14,814
|
)
|
|
$
|
1.85
|
|
|
—
|
|
|
$
|
—
|
|
Expired during the year
|
|
(441,497
|
)
|
|
$
|
3.25
|
|
|
(180,500
|
)
|
|
$
|
5.67
|
|
|
(70,500
|
)
|
|
$
|
1.34
|
|
Outstanding at period end
|
|
6,197,848
|
|
|
$
|
3.59
|
|
|
5,983,452
|
|
|
$
|
3.50
|
|
|
5,771,960
|
|
|
$
|
3.46
|
|
Of which, warrants for consultants equivalent to employees
|
|
151,500
|
|
|
$
|
3.29
|
|
|
180,500
|
|
|
$
|
2.75
|
|
|
177,500
|
|
|
$
|
2.70
|
|
Exercisable at period end
|
|
4,900,052
|
|
|
$
|
3.90
|
|
|
5,194,187
|
|
|
$
|
3.62
|
|
|
5,114,422
|
|
|
$
|
3.55
|
|
Of which, warrants for consultants equivalent to employees
|
|
131,917
|
|
|
$
|
3.51
|
|
|
143,833
|
|
|
$
|
3.11
|
|
|
160,833
|
|
|
$
|
2.84
|
|
(1)
|
The weighted average share estimated fair value at the dates of exercise of these options was $2.20 in 2018 and $3.49 in 2017.
|
|
|
December 31,
|
|||||||
|
|
2017
|
|
2018
|
|
2019
|
|||
Outstanding at January 1,
|
|
634,720
|
|
|
1,467,166
|
|
|
2,746,181
|
|
Granted during the year
|
|
1,002,650
|
|
|
1,803,550
|
|
|
4,180,218
|
|
Forfeited during the year
|
|
(15,200
|
)
|
|
(206,517
|
)
|
|
(184,314
|
)
|
Vested during the year
|
|
(155,004
|
)
|
|
(318,018
|
)
|
|
(858,898
|
)
|
Outstanding at period end
|
|
1,467,166
|
|
|
2,746,181
|
|
|
5,883,187
|
|
|
|
December 31,
|
|||||||
|
|
2017
|
|
2018
|
|
2019
|
|||
Dividend yield (%)
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected volatility (%)
|
|
63 - 64
|
|
|
68 - 70
|
|
|
55
|
|
Risk–free interest rate (%)
|
|
0.43
|
|
|
0
|
|
|
0.00
|
|
Assumed annual lapse rate of awards (%)
|
|
10 for RSA 2 for stock options, warrants and a limited group of beneficiaries
|
|
|
10 for RSA 2 for stock options, warrants and a limited group of beneficiaries
|
|
|
10 for all except 2 for warrants and a limited group of beneficiaries
|
|
Sell price multiple (applied to exercise price)
|
|
2
|
|
|
2
|
|
|
2
|
|
Weighted average share price (€)
|
|
2.30
|
|
|
1.08
|
|
|
0.68
|
|
Model used
|
|
Binomial
|
|
|
Binomial
|
|
|
Binomial
|
|
|
|
|
|
At December 31,
|
|||||||||||
|
|
Note
|
|
2017
|
|
2018
|
|
2019
|
|||||||
|
|
|
|
(in thousands)
|
|||||||||||
Current
|
|
|
|
|
|
|
|
|
|||||||
Convertible debt
|
|
14.1
|
|
|
—
|
|
|
—
|
|
|
7,329
|
|
|||
Venture debt
|
|
14.2
|
|
|
—
|
|
|
823
|
|
|
5,109
|
|
|||
Interest-bearing receivables financing
|
|
14.3
|
|
|
7,413
|
|
|
10,295
|
|
|
4,068
|
|
|||
Total current portion
|
|
|
|
$
|
7,413
|
|
|
$
|
11,118
|
|
|
$
|
16,506
|
|
|
Non-current
|
|
|
|
|
|
|
|
|
|||||||
Convertible debt
|
|
14.1
|
|
|
$
|
17,063
|
|
|
$
|
19,723
|
|
|
$
|
23,342
|
|
Venture debt
|
|
14.2
|
|
|
—
|
|
|
11,811
|
|
|
7,071
|
|
|||
Total non-current portion
|
|
|
|
$
|
17,063
|
|
|
$
|
31,534
|
|
|
$
|
30,413
|
|
•
|
A liability component reflecting the Company’s contractual obligation to pay interest and redeem the bonds in cash; and
|
•
|
An embedded derivative, which is the holder's call option whereby the Company can be required to issue a number of shares in exchange for notes, at a rate which may vary during the first twelve months after issuance of the 2015 note under certain contractual conditions and during the period beginning on April 28, 2016 and ending on May 12, 2016 for the 2016 notes, and at the fixed conversion rate for the 2018 note.
|
•
|
A liability component reflecting the Company’s contractual obligation to pay interest and redeem the bonds in cash; and
|
•
|
An equity component for the value of the conversion option.
|
Security
|
Contractual conversion rate/exercice price per share
|
Adjusted conversion rate/exercice price per ADS as of Nov 29, 2019
|
||||||
2015 notes, 2018 notes, warrants
|
|
$
|
1.70
|
|
|
$
|
6.80
|
|
2016 notes
|
|
$
|
2.25
|
|
|
$
|
9.00
|
|
2019-1 notes
|
|
$
|
1.21
|
|
|
$
|
4.84
|
|
2019-2 notes
|
|
$
|
1.03
|
|
|
$
|
4.12
|
|
|
Real-estate
|
|
IT and office equipment
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
As at January 1, 2019
|
$
|
4,159
|
|
|
397
|
|
|
4,556
|
|
||
Additions
|
847
|
|
|
|
|
847
|
|
||||
Depreciation expense
|
(1,064
|
)
|
|
(290
|
)
|
|
(1,354
|
)
|
|||
As at December 31, 2019
|
$
|
3,942
|
|
|
$
|
107
|
|
|
$
|
4,049
|
|
|
Lease liabilities
|
|
Current
|
|
Non-current
|
||||||
|
(In thousands)
|
||||||||||
As at January 1, 2019
|
$
|
4,623
|
|
|
$
|
1,415
|
|
|
$
|
3,208
|
|
Additions
|
732
|
|
|
|
|
|
|||||
Interests expense
|
622
|
|
|
|
|
|
|||||
Foreign exchange gain (loss)
|
49
|
|
|
|
|
|
|||||
Payments
|
(1,922
|
)
|
|
|
|
|
|||||
As at December 31, 2019
|
$
|
4,104
|
|
|
$
|
900
|
|
|
$
|
3,204
|
|
|
|
|
|
December 31,
|
||||||||||
|
|
Note
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
|
|
(in thousands)
|
||||||||||
Current
|
|
|
|
|
|
|
|
|
||||||
Government grant advances
|
|
16.1
|
|
$
|
93
|
|
|
$
|
58
|
|
|
$
|
349
|
|
Research project financing
|
|
16.2
|
|
899
|
|
|
172
|
|
|
674
|
|
|||
Government loans
|
|
16.2
|
|
600
|
|
|
458
|
|
|
449
|
|
|||
Total current portion
|
|
|
|
$
|
1,592
|
|
|
$
|
688
|
|
|
$
|
1,472
|
|
Non-current
|
|
|
|
|
|
|
|
|
||||||
Government grant advances
|
|
16.1
|
|
$
|
350
|
|
|
$
|
86
|
|
|
$
|
510
|
|
Research project financing
|
|
16.2
|
|
2,946
|
|
|
4,274
|
|
|
4,652
|
|
|||
Government loans
|
|
16.3
|
|
1,353
|
|
|
819
|
|
|
348
|
|
|||
Accrued interest
|
|
16.2
|
|
381
|
|
|
495
|
|
|
640
|
|
|||
Total non-current portion
|
|
|
|
$
|
5,030
|
|
|
$
|
5,674
|
|
|
$
|
6,150
|
|
|
|
Post-
employment
benefits
|
|
Other provisions
|
|
Total
|
|
Current
|
|
Non current
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
At January 1, 2017
|
|
$
|
688
|
|
|
$
|
664
|
|
|
$
|
1,352
|
|
|
$
|
46
|
|
|
$
|
1,306
|
|
Arising (released) during the year
|
|
216
|
|
|
443
|
|
|
659
|
|
|
—
|
|
|
—
|
|
|||||
Released (used) during the year
|
|
—
|
|
|
(50
|
)
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|||||
Released (unused) during the year
|
|
—
|
|
|
(397
|
)
|
|
(397
|
)
|
|
—
|
|
|
—
|
|
|||||
At December 31, 2017
|
|
904
|
|
|
660
|
|
|
1,564
|
|
|
32
|
|
|
1,532
|
|
|||||
Arising (released) during the year
|
|
86
|
|
|
590
|
|
|
676
|
|
|
—
|
|
|
—
|
|
|||||
Released (used) during the year
|
|
—
|
|
|
(32
|
)
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|||||
Released (unused) during the year
|
|
—
|
|
|
(167
|
)
|
|
(167
|
)
|
|
—
|
|
|
—
|
|
|||||
At December 31, 2018
|
|
990
|
|
|
1,051
|
|
|
2,041
|
|
|
352
|
|
|
1,689
|
|
|||||
Arising (released) during the year
|
|
94
|
|
|
190
|
|
|
284
|
|
|
—
|
|
|
—
|
|
|||||
Released (used) during the year
|
|
(21
|
)
|
|
(352
|
)
|
|
(373
|
)
|
|
—
|
|
|
—
|
|
|||||
Released (unused) during the year
|
|
—
|
|
|
(47
|
)
|
|
(47
|
)
|
|
—
|
|
|
—
|
|
|||||
At December 31, 2019
|
|
$
|
1,063
|
|
|
$
|
842
|
|
|
$
|
1,905
|
|
|
$
|
—
|
|
|
$
|
1,905
|
|
|
|
2017
|
|
2018
|
|
2019
|
Discount rate
|
|
1.30%
|
|
1.57%
|
|
0.77%
|
Salary increase
|
|
Between 1.5% and 3.5%
|
|
Between 1.5% and 3.5%
|
|
Between 1.5% and 3.5%
|
Retirement age
|
|
60-62 years
|
|
60-62 years
|
|
60-62 years
|
Turnover: depending on the seniority
|
|
4.35%, nil as from 64
year old |
|
4.35%, nil as from 64
year old |
|
4.35%, nil as from 64
year old |
|
|
At December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Trade payables
|
|
$
|
13,023
|
|
|
$
|
9,412
|
|
|
$
|
8,834
|
|
Other current liabilities:
|
|
|
|
|
|
|
||||||
Employees and social debts
|
|
3,720
|
|
|
3,091
|
|
|
3,575
|
|
|||
Others
|
|
1,418
|
|
|
1,563
|
|
|
965
|
|
|||
Total other current liabilities
|
|
$
|
5,138
|
|
|
$
|
4,654
|
|
|
$
|
4,540
|
|
Contract liabilities:
|
|
|
|
|
|
|
||||||
License and development services agreement
|
|
—
|
|
|
—
|
|
|
5,303
|
|
|||
Deferred revenue
|
|
740
|
|
|
973
|
|
|
$
|
727
|
|
||
|
|
$
|
740
|
|
|
$
|
973
|
|
|
$
|
5,812
|
|
•
|
Trade payables are non-interest bearing and are generally settled on 30-day terms.
|
•
|
Other current liabilities, primarily accrued compensation and related social charges, are non-interest bearing.
|
•
|
The upfront payment received from a strategic partner is deemed to include a financing component, and as such, bears interest.
|
|
|
At December 31,
|
||||||||||
|
|
2017
|
|
2018
|
|
2019
|
||||||
|
|
(in thousands)
|
||||||||||
Trade Payables
|
|
—
|
|
|
—
|
|
|
1,139
|
|
|||
Deferred tax liabilities
|
|
52
|
|
|
691
|
|
|
429
|
|
|||
Contract liabilities:
|
|
|
|
|
|
|
||||||
License and development services agreement
|
|
—
|
|
|
—
|
|
|
11,249
|
|
|||
Deferred revenue
|
|
1,293
|
|
|
808
|
|
|
323
|
|
|||
Total contract liabilities
|
|
$
|
1,293
|
|
|
$
|
808
|
|
|
$
|
11,572
|
|
|
|
Carrying amount
|
|
Fair value
|
||||||||||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||
|
|
2017
|
|
2018
|
|
2019
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade and other receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade receivables
|
|
$
|
20,926
|
|
|
$
|
15,884
|
|
|
$
|
9,977
|
|
|
$
|
20,926
|
|
|
$
|
15,884
|
|
|
$
|
9,977
|
|
Deposits and other receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits
|
|
402
|
|
|
394
|
|
|
401
|
|
|
402
|
|
|
394
|
|
|
401
|
|
||||||
Other financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term investments
|
|
353
|
|
|
337
|
|
|
335
|
|
|
353
|
|
|
337
|
|
|
335
|
|
||||||
Financial instruments at fair value through other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flow hedges
|
|
72
|
|
|
—
|
|
|
46
|
|
|
72
|
|
|
—
|
|
|
46
|
|
||||||
Cash, cash equivalents and short-term investments
|
|
3,295
|
|
|
12,086
|
|
|
14,098
|
|
|
3,295
|
|
|
12,086
|
|
|
14,098
|
|
||||||
Total financial assets
|
|
$
|
25,048
|
|
|
$
|
28,701
|
|
|
$
|
24,857
|
|
|
$
|
25,048
|
|
|
$
|
28,701
|
|
|
$
|
24,857
|
|
Total current
|
|
$
|
24,293
|
|
|
$
|
27,970
|
|
|
$
|
24,121
|
|
|
$
|
24,293
|
|
|
$
|
27,970
|
|
|
$
|
24,121
|
|
Total non-current
|
|
$
|
755
|
|
|
$
|
731
|
|
|
$
|
736
|
|
|
$
|
755
|
|
|
$
|
731
|
|
|
$
|
736
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease liability
|
|
—
|
|
|
—
|
|
|
4,104
|
|
|
—
|
|
|
—
|
|
|
4,104
|
|
||||||
Interest-bearing loans and borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing receivables financing
|
|
7,413
|
|
|
10,295
|
|
|
4,068
|
|
|
7,413
|
|
|
10,295
|
|
|
4,068
|
|
||||||
Convertible debt
|
|
17,063
|
|
|
19,723
|
|
|
30,671
|
|
|
16,309
|
|
|
19,708
|
|
|
30,706
|
|
||||||
Venture debt
|
|
—
|
|
|
12,634
|
|
|
12,180
|
|
|
—
|
|
|
12,634
|
|
|
12,180
|
|
||||||
Government loans
|
|
2,071
|
|
|
1,431
|
|
|
1,002
|
|
|
2,071
|
|
|
1,431
|
|
|
1,002
|
|
||||||
Research project financing
|
|
4,004
|
|
|
4,688
|
|
|
5,696
|
|
|
4,004
|
|
|
4,688
|
|
|
5,696
|
|
||||||
Trade and other payables (current and non current)
|
|
13,023
|
|
|
9,412
|
|
|
9,973
|
|
|
13,023
|
|
|
9,412
|
|
|
9,973
|
|
||||||
Total financial liabilities
|
|
$
|
43,574
|
|
|
$
|
58,183
|
|
|
$
|
67,694
|
|
|
$
|
42,820
|
|
|
$
|
58,168
|
|
|
$
|
67,729
|
|
Total current
|
|
$
|
21,935
|
|
|
$
|
21,160
|
|
|
$
|
27,363
|
|
|
$
|
21,935
|
|
|
$
|
21,160
|
|
|
$
|
27,328
|
|
Total non-current
|
|
$
|
21,639
|
|
|
$
|
37,023
|
|
|
$
|
40,331
|
|
|
$
|
20,885
|
|
|
$
|
37,008
|
|
|
$
|
40,401
|
|
•
|
a bank guarantee secured by pledges of investments in money market funds issued in favor of the owners of leased office space to secure annual lease payments by the Company for its office space in Colombes; and
|
•
|
bank credit lines used in connection with the purchase of hedging instruments and finance lease, also secured by pledged money market funds.
|
•
|
Cash, cash equivalents, short-term investments, accounts receivable, accounts payable, other receivable and accrued liabilities: due to the short-term nature of these balances, carrying amounts approximate fair value.
|
•
|
Long-term investments are composed of debt-based mutual funds with traded market prices. Their fair values amounted to $353,000, $337,000 and $335,000 at December 31, 2017, 2018 and 2019, respectively.
|
•
|
Foreign exchange forward and option contracts: the fair values of foreign exchange forward and option contracts were calculated using the market price that the Company would pay or receive to settle the related agreements, by reference to published exchange rates.
|
•
|
The fair value of the debt components of convertible notes was calculated using the effective interest rate of the debt component of the last issued convertible notes in 2019.
|
•
|
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
|
•
|
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
|
•
|
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data
|
|
|
At December 31,
|
|
|
|
|
|
|
||||||
|
|
2017
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
|
(in thousands)
|
||||||||||||
Long-term investments
|
|
$
|
353
|
|
|
—
|
|
|
$
|
353
|
|
|
—
|
|
Financial instruments at fair value through other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||
Cash flow hedge
|
|
$
|
72
|
|
|
—
|
|
|
$
|
72
|
|
|
—
|
|
|
|
At December 31,
|
|
|
|
|
|
|
||||||
|
|
2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
|
(in thousands)
|
||||||||||||
Long-term investments
|
|
$
|
337
|
|
|
—
|
|
|
$
|
337
|
|
|
—
|
|
|
|
At December 31,
|
|
|
|
|
|
|
||||||
|
|
2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
|
(in thousands)
|
||||||||||||
Long-term investments
|
|
$
|
335
|
|
|
—
|
|
|
$
|
335
|
|
|
—
|
|
Financial instruments at fair value through other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||
Cash flow hedge
|
|
46
|
|
|
|
|
46
|
|
|
|
|
|
At December 31, 2017
|
||||||
|
|
Notional Amount
|
|
Fair value
|
||||
|
|
(in thousands)
|
||||||
Forward contracts (buy euros, sell U.S dollars)
|
|
€
|
2,250
|
|
|
$
|
53
|
|
Options (buy euros, sell U.S. dollars)
|
|
3,000
|
|
|
19
|
|
||
Total
|
|
€
|
5,250
|
|
|
$
|
72
|
|
|
|
|
|
|
||||
|
|
At December 31, 2019
|
||||||
|
|
Notional Amount
|
|
Fair value
|
||||
|
|
(in thousands)
|
||||||
Forward contracts (buy euros, sell U.S. dollars)
|
|
€
|
3,000
|
|
|
$
|
46
|
|
Options (buy euros, sell U.S. dollars)
|
|
—
|
|
|
—
|
|
||
Total
|
|
€
|
3,000
|
|
|
$
|
46
|
|
•
|
Operating activities, when revenues or expenses are denominated in different currencies from the functional currency of the entity carrying out these transactions.
|
•
|
Venture debt and government loans are denominated in euros, and lease liabilities are denominated in different currencies while the functional currency of the entity carrying out these transactions is the U.S. dollar.
|
•
|
Non-derivative monetary financial instruments that are denominated and settled in a currency different from the functional currency of the entity which holds them.
|
Customer
|
|
Customer Location
|
|
% of total revenues for the year ended December 31,
|
|
Trade receivables at December 31,
|
|||||||||||||||||
|
|
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|||||||||
A
|
|
Taiwan
|
|
27
|
%
|
|
32
|
%
|
|
16
|
%
|
|
$
|
1,383,000
|
|
|
$
|
5,881,000
|
|
|
$
|
4,060,000
|
|
B
|
|
Korea
|
|
22
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2,680,000
|
|
|
—
|
|
|
—
|
|
|||
C
|
|
Taiwan
|
|
10
|
%
|
|
Less than 10%
|
|
|
—
|
%
|
|
1,745,000
|
|
|
1,138,000
|
|
|
—
|
|
|||
D
|
|
China
|
|
Less than 10%
|
|
|
13
|
%
|
|
Less than 10%
|
|
|
—
|
|
|
1,858,000
|
|
|
911,000
|
|
|||
E
|
|
Taiwan
|
|
Less than 10%
|
|
|
Less than 10%
|
|
|
17
|
%
|
|
$
|
201,000
|
|
|
$
|
2,526,000
|
|
|
$
|
5,352,000
|
|
|
Within 1
year
|
1 to 2
years
|
2 to 3
years
|
3 to 4
years
|
4 to 5
years
|
More
than 5
years
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
At December 31, 2017
|
|
|
|
|
|
|
|
||||||||||||||
Research project financing
|
$
|
899
|
|
$
|
1,246
|
|
$
|
671
|
|
$
|
291
|
|
$
|
297
|
|
$
|
441
|
|
$
|
3,845
|
|
Interest-bearing receivables financing
|
7,413
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,413
|
|
|||||||
Government loans
|
656
|
|
523
|
|
510
|
|
497
|
|
245
|
|
—
|
|
2,431
|
|
|||||||
Convertible debt
|
—
|
|
15,730
|
|
9,175
|
|
—
|
|
—
|
|
—
|
|
24,905
|
|
|||||||
Trade payables
|
13,023
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,023
|
|
|||||||
Other current liabilities
|
5,138
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,138
|
|
|||||||
|
$
|
27,129
|
|
$
|
17,499
|
|
$
|
10,356
|
|
$
|
788
|
|
$
|
542
|
|
$
|
441
|
|
$
|
56,755
|
|
At December 31, 2018
|
|
|
|
|
|
|
|
||||||||||||||
Research project financing
|
$
|
238
|
|
$
|
973
|
|
$
|
2,043
|
|
$
|
1,687
|
|
$
|
375
|
|
$
|
73
|
|
$
|
5,389
|
|
Interest-bearing receivables financing
|
10,295
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10,295
|
|
|||||||
Government loans
|
499
|
|
487
|
|
475
|
|
234
|
|
—
|
|
—
|
|
1,695
|
|
|||||||
Convertible debt
|
—
|
|
7,863
|
|
23,357
|
|
—
|
|
—
|
|
—
|
|
31,220
|
|
|||||||
Venture debt
|
2,057
|
|
6,158
|
|
6,158
|
|
2,396
|
|
—
|
|
—
|
|
16,769
|
|
|||||||
Trade payables
|
9,412
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,412
|
|
|||||||
Other current liabilities
|
4,654
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,654
|
|
|||||||
|
$
|
27,155
|
|
$
|
15,481
|
|
$
|
32,033
|
|
$
|
4,317
|
|
$
|
375
|
|
$
|
73
|
|
$
|
79,434
|
|
At December 31, 2019
|
|
|
|
|
|
|
|
||||||||||||||
Research project financing
|
$
|
739
|
|
$
|
2,252
|
|
$
|
2,601
|
|
$
|
368
|
|
$
|
72
|
|
$
|
—
|
|
$
|
6,032
|
|
Interest-bearing receivables financing
|
4,068
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,068
|
|
|||||||
Government loans
|
478
|
|
466
|
|
229
|
|
—
|
|
—
|
|
—
|
|
1,173
|
|
|||||||
Convertible debt (1)
|
7,863
|
|
26,792
|
|
6,124
|
|
—
|
|
—
|
|
—
|
|
40,779
|
|
|||||||
Venture debt
|
6,042
|
|
6,042
|
|
2,351
|
|
—
|
|
—
|
|
—
|
|
14,435
|
|
|||||||
Lease liabilities
|
1,147
|
|
832
|
|
973
|
|
980
|
|
965
|
|
1,307
|
|
6,204
|
|
|||||||
Trade payables
|
9,057
|
|
1,000
|
|
250
|
|
—
|
|
—
|
|
—
|
|
10,307
|
|
|||||||
Other current liabilities
|
4,540
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,540
|
|
|||||||
|
$
|
33,934
|
|
$
|
37,384
|
|
$
|
12,528
|
|
$
|
1,348
|
|
$
|
1,037
|
|
$
|
1,307
|
|
$
|
87,538
|
|
(in thousands)
|
January 1, 2017
|
Cash flows
|
Foreign exchange movement
|
Accrued interest
|
Non-cash impact of amendment
|
Other(1)
|
December 31, 2017
|
|||||||||
Government grant advances and loans
|
$
|
5,745
|
|
2,600
|
|
915
|
|
90
|
|
—
|
|
(2,728
|
)
|
$
|
6,622
|
|
Convertible debt
|
$
|
16,338
|
|
—
|
|
—
|
|
3,987
|
|
(3,097
|
)
|
(165
|
)
|
$
|
17,063
|
|
Interest-bearing financing of receivables
|
$
|
7,712
|
|
(299
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
7,413
|
|
Total
|
$
|
29,795
|
|
2,301
|
|
915
|
|
4,077
|
|
(3,097
|
)
|
(2,893
|
)
|
$
|
31,098
|
|
(in thousands)
|
January 1, 2018
|
Cash flows
|
Foreign exchange movement
|
Accrued interest
|
Non-cash impact of amendment
|
Other(1)
|
December 31, 2018
|
|||||||||
Government grant advances and loans
|
$
|
6,622
|
|
985
|
|
(250
|
)
|
151
|
|
—
|
|
(1,146
|
)
|
$
|
6,362
|
|
Convertible debt
|
$
|
17,063
|
|
3,202
|
|
—
|
|
4,435
|
|
(3,630
|
)
|
(1,347
|
)
|
$
|
19,723
|
|
Venture debt
|
$
|
—
|
|
13,369
|
|
(243
|
)
|
327
|
|
—
|
|
(819
|
)
|
$
|
12,634
|
|
Interest-bearing financing of receivables
|
$
|
7,413
|
|
2,882
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
10,295
|
|
Total
|
$
|
31,098
|
|
20,438
|
|
(493
|
)
|
4,913
|
|
(3,630
|
)
|
(3,312
|
)
|
$
|
49,014
|
|
(in thousands)
|
January 1, 2019 *
|
Cash flows
|
Foreign exchange movement
|
Accrued interest
|
Other(1)
|
December 31, 2019
|
||||||||
Government grant advances and loans
|
$
|
6,362
|
|
1,006
|
|
(112
|
)
|
220
|
|
145
|
|
$
|
7,621
|
|
Convertible debt
|
$
|
19,723
|
|
7,967
|
|
—
|
|
5,844
|
|
(2,863
|
)
|
$
|
30,671
|
|
Venture debt
|
$
|
12,634
|
|
(2,010
|
)
|
(240
|
)
|
1,796
|
|
—
|
|
$
|
12,180
|
|
Lease liabilities
|
$
|
4,623
|
|
(1,922
|
)
|
49
|
|
622
|
|
732
|
|
$
|
4,104
|
|
Interest-bearing financing of receivables
|
$
|
10,295
|
|
(6,227
|
)
|
—
|
|
—
|
|
—
|
|
$
|
4,068
|
|
Total
|
$
|
53,637
|
|
(1,186
|
)
|
(303
|
)
|
8,482
|
|
(1,986
|
)
|
$
|
58,644
|
|
|
Year ended December 31,
|
||||||||
|
2017
|
2018
|
2019
|
||||||
|
(in thousands)
|
||||||||
Fixed and variable wages, social charges and benefits expensed in the year
|
$
|
2,376
|
|
$
|
2,348
|
|
$
|
2,179
|
|
Share-based payment expense for the year
|
1,043
|
|
1,397
|
|
1,106
|
|
|||
Board members fees to non-executive members
|
190
|
|
199
|
|
210
|
|
|||
Total compensation expense for key management personnel
|
$
|
3,609
|
|
$
|
3,944
|
|
$
|
3,495
|
|
•
|
The study, development and marketing of all products and/or services relating to radio fixed and/or optical-type communication networks systems;
|
•
|
Advising and training, by all means and technical media, relating to the aforementioned fields of operations;
|
•
|
The participation, directly or indirectly, in all transaction that may be related to any of the purposes defined above, through the creation of new companies or legal entities, the contribution, subscription, or purchase of securities or corporate rights, acquisition of interests, mergers, partnerships, or any other methods;
|
•
|
And, more generally, all industrial, commercial, and financial transactions, or transactions involving movable or fixed assets, that may be related directly or indirectly, in whole or in part, to any of the aforementioned corporate purposes, or to any similar or related purposes, or to any and all purposes that may enhance or develop the company’s business.
|
a.
|
Article II is hereby amended and restated in its entirety as follows:
|
b.
|
Section 3.1 of the Note is hereby amended and restated in its entirety as follows:
|
c.
|
Section 5.2 of the Note is hereby amended and restated in its entirety as follows:
|
d.
|
Article XII is hereby added as follows:
|
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. This Amendment shall not be construed as a novation of any of the Note or the Purchase Agreement.
|
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.
|
a.
|
Article II is hereby amended and restated in its entirety as follows:
|
b.
|
Section 3.1 of the Note is hereby amended and restated in its entirety as follows:
|
c.
|
Section 5.2 of the Note is hereby amended and restated in its entirety as follows:
|
d.
|
Article XII is hereby added as follows:
|
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. This Amendment shall not be construed as a novation of any of the Note or the Purchase Agreement.
|
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.
|
a.
|
Article II is hereby amended and restated in its entirety as follows:
|
b.
|
Section 3.1 of the Note is hereby amended and restated in its entirety as follows:
|
c.
|
Section 5.2 of the Note is hereby amended and restated in its entirety as follows:
|
d.
|
Article XII is hereby added as follows:
|
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. This Amendment shall not be construed as a novation of any of the Note or the Purchase Agreement.
|
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.
|
a.
|
Article II is hereby amended and restated in its entirety as follows:
|
b.
|
Section 3.1 of the Note is hereby amended and restated in its entirety as follows:
|
c.
|
Section 5.2 of the Note is hereby amended and restated in its entirety as follows:
|
d.
|
Article XII is hereby added as follows:
|
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. This Amendment shall not be construed as a novation of any of the Note or the Purchase Agreement.
|
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.
|
a.
|
Article II is hereby amended and restated in its entirety as follows:
|
b.
|
Section 3.1 of the Note is hereby amended and restated in its entirety as follows:
|
c.
|
Section 5.2 of the Note is hereby amended and restated in its entirety as follows:
|
d.
|
Article XII is hereby added as follows:
|
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. This Amendment shall not be construed as a novation of any of the Note or the Purchase Agreement.
|
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.
|
a.
|
The Term/Expiration date of the Warrants as set forth in the preamble of the Warrant Agreement is amended and replaced as follows:
|
b.
|
Article 2.1 is hereby amended and restated in its entirety as follows:
|
c.
|
Article 2.2 is hereby amended by adding the following new sentence at the end of the section:
|
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
|
b.
|
Continuing Effect. Other than as set forth in this Amendment, all of the terms and conditions of the Warrant Agreement and Warrants will continue in full force and effect. This Amendment shall not be construed as a novation of any of the Warrants or the Warrant Agreement.
|
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 Beneficiary. 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.
|
e.
|
Effectiveness of Amendment. This Amendment is contingent on and will only be effective upon the effectiveness of the Note Amendments.
|
|
1.
|
I have reviewed this Annual Report on Form 20-F of Sequans Communications S.A.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
|
|
|
||
|
|
|
/s/ Dr. Georges Karam
|
Name: Dr. Georges Karam
|
Title: Chief Executive Officer
|
|
1.
|
I have reviewed this Annual Report on Form 20-F of Sequans Communications S.A.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
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5.
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The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
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/s/ Deborah Choate
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Name: Deborah Choate
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Title: Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By:
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/s/ Dr. Georges Karam
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Name: Dr. Georges Karam
Title: Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By:
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/s/ Deborah Choate
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Name: Deborah Choate
Title: Chief Financial Officer
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(1)
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Registration Statement (Form S-8 No. 333-177919) pertaining to the Stock Option Subscription Plans, BSA Subscription Plans and BCE Subscription Plans of Sequans Communications S.A.,
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(2)
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Registration Statement (Form S-8 No. 333-180487) pertaining to the BSA (Warrants) Issuance Agreements dated January 11, 2011 and March 8, 2011 of Sequans Communications S.A.,
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(3)
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Registration Statement (Form S-8 No. 333-187611) pertaining to the Stock Option Subscription Plan, BSA Subscription Plan and BSA (Warrants) Issuance Agreements dated June 26, 2012 of Sequans Communications S.A,
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(4)
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Registration Statement (Form S-8 No. 333-194903) pertaining to the Stock Option Subscription Plan and BSA (Warrants) Issuance Agreements dated June 25, 2013 of Sequans Communications S.A;
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(5)
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Registration Statement (Form S-8 No. 333-203539) pertaining to the Stock Option Subscription Plan 2014-1, BSA Subscription Plan 2014-1 and BSA (Warrants) Issuance Agreements dated June 26, 2014 of Sequans Communications S.A.;
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(6)
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Registration Statement (Form S-8 No. 333-211011) pertaining to the Stock Option Subscription Plan 2015-1 and BSA (Warrants) Issuance Agreements dated June 29, 2015 of Sequans Communications S.A.;
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(7)
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Registration Statement (Form S-8 No. 333-214444) pertaining to the Stock Options Subscription Plan 2016-1, Restricted Share Award Plan 2016-1, BSA (Warrants) Subscription Plan 2016-1, BSA (Warrants) Subscription Plan 2016-2 and BSA (Warrants) Issuance Agreements dated June 28, 2016 of Sequans Communications S.A;
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(8)
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Registration Statement (Form S-8 No. 333-215911) pertaining to the Restricted Share Award Plan 2016-2 Agreement dated June 28, 2016 of Sequans Communications S.A; and
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(9)
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Registration Statement (Form F-3 No. 333-221919) of Sequans Communications S.A;
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(10)
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Registration Statement (Form S-8 No. 333-219430) pertaining to the Stock Option subscription Plan 2017-1, Restricted Share Aware Plan 2017-1, Restricted Share Aware Plan 2017-2, Restricted Share Aware Plan 2017-3, BSA (Warrants) Issuance Agreement 2017-1, BSA (Warrants) Issuance Agreement 2017-2 and BSA (Warrants) Issuance Agreements dated June 30, 2017 of Sequans Communications S.A.
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(11)
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Registration Statement (Form S-8 No. 333-226458) pertaining to the Stock Option Subscription Plan 2018, Restricted Share Award Plan 2018-1, Restricted Share Award Plan 2018-2, BSA 2018-1 (Warrants) Issuance Agreement, BSA 2018-2 (Warrants) Issuance Agreement, BSA (Warrants) Issuance Agreement, dated June 29, 2018, and Restricted Share Award Plan 2018-4 of Sequans Communications S.A.
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(12)
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Registration Statement (Form S-8 No. 333-233473) pertaining to the Stock Option Subscription Plan 2019, Restricted Share Award Plan 2019-1, Restricted Share Award Plan 2019-2, BSA 2019-1 (Warrants) Issuance Agreement, BSA 2019-2 (Warrants) Issuance Agreement, and BSA (Warrants) Issuance Agreement, Dated July 1, 2019 of Sequans Communications S.A.
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of our reports dated March 30, 2020, with respect to the consolidated financial statements of Sequans Communications S.A. and the effectiveness of internal control over financial reporting of Sequans Communications S.A. included in this Annual Report (Form 20-F) of Sequans Communications S.A. for the year ended December 31, 2019.
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