Sequans Communications 6-K, filed Feb 9, 2021
Sequans Communications (SQNS)
6-K
2021-02-09
For: 2020-12-31
View Original
Added on
April 10, 2026
About this 6-K
Sequans Communications filed this 6-K on February 9, 2021.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934
For the month of February 2021
Commission File Number: 001-35135
Sequans Communications S.A.
(Translation of Registrant’s name into English)
15-55 boulevard Charles de Gaulle
92700 Colombes, France
Telephone : +33 1 70 72 16 00
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F R Form 40-F £
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Yes £ NoR
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Yes £ NoR
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
The information in this report, furnished on Form 6-K, excluding the section titled “Q4 2020 Outlook”,
shall be incorporated by reference into each of the following Registration Statements under the Securities Act of 1933, as amended, of the registrant: Form S-8 (File Nos. 333-177919, 333-180487, 333-187611, 333-194903, 333-203539, 333-211011, 333-214444, 333-215911, 333-219430, 333-226458, 333-219430, 333-226458, 333-233473 and 333-239968).
EXPLANATORY NOTE
On February 9, 2021, Sequans Communications S.A. issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2020. A copy of the press release is attached to this Form 6-K as Exhibit 99.1 and is incorporated herein by reference.
EXHIBIT INDEX
The following exhibit is filed as part of this Form 6-K:
| Exhibit | Description | ||||
| 99.1 | Press release dated February 9, 2021 | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SEQUANS COMMUNICATIONS S.A. (Registrant) | ||||||||||||||
| Date: February 9, 2021 | By: | /s/ Deborah Choate | ||||||||||||
| Deborah Choate | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
 | NEWS | ||||
Sequans Communications Announces
Fourth Quarter 2020 and Fully Year 2020 Financial Results
PARIS - February 9, 2021 - Sequans Communications S.A. (NYSE: SQNS), a leading developer and provider of 5G/4G chips and modules, today announced financial results for the fourth quarter and full year ended December 31, 2020.
Fourth Quarter and Fully Year 2020 Highlights:
Revenue: Revenue was $15.8 million, an increase of 11.8% compared to the third quarter of 2020 and an increase of 58.4% compared to the fourth quarter of 2019. Full-year revenue for 2020 was $50.9 million, an increase of 65.0% compared to $30.9 million for 2019.
Gross margin: Gross margin was 45.1% compared to 42.0% in the third quarter of 2020, and compared to 51.2% in the fourth quarter of 2019. Full-year gross margin increased from 40.1% in 2019 to 46.1% in 2020.
Operating loss: Operating loss was $5.4 million compared to $5.9 million in the third quarter of 2020 and $4.6 million in the fourth quarter of 2019. Full year operating loss for 2020 was $24.7 million compared to $28.0 million for 2019.
Net loss: Net loss was $11.3 million, or ($0.36) per diluted ADS, compared to $9.0 million, or ($0.30) per ADS, in the third quarter of 2020 and $8.1 million, or ($0.34) per ADS, in the fourth quarter of 2019. Net loss in the fourth quarter of 2020 includes a $0.1 million gain on revaluation of the embedded derivative arising from the amendments to the convertible debt made in March 2020. The revaluation was a $1.5 million gain in the third quarter of 2020. Full year net loss for 2020 was $54.5 million, or ($1.94) per ADS, compared to $36.7 million, or ($1.54) per ADS, for 2019. Net loss for the full year includes a $13.1 million loss on the revaluation of the embedded derivative and a $1.4 million non-cash gain recorded as a result of the amendments to the convertible debt agreements.
Non-IFRS Net loss and diluted loss per ADS: Excluding the non-cash stock-based compensation, the non-cash impact of the fair-value and effective interest adjustments related to the convertible debt with embedded derivatives and other financings, the non-cash impact of convertible debt amendments, and deferred tax benefit or expense related to the convertible debt and other financings, non-IFRS net loss was $8.5 million, or ($0.28) per ADS, compared to $8.4 million, or ($0.28) per ADS in the third quarter of 2020, and $6.8 million, or ($0.29) per ADS, in the fourth quarter of 2019. The non-IFRS net loss includes foreign exchange losses of $1.9 million, or ($0.06) per ADS, in the fourth quarter of 2020 and $0.9 million, or ($0.03) per ADS, in the third quarter of 2020 and a foreign exchange loss of $0.8 million, or ($0.03) per ADS, in the fourth quarter of 2019. Full year non-IFRS net loss for 2020 was $33.0 million, or ($1.17) per ADS, compared to $31.6 million, or ($1.33) per ADS in 2019. Full year non-IFRS net loss for 2020 includes foreign exchange losses of $2.6 million, or ($0.09) per ADS, compared with a foreign exchange gain of $0.1 million, or ($0.00) per ADS, in 2019.
Cash: Cash, cash equivalents and short-term deposits at December 31, 2020 totaled $18.5 million compared to $25.3 million at September 30, 2020.
Sequans reports fourth quarter 2020 financial results
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| In millions of US$ except percentages, shares and per share amounts | Key Metrics | |||||||||||||||||||||||||||||||
| Q4 2020 | %* | Q3 2020 | %* | Q4 2019 (1) | %* | Full year 2020 | %* | Full year 2019 | %* | |||||||||||||||||||||||
| Revenue | $15.8 | $14.1 | $10.0 | $50.9 | $30.9 | |||||||||||||||||||||||||||
| Gross profit | 7.1 | 45.1 | % | 5.9 | 42.0 | % | 5.1 | 51.2 | % | 23.5 | 46.1 | % | 12.4 | |||||||||||||||||||
| Operating loss | (5.4) | (34.4) | % | (5.9) | (41.8) | % | (4.6) | (45.7) | % | (24.7) | (48.5) | % | (28.0) | 40.1 | % | |||||||||||||||||
| Net loss | (11.3) | (71.3) | % | (9.0) | (63.7) | % | (8.1) | (81.4) | % | (54.5) | (107.0) | % | (36.7) | (90.6) | % | |||||||||||||||||
| Diluted earnings per ADS | ($0.36) | ($0.30) | ($0.34) | ($1.94) | ($1.54) | (118.9) | % | |||||||||||||||||||||||||
| Weighted average number of diluted ADS | 31,044,769 | 30,275,352 | 23,797,256 | 28,108,247 | 23,752,130 | |||||||||||||||||||||||||||
| Cash flow from (used in) operations | (1.4) | (7.9) | 16.3 | 5.1 | ||||||||||||||||||||||||||||
| Cash, cash equivalents and short-term deposits at quarter-end | 18.5 | 25.3 | 14.1 | 18.5 | 14.1 | |||||||||||||||||||||||||||
| Additional information on non-cash items: | ||||||||||||||||||||||||||||||||
| - Non-cash stock-based compensation included in operating result | 1.2 | 0.5 | 0.5 | 3.0 | 1.8 | |||||||||||||||||||||||||||
| - Non-cash interest on convertible debt and other financing | 1.7 | 1.6 | 1.3 | 6.4 | 4.4 | |||||||||||||||||||||||||||
| - Non-cash change in the fair value of convertible debt embedded derivative | (0.1) | (1.5) | — | 13.1 | — | |||||||||||||||||||||||||||
| - Non-cash impact of convertible debts amendment | — | — | — | (1.4) | — | |||||||||||||||||||||||||||
| - Non-cash impact of deferred tax expense (benefit) | — | — | (0.5) | 0.4 | (1.0) | |||||||||||||||||||||||||||
| Non-IFRS diluted earnings per ADS | ($0.28) | ($0.28) | ($0.29) | ($1.17) | ($1.33) | |||||||||||||||||||||||||||
* Percentage of revenue
(1) Updated from the prior earnings release
"We had a strong finish in 2020 and we are off to an excellent start for 2021," said Georges Karam, CEO of Sequans. "Our fourth quarter revenue growth exceeded our target, even as demand related to portable routers began to return to pre-COVID levels, leading to year-over-year growth of almost 65%. Some of our most important accomplishments in 2020 included the strengthening of our go-to-market capabilities via relationships with new distributors and MCU partners, extending our technology leadership by introducing the second generation of our Monarch platform, and reaching important milestones in our 5G development, which is expected to create another major growth engine for the company. Several of these initiatives are already making a positive contribution and all will help sustain our momentum as time goes on, and support our goal of an average of 50% annual growth for the five-year period beginning in 2020.
"We are entering 2021 with the highest-ever level of backlog, driven by strong demand in the Massive IoT business. Since the end of 2020, we have secured several key Massive IoT design wins within our strong pipeline of developing business which will help offset lower revenue related to portable routers in 2021 and support our long-term growth objectives.”
Q1 2021 Outlook
The following statement is based on management’s current assumptions and expectations and assumes no increase in the severity or duration of the COVID-19 pandemic. This statement is forward-looking and actual results may differ materially.
Overall demand, driven mainly by Massive IoT, continues to be strong and supports the company’s short and long-term growth targets despite the already-anticipated reduction in the portable router business. Management expects Q1 2021 revenue to follow the company’s typical seasonal pattern of a decline compared to Q4; management has decided not to give specific quarterly guidance in view of the potential impact of industry-wide supply chain bottlenecks, which could delay some shipments.
Conference Call and Webcast
Sequans plans to conduct a teleconference and live webcast to discuss the financial results for the fourth quarter of 2020 today, February 9, 2021 at 8:00 a.m. ET /14:00 CET. To participate in the live call, analysts and investors should dial 800-437-2398 or +1 720-452-9102 if outside the U.S. When prompted, provide the event title or access code: 2037577. A
Sequans reports fourth quarter 2020 financial results
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live and archived webcast of the call will be available from the Investors section of the Sequans website at www.sequans.com/investors/. An audio replay of the conference call will be available until February 16, 2021 by dialing toll free 888-203-1112 or 719-457-0820 from outside the U.S., using the following access code: 2037577.
Forward Looking Statements
This press release contains projections and other forward-looking statements regarding future events or our future financial performance and potential financing sources. All statements other than present and historical facts and conditions contained in this release, including any statements regarding expected seasonal revenue decline for the first quarter of 2021, long-term revenue goals, future results of operations and financial positions, business strategy and plans, expectations for Massive IoT and Broadband and Critical IoT sales, the ability to continue to operate remotely (as required) at high levels of productivity, increasing backlog of orders, the impact of the coronavirus on our manufacturing operations, supply chain, and on customer demand, the impact of component shortages and manufacturing capacity, and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We undertake no obligation to update the information made in this release in the event facts or circumstances subsequently change after the date of this press release. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not rely on or place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements. In addition to the risk factors contained in our Form 20-F for the fiscal year ended December 31, 2019, some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: (i) the contraction or lack of growth of markets in which we compete and in which our products are sold, (ii) unexpected increases in our expenses, including manufacturing expenses, (iii) our inability to adjust spending quickly enough to offset any unexpected revenue shortfall, (iv) delays or cancellations in spending by our customers, (v) unexpected average selling price reductions, (vi) 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, (vii) our inability to anticipate the future market demands and future needs of our customers, (viii) 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, (ix) our inability to enter into and execute on strategic alliances, (x) our ability to meet performance milestones under strategic license agreements, (xi) the impact of natural disasters on our sourcing operations and supply chain, (xii) our ability to remediate material weaknesses in our internal controls relating to controls over the accounting and presentation of complex, non-routine and certain other transactions, including certain revenue arrangements, (xiii) the impact of the coronavirus on the ability to operate our business and research, production of our products or demand for our products by customers whose supply chain is impacted or whose operations have been impacted by government shelter-in-place or similar orders, (xiv) the impact of the coronavirus on capital markets and our ability to raise debt and equity financing, and (xv) other factors detailed in documents we file from time to time with the Securities and Exchange Commission. We have not filed our Form 20-F for the year ended December 31, 2020. As a result, all financial results described in this earnings release should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates, that are identified prior to the tie we file the Form 20-F.
Use of Non-IFRS/non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements prepared in accordance with IFRS, we disclose certain non-IFRS, or non-GAAP, financial measures. These measures exclude the non-cash stock-based compensation and the non-cash impacts of convertible debt amendments, effective interest adjustments related to the convertible debt with embedded derivatives and other financings, and deferred tax benefit or expense related to the convertible debt and other financings. We believe that these measures can be useful to facilitate comparisons among different companies. These non-GAAP measures have limitations in that the non-GAAP measures we use may not be directly comparable to those reported by other companies. We seek to compensate for this limitation by providing a reconciliation of the non-GAAP financial measures to the most directly comparable IFRS measures in the table attached to this press release.
About Sequans Communications
Sequans Communications S.A. (NYSE: SQNS) is a leading developer and provider of 5G and 4G chips and modules for IoT devices. For 5G/4G massive IoT applications, Sequans provides a comprehensive product portfolio based on its flagship Monarch LTE-M/NB-IoT and Calliope Cat 1 chip platforms, featuring industry-leading low power consumption, a large set of integrated functionalities, and global deployment capability. For 5G/4G broadband and critical IoT applications, Sequans offers a product portfolio based on its Cassiopeia 4G Cat 4/Cat 6 and high-end Taurus 5G chip platforms, optimized for low-cost residential, enterprise, and industrial applications. Founded in 2003, Sequans is based in Paris, France with additional offices in the United States, United Kingdom, Israel, Hong Kong, Singapore, Finland, Taiwan, South Korea, and China.
Sequans reports fourth quarter 2020 financial results
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Visit Sequans online at www.sequans.com; www.facebook.com/sequans; www.twitter.com/sequans
Media Relations: Kimberly Tassin, +1.425.736.0569, Kimberly@sequans.com
Investor Relations: Claudia Gatlin, +1 212.830.9080, Claudia@sequans.com
Condensed financial tables follow
Sequans reports fourth quarter 2020 financial results
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SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three months ended | ||||||||||||||||||||||||||
| (in thousands of US$, except share and per share amounts) | December 31, 2020 | Sept 30, 2020 | December 31, 2019 (1) | |||||||||||||||||||||||
| Revenue : | ||||||||||||||||||||||||||
| Product revenue | $ | 12,064 | $ | 11,580 | $ | 5,854 | ||||||||||||||||||||
| Other revenue | 3,727 | 2,542 | 4,112 | |||||||||||||||||||||||
| Total revenue | 15,791 | 14,122 | 9,966 | |||||||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||||
| Cost of product revenue | 8,183 | 7,668 | 4,534 | |||||||||||||||||||||||
| Cost of other revenue | 494 | 527 | 332 | |||||||||||||||||||||||
| Total cost of revenue | 8,677 | 8,195 | 4,866 | |||||||||||||||||||||||
| Gross profit | 7,114 | 5,927 | 5,100 | |||||||||||||||||||||||
| Operating expenses : | ||||||||||||||||||||||||||
| Research and development | 7,938 | 7,984 | 5,664 | |||||||||||||||||||||||
| Sales and marketing | 2,003 | 1,774 | 1,864 | |||||||||||||||||||||||
| General and administrative | 2,606 | 2,076 | 2,124 | |||||||||||||||||||||||
| Total operating expenses | 12,547 | 11,834 | 9,652 | |||||||||||||||||||||||
| Operating loss | (5,433) | (5,907) | (4,552) | |||||||||||||||||||||||
| Financial income (expense): | ||||||||||||||||||||||||||
| Interest income (expense), net | (3,643) | (3,623) | (3,110) | |||||||||||||||||||||||
| Change in fair value of convertible debt derivative | 111 | 1,522 | — | |||||||||||||||||||||||
| Foreign exchange gain (loss) | (1,936) | (885) | (822) | |||||||||||||||||||||||
| Loss before income taxes | (10,901) | (8,893) | (8,484) | |||||||||||||||||||||||
| Income tax expense (benefit) | 361 | 98 | (374) | |||||||||||||||||||||||
| Loss | $ | (11,262) | $ | (8,991) | $ | (8,110) | ||||||||||||||||||||
| Attributable to : | ||||||||||||||||||||||||||
| Shareholders of the parent | (11,262) | (8,991) | (8,110) | |||||||||||||||||||||||
| Minority interests | — | — | — | |||||||||||||||||||||||
| Basic loss per ADS | ($0.36) | ($0.30) | ($0.34) | |||||||||||||||||||||||
| Diluted loss per ADS | ($0.36) | ($0.30) | ($0.34) | |||||||||||||||||||||||
| Weighted average number of ADS used for computing: | ||||||||||||||||||||||||||
| — Basic | 31,044,769 | 30,275,352 | 23,797,256 | |||||||||||||||||||||||
| — Diluted | 31,044,769 | 30,275,352 | 23,797,256 | |||||||||||||||||||||||
| (1) Updated from the prior earnings release | ||||||||||||||||||||||||||
Sequans reports fourth quarter 2020 financial results
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SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Twelve months ended Dec 31, | |||||||||||||||||
| (in thousands of US$, except share and per share amounts) | 2020 | 2019 (1) | |||||||||||||||
| Revenue : | |||||||||||||||||
| Product revenue | $ | 37,919 | $ | 21,947 | |||||||||||||
| Other revenue | 12,997 | 8,917 | |||||||||||||||
| Total revenue | 50,916 | 30,864 | |||||||||||||||
| Cost of revenue | |||||||||||||||||
| Cost of product revenue | 25,632 | 16,703 | |||||||||||||||
| Cost of other revenue | 1,834 | 1,782 | |||||||||||||||
| Total cost of revenue | 27,466 | 18,485 | |||||||||||||||
| Gross profit | 23,450 | 12,379 | |||||||||||||||
| Operating expenses : | |||||||||||||||||
| Research and development | 30,855 | 23,799 | |||||||||||||||
| Sales and marketing | 7,912 | 7,968 | |||||||||||||||
| General and administrative | 9,369 | 8,570 | |||||||||||||||
| Total operating expenses | 48,136 | 40,337 | |||||||||||||||
| Operating loss | (24,686) | (27,958) | |||||||||||||||
| Financial income (expense): | |||||||||||||||||
| Interest income (expense), net | (14,474) | (9,593) | |||||||||||||||
| Change in fair value of convertible debt derivative | (13,129) | — | |||||||||||||||
| Convertible debt amendment | 1,399 | — | |||||||||||||||
| Foreign exchange gain (loss) | (2,650) | 71 | |||||||||||||||
| Loss before income taxes | (53,540) | (37,480) | |||||||||||||||
| Income tax expense (benefit) | 936 | (783) | |||||||||||||||
| Loss | $ | (54,476) | $ | (36,697) | |||||||||||||
| Attributable to : | |||||||||||||||||
| Shareholders of the parent | (54,476) | (36,697) | |||||||||||||||
| Minority interests | — | — | |||||||||||||||
| Basic loss per ADS | ($1.94) | ($1.54) | |||||||||||||||
| Diluted loss per ADS | ($1.94) | ($1.54) | |||||||||||||||
| Weighted average number of ADS used for computing: | |||||||||||||||||
| — Basic | 28,108,247 | 23,752,130 | |||||||||||||||
| — Diluted | 28,108,247 | 23,752,130 | |||||||||||||||
| (1) Updated from the prior earnings release | |||||||||||||||||
Sequans reports fourth quarter 2020 financial results
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SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| At Dec 31, | At Dec 31, | |||||||||||||
| (in thousands of US$) | 2020 | 2019 (1) | ||||||||||||
| ASSETS | ||||||||||||||
| Non-current assets | ||||||||||||||
| Property, plant and equipment | $ | 9,187 | $ | 8,858 | ||||||||||
| Intangible assets | 25,312 | 16,696 | ||||||||||||
| Deposits and other receivables | 466 | 401 | ||||||||||||
| Other non-current financial assets | 386 | 335 | ||||||||||||
| Total non-current assets | 35,351 | 26,290 | ||||||||||||
| Current assets | ||||||||||||||
| Inventories | 6,225 | 6,664 | ||||||||||||
| Trade receivables | 17,277 | 8,390 | ||||||||||||
| Contract assets | 537 | 1,587 | ||||||||||||
| Prepaid expenses | 962 | 901 | ||||||||||||
| Other receivables | 3,264 | 2,253 | ||||||||||||
| Research tax credit receivable | 5,232 | 3,132 | ||||||||||||
| Short-term deposits | 10,900 | — | ||||||||||||
| Cash and cash equivalents | 7,574 | 14,098 | ||||||||||||
| Total current assets | 51,971 | 37,025 | ||||||||||||
| Total assets | $ | 87,322 | $ | 63,315 | ||||||||||
| EQUITY AND LIABILITIES | ||||||||||||||
| Equity | ||||||||||||||
| Issued capital, euro 0.02 nominal value, 133,934,090 shares authorized, issued and outstanding at December 31, 2020 (95,587,146 shares at December 31, 2019) | $ | 3,269 | $ | 2,403 | ||||||||||
| Share premium | 276,560 | 233,720 | ||||||||||||
| Other capital reserves | 46,677 | 43,656 | ||||||||||||
| Accumulated deficit | (363,209) | (308,733) | ||||||||||||
| Other components of equity | (423) | (607) | ||||||||||||
| Total equity | (37,126) | (29,561) | ||||||||||||
| Non-current liabilities | ||||||||||||||
| Government grant advances, loans and other liabilities | 11,203 | 6,150 | ||||||||||||
| Venture debt | 2,172 | 7,071 | ||||||||||||
| Convertible debt | 26,074 | 23,342 | ||||||||||||
| Convertible debt embedded derivative | 12,395 | — | ||||||||||||
| Lease liabilities | 4,762 | 3,204 | ||||||||||||
| Trade payables | 851 | 1,139 | ||||||||||||
| Provisions | 1,874 | 1,905 | ||||||||||||
| Deferred tax liabilities | 19 | 429 | ||||||||||||
| Contract liabilities | 2,473 | 11,572 | ||||||||||||
| Total non-current liabilities | 61,823 | 54,812 | ||||||||||||
| Current liabilities | ||||||||||||||
| Trade payables | 15,701 | 8,834 | ||||||||||||
| Interest-bearing receivables financing | 14,228 | 4,068 | ||||||||||||
| Venture debt | 6,104 | 5,109 | ||||||||||||
| Convertible debt | — | 7,329 | ||||||||||||
| Lease liabilities | 1,014 | 900 | ||||||||||||
| Government grant advances and loans | 3,867 | 1,472 | ||||||||||||
| Contract liabilities | 13,235 | 5,812 | ||||||||||||
| Other current liabilities and provisions | 8,476 | 4,540 | ||||||||||||
| Total current liabilities | 62,625 | 38,064 | ||||||||||||
| Total equity and liabilities | $ | 87,322 | $ | 63,315 | ||||||||||
| (1) Updated from the prior earnings releases; as set forth in the annual report on Form 20-F | ||||||||||||||
Sequans reports fourth quarter 2020 financial results
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SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
| Twelve months ended Dec 31, | ||||||||||||||||||||
| (in thousands of US$) | 2020 | 2019 (1) | ||||||||||||||||||
| Operating activities | ||||||||||||||||||||
| Loss before income taxes | $ | (53,540) | $ | (37,480) | ||||||||||||||||
| Non-cash adjustment to reconcile income before tax to net cash from (used in) operating activities | ||||||||||||||||||||
| Depreciation and impairment of property, plant and equipment | 3,755 | 4,126 | ||||||||||||||||||
| Amortization and impairment of intangible assets | 6,018 | 4,279 | ||||||||||||||||||
| Share-based payment expense | 2,985 | 1,797 | ||||||||||||||||||
| Increase (Decrease) in provisions | 112 | (244) | ||||||||||||||||||
| Interest expense, net | 14,474 | 9,593 | ||||||||||||||||||
| Change in the fair value of convertible debt embedded derivative | 13,129 | — | ||||||||||||||||||
| Convertible debt amendment | (1,399) | — | ||||||||||||||||||
| Foreign exchange loss (gain) | 2,749 | (420) | ||||||||||||||||||
| Loss on disposal of property, plant and equipment | 6 | (22) | ||||||||||||||||||
| Bad debt expense | 4 | 515 | ||||||||||||||||||
| Working capital adjustments | ||||||||||||||||||||
| Decrease (Increase) in trade receivables and other receivables | (8,703) | 6,546 | ||||||||||||||||||
| Decrease in inventories | 439 | 1,579 | ||||||||||||||||||
| Decrease (Increase) in research tax credit receivable | (718) | 622 | ||||||||||||||||||
| Increase (Decrease) in trade payables and other liabilities | 6,216 | (705) | ||||||||||||||||||
| Decrease (Increase) in contract liabilities | (4,897) | 14,984 | ||||||||||||||||||
| Increase in government grant advances | 270 | 288 | ||||||||||||||||||
| Income tax paid | (286) | (365) | ||||||||||||||||||
| Net cash flow provided by (used in) operating activities | (19,386) | 5,093 | ||||||||||||||||||
| Investing activities | ||||||||||||||||||||
| Purchase of intangible assets and property, plant and equipment | (6,566) | (3,520) | ||||||||||||||||||
| Capitalized development expenditures | (7,209) | (5,626) | ||||||||||||||||||
| Sale (purchase) of financial assets | (116) | (5) | ||||||||||||||||||
| Purchase of short-term deposits | (10,900) | — | ||||||||||||||||||
| Interest received | 29 | 50 | ||||||||||||||||||
| Net cash flow used in investments activities | (24,762) | (9,101) | ||||||||||||||||||
| Financing activities | ||||||||||||||||||||
| Proceeds from issue of warrants, exercise of stock options/warrants | 32 | — | ||||||||||||||||||
| Public equity offering proceeds, net of transaction costs paid | 29,272 | — | ||||||||||||||||||
| Proceeds from issuing of warrants, net of transaction costs paid | — | 8,269 | ||||||||||||||||||
| Proceeds (Repayment of) from interest-bearing receivables financing | 9,914 | (6,227) | ||||||||||||||||||
| Proceeds from government loans, net of transaction cost | 5,392 | 7,967 | ||||||||||||||||||
| Proceeds from interest-bearing research project financing | 405 | 1,126 | ||||||||||||||||||
| Proceeds from convertible debt, net of transaction cost | 2,050 | — | ||||||||||||||||||
| Payment of lease liabilities | (1,221) | (1,299) | ||||||||||||||||||
| Repayment of interest-bearing research project financing | (355) | (168) | ||||||||||||||||||
| Repayment of government loans | (241) | (447) | ||||||||||||||||||
| Repayment of venture debt | (5,165) | (801) | ||||||||||||||||||
| Interest paid | (2,464) | (2,401) | ||||||||||||||||||
| Net cash flows from financing activities | 37,619 | 6,019 | ||||||||||||||||||
Sequans reports fourth quarter 2020 financial results
Page 9
SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Continued)
| Net increase (decrease) in cash and cash equivalents | (6,529) | 2,011 | ||||||||||||||||||
| Net foreign exchange difference | 5 | 1 | ||||||||||||||||||
| Cash and cash equivalents at January 1 | 14,098 | 12,086 | ||||||||||||||||||
| Cash and cash equivalents at end of the period | 7,574 | $ | 14,098 | |||||||||||||||||
| (1) Updated from the prior earnings release | ||||||||||||||||||||
Sequans reports fourth quarter 2020 financial results
Page 10
SEQUANS COMMUNICATIONS S.A.
UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL RESULTS
| (in thousands of US$, except share and per share amounts) | Three months ended | ||||||||||||||||||||||
| Dec 31, 2020 | Sept 30, 2020 | Dec 31, 2019 (3) | |||||||||||||||||||||
| Net IFRS loss as reported | $ | (11,262) | $ | (8,991) | $ | (8,110) | |||||||||||||||||
| Add back | |||||||||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | 1,172 | 521 | 517 | ||||||||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | (111) | (1,522) | — | ||||||||||||||||||||
Non-cash interest on convertible debt and other financing (2) | 1,663 | 1,608 | 1,265 | ||||||||||||||||||||
| Non-cash impact of deferred tax income (loss) | — | — | (489) | ||||||||||||||||||||
| $ | (8,538) | $ | (8,384) | $ | (6,817) | ||||||||||||||||||
| IFRS basic loss per ADS as reported | ($0.36) | ($0.30) | ($0.34) | ||||||||||||||||||||
| Add back | |||||||||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | $0.04 | $0.02 | $0.02 | ||||||||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | $0.00 | ($0.05) | $0.00 | ||||||||||||||||||||
Non-cash interest on convertible debt and other financing (2) | $0.04 | $0.05 | $0.05 | ||||||||||||||||||||
| Non-cash impact of deferred tax income (loss) | $0.00 | $0.00 | ($0.02) | ||||||||||||||||||||
| Non-IFRS basic loss per ADS | ($0.28) | ($0.28) | ($0.29) | ||||||||||||||||||||
| IFRS diluted loss per ADS | ($0.36) | ($0.30) | ($0.34) | ||||||||||||||||||||
| Add back | |||||||||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | $0.04 | $0.02 | $0.02 | ||||||||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | $0.00 | ($0.05) | $0.00 | ||||||||||||||||||||
Non-cash interest on convertible debt and other financing (2) | $0.04 | $0.05 | $0.05 | ||||||||||||||||||||
| Non-cash impact of deferred tax income (loss) | $0.00 | $0.00 | ($0.02) | ||||||||||||||||||||
| Non-IFRS diluted loss per ADS | ($0.28) | ($0.28) | ($0.29) | ||||||||||||||||||||
| (1) Included in the IFRS loss as follows: | |||||||||||||||||||||||
| Cost of product revenue | $ | 28 | $ | 4 | $ | 4 | |||||||||||||||||
| Research and development | 647 | 209 | 136 | ||||||||||||||||||||
| Sales and marketing | 190 | 105 | 100 | ||||||||||||||||||||
| General and administrative | 307 | 203 | 277 | ||||||||||||||||||||
| (2) Related to the difference between contractual and effective interest rates | |||||||||||||||||||||||
| (3) Updated from the prior earnings release | |||||||||||||||||||||||
Sequans reports fourth quarter 2020 financial results
Page 11
SEQUANS COMMUNICATIONS S.A.
UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL RESULTS
| (in thousands of US$, except share and per share amounts) | Twelve months ended Dec 31, | ||||||||||||||||
| 2020 | 2019 (3) | ||||||||||||||||
| Net IFRS loss as reported | $ | (54,476) | $ | (36,697) | |||||||||||||
| Add back | |||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | 2,985 | 1,797 | |||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | 13,129 | — | |||||||||||||||
| Non-cash interest on convertible debt and other financing (2) | 6,355 | 4,358 | |||||||||||||||
| Non-cash impact of deferred tax income (loss) | 398 | (1,018) | |||||||||||||||
| Non-cash impact of convertible debt amendment | (1,399) | — | |||||||||||||||
| $ | (33,008) | $ | (31,560) | ||||||||||||||
| IFRS basic loss per ADS as reported | ($1.94) | ($1.54) | |||||||||||||||
| Add back | |||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | $0.11 | $0.09 | |||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | $0.47 | $0.00 | |||||||||||||||
Non-cash interest on convertible debt and other financing (2) | $0.23 | $0.18 | |||||||||||||||
| Non-cash impact of deferred tax income (loss) | $0.01 | ($0.04) | |||||||||||||||
| Non-cash impact of convertible debt amendment | ($0.05) | $0.00 | |||||||||||||||
| Non-IFRS basic loss per ADS | ($1.17) | ($1.33) | |||||||||||||||
| IFRS diluted loss per ADS | ($1.94) | ($1.54) | |||||||||||||||
| Add back | |||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | $0.11 | $0.09 | |||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | $0.47 | $0.00 | |||||||||||||||
Non-cash interest on convertible debt and other financing (2) | $0.23 | $0.18 | |||||||||||||||
| Non-cash impact of deferred tax income (loss) | $0.01 | ($0.04) | |||||||||||||||
| Non-cash impact of convertible debt amendment | ($0.05) | $0.00 | |||||||||||||||
| Non-IFRS basic loss per ADS | ($1.17) | ($1.33) | |||||||||||||||
| (1) Included in the IFRS loss as follows: | |||||||||||||||||
| Cost of product revenue | $ | 42 | $ | 10 | |||||||||||||
| Research and development | 1,394 | 508 | |||||||||||||||
| Sales and marketing | 529 | 282 | |||||||||||||||
| General and administrative | 1,020 | 997 | |||||||||||||||
| (2) Related to the difference between contractual and effective interest rates | |||||||||||||||||
| (3) Updated from the prior earnings release | |||||||||||||||||