Sequans Communications 6-K, filed Feb 8, 2022
Sequans Communications (SQNS)
6-K
2022-02-08
For: 2021-12-31
View Original
Added on
April 10, 2026
About this 6-K
Sequans Communications filed this 6-K on February 8, 2022.
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 2022
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 “Q3 2021 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, 333-233473, 333-239968 and 333-259914) and Form F-3 (File Nos. 333-250122 and 333-255865).
EXPLANATORY NOTE
On February 8, 2022, Sequans Communications S.A. issued a press release announcing its financial results for the quarter and year ended December 31, 2021. 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 8, 2022 | ||||
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 8, 2022 | By: | /s/ Deborah Choate | ||||||||||||
| Deborah Choate | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
 | NEWS | ||||
Sequans Communications Announces
Fourth Quarter and Full Year 2021 Financial Results
PARIS - February 8, 2022 - Sequans Communications S.A. (NYSE: SQNS), a leading developer and provider of 5G/4G solutions for IoT devices, today announced financial results for the fourth quarter and full year ended December 31, 2021.
Fourth Quarter and Full Year 2021 Summary Results Table:
| (in US$ millions, except share and per share data) | Q4 2021 | Q3 2021 | Q4 2020 | Full year 2021 | Full year 2020 | ||||||||||||
| Revenue | $13.8 | $11.9 | $15.8 | $50.9 | $50.9 | ||||||||||||
| Gross profit | 7.9 | 5.8 | 7.1 | 27.2 | 23.5 | ||||||||||||
| Gross margin (%) | 57.1 | % | 49.2 | % | 45.1 | % | 53.4 | % | 46.1 | % | |||||||
| Operating loss | (4.0) | (5.1) | (5.4) | (18.3) | (24.7) | ||||||||||||
| Net Profit (Loss) | (7.7) | 0.2 | (11.3) | (20.3) | (54.5) | ||||||||||||
| Diluted earnings (loss) per ADS | ($0.21) | $— | ($0.36) | ($0.55) | ($1.94) | ||||||||||||
| Non-IFRS diluted earnings per ADS * | ($0.09) | ($0.14) | ($0.28) | ($0.53) | ($1.17) | ||||||||||||
| Weighted average number of diluted ADS | 37,497,367 | 41,024,405 | 31,044,769 | 36,672,946 | 28,108,247 | ||||||||||||
* See Use of Non-IFRS/non-GAAP Financial Measures disclosure on page 3. IFRS Net Profit (Loss) includes significant non-cash interest expense and change in value of embedded derivative that are excluded from Non-IFRS measures | |||||||||||||||||
“Sequans exited 2021 with growing momentum in our Massive IoT and CBRS Broadband businesses, setting us up for improved results for 2022 as more design wins in our pipeline move to mass production, " said Georges Karam, CEO of Sequans. "Fourth quarter revenue grew by 16.1% sequentially and, when adjusted to exclude last year’s Jetpack contribution (1), increased by 61.4% year-over-year, mainly driven by Massive IoT and CBRS Broadband. While supply chain constraints remain a potential disruptor, we have improved visibility at this time for sufficient capacity to meet our customer demand in 2022, as the majority of the anticipated shortfall has been resolved.
“Our expanded partnership with Renesas strengthens our go-to-market opportunities for our products and provides an opportunity to reduce our manufacturing costs and increase supply capacity,” continued Mr. Karam. “Sequans’ family of MCU and channel partners, with their globally recognized brands, are the foundation of our go-to-market strategy and important growth drivers for us that are expected to accelerate in 2022. We are entering 2022 with a record backlog, and our pipeline now exceeds $650 million of potential product revenue, of which design wins represent almost 50%. We are extending our success in 2021 with our CAT-M Monarch 2 platform and enjoying an enthusiastic response to the recent launch of our CAT-1 Calliope 2 solution. At this time, around 80% of our design wins are for Massive IoT applications, where we are engaged in over 100 projects, many with high-profile, Tier-1 customers."
Mr. Karam concluded, “My team and I are committed to expanding our 5G Massive IoT and Broadband IoT leadership, leveraging our relationships with our strategic partners and channels and maximizing value for shareholders. As stated on our last earnings call, Sequans is exploring options to finance our 5G investment. We are engaged in productive dialogs with potential strategic partners and are encouraged by their level of interest. Our proven track record of closing strategic deals reinforces our confidence in reaching a mutually beneficial agreement with a new 5G partner.”
Q1 2022 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.
Taking into consideration current customer demand and expectations for component availability, management is targeting revenues to be flat for the quarter ending March 31, 2022, despite the historically seasonally lower activity in the first quarter, with a lower operating loss.
_________________
(1) Revenues from the Verizon Jetpack were $7.2 million in the fourth quarter of 2020. There were no revenues from the Verizon Jetpack in the fourth quarter of 2021
Sequans reports fourth quarter and full year 2021 financial results
Page 2
Fourth Quarter and Full Year 2021 Highlights:
Revenue: Revenue was $13.8 million, an increase of 16.1% compared to the third quarter of 2021 and a decrease of 12.5% compared to the fourth quarter of 2020. Full-year revenue was $50.9 million for each 2021 and 2020.
Gross margin: Gross margin was 57.1% compared to 49.2% in the third quarter of 2021 and compared to 45.1% in the fourth quarter of 2020. Full-year gross margin increased from 46.1% in 2020 to 53.4% in 2021.
Operating loss: Operating loss was $4.0 million compared to $5.1 million in the third quarter of 2021 and $5.4 million in the fourth quarter of 2020. Full year operating loss for 2021 was $18.3 million compared to $24.7 million for 2020.
Net profit / loss: Net loss was $7.7 million, or ($0.21) per diluted ADS, compared to net profit of $0.2 million, or $0.01 per ADS, in the third quarter of 2021 and a net loss of $11.3 million, or ($0.36) per ADS, in the fourth quarter of 2020. Net loss in the fourth quarter of 2021 includes a $1.2 million loss on the change in fair value of the convertible debt derivative whereas in the third quarter there was a gain of $7.7 million. Full year net loss for 2021 was $20.3 million, or ($0.55) per ADS, compared to $54.5 million, or ($1.94) per ADS, for 2020. Net loss for the full year includes a $3.8 million gain on the change in fair value of the convertible debt derivative whereas in 2020 there was a loss of $13.1 million.
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 $3.5 million, or ($0.09) per ADS, compared to $5.3 million, or ($0.14) per ADS in the third quarter of 2021, and $8.5 million, or ($0.28) per ADS, in the fourth quarter of 2020. The non-IFRS net loss includes foreign exchange gains of $118,000, or less than $0.01 per ADS, in the fourth quarter of 2021 and $409,000, or ($0.01) per ADS, in the third quarter of 2021 and a foreign exchange loss of $1.9 million, or ($0.06) per ADS, in the fourth quarter of 2020. Full year non-IFRS net loss for 2021 was $19.5 million, or ($0.53) per ADS, compared to $33.0 million, or ($1.17) per ADS in 2020. Full year non-IFRS net loss for 2021 includes foreign exchange gains of $921,000, or $0.03 per ADS, compared with foreign exchange losses of $2.7 million, or ($0.09) per ADS, in 2020.
Cash: Cash and cash equivalents and short-term deposits at December 31, 2021 totaled $4.8 million compared to $18.5 million at December 31, 2020. The balance at the end of 2021 does not reflect $16.7 million received after December 31, 2021 in proceeds from the Renesas strategic agreement and investment announced in January 2022.
Conference Call and Webcast
Sequans plans to conduct a teleconference and live webcast to discuss the financial results for the fourth quarter of 2021 today, February 8, 2022 at 8:00 a.m. ET /14:00 CET. To participate in the live call, analysts and investors should dial 877-407-0792 or +1 201-689-8263 if outside the U.S. When prompted, provide the event title or access code: 13725431. A live and archived webcast of the call will be available from the Investors section of the Sequans website at https://www.sequans.com/company/investor-relations/webcasts-and-presentations/. An audio replay of the conference call will be available until February 22, 2022 by dialing toll free 844-512-2921 or 412-317-6671 from outside the U.S., using the following access code: 13725431.
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 future results of operations and financial positions, business strategy and plans, including financing alternatives for our 5G business and ability to enter into a new 5G strategic agreement, expectations for Massive IoT sales, the impact of the Covid-19 on our supply chain and on customer demand, our expectation for sufficient capacity to meet customer demand in 2022, the impact of component shortages and manufacturing capacity, our ability to convert our pipeline to revenue 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, 2020, some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: (i)
Sequans reports fourth quarter and full year 2021 financial results
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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) the impact of Covid-19 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, (xiii) 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.
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, conversions and repayments, 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 planned 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.
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: Kimberly Rogers, +1 385.831-7337, krogers@sequans.com
Condensed financial tables follow
Sequans reports fourth quarter and full year 2021 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) | Dec 31, 2021 | September 30, 2021 | Dec 31, 2020 | |||||||||||||||||||||||
| Revenue : | ||||||||||||||||||||||||||
| Product revenue | $ | 6,924 | $ | 7,545 | $ | 12,064 | ||||||||||||||||||||
| Services and license revenue | 6,886 | 4,346 | 3,727 | |||||||||||||||||||||||
| Total revenue | 13,810 | 11,891 | 15,791 | |||||||||||||||||||||||
| Cost of revenue | 5,922 | 6,043 | 8,677 | |||||||||||||||||||||||
| Gross profit | 7,888 | 5,848 | 7,114 | |||||||||||||||||||||||
| Operating expenses : | ||||||||||||||||||||||||||
| Research and development | 6,678 | 6,634 | 7,938 | |||||||||||||||||||||||
| Sales and marketing | 2,342 | 2,116 | 2,003 | |||||||||||||||||||||||
| General and administrative | 2,897 | 2,181 | 2,606 | |||||||||||||||||||||||
| Total operating expenses | 11,917 | 10,931 | 12,547 | |||||||||||||||||||||||
| Operating loss | (4,029) | (5,083) | (5,433) | |||||||||||||||||||||||
| Financial income (expense): | ||||||||||||||||||||||||||
| Interest income (expense), net | (2,475) | (2,685) | (3,643) | |||||||||||||||||||||||
| Change in fair value of convertible debt derivative | (1,176) | 7,706 | 111 | |||||||||||||||||||||||
| Foreign exchange gain (loss) | 122 | 409 | (1,936) | |||||||||||||||||||||||
| Loss before income taxes | (7,558) | 347 | (10,901) | |||||||||||||||||||||||
| Income tax expense | 173 | 155 | 361 | |||||||||||||||||||||||
| Profit (Loss) | $ | (7,731) | $ | 192 | $ | (11,262) | ||||||||||||||||||||
| Attributable to : | ||||||||||||||||||||||||||
| Shareholders of the parent | (7,731) | 192 | (11,262) | |||||||||||||||||||||||
| Minority interests | — | — | — | |||||||||||||||||||||||
| Basic loss per ADS | ($0.21) | $0.01 | ($0.36) | |||||||||||||||||||||||
| Diluted loss per ADS | ($0.21) | $— | ($0.36) | |||||||||||||||||||||||
| Weighted average number of ADS used for computing: | ||||||||||||||||||||||||||
| — Basic | 37,497,367 | 37,382,595 | 31,044,769 | |||||||||||||||||||||||
| — Diluted | 37,497,367 | 41,024,405 | 31,044,769 | |||||||||||||||||||||||
Sequans reports fourth quarter and full year 2021 financial results
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SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Twelve months ended Dec 31, | |||||||||||||||||
| (in thousands of US$, except share and per share amounts) | 2021 | 2020 | |||||||||||||||
| Revenue : | |||||||||||||||||
| Product revenue | $ | 30,410 | $ | 37,919 | |||||||||||||
| Services and license revenue | 20,469 | 12,997 | |||||||||||||||
| Total revenue | 50,879 | 50,916 | |||||||||||||||
| Cost of revenue | 23,690 | 27,466 | |||||||||||||||
| Gross profit | 27,189 | 23,450 | |||||||||||||||
| Operating expenses : | |||||||||||||||||
| Research and development | 26,414 | 30,855 | |||||||||||||||
| Sales and marketing | 9,049 | 7,912 | |||||||||||||||
| General and administrative | 10,045 | 9,369 | |||||||||||||||
| Total operating expenses | 45,508 | 48,136 | |||||||||||||||
| Operating loss | (18,319) | (24,686) | |||||||||||||||
| Financial income (expense): | |||||||||||||||||
| Interest income (expense), net | (11,282) | (14,474) | |||||||||||||||
| Change in fair value of convertible debt derivative | 3,848 | (13,129) | |||||||||||||||
| Impact of debt reimbursement | 5,177 | 1,399 | |||||||||||||||
| Foreign exchange gain (loss) | 925 | (2,650) | |||||||||||||||
| Loss before income taxes | (19,651) | (53,540) | |||||||||||||||
| Income tax expense | 625 | 936 | |||||||||||||||
| Profit (Loss) | $ | (20,276) | $ | (54,476) | |||||||||||||
| Attributable to : | |||||||||||||||||
| Shareholders of the parent | (20,276) | (54,476) | |||||||||||||||
| Minority interests | — | — | |||||||||||||||
| Basic loss per ADS | ($0.55) | ($1.94) | |||||||||||||||
| Diluted loss per ADS | ($0.55) | ($1.94) | |||||||||||||||
| Weighted average number of ADS used for computing: | |||||||||||||||||
| — Basic | 36,672,946 | 28,108,247 | |||||||||||||||
| — Diluted | 36,672,946 | 28,108,247 | |||||||||||||||
Sequans reports fourth quarter and full year 2021 financial results
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SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| At Dec 31, | At Dec 31, | |||||||||||||
| (in thousands of US$) | 2021 | 2020 (1) | ||||||||||||
| ASSETS | ||||||||||||||
| Non-current assets | ||||||||||||||
| Property, plant and equipment | $ | 7,862 | $ | 9,187 | ||||||||||
| Intangible assets | 38,132 | 25,312 | ||||||||||||
| Deposits and other receivables | 2,311 | 588 | ||||||||||||
| Other non-current financial assets | 357 | 386 | ||||||||||||
| Total non-current assets | 48,662 | 35,473 | ||||||||||||
| Current assets | ||||||||||||||
| Inventories | 6,433 | 6,225 | ||||||||||||
| Trade receivables | 13,622 | 17,277 | ||||||||||||
| Contract assets | 789 | 371 | ||||||||||||
| Prepaid expenses | 2,108 | 962 | ||||||||||||
| Other receivables | 7,197 | 3,264 | ||||||||||||
| Research tax credit receivable | 5,918 | 5,110 | ||||||||||||
| Short-term deposits | — | 10,900 | ||||||||||||
| Cash and cash equivalents | 4,835 | 7,574 | ||||||||||||
| Total current assets | 40,902 | 51,683 | ||||||||||||
| Total assets | $ | 89,564 | $ | 87,156 | ||||||||||
| EQUITY AND LIABILITIES | ||||||||||||||
| Equity | ||||||||||||||
| Issued capital, euro 0.02 nominal value, 151,419,322 shares authorized, issued and outstanding at December 31, 2021 (133,934,090 shares at December 31, 2020) | $ | 3,687 | $ | 3,269 | ||||||||||
| Share premium | 298,389 | 276,560 | ||||||||||||
| Other capital reserves | 57,198 | 46,677 | ||||||||||||
| Accumulated deficit | (383,485) | (363,209) | ||||||||||||
| Other components of equity | (95) | (103) | ||||||||||||
| Total equity | (24,306) | (36,806) | ||||||||||||
| Non-current liabilities | ||||||||||||||
| Government grant advances, loans and other liabilities | 9,354 | 11,203 | ||||||||||||
| Venture debt | — | 2,172 | ||||||||||||
| Convertible debt | 36,373 | 26,074 | ||||||||||||
| Convertible debt embedded derivative | 10,081 | 12,395 | ||||||||||||
| Lease liabilities | 3,373 | 4,762 | ||||||||||||
| Trade payables | 964 | 851 | ||||||||||||
| Provisions | 2,137 | 1,554 | ||||||||||||
| Deferred tax liabilities | 138 | 19 | ||||||||||||
| Contract liabilities | 214 | 2,397 | ||||||||||||
| Total non-current liabilities | 62,634 | 61,427 | ||||||||||||
| Current liabilities | ||||||||||||||
| Trade payables | 13,916 | 15,701 | ||||||||||||
| Interest-bearing receivables financing | 9,518 | 14,228 | ||||||||||||
| Venture debt | — | 6,104 | ||||||||||||
| Lease liabilities | 1,247 | 1,014 | ||||||||||||
| Government grant advances and loans | 6,206 | 3,867 | ||||||||||||
| Contract liabilities | 10,693 | 13,145 | ||||||||||||
| Other current liabilities and provisions | 9,656 | 8,476 | ||||||||||||
| Total current liabilities | 51,236 | 62,535 | ||||||||||||
| Total equity and liabilities | $ | 89,564 | $ | 87,156 | ||||||||||
| (1) 2020 amounts restated to reflect the impact of application of the IFRS IC decision on IAS 19 | ||||||||||||||
Sequans reports fourth quarter and full year 2021 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$) | 2021 | 2020 | ||||||||||||||||||
| Operating activities | ||||||||||||||||||||
| Loss before income taxes | $ | (19,651) | $ | (53,540) | ||||||||||||||||
| Non-cash adjustment to reconcile income before tax to net cash from (used in) operating activities | ||||||||||||||||||||
| Depreciation and impairment of property, plant and equipment | 3,521 | 3,755 | ||||||||||||||||||
| Amortization and impairment of intangible assets | 7,051 | 6,018 | ||||||||||||||||||
| Share-based payment expense | 5,135 | 2,985 | ||||||||||||||||||
| Increase in provisions | 474 | 112 | ||||||||||||||||||
| Interest expense, net | 11,285 | 14,474 | ||||||||||||||||||
| Change in the fair value of convertible debt embedded derivative | (3,848) | 13,129 | ||||||||||||||||||
| Impact of debt reimbursement | (5,177) | — | ||||||||||||||||||
| Convertible debt amendment | — | (1,399) | ||||||||||||||||||
| Foreign exchange loss (gain) | (1,053) | 2,749 | ||||||||||||||||||
| Loss (Gain) on disposal of property, plant and equipment | 48 | 6 | ||||||||||||||||||
| Bad debt expense | 65 | 4 | ||||||||||||||||||
| Working capital adjustments | ||||||||||||||||||||
| Decrease (Increase) in trade receivables and other receivables | 1,421 | (8,703) | ||||||||||||||||||
| Decrease (increase) in inventories | (208) | 439 | ||||||||||||||||||
| Increase in research tax credit receivable | (4,037) | (718) | ||||||||||||||||||
| Increase in trade payables and other liabilities | 4,741 | 6,216 | ||||||||||||||||||
| Decrease in contract liabilities | (6,791) | (4,897) | ||||||||||||||||||
Increase (Decrease) in government grant advances (1) | (1,387) | 270 | ||||||||||||||||||
| Income tax paid | (346) | (286) | ||||||||||||||||||
| Net cash flow provided by (used in) operating activities | (8,757) | (19,386) | ||||||||||||||||||
| Investing activities | ||||||||||||||||||||
| Purchase of intangible assets and property, plant and equipment | (9,544) | (6,566) | ||||||||||||||||||
| Capitalized development expenditures | (19,075) | (7,209) | ||||||||||||||||||
| Purchase of financial assets | (1,694) | (116) | ||||||||||||||||||
| Decrease (increase) of short-term deposit | 10,900 | (10,900) | ||||||||||||||||||
| Interest received | 47 | 29 | ||||||||||||||||||
| Net cash flow used in investments activities | (19,366) | (24,762) | ||||||||||||||||||
| Financing activities | ||||||||||||||||||||
| Proceeds from issue of warrants, exercise of stock options/warrants | 138 | 32 | ||||||||||||||||||
| Public equity offering proceeds, net of transaction costs paid | 9,852 | 29,272 | ||||||||||||||||||
| Proceeds (Repayment of) from interest-bearing receivables financing | 21 | 9,914 | ||||||||||||||||||
| Proceeds from convertible debt, net of transaction cost | 39,682 | 2,050 | ||||||||||||||||||
| Proceeds from government loans, net of transaction cost | — | 5,392 | ||||||||||||||||||
| Proceeds from interest-bearing research project financing | — | 405 | ||||||||||||||||||
| Payment of lease liabilities | (1,063) | (1,221) | ||||||||||||||||||
| Repayment of convertible debt | (8,750) | — | ||||||||||||||||||
| Repayment of government loans | (469) | (241) | ||||||||||||||||||
| Repayment of venture debt | (8,042) | (5,165) | ||||||||||||||||||
| Repayment of interest-bearing research project financing | (804) | (355) | ||||||||||||||||||
| Interest paid | (5,185) | (2,464) | ||||||||||||||||||
| Net cash flows from financing activities | 25,380 | 37,619 | ||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | (2,743) | (6,529) | ||||||||||||||||||
| Net foreign exchange difference | 4 | 5 | ||||||||||||||||||
| Cash and cash equivalents at January 1 | 7,574 | 14,098 | ||||||||||||||||||
| Cash and cash equivalents at end of the period | 4,835 | 7,574 | ||||||||||||||||||
(1) Including $1.4 million related to the forgiveness of a debt in April 2021
Sequans reports fourth quarter and full year 2021 financial results
Page 8
SEQUANS COMMUNICATIONS S.A.
UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL RESULTS
| (in thousands of US$, except share and per share amounts) | Three months ended | ||||||||||||||||||||||
| Dec 31, 2021 | September 30, 2021 | Dec 31, 2020 | |||||||||||||||||||||
| Net IFRS loss as reported | $ | (7,731) | $ | 192 | $ | (11,262) | |||||||||||||||||
| Add back | |||||||||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | 1,861 | 1,022 | 1,172 | ||||||||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | 1,176 | (7,706) | (111) | ||||||||||||||||||||
Non-cash interest on convertible debt and other financing (2) | 1,219 | 1,193 | 1,663 | ||||||||||||||||||||
| Non-IFRS loss adjusted | $ | (3,475) | $ | (5,299) | $ | (8,538) | |||||||||||||||||
| IFRS basic loss per ADS as reported | ($0.21) | $0.01 | ($0.36) | ||||||||||||||||||||
| Add back | |||||||||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | $0.05 | $0.03 | $0.04 | ||||||||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | $0.03 | ($0.21) | $0.00 | ||||||||||||||||||||
Non-cash interest on convertible debt and other financing (2) | $0.03 | $0.03 | $0.04 | ||||||||||||||||||||
| Non-IFRS basic loss per ADS | ($0.09) | ($0.14) | ($0.28) | ||||||||||||||||||||
| IFRS diluted loss per ADS | ($0.21) | $— | ($0.36) | ||||||||||||||||||||
| Add back | |||||||||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | $0.05 | $0.03 | $0.04 | ||||||||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | $0.03 | ($0.21) | $0.00 | ||||||||||||||||||||
Non-cash interest on convertible debt and other financing (2) | $0.03 | $0.03 | $0.04 | ||||||||||||||||||||
| Non-IFRS diluted loss per ADS | ($0.09) | ($0.14) | ($0.28) | ||||||||||||||||||||
| (1) Included in the IFRS loss as follows: | |||||||||||||||||||||||
| Cost of product revenue | $ | 14 | $ | 14 | $ | 28 | |||||||||||||||||
| Research and development | 555 | 487 | 647 | ||||||||||||||||||||
| Sales and marketing | 346 | 200 | 190 | ||||||||||||||||||||
| General and administrative | 946 | 321 | 307 | ||||||||||||||||||||
| (2) Related to the difference between contractual and effective interest rates | |||||||||||||||||||||||
Sequans reports fourth quarter and full year 2021 financial results
Page 9
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, | ||||||||||||||||
| 2021 | 2020 | ||||||||||||||||
| Net IFRS loss as reported | $ | (20,276) | $ | (54,476) | |||||||||||||
| Add back | |||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | 5,135 | 2,985 | |||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | (3,848) | 13,129 | |||||||||||||||
| Non-cash interest on convertible debt and other financing (2) | 4,684 | 6,355 | |||||||||||||||
| Non-cash impact of deferred tax income (loss) | — | 398 | |||||||||||||||
| Impact of debt reimbursement | (5,177) | — | |||||||||||||||
| Non-cash impact of convertible debt amendment | — | (1,399) | |||||||||||||||
| Non-IFRS loss adjusted | $ | (19,482) | $ | (33,008) | |||||||||||||
| IFRS basic loss per ADS as reported | ($0.55) | ($1.94) | |||||||||||||||
| Add back | |||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | $0.14 | $0.11 | |||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | ($0.11) | $0.47 | |||||||||||||||
Non-cash interest on convertible debt and other financing (2) | $0.13 | $0.23 | |||||||||||||||
| Non-cash impact of deferred tax income (loss) | $0.00 | $0.01 | |||||||||||||||
| Impact of debt reimbursement | ($0.14) | $0.00 | |||||||||||||||
| Non-cash impact of convertible debt amendment | $0.00 | ($0.05) | |||||||||||||||
| Non-IFRS basic loss per ADS | ($0.53) | ($1.17) | |||||||||||||||
| IFRS diluted loss per ADS | ($0.55) | ($1.94) | |||||||||||||||
| Add back | |||||||||||||||||
Non-cash stock-based compensation expense according to IFRS 2 (1) | $0.14 | $0.11 | |||||||||||||||
| Non-cash change in the fair value of convertible debt embedded derivative | ($0.11) | $0.47 | |||||||||||||||
Non-cash interest on convertible debt and other financing (2) | $0.13 | $0.23 | |||||||||||||||
| Non-cash impact of deferred tax income (loss) | $0.00 | $0.01 | |||||||||||||||
| Impact of debt reimbursement | ($0.14) | $0.00 | |||||||||||||||
| Non-cash impact of convertible debt amendment | $0.00 | ($0.05) | |||||||||||||||
| Non-IFRS basic loss per ADS | ($0.53) | ($1.17) | |||||||||||||||
| (1) Included in the IFRS loss as follows: | |||||||||||||||||
| Cost of product revenue | $ | 57 | $ | 42 | |||||||||||||
| Research and development | 2,109 | 1,394 | |||||||||||||||
| Sales and marketing | 970 | 529 | |||||||||||||||
| General and administrative | 1,999 | 1,020 | |||||||||||||||
| (2) Related to the difference between contractual and effective interest rates | |||||||||||||||||