WISeQey Corp 20-F for FY2020

UNITED STATES

SECURITIESAND EXCHANGE COMMISSION

WASHINGTON,D.C. 20549

____________________________________________________________________________________________________

FORM 20-F

____________________________________________________________________________________________________

(Mark One)

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

or

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31,2020

or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

or

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________to _____________________.

Commission file number: 001-39115

____________________________________________________________________________________________________

WISEKEY INTERNATIONAL HOLDING AG

(Exact name of Registrant as specified in its charter)

____________________________________________________________________________________________________

WISEKEY INTERNATIONAL HOLDING LTD

(Translation of Registrant's name into English)

____________________________________________________________________________________________________

Canton of Zug, Switzerland
(Jurisdiction of incorporation or organization)

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General-Guisan-Strasse 6

CH-6300 Zug, Switzerland

(Address of principal executive offices)

_________________________________________________________________________________________________

Peter Ward

Chief Financial Officer

WISeKey International Holding AG

General-Guisan-Strasse 6

CH-6300 Zug, Switzerland

Tel: +41-22-594-3000

Fax: +41-22-594-3001

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Copies to:

Herman H. Raspé, Esq.

Patterson Belknap Webb & Tyler LLP

1133 Avenue of the Americas

New York, New York 10036

Tel: (212) 336-2000

____________________________________________________________________________________________________

Securities registered or to be registeredpursuant to Section 12(b) of the Act.

Title of each class	Trading Symbols	Name of each exchange and on which registered
American Depositary Shares,each representing fiveClass B Shares, par value CHF 0.05 per share<br><br> <br>Class B Shares, par value CHF0.05 per share*	WKEY	The Nasdaq Stock Market LLC

____________________

* Not for trading, but only in connection with the registration of the American Depositary Shares.

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 40,021,988 Class A Shares and 42,839,554 Class B Shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or (15)(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "accelerated filer," "large accelerated filer" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐	Accelerated Filer ☐	Non-Accelerated Filer ☐
		Emerging Growth Company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒	International Financial Reporting<br>Standards as issued<br><br> <br>by the International Accounting<br>Standards Board ☐	Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

TABLE OF CONTENTS

INTRODUCTION AND USE OF CERTAIN TERMS			1
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS			2
Item 1.	Identity of Directors, Senior Management and Advisers		3
Item 2.	Offer Statistics and Expected Timetable		3
Item 3.	Key Information		3
	A.	Selected Financial Data	3
	B.	Capitalization and Indebtedness	5
	C.	Reasons for the Offer and Use of Proceeds	5
	D.	Risk Factors	5
Item 4.	Information on the Company		29
	A.	History and Development of the Company	29
	B.	Business Overview	29
	C.	Organizational Structure	41
	D.	Property, Plants, and Equipment	41
Item 4A.	Unresolved Staff Comments		42
Item 5.	Operating and Financial Review and Prospects		42
	A.	Operating Results	42
	B.	Liquidity and Capital Resources	57
	C.	Research and Development, Patents and Licenses, Etc.	69
	D.	Trend Information	69
	E.	Off-Balance Sheet Arrangements	70
	F.	Tabular Disclosure of Contractual Obligations	70
Item 6.	Directors, Senior Management and Employees		70
	A.	Directors and Senior Management	70
	B.	Compensation	74
	C.	Board Practices	77
	D.	Employees	81
	E.	Share Ownership	81
Item 7.	Major Shareholders and Related Party Transactions		83
	A.	Major Shareholders	83
	B.	Related Party Transactions	85
	C.	Interests of experts and counsel	92
Item 8.	Financial Information		92
	A.	Consolidated Financial Statements and Other Financial Information	92
	B.	Significant Changes	92
Item 9.	The Listing		93
	A.	Listing Details	93
	B.	Plan of Distribution	93
	C.	Markets	93
	D.	Selling Shareholders	93
	E.	Dilution	93
	F.	Expenses of the Issue	93
Item 10.	Additional Information		93
	A.	Share Capital	93
	B.	Memorandum and Articles of Association	93
	C.	Material Contracts	114
	D.	Exchange Controls	122
	E.	Taxation	122
	F.	Dividends and Paying Agents	127
	G.	Statement by Experts	127
	H.	Documents on Display	128
	I.	Subsidiary Information	128
Item 11.	Quantitative and Qualitative Disclosures about Market Risk		128
Item 12.	Description of Securities Other than Equity Securities		129
	A.	Debt Securities	129
	B.	Warrants and Rights	129

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	C.	Other Securities	129
	D.	American Depositary Shares	129
Item 13.	Defaults, Dividend Arrearages and Delinquencies		131
Item 14.	Material Modifications to The Rights of Security Holders and Use of Proceeds		131
Item 15.	Controls and Procedures		131
Item 16.	[RESERVED]		131
Item 16A.	Audit Committee Financial Expert		131
Item 16B.	Code of Ethics		131
Item 16C.	Principal Accounting Fees and Services		131
Item 16D.	Exemptions from the Listing Standards for Audit Committees		132
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		132
Item 16F.	Change in Registrant's Certifying Accountant		132
Item 16G.	Corporate Governance		133
Item 16H.	Mine Safety Disclosure		133
Item 17.	Financial Statements		134
Item 18.	Financial Statements		134
Item 19.	Exhibits		134
Index to Exhibits			134
SIGNATURES			137

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INTRODUCTION AND USE OF CERTAIN TERMS

We were formed in 2015 as a holding company to incorporate, acquire, hold, and dispose of interests in national and international entities, in particular entities active in the area of security technology and related areas. Our Class B Shares, as defined below, have been listed on the Swiss Exchange (SIX) since 2016 and our American Depositary Shares ("ADSs") have been listed on the Nasdaq Stock Market LLC under the symbol "WKEY" since December 4, 2019. The Bank of New York Mellon, acting as depositary, registers and delivers our ADSs, each of which represents five of our Class B Shares.

We have prepared this annual report using a number of conventions, which you should consider when reading the information contained herein. In this annual report, "we," "us," "our Company," "the Group," "WISeKey," "WISeKey International Holding Ltd" and "our" shall refer to WISeKey International Holding AG and its subsidiaries, affiliates, and predecessor entities. Additionally, this annual report uses the following conventions:

·	"CHF" and "Swiss francs" refer to the legal currency of Switzerland
·	"Class A Shares" refers to our Class A Shares, par value CHF 0.01 per share
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·	"Class B Shares" refers to our Class B Shares, par value CHF 0.05 per share
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·	"NASDAQ" refers to the Nasdaq Stock Market LLC
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·	"PKI" refers to Public Key Infrastructure
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·	"$," "US $," "USD" and "U.S. dollars" refer to the legal<br>currency of the United States
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·	"SIX" refers to the Swiss Exchange (SIX)
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·	"Switzerland" refers to the Swiss Confederation
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·	"IoT" refers to Internet of Things
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·	“RPA” refers to Robotic Process Automation
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·	“SaaS” refers to Software as a Service
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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This annual report contains forward-looking statements. Some of these forward-looking statements can be identified by terms and phrases such as "anticipate," "should," "likely," "foresee," "believe," "estimate," "expect," "intend," "continue," "could," "may," "plan," "project," "predict," "will," and similar expressions. Forward-looking statements appear in a number of places in this annual report and include, but are not limited to, statements contained in the sections entitled "Item 3. Key Information," "Item 4. Informationon the Company" and "Item 5. Operating and Financial Review and Prospects."

These forward-looking statements include, but are not limited to, statements relating to:

·	Our anticipated goals, growth strategies and profitability;
·	Our ability to attract new customers and retain existing customer base;
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·	Our ability to attract and retain qualified employees and key personnel;
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·	Our ability to develop new products and enhancements to our existing products;
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·	Our ability to anticipate market needs and opportunities;
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·	Our ability to prevent security breaches and unauthorized access to confidential customer information;
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·	Our ability to maintain, protect and enhance our intellectual property;
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·	The sufficiency of our cash and cash equivalents to meet our liquidity needs;
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·	Our ability to comply with modified or new laws and regulations relating to our industries;
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·	The activities of our competitors and the introduction of competing products by our competitors;
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·	How long we will qualify as an emerging growth company or a foreign private issuer;
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·	The future growth of the information technology and cybersecurity industry;
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·	Assumptions underlying or related to any of the foregoing;
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·	Other risks and uncertainties, including those listed in this section of this Form 20-F titled<br>"Item 3.D—Risk Factors."
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The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us and are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by these forward-looking statements which are set forth in "Item3D. Risk Factors." Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results.

Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement included in this annual report should not be construed as exhaustive. You should read this annual report, and each of the documents filed as exhibits to the annual report, completely, with this cautionary note in mind, and with the understanding that our actual future results may be materially different from what we expect.

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Item 1.	Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.	Offer Statistics and Expected Timetable

Not applicable.

Item 3.	Key Information
A.	Selected Financial Data
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The following tables set forth our selected consolidated financial and other data for the fiscal years ended December 31, 2020, December 31, 2019 and December 31, 2018 and are derived from our audited consolidated financial statements included elsewhere in this annual report. This information should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this annual report, and the information contained in "Item 5. Operating and Financial Review and Prospects" and "Item 3D. Risk Factors." The historical financial and other data included here and elsewhere in this annual report should not be assumed to be indicative of our future financial condition or results of operations.

We note that, in 2020, the Group adopted Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (Topic 820) which, under its core principle, modifies the disclosure requirements on fair value measurements. The Group also adopted ASU 2016-13, Financial Instruments – Credit Losses, which requires the measurement of expected lifetime credit losses, rather than incurred losses, for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts and ASU 2019-04, Codification improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies and improves areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement of financial instruments to ASU 2016-01, 2016-13 & 2017-12. The Group has elected to follow this guidance.

We adopted the new standards as of January 01, 2020. Accordingly, previously reported financial statements, including footnote disclosures, have not been recast to reflect the application of the new standard to all comparative periods presented. Financial statements for the years ended December 31, 2019 and 2018 have not been restated.

Therefore, our selected consolidated financial and other data for the fiscal year ended December 31, 2020 reflect the requirements of the related ASUs, whilst our selected consolidated financial and other data for the fiscal years ended December 31, 2019 and December 31, 2018 reflect the old standards.

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Consolidated Statement of Comprehensive Income/(Loss)

'000 (except earnings per share: )	2019	2018
Net sales	22,652	34,280
Cost of sales	(12,871)	(17,607)
Depreciation of production assets	(325)	(712)
Gross profit	9,456	15,961
Total operating expenses	(29,960)	(25,021)
Operating loss	(20,504)	(9,060)
Non-operating expenses	(2,513)	(795)
Loss from continuing operations before income tax expense	(23,017)	(9,855)
Income tax expense	(13)	(53)
Loss from continuing operations, net	(23,030)	(9,908)
Income / (loss) on discontinued operations	30,484	(6,357)
Net income / (loss)	7,454	(16,265)
Less: Net income / (loss) attributable to noncontrolling interests	(733)	13
Net income / (loss) attributable to WISeKey International Holding AG	8,187	(16,278)
Earnings per share ()
Earnings from continuing operations per share - Basic	(0.64)	(0.29)
Earnings from continuing operations per share - Diluted	(0.64)	(0.29)
Earnings from discontinued operations per share - Basic	0.84	(0.19)
Earnings from discontinued operations per share - Diluted	0.81	(0.19)
Earning per share attributable to WISeKey International Holding AG
Basic	0.23	(0.48)
Diluted	0.23	(0.48)
Other comprehensive income / (loss)	(1,683)	395
Comprehensive income / (loss)	5,771	(15,870)
Comprehensive income / (loss) attributable to noncontrolling interests	(860)	(10)
Comprehensive income / (loss) attributable to WISeKey International Holding AG	6,631	(15,860)

All values are in US Dollars.

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Consolidated Balance Sheet

	As at December 31,
USD'000 (except share amounts)	2020	2019
Cash and cash equivalents	19,650	12,121
Restricted cash, current	2,113	2,525
Other current assets	16,900	8,938
Total current assets	38,663	23,584
Total noncurrent assets	14,218	26,320
TOTAL ASSETS	52,881	49,904
Total current liabilities	24,977	20,150
Total noncurrent liabilities	13,478	9,310
TOTAL LIABILITIES	38,455	29,460
Common stock<br>- Class A<br><br> <br>CHF 0.01<br>par value<br><br> <br>Authorized<br>- 40,021,988, 40,021,988 and 40,021,988 shares<br><br> <br>Issued and<br>outstanding - 40,021,988, 40,021,988 and 40,021,988 shares	400	400
Common stock - Class<br>B<br><br> <br>CHF 0.05 par value<br><br> <br>Authorized –<br>63,234,625, 41,066,298 and 41,063,901<br><br> <br>Issued – 47,622,689,<br>28,824,086 and 28,769,797<br><br> <br>Outstanding –<br>42,839,554, 27,621,895 and 26,681,736	2,490	1,475
Total shareholders' equity attributable to WISeKey shareholders	16,269	22,015
Noncontrolling interests in consolidated subsidiaries	(1,843)	(1,571)
Total shareholders' equity	14,426	20,444
TOTAL LIABILITIES AND EQUITY AND REDEEMABLE PREFERRED SHARES	52,881	49,904
B.	Capitalization and Indebtedness
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Not applicable.

C.	Reasons for the Offer and Use of Proceeds

Not applicable.

D.	Risk Factors

Risks Related to Our Business and Industry

COVID-19 andprolonged economic uncertainties or downturns could materially adversely affect our business.

Our business depends on our current and prospective customers' ability and willingness to spend money in security applications, which in turn is dependent upon the overall economic health. Negative economic conditions have been seen globally since the COVID-19 pandemic began and while there is positive movement, the overall economic impact is still unknown. As a result of the overall impact of COVID-19 and other conditions resulting from financial and credit market fluctuations, there could be a decrease in corporate spending on information security software. Continuing economic challenges may cause our customers to re-evaluate decisions to purchase our solution or to delay their purchasing decisions, which could adversely impact our results of operations.

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The future growthof the information technology and cybersecurity industry is uncertain.

Information (including cybersecurity) technology companies are generally subject to the following risks: rapidly changing technologies; short product life cycles; fierce competition; aggressive pricing and narrow profit margins; the loss of patent, copyright and trademark protections; cyclical market patterns; evolving industry standards; and frequent new product introductions. Technology companies may be smaller and less experienced companies, with limited product lines, markets or financial resources and fewer experienced management or marketing personnel. Information technology company stocks, especially those which are Internet related, have experienced extreme price and volume fluctuations that are often unrelated to their operating performance.

TechnologicalChange

WISeKey needs to keep pace with changing technologies in order to provide effective identification and authentication solutions. In addition, we need to continue adjacent and inorganic growth in order to broaden and strengthen the portfolio of products and stay ahead of the technology changes and risks in order to be successful. WISeKey needs to anticipate, and quickly react to, rapid changes occurring in communications technologies and to the development of new and improved devices and services that result from these changes. WISeKey must also continue to move vertically up the value chain with its customers in order to secure future business and substantiate growth. If WISeKey is unable to respond quickly and cost-effectively to changing communications technologies and devices and evolving industry standards, the existing service offering could become non-competitive and WISeKey may lose market share. WISeKey's success will depend, in part, on its ability to effectively use leading technologies critical to the business, enhance its existing solutions, find appropriate technology partners, and continue to develop new solutions and technology that address the increasingly sophisticated and varied needs of its current and prospective clients and their customers and its ability to influence and respond to technological advances, emerging industry and regulatory standards and practices and competitive service offerings. WISeKey's ability to remain technologically competitive may require substantial expenditures and lead-time and the integration of newly acquired technologies will also take time. If WISeKey is unable to adapt and integrate in a timely manner to changing market conditions or customer requirements, its business, financial condition and results of operations could be seriously harmed.

WISeKey facesintense competition from companies that are larger and better known than we are, and we may lack sufficient financial or otherresources to maintain or improve our competitive position.

The digital security market and now the knowledge automation space in which we operate face intense competition, constant innovation and evolving security threats. There are several global security companies with strong presence in this market, including VeriSign, Inc., DigiCert Inc., Entrust Datacard, Let's Encrypt, Symantec Corporation, FireEye, Inc., Red Hat Software, VASCO Data Security International, Inc., Zix Corp, NXP Semiconductors, Infineon Technologies, STMicroelectronics and Samsung Electronics. As we integrate and move into the knowledge automation space there are also related data lake and automation companies with strong foundations including Palantir and Snowflake.

Some of our competitors are large companies that have the technical and financial resources and broad customer bases needed to bring competitive solutions to the market and already have existing relationships as a trusted vendor for other products. Such companies may use these advantages to offer products and services that are perceived to be as effective as ours at a lower price or for free as part of a larger product package or solely in consideration for maintenance and services fees. They may also develop different products to compete with our current security solutions and respond more quickly and effectively than we do to new or changing opportunities, technologies, standards or client requirements. Additionally, we may compete with smaller regional vendors that offer products with a more limited range of capabilities that purport to perform functions similar to our security solutions. Such companies may enjoy stronger sales and service capabilities in their particular regions.

WISeKey's competitors may have competitive advantages, such as:

·	greater name recognition, a longer operating history and a larger customer base;

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·	larger sales and marketing budgets and resources;
·	broader distribution and established relationships with distribution partners and customers;
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·	greater customer care and support resources;
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·	broader supply chains;
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·	greater resources to make acquisitions;
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·	larger intellectual property portfolios; and
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·	greater financial, technical and other resources.
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Our current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their resources. Current or potential competitors may be acquired by third parties with access to greater available resources. As a result of such acquisitions, our current or potential competitors may be able to adapt more quickly to new technologies and customer needs, devote greater resources to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of other opportunities more readily or develop and expand their product and service offerings more quickly than we do. Larger competitors with more diverse product offerings may reduce the price of products that compete with ours in order to promote the sale of other products or may bundle them with other products, which would lead to increased pricing pressure on our products and could cause the average sales prices for our products to decline.

If WISeKey doesnot successfully anticipate market needs and enhance existing products or develop new products that meet those needs on a timelybasis, WISeKey may not be able to compete effectively and WISeKey's ability to generate revenues will suffer.

Many of our customers operate in markets characterized by rapidly changing technologies and business plans, which require them to adapt to increasingly complex digital security infrastructures to protect internal and external corporate communications. As our customers' technologies and business plans grow more complex, we expect them to face new and increasingly sophisticated threats of security breach or counterfeiting. WISeKey faces significant challenges in ensuring that our security and automation solutions effectively protect identities of individual customers, company information and their brands in addition to driving efficient operations through automated decision making. As a result, we must continually modify and improve our products in response to changes in our customers' technology infrastructures.

WISeKey may not be able to successfully anticipate or adapt to changing technology or customer requirements on a timely basis or at all. If we fail to keep up with technological changes or to convince our customers and potential customers of the value of our security and automation solutions even in light of new technologies and integration, our business, results of operations and financial condition could be materially and adversely affected.

WISeKey cannot guarantee that it will be able to anticipate future market needs and opportunities or be able to develop product enhancements or new products to meet such needs or opportunities in a timely manner, if at all. Even if we are able to anticipate, develop and commercially introduce enhancements and new products, there can be no assurance that enhancements or new products will achieve widespread market acceptance.

Our product enhancements or new products could fail to attain sufficient market acceptance for many reasons, including:

·	delays in releasing product enhancements or new products;
·	failure to accurately predict market demand and to supply products that meet this demand in a timely<br>fashion;
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·	failure to accurately price products and solutions;
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·	inability to interoperate effectively with the existing or newly introduced technologies, systems<br>or applications of our existing and prospective customers;
·	defects in our products;
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·	Inability to integrate security and automation;
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·	negative publicity about the performance or effectiveness of our products;
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·	introduction or anticipated introduction of competing products by our competitors; and
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·	installation, configuration or usage errors by our customers.
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If WISeKey fails to anticipate market requirements or fails to develop and introduce product enhancements or new products to meet those needs in a timely manner, that could cause us to lose existing customers and prevent us from gaining new customers, which would significantly harm our business, financial condition and results of operations.

Sometimes itwill be necessary to make a product or product line obsolete and there may be negative impacts to sales or disruption to the customerbase during the ramp down of that product.

All products have a natural lifecycle that includes the inevitable end-of-life (“EOL”) process. During the ramping down of a product, or product family, there are many ways that our business operations can be challenged. Last time buys are a typical way for customers to deal with the EOL of a product that is still critical to one of their end products. These kinds of orders show an increase in short term sales but result in the abrupt drop off of revenue from that customer, for that product, after the last time buy is delivered. Discontinuing a product also comes with the risk that we may lose that customer for good if we do not have a replacement for the product or if they decide to look at alternative suppliers because of the change in supply.

WISeKey is subjectto a number of risks associated with global sales and operations.

Business practices in the global markets that we serve may differ and may require us to include non-standard terms in customer contracts, such as extended payment or warranty terms. To the extent that we enter into customer contracts that include non-standard terms related to payment, warranties or performance obligations, our results of operations may be adversely impacted.

Additionally, our global sales and operations are subject to a number of risks, including the following:

·	difficulty in enforcing contracts and managing collections, as well as long collection periods;
·	costs of doing business globally, including costs incurred in maintaining office space, securing<br>adequate staffing and localizing our contracts;
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·	management communication and integration problems resulting from cultural and geographic dispersion;
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·	risks associated with trade restrictions and foreign legal requirements;
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·	risk of unexpected changes in regulatory practices, tariffs, tax laws and treaties;
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·	compliance with anti-bribery laws;
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·	heightened risk of unfair or corrupt business practices in certain geographies and of improper<br>or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial<br>statements;
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·	social, economic and political instability, terrorist attacks and security concerns in general;
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·	reduced or uncertain protection of intellectual property rights in some countries; and
·	potentially adverse tax consequences.
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These factors could harm our ability to generate future global revenues and, consequently, materially impact our business, results of operations and financial condition.

Some of our largeropportunities depend on our customers’ ability to be awarded significant regional or national contracts in order to fulfilthe volume predictions that were used in the pricing negotiations and forecasts.

The design of many industrial device comes with the risk that the product may not see the demand that was expected in that market, or the high-volume contracts may be awarded to competing suppliers. Our customers may be bidding against several other suppliers to win a government contract and if they lose the bid, we will not see the results that were originally expected during the forecasting of the opportunity size and profitability.

The shift intoknowledge automation and artificial intelligence is unknown and unproven on a global scale.

The automation market has been moving forward with Robotic Process Automation (“RPA”) for years and the demand in the market for the next evolution of such technology remains unknown. Our potential customers need to be accepting to move forward from their current business process automation and RPA implementations in order for WISeKey to be successful. The ability for WISeKey to predict the market and conditions is yet to be proven and the customer reaction remains unknown. In addition, the complex implementation in this sphere requires focused delivery resources and clear plans with the customer. Customer input and knowledge is critical to the success of knowledge automation and therefore some of WISeKey’s potential success will be reliant on its customers belief in the value proposition but their ability to support the implementation.

Our researchand development efforts may not produce successful products or enhancements to our security and automation solutions that resultin significant revenue or other benefits in the near future, if at all.

Investing in research and development personnel, developing new products and enhancing existing products is expensive and time consuming, and there is no assurance that such activities will result in significant new marketable products or enhancements to our products, design improvements, cost savings, revenues or other expected benefits. If we spend significant time and effort on research and development and are unable to generate an adequate return on our investment, our business and results of operations may be adversely affected. This is expected to be exacerbated in the coming year with the required integration of newly acquired knowledge automation assets which is expected to result in a more complex research and development program.

If WISeKey isunable to attract new customers, our future revenues and operating results will be harmed.

Our success depends in large part on our ability to attract new customers. The number of customers that WISeKey adds in a given period impacts both our short-term and long-term revenues. If WISeKey is unable to successfully attract a sufficient number of new customers, we may be unable to generate revenue growth.

A large amount of investment in sales and marketing and support personnel is required to attract new customers. If we are unable to convince these potential new customers of a need for our products or if we are unable to persuade them of our products' efficacy, we may be unable to achieve growth and there may be a meaningful negative impact on future revenues and operating results.

Software errorsand non-compliance may affect our reputation and our financial results.

WISeKey's software applications are complex, the addition of newly acquired assets increases this complexity and there is a risk that defects or errors could arise, particularly where new versions or enhancements are released. Similarly, regulatory and industry requirements are continuously evolving and we may not be able to keep up with them. This could result in adverse consequences for us, such as lost revenue, a delay in market acceptance or customer claims.

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If we experiencesecurity breaches, we could be exposed to liability and our reputation and business could suffer.

We operate sensitive public key infrastructure ("PKI") platforms, retain certain confidential customer information in our secure data centers and registration systems, and our digital certificates and electronic signatures may be used by customers in mission critical applications. It is critical to our business strategy that our facilities and infrastructure remain secure and are perceived by the marketplace to be secure. We may have to expend significant time and money to maintain or increase the security of our facilities and infrastructure. Despite our security measures, our infrastructure may be vulnerable to physical break-ins, computer viruses, attacks by hackers or similar disruptive problems. It is possible that we may have to expend additional financial and other resources to address such problems. In the event of a security breach, we could face significant liability, customers could be reluctant to use our services and we could be at risk for loss of various compliance certifications needed for the operation of our businesses.

WISeKey's reputationand business could be harmed based on real or perceived shortcomings, defects or vulnerabilities in our security solutions or thefailure of our security solutions to meet customers' expectations.

Organizations are facing increasingly sophisticated digital security threats and threats of counterfeiting. If WISeKey fails to identify and respond to new and increasingly complex methods of counterfeiting products or hacking personal and corporate digital accounts, our business and reputation will suffer. In particular, WISeKey may suffer significant adverse publicity and reputational harm if any of our products fail to perform as advertised. An actual or perceived breach of our customers' sensitive business data, regardless of whether the breach is attributable to the failure of our products, could adversely affect the market's perception of the efficacy of our security solutions and current or potential customers may look to our competitors for alternatives to our security solutions. Similarly, an actual or perceived failure of our product to prevent counterfeit products from being detected, regardless of whether such failure is attributable to our products, could adversely affect the market's perception of the efficacy of our authentication solutions and could encourage current or potential customers to look to our competitors for an alternative to our products. The failure of our products may also subject us to product liability lawsuits and financial losses stemming from indemnification of our partners and other third parties, as well as the expenditure of significant financial resources to analyze, correct or eliminate any vulnerability. It could also cause us to suffer reputational harm, lose existing customers or deter them from purchasing additional products and services and prevent new customers from purchasing our security solutions.

InternationalExpansion

WISeKey's strategy includes the international expansion of its business. The expansion into international markets may cause difficulties because of distance, as well as language and cultural differences. Other risks related to international operations include fluctuations in currency exchange rates, difficulties arising from staffing and managing foreign operations, legal and regulatory requirements of different countries, potential political and economic instability, and overlapping or differing tax laws. Management cannot assure that it will be able to market and operate WISeKey's services successfully in foreign markets, select appropriate markets to enter, open new offices efficiently or manage new offices profitably. If WISeKey is not successful in accessing new markets, its results of operations and financial condition could be materially and adversely affected.

If WISeKey isunable to hire, retain and motivate qualified personnel, our business will suffer.

Our future success depends, in part, on our ability to continue to attract and retain highly skilled personnel. Any of our employees may terminate their employment at any time. Competition for highly skilled personnel is frequently intense. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or have divulged proprietary or other confidential information. Further, the training and integration of new employees requires allocation of a significant amount of internal resources and, even if we make this investment, there is no guarantee that existing or new personnel will remain or become productive members of our team. Our inability to attract or retain qualified personnel, or delays in hiring required personnel, particularly in sales & marketing and research & development, may seriously harm our business, financial condition and results of operations.

Furthermore, WISeKey's performance depends on favorable labor relations with our employees and compliance with labor laws in the countries where we have employees and plans to hire new employees. Any deterioration of current relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.

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Dependence onkey personnel and loss of such key personnel may have a negative impact on the operations and profitability of WISeKey.

Our future success depends in part on the continued service of our key personnel, particularly, the members of our senior management. We have employment agreements with our key personnel, but these do not prevent such personnel from choosing to leave the Company.

One of the cryptographicrootkeys used by WISeKey is owned by the Organisation Internationale pour la Sécurité des Transactions ElectroniquesOISTE. The Organisation Internationale pour la Sécurité des Transactions Electroniques OISTE has granted us a perpetuallicense to exclusively use the cryptographic rootkey. A termination of the license agreement would present a threat to WISeKey'sexisting business model.

The cryptographic rootkey used by WISeKey is owned by the Organisation Internationale pour la Sécurité des Transactions Electroniques OISTE ("OISTE") acting as a trusted third party and not-for-profit entity in charge of ensuring that the Root of Trust (the "RoT") remains neutral and trusted. The name of the RoT is OISTE/WISeKey, as shown in all major current browsers that embed the rootkey. Three members of the three-member foundation board of OISTE are WISeKey board members. Members of the foundation board of OISTE are appointed by a policy authorizing authority (the "Policy Authorizing Authority" or "PAA"), whose members are international organizations, governments and large corporations that use the OISTE/WISeKey RoT. OISTE has granted us a perpetual license to exclusively use the cryptographic rootkey and develop technologies and processes based on OISTE's trust model. The perpetual license agreement can only be terminated under limited circumstances, including if WISeKey were to move from the trust model developed by OISTE and/or changing the location of the RoT from Switzerland to another country. A termination of the license agreement would present a threat to WISeKey's current trust model.

Services offeredby our PKI business rely on the continued integrity of public key cryptography technology and algorithms that may be compromisedor proven obsolete over time.

Services offered by our PKI business are based on public key cryptography technology. With public key cryptography technology, a user possesses a public key and a private key, both of which are required to perform encryption and decryption operations. The security afforded by this technology depends on the integrity of a user's private key and ensuring that it is not lost, stolen or otherwise compromised. Advances in attacks on cryptographic algorithms and technology may weaken their effectiveness, and significant new technology requirements may be imposed by root distribution programs that require us to make significant modifications to our systems or to reissue digital certificates to some or all of our customers, which could damage our reputation or otherwise harm our business. Severe attacks on public key cryptography could render PKI services in general obsolete or unmarketable.

We are dependenton the timely supply of equipment and materials from various sub-contractors and if any one of these suppliers fail to meet, ordelays, their committed delivery schedules, we can suffer with lower or lost revenues.

We use various suppliers for silicon manufacturing and testing our parts. Any one of these suppliers could not meet their commitments for on-time delivery of our products. The market supply of such products has seen and continues to see difficulties in meeting demand and these kinds of supply disruptions can happen due to global shortages of silicon wafers or chemicals used in the processing of the silicon packaging or shortages in the labor force due to unrest or sicknesses. Our business and operating conditions can be at risk if we cannot deliver on our product demand as committed in our customer contracts.

Failure of ourthird-party suppliers to handle increased volume for their services could impact our ability to take advantage of upside businessopportunities.

We outsource several critical functions in our supply chain to third-party suppliers such as the manufacture of our semiconductors. They all have a number of risks that are present in their businesses that could limit their ability to meet increased demands if we see increased orders from our customers. If our suppliers cannot satisfy our demand, we may not be able to meet our customer demands. Also, if our suppliers add higher costs to cover their increased volume, we may see drops in our gross profit margins. Many of these costs are not fixed, even though there may be contracts in place, and may be at the discretion of the third-party vendor.

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Financial Risks

WISeKey has entered,and expects to continue to enter, into joint venture agreements and these activities involve risks and uncertainties.

WISeKey has entered, and expects to continue to enter, into joint venture agreements in order to effectively grow its revenue and penetrate certain geographic regions. Entering into joint venture agreements or other similar forms of partnership involves risks and uncertainties, including the risk that the partners that we enter into joint ventures with will not have the market connections that we expect them to bring to the joint venture. Additionally, there is a risk that a given joint venture could fail to satisfy its obligations, which may result in certain liabilities to us for guarantees and other commitments. Further, since we may not exercise control over our current or future joint ventures, we may not be able to require our joint ventures to take the actions that we believe are necessary to implement our business strategy. Additionally, differences in views among joint venture participants may result in delayed decisions or failures to agree on major issues. If any of these difficulties cause any of our joint ventures to deviate from our business strategy, or if this leads any of our joint ventures to fail to attract the customer base that we project it to attract, our results of operations could be materially adversely affected.

WISeKey is exposedto risks associated with acquisitions and investments.

We may in the future make acquisitions of, or investments in, existing companies or existing or new businesses. Acquisitions and investments involve numerous risks that vary depending on their scale and nature, including, but not limited to:

·	diversion of management's attention from other operational matters;
·	inability to complete proposed transactions as anticipated or at all (and any ensuing obligation<br>to pay a termination fee or other costs and expenses);
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·	the possibility that the acquired business will not be successfully integrated or that anticipated<br>cost savings, synergies or other benefits will not be realized;
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·	the acquired business or strategic partnership may lose market acceptance or profitability;
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·	a decrease in our cash or an increase in our indebtedness, including security interests that may<br>have to be constituted as part of the acquisition indebtedness, may limit our ability to access additional capital when needed;
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·	failure to commercialize purchased technologies, intellectual property rights or partnered solutions;
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·	initial dependence on unfamiliar supply chains or relatively small supply partners;
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·	inability to obtain and protect intellectual property rights in key technologies;
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·	incurrence of unexpected liabilities; and
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·	loss of key personnel and clients or customers of acquired businesses.
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In addition, if WISeKey is unsuccessful at integrating such acquisitions or the technologies associated with such acquisitions, our revenues and results of operations could be adversely affected. Any integration process may require significant time and resources, and WISeKey may not be able to manage the process successfully. WISeKey may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast the financial impact of an acquisition transaction, including accounting charges. WISeKey may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect our financial condition. The sale of equity or incurrence of debt to finance any such acquisitions could result in dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.

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WISeKey has ahistory of losses and may not achieve profitability in the future.

WISeKey has invested substantial amounts of financial resources so far on its acquisitions, brand technology and market position. As at December 31, 2020, WISeKey had, on a consolidated level, an accumulated cumulative loss of USD 217,819,809, compared to USD 189,161,455 as at December 31, 2019 and USD 197,348,528 as at December 31, 2018. In the past, we made significant investments in our operations which have not resulted in corresponding revenue growth and, as a result, increased our losses. WISeKey expects to make significant future investments to support the further development and expansion of our business and these investments may not result in increased revenue or growth on a timely basis or at all.

WISeKey may also incur significant losses in the future for a number of reasons, including slowing demand for our products and services, increasing competition, weakness in the software and security industries generally, as well as other risks described herein, and we may encounter unforeseen expenses, difficulties, complications and delays, and other unknown factors. If WISeKey incurs losses in the future, we may not be able to reduce costs effectively because many of our costs are fixed. In addition, to the extent that we reduce variable costs to respond to losses, this may affect our ability to attract customers and grow our revenues. Accordingly, WISeKey may not be able to achieve or maintain profitability and we may continue to incur significant losses in the future.

Certain of theCompany's large shareholders, including if acting in concert, may be able to exert significant influence on the Company and theirinterests may conflict with the interests of its other shareholders.

Our founder, Carlos Moreira, holds more than 40% of the Company's voting rights as at December 31, 2020. Further, all holders of the Class A Shares represent approximately 45% of the Company's voting rights as at December 31, 2020. Our founder, or if the holders of Class A Shares were to act in concert with each other, the holders of the Class A Shares, would be able to exert significant influence over certain matters, including matters that must be resolved by the general meeting of shareholders, such as the election of members to the board of directors or the declaration of dividends or other distributions. To the extent that the interests of these shareholders may differ from the interests of the Company's other shareholders, the Company's other shareholders may be disadvantaged by any actions that these shareholders may seek to pursue.

The market forand price of Class B Shares and our ADSs may be highly volatile.

There has not been a public market in the United States for our Class B Shares, and the market for the ADS listed on NASDAQ is limited. You may not be able to sell your ADSs quickly or at the market price if trading in the ADSs is limited.

The market price of Class B Shares and our ADSs may be highly volatile and may be affected negatively by events involving us, our competitors, the software and security industry, or the financial markets in general. Furthermore, investors might not be able to resell their Class B Shares and our ADSs at the price at which they were purchased or at a higher price or at all. Factors that could cause this volatility in the market price of Class B Shares and our ADSs include, but are not limited to:

·	our operating and financial results;
·	future announcements concerning our business;
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·	changes in revenue or earnings estimates and recommendations by securities analysts;
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·	changes in our business strategy and operations;
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·	changes in our senior management or board of directors;
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·	speculation of the press or the investment community;
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·	disposals of Class B Shares by shareholders;
·	actions of competitors;
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·	our involvement in acquisitions, strategic alliances or joint ventures;
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·	regulatory factors;
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·	arrival and departure of key personnel;
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·	investment community views on technology stock;
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·	liquidity of the Class B Shares and our ADSs; and
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·	general market, economic and political conditions.
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In addition, securities markets in general have from time to time, experienced significant price and volume fluctuations. Such fluctuations, as well as the economic environment as a whole, can have a substantial negative effect on the market price of our securities, regardless of our operating results or our financial position. Any such broad market fluctuations may adversely affect the trading price of our securities.

Our securitieswill be traded on more than one market or exchange and this may result in price variations.

Our Class B Shares have been trading on the SIX since March 2016. The ADSs have been listed on NASDAQ since December 2019. Trading in Class B Shares and ADSs, as applicable, on these markets will take place in different currencies (U.S. dollars on NASDAQ and Swiss francs on the SIX), and at different times (resulting from different time zones, trading days, and public holidays in the United States and Switzerland). The trading prices of our Class B Shares and ADSs on these two markets may differ due to these and other factors. Any decrease in the price of our Class B Shares on the SIX could cause a decrease in the trading price of the ADSs on NASDAQ, and vice versa.

Future salesor issuances, or the possibility or perception of future sales or issuances, of a substantial number of Shares could cause themarket price of our Class B Shares or the ADSs to fall.

The market price of our Class B Shares or ADSs could decline as a result of sales of a large number of Class B Shares in the public market in the future or the possibility or perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for the Company to issue equity securities in the future at a time and price that it deems appropriate.

Further, the Company may choose to raise additional capital by issuing additional Class B Shares, depending on market conditions or strategic considerations. In particular, under our Articles of Association as at December 31, 2020^1^, the board of directors is authorized to issue up to 7,808,906 new Class B Shares out of authorized capital at any time until May 15, 2022 and thereby increase the Company's share capital without further shareholder approval. After May 15, 2022 (and each subsequent two-year period), the shareholders may re-approve this authorization. Further, our Articles of Association provide for a conditional share capital based on which, as at December 31, 2020, the Company is authorized to issue up to 7,804,030 new Class B Shares, corresponding to CHF 390,201.50 in par value. Since December 16, 2020, the date of reference for the last formal recording in the Articles and the commercial register of the Canton of Zug, Switzerland, an aggregate number of 359,566 Class B Shares has been issued out of the Company's conditional share capital as at December 31, 2020. As a result, the available conditional share capital of the Company, as at December 31, 2020, amounted to CHF 372,223.20, corresponding to the issuance of 7,444,464 Class B Shares. Among other things, the Company's conditional share capital could be used in connection with the issuance of securities that are convertible into Class B Shares. To the extent that additional capital is raised through the issuance of Class B Shares or other securities that are convertible into Class B Shares, the issuance of such securities could dilute the Company's shareholders' interest in the Company.

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^1^The Company held an extraordinary general meeting on January 28, 2021 where our shareholders voted to increase both the authorized capital and the conditional capital of the Company. Therefore, under our Articles of Association approved at the extraordinary general meeting on January 28, 2021, the board of directors is authorized to issue up to 25,313,543 new Class B Shares out of authorized capital at any time until January 28, 2023 and thereby increase the Company's share capital without further shareholder approval. After January 28, 2023 (and each subsequent two-year period), the shareholders may re-approve this authorization. Further, our Articles of Association provide for a conditional share capital based on which, the Company is authorized to issue up to 22,913,543 new Class B Shares, corresponding to CHF 1,145,677.15 in par value.

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On January 19, 2016, the Company entered into a share subscription facility agreement (the "SSF") with GEM Global Yield Fund LLC SCS and GEM Investments America, LLC (collectively referred to as "GEM"), according to which the Company has the right, at any date after the date on which the Class B Shares are listed on the SIX, during the period expiring on the earlier of (i) January 19, 2021 and (ii) the date on which GEM has subscribed for Class B Shares with an aggregate subscription price of CHF 60,000,000, to request GEM, in one or several steps, to subscribe for Class B Shares up to an aggregate subscription amount of CHF 60,000,000. After drawdowns made under this facility in June, August and December 2017 in the aggregate amount of CHF 3,905,355, the remaining amount available for drawdown is CHF 56,094,645 as at December 31, 2020. The subscription price for each subscription request of the Company corresponds to 90% of the average of the closing bid prices for Class B Shares on the SIX (as adjusted for variations) as reported by Bloomberg during the respective pricing period. If the Company elects to exercise its rights under the SSF, the issuance of Class B Shares would dilute the Company's shareholders' interest in the Company. As at December 31, 2020, the remaining amount available for drawdown by the Company under the SSF is CHF 56,094,645 (USD 63,434,405 at closing rate) and the estimated maximum number of Class B Shares deliverable under the SSF is 50,856,432 Class B Shares at CHF 1.103 per Class B Share (calculated based on the closing price of a Class B Share on December 30, 2020 of CHF 1.225 per Class B Share, discounted by 10%). The actual price, at which the Company may drawdown under the SSF is subject to change, and, therefore, the number of Class B Shares deliverable to GEM may vary. On January 19, 2021, the SSF expired. The Company did not make any drawdown on the facility between January 1, 2021 and January 19, 2021.

In connection with the SSF, on May 06, 2016, the Company granted to GEM 1,459,127 options on Class B Shares (the "GEM Options") for the acquisition of an equal number of Class B Shares. The GEM Options may be exercised by GEM at any time on or before May 6, 2021, at an exercise price per GEM Option initially set to CHF 8.85432 per Class B Share (the "GEM Initial Exercise Price"). The GEM Initial Exercise Price may be adjusted using certain agreed-upon formulae more fully described in Item 10.C -- MaterialContracts – Options Issued to GEM. In application of adjustment provisions under the relevant warrant, the exercise price of the warrant has been adjusted from CHF 8.85342 to CHF 8.8264 and the number of Class B Shares that GEM is entitled to purchase upon exercise of the warrant has been increased by 4,612 Class B Shares to 1,463,739 as at December 31, 2020. The Class B Shares issued to GEM in connection with the GEM Options would be issued out of the Company's conditional share capital or authorized share capital without triggering the pre-emptive rights of the existing shareholders of the Company. The exercise of GEM Options will dilute the Company's shareholders' interests in the Company.

On February 08, 2018, the Company entered into a Standby Equity Distribution Agreement, as amended on September 28, 2018 (the "SEDA") with YA II PN, Ltd., a fund managed by Yorkville Advisors Global, LLC (collectively referred to as "Yorkville"). Pursuant to the SEDA, the Company has the right, at any time during a five-year period, to request Yorkville, in one or several steps, to subscribe for Class B Shares up to an aggregate subscription amount of CHF 50,000,000. After several drawdowns made by WISeKey under the SEDA in 2018, 2019 and 2020, in the aggregate amount of CHF 3,992,169, the remaining amount available for drawdown is CHF 46,007,831 as at December 31, 2020. As long as a sufficient number of Class B Shares is provided through share lending, WISeKey has the right to make drawdowns under the SEDA at its discretion by requesting Yorkville to subscribe for (if the Class B Shares are issued out of authorized share capital) or purchase (if the Class B Shares are delivered out of treasury) Class B Shares worth up to CHF 5,000,000 each, subject to certain exceptions and limitations (including the exception that a drawdown request by WISeKey shall in no event cause the aggregate number of Class B Shares held by Yorkville to meet or exceed 4.99% of the total number of shares registered with the commercial register of the Canton of Zug). The subscription price for each subscription request of the Company corresponds to 93% of the lowest daily volume-weighted average share price (the "VWAP") of a Class B Share, as traded and quoted on the SIX, over the five trading days following the drawdown request by WISeKey. If the Company elects to exercise its rights under the SEDA, the issuance of Class B Shares would dilute the Company's shareholders' interest in the Company. As at December 31, 2020, the remaining amount available for drawdown by the Company under the SEDA is CHF 46,007,831 (USD 52,027,772 at closing rate) and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the SEDA is 40,393,178 Class B Shares at CHF 1.139 per Class B Share (calculated based on the closing price of a Class B Share on December 30, 2020 of CHF 1.225 per Class B Share, discounted by 7%). The actual price, at which the Company may drawdown under the SEDA is subject to change, and, therefore, the number of Class B Shares deliverable to Yorkville may vary.

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In connection with a convertible loan agreement WISeKey entered into with Crede CG III, Ltd., Hamilton, Bermuda ("Crede") on September 28, 2018 (which matured on October 30, 2020), the Company granted to Crede, on September 28, 2018, 408,247 options (the "Crede Options") for the acquisition of an equal number of Class B Shares. As a result, the maximum total number of Class B Shares that are issuable under the Crede Options as at December 31, 2020 is 408,247 Class B Shares. The Crede Options were amended on September 18, 2020 to extend the exercise period and may be exercised by Crede at any time on or before October 29, 2023 at an exercise price per Crede Option equal to CHF 3.84 per Class B Share. The Class B Shares issued to Crede in connection with the Crede Options would be issued out of the Company's conditional share capital or authorized share capital without triggering the pre-emptive rights of the existing shareholders of the Company. The exercise of Crede Options will dilute the Company's shareholders' interests in the Company.

In connection with a convertible loan agreement WISeKey entered into with YA II PN, Ltd., a fund managed by Yorkville (“Yorkville”) on June 27, 2019 (which matured on August 1, 2020), the Company granted to Yorkville, on June 27, 2019, 500,000 options (the "Yorkville Options") for the acquisition of an equal number of Class B Shares. As a result, the maximum total number of Class B Shares that are issuable under the Yorkville Options as at December 31, 2020 is 500,000 Class B Shares. The Yorkville Options may be exercised by Yorkville at any time on or before June 27, 2022, at an exercise price per Yorkville Option initially set to CHF 3.00 per Class B Share (the "Yorkville Initial Exercise Price"). The Yorkville Initial Exercise Price may be adjusted using certain agreed-upon formulae more fully described in Item 10C – Contracts – Options Issued to Yorkville. The Class B Shares issued to Yorkville in connection with the Yorkville Options would be issued out of the Company's conditional share capital or authorized share capital without triggering the pre-emptive rights of the existing shareholders of the Company. The exercise of Yorkville Options will dilute the Company's shareholders' interests in the Company.

On December 16, 2019, WISeKey entered into a Convertible Term Loan Facility Agreement (the “LSI Convertible Facility”) with Long State Investment Limited (“LSI”), a Hong Kong-based investment company, to borrow up to CHF 30,000,000 (the "LSI Principal Amount"). Under the terms of the LSI Convertible Facility, WISeKey is able to drawdown individual term loans of up to CHF 500,000 or, if so agreed between the parties, up to CHF 2,500,000 at an interest rate of 1.5% per annum (the "LSI Interest"), up to an aggregate amount of CHF 30,000,000 over a commitment period of 24 months. LSI have the right to convert a drawdown tranche into Class B Shares or, if so agreed among the parties and permitted by law, into ADSs, within a period of 21 SIX trading days after each individual drawdown at 95% of the higher of (i) the then prevailing market rate and (ii) the minimum conversion price of CHF 1.80. Any term loan not converted by LSI initially will automatically convert into Class B Shares, or ADSs, 20 SIX trading days before the expiration of the commitment period at the applicable conversion price. Under certain circumstances, interest payments may be “paid in kind” by capitalizing such interest and adding to it the aggregate principal balance of the loan outstanding. As at December 31, 2020, WISeKey has not made any drawdown under the LSI Convertible Facility, therefore the remaining amount available for drawdown is CHF 30,000,000. The conversion of the LSI Principal Amount and, if applicable, the LSI Interest, into Class B Shares will dilute the Company's shareholders' interest in the Company. The number of Class B Shares deliverable by the Company to LSI in connection with conversions of the LSI Principal Amount and the LSI Interest will depend on the applicable conversion price. As at December 31, 2020, the remaining amount available for drawdown by the Company under the LSI Convertible Facility is CHF 30,000,000 (USD 33,925,380 at closing rate) and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the LSI Convertible Facility is 17,543,860 Class B Shares at CHF 1.71 per Class B Share (calculated based on the higher of (i) the closing price of a Class B Share on the SIX on December 30, 2020 of CHF 1.225 per Class B Share and (ii) the minimum conversion price of CHF 1.80, discounted by 5%). Note that the actual price at which LSI may convert each tranche under the LSI Convertible Facility is subject to change, and, therefore, the number of Class B Shares deliverable to LSI may vary.

On March 04, 2020, WISeKey entered into a convertible loan agreement with Yorkville, pursuant to which Yorkville has committed to grant a loan to WISeKey in the amount of USD 4,000,000 (the "Yorkville Convertible Loan"). The Yorkville Convertible Loan will mature on April 30, 2021 ("Yorkville Maturity") and bear interest at a yearly rate of 6% ("Yorkville Interest"). The Yorkville Convertible Loan is to be repaid in cash in monthly instalments starting on March 30, 2020. However, Yorkville, in its sole and absolute discretion, may elect to convert any amount outstanding (principal and/or interests) into Class B Shares. The conversion price corresponds to the quotient of (i) the amount to be converted translated to CHF using the rate of exchange applicable on the date of the conversion, and (ii) a conversion price, initially set at CHF 3.00 per Class B Share but subject to adjustments under certain extraordinary circumstances. Yorkville did not effect any conversions in 2020. As at December 31, 2020 the remaining balance of the Yorkville Convertible Loan is USD 1,692,979.16. The conversion of the Yorkville Convertible Loan principal amount and, if applicable, the Yorkville Interest, into Class B Shares will dilute the Company's shareholders' interest in the Company. As at December 31, 2020, the remaining amount available for drawdown by the Company under the Yorkville Convertible Loan is USD 1,692,979.16 and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the Yorkville Convertible Loan is 507,431 Class B Shares at CHF 3.00 per Class B Share, assuming that the entire remaining amount of the Yorkville Convertible Loan (USD 1,692,979.16) would be converted in one step, together with all Yorkville Interest to be earned until the Yorkville Maturity. Note that the actual price at which Yorkville may convert each tranche under the Yorkville Convertible Loan is subject to change, and, therefore, the number of Class B Shares deliverable to Yorkville may vary.

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On May 18, 2020, WISeKey entered into an Agreement for the Issuance and Subscription of Convertible Notes (the “Nice & Green Facility”) with Nice & Green SA (“Nice & Green”), pursuant to which WISeKey has the right to draw down up to a maximum of CHF 10,000,000 in up to 25 tranches, each of which is divided into 25 convertible notes (the “Nice & Green Convertible Notes”), during a commitment period of 24 months commencing on May 20, 2020. The Nice & Green Convertible Notes do not bear interest. Subject to a cash redemption right of WISeKey, the Nice & Green Convertible Notes are mandatorily convertible into Class B Shares within a period of 12 months from issuance of the respective Nice & Green Convertible Notes (the “Nice & Green Conversion Period”). Conversion takes place upon request by Nice & Green during the Nice & Green Conversion Period, but in any case, no later than at the expiry of the Nice & Green Conversion Period, at a conversion price of 95% of the lowest daily volume-weighted average price of a Class B Share as traded on the SIX Swiss Exchange during the ten trading days preceding the relevant conversion date. WISeKey made several drawdowns in 2020 under the Nice & Green Facility and the remaining amount available for drawdown as at December 31, 2020 is CHF 1,083,111 (USD 1,224,832 at closing rate). The conversion of the drawdowns under the Nice & Green Facility into Class B Shares will dilute the Company's shareholders' interest in the Company. In 2020, Nice & Green requested to convert all Nice & Green Convertible Notes issued in 2020, therefore, as at December 31, 2020, there were no Nice & Green Convertible Notes outstanding. As at December 31, 2020, the remaining amount available for drawdown by the Company under the Nice & Green Facility is CHF 1,083,111 (USD 1,224,832 at closing rate) and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the Nice & Green Facility is 930,507 Class B Shares at CHF 1.164 per Class B Share (calculated based on the closing price of a Class B Share on the SIX on December 30, 2020 of CHF 1.225 per Class B Share discounted by 5%). Note that the actual price at which Nice & Green may convert each tranche under the Nice & Green Facility is subject to change, and, therefore, the number of Class B Shares deliverable to Nice & Green may vary.

On August 07, 2020, WISeKey entered into a convertible loan agreement (the “Crede Convertible Loan”) with Crede, pursuant to which Crede has committed to grant a loan to WISeKey in the amount of USD 5,000,000. The Crede Convertible Loan will mature on August 07, 2022 ("Crede Maturity") and bear interest at a yearly rate of 5% ("Crede Interest"). The Crede Convertible Loan is to be repaid at Crede Maturity by way of conversion into such number of Class B Shares as corresponds to the quotient of the (i) then outstanding Crede Convertible Loan and (ii) 92% of the lowest daily volume weighted average share prices of a Class B Share, quoted on the SIX Swiss Exchange during the ten trading days immediately preceding the relevant conversion date, converted into USD at the relevant exchange rate. Pursuant to the terms of the Crede Convertible Loan, the Company has the right, at its sole election, to pay interest accrued on the outstanding principal amount in cash or by delivery of such number of Class B Shares, determined in accordance with the aforementioned conversion methodology. Crede may effect the conversion of the Crede Convertible Loan any time before Crede Maturity. Crede effected several conversions in 2020. As at December 31, 2020, the remaining balance of the Crede Convertible Loan is USD 4,215,119.92. The conversion of the Crede Convertible Loan amount into Class B Shares will dilute the Company's shareholders' interest in the Company. As at December 31, 2020, the remaining amount available for drawdown by the Company under the Crede Convertible Loan is USD 4,215,119.92 and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the Crede Convertible Loan is 3,625,726 Class B Shares at CHF 1.274 per Class B Share, assuming that the entire remaining amount of the Crede Convertible Loan (USD 4,215,119.92) would be converted in one step, together with all Crede Interest to be earned until the Crede Maturity. Note that the actual price at which Crede may convert each tranche under the Crede Convertible Loan is subject to change, and, therefore, the number of Class B Shares deliverable to Crede may vary.

In connection with the Crede Convertible Loan, the Company granted to Crede, on August 07, 2020, 1,675,885 options (the "Second Crede Options") for the acquisition of an equal number of Class B Shares. As a result, the maximum total number of Class B Shares that are issuable under the Second Crede Options as at December 31, 2020 is 1,675,885 Class B Shares. The Second Crede Options may be exercised by Crede at any time on or before September 14, 2023 at an exercise price per option equal to CHF 1.375 per Class B Share, as amended. The Class B Shares issued to Crede in connection with the Second Crede Options would be issued out of the Company's conditional share capital or authorized share capital without triggering the pre-emptive rights of the existing shareholders of the Company. The exercise of the Second Crede Options will dilute the Company's shareholders' interests in the Company.

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On December 08, 2020, WISeKey entered into an Agreement for the Issuance and Subscription of Convertible Notes (the "GTO Facility") with GLOBAL TECH OPPORTUNITIES 8, Grand Cayman, Cayman Islands ("GTO") pursuant to which GTO committed to grant a loan to WISeKey by way of convertible notes (the “GTO Convertible Notes”), for up to a maximum amount of CHF 15,500,000, subject to certain conditions, over a period of 18 months. The GTO Convertible Notes do not bear any interest. Each GTO Convertible Note may be converted within a period of 12 months after its issuance (the “GTO Conversion Period”). Conversion takes place upon request by GTO during the GTO Conversion Period, but in any case no later than at the expiry of the GTO Conversion Period, into such number of Class B Shares as corresponds to the principal amount of the GTO Convertible Note divided by the higher of (i) CHF 0.05 and (ii) 97% of the lowest five trading day volume weighted average price of Class B Shares as traded on the SIX Swiss Exchange over the twenty trading days immediately preceding the relevant conversion date. The GTO Convertible Notes are only repayable in cash in an event of default under the terms of the GTO Facility or if WISeKey so elects. GTO made several subscriptions in 2020 under the GTO Facility and the remaining amount available for subscription as at December 31, 2020 is CHF 10,840,000 (USD 12,258,371 at closing rate). The conversion of the drawdowns under the GTO Facility into Class B Shares will dilute the Company's shareholders' interest in the Company. GTO requested to convert some but not all GTO Convertible Notes issued in 2020. As at December 31, 2020, GTO Convertible Notes in an aggregate amount of CHF 3,910,000 (USD 4,421,608 at closing rate) remained unconverted and the remaining amount available for subscription by the Company under the GTO Facility is CHF 10,840,000 (USD 12,258,371 at closing rate), therefore, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the GTO Facility is 12,415,824 Class B Shares at CHF 1.188 per Class B Share (calculated based on the closing price of a Class B Share on the SIX on December 30, 2020 of CHF 1.225 per Class B Share discounted by 3%). Note that the actual price at which GTO may convert each tranche under the GTO Facility is subject to change, and, therefore, the number of Class B Shares deliverable to GTO may vary.

In connection with the GTO Facility, the Company granted GTO the option to acquire Class B Shares at an exercise price of the higher of (a) 120% of the 5-trading day VWAP of the Class B Shares on the SIX Swiss Stock Exchange over the 5 trading days immediately preceding the relevant subscription request and (b) CHF 1.50 (the “GTO Option Exercise Price”). The number of options granted at each tranche subscription is calculated as 15% of the principal amount of each subscription divided by the GTO Option Exercise Price. Each option agreement has a 5-year exercise period starting on the relevant subscription date. As at December 31, 2020, a total of 466,000 options (the "GTO Options") for the acquisition of an equal number of Class B Shares. As a result, the maximum total number of Class B Shares that are issuable under the GTO Options as at December 31, 2020 is 466,000 Class B Shares. The GTO Options may be exercised by GTO at any time until the fifth anniversary of their respective grant at the GTO Option Exercise Price. Should the remaining amount available for subscription by the Company under the GTO Facility of CHF 10,840,000 (USD 12,258,371 at closing rate) be subscribed for, the estimated maximum number of options deliverable under the GTO Facility is 7,226,666 for the acquisition of an equal number of Class B Shares. As a result, assuming the GTO Facility is fully subscribed for, the maximum total number of Class B Shares that are issued and issuable under the GTO Facility as at December 31, 2020 is 7,692,666 Class B Shares (the “Total GTO Options”). The Class B Shares issued to GTO in connection with the Total GTO Options would be issued out of the Company's conditional share capital or authorized share capital without triggering the pre-emptive rights of the existing shareholders of the Company. The exercise of the Total GTO Options will dilute the Company's shareholders' interests in the Company. Note that the actual GTO Warrant Exercise Price at each subscription used to calculate the number of options granted to GTO is subject to change, and, therefore, the number of Class B Shares deliverable to GTO may vary.

Our financialresults may be affected by fluctuations in exchange rates.

Due to the broad scope of our international operations, a portion of our revenue and our expenses are denominated in currencies other than USD, our reporting currency. As a result, our business is exposed to transactional and translational currency exchange risks caused by fluctuations in exchange rates among those different currencies.

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The functional currency of most of our operating subsidiaries is the applicable local currency. The translation from the applicable functional currencies into our reporting currency is performed for balance sheet accounts using exchange rates in effect at the balance sheet date, and, for the statement of operations accounts, using average exchange rates prevailing during the relevant period. Functional currency exchange rates for our operating subsidiaries have in the past, and may in the future, fluctuate significantly against the USD. Because we prepare our consolidated financial statements in USD, these fluctuations may have an effect both on our results of operations and on the reported value of our assets, liabilities, revenue and expenses as measured in USD, which in turn may significantly affect reported earnings, either positively or negatively, and the comparability of period-to-period results of operations.

In addition to currency translation risks, we are exposed to currency transaction risks. Currency transaction risk is the risk that the domestic currency value of a future foreign currency denominated cash flow (payments or receipts from a committed or uncommitted contract or credit facility) varies as a direct result of changes in exchange rates. Fluctuations in currencies may adversely impact our ability to compete on a global basis and our results of operations and our financial condition.

Our operatingresults can vary significantly due to the impairment of goodwill and other tangible and intangible assets due to changes in thebusiness environment.

Our operating results can also vary significantly due to impairments of intangible assets, including goodwill, and other fixed assets. As at December 31, 2020, the value of our goodwill as recorded on our balance sheet was USD 8,316,892 and the value of acquired technologies and other intangible assets was USD 8,900, net of impairment and amortization. Because the market for our products is characterized by rapidly changing technologies, our future cash flows may not support the value of goodwill and other intangibles recorded in our consolidated financial statements. According to U.S. GAAP, we are required to annually test our recorded goodwill and indefinite-lived intangible assets, if any, and to assess the carrying values of other intangible assets when impairment indicators exist. As a result of such tests, we could be required to book impairment charges in our statement of operations if the carrying value is greater than the fair value. The amount of any potential impairment is not predictable.

Factors that could trigger an impairment of such assets include, but are not limited to, the following:

·	underperformance relative to projected future operating results;
·	negative industry or economic trends, including changes in borrowing rates or weighted average<br>cost of capital;
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·	applicable tax rates;
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·	changes in working capital;
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·	the market multiples utilized in our fair value calculations;
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·	changes in the manner or use of the acquired assets or the strategy for our overall business; and
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·	changes in our organization or management reporting structure, which could require greater aggregation<br>or disaggregation in our analysis by reporting unit and potentially alternative methods/ assumptions of estimating fair values.
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Any potential future impairment, if required, could have a material adverse effect on our business, financial condition and results of operations.

We may need additionalcapital in the future and it may not be available on terms favorable to us or at all.

We may require additional capital in the future to do, among other things, the following:

·	fund our operations;
·	finance investments in equipment and infrastructure needed to maintain our manufacturing capabilities;
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·	enhance and expand the range of products and services we offer;
·	respond to potential strategic opportunities, such as investments, acquisitions and expansions;<br>and
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·	service or refinance other indebtedness.
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Our ability to obtain external financing in the future is subject to a variety of uncertainties, including: (i) our financial condition, results of operations and cash flows, and (ii) general market conditions for financing activities.

The terms of available financing may also restrict our financial and operating flexibility. If adequate funds are not available on acceptable terms, we may be forced to reduce our operations or delay, limit or abandon expansion opportunities. Moreover, even if we are able to continue our operations, the failure to obtain additional financing could have a material adverse effect on our business, financial condition and results of operations.

The Company isa holding company with no direct cash generating operations and relies on its subsidiaries to provide it with funds necessary topay dividends to shareholders.

The Company is a holding company with no significant assets other than the equity interests in its subsidiaries. The Company's subsidiaries own substantially all the rights to its revenue streams. The Company has no legal obligation to, and may not, declare dividends or other distributions on its shares. The Company's ability to pay dividends to its shareholders depends on the availability of sufficient legally distributable profits from previous years, which depends on the performance of its subsidiaries and their ability to distribute funds to the Company, and/or on the availability of distributable reserves from capital contributions at the Company level, and on the need for shareholder approval.

The ability of a subsidiary to make distributions to the Company could be affected by a claim or other action by a third party, including a creditor, or by laws which regulate the payment of dividends by companies. In addition, the subsidiaries' ability to distribute funds to the Company depends on, among other things, the availability of sufficient legally distributable profit of such subsidiaries. The Company cannot offer any assurance that legally distributable profit or reserves from capital contributions will be available in any given financial year.

Even if there is sufficient legally distributable profit or reserves from capital contributions available, the Company may not be able to pay a dividend or distribution of reserves from capital contributions for a variety of reasons. Payment of future dividends and other distributions will depend on our liquidity and cash flow generation, financial condition and other factors, including regulatory and liquidity requirements, as well as tax and other legal considerations.

Legal Risks

We are subjectto anti-takeover provisions.

Our Articles and Swiss law contain provisions that could prevent or delay an acquisition of the Company by means of a tender offer, a proxy contest or otherwise. These provisions may also adversely affect prevailing market prices for our Class B Shares and our ADSs. These provisions provide, among other things:

·	an opting-out from the obligation of an acquirer of Shares to make a public offer pursuant to article 135<br>and 163 of the Swiss Financial Market Infrastructure Act, including its implementing directives, circulars and other regulations<br>(the "FMIA");
·	that the share capital is divided into different classes of shares, of which only Class B Shares<br>are listed on the SIX, whereas Class A Shares are not listed and tradable;
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·	that the Board is currently authorized, at any time until January 28, 2023, to issue up to 25,313,543^2^<br>new Class B Shares and to limit or withdraw the pre-emptive rights of existing shareholders in various circumstances;
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^2^ As approved at the extraordinary general meeting held on January 28, 2021.

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·	that any shareholder who is entitled to propose any business or to nominate a person or persons<br>for election as member of the Board at an annual meeting may only do so if advance notice is given to the Company;
·	that a merger or demerger transaction requires the affirmative vote of the holders of at least<br>two-thirds of voting rights and an absolute majority of the par value of the shares, each as represented (in person or by proxy)<br>at the general meeting of shareholders and the possibility of a so-called "cash-out" or "squeeze-out" merger<br>if the acquirer controls 90% of the outstanding shares entitled to vote at a general meeting of shareholders; and
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·	that any action required or permitted to be taken by the holders of shares must be taken at a duly<br>called annual or extraordinary general meeting of shareholders of the Company.
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Each Class AShare and each Class B Share has one vote despite the difference in par value

Each Class A Share and each Class B Share carries one vote per share but our Class A Shares have a lower par value (CHF 0.01 per share) than our Class B Shares (CHF 0.05 per share). This means that, relative to their respective per share contribution to the Company’s capital, the holders of our Class A Shares have a greater relative per share voting power than the holders of our Class B Shares for matters that require approval on the basis of a specified majority of shares present at the shareholders meeting.

However, to the extent shareholder resolutions require as the relevant majority standard a majority of the par value of the shares present at the meeting, Class A Shares as a class have less votes than Class B Shares as a class (as the Class B Shares have a par value of CH 0.05 per Class B Share as compared to CH 0.01 per Class A Share). The majority of par value standard for approval of resolutions applies (i) to shareholder resolutions on certain specific matters (see Item 10B -Memorandum and Articles of Association - Dual VotingRights) and (ii) to the extent that Swiss corporate law requires that a shareholder resolution be adopted with a majority of (A) two-thirds of the voting rights attached to, and (B) the absolute majority of the par value of, the shares, each as represented at the relevant meeting (see also Item 10B-Memorandum and Articles of Association - Voting Requirements).

Assuming a total of approximately 87.6 million of our shares are issued (in line with the commercial register of the Canton of Zug as at December 31, 2020), of which approximately 40.0 million are Class A Shares and approximately 47.6 million are Class B Shares, the Class A Shares as a class contribute approximately 14% of the aggregate par value of the Company, have 46% of the total votes for matters that require approval on the basis of a specified majority of the number of shares present or represented at the shareholders meeting, but 14% of the total votes for matters that require approval on the basis of a specified majority of the par value of the shares present at the shareholders meeting. Assuming the same total of approximately 87.6 million of our shares are issued, of which approximately 40.0 million are Class A Shares and approximately 47.6 million are Class B Shares, Class B Shares as a class contribute 86% of the aggregate par value of the Company, have 54% of the total votes for matters that require approval on the basis of a specified majority of the number of shares present or represented at the shareholders meeting, but 86% of the total votes for matters that require approval on the basis of a specified majority of the par value of the shares present at the shareholders meeting.

A change in taxlaws, treaties or regulations, or their interpretation, of any country in which we operate, including tax rules limiting the deductibilityof interest expense, could result in a higher tax rate on our earnings, which could result in a significant negative impact onour earnings and cash flows from operations.

We operate in various jurisdictions. Consequently, we are subject to changes in applicable tax laws, treaties or regulations in the jurisdictions in which we operate, which could include laws or policies directed toward companies organized in jurisdictions with low tax rates. A material change in the tax laws or policies, or their interpretation, of any country in which we have significant operations, or in which we are incorporated or resident, including the limitation of deductibility of interest expense, could result in a higher effective tax rate on our worldwide earnings and such change could be significant to our financial results.

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We may becomeexposed to costly and damaging intellectual property or liability claims, and our product liability may not cover all damages fromsuch claims.

We are exposed to potential intellectual property or product liability claims. We currently have not been involved in any such legal proceedings. However, the current and future use of our products may expose us to such claims. Any claims made against us, regardless of their merit, could be difficult and costly to defend, and could compromise the market acceptance of our products and any prospects for future products. Such legal proceedings could have a material adverse effect on our business, financial condition, or results of operations.

If WISeKey isunable to adequately protect its proprietary technology and intellectual property rights, its business could suffer substantialharm.

Our intellectual property rights are important to our business. We rely on a combination of confidentiality clauses, trade secrets, copyrights and trademarks to protect our intellectual property and know-how. In addition, we have filed a number of applications for patents to protect our technologies and have been granted two patents in Switzerland for the company's verification and authentication of valuable objects on the Internet in connection with technology involving the internet of things ("IoT") when connecting to each other or to the cloud. Further, in connection with the acquisition of WISeKey Semiconductors SAS from Inside Secure SA, we have acquired 39 patent families.

The steps we take to protect our intellectual property may be inadequate. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. Despite our precautions, it may be possible for unauthorized third parties to copy our products and use information that we regard as proprietary to create solutions and services that compete with ours. Some license provisions protecting against unauthorized use, copying, transfer and disclosure of our solutions may be unenforceable under the laws of certain jurisdictions.

We enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with the parties with whom we have strategic relationships and business alliances. No assurance can be given that these agreements will be effective in controlling access to our proprietary information. Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our solutions. Additionally, we may from time to time be subject to opposition or similar proceedings with respect to applications for registrations of our intellectual property, including but not limited to our trademarks and patent applications. While we aim to acquire adequate protection of our brand through registrations in key markets, occasionally third parties may have already registered or otherwise acquired rights to identical or similar brands for solutions that also address the cybersecurity, authentication or mobile application markets. Additionally, the process of seeking patent protection can be lengthy and expensive. Any of our pending or future patent or trademark applications, whether challenged or not, may not be issued with the scope of the claims we seek, if at all.

From time to time, we may discover that third parties are infringing, misappropriating or otherwise violating our intellectual property rights. However, policing unauthorized use of our intellectual property and misappropriation of our technology is difficult and we may therefore not always be aware of such unauthorized use or misappropriation. Despite our efforts to protect our intellectual property rights, unauthorized third parties may attempt to use, copy or otherwise obtain and market or distribute our intellectual property rights or technology or otherwise develop solutions with the same or similar functionality as our solutions. If competitors infringe, misappropriate or otherwise misuse our intellectual property rights and we are not adequately protected, or if such competitors are able to develop solutions with the same or similar functionality as ours without infringing our intellectual property, our competitive position and results of operations could be harmed and our legal costs could increase.

WISeKey may incurfines or penalties, damage to its reputation or other adverse consequences if its employees, agents or business partners violate,or are alleged to have violated, anti-bribery, competition or other laws.

WISeKey's internal controls may not always protect us from reckless or criminal acts committed by our employees, agents or business partners that would violate Swiss, U.S. or other laws, including anti-bribery, competition, trade sanctions and regulations and other related laws. Any such improper actions could subject WISeKey to administrative, civil or criminal investigations in the competent jurisdictions, could lead to substantial civil or criminal monetary and non-monetary penalties against WISeKey or our subsidiaries, and could damage our reputation. Even the allegation or appearance of WISeKey's employees, agents or business partners acting improperly or illegally could damage our reputation and result in significant expenditures in investigating and responding to such actions.

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We could be subjectto litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect onus.

As WISeKey continues to expand products, partnerships, sales and distribution, the risk of being involved in legal proceedings will invariably increase. While WISeKey has successfully avoided being involved in legal proceedings in the past, it may not be able to do so in the future. Legal proceedings, especially when involving intellectual property rights and product liability, may have material adverse effects on WISeKey's financial condition, results of operations and cash flows.

We process andstore personal information, which subjects us to data protection laws and contractual commitments, and our actual or perceivedfailure to comply with such laws and commitments could harm our business.

The personal information we process is subject to an increasing number of laws regarding privacy and data protection, as well as contractual commitments. Any failure or perceived failure by us to comply with such obligations may result in governmental enforcement actions, fines, or cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.

Risks Related to Our Shares and ADSs

As a foreignprivate issuer, we are permitted to rely on exemptions from certain corporate governance standards.

As a foreign private issuer, we are permitted to, and we are relying on exemptions from certain NASDAQ corporate governance standards applicable to domestic U.S. issuers. This may afford less protection to holders of our ordinary shares and the ADSs.

We are exempted from certain corporate governance requirements of NASDAQ by virtue of being a foreign private issuer. We are required to provide a brief description of the significant differences between our corporate governance practices and the corporate governance practices required to be followed by domestic U.S. companies listed on NASDAQ. The standards applicable to us are considerably different than the standards applied to domestic U.S. issuers. For instance, we are not required to:

·	have a majority of the board be independent (although all of the members of the audit committee<br>must be independent under the U.S. Securities Exchange Act of 1934, as amended, or the "Exchange Act");
·	have a compensation committee or a nominating or corporate governance committee consisting entirely<br>of independent directors; or
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·	have regularly scheduled executive sessions with only independent directors.
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We have relied on and intend to continue to rely on some of these exemptions. As a result, you may not be provided with the benefits of certain corporate governance requirements of NASDAQ.

As a foreignprivate issuer, we are exempt from certain disclosure requirements under the Exchange Act, which may afford less protection toour shareholders and ADS holders than they would enjoy if we were a domestic U.S. company.

As a foreign private issuer, we are exempt from, among other things, the rules prescribing the furnishing and content of proxy statements under the Exchange Act. In addition, our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit and recovery provisions contained in Section 16 of the Exchange Act. We are also not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic U.S. companies with securities registered under the Exchange Act. As a result, our shareholders and ADS holders may be afforded less protection than they would under the Exchange Act rules applicable to domestic U.S. companies.

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We may lose ourforeign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime andcause us to incur significant legal, accounting and other expenses.

As a foreign private issuer, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. In order to maintain our current status as a foreign private issuer, either (a) a majority of our common shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors may not be United States citizens or residents, (ii) more than 50 percent of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. These criteria are tested annually. If we lost this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and stock exchange rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time-consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

We are an "emerginggrowth company", and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies maymake the ADSs less attractive to investors and, as a result, adversely affect the price of the ADSs and result in a less activetrading market for the ADSs.

We are an "emerging growth company" as defined in the U.S. Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. For example, we have elected to rely on an exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act relating to internal control over financial reporting, and we will not provide such an attestation from our auditors. We may avail ourselves of these disclosure exemptions until we are no longer an emerging growth company. We cannot predict whether investors will find the ADSs less attractive because of our reliance on some or all of these exemptions. If investors find the ADSs less attractive, it may adversely affect the price of the ADSs and there may be a less active trading market for the ADSs.

We will cease to be an emerging growth company upon the earliest of:

·	the last day of the fiscal year during which we have total annual gross revenues of USD 1,070,000,000<br>(as such amount is indexed for inflation every five years by the United States Securities and Exchange Commission, or SEC) or more;
·	the last day of our fiscal year following the fifth anniversary of the completion of our first<br>sale of common equity securities pursuant to an effective registration statement under the Securities Act;
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·	the date on which we have, during the previous three-year period, issued more than USD 1,070,000,000<br>in non-convertible debt; or
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·	the date on which we are deemed to be a "large accelerated filer", as defined in Rule<br>12b-2 of the Exchange Act, which would occur if the market value of our ordinary shares and ADSs that are held by non-affiliates<br>exceeds USD700,000,000 as of the last day of our most recently-completed second fiscal quarter.
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In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. Depending on the circumstances, we may or may not take advantage of the extended transition period under Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards and therefore our financial statements may not be comparable to companies that comply with public company effective dates.

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The requirementsof being a public company may strain our resources and distract our management.

Following the listing of the ADSs on NASDAQ, we are required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these reporting and other regulatory requirements will be time-consuming and will result in increased costs to us, either or both of which could have a negative effect on our business, financial condition and results of operations.

As a public company, we are (subject to certain exceptions) subject to the reporting requirements of the Exchange Act and the other rules and regulations of the SEC, including the Sarbanes-Oxley Act and the listing and other requirements of NASDAQ. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual and current reports with respect to our business and financial performance. The Sarbanes-Oxley Act requires that we maintain disclosure controls and procedures and internal control over financial reporting. To improve the effectiveness of our disclosure controls and procedures and our internal control over financing reporting, we need to commit significant resources and provide additional management oversight. We are implementing additional procedures and processes for the purpose of addressing the U.S. standards and requirements applicable to public companies. These activities may divert management's attention from other business concerns and we will incur significant legal, accounting and other expenses that we did not have prior to the listing on NASDAQ, which could have a material adverse effect on our business, financial condition and results of operations.

We have neverpaid dividends on our share capital, and we do not anticipate paying cash dividends in the foreseeable future.

We have never declared or paid cash dividends on our share capital. We do not anticipate paying cash dividends on our shares in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to compliance with applicable laws and covenants under current or future credit facilities, which may restrict or limit our ability to pay dividends and will depend on our financial condition, operating results, capital requirements, distributable profits and/or distributable reserves from capital contributions, general business conditions and other factors that our board of directors may deem relevant. As a result, capital appreciation, if any, of our securities will be your sold source of gain for the foreseeable future.

ADS holders maynot be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorableoutcomes to the plaintiffs in any such action.

The deposit agreement governing the ADSs representing our Class B Shares provides that, to the fullest extent permitted by applicable law, ADSs holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our Class B Shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws. The waiver to right to a jury trial of the deposit agreement is not intended to be deemed a waiver by any holder or beneficial owner of ADSs of our or the depositary's compliance with the U.S. federal securities laws and the rules and regulations promulgated thereunder.

If we or the depositary oppose a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. The enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before investing in the ADSs.

If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the depositary. If a lawsuit is brought against us and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcome than a trial by jury would have had, including results that could be less favorable to the plaintiffs in any such action.

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Nevertheless, if this jury trial waiver is not permitted by applicable law, an action could proceed under the terms of the deposit agreement with a jury trial. No condition, stipulation or provision of the deposit agreement or our ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder.

Your voting rightsas a holder of our ADSs are limited by the terms of the deposit agreement.

You may exercise your voting rights with respect to the ordinary shares underlying your ADSs only in accordance with the provisions of the deposit agreement. Upon receipt of voting instructions from you in the manner set forth in the deposit agreement, the depositary for our ADSs will endeavor to vote your underlying ordinary shares in accordance with these instructions. When a general meeting is convened, you may not receive sufficient notice of a shareholders' meeting to permit you to withdraw your ordinary shares to allow you to cast your vote with respect to any specific matter at the meeting. In addition, the depositary and its agents may not be able to send voting instructions to you or carry out your voting instructions in a timely manner. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, but you may not receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. As a result, you may not be able to exercise your right to vote.

The depositaryfor our ADSs will give a discretionary proxy to vote the ordinary shares underlying your ADSs if you do not give timely votinginstructions, except in limited circumstances, which could adversely affect your interests.

Under the deposit agreement for our ADSs, the depositary will, to the extent permitted under applicable law, give a discretionary proxy to the independent proxy holder elected by the Company's shareholders to exercise the voting rights of the ordinary shares underlying your ADSs at shareholders' meetings if you do not give voting instructions to the depositary, unless:

·	we have instructed the depositary that we do not wish a discretionary proxy to be given;
·	we have informed the depositary that there is substantial opposition as to a matter to be voted<br>on at the meeting; or
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·	a matter to be voted on at the meeting would have a material adverse impact on shareholders.
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The effect of this discretionary proxy is that, if you fail to give voting instructions to the depositary, you cannot prevent the ordinary shares underlying your ADSs from being voted, absent the situations described above, and it may make it more difficult for shareholders to influence our management.

You may be subjectto limitations on transfer of your ADSs.

Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

You may not receivedistributions on our Class B Shares or any value for them if it is illegal or impractical to make them available to you as an ADSholder.

The depositary of our ADSs has agreed to pay you the cash dividends or other distributions it or the custodian for the Class B Shares represented by ADSs after deducting its fees and expenses. You will receive these distributions in proportion to the number of our Class B Shares that your ADSs represent. However, the depositary is not responsible for making such payments or distributions if it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act but that are not properly registered or distributed pursuant to an applicable exemption from registration. The depositary is not responsible for making a distribution available to any holders of ADSs if any government approval or registration required for such distribution cannot be obtained after reasonable efforts made by the depositary. We have no obligation to take any other action to permit the distribution of our ADSs, Class B Shares, rights or anything else to holders of our ADSs. This means that you may not receive the distributions we make on our Class B Shares or any value for them if it is illegal or impractical for us to make them available to you as an ADS holder. These restrictions may reduce the value of your ADSs.

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The rights accruingto holders of our shares may differ from the rights typically accruing to shareholders of a U.S. corporation.

We are organized under the laws of Switzerland. The rights of holders of Class B Shares and, therefore, certain of the rights of ADSs, are governed by the laws of Switzerland and by our Articles of Association. These rights differ in certain respects from the rights of shareholders in typical U.S. corporations. See the sections entitled "Description of Share Capital and Articles of Association – Differences in Corporate Law" and "Description of Share Capital and Articles of Association – Articles of Association – Other Swiss Law Considerations" for a description of the principal differences between the provisions of Swiss law applicable to us and, for example, the Delaware General Corporation Law relating to shareholders' rights and protections.

Claims of U.S.civil liabilities may not be enforceable against us.

We are incorporated under the laws of Switzerland. Certain of our directors reside outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce judgments obtained in U.S. courts against them or us, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. The United States and Switzerland do not currently have a treaty providing for recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in Switzerland. In addition, uncertainty exists as to whether Swiss courts would entertain original actions brought in Switzerland against us or our directors predicated upon the securities laws of the United States or any state in the United States. Any final and conclusive monetary judgment for a definite sum obtained against us in U.S. courts would be reviewed by the courts of Switzerland. Whether these requirements are met in respect of a judgment based upon the civil liability provisions of the U.S. securities laws, including whether the award of monetary damages under such laws would constitute a penalty, is an issue for the court making such decision. If a Swiss court gives judgment for the sum payable under a U.S. judgment, the Swiss judgment will be enforceable by methods generally available for this purpose. These methods generally permit the Swiss court discretion to prescribe the manner of enforcement. As a result, U.S. investors may not be able to enforce against us or certain of our directors, or certain experts named herein who are residents of Switzerland or countries other than the United States, any judgments obtained in U.S.

If we fail tomaintain an effective system of internal control over financial reporting, we may not be able to accurately report our financialresults or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which wouldharm our business and the trading price of ADSs or our Class B Shares.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. Inadequate internal controls could cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our ADSs or our Class B Shares.

Management will be required to assess the effectiveness of our internal controls annually. However, for as long as we are an "emerging growth company", our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting. An independent assessment of the effectiveness of our internal controls could detect problems that our management's assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements requiring us to incur the expense of remediation and could also result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

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If securitiesor industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of ourADSs or our Class B Shares and their respective trading volumes could decline.

The trading market for our ADSs and our Class B Shares depends in part on the research and reports that securities or industry analysts publish about us or our business. Since we have not undertaken an initial public offering of ADSs in connection with the listing of our ADSs on NASDAQ, we do not anticipate that many or any industry analysts in the United States will publish such research and reports in the United States about our Class B Shares or our ADSs. If no or too few securities or industry analysts commence or continue coverage on us, the trading price for our ADSs and our Class B Shares could be affected. If one or more of the analysts who may eventually cover us downgrade our ADSs or our Class B Shares or publish inaccurate or unfavorable research about our business, the trading price of our ADSs or our Class B Shares would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our ADSs or Class B Shares could decrease, which might cause the price of such securities and their respective trading volumes to decline.

Although we believethat we were not a "passive foreign investment company," or PFIC, for U.S. federal income tax purposes in 2020, therecan be no assurance in this regard, and if we are a PFIC in any year, U.S. holders of our ADSs may be subject to adverse U.S. federalincome tax consequences.

Under the Internal Revenue Code of 1986, as amended, or the Code, we will be a PFIC for any taxable year in which, after the application of certain look-through rules with respect to subsidiaries, either (i) 75% or more of our gross income consists of passive income or (ii) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, passive income. Based on our financial statements, business plan and certain estimates and projections, including as to the relative values of our assets, we do not believe that we were a PFIC for our 2020 taxable year and do not expect to be a PFIC in the foreseeable future. However, there can be no assurance that the Internal Revenue Service (the "IRS") will agree with our conclusion regarding our PFIC status, and whether we are or will be classified as a PFIC in any particular year is uncertain because we currently own a substantial amount of passive assets, including cash, and the valuation of certain of our assets is uncertain and may vary substantially over time. Accordingly, there can be no assurance that we will not be a PFIC for any taxable year.

If we are a PFIC for any taxable year during which a U.S. investor holds ADSs, we generally would continue to be treated as a PFIC with respect to that U.S. investor for all succeeding years during which the U.S. investor holds ADSs, even if we ceased to meet the threshold requirements for PFIC status. Such a U.S. investor may be subject to adverse U.S. federal income tax consequences, including (i) the treatment of all or a portion of any gain on disposition as ordinary income, (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends and (iii) compliance with certain reporting requirements. We do not intend to provide the information that would enable investors to make a qualified electing fund election that could mitigate the adverse U.S. federal income tax consequences should we be classified as a PFIC.

For further discussion, see "Taxation—Material U.S. Federal Income Tax Considerations for U.S. Holders."

If a United Statesperson is treated as owning at least 10% of our shares or ADSs, such holder may be subject to adverse U.S. federal income tax consequences.

If a U.S. investor owns or is treated as owning (indirectly or constructively) at least 10% of the value or voting power of our shares or ADSs, such investor may be treated as a "United States shareholder" with respect to each "controlled foreign corporation" in our group (if any). Because our group includes a U.S. subsidiary, certain of our non-U.S. subsidiaries could be treated as controlled foreign corporations (regardless of whether or not we are treated as a controlled foreign corporation). A United States shareholder of a controlled foreign corporation may be required to report annually and include in its U.S. taxable income its pro rata share of "Subpart F income," "global intangible low-taxed income," and investments in U.S. property by controlled foreign corporations, regardless of whether we make any distributions. Failure to comply with these reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such shareholder's U.S. federal income tax return for the year for which reporting was due from starting. We cannot provide any assurances that we will assist investors in determining whether any of our non-U.S. subsidiaries is treated as a controlled foreign corporation or whether any investor is treated as a United States shareholder with respect to any such controlled foreign corporation or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. A United States investor should consult its advisors regarding the potential application of these rules to an investment in our ADSs.

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Item 4.	Information on the Company
A.	History and Development of the Company
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We are a Swiss stock corporation (Aktiengesellschaft) of unlimited duration with limited liability under the laws of Switzerland and registered in the Commercial Register of the Canton of Zug, Switzerland, on December 3, 2015 under the register number CHE-143.782.707. We are registered under the company name "WISeKey International Holding AG" and have our registered office and principal executive offices at General-Guisan-Strasse 6, 6300 Zug, Switzerland. WISeKey International Holding AG is the parent company of WISeKey SA, which was established in 1999. Our address on the Internet is http://www.wisekey.com. The information on our website is not incorporated by reference in this annual report.

In the first quarter of 2019, we completed the sale of the QuoVadis Group to DigiCert Inc, a leading global provider of TLS/SSL, IoT and other PKI solutions, for USD 45 million cash. The products and solutions of the QuoVadis Group sold to DigiCert Inc. consisted of QuoVadis Trust/Link which provides managed Public Key Infrastructure (PKI) including Digital Certificates for authentication, encryption, and digital signature; TLS/SSL Certificates for websites; QuoVadis sealsign which provides software and cloud solutions for Electronic Signatures and time-stamping. We retained ownership of the ISTANA Platform used to secure, among other things, the connected car industry, as part of its offerings for the Internet of Things (IoT) market, together with its latest Blockchain technology. The ISTANA Platform complements our core products and solutions which are based on our Cybersecurity SaaS business, also known as managed PKI services, and on our Semiconductor chips, and focus on securing the IoT market and using Artificial Intelligence (AI) to analyze data, with products and services using public key encryption and hardware encryption, digital identity protection services, anti-illicit trade products and services, and Blockchain services.

In January 2021, we completed the first phase of the acquisition of arago GmbH (“arago”) by acquiring a controlling interest in arago. arago is a leading German technology company that provides Artificial Intelligence (“AI”) to enterprises globally through knowledge automation. On November 18, 2020, the Company signed a convertible loan agreement with arago to acquire, through conversion of a CHF 5 million loan and guaranteeing arago’s existing indebtedness, a controlling interest of 51% in arago (see Note 10 of our consolidated financial statement as at December 31, 2020). On January 18, 2021, we requested to convert the loan into 51% of arago’s share capital carrying 51% of the voting rights (see Note 40 of our consolidated financial statement as at December 31, 2020).

The acquisition of a controlling interest in arago is the initial step in an overall transaction which would lead to a combination of the businesses of WISeKey and arago. As per the terms of a non-binding term sheet between WISeKey and the shareholders of arago, the combination would be completed through the issuance by WISeKey of new Class B shares to arago’s remaining minority shareholder against contribution by arago’s minority shareholder of the remaining arago shares to WISeKey. arago’s remaining shareholder would then hold a significant minority stake in WISeKey. The transaction is subject to the parties agreeing on definitive agreements, including the respective relative valuations. The term sheet contemplates that arago's shareholders would hold up to 12,327,506 Class B Shares. The subsequent completion of definitive agreements would, among other things, be conditional upon obtaining the required regulatory and other standard authorizations.

The SEC maintains an internet site at http://www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC.

B.	Business Overview

Overview

We are a Swiss cybersecurity company, publicly listed in Switzerland on the SIX since 2016 (Class B Shares) and NASDAQ, since 2019 (American Depositary Shares), focused on delivering integrated security solutions for the Internet of Things (IoT) and digital identity ecosystems. In addition, with recently acquired assets, WISeKey is evolving to now include secure knowledge automation fueled by artificial intelligence. With over two decades of experience in the digital security market, we integrate our secure semiconductors, cybersecurity software, and a globally recognized Root of Trust (RoT) into leading-edge products and services that protect users, devices, data and transactions in the internet-connected world. Taking this trusted foundation, WISeKey intends to integrate the arago AI and data platform and wrap it with a cybersecurity layer to deliver Trusted Knowledge Automation via a cloud-based Software as a Service (“SaaS”) offering designed for an uncertain cyberthreat environment. This unique combination of data, AI, and trust technologies is intended to enable organizations worldwide to digitize their business operations.

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The rapid proliferation of internet-connected devices and individuals' increasing dependence on them for personal and business purposes have exposed shortcomings in traditional security solutions. Legacy IT networks are easy targets for attackers that leverage the vulnerabilities of the outdated perimeter-based security methods that cannot keep up with the sheer number of devices that are being added every day. Our cybersecurity platform is the first of its kind to be intentionally designed to provide organizations with a holistic cybersecurity solution to safeguard their connected device ecosystem from the evolving cyber threats that lurk around every corner of the burgeoning Internet of Things (IoT) landscape. In addition to the cybersecurity risks, IT operations are traditionally lacking in efficiency and automation. The rise of Robotic Process Automation (RPA) has started to improve efficiency with automation but suffers from limitations. With the traditional deterministic model, scalability plateaus too quickly and this where our cybersecure knowledge automation can take over and elevate the current landscape to achieve significantly greater automation rates and operational efficiency.

Cyber-attacks are becoming increasingly sophisticated, posing significant and persistent threats to international organizations and the sensitive data that they are responsible to protect under government regulations such as GDPR. Attackers deploy clandestine, advanced, and targeted attacks on less secure bring-your-own-devices (BYOD) to infiltrate broader networks. These attacks can remain inside a network for extended periods of time undetected, most often to steal valuable data, spread malicious malware, or sabotage critical infrastructure. The proliferation of the IoT and the increase in connected devices is driving the severity of these risks up. As more devices are connected, more data is shared and as more data is shared, there are more points of vulnerability. Being able to secure these points of vulnerability is critical to the success of business and data communications future. The World Economic Forum said, in an article published in November of 2019, that Cybercrime will remain a large-scale concern for years to come. From 2019 to 2023E, approximately $5.2 trillion in global value will be at risk from cyberattacks, creating an ongoing challenge for corporations and investors alike^3^. With these cyber-risks, business process automation can be cumbersome and difficult and often requires on-premise implementation in order to limit risk and exposure. This creates inefficiencies, limits the upside and still does not close the gap on all data vulnerabilities.

In the context of cybersecurity, a major concern is not just the risk of exposing data to bad actors, but also the actions and decisions that are made based on the data and that cannot take place if the data cannot be trusted. As a result, conceptually in terms of data classes, some data can be trusted to take a particular action and other data cannot. If data is categorized as "Untrusted Data", where the identity of a device or data source is not known, the network security is low or the data integrity cannot be validated, that data is flagged as untrusted. So-called "Secure Data" on the other hand stems from devices and data sources with trusted identities and data validation processes, inherently part of a Public Key Infrastructure (PKI), generating "Trusted Data" that can trigger reliable actions, transactions and processes. As more and more applications rely on immediate actions, like the decision for a drone to complete its delivery, the need for Secure Data becomes critical for safety and security and it can only derive from secure, trusted IoT ecosystems. This is the entire intent behind Trusted Knowledge Automation which is to be able to make real-time decisions based on Secure Data.

WISeKey believes that, with arago, we are in a space alone, combining secure IoT microchips with proven cybersecurity software and services and offering that as a wrapper for Knowledge Automation which can now be provided in a cloud-based SaaS environment due to the security and secure data communications. Simply put, devices and data sources that are deployed without the security provided by our platform are exposed and lack the mission-critical security systems to defend themselves and the networks they are connected to. Our security solutions are therefore at the forefront of cybersecurity innovation, driving the future of IoT and IT security as the most comprehensive way to fill all gaps in identity and data protection, giving organizations the confidence that they are protected from device-to-cloud and beyond. This is also the foundation by which we can supply Trusted Knowledge Automation with secure data entering the applicable system. This decreases the volume of necessary data in order to make automated and informed decisions which improves the time to market for businesses to implement knowledge automation.

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^3^Ghosh, I, ‘This is the crippling cost of cybercrime on corporations’, World Economic Forum, November 7, 2019.

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Our cybersecurity and automation platform is comprised of our proprietary software and hardware products that have been designed from the ground up to address the unique attack parameters that threaten the IoT and data ecosystem:

·	Hardware - Our unique position as one of only six companies worldwide capable of designing<br>and deploying secure microchips that have been certified by globally recognized security certification boards like Common Criteria,<br>Cybersecurity and Infrastructure Security Agency and FIPS (Federal Information Processing Standards) gives us the advantage of<br>being able to provide our clients with the highest level of digital security available on the market at this time. Our secure microchips,<br>typically referred to as Secure Elements, have been embedded into billions of devices and are trusted to secure drone, enterprise,<br>government, and medical-grade applications.
·	Software - Our software solutions are driven by proprietary technologies based on widely<br>adopted standards such as Root of Trust (RoT) and Public Key Infrastructure (PKI), that enable our clients to effectively manage<br>their digital identities, information, and communications through a single integrated platform. RoT enables us to secure electronic<br>information through our PKI digital certificate technology. These digital certificates are deployed for mutual authentication and<br>encryption, creating tamperproof electronic "fingerprints", allowing our clients to adapt to an always changing device<br>landscape without compromising their digital security and integrity. This security is then wrapped around our cloud-based knowledge<br>automation platform which enables the automation of decisions for IT operations, financial operations, IoT applications, and more.
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Market Opportunities

Our security and automation solutions address the complex needs of global enterprises and organizations. Our customers include leading organizations in a diverse set of industries, including energy and utilities, financial services, healthcare, manufacturing, retail, technology, IT operations and telecommunications, as well as the public and academic sectors. In addition, we have an extensive network of channel partners, including software providers, systems integrators, IT outsourcing providers and leading cybersecurity consulting firms.

While our focus is on integrated solutions, we market and sell our products as both standalone products and integrated product suites. We derive revenue from the sales of microchips, software subscriptions, maintenance and licenses across our product portfolio.

Our core business addresses primarily three large and growing markets – Business Process Automation, Cybersecurity and IoT. According to industry research, worldwide information security spending will exceed $124 billion in 2019 (Aitken 2018)^4^ and steady commercial and consumer adoption will drive worldwide spending on the Internet of Things to $1.1 Trillion by 2023 (IDC 2019)^5^ with an estimated 7 billion IoT devices deployed (IoT Analytics 2018)^6^. Some notable sub-categories of where we have a significant track record include:

·	Industry 4.0
·	IT Operations Automation
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·	Drone Security
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·	Healthcare and Medical Devices
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·	Data Privacy
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·	Autonomous Safety
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As at December 31, 2020, we had 81 employees located across 7 countries. We also have 17 independent contractors located in Vietnam and 2 in France. For the fiscal year ended December 31, 2020, we generated revenues of USD 14.8 million with cash reserves (restricted and unrestricted) of USD 21.8 million.

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^4^Aitken, R, ‘Global Information Security Spending To Exceed $124B in 2019, Privacy Concerns Driving Demand’, Forbes, August 19, 2018.

^5^IDC Spending Guides, ‘Steady Commercial and Consumer Adoption Will Drive Worldwide Spending on the Internet of Things to $1.1 Trillion in 2023, According to a New IDC Spending Guide’, Business Wire, June 13, 2019.

^6^Lueth, KL,‘State of the IoT 2018: Number of IoT devices now at 7B – Market accelerating’, IoT Analytics, August 8, 2018.

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Security is our DNA and we are committed to continuing to develop and deliver solutions that keep our clients ahead of the unique cybersecurity threats that they face within their markets, enabling them to adapt to an evolving landscape. Trustworthiness is also demonstrated by means of independent audits and accreditations. WISeKey products and services are recognized for their superior quality and maximum-security levels through accreditations such as WebTrust for the PKI solutions and Common Criteria for the semiconductor products, meeting or exceeding the highest standards required by the industry.

Industry Background

Knowledge Automationis the next evolution of business process automation

Business process automation started in the 1990s with the first wave being simple task automation. The running of simple scripts or code to automate a simple task on a server for example and a situation where every single automation is a new application that must be developed. In the beginning of the 21^st^ century, task automation saw some progression with runbooks and Business Process Management (“BPM”) tools in order to manage the scripts inside of an application. This continues to be an on-premise environment and all of the automations are stored within a single application. In the 2010’s, RPAs and solution building began to take hold with the ability to automate on the desktop. This enabled the automation of User Interface (“UI”) activity and more complex tasks, but the automation continued to be script based and on-premise.

WISeKey is poised to lead the next wave of the evolution in business process automation using AI to automate data and human knowledge for significantly improved and more efficient decision making of increasingly complex tasks. This is knowledge automation! It enables all tasks to be automated and to fully digitize processes from end-to-end. It is imperative complexity and cybersecurity, which have been the most pressing issues to resolve in the next evolution are addressed.

RPA scaling is limited to static tasks and not suited for complex or highly variable tasks. It makes maintenance and staying current extremely costly. Traditionally, business process automations have been applied directly to a UI or server which requires an on-premise presence in order to manage cybersecurity threats. These automations are not supportive of a true digital transformation as the approach is restricted to high frequency/low variability tasks with premise access. While this type of automation can increase the throughput of staff, it requires people to manage and supervise the automation and has a low ceiling.

WISeKey Knowledge Automation is breaking through these current limitations represents the next wave after RPA. We are providing a true digital transformation through process automation. Automation powered by Advanced AI acts on contextual data and insight from data – not on scripted instructions to automate a specific task, thereby reducing the effort required to automate. Automation is accomplished via secure APIs and data secured by Trust technologies such as digital identities and PKI certificates, enabling a SaaS model and cloud-based automation, thereby lowering costs to the customer. Applied AI automatically selects knowledge to apply in order to automate. Solutions are not fixed, enabling adapting to business change, thereby lowering maintenance costs (TCO). Reliance on data, not scripted automation, and lower automation and maintenance costs means that all tasks in a process can be automated – delivering end-to-end digital transformation.

Broad rolloutand adoption of internet connected devices creates increased exposure

The Internet of Things (IoT) is the network of physical devices, vehicles, home appliances, and other things embedded with electronics, software, sensors, actuators and network connectivity that create an ecosystem of connected devices exchanging and making decisions on data that is being broadcast across the Internet.

Organizations face persistent threats from advanced attackers who are increasingly aware of existing vulnerabilities in existing security solutions and target the weakest link in the chain of security. Attackers can penetrate unsecured devices and subsequently connect to and cause harm to networks, manipulate data or use this data to gain competitive advantages. These devices include employees' personal devices (e.g., smartphones, laptops, and tablets), non-employee personal devices, (e.g., devices owned by third parties and others within enterprises), as well as IoT devices used for corporate purposes (e.g., lights, security cameras, printers, point-of-sale machines, thermostats, and medical devices). This landscape is growing rapidly and securing these devices and the data they provide has become an overwhelming priority for almost every single company in business today.

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Most devices today lack encryption, authentication and other forms of protection from malicious attacks. Once the security parameters are penetrated, attackers can infiltrate and further spread malicious software to a range of devices. This can ultimately lead to interruption of business operations, slowdown of internet functionality, potential disruptions to critical infrastructure, and in some cases even the loss of sensitive consumer information. Based on a report that INC.com conducted with collaboration from Cisco and the National Center for Middle Market, 60% of small businesses would fold within 6 months of a cyber-attack (Galvin 2018)^7^.

Existing securitysolutions were not built for today's connected world

Traditional IT security consists of software security solutions that were developed decades ago and focus primarily on legacy closed networks where the security landscape and challenges are less fractured and firewalls are used to protect a well-defined network perimeter.

Unlike personal computers, IoT devices rely on cloud computing for much of their operations. This has driven a paradigm shift to device-level security, as smart devices lack the critical security infrastructure to prevent infiltration. Attackers carry out DDoS (Distributed Denial of Service) attacks by taking advantage of vulnerabilities in these devices, which enables them to command a much greater and more widely distributed IP address base than other attacks.

In today's environment, security for IoT relies on various vendors and solutions. According to Symantec Corporation, the average enterprise uses 75 distinct and different security products (Symantec 2015)^8^. These products can be effective at preventing an attack if it falls within the scope of their specific capability and the enterprises have the necessary security knowledge of how to implement the different elements. Enterprises increasingly require a vendor such as WISeKey that can provide a fully integrated offering designed specifically to address the unique challenges of IoT security.

Enterprises needsecurity solutions that address today's complexities and dynamic threat environment

Enterprises must address the IoT security problem and bridge the gap between device proliferation and device security. It is imperative for devices to be manufactured with immutable digital identities that can be secured inside embedded microchips, giving the devices the ability to securely authenticate themselves within the network. This device-level authentication creates an end-to-end secure connection, extending all of the way from the device through the cloud platforms and ultimately to the end applications, eliminating potential security gaps that are inevitably generated during integration of various technologies.

Cyber-attackers often target identities as they provide access to valuable systems and data while concealing their activity within networks. More than ever, enterprises must focus on digital identities as the primary constant in an ever-evolving technology and threat landscape. PKI and digital certificates are two tools in the security chain that leverage the device's digital identity to implement strong authentication, encryption and digital signatures, which are the building blocks of cybersecurity solutions. Digital certificates provide identifying information, are forgery resistant, and can be verified because they are issued by official, trusted agencies. As digital identities have effectively become the new network perimeter, securing these identities has become paramount.

Our Technology

After reviewing the market conditions listed in the Industry Background section above, it's easy to see that there is a clear and present need for a unified platform that can address the broad range of unique security, trust and automation challenges facing the market today. Even with a host of large corporations operating in automation and cybersecurity, they have not succeeded in building - in the way WISeKey does - comprehensive solutions that integrate automation, software and hardware into a single, easy to implement, platform that gives organizations the peace of mind that their processes are automated and products, networks, private data, and reputations are holistically protected.

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^7^Galvin, J, ‘60 Percent of Small Businesses Fold Within 6 Months of a Cyber Attack. Here’s How to Protect Yourself’, Inc., May 7, 2018

^8^Symantec, ‘Symantec Introduces New Era of Advanced Threat Protection’, Symantec Press Release, October 27, 2015

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WISeKey with its Trust Technology is a leader in cybersecurity with core technology used to generate digital identities

and authenticate data and IoT, thereby enabling trust in IoT, data and identification. WISeKey’s recent acquisition of arago brings with it its AI and Data Technology who are leaders in business process automation and their next-generation Knowledge Automation enables up to 3x higher automation at lower ownership cost and enables full digitization of end-to-end processes and establishes customer data platform to support AI and analytics.

WISeKey is now combining these technologies, adding Trust to Knowledge Automation and enabling the delivery of the next wave in business process automation with the Trust required to combat the cyberthreats that have plagued the automation market in the past. This is a cloud-based SaaS offering designed for an uncertain cyberthreat environment with the customer data secured and authenticated throughout the entire process delivering unprecedented value to customers.

Knowledge Automation– There are three steps in the knowledge automation process:

1.          Data, a ticket or request is sent to HIRO, the arago knowledge automation platform, and the AI engine assesses if additional data required to determine what to do next.<br><br> <br><br><br> <br>2.          HIRO requests contextual data to determine what the problem is and through a trial-and-error process AI identifies the problem.<br><br> <br><br><br> <br>3.          HIRO then applies automation to solve problem, where each action feeds back data and the AI engine uses data to determine if the problem is solved or more steps are required.

This entire process is secured by Trust technology:

•	All communication through secure APIs, not directly to UI or server
•	Data “watermarked” when leaving customer systems
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•	Encrypted in transit to HIRO
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•	All contact with data is securely recorded and auditable
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•	Personal data (PII) can be pseudomized for GDPR compliance
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At the heart is an AI Data Warehouse:

•	All data used by HIRO during automation is stored in a Knowledge Graph
•	Data is structured and tagged for analytics – AI ready
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Connected TrustEssentials - The future of the connected world relies on trust and our mission at WISeKey is to build trust through the delivery of integrated security solutions. This is at the core of our Knowledge Automation platform and supported by three core technologies that we believe are necessary to deliver on this mission: Digital Identities (Digital IDs), Public Key Infrastructure (PKI), and a globally recognized Root of Trust (RoT). Below is a brief overview of each component:

DigitalIDs - A digital identity is the virtual representation of the real identity of a person, application or object. This identity must be:

·	Based on standards that are commonly adopted and implemented by default by most common software<br>applications and operating systems, in order to reduce the implementation effort;
·	Trustworthy by all parties involved in its use or validation, by means of trusting the entity that<br>issued the digital identity;
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·	Multifunctional, so the same technology can be used for as many purposes as possible, like strong<br>authentication, digital signature and encryption;
·	Revocable, in case of security compromise, cease of operation or other causes, in such a way that<br>all participants can verify at any moment if an identity is valid.
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WISeKey leverages the standards around Public Key Cryptography and Digital Certificates to build its concept of Digital ID and electronic transaction security.

PublicKey Infrastructure (PKI) - A Public Key Infrastructure (PKI) is commonly defined as "a set of IT systems, people, policies, and procedures needed to create, manage, distribute, use, store, and revoke digital certificates". PKI is WISeKey's base technology to manage Digital Identities. WISeKey's PKI is built fully compatible with the ITU X.509 standard (International Telecommunication Union 2016 ITU-T X-Series Recommendations) for personal certificates, and is built around a proprietary software solution for certificate management, that allows issuing millions of certificates and provide a multi-tenant interface that can be accessed by our corporate customers to manage the certificates of their employees or customers.

Root of Trust (RoT)- The concept of "Root of Trust" has a dual approach and interpretation:

·	Software-approach: Transactional RoT - This approach to the RoT is the one related<br>to PKI technology and Digital Certificates. Typically, the PKI is built as a hierarchy of Certification Authorities, in such a<br>way that the CA that issues the Digital Certificate of an entity is itself endorsed by a higher level Certification Authority (CA).<br>Typically, this chain has two or three levels and at the top level we'll find what is called the "Root Certification Authority"<br>(Root CA). This brings a key concept around Trust in PKI: We can trust a Digital Certificate if we trust the Root CA. WISeKey's<br>Root CA is endorsed by the OISTE Foundation.
·	Device-approach: Hardware RoT - Encryption techniques in general and Public Key Cryptography<br>in particular require an adequate protection of these encryption keys. Keys must be protected against physical and logistical attacks,<br>ensuring that only the authorized owner can use it. The highest protection for these keys can be achieved by incorporating in the<br>device a specific chip that assumes the role to protect the encryption keys and perform the cryptographic operations in a protected<br>environment. These chips, or secure microcontrollers, are commonly known as the "Secure Element". For IoT devices it<br>is also important to ensure that the software running in the device can't be corrupted or modified. This can also be achieved by<br>encrypting and digitally signing the device firmware with a key protected in the secure element.
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The WISeKey UniqueRoT – WISeKey at present is the only company in the world with a value proposition for Root of Trust that covers both the requirements for the Transactional RoT and the Hardware RoT:

·	WISeKey provides worldwide trusted Digital Certificates thanks to its PKI and the WISeKey/OISTE<br>Root Certification Authorities.
·	WISeKey provides extremely secure elements that can protect the cryptographic keys in IoT devices.
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OISTE Root of Trust

• Founded in 1998, Transactions Electroniques OISTE was created with the objectives of promoting the use and adoption of international standards to secure electronic transactions, expand the use of digital certification and ensure the interoperability of certification authorities' e-transaction systems. OISTE holds special consultative status with the Economic and Social Council of the UN (ECOSOC) and is an accredited member of the Non-commercial Users Stakeholders Group (NCSG) of ICANN as part of the Not-for-Profit Operational Concerns (NPOC) constituency. The OISTE foundation is regulated by article 80 of the Swiss Civil Code. The OISTE Foundation owns and regulates the OISTE Global Trust Model, which includes as "Root of Trust" a number of Root Certification Authorities that are globally recognized. OISTE delegated to WISeKey SA the operation of the systems and infrastructures supporting the Global Trust Model. The OISTE foundation does not itself issue certificates to end subscribers or operate as data center, instead, it granted WISeKey SA an exclusive license as Subordinate Certification Authority, allowing the delivery of Trust Services for Persons, Applications and Objects.

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WISeKey acts as the operator chosen by the foundation for the management of the OISTE Cryptographic Root Key. The OISTE RoT serves as a common trust anchor, recognized by operating systems and IoT applications to ensure the authenticity, confidentiality, and integrity of online identities and transactions. We believe these features are important in creating business opportunities with governments, international bodies, and corporations that are wary of foreign government oversight intervention and centralization of data on servers outside of their respective jurisdictions.

Our Additional Products & Services

Secure Microchipsand Secure Software Products - We offer a large range of secure microcontrollers that share consistent secure 8-/16-/32-bit RISC CPU performance, with strong security mechanisms, and enhanced crypto engines to optimize performance and power consumption. The products also provide high-density, low-power EEPROM and FLASH memory storage technologies. We design our chips to meet the most stringent security requirements, many of them are EAL5+ Common Criteria security-certified, or VISA and MasterCard certified. Common Criteria is a world standard, government driven design for assessing the level of resistance of systems or devices to all known attacks. It is constantly updated with all new attacks, and the chips' resistance is reassessed annually. EAL5+ is currently the highest level of resistance in the secure chip industry. We offer over 50 versions of secure microcontrollers and various supporting secure software solutions:

·	VaultIC - Family of secure microcontrollers delivered with our own embedded firmware, which<br>we designed to give an unforgeable identity to any connected device, and to provide system integrators with a set of cryptographic<br>APIs (Application Programming Interface) to protect devices against cyber-attacks, counterfeiting and forgery. VaultIC chips are<br>bundled together with our software and services platform to serve the IoT market.
·	Nanoseal - New family of secure memory chips specifically designed for digital brand protection<br>applications.
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·	MicroXsafe - Secure microcontrollers delivered with an SDK (Software Development Kit) that<br>allows our customers to develop their own embedded firmware (also called OS – Operating System). They are designed to protect<br>smart cards, USB tokens, and electronic systems against cyber-attacks, counterfeiting and forgery.
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·	MicroPass - Family of secure microcontrollers certified by VISA and MasterCard. They have<br>been designed and certified to be integrated into payment cards as well as into wearable devices such as watches, bracelets, and<br>jerseys. They are compatible with NFC (Near Field Communication) standards, thus capable to interact with NFC enabled devices such<br>as Android or iOS smartphones.
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·	PicoPass - Family of secure memory chips specifically designed for NFC (Near Field Communication)<br>access control badges.
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·	VaultiTrust - WISeKey’s VaultiTrust offers two modules: trusted data generation and<br>secure elements provisioning. VaultiTrust takes advantage of WISeKey’s government grade security certified offerings and<br>end-to-end digital security management to generate identity keys and efficiently install them into chips. VaultiTrust’s web<br>portal complements the service by offering an easy way to configure, manage and track production. WISeKey operates FIPS 140-2 Level<br>3 certified Hardware Security Modules (HSM) to efficiently generate secure data. These HSM are located in a WISeKey Common Criteria<br>EAL5+ and ISO27001 certified backed up data center and the HSM can be shared only upon customer’s request. WISeKey also offers<br>a cryptography customization service whenever needed.
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·	WISeTrustBoot - WISeKey's WISeTrustBoot solution, is the first platform-independent "Secure<br>Boot" and "Secure Firmware Update" solution that combines the strength of a tamper resistant secure elements- VaultIC,<br>state-of-the-art crypto libraries and strong digital signatures. By storing critical boot information in a VaultIC chip, and cryptographically<br>embedding this chip into the device's main processor, the carefully designed boot loader of the main processor becomes a stronghold<br>able to verify the authenticity of the firmware prior to starting up or receive firmware updates. WISeTrustBoot is delivered to<br>our customers with a powerful toolbox providing application developers the flexibility to tailor it to their specific needs.
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·	CertifyID PKI Suite – WISeKey's PKI Suite is branded with the "CertifyID"<br>trademark. This suite comprises all the products required to: 1) build an enterprise-grade PKI platform that can be used to serve<br>the most vital needs, and 2) leverage the use of the digital certificates due to software applications to implement digital signatures,<br>authentication and encryption. The CertifyID Suite is composed of these Products:
o	Universal Registration Authority (URA) - The URA is WISeKey's main application for certificate<br>management and can be used to build a multi-tenant, multi-purpose certificate management Solution
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o	WISignDoc - This product provides a "Document Signature Server" that can be integrated<br>into the corporate business processes to manage legally-binding digital signatures
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o	CertifyID Suite for Microsoft CAS - WISeKey provides series of modules that can enhance<br>the Microsoft Active Directory Certificate Services to build enterprise-grade PKI systems. WISeKey uses the CertifyID Suite to<br>build its own PKI platform and operate it from our Secure Datacenter in Switzerland and other locations to provide "Trust<br>Services" like mPKI (managed PKI).
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·	WISeID - WISeKey's WISeID offers secured storage to protect Personally Identifiable Information<br>(PII). Protecting your PII is important to avoid impersonation and identity theft. The personal data that you save in WISeID always<br>stays under your control, is encrypted with strong keys, and is never communicated to third parties. WISeID users have the freedom<br>to choose where their data resides and who is allowed to access it. By decoupling content from the application and digital identity<br>itself, users are able to use their data as currency and develop digital data dividends-based solutions in the spirit that consumers<br>have a right to know and control how their data is being used and should be able to monetize their data.
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·	WISeAuthentic - WISeKey has been a pioneer in digital luxury product authentication since<br>2007. WISeKey's expertise in the design of NFC (Near Field Communication) secure chips combined with its WISeAuthentic platform<br>for the identification, authentication, tracking and direct marketing of goods, provides customer-tailored solutions for brand<br>protection. WISeAuthentic provides the link between a physical product and a digital identity to effectively protect them against<br>counterfeiting and create new, unprecedented channels between brands and their distributors and customers. WISeAuthentic is both<br>an enterprise solution as well as mobile applications that provide a variety of services and information specifically designed<br>to a particular a stakeholder group. WISeKey has successfully deployed its WISeAuthentic platform to luxury brands including Bulgari<br>and LVMH's Hublot watches, and believes the WISeAuthentic platform can successfully be deployed for a large variety of sectors.<br>Our most recent developments enhance our security solution through secure Blockchain layers.
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·	WISePrint – The WISeAuthentic portfolio has been expanded to reduce the risk of fraud<br>and help printer manufacturers to protect their legitimate cartridges. This solution called WISePrint includes cryptographic hardware<br>modules and a turnkey high security infrastructure as well as services that help deployment from the manufacturer to the end-user.
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·	Trust Services, Managed PKI - WISeKey operates, under the WISeKey/OISTE Root, a worldwide-recognized<br>PKI platform from its secure datacenter in Switzerland. This platform is based in the Certificate Management Solution CertifyID<br>URA (Universal Registration Authority), and enables WISeKey to provide a full portfolio of "Trust Services", delivering<br>digital certificates to protect persons, applications and objects. One of the advantages of the URA platform is the capability<br>to build a multi-tenant service with delegated administrators. This service allow WISeKey to provide a "Managed PKI"<br>service to our customers, that can access the URA to manage their digital certificates without requiring to deploy any on-premises<br>architecture, as the MPKI service is securely accessed from the cloud using a web portal or advanced API, that enables certificate<br>management automation. MPKI customers have the ability to manage multiple certificate types, as for example:
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·	Personal Digital Certificates for employees or customers, that enable secure email, document signatures<br>and others;
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·	SSL Certificates, to protect the corporate web and application servers;
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·	Device Certificates, to protect IoT applications.
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Market Verticals

Industry 4.0

• Industry 4.0 is based on the concept of smart cities and factories where machines are augmented with internet connectivity and connected to a system that can visualize the entire production chain and make decisions on its own. The trend is towards automation and data exchange in technologies which include Smart Cities, Smart Meters, Cyber-Physical Systems (CPS), the Industrial IoT (IIOT), cloud computing and cognitive computing. Industry 4.0 is also referred to as the fourth industrial revolution. Our solutions are ideally suited to meet the needs of the Industry 4.0 market, where connected devices and cloud platforms merge with the goal of automating processes and introducing predictive analytics that can submit a repair request before a problem occurs, saving valuable down-time that costs manufacturers and suppliers millions in lost production. Industry 4.0 is fast becoming synonymous for the connectivity trend that is happening inside of smart cities, smart electricity grids, smart buildings, and any network that connects industrial applications.

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IT Operations Automation – IT operations have long been faced with inefficient decision making and human error causing problems to be resolved not once, but multiple times before the situation is ultimately resolved. While the market has begun the automation process and evolved to RPAs, the ceiling is low and on-premise deployment is required to manage the security aspects. This also creates more costly investments and drives the human maintenance costs up. With WISeKey’s Knowledge Automation, these barriers are broken down and automation can be deployed where human knowledge can be leveraged and decisions can be automatically taken with the platform continuing to learn. The limits of RPAs typically generate no more than 30% automation while WISeKey’s knowledge automation significantly enhances proven automation rates. This drive efficiency, cost savings and a continuously improved customer satisfaction.

Drone Security - Enterprise drones as all unmanned aerial vehicles (UAVs) are experiencing massive growth across many segments including agriculture, construction, delivery, and law enforcement. As this growth occurs, the need for security becomes even more prevalent. There are security vulnerabilities through the entire process with risks not only of the drones being illicitly used but also of the data being highjacked. WISeKey has solutions to secure not only the drones themselves, but also the controllers, data, communications and even pilots with digital identities.

Healthcare and MedicalDevices – COVID-19 has changed the landscape of healthcare and driven a massive increase in virtual health visits and home testing. This has continued to exacerbate the need for data privacy and test and health monitoring security. WISeKey has proven technologies already deployed in the market that provide digital identities for healthcare workers and consumers alike. These digital identities are combined with device security and data encryption to provide holistic security solutions allowing for home health care and testing to not only meet the current regulations but go beyond them and future proof the solutions.

Data Privacy

• The protection of the information in general, and the protection of the private personal information of people in particular, is based on two major paradigms:

·	Information can only be accessed by the authorized parties, as decided by the owner at any moment.<br>This includes the capability to authenticate who is trying to access the information, and also to avoid eavesdropping during storage<br>or transmission;
·	Information must be authentic, so it cannot be manipulated while stored or transmitted, and there<br>must be a mechanism to detect if any tampering occurred.
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WISeKey uses advanced technologies that ensure the privacy of personal data thanks to the adoption of PKI technology, including:

·	Digital Identity, in the form of a Digital Certificate, to implement strong authentication mechanism,<br>being able to ensure who can access the information.
·	Strong encryption to protect the data while stored in servers or transmitted over the internet.
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·	Legally-binding digital signatures to ensure that the authenticity and integrity of the information
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WISeKey's suite of products and services, including CertifyID and WISeID products enable such capabilities on all environments, including enterprise applications, desktop solutions, and mobile applications.

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Autonomous Safety

• The growing addition of complex technologies in the automotive industry had always as a goal to elevate the levels of safety and comfort for drivers and passengers. Self-driving cars, intelligent collision detection, advanced entertainment systems, connected to the Internet are just a few to mention. The potential risk of security flaws or errors in these technologies is enormous. Latest reports go as far as to consider a self-driving vehicle as a weapon if a malicious attacker takes controls of it (Campbell 2018)^9^. The only possibility to adopt these technologies with a reasonable control of the inherent risks is to adopt and embed security as a fundamental principle of the design and manufacturing process. Intelligent cars must embed security technologies in all layers where a potential attack vector exists. All sensors in the cars must interact with the controlling units in a way that both parts can be sure that there is no room for tampering in the data and commands. One must also control who can access the car components, from the driver to the personnel at the service shops. WISeKey offers a suite of technologies to enable such levels of security, including:

·	VaultiTrust - WISeKey’s VaultiTrust can be used for trusted data generation and secure<br>elements provisioning inside of secure automotive manufacturing applications.
·	ISTANA PKI solution: Solution to manage all components in an intelligent car, by means of<br>providing strong digital identities, based on PKI technology.
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Our Competitive Strengths

We believe we have several competitive advantages that will enable us to defend and extend our market position in automation, digital identification and IoT security. Our key competitive strengths include:

·	Cybersecure Knowledge Automation - Business process automation is not a new market,<br>but the WISeKey offer is changing the landscape and revolutionizing the opportunity for process automation with a new and comprehensively<br>secure automation platform. This allows for end-to-end automation provided via the cloud which opens signtifiantly more opportunity.<br>In addition, the fact that all of the data and inputs are secured enables for automation to be accomplished with less data because<br>data uncertainty is removed from the equation. This is transformational and empowers business process automation to be fully digitized.
·	Unified Cybersecurity Platform - On the surface it may seem easy to look at WISeKey's<br>secure semiconductor offerings and to compare us to other traditional semiconductor companies like NXP, Microchip, or ST Microelectronics<br>or, or considering our experience in Root of Trust and PKI services, compare us to Certificate Authorities (CA) like Digicert,<br>Comodo, or Globalsign. The key to our success is the fact that we are the first company of our scale to combine both offerings<br>into a single platform.
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The term "one-stop-shop" may seem a bit cliché but in this case it's a perfect description of our capabilities. In the end, your security ecosystem must be solid across the full spectrum. There are three distinct advantages to building a connected security scheme from the products delivered by one vendor: First, one does not have to hire or pay for the security expertise to make sure that each different component will work with the next element; second, time to market is critical in the IoT space and qualifying multiple vendors and negotiating contracts takes up time where a manufacturer's product could be selling instead of waiting to be built; third, if a security issue needs to be addressed only one vendor needs to be engaged to resolve the issues as quickly as possible.

·	Swiss-based RoT - Swiss neutrality, security and privacy laws allow us to operate<br>as the trusted operator of the OISTE Global RoT and without geo-political or governmental constraints. The OISTE RoT is located<br>in Switzerland and is managed by a not-for-profit entity, OISTE. The OISTE RoT serves as a common trust anchor, recognized by operating<br>systems and IoT applications to ensure the authenticity, confidentiality, and integrity of online identities and transactions.<br>We believe these features are important in creating business opportunities with various governments, international bodies, and<br>industrial companies that are wary of foreign government oversight intervention and centralization of data on servers outside of<br>their respective jurisdictions.
·	Global Interoperability - We offer solutions on a global scale that are capable of<br>adapting to complex and country-specific rules and regulations. We operate our RoT within the EU and India, and expect to operate<br>RoT in the United States and China. Our RoT satisfies national cybersecurity requirements and is backed by globally recognized<br>security credentials, allowing us to deploy our trusted platforms on a global scale while adapting to country-specific security<br>regulatory bodies.
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^9^ Campbell, P, ‘Hackers have self-driving cars in their headlights’, Financial Times, March 15, 2018.

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Our Growth Strategies

Our mission is to build trust through the delivery of integrated automation and security solutions. This is a broad reaching goal that requires a well-thought-out strategy to accomplish it. The key elements of our growth strategy include:

·	Direct Sales and Expansion within our Existing Customer Base - Our existing customer<br>base provides a significant opportunity to drive incremental sales. We plan to increasingly market our automation, cybersecurity<br>software and ROT offerings to our customers. We currently have growing number of customers using multiple components of our portfolio<br>and believe helping our current customers identify gaps in their strategies will drive significant cross selling opportunities<br>and increase our product deployment. In addition, we are investing in our Sales and Marketing to increase our ability to address<br>new customers and opportunities in a direct sales model.
·	Acquiring New Customers through an OEM approach - Leveraging the expertise of others<br>is always a smart way to approach the market. What’s more valuable is being able to offer others, OEMs and Systems Integrators<br>to expand their own business models and approach by leveraging our cybersecurity and automation portfolio. This empowers them to<br>customize their approach to the market and support that with a platform they can build upon. Knowledge Automation may be the best<br>example where OEMs and Systems Integrators alike can integrate the Hiro platform to their existing business process automation<br>ecosystem and drive their value to customers up much more rapidly than was previously possible. This in-turn enables WISeKey to<br>address new markets and niche plays that otherwise might not be realized.
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·	Expand our Geographic Coverage - We operate in a large, growing markets and there<br>are substantial opportunities to expand our geographic coverage and client base. We plan to expand our global footprint outside<br>of the areas where we currently operate. Our Swiss affiliation allows us to penetrate markets that have been traditionally difficult<br>for our competitors and other security vendors, including China. In recent years we entered into the Indian market and expanded<br>our operations in France, Taiwan, Japan, the United States and Germany. We specifically want to focus on continued expansion in<br>the United States, which is a very underpenetrated foreign market for the Company.
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·	Selectively Pursue Strategic Transactions - We will continue to proactively explore<br>and pursue selective acquisitions to help drive our growth and complement our product offerings, expand the functionality of our<br>security solutions, acquire technology or talent, or bolster our leadership position by gaining access to new customers or markets.<br>Acquisitions remain core to our strategy and we continue to monitor an active pipeline of opportunities.
---	---

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C.	Organizational Structure

We are the holding company of the WISeKey Group.

The chart below contains a summary of our organizational structure and sets out our subsidiaries, associated companies and joint ventures as at December 31, 2020. Although not all of our subsidiaries are wholly-owned, all of them are assessed as being under our control.

As at December 31, 2020, our main operating subsidiaries were WISeKey Semiconductors SAS, domiciled in France, and WISeKey SA, domiciled in Switzerland:

Company Name	Country of incorporation	Percentage ownershipas at December 31, 2020
WISeKey SA	Switzerland	95.75%
WISeKey Semiconductors SAS	France	100.00%
D.	Property, Plants, and Equipment
---	---

Our corporate headquarters are located in Geneva, Switzerland. The principal office for our Swiss and international operations, which is also our registered office, is located in Zug, Switzerland.

As of December 31, 2020, the net book values of tangible fixed assets were as follows:

	As at December 31, 2020
Asset category	Net book value<br><br> <br>(USD millions)
Machinery & equipment	0.7
Office equipment and furniture	0.3
Total tangible fixed assets	1.0

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We do not own any facility and our group companies have entered into lease arrangements for the premises in which they operate. The following table sets forth our most significant facilities as at December 31, 2020:

Location	Size of site<br><br> <br>(in m^2^)	Use of the property
Meyreuil, France	1,498*	Research & development, sales & marketing, administration.
Geneva, Switzerland	693*	Head office administration, sales & marketing and data center.

* excluding parking spaces

Item 4A.	Unresolved Staff Comments

Not applicable.

Item 5.	Operating and Financial Review and Prospects

The following discussionof our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financialstatements and their related notes included in this annual report on Form 20-F.

Certain informationincluded in this discussion and analysis includes forward-looking statements that are subject to risks and uncertainties, and whichmay cause actual results to differ materially from those expressed or implied by such forward-looking statements. For further informationon important factors that could cause our actual results to differ materially from the results described in the forward-lookingstatements contained in this discussion and analysis, see "Special Note Regarding Forward-Looking Statements" and "Item3D. Risk Factors."

A.	Operating Results

Company Overview

We are a Swiss cybersecurity company focused on delivering integrated automation and security solutions globally. With over two decades of experience in the digital security market, we integrate our secure semiconductors, cybersecurity software, and a globally recognized Root of Trust (RoT) into leading-edge products and services that protect users, devices, data and transactions in the connected world. Now, this is also a cybersecure wrapper for our knowledge automation platform leveraging artificial intelligence and revolutionizing the business process automation space.

WISeKey is now positioned to further the digital transformation that has just started for all markets. By leveraging the strong track record of cybersecurity and now bringing that to business process automation we are set to revolutionize the market while at the same time continue to provide the highest quality solutions serving the semiconductor and digital identity markets.

Basis of presentation

We prepare our financial statements in accordance with US GAAP. Our reporting currency is the U.S. Dollar ("USD").

Our critical accounting policies are described in Note 4.

Discontinued Operations relating to WISeKey (Bermuda) Holding Ltd and affiliates (QuoVadis Group)

On December 21, 2018 the Group signed a sale and purchase agreement (the "SPA") to sell WISeKey (Bermuda) Holding Ltd, a Bermuda based company, and its affiliates to Digicert Inc. The sale was completed in the first quarter of 2019. The group subsidiaries making up the QuoVadis Group in scope for the sale were WISeKey (Bermuda) Holding Ltd, QuoVadis Trustlink Schweiz AG, WISeKey (UK) Ltd, QuoVadis Trustlink BVBA, QuoVadis Trustlink BV, QV BE BV, QuoVadis Trustlink GmbH, QuoVadis Services Ltd, and QuoVadis Ltd.

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WISeKey Consolidated Financial Statements for the Year Ended December 31, 2018

We assessed the SPA under ASC 205 and concluded that, although the sale had not been completed as at December 31, 2018, the operation met the requirement to be classified as held for sale and as such qualifies as a discontinued operation.

In line with ASC 205-20-45-3A, we reported the results of the discontinued operations as a separate component of income, and classified their assets and liabilities separately as held for sale in the balance sheet for all periods presented. Long lived assets classified as held for sale were recorded at the lower of (i) their carrying value, and (ii) their fair value less costs to sell. No gain or loss on classification as held for sale was recorded in 2018. The Group elected to allocate interest to discontinued operations in accordance with ASC 205-20-45-6 to 205-20-45-8.

WISeKey Consolidated Financial Statements for the Year Ended December 31, 2019

The sale of WISeKey (Bermuda) Holding Ltd and its affiliates was completed on January 16, 2019, when all entities except QuoVadis Services Ltd were transferred to Digicert Inc. The transfer of ownership of QuoVadis Services Ltd was conditional on receiving the consent from the Regulatory Authority in Bermuda (the "RAB") (the "RAB Consent") to the change in ultimate beneficial ownership of QuoVadis Services Ltd, being the entity holding the Communications Operating Licence in Bermuda. The RAB Consent was obtained in February 2019 and the transfer of ownership of QuoVadis Services Ltd from WISeKey to Digicert Inc. was effective on February 28, 2019. We assessed the SPA under ASC 810-10-40-6 and concluded that the terms and conditions of the SPA met the definition to account for the sale as a single transaction effective on January 16, 2019.

We assessed the SPA under ASC 205 and concluded that, for the period January 01, 2019 to January 16, 2019, the operation met the requirement to be classified as held for sale and as such qualifies as a discontinued operation. The Group elected to allocate interest to discontinued operations in accordance with ASC 205-20-45-6 to 205-20-45-8. The allocation method is detailed in Note 28.

In line with ASC 205-20-45-3A, we reported the results of the discontinued operations as a separate component of income. The divested assets and liabilities were deconsolidated from February 28, 2019 for QuoVadis Services Ltd, and from January 16, 2019 for all other entities.

The gain from divestiture recorded in the year to December 31, 2019 is shown as a separate line within discontinued operations in the income statement.

Factors affecting our results of operations

Although most of our IoT segment customers are recurring customers, it is not industry practice to work with long-term contracts. Therefore, most of our IoT customers have signed a framework agreement with us but are not committed to certain volumes over a period of time. This introduces a level of uncertainty on the level of revenue generated from recurring customers.

In our IoT segment, as microelectronics technology evolves, customers look for added functionalities, and competitors in the semiconductors industry develop new products, sales of a given product typically decrease over time as the next-generation semiconductors are introduced. In order to sustain revenue, IoT companies must be able to develop or otherwise acquire the rights to develop or market new products with additional or innovative security and application features. See "Item 4. Information on the Company – B. Business Overview" for information regarding our technology and product developments.

Operating Segments

Since the acquisition of WISeKey Semiconductors SAS in 2016, we organized our business into two operating segments: the IoT segment, which is centered on our family of secure microcontrollers designed to give an unforgeable identity to any connected device, and the mPKI segment, for managed Public Key Infrastructure, which encompasses our digital identity, certificate management and signing solutions, and trust services.

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Geographic Information

Our operations are global in scope and we generate revenue from selling our products and services across various regions. While our operations in Europe have historically contributed the largest portion of our revenues, our efforts to expand in the United States have increased the revenue generated from North America. We are also building a strategy to expand into new territories in Asia, although at this stage the results have not yet materialized in our revenue.

Our total revenue by geographic region for the fiscal years ended December 31, 2020, December 31, 2019 and December 31, 2018 is set forth in the following table:

	12 months ended December 31,
	2020		2019		2018
Net Sales by region	USD'000	%	USD'000	%	USD'000	%
Switzerland	592	4%	2,137	9%	2,512	7%
Rest of EMEA*	4,321	29%	8,046	36%	14,122	41%
North America	8,260	56%	9,691	43%	15,165	44%
Asia Pacific	1,526	10%	2,504	11%	2,306	7%
Latin America	80	1%	274	1%	175	1%
Total Net sales from continuing operations	14,779	100%	22,652	100%	34,280	100%

*EMEA means Europe, Middle East and Africa

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Financial year ended December 31, 2020 compared with financial year ended December 31, 2019

	12 months ended<br><br> <br>December 31,			12 months ended<br><br> <br>December 31,			Year-on-Year<br> Variance
USD'000	2020			2019
Net sales		14,779			22,652			-35	%
Cost of sales		(8,578	)		(12,871	)		-33	%
Depreciation of production assets		(736	)		(325	)		126	%
Gross profit		5,465			9,456			-42	%
Other operating income		43			180			-76	%
Research & development expenses		(6,012	)		(6,422	)		-6	%
Selling & marketing expenses		(7,355	)		(7,929	)		-7	%
General & administrative expenses		(10,673	)		(15,789	)		-32	%
Total operating expenses		(23,997	)		(29,960	)		-20	%
Operating income / (loss)		(18,532	)		(20,504	)		-10	%
Non-operating income		1,127			1,918			-41	%
Gain / (loss) on derivative liability		44			214			-79	%
Gain / (loss) on debt extinguishment		-			(233	)		-100	%
Interest and amortization of debt discount		(458	)		(742	)		-38	%
Non-operating expenses		(11,079	)		(3,670	)		23	%
Income / (loss) from continuing operations before income tax expense		(28,898	)		(23,017	)		-3	%
Income tax (expense)/recovery		(9	)		(13	)		-31	%
Income/ (loss) from continuing operations, net		(28,907	)		(23,030	)		-3	%
Discontinued operations:
Net sales from discontinued operations		-			1,934			-100	%
Cost of sales from discontinued operations		-			(791	)		-100	%
Total operating and non-operating expenses from discontinued operations		-			(1,801	)		-100	%
Income tax (expense)/recovery from discontinued operations		-			42			-100	%
Gain on disposal of a business, net of tax on disposal		-			31,100			-100	%
Income / (loss) on discontinued operations		-			30,484			-100	%
Net income / (loss)		(28,907	)		7,454			-400	%
Less: Net income / (loss) attributable to noncontrolling interests		(248	)		(733	)		-66	%
Net income / (loss) attributable to WISeKey International Holding AG		(28,659	)		8,187			-370	%

Revenue

Our total revenue for the year ended December 31, 2020 decreased by USD 7.9 million or 35% from prior period. The two main macro-economic factors behind this decrease are: the political and trading tensions between the U.S. and China, and the rising threat of protectionism and vulnerabilities in emerging markets, which continue to affect all IoT and microprocessors companies by delaying their investment decisions because of the threat over their supply chain, and the fact that the COVID-19 pandemic has upended the global economy and disrupted worldwide supply chains, causing significant near-term market uncertainty (according to the Semiconductors Industry Association (“SIA”), 2020 State of the U.S. Semiconductor Industry).

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In relation to our mPKI segment, the uncertainty brought on by the COVID-19 pandemic has led some of our customers to halt authentication programs, and not maintain their commitment level to WISeKey.

With the planned expansion of WISeKey into AI through arago (see Notes 10 and 40, and above Item 4.A -- History and Development of the Company), we are positioning our product offering for the next technological evolutions to develop our authentication offering and deliver Trusted Knowledge Automation, so as to enable organizations worldwide to digitize their business, in an era when remote working has come to a peak.

The table below shows the breakdown of our revenue by operating segment for the years ended December 31, 2020 and December 31, 2019.

	12 months ended December 31,	12 months ended December 31,	Year-on-Year
USD'000	2020	2019	Variance
IoT segment revenue from external customers	14,317	20,504	-30%
mPKI segment revenue from external customers	462	2,148	-78%
Total revenue	14,779	22,652	-35%

Gross Profit

Our gross profit decreased by USD 4.0 million to USD 5.5 million (gross margin of 37%) in the year ended December 31, 2020 in comparison with a gross profit of USD 9.5 million (gross margin of 42%) in the year ended December 31, 2019. Most of the decrease in gross profit is the direct result of the decrease in revenue year-on-year. Due to the long manufacturing cycle of our IoT activity, and in order to reduce the lead time to our customers, we start the manufacturing cycle early. However, with the downturn and uncertainties in the global economy, some customers reduced their order volumes in 2020 on a very short notice, which did not allow us to adapt our manufacturing cycle and adversely impacted our gross profit margin. As an illustration, a total obsolescence charge of USD 1.0 million was recorded in the income statement in the year ended December 31, 2020 (compared to USD 335,667 in the year ended December 31, 2019) although the effect was reduced by the utilization of a provision for obsolescence of USD 622,335.

To a lesser extent, our gross profit was also adversely impacted by the introduction costs of the new Nanoseal product family in our IoT segment.

Other operating income

In 2020 our other operating income consisted of recharges for the use of our premises by OISTE (see Note 39 of our consolidated financial statement as at December 31, 2020) for USD 43,000. In 2019 our other operating income consisted of recharges for the use of our premises by OISTE (see Note 39 of our consolidated financial statement as at December 31, 2019) for USD 140,000 and a gain on the liquidation of our subsidiaries WISeKey Italia s.r.l and WISeKey Singapore Pte Ltd. for USD 40,000.

We do not have recurring other operating income that contributes to our profit.

Research & development expenses

Our research and development ("R&D") expenses includes expenses related to the research of new technology, products and applications, as well as their development and proof of concept, and the development of further application for our existing products and technology. They include salaries, bonuses, pension costs, stock-based compensation, depreciation and amortization of capitalized assets, costs of material and equipment that do not meet the criteria for capitalization, as well as any tax credit relating to R&D activities, among others.

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Our R&D expenses represented respectively 25% of total operating expenses in 2020 and 21% in 2019. Our Group being technology-driven, the level of our R&D expenses reflects our engagement to act as a leader on new cybersecurity developments and future applications, despite a reduction of our total operating expenses by USD 6.0 million.

Research tax credits are provided by the French government to give incentives for companies to perform technical and scientific research. Our subsidiary WISeCoin R&D Lab is eligible to receive such tax credits. The credit is deductible from the entity's income tax charge for the year or payable in cash the following year, whichever event occurs first.

Selling & marketing expenses

Our selling & marketing ("S&M") expenses include advertising and sales promotion expenses such as salaries, bonuses, pension costs, stock-based compensation, business development consultancy services, and costs of supporting material and equipment that do not meet the criteria for capitalization, among others.

Our S&M expenses accounted for 31% of our total operating expenses in 2020 compared with 26% in 2019. This reflects our efforts to rebuild our sales team following the divestiture of WISeKey (Bermuda) Holding Ltd and its affiliates in 2018. In order to support future revenue, we intend to continue investing in our sales & marketing activities.

General & administrative expenses

Our general & administrative ("G&A") expenses cover all other charges necessary to run our operations and supporting functions, and include salaries, bonuses, pension costs, stock-based compensation, lease and building costs, insurance, legal, professional, accounting and auditing fees, depreciation and amortization of capitalized assets, and costs of supporting material and equipment that do not meet the criteria for capitalization, among others.

Our G&A expenses decreased by 32% or USD 5.1 million in 2020 compared with 2019 and represented 44% of total operating expenses in 2020 compared with 53% in 2019. This decrease is the translation of our efforts to improve our group cost structure. It is also partly due to a reduction of USD 3.2 million in stock-based compensation year-on-year following the grant of ESOP options in 2019 to our employees in recognition for past services to our Company.

Operating loss

Our operating loss for the year ended December 31, 2020 decreased by USD 2.0 million compared with 2019, which shows that the USD 6.0 million reduction in operating expenses more than compensated for the USD 4.0 million decrease in gross profit. Although we are planning to continue investing in R&D and are also expecting to increase our S&M expenses in future as we strengthen our sales team, the Company keeps its focus on trying to rationalize its cost structure.

Non-operating income and expenses

The net expense resulting from income and expenses of our non-operating activities increased by USD 7.1 million in 2020 compared with 2019.

This is mainly due to an increase of non-operating expenses year-on-year by USD 7.4 million and a decrease of non-operating income year-on-year by USD 0.8 million. The primary factor affecting our non-operating activities in 2020 was the full impairment of our Tarmin warrant which had a carrying value of USD7.0 million (see Note 19 of our consolidated financial statement as at December 31, 2020).

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Conversely, we recorded a decrease in expenses in relation to our financing facilities by USD 0.3 million in 2020 compared with 2019 (derivative liability, debt extinguishment, and interest and amortization of debt discount). In 2020, the Company entered into new financing instruments (see Note 25) without incurring any debt extinguishment expenses (compared to a debt extinguishment expense of USD 0.2 million in 2019). Our interest and amortization of debt discount expense in the year to December 31, 2020 was USD 0.5 million compared with USD 0.7 million in 2019.This decrease was mainly attributable to the fact that most conversions under our convertible facilities occurred long before maturity, which resulted in the corresponding unamortized debt discounts being recorded in Additional Paid-In Capital ("APIC") instead of amortized in the income statement.

Our Company regularly enters into loan and convertible loan agreements to finance its operations.

Net loss from continuing operations

As a result of the above factors, the net loss from continuing operations increased by 26%, or USD 5.9 million, from USD 23.0 million in the year ended December 31, 2019 to USD 28.9 million in the year ended December 31, 2020.

Net income

In the year ended December 31, 2020, the Company made a net loss of USD 28.9 million.

With a non-recurring USD 31.1 million gain from divestiture included in the income on discontinued operations in the income statement in the year ended December 31, 2019, we reached a net income position of USD 7.5 million in 2019.

Non-GAAP Performance Measures

In addition to our reported financial results prepared under US GAAP, we also prepare and disclose EBITDA and Adjusted EBITDA, which are measures not prepared in accordance with US GAAP. We present EBITDA and Adjusted EBITDA because we believe that these measures are useful to investors as they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We further believe that Adjusted EBITDA is helpful to investors in identifying trends in our business that could otherwise be obscured by certain items unrelated to ongoing operations because they are highly variable, difficult to predict, may substantially impact our results of operations and may limit the ability to evaluate our performance from one period to another on a consistent basis.

The usefulness of EBITDA and Adjusted EBITDA to investors has limitations including, but not limited to, (i) they may not be comparable to similarly titled measures used by other companies, including those in our industry, (ii) they exclude financial information and events, such as the effects of an acquisition or amortization of intangible assets, or of stock-based compensation, that some may consider important in evaluating our performance, value or prospects for the future, (iii) they exclude items or types of items that may continue to occur from period to period in the future and (iv) they may not exclude all items, which could increase or decrease these measures, which investors may consider to be unrelated to our long-term operations, such as the results of businesses divested during a period. These non-GAAP measures should not be considered in isolation and are not, and should not be viewed as, substitutes for income, net profit for the year or any other measure of performances presented in accordance with US GAAP. We encourage investors to review our historical financial statements in their entirety and caution investors to use US GAAP measures as the primary means of evaluating our performance, value and prospects for the future, and EBITDA and Adjusted EBITDA as supplemental measures.

EBITDA and Adjusted EBITDA

We define EBITDA as operating income/loss before income tax expenses, depreciation and amortization including any purchase accounting ("PPA") effects when applicable, and net interest expense.

We define Adjusted EBITDA as EBITDA further adjusted to exclude non-cash expenses such as stock-based compensation and equity settlements, and other items that management believes are unrelated to our core operations such as non-recurring legal and professional expenses related to our merger and acquisition activities.

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The following table provides a reconciliation from operating loss to EBITDA and Adjusted EBITDA for the years ended December 31, 2020 and December 31, 2019.

	12 months ended December 31,
(Million USD)	2020			2019
Operating loss as reported		(18.5	)		(20.5	)
Non-GAAP adjustments from continuing operations:
Depreciation expense from continuing operations		1.0			0.8
Amortization expense on intangibles from continuing operations		0.6			0.5
EBITDA		(16.9	)		(19.2	)
Non-GAAP adjustments from continuing operations:
Stock-based compensation		0.4			5.4
M&A-related legal fees		0.5			1.0
M&A-related professional fees		0.1			-
Listing-related professional fees		0.1			0.2
Adjusted EBITDA		(15.8	)		(12.6	)

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Financial year ended December 31, 2019 compared with financial year ended December 31, 2018

	12 months<br><br> <br>ended<br><br> <br>December 31,			12 months<br><br> <br>ended<br><br> <br>December 31,			Year-on-Year<br> Variance
USD'000	2019			2018
Net sales		22,652			34,280			-34	%
Cost of sales		(13,196	)		(18,319	)		-28	%
Gross profit		9,456			15,961			-41	%
Other operating income		180			289			-38	%
Research & development expenses		(6,422	)		(5,306	)		21	%
Selling & marketing expenses		(7,929	)		(5,772	)		37	%
General & administrative expenses		(15,789	)		(14,232	)		11	%
Total operating expenses		(29,960	)		(25,021	)		20	%
Operating income / (loss)		(20,504	)		(9,060	)		126	%
Non-operating income		1,918			2,181			-12	%
Gain / (loss) on derivative liability		214			-			n/a
Gain / (loss) on debt extinguishment		(233	)		-			n/a
Interest and amortization of debt discount		(742	)		(150	)		395	%
Non-operating expenses		(3,670	)		(2,826	)		30	%
Income / (loss) from continuing operations before income tax expense		(23,017	)		(9,855	)		134	%
Income tax (expense)/recovery		(13	)		(53	)		-75	%
Income/ (loss) from continuing operations, net		(23,030	)		(9,908	)		132	%
Discontinued operations:
Net sales from discontinued operations		1,934			19,412			-90	%
Cost of sales from discontinued operations		(791	)		(6,196	)		-87	%
Total operating and non-operating expenses from discontinued operations		(1,801	)		(19,778	)		-91	%
Income tax (expense)/recovery from discontinued operations		42			205			-80	%
Gain on disposal of a business, net of tax on disposal		31,100			-			n/a
Income / (loss) on discontinued operations		30,484			(6,357	)		580	%
Net income / (loss)		7,454			(16,265	)		146	%
Less: Net income / (loss) attributable to noncontrolling interests		(733	)		13			-5738	%
Net income / (loss) attributable to WISeKey International Holding AG		8,187			(16,278	)		150	%

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Revenue

Our total revenue for the year ended December 31, 2019 decreased by USD 11.6 million or 34% from prior period. This is mostly attributable to three factors:

·	The impact of the sale of WISeKey (Bermuda) Holding Ltd and its affiliates on our continuing operations<br>with the absence of cross-selling opportunities, i.e. opportunities to sell other products and services of the group to existing<br>customers of the divested entities, and the reduction of our sales team.
·	Our IoT activity was adversely affected by the overall downturn in the semiconductor industry worldwide.<br>This downturn, linked to the political and trading tensions between the U.S. and China, and the rising threat of protectionism<br>and vulnerabilities in emerging markets, has affected all IoT and microprocessors companies (according to the Semiconductors Industry<br>Association, 2019 mid-year global semiconductor sales were down 14.5% as compared to 2018^10^).
---	---
·	One of our products, the old-generation of MicroPass used in the past for electronic payments in<br>the U.S. market, is reaching the end of its life.
---	---

With the introduction of the Nanoseal family, the next-generation family of secure memory chips, we are positioning our product offering for the next technological evolutions. However, the performance of our IoT segment will remain dependent on the macro-economic factors impacting the semiconductors industry, particularly the evolution of the tensions between the United States and China.

_____________________________

^10^Semiconductors Industry Association, ‘Mid-Year Global Semiconductor Sales Down 14.5 Compared to 2018’, SIALatest News, August 5, 2019.

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The table below shows the breakdown of our revenue by operating segment for the years ended December 31, 2019 and December 31, 2018.

	12 months ended December 31,	12 months ended December 31,	Year-on-Year
USD'000	2019	2018	Variance
IoT segment revenue from external customers	20,504	29,404	-30%
mPKI segment revenue from external customers	2,148	4,876	-56%
Total IoT segment revenue	22,652	34,280	-34%

Gross Profit

Our gross profit decreased by USD 6.5 million to USD 9.4 million (gross margin of 42%) in the year ended December 31, 2019 in comparison with a gross profit of USD 16.0 million (gross margin of 47%) in the year ended December 31, 2018. Due to the long manufacturing cycle of our IoT activity, and in order to reduce the lead time to our customers, we start the manufacturing cycle early. However, with the downturn in the semiconductor industry, some customers were left with excess stock at the end of 2018 thus reduced their order volumes in 2019 on a very short notice, which did not allow us to adapt our manufacturing cycle. The gross margin improved significantly between the first half of 2019 (39%) and the second half of 2019 (45%), however this was not enough to reach a gross margin consistent with 2018 because of the decrease on the higher-margin mPKI revenue between 2018 and 2019.

To a lesser extent, our gross profit was also adversely impacted by the new product introduction costs in our IoT segment.

Other operating income

In 2019 our other operating income consisted of recharges for the use of our premises by OISTE (see Note 39 of our consolidated financial statement as at December 31, 2019) for USD 140,000 and a gain on the liquidation of our subsidiaries WISeKey Italia s.r.l and WISeKey Singapore Pte Ltd. for USD 40,000. In the year ended December 31, 2018 the Group had recorded a USD 289,000 gain on the liquidation of its subsidiary WISeKey BRBV classified as other operating income.

We do not have recurring other operating income that contributes to our profit.

Research & development expenses

Our research and development ("R&D") expenses includes expenses related to the research of new technology, products and applications, as well as their development and proof of concept, and the development of further application for our existing products and technology. They include salaries, bonuses, pension costs, stock-based compensation, depreciation and amortization of capitalized assets, costs of material and equipment that do not meet the criteria for capitalization, as well as any tax credit relating to R&D activities, among others.

Our R&D expenses represented respectively 21% of total operating expenses in 2019 and 2018. Our Group being technology-driven, this reflects our engagement to act as a leader on new cybersecurity developments and future applications. In addition to the expected growth in our R&D expenses linked to our technology leadership position, in 2019, the increase by USD 1.1 million or 21% from prior period was partly due to an increase by USD 0.7 million in R&D-related stock-based compensation.

Research tax credits are provided by the French government to give incentives for companies to perform technical and scientific research. Our subsidiary WISeKey Semiconductors SAS is eligible to receive such tax credits. The credit is deductible from the entity's income tax charge for the year or payable in cash the following year, whichever event occurs first.

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Selling & marketing expenses

Our selling & marketing ("S&M") expenses include advertising and sales promotion expenses such as salaries, bonuses, pension costs, stock-based compensation, business development consultancy services, and costs of supporting material and equipment that do not meet the criteria for capitalization, among others.

Our S&M expenses increased by 37% or USD 2.2 million in 2019 compared with 2018. This is explained by the expansion of our sales force in Europe and North America and our efforts to rebuild our sales team following the divestiture of WISeKey (Bermuda) Holding Ltd and its affiliates in addition to an increase in our stock-based compensation by USD 0.7 million.

General & administrative expenses

Our general & administrative ("G&A") expenses covers all other charges necessary to run our operations and supporting functions, and include salaries, bonuses, pension costs, stock-based compensation, lease and building costs, insurance, legal, professional, accounting and auditing fees, depreciation and amortization of capitalized assets, and costs of supporting material and equipment that do not meet the criteria for capitalization, among others.

Our G&A expenses increased by 11% or USD 1.6 million in 2019 compared with 2018. This increase is due to an increase in stock-based compensation by USD 2.4 million year-on-year following the grant of ESOP options to our employees in recognition for past services to our Company. If we exclude the impact of our stock-based compensation, our G&A expenses actually decreased by USD 0.8 million, which reflects the efforts that we made to reduce our cost basis.

Operating loss

Our operating loss for the year ended December 31, 2019 increased by USD 11.4 million compared with 2018, primarily. The key factors behind these results are to the decrease in gross profit by USD 6.5 million as detailed above, and the increase of our stock-based compensation expense by a total of USD 3.8 million year on year, following the grant of ESOP options to our employees in recognition for past services to our Company.

Non-operating income and expenses

Income and expenditure resulting from non-operating activities increased by USD 1.7 million in 2019 compared with 2018. This was primarily due to our financing facilities. As at December 31, 2018, we had three interest-bearing instruments: the ExWorks Line of Credit, the Crede Convertible Loan Agreement from September 28, 2018, and the Yorkville Convertible Loan Agreement from September 28, 2018. In line with ASC 205, part of the interest expense relating to the ExWorks Line of Credit was classified under the results from discontinued operations, whilst the interest expense in connection with both the Crede Convertible Loan Agreement and the Yorkville Convertible Loan Agreement only related to one quarter. In 2019, the ExWorks Line of Credit was repaid in full on January 16, 2019, but our Company entered into a new loan with ExWorks from April 2019, and the Group paid interest expense for the full year on both the Crede Convertible Loan Agreement and the Yorkville Convertible Loan Agreement, hence an increase in interest expense of USD 0.4 million and in interest and amortization of debt discount by USD 0.6million from prior year. See Note 24 of our consolidated financial statements for the year ended December 31, 2018 and 2019 for details on these financial instruments.

Additionally, for the year ended December 31, 2019, our non-operating income decreased by USD 0.3 million from prior period because of a non-recurring credit for the fair value measurement of our investment in OpenLimit booked in the income statement in 2018, and our foreign exchange losses increased by USD 0.4 million from prior period due to unfavorable currency fluctuations (see Impact of foreign currency fluctuation below).

Our Company regularly enters into loan and convertible loan agreements to finance its operations.

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Net loss from continuing operations

As a result of the above factors, the net loss from continuing operations increased by 132%, or USD 13.1 million, from USD 9.9 million in the year ended December 31, 2018 to USD 23.0 million in the year ended December 31, 2019.

Income from discontinued operations

As detailed in the above Basis of presentation subsection, the SPA to sell WISeKey (Bermuda) Holding Ltd and its affiliates met the requirement to be classified as held for sale and as such qualified as a discontinued operation. In line with ASC 205-20-45-3A, we reported the results of the discontinued operations, WISeKey (Bermuda) Holding Ltd and its affiliates, as a separate component of income.

The USD 31.1 million gain from the divestiture of WISeKey (Bermuda) Holding Ltd and its affiliates was also reported in the results of the discontinued operations in the year ended December 31, 2019.

Net income

With the USD 31.1 million gain from divestiture included in the income on discontinued operations in the income statement in the year ended December 31, 2019, we reached a net income position of USD 7.5 million, compared with a net loss of USD 16.3 million in the year ended December 31, 2018.

Non-GAAP Performance Measures

In addition to our reported financial results prepared under US GAAP, we also prepare and disclose EBITDA and Adjusted EBITDA, which are measures not prepared in accordance with US GAAP. We present EBITDA and Adjusted EBITDA because we believe that these measures are useful to investors as they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We further believe that Adjusted EBITDA is helpful to investors in identifying trends in our business that could otherwise be obscured by certain items unrelated to ongoing operations because they are highly variable, difficult to predict, may substantially impact our results of operations and may limit the ability to evaluate our performance from one period to another on a consistent basis.

The usefulness of EBITDA and Adjusted EBITDA to investors has limitations including, but not limited to, (i) they may not be comparable to similarly titled measures used by other companies, including those in our industry, (ii) they exclude financial information and events, such as the effects of an acquisition or amortization of intangible assets, or of stock-based compensation, that some may consider important in evaluating our performance, value or prospects for the future, (iii) they exclude items or types of items that may continue to occur from period to period in the future and (iv) they may not exclude all items, which could increase or decrease these measures, which investors may consider to be unrelated to our long-term operations, such as the results of businesses divested during a period. These non-GAAP measures should not be considered in isolation and are not, and should not be viewed as, substitutes for income, net profit for the year or any other measure of performances presented in accordance with US GAAP. We encourage investors to review our historical financial statements in their entirety and caution investors to use US GAAP measures as the primary means of evaluating our performance, value and prospects for the future, and EBITDA and Adjusted EBITDA as supplemental measures.

EBITDA and Adjusted EBITDA

We define EBITDA as net profit before income tax expenses, depreciation and amortization including purchase accounting ("PPA") effects, and net interest expense.

We define Adjusted EBITDA as EBITDA further adjusted to exclude non-cash expenses such as stock-based compensation and equity settlements, and other items that management believes are unrelated to our core operations such as non-recurring legal and professional expenses related to our merger and acquisition activities.

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The following table provides a reconciliation from operating loss to EBITDA and Adjusted EBITDA for the years ended December 31, 2019 and December 31, 2018.

	12 months ended December 31,
(Million USD)	2019			2018
Operating loss as reported		(20.5	)		(9.1	)
Non-GAAP adjustments from continuing operations:
Depreciation expense from continuing operations		0.8			0.9
Amortization expense on intangibles from continuing operations		0.5			0.5
EBITDA		(19.2	)		(7.7	)
Non-GAAP adjustments from continuing operations:
Stock-based compensation		5.4			1.7
Expenses settled in equity		-			1.7
M&A-related legal fees		1.0			1.3
M&A-related professional fees		-			0.3
NASDAQ listing-related professional fees		0.2			-
Adjusted EBITDA		(12.6	)		(2.7	)

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Factors affecting our income tax expenses and recovery

For the financial years 2020, 2019 and 2018, income tax at the Swiss statutory rate compared to the Group's income tax expenses as reported is as per table below.

Income taxes at the Swiss statutory rate	As at December 31,	As at December 31,	As at December 31,
USD'000	2020	2019	2018
Net income/(loss) from continuing operations before income tax	(28,898)	(23,017)	(9,855)
Statutory tax rate	14%	24%	24%
Expected income tax (expense)/recovery	4,043	5,524	2,365
Income tax (expense)/recovery	(9)	(13)	(53)
Change in valuation allowance	(631)	(2,129)	4,228
Permanent Difference	(1)	0	(9)
Change in expiration of tax loss carryforwards	(3,411)	(3,395)	(6,584)
Income tax (expense) / recovery	(9)	(13)	(53)

As at December 31, 2020 and 2019, our net deferred tax balance was reconciled as follows:

Deferred tax assets and liabilities	As at December 31,	As at December 31,
USD'000	2020	2019
Stock-based compensation	1	-
Defined benefit accrual	1,089	1,100
Tax loss carry-forwards	12,655	11,264
Deferred tax liability on change in unrealized gains related to available-for-sale debt securities	(753)	-
Valuation allowance	(12,989)	(12,358)
Deferred tax assets / (liabilities)	3	6

The valuation allowance corresponds to the amount of deferred tax that, based on our accounting assessment under applicable standards, should not be recognized as assets in our balance sheet. For the calculation of the valuation allowance, management has considered the extent to which realization of the tax assets is probable for group entities that are or have been in a loss-making position during the last three financial years.

In 2020, the valuation allowance increased by USD 0.6 million due to the increase in tax loss carry-forwards. In 2019, the valuation allowance increased by USD 2.2 million, mainly due to the increase in tax loss carry-forwards by USD 0.7 million and the impact of the divestiture of QuoVadis.

Impact of foreign currency fluctuation

We operate worldwide and as such are exposed to currency fluctuation risks. Although the majority of our sales, purchase and financial operations are denominated in our reporting currency, the U.S. Dollar, some sales and financing contracts are denominated in other currency, and especially in the currency of our head office in Switzerland, the Swiss Franc.

Fluctuations in the exchange rates between the U.S. Dollar and other currencies may have a significant effect on both the Company's results of operations, including reported sales and earnings, and the Company's assets, liabilities and cash flows. This, in turn, may affect the comparability of period-to-period results of operations.

We do not currently hedge against foreign currency fluctuation.

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		12 months ended December 31,
		2020		2019		Year-on-Year Variance
Foreign currency to U.S. Dollar		Closing rate	12-month Average rate	Closing rate	12-month Average rate	Closing rate	12-month Average rate
Swiss Franc	CHF:USD	1.130846	1.066001	1.033253	1.006467	9.45%	5.92%
Euro	EUR:USD	1.222811	1.141357	1.122701	1.119921	8.92%	1.91%
Indian Rupee	INR:USD	0.013697	0.013487	0.014027	0.014200	-2.35%	-5.02%
Japanese Yen	JPY:USD	0.009690	0.009367	0.009201	0.009174	5.31%	2.10%
U.K. Pound Sterling	GBP:USD	1.366312	1.283296	1.326752	1.276954	2.98%	0.50%
Taiwanese Dollar	TWD:USD	0.035602	0.033968	0.033396	0.032374	6.61%	4.92%

The table below shows the variation in foreign exchange rates used to prepare our financial statements for the financial years ended December 31, 2020, December 31, 2019, and December 31, 2018.

		12 months ended December 31,
		2019		2018		Year-on-Year Variance
Foreign currency to U.S. Dollar		Closing rate	12-month Average rate	Closing rate	12-month Average rate	Closing rate	12-month Average rate
Swiss Franc	CHF:USD	1.033253	1.006467	1.016946	1.022876	1.60%	-1.60%
Euro	EUR:USD	1.122701	1.119921	1.145548	1.181497	-1.99%	-5.21%
Indian Rupee	INR:USD	0.014027	0.014200	0.014367	0.014654	-2.37%	-3.10%
Japanese Yen	JPY:USD	0.009201	0.009174	0.009115	0.009061	0.94%	1.25%
Singapore Dollar	SGD:USD	0.743657	0.732963	0.734040	0.741450	1.31%	-1.14%
U.K. Pound Sterling	GBP:USD	1.326752	1.276954	1.276021	1.335429	3.98%	-4.38%
Taiwanese Dollar	TWD:USD	0.033396	0.032374	0.032663	0.033194	2.24%	-2.47%

We do not operate in countries experiencing hyperinflation and assessed the impact of inflation as immaterial to our financial statements.

B.	Liquidity and Capital Resources

Company liquidity

Our cash and capital requirement relate mainly to our operating cash requirement, capital expenditures, contractual obligations, repayment of indebtedness and payment of interest and financing fees.

Sources of liquidity

Our usual sources of liquidity are cash generated from customers, cash from financing instruments such as debt and convertible debt, cash from share subscription facilities, and cash from private investors in exchange for our Class B Shares. As a non-recurring source of liquidity, the sale of the QuoVadis Group in the first quarter of 2019 provided a material cash inflow. Historically, the Group has been dependent on equity financing to augment the operating cash flow to cover its cash requirements.

We had positive working capital of USD 13.7 million as at December 31, 2020. We calculate working capital as our current assets, less our current liabilities. Although our adjusted working capital is positive, based on the Group’s cash projections for the next 12 months to March 31, 2022, the Group will need approximately USD 1 million to fund operations and financial commitments. Note 25 of our consolidated financial statement as at December 31, 2020 describes the sources of funding that the Group can turn to whenever needed. In addition to two separate equity facilities (the SSF and SEDA), the loans contracted by WISeKey in 2020 and 2019 demonstrate the availability of lenders to support the Group in its activities and development.

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As at December 31, 2020, we hold cash and cash equivalent and restricted cash in an amount of USD 21.8 million following the cash injection from our financial instruments. We expect to use this liquidity to fund our operations, develop our sales team, and form part of the consideration for future potential merger and acquisition transactions.

Consolidated cash flows

The following table shows information about our cash flows during the financial years ended December 31, 2020, 2019 and 2018 respectively.

	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
'000	2020	2019	2018
Cash Flows from operating activities:
Net cash provided by (used in) operating activities	(12,550)	(13,891)	(8,492)
Net cash provided by (used in) investing activities	(3,897)	36,626	(4,244)
Net cash provided by (used in) financing activities	21,482	(17,284)	11,876
Effect of exchange rate changes on cash and cash equivalents	82	41	(200)
Cash and cash equivalents
	5,117	5,492	(1,060)
	16,646	11,154	12,214
	21,763	16,646	11,154
Reconciliation to balance sheet
	19,650	12,121	9,146
	2,113	2,525	618
	-	2,000	-
	-	-	1,390
	21,763	16,646	11,154

All values are in US Dollars.

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The following tables provide the details of the cash flows separated between continuing and discontinued activities following the divestiture of QuoVadis.

Continuing operations	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
USD'000	2020	2019	2018
Net cash provided by (used in) operating activities	(12,550)	(14,674)	(2,328)
Net cash provided by (used in) investing activities	(3,897)	36,626	(5,489)
Net cash provided by (used in) financing activities	21,482	(17,284)	8,198
Discontinued operations	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
---	---	---	---
USD'000	2020	2019	2018
Net cash provided by (used in) operating activities	-	783	(6,164)
Net cash provided by (used in) investing activities	-	-	1,245
Net cash provided by (used in) financing activities	-	-	3,678

We have not experienced any legal or economic restrictions on the ability of subsidiaries to transfer funds to the Company in the form of loans.

Impact of discontinued operations

The Company has assessed the impact on our cash flows following the sale of the QuoVadis Group. As shown in the table above, the QuoVadis Group was cash flow negative on operating activities, largely as a result of ongoing losses. The sale of the QuoVadis Group has enabled the Company to repay the ExWorks Line of Credit in full during 2019, a facility that carried interest at 12% per annum. In addition to this, the sale of the QuoVadis Group has left the Company with an improved net cash and cash equivalents balance that will enable us to fund our activities as set out above.

We believe that the sale of the QuoVadis Group has benefitted the Company significantly as it has provided us with sufficient working capital to be able to focus on the future whilst, at the same time, removing a part of the business that was a drain on our liquidity.

Level of borrowing

As at December 31, 2020, we held short-term notes payable in an amount of USD 4,114,721, and long–term notes payable in an amount of USD 646,278. The section below gives the detail of the financial instruments used by the company.

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Financial instruments

The following financial instruments are those that were in use and disclosed in our balance sheet and notes as at December 31, 2020.

Share Subscription Facility with GEM LLC

On January 19, 2016 the Group closed the SSF with GEM, which is a CHF 60 million facility over 5 years and allows the Group to draw down funds at its option in exchange for WIHN class B shares. The mechanics of the deal allow for a drawdown essentially 18 times in a year, the amount being in a range related to the trading volume and price of the WIHN class B share trading on the Swiss SIX Stock Exchange. The drawdown amount is based on 90% of the average closing price of the last 15 trading days multiplied by 1,000% of the average volume of the last 15 trading days. GEM can then elect to purchase between 50% and 200% of this figure.

The instrument was assessed under ASC 815 as an equity instrument. The drawdowns were reflected as increases in Common Share Capital with an increase in the value of common stock issued and the difference between the nominal value of the shares and the funds received being recorded against APIC.

In 2017, WISeKey made three drawdowns for a total of CHF 3,905,355 in exchange for a total of 825,000 WIHN class B shares issued out of authorized share capital.

There were no drawdowns made in 2018, 2019, or in 2020.

Therefore, as at December 31, 2020 the outstanding facility available is CHF 56,094,645.

Standby Equity Distribution Agreement with YA II PN, Ltd.

On February 08, 2018 WISeKey entered into the SEDA with Yorkville. Under the terms of the SEDA as amended, Yorkville has committed to provide WISeKey, upon a drawdown request by WISeKey, up to CHF 50,000,000 in equity financing originally over a period of three-year period ending March 01, 2021, now over a period of five years ending March 31, 2023 in line with the amendment signed by the parties on March 04, 2020. Provided that a sufficient number of class B shares is provided through share lending, WISeKey has the right to make drawdowns under the SEDA, at its discretion, by requesting Yorkville to subscribe for (if the class B shares are issued out of authorized share capital) or purchase (if the class B shares are delivered out of treasury) class B shares worth up to CHF 5,000,000 by drawdown, subject to certain exceptions and limitations (including the exception that a drawdown request by WISeKey shall in no event cause the aggregate number of class B shares held by Yorkville to meet or exceed 4.99% of the total number of shares registered with the commercial register of the Canton of Zug). The purchase price will be 93% of the relevant market price at the time of the drawdown, determined by reference to a ten-day trading period following the draw down request by WISeKey.

The instrument was assessed under ASC 815 as an equity instrument. WISeKey paid a one-time commitment fee of CHF 500,000 (USD 524,231 at historical rate) on April 24, 2018 in 100,000 WIHN class B shares. In line with ASU 2015-15 the commitment fee was capitalized as deferred charges to be amortized over the original duration of the contract as a reduction of equity.

In 2018, WISeKey made 4 drawdowns for a total of CHF 1,749,992 (USD 1,755,378 at historical rate) in exchange for a total of 540,539 WIHN class B shares issued out of authorized share capital or treasury share capital.

In 2020, WISeKey made the following drawdowns:

-	On April 16, 2020 one drawdown for CHF 250,000 (USD 259,250 at historical rate) in exchange for<br>306,372 WIHN class B shares issued out of treasury share capital.
-	On May 15, 2020 one drawdown for CHF 249,433 (USD 256,417 at historical rate) in exchange for<br>343,572 WIHN class B shares issued out of treasury share capital.
---	---

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-	On July 14, 2020 one drawdown for CHF 72,313 (USD 76,652 at historical rate) in exchange for<br>74,396 WIHN class B shares issued out of treasury share capital.
-	On July 16, 2020 one drawdown for CHF 62,500 (USD 66,250 at historical rate) in exchange for<br>61,035 WIHN class B shares issued out of treasury share capital.
---	---
-	On August 5, 2020 one drawdown for CHF 250,000 (USD 275,000 at historical rate) in exchange for<br>198,255 WIHN class B shares issued out of treasury share capital.
---	---
-	On September 9, 2020 one drawdown for CHF 250,000 (USD 275,000 at historical rate) in exchange<br>for 182,215 WIHN class B shares issued out of treasury share capital.
---	---

The amortization charge for the capitalized fee recognized in APIC amounted to USD 184,134 for the year to December 31, 2020 and the remaining deferred charge balance was USD 30,188 which was all current.

As at December 31, 2020 the outstanding equity financing available was CHF 46,007,830.

Facility Agreement with YA II PN, Ltd.

On September 28, 2018 WISeKey entered into short-term Facility Agreement (the “Yorkville Loan”) with Yorkville to borrow USD 3,500,000 repayable by May 01, 2019 in monthly cash instalments starting in November 2018. The loan bears an interest rate of 4% per annum payable monthly in arrears. A fee of USD 140,000 and debt issuance costs of USD 20,000 paid at inception.

The debt instrument was assessed as a term debt. A discount of USD 160,000 was recorded at inception and will be amortized using the effective interest method over the life of the debt.

The remaining loan balance at December 31, 2018 was USD 2,717,773 including unamortized debt discount of USD 57,007.

The discount amortization expense recorded for the period to December 31, 2018 was USD 102,993.

In the period to December 31, 2018, WISeKey repaid USD 725,220 of the principal loan amount in cash.

On June 27, 2019, WISeKey entered into a Convertible Loan Agreement (the “Yorkville Convertible Loan”) with Yorkville to borrow USD 3,500,000 repayable by August 01, 2020 in monthly instalments starting in August 01, 2019 either in cash or in WIHN class B Shares. The loan bears an interest rate of 6% per annum payable monthly in arrears. Total fees of USD 160,000 were paid at inception.

The conversion option into WIHN Class B shares is exercisable at the election of Yorkville and may be exercised at each monthly repayment date, covering any amount outstanding, be it principal and/or accrued interests. The initial exercise price is set at CHF 3.00 per WIHN class B Share but may be adjusted as a result of specific events so as to prevent any dissolution effect. The events triggering anti-dissolution adjustments are: (a) increase of capital by means of capitalization of reserves, profits or premiums by distribution of WIHN Shares, or division or consolidation of WIHN Shares, (b) issue of WIHN shares or other securities by way of conferring subscription or purchase rights, (c) spin-offs and capital distributions other than dividends, and (d) dividends.

At the date of inception of the Yorkville Convertible Loan, on June 27, 2019, an unpaid balance of USD 500,000 remained on the Yorkville Loan. There was no unamortized debt discount on the Yorkville Loan as it was amortized in accordance with the planned repayment schedule, i.e. by May 01, 2019.

In line with ASC 470-50, we compared the present value of the new debt (the Yorkville Convertible Loan) to the present value of the old debt (the Yorkville Loan) using the net method and concluded that the difference was below the 10% threshold. Therefore the Yorkville Convertible Loan was analyzed as a debt modification and accounted for under ASC 470-50-40-14.

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In line with ASU 2014-16, the convertible note was assessed as a hybrid instrument, being a debt instrument with an equity-linked component (the conversion option). Per ASC 815-10, the embedded conversion option met the definition of a derivative and was accounted for separately, thereby creating a debt discount.

The derivative liability component (the conversion option) was fair valued using a binomial lattice model, building in quoted market prices of WIHN class B shares, and inputs such as time value of money, volatility, and risk-free interest rates. It was valued at inception at USD 257,435, and was allocated between current and noncurrent on a prorata temporis basis according to the monthly repayment schedule. The derivative component will be revalued at fair value at each reporting date in line with ASC 815-15-30-1.

On the date of the agreement, WISeKey signed an option agreement granting Yorkville the option to acquire up to 500,000 WIHN class B shares at an exercise price of CHF 3.00, exercisable between June 27, 2019 and June 27, 2022. In order to prevent any dissolution effect, the exercise price may be adjusted as a result of the same specific events listed above as adjustments to the conversion price of the principal amount. In line with ASC 470-20-25-2, the proceeds from the convertible debt with a detachable warrant was allocated to the two elements based on the relative fair values of the debt instrument net of the warrant and the embedded conversion separated out on the one side, and the warrant at time of issuance on the other side. The option agreement was assessed as an equity instrument and was fair valued at grant for an amount of USD 373,574 using the Black-Scholes model and the market price of WIHN class B shares on the date of grant, June 27, 2019, of CH 2.35. The fair value of the debt was calculated using the discounted cash flow method as USD 3,635,638. Applying the relative fair value method per ASC 470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of USD 326,126, and the credit entry was booked in APIC.

As a result of the above accounting entries, the total debt discount recorded at inception was USD 743,561, made up of USD 160,000 fees to Yorkville, USD 257,435 from the bifurcation of the embedded conversion option into derivative liabilities, and USD 326,126 from the recognition of the warrant agreement.

On March 04, 2020, WISeKey entered into the Second Yorkville Convertible Loan with Yorkville to borrow USD 4,000,000 repayable by April 30, 2021 in monthly instalments starting on March 31, 2020 either in cash or in WIHN class B Shares. The loan bears an interest rate of 6% per annum payable monthly in arrears. Total fees of USD 68,000 will be paid in monthly instalments over the life of the loan.

The conversion option into newly issued or existing WIHN Class B shares is exercisable at the election of Yorkville and may be exercised at any time until all amounts have been repaid in full, covering any amount outstanding, be it principal and/or accrued interests. The initial exercise price is set at CHF 3.00 per WIHN class B Share but may be adjusted as a result of specific events so as to prevent any dilution effect. The events triggering anti-dilution adjustments are: (a) increase of capital by means of capitalization of reserves, profits or premiums by distribution of WIHN Shares, or division or consolidation of WIHN Shares, (b) issue of WIHN shares or other securities by way of conferring subscription or purchase rights, (c) spin-offs and capital distributions other than dividends, and (d) dividends.

At the date of inception of the Second Yorkville Convertible Loan on March 04, 2020, an unpaid balance of USD 2,300,000 and an unamortized debt discount of USD 104,469 remained on the Yorkville Convertible Loan.

Per ASC 470-50, we compared the present value of the new debt (the Second Yorkville Convertible Loan) to the present value of the old debt (the Yorkville Convertible Loan) using the net method and concluded that the difference was below the 10% threshold. Therefore, the Second Yorkville Convertible Loan was analyzed as a debt modification and accounted for under ASC 470-50-40-14.

In line with ASU 2014-16, the convertible note was assessed as a hybrid instrument, being a debt instrument with an equity-linked component (the conversion option). Per ASC 815-10, the embedded conversion option met the definition of a derivative and was accounted for separately, thereby creating a debt discount.

The derivative liability component (the conversion option) was fair valued using a binomial lattice model, building in quoted market prices of WIHN class B shares, and inputs such as time value of money, volatility, and risk-free interest rates. It was valued at inception at USD nil. The derivative component will be revalued at fair value at each reporting date in line with ASC 815-15-30-1 and will be allocated between current and noncurrent on a prorata temporis basis according to the monthly repayment schedule (see Note 6).

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In 2020, WISeKey’s repayments amounted to a total of USD 2,307,021. As at December 31, 2020, the principal amount outstanding was USD 1,692,979 with an unamortized debt discount of USD 82,560, and the derivative component measured at fair value at the reporting date at USD nil. No conversion rights were exercised in 2020.

For the year ended December 31, 2020, WISeKey recorded in the income statement a net loss on derivative of USD 43,655 and a debt discount amortization expense of USD 280,736.

Convertible Loan with Crede CG III, Ltd

On September 28, 2018 the Group closed a convertible loan with Crede for an amount of USD 3,000,000. The funds were made available on October 31, 2018. The loan bears a 10% p.a. interest rate, payable in arrears on a quarterly basis starting December 31, 2018, and is repayable in WIHN class B shares any time between November 30, 2018 and the maturity date of September 28, 2020, at Crede’s election. Accrued interests are payable, at WISeKey’s sole election, either in cash or in WIHN class B Shares. The conversion price applicable to the prepayment of the principal amount or accrued interest is calculated as 93% of the average of the 2 lowest daily volume-weighted average prices quoted on the SIX Stock Exchange during the 10 Trading Days immediately preceding the relevant conversion date or interest payment date respectively, disregarding any day on which Crede (or its Affiliates or related party) has effected any trade, converted into USD at the exchange rate reported by Bloomberg at 9 a.m. Swiss time on the relevant conversion date or interest payment date.

Due to Crede’s option to convert the loan in part or in full at any time before maturity, the convertible loan was assessed as a share-settled debt instrument with an embedded put option. Because the value that Crede will receive at settlement does not vary with the value of the shares, the settlement provision is not considered a conversion option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the convertible loan was accounted for as a liability measured at fair value using the discounted cash flow method at inception.

On the date of the agreement, WISeKey signed an option agreement granting Crede the option to acquire up to 408,247 WIHN class B shares at an exercise price of CHF 3.84, exercisable between October 31, 2018 and October 29, 2021. Per the option agreement’s term, the date of grant under US GAAP is October 29, 2018 upon issuance of a Tax Ruling from the Swiss Federal Tax Administration and the Zug tax authority. In line with ASC 470-20-25-2, the proceeds from the convertible debt with a detachable warrant was allocated to the two elements based on the relative fair values of the debt instrument without the warrant and of the warrant at time of issuance. The option agreement was assessed as an equity instrument and was fair valued at grant for an amount of USD 408,056 using the Black-Scholes model and the market price of WIHN class B shares on the date of grant, October 29, 2018, of CH 3.06. The fair value of the debt was calculated using the discounted cash flow method as USD 2,920,556. Applying the relative fair value method per ASC 470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of USD 367,771, and the credit entry was booked in APIC.

In 2020, Crede issued three exercise notices, resulting in the following conversions:

-	On January 10, 2020 for 150,000 WIHN class B shares delivered on January 14, 2020 for a conversion<br>of USD 259,436.
-	On April 03, 2020 for 200,428 WIHN class B shares delivered on April 06, 2020 for a conversion of<br>USD 152,490.
---	---
-	On June 15, 2020 for 970,555 WIHN class B shares delivered on June 18, 2020 for a final conversion<br>of USD 816,974.
---	---

The loan was fully converted after the last conversion on June 18, 2020. Therefore, there were no outstanding balance on this loan as at December 31, 2020.

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For the year to December 30, 2020, the Group recorded a net debt discount amortization expense in the income statement of USD 29,055.

Credit Agreement with ExWorks Capital Fund I, L.P

On April 04, 2019 WISeCoin, an affiliate of the Company, signed a credit agreement with ExWorks. Under this credit agreement, WISeCoin was granted a USD 4,000,000 term loan and may add up to USD 80,000 accrued interest to the loan principal, hence a maximum loan amount of USD 4,080,000. The loan bears an interest rate of 10% p.a. payable monthly in arrears. The maturity date of the arrangement is April 04, 2020 therefore all outstanding balances are classified as current liabilities in the balance sheet. ExWorks can elect to have part of or all of the principal loan amount and interests paid either in cash or in WCN Token as may be issued by WISeCoin from time to time. As at June 30, 2019, the conversion price is set at CHF 12.42 per WCN Token based on a non-legally binding term sheet.

Under the terms of the credit agreement, WISeCoin is required to not enter into agreements that would result in liens on property, assets or controlled subsidiaries, in indebtedness other than the exceptions listed in the credit agreement, in mergers, consolidations, organizational changes except with an affiliate, contingent and third party liabilities, any substantial change in the nature of its business, restricted payments, insider transactions, certain debt payments, certain agreements, negative pledge, asset transfer other than sale of assets in the ordinary course of business, or holding or acquiring shares and/or quotas in another person other than WISeCoin R&D. Furthermore, WISeCoin is required to maintain its existence, pay all taxes and other liabilities.

Borrowings under the line of credit are secured by first ranking security interests on all material assets and personal property of WISeCoin, and a pledge over the shares in WISeCoin representing 90% of the capital held by the Company. Under certain circumstances, additional security may be granted over the intellectual property rights of WISeCoin and WISeCoin R&D, and the shares held by WISeCoin in WISeCoin R&D.

Total debt issue costs of USD 160,000 were recorded as debt discount and amortized over the duration of the loan.

In the year 2020, WISeKey recorded a total debt amortization charge of USD 8,657 and the debt discount was fully amortized as at December 31, 2020.

As at December 31, 2020, the loan had not been repaid and the outstanding borrowings were USD 4,030,000, meaning that the loan is past due under the terms of the credit agreement with ExWorks. The Company is currently in negotiation with ExWorks regarding a potential sale of its investment in Tarmin, a company in which ExWorks is also a significant shareholder. It is the view of the management of the Company that the sale of the investment in Tarmin and the repayment of the credit agreement are codependent and therefore the loan will be repaid at such time as the investment is sold. ExWorks continues to charge interest on the loan at the rate of 10% p.a. and has not launched any formal recovery proceedings as of the date of this report.

Credit Agreement with Long State Investment Limited

On December 16, 2019, WISeKey entered into the LSI Convertible Facility with LSI to borrow up to CHF 30 million. Under the terms of the LSI Convertible Facility, WISeKey will be able to drawdown individual term loans of up to CHF 500,000 or, if so agreed between the parties, up to CHF 2.5 million at an interest rate of 1.5% p.a., up to an aggregate amount of CHF 30 million over a commitment period of 24 months. LSI will have the right to convert a drawdown tranche into WIHN class B shares or, if so agreed among the parties and permitted by law, into ADSs representing WIHN class B shares, within a period of 21 SIX trading days after each individual drawdown at 95% of the higher of (i) the then prevailing market rate and (ii) the minimum conversion price of CHF 1.80. Any term loan not converted by LSI initially will automatically convert into WIHN class B shares, or ADSs, 20 SIX trading days before the expiration of the commitment period at the applicable conversion price. Under certain circumstances, interest payments may be “paid in kind” by capitalizing such interest and adding to it the aggregate principal balance of the loan outstanding.

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Under the arrangement, WISeKey and LSI plan to establish a Joint Venture in Hong Kong in the first quarter of 2020 to focus on business opportunities in Asia. A memorandum of understanding has been executed between WISeKey and LSI to that effect.

Due to LSI’s option to convert the loan in part at each drawdown before maturity, the LSI Convertible Facility was assessed as a debt instrument with an embedded put option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the LSI Convertible Facility will be accounted for as a liability measured at fair value using the discounted cash flow method for each term loan (corresponding to each drawdown).

Total debt issue costs amounting to CHF 56,757 in legal fees and expense allowance were paid by WISeKey in 2019 and 2020, and a commitment fee payable in 400,000 WIHN class B shares was settled on January 23, 2020 with a fair value of CHF 759,200 based on the market price of the WIHN shares at settlement. The debt issue costs and commitment fee will be recorded as a debt discount proportionately to each drawdown. However, as at December 31, 2020, WISeKey had not yet drawn down on the LSI Convertible Facility, therefore, in application of ASC 340-10-S99-1, WISeKey accounted for the debt issue costs of CHF 56,757 and the commitment fee of CHF 759,200 as a deferred asset to be amortized on a straight-line basis over the access period of the LSI Convertible Facility.

In 2020, WISeKey did not make any drawdowns under the LSI Convertible Facility.

The amortization charge for the capitalized costs and fee recognized in APIC amounted to CHF 443,484 (USD 472,754) for the year to December 31, 2020 and the remaining deferred charge balance was CHF 372,473 (USD 421,210) which was all current.

As at December 31, 2020 the outstanding LSI Convertible Facility available was CHF 30.0 million (USD 33.9 million).

Loan Agreements with UBS SA

On March 26, 2020, two members of the Group entered into the Covid loans to borrow funds under the Swiss Government supported COVID-19 Credit Facility with UBS SA. Under the terms of the Agreement, UBS has lent such Group members a total of CHF 571,500. The loans are repayable in full on March 30, 2028, as amended, being the eighth anniversary of the date of deposit of the funds by UBS, although UBS reserves the right to implement instalments before this date. The interest rate is determined by Swiss COVID-19 Law and currently the Covid loans carry an interest rate of 0%. There were no fees or costs attributed to the Covid loans and as such there is no debt discount of debt premium associated with the loan facility.

Under the terms of the loans, the relevant companies are required to use the funds solely to cover the liquidity requirements of the Company. In particular, the Company cannot use the funds for the distribution of dividends and directors' fees as well as the repayment of capital contributions, the granting of active loans; refinancing of private or shareholder loans; the repayment of intra-group loans; or the transfer of guaranteed loans to a group company not having its registered office in Switzerland, whether directly or indirectly linked to applicant.

As at December 31, 2020, the outstanding balance on the loans was CHF 571,500 (USD 646,278).

Credit Agreement with Nice & Green SA

On May 18, 2020, the Group entered into the Nice & Green Facility with Nice & Green pursuant to which WISeKey has the right to draw down up to a maximum of CHF 10 million during a commitment period of 24 months commencing on May 20, 2020, in up to 25 tranches based upon 60% of the traded volume of the WIHN class B share on the SIX Swiss Stock Exchange over the 5 trading days preceding the subscription date. Each tranche is divided into 25 convertible notes that do not bear interest. Subject to a cash redemption right of WISeKey, the convertible notes are mandatorily convertible into WIHN class B shares within the Nice & Green Conversion Period. Conversion takes place upon request by Nice & Green during the Nice & Green Conversion Period, but in any case no later than at the expiry of the Nice & Green Conversion Period, at a conversion price of 95% of the lowest daily volume-weighted average price of a WIHN class B share as traded on the SIX Swiss Exchange during the 10 trading days preceding the relevant conversion date.

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Due to Nice & Green’s option to convert the loan in part at any time before maturity, and as there is no limit on the number of shares to be delivered, the Nice & Green Facility was assessed as a share-settled debt instrument with an embedded put option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the Nice & Green Facility will be accounted for as a liability measured at cost for each term loan (corresponding to each drawdown).

Per the terms of the Nice & Green Facility, WISeKey pays to Nice & Green, in cash, a commitment fee of 5% of the amount of each subscription which will be recorded as a debt discount against each subscription (principal). Nice & Green also undertake to pay to WISeKey an incentive fee equal to 10% of the positive difference between the net capital gain and the net capital loss generated by Nice & Green on the sales of WIHN class B shares. The incentive fee income is recorded in the income statement in other non-operating income (see Note 33).

During the year to December 31, 2020, the Group made a total of six subscriptions under the terms of the agreement as follows:

-	On June 17, 2020 for CHF 1,931,355 (USD 2,029,927 at historical rate).
-	On July 22, 2020 for CHF 1,239,226 (USD 1,333,867 at historical rate).
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-	On August 17, 2020 for CHF 2,521,308 (USD 2,783,403 at historical rate).
---	---
-	On September 18, 2020 for CHF 1,075,000 (USD 1,181,972 at historical rate).
---	---
-	On October 22, 2020 for CHF 1,075,000 (USD 1,184,872 at historical rate).
---	---
-	On November 20, 2020 for CHF 1,075,000 (USD 1,179,242 at historical rate).
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In 2020, Nice & Green issued a total of eleven conversion notices, resulting in the following conversions:

-	On June 18, 2020 for 2,313,000 WIHN class B shares delivered on June 18, 2020 for a conversion<br>of CHF 1,931,355 (USD 2,030,992 at historical rate).
-	On July 30, 2020 for 676,941 WIHN class B shares delivered on July 30, 2020 for a conversion of CHF<br>793,105 (USD 869,571 at historical rate).
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-	On August 6, 2020 for 346,555 WIHN class B shares delivered on August 6, 2020 for a conversion of<br>CHF 446,121 (USD 489,965 at historical rate).
---	---
-	On August 24, 2020 for 115,722 WIHN class B shares delivered on August 24, 2020 for a conversion of<br>CHF 201,705 (USD 221,441 at historical rate).
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-	On September 11, 2020 for 143,971 WIHN class B shares delivered on September 11, 2020 for a conversion<br>of CHF 201,705 (USD 221,837 at historical rate).
---	---
-	On September 15, 2020 for 427,340 WIHN class B shares delivered on September 15, 2020 for a conversion<br>of CHF 504,262 (USD 555,103 at historical rate).
---	---
-	On September 21, 2020 for 427,340 WIHN class B shares delivered on September 21, 2020 for a conversion<br>of CHF 504,262 (USD 550,300 at historical rate).
---	---
-	On September 29, 2020 for 927,804 WIHN class B shares delivered on September 29, 2020 for a conversion<br>of CHF 1,008,523 (USD 1,094,600 at historical rate).
---	---
-	On October 12, 2020 for 1,081,740 WIHN class B shares delivered on October 12, 2020 for a conversion<br>of CHF 1,175,852 (USD 1,292,574 at historical rate).
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-	On November 5, 2020 for 1,158,405 WIHN class B shares delivered on November 5, 2020 for a conversion<br>of CHF 1,075,000 (USD 1,185,993 at historical rate).
---	---
-	On November 24, 2020 for 1,069,651 WIHN class B shares delivered on November 24, 2020 for a conversion<br>of CHF 1,075,000 (USD 1,178,545 at historical rate).
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During the year to December 31, 2020, debt discount in the amount of CHF 12,101 (USD 12,900) was amortized to the income statement, whilst CHF 433,743 (USD 490,497) was booked to APIC as per ASC 470-02-40-4. There was no unamortized debt discount outstanding at December 31, 2020.

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As at December 31, 2020, the outstanding Nice & Green Facility available was CHF 1,083,111 (USD 1,224,832) and there were no unconverted outstanding loan amounts.

New Convertible Loan with Crede CG III, Ltd

On August 07, 2020, WISeKey entered into the Crede Convertible Loan with Crede for an amount of USD 5 million. The funds were made available on September 23, 2020. The loan bears a 5% p.a. interest rate, payable in arrears on a quarterly basis starting September 30, 2020, and is repayable in WIHN class B shares any time between September 23, 2020 and the maturity date of August 07, 2022, at Crede’s election. Accrued interests are payable, at WISeKey’s sole election, either in cash or in WIHN class B shares. The conversion price applicable to the prepayment of the principal amount or accrued interest is calculated as 92% of the lowest daily volume weighted average share prices quoted on the SIX Stock Exchange during the 10 trading days immediately preceding the relevant conversion date or interest payment date respectively, disregarding any day on which Crede (or its Affiliates or related party) has effected any trade, converted into USD at the exchange rate reported by Bloomberg at 9 a.m. Swiss time on the relevant conversion date or interest payment date.

Due to Crede’s option to convert the loan in part or in full at any time before maturity, the Crede Convertible Loan was assessed as a share-settled debt instrument with an embedded put option. Because the value that Crede will receive at settlement does not vary with the value of the shares, the settlement provision is not considered a conversion option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the Crede Convertible Loan was accounted for as a liability measured at fair value using the discounted cash flow method at inception.

On the date of the Crede Convertible Loan, WISeKey signed an option agreement granting Crede the option to acquire up to 1,675,885 WIHN class B shares at an exercise price set initially at CHF 1.65 but revised down to CHF 1.375 in an amendment signed by both parties on September 18, 2020, exercisable between September 24, 2020 and September 14, 2023. Per the option agreement’s term, the date of grant under US GAAP is September 14, 2020 upon issuance of a Tax Ruling from the Swiss Federal Tax Administration and the Zug tax authority. In line with ASC 470-20-25-2, the proceeds from the convertible debt with a detachable warrant was allocated to the two elements based on the relative fair values of the debt instrument without the warrant and of the warrant at time of issuance. The option agreement was assessed as an equity instrument and was fair valued at grant at an amount of USD 866,046 using the Black-Scholes model and the market price of WIHN class B shares on the date of the amendment, September 18, 2020, of CHF 1.25. The fair value of the debt was calculated using the discounted cash flow method as USD 5,387,271. Applying the relative fair value method per ASC 470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of USD 692,469, and the credit entry was booked in APIC.

In 2020, Crede issued two exercise notices under the Crede Convertible Loan, resulting in the following conversions:

-	On November 20, 2020 for 220,143 WIHN class B shares delivered on November 25, 2020 for a conversion<br>of USD 219,680.
-	On December 18, 2020 for 549,190 WIHN class B shares delivered on December 23, 2020 for a conversion<br>of USD 565,200.
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As at December 31, 2020, the principal amount outstanding under the Crede Convertible Loan was USD 4,215,120, with unamortized debt discount of USD 504,855. For the year to December 31, 2020, the Group recorded a net debt discount amortization expense in the income statement of USD 90,901.

Credit Agreement with GLOBAL TECH OPPORTUNITIES 8

On December 08, 2020, WISeKey entered into the GTO Facility, an Agreement for the Issuance and Subscription of Convertible Notes with GTO, pursuant to which GTO commits to grant a loan to WISeKey for up to a maximum amount of CHF 15.5 million divided into tranches of variable sizes, during a commitment period of 18 months ending June 09, 2022. The dates and amounts of the first 3 tranches were agreed in advance in the GTO Facility agreement; for the remaining facility, GTO has the right to request the subscription of 2 tranches, all other tranches are to be subscribed for by WISeKey during the commitment period, subject to certain conditions. Each tranche is divided into convertible notes of CHF 10,000 each that do not bear interest. Subject to a cash redemption right of WISeKey, the convertible notes are mandatorily convertible into WIHN class B shares within the GTO Conversion Period. Conversion takes place upon request by GTO during the GTO Conversion Period, but in any case no later than at the expiry of the GTO Conversion Period, at a conversion price of the higher of (i) CHF 0.05 and (ii) 97% of the average of the 5 lowest closing volume-weighted average price of a Class B Share as traded on the SIX Swiss Exchange during the 20 trading days preceding the relevant conversion date.

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Due to GTO’s option to convert the loan in part or in full at any time before maturity, the GTO Facility was assessed as a share-settled debt instrument with an embedded put option. Because the value that GTO will receive at settlement does not vary with the value of the shares, the settlement provision is not considered a conversion option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the GTO Facility was accounted for as a liability measured at fair value using the discounted cash flow method at inception.

Debt issue costs made up of legal expenses of CHF 33,000 and a commitment fee of CHF 697,500, representing 4.5% of the maximum GTO Facility, were due to GTO at inception, payable throughout the commitment period but no later than June 08, 2022. At inception on December 08, 2020, in application of ASC 340-10-S99-1, WISeKey accounted for the debt issue costs of CHF 33,000 and the commitment fee of CHF 697,500 as a deferred asset to be amortized on a straight-line basis over the commitment period (access period) of the GTO Facility. Upon subscription of each tranche, the debt issue costs and commitment fee are recorded as a debt discount proportionately to each tranche amount.

Additionally, per the terms of the GTO Facility, upon each tranche subscription, WISeKey will grant GTO the option to acquire WIHN class B shares at an exercise price of the higher of (a) 120% of the 5-trading day VWAP of the WIHN class B shares on the SIX Swiss Stock Exchange over the 5 trading days immediately preceding the relevant subscription request and (b) CHF 1.50 (the “GTO Warrant Exercise Price”). The number of options granted at each tranche subscription is calculated as 15% of the principal amount of each Tranche divided by the GTO Warrant Exercise Price. Each warrant agreement has a 5-year exercise period starting on the relevant subscription date. In line with ASC 470-20-25-2, for each subscription, the proceeds from the convertible notes with a detachable warrant were allocated to the two elements based on the relative fair values of the debt instrument without the warrant and of the warrant at time of issuance. When assessed as an equity instrument, the option agreement is fair valued at grant using the Black-Scholes model and the market price of WIHN class B shares on the date of the subscription. The fair value of the debt is calculated using the discounted cash flow method.

During the year to December 31, 2020, the Group made a total of three subscriptions under the terms of the GTO Facility as follows:

-	On December 09, 2020 for convertibles notes in the amount CHF 750,000 (USD 842,302 at historical rate).<br>The funds were received on December 11, 2020. On December 09, 2020, in line with the terms of the GTO Facility, WISeKey<br>issued GTO with 75,000 warrants on WIHN class B shares at an exercise price of CHF 1.50. The option agreement was assessed<br>as an equity instrument and was fair valued at grant at an amount of CHF 30,000 (USD 33,692) using the Black-Scholes<br>model and the market price of WIHN class B shares on the date of grant of CHF 0.99. The fair value of the debt was calculated<br>using the discounted cash flow method as CHF 726,445 (USD 815,848). Applying the relative fair value method per ASC 470-20-25-2,<br>the recognition of the option agreement created a debt discount on the debt host in the amount of CHF 29,744 (USD 33,405),<br>and the credit entry was booked in APIC.
-	On December 21, 2020 for convertibles notes in the amount CHF 1,750,000 (USD 1,975,678 at historical<br>rate). The funds were received on December 28, 2020. On December 21, 2020, in line with the terms of the GTO Facility, WISeKey<br>issued GTO with 175,000 warrants on WIHN class B shares at an exercise price of CHF 1.50. The option agreement was assessed<br>as an equity instrument and was fair valued at grant at an amount of CHF 78,750 (USD 88,906) using the Black-Scholes<br>model and the market price of WIHN class B shares on the date of grant of CHF 1.065. The fair value of the debt was calculated<br>using the discounted cash flow method as CHF 1,695,038 (USD 1,913,628). Applying the relative fair value method per ASC<br>470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of CHF 76,773<br>(USD 86,674), and the credit entry was booked in APIC.
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-

On December 24, 2020 for convertibles notes in the amount CHF 2,160,000 (USD 2,422,792 at<br>historical rate). The funds were received on December 31, 2020. On December 24, 2020, in line with the terms of the GTO Facility,<br>WISeKey issued GTO with 216,000 warrants on WIHN class B shares at an exercise price of CHF 1.50. The option agreement was assessed<br>as an equity instrument and was fair valued at grant at an amount of CHF 103,680 (USD 116,294) using the Black-Scholes<br>model and the market price of WIHN class B shares on the date of grant of CHF 1.105. The fair value of the debt was calculated<br>using the discounted cash flow method as CHF 2,118,422 (USD 2,376,156). Applying the relative fair value method per ASC<br>470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of CHF 100,782<br>(USD 113,043), and the credit entry was booked in APIC.

During the year to December 31, 2020, GTO issued a total of five conversion notices, resulting in the following conversions:

-	On December 14, 2020 for 50,607 WIHN class B shares delivered on December 18, 2020 for a conversion<br>of CHF 50,000 (USD 56,487).
-	On December 18, 2020 for 102,986 WIHN class B shares delivered on December 23, 2020 for a conversion<br>of CHF 100,000 (USD 112,582).
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-	On December 21, 2020 for 205,973 WIHN class B shares delivered on December 28, 2020 for a conversion<br>of CHF 200,000 (USD 224,801).
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-	On December 23, 2020 for 205,973 WIHN class B shares delivered on December 28, 2020 for a conversion<br>of CHF 200,000 (USD 224,801).
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-	On December 29, 2020 for 205,973 WIHN class B shares delivered on December 30, 2020 for a conversion<br>of CHF 200,000 (USD 226,444).
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We note that GTO sent a conversion notice on December 30, 2020 for 1,802,265 WIHN class B shares representing a conversion of CHF 1,750,000 (USD 1,978,980 at closing rate). The shares were not delivered by December 31, 2020.

During the year to December 31, 2020, a debt discount charge of CHF 4,483 (USD 4,779) and deferred charges in the amount of CHF 28,724 (USD 30,620) were amortized to the income statement, and commitment fees of CHF 62,243 (USD 66,351) were booked to APIC as per ASC 470-02-40-4.

As at December 31, 2020 the outstanding GTO Facility available was CHF 10,840,000 (USD 12,258,371). Convertible notes in an aggregate amount of CHF 3,910,000 (USD 4,421,608) remained unconverted and the unamortized debt discount balance was CHF 352,912 (USD 399,089), hence a carrying value of CHF 3,557,088 (USD 4,022,519). as at December 31, 2020. The deferred charge balance was CHF 489,437 (USD 553,478).

C.	Research and Development, Patents and Licenses, Etc.

WISeKey's research and development spending totaled USD 6.0 million in the year ended December 31, 2020, USD 6.4 million in the year ended December 31, 2019, and USD 5.3 million in the year ended December 31, 2018. As mentioned in Item 3. Key Information – D. Risk Factors, we need to keep pace with changing technologies in order to maintain and grow our revenue. We currently own 88 individual patents which preserve our technology. Our spending in research and development includes the development of future technologies that we will register legally in the future to develop our patent portfolio and ensure that competitors cannot replicate our technology easily.

D.	Trend Information

Our growth strategy and industry trends are detailed in Item 3. Key Information – B. Business Overview. The uncertainties and material commitments such as financial instruments that are likely to have a material effect on the companies' financial condition are described in Item 3. Key Information – D. Risk Factors and Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital resources.

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E.	Off-Balance Sheet Arrangements

We have no special purpose financing or partnership entities, or other off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that is material to investors.

F.	Tabular Disclosure of Contractual Obligations

The following table sets forth our contractual obligations as at December 31, 2020 in USD'000s:

	Payments due by period
Contractual obligations	Total	Less than 1 year	1-3 years	3-5 years	more than 5 years
Operating and short-term lease obligations	2,997	633	806	711	847
Finance lease obligations	189	125	64	-	-
Debt and convertible note obligations	7,208	6,157	405	646	-
Total contractual obligations	10,394	6,915	1,275	1,357	847
Item 6.	Directors, Senior Management and Employees
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A.	Directors and Senior Management
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The following table sets forth the name, date of birth and functions of our non-executive and executive directors, and our senior management as at the date of this annual report. Unless otherwise indicated, the current business address for our executive officers and directors is General-Guisan-Strasse 6, 6300 Zug, Switzerland. Our non-executive and executive directors are elected annually and individually as a matter of law by the shareholders at each Annual General Meeting of the shareholders for a term extending up until the following Annual General Meeting of the shareholders. The last Annual General Meeting of the shareholders was on May 15,2020.

Name	Date of birth	Functions in WISeKey	Date first appointed
Non-Executive Directors
Philippe Doubre	March 24, 1935	Board Member, Member of the Nomination and Compensation Committee	March 21, 2016<br><br> <br>(1999*)
David Fergusson	August 15, 1960	Board Member, Chairman of the Nomination and Compensation Committee, Member of the Audit Committee	May 31, 2017
Jean-Philippe Ladisa	August 01, 1963	Board Member, Chairman of the Audit Committee	May 15, 2020
Eric Pellaton	March 25, 1959	Board Member, Member of the Nomination and Compensation Committee	May 15, 2020
Executive Directors
Carlos Moreira	September 01, 1958	Chairman of the Board of Directors, Member of the Strategy Committee, Founder and Chief Executive Officer	March 21, 2016<br><br> <br>(1999*)
Peter Ward	January 05, 1952	Board Member, Member of the Strategy Committee	March 21, 2016<br><br> <br>(2012*)
Senior Management
Pedro Fuentes	November 12, 1969	Chief Security Officer	August 01, 2016

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Name	Date of birth	Functions in WISeKey	Date first appointed
Carlos Moreno	March 09, 1964	Vice President of Strategic Partnerships	July 15, 2006*
---	---	---	---
Benjamin Stump	June 17, 1973	Chief Revenue Officer	July 01, 2020
Nathalie Verjus	February 19, 1975	Company Secretary and Financial Planning & Reporting Manager	November 01, 2016
Bernard Vian	March 22, 1967	General Manager of WISeKey Semiconductors	September 21, 2016**
Alexander Zinser	July 17, 1969	Chief Legal Officer	April 09, 2018

* Includes board membership and employment at the Company's predecessor holding company of the WISeKey Group, WISeKey SA.

** Joined the WISeKey Group on the acquisition of WISeKey Semiconductors SAS on September 21, 2016.

Biographies

Directors

Carlos Moreira, Founder, Chairman of the Board of Directors and CEO of WISeKey, UN Expert on CyberSecurity and Trust Models for ILO, UN, UNCTAD, ITC/WTO, World Bank, UNDP, ESCAP (83-99). Author, Internet Pioneer; Founder OISTE.org. Founding Member of the "Comité de Pilotage Project E-Voting" of the Geneva Government, Member of the UN Global Compact, Member of the WEF Global Agenda Council. Founding Member WEF Global Growth Companies 2007. WEF New Champion 2007 to 2016, Vice Chair WEF Agenda Council on Illicit Trade 12/15, Member of the Selection Committee for the WEF Growth Companies. Founder of the Geneva Security Forum. Member the WEF Global Agenda Council on the Future of IT Software & Services 2014-16. Member of the New York Forum. Selected as one of the WEF, Trailblazers, Shapers and Innovators, Member of Blockchain Advisory Board of the Government of Mexico. Nominated by Bilan.CH among the 300 most influential persons in Switzerland 2011 and 2013, top 100 of Who's Who of the Net Economy, Most Exciting EU Company at Microsoft MERID 2005, Man of the Year AGEFI 2007, Selected by Bilanz among the 100 most important 2016 digital heads in Switzerland 2017. Award Holder CGI. Adjunct Professor of the Graduate School of Engineering RMIT Australia (95/99). Head of the Trade Efficiency Lab at the Graduate School of Engineering at RMIT.  M&A Award 2017 Best EU acquisition. 2018 Blockchain Davos Award of Excellence by the Global Blockchain Business Council. Member of The Blockchain Research Institute. Founder Blockchain Center of Excellence 2019.  Entrepreneur and investor in disruptive cryptotechnology AI, Blockchain, IoT and Cybersecurity. Keynote speaker at the UN, WEF, CGI, ITU, Bloomberg, Oracle, SAP, Zermatt Summit, Microsoft, IMD, INSEAD, MIT Sloan, HEC, UBS, CEO Summit. Coauthor of "The transHuman Code: How to Program Your Future" (2019).

Peter Ward has served our Chief Financial Officer and a director since 2012. Mr. Ward began his tenure with our Company in 2008 as Finance Director. From 2005 to 2008, Mr. Ward served as a director and International Finance Director at Isotis International Inc., a manufacturer and distributor of bone and skin transplants. From 1996 to 2004, Mr. Ward served as a director and International Finance Director, then Director Administration and Taxes of Iomega International, a manufacturer and distributor of external computer drives and disks. From 1986 to 1996, Mr. Ward served as Finance Director for Germany, Austria & Switzerland Finance for GE Information Services (GEISCO), based in Cologne, Germany, then Commercial Finance Manager for GE Plastics BV, based in Bergen op Zoom, The Netherlands and Finance Director for Germany, Austria & Switzerland for GE Medical Services AG, based in Frankfurt am Main, Germany at General Electric. From 1973 to 1985, Mr. Ward served as Cost Analyst at Standard Telephones & Cables Ltd, a manufacturer and installer of submarine telephone cables, based in Southampton, United Kingdom, then Finance Accountant for Payot Cosmetics Ltd and Mavala Cosmetics Ltd, manufacturers of cosmetics and nail products respectively, based in Ashford, Kent, United Kingdom, then Financial Controller for Rimmel Cosmetics Germany and ITT Photoproducts, Germany, distributors of cosmetics and photographic equipment respectively, based in Frankfurt am Main, Germany, then Financial Analyst for the Automotive and Sanitary Products Division, based in ITTE HQ in Brussels, Belgium, then Manager Financial Controls for the Telecommunications Division based in ITTE HQ Brussels, Belgium, at ITTE. He holds a B.A. with honors in Business Administration from Wolverhampton University, in Wolverhampton, U.K. and is a qualified Chartered Management Accountant.

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Philippe Doubreis a co-founder of our company and has served as a member of our board since 1999. Mr. Doubre is also the co-founder and Présidentdu Conseil de Fondation of the Organisation Internationale pour la Sécurité des Transactions Electroniques (OISTE), a not-for-profit organization founded in 1998 that promotes digital security and certification of persons and objects. Mr. Doubre serves as vice president and treasurer of the World Trade Point Federation (WTPF), an international non-governmental organization founded in 2000 in partnership with the United Nations Conference on Trade and Development (UNCTAD), which assists small and medium enterprises (SMEs) in over 70 countries worldwide to trade internationally through the use of electronic commerce technologies. Additionally, Mr. Doubre serves as president of the China Hub in Geneva, Switzerland, and a permanent representative of the WTCA organization to the U.N. in Geneva, Switzerland. From 1979 to 2015, Mr. Doubre served as secretary general and then president of the World Trade Centre Geneva, Switzerland, a member of the World Trade Center Association (WTCA). Mr. Doubre served as the co-chairman of the WTCA Committee on Information and Communication, and as a member of the WTCA New York board of directors since 1999. Prior to his role with the WTCA, Mr. Doubre held several senior positions in the banking and finance industry, including vice president and general cashier of American Express Paris, and general manager of the Overseas Development Bank between 1967 and 1970. Mr. Doubre graduated in mathematics from the Collège Saint Barbe in Paris, France.

David Fergussonhas served as a member of our board since 2017. Since 2010, Mr. Fergusson serves as president and CEO of "The M&A Advisor", the world's premier think tank for corporate finance, mergers & acquisition and restructuring professionals. From London and New York, M. Fergusson leads the company's market intelligence, media, event, and consulting services for a global constituency of over 350,000 finance industry professionals. M. Fergusson is a sought-after speaker and contributor on the subjects of finance, technology and operational innovation with international media, educational institutions and leadership assemblies. A market expert on the impact of technological innovation on corporations, M. Fergusson is also the editor of 5 annual editions of "The Best Practices of the Best Dealmakers" with over 500,000 readers and distribution in over 60 countries. In 2013, Mr. Fergusson founded the global Corporate Finance Emerging Leaders program, which engages future global business stalwarts to affect significant change through social innovation. A pioneer in cross border M&A between the United States and China, he was recognized with the 2017 M&A Leadership Award from the China Mergers & Acquisitions Association and is Chairman of the US Chapter of the Asia M&A Association. Additionally, Mr. Fergusson serves as president-elect of Hugh O'Brien Youth Leadership (HOBY), the world's largest social leadership philanthropic foundation for high school students. He received the 2015 Albert Schweitzer Leadership Award for his work in youth leadership development. Mr. Fergusson is also a founding member of the City of London's Guild of Entrepreneurs, a member of British American Business, and of the Association for Corporate Growth (ACG). Mr. Fergusson is a graduate of Kings College School and the University of Guelph where he earned a Bachelor of Arts in Political Studies.

Jean-Philippe Ladisa has served as a member of the Board since May 2020. Mr. Ladisa has over thirty years’ experience in audit, accounting, financial analysis, corporate/personal taxation, payroll and human resources in Switzerland. Mr. Ladisa joined Fiduciaire Wuarin & Chatton SA, an audit and accounting firm in Switzerland, in 1993, first as a director then as a partner. Mr. Ladisa serves as an expert in auditing, tax reporting, advisory for natural and legal persons, application of conventions to avoid double taxation and business valuation with the Geneva Court. Mr. Ladisa started his career managing audit and accounting mandates of small and medium-sized Swiss companies in the construction, trade and services sectors with BFB Sociétés Fiduciaires in Switzerland from 1982 to 1993. Mr. Ladisa graduated in audit from ExpertSuisse in Switzerland, and as a chartered accountant from the Autorité de Surveillance des Réviseurs in Switzerland.

Eric Pellaton has served as a member of the Board since May 2020. Mr. Pellaton is an investor in several startup companies involved in different fields: in Real Estate Holdings, Sofia Rental (Bulgaria), a company that buys, sells and manages apartments and a luxury hotel, where has been a partner and investor since 2000; in ZeroBoundary Inc (USA), from 2001 until 2018, a company involved in project management and leadership development products and services, in face-to-face and e-learning delivery formats which he co-founded; in Pelican Packaging (USA), a company involved in die packaging for the semiconductor industry, where he acted as partner and investor from 2002 until 2007; in ACN (Switzerland), a company that develops electronic chips that can transfer inter-net/video/audio information through the power line, and in Seyonics (Switzerland), a company specialized in Nano liter dispensing system (syringe), where, in both cases, he has been acting as investor and advisor since 2003; in Visage Pro USA, a company involved in skin care products with organic cream ranging from anti-aging to burn issues, where he was a partner and investor between 2005 and 2018;and in Solar Rain (USA), a company involved in salt water and dirty water purification systems for drinking water, where he has been a partner and investor since 2008. Prior to that, Mr. Pellaton held different positions from sales, service, management, CEO and Chairman in the field of automation and robotics at Ismeca Group from 1981 to 2000. Ismeca was producing equipment for the Electronic, Medical, Watches and Car Industries all over the world. Mr. Pellaton also owns a patent in RFID technology. Mr. Pellaton graduated as an Electronic/Electro technique Engineer from Ecole Technique Supérieure du Locle, Switzerland.

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Senior Management

Pedro Fuentes serves as our Chief Security Officer. Mr. Fuentes is responsible for the PKI platforms and compliance, ensuring the worldwide accreditation of WISeKey's certification services, our product strategy, leading projects and customer support worldwide. He is a senior specialist in information security and PKI in particular with more than 20 years of active work in these areas as a certified professional (CISM, ISO27000, MSCP and others). Mr. Fuentes joined WISeKey in 2009 to reinforce the eSecurity Business Unit. Prior to joining WISeKey, he worked at Siemens as responsible for the cybersecurity product line for southern Europe, managing key projects for national identity and leveraging eGovernance services through the integration of eSecurity techniques in business processes. Mr. Fuentes obtained a high degree in Computer Science from the Polytechnic University of Valencia, Spain.

Carlos Moreno is our Vice President of Strategic Partnerships. Mr. Moreno has more than 30 years of experience in Sales Engineering, Sales Management and Business Development. He has worked extensively on strategic projects for both national and multinational companies in the public, financial and industrial sectors throughout his career at Banque Worms, Infogestion, Sopra Steria Informatique, Deutsche Bank, Uniface, Compuware and BMC Software. He has held management and executive roles in the areas of people management, sales coaching, market analysis, establishment and implementation of account plans. He joined WISeKey in 2006 as sales director for Switzerland and held several operational positions before being appointed Vice President of Strategic Partnerships to oversee commercial relationships with strategic customers and helm market analysis and go-to-market strategies. He qualified in Business and administration with the Commercial School Nicolas Bouvier in Geneva, Switzerland, and obtained a qualification as Programmer Analyst with the IEPIGE Institute in Geneva, Switzerland.

Benjamin Stump serves as Chief Revenue Officer at WISeKey, focused the revenue objectives of the business and responsible for all of Sales and Marketing. Prior to joining WISeKey, Mr. Stump has held executive level positions for OpSec Security, Inc., Westell Technologies, Kentrox Inc., Digicel USA, Telcordia Technologies and started his career with Bellcore. He has dedicated his career to technology advancements and been focused on revenue and growth strategies for more than two decades. Mr. Stump is experienced in both organic and inorganic growth and specialized in digital transformations. Mr. Stump holds a Bachelor of Science from Lafayette College, PA, USA, and a Master of Science, Industrial and Operations Engineering from the University of Michigan, MI, USA.

Nathalie Verjus serves as our Company Secretary and Financial Planning & Reporting Manager. A qualified chartered accountant, Ms. Verjus has a solid background in compliance and finance, combined with project management and operational experience. Prior to joining WISeKey, Ms. Verjus worked for Tyco International, where she served as EMEA Controllership Senior Manager, then Finance Transformation Senior Project Manager, before becoming Operational Excellence Lead and Head of a Business Unit. Prior to joining Tyco International, Ms. Verjus spent four years with PricewaterhouseCoopers UK in Audit and Risk Assurance. Prior to joining PricewaterhouseCoopers, Ms. Verjus served as Project Manager and Export Administration Manager for NACCO Industries. In addition to her chartered accountant qualification (ACA) with the Institute of Chartered Accountants in England and Wales (ICAEW), UK, Ms. Verjus holds an MA in International Business Administration for Bournemouth University, UK, and a Master’s in International Business from the EDC Paris Business School in Paris, France.

Bernard Vian serves as General Manager of WISeKey Semiconductors. Prior to our acquisition of WISeKey Semiconductors SAS, Mr. Vian served as the Executive Vice President of the Secure Transaction Business Division, Vice President of Business Development and Executive Vice President for Secure Payments at INSIDE Secure SA. He came to INSIDE Secure from Gemplus (now renamed GEMALTO) where he served in several positions in Sales Support and Marketing, in Europe and lately in California where he opened the Gemplus North America headquarter and served as Technical Support Director for 5 years. Mr. Vian joined INSIDE Secure's team in 2002 as Business Development Vice President. He is a graduate of the University of Aix-Marseille, France, with an engineering degree in Electronic Systems.

Alexander Zinser serves as Chief Legal Officer. Prior to joining WISeKey, Mr. Zinser served ad-interim at the General Counsel Office for Ernst & Young Switzerland. Prior to joining Ernst & Young Switzerland, Mr. Zinser served as Managing Counsel for SFR Tobacco International GmbH (formerly Reynolds American Group) in Switzerland. Prior to working for SFR Tobacco International GmbH, Mr. Zinser served as Assistant General Counsel Europe at the EMEA headquarter of Guardian Industries Europe S.à.r.l. in Luxembourg. Prior to working for Guardian Industries Europe S.à.r.l., Mr. Zinser served as senior attorney for Agilent Technologies International S.à.r.l., initially in Germany before transferring to the European headquarter in Switzerland. Prior to working for Agilent Technologies International S.à.r.l., Mr. Zinser served as Attorney-at-law for Graf von Westphalen Fritze & Modest in Germany. Mr. Zinser is a qualified Doctor of Laws from the University of Kiel, Germany. He also holds a post-graduate degree in Comparative Law from the University of Strasbourg, France, a diploma in English Law from the University of Birmingham, U.K., a Master of Laws from the University of Huddersfield, U.K., and an Executive MBA from the University of Saint Gallen, Switzerland.

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Family Relationship

There are no family relationships among any of our executive and non-executive officers or directors.

Potential arrangements

There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or member of senior management. However, Carlos Moreira has a significant shareholding in our company as disclosed in "Item 7A. Major Shareholders".

B.	Compensation

Compensation ofDirectors and Executive Officers

We are subject to the Ordinance against Excessive Compensation with respect to Listed Companies issued by the Swiss Federal Council (the "Compensation Ordinance") and the Directive on Information Relating to the Corporate Governance issued by the SIX (the "Corporate Governance Directive"). The Compensation Ordinance requires a "say on pay" approval mechanism for the compensation of the board of directors and the executive management pursuant to which the shareholders must vote on the compensation of the board of directors and the executive management on an annual basis. Accordingly, our Articles provide that the general meeting of shareholders must, each year, vote separately on the proposals by the board of directors regarding the maximum aggregate amounts of:

·	the total compensation of the board of directors for the next term of office; and
·	the total compensation of the executive management for the period of the next fiscal year.
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If the general meeting of shareholders does not approve a proposal of the board of directors, the board of directors determines the maximum aggregate amount or maximum partial amounts taking into account all relevant factors and submits such amounts for approval to the same general meeting of shareholders, to an extraordinary general meeting of shareholders or to the next ordinary general meeting of shareholders for retrospective approval. If the maximum aggregate amount of compensation already approved by the general meeting of shareholders is not sufficient to also cover the compensation of persons newly appointed to or promoted within the executive management, such persons may be paid for each of the following purposes an aggregate of up to 40% in excess of the total annual compensation of the respective predecessor or for a similar pre-existing position: (i) as compensation for the relevant compensation period; and, in addition, (ii) as compensation for any prejudice incurred in connection with the change of employment.

For the year ended December 31, 2020, the aggregate compensation paid to the members of our board of directors and our executive officers for services in all capacities was CHF 5,248,000 (USD 5,594,373 at annual average rate). For the year ended December 31, 2020, the compensation of Carlos Moreira, as the company's highest paid executive, was CHF 3,521,000 (USD 3,753,390 at annual average rate).

The tables below show the amount of compensation paid and benefits in kind granted to our executive and non-executive directors for the year ended December 31, 2020 as disclosed in our 2020 annual report. We note that Mr. Juan Hernandez-Zayas was a member of our board of directors as at December 31, 2019 but did not seek reelection at the annual general meeting of shareholders on May 15, 2020, which means that his Board duties ceased on May 15, 2020. We also note that Mr. Dourgam Kummer was a member of our board of directors as at December 31, 2019 but resigned on November 30, 2020.

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Compensation of the Board of Directors of WISeKey International Holding AG<br> for the 12 months ending December 31, 2020
CHF'000 ^1^	Function	Board<br> Fee^2^		Additional Fees^3^		Other Stock Based Compensation^4^		Total Compensation
Philippe Doubre	Board Member, NCC^5^ Member		81		-		-		81
David Fergusson	Board Member, NCC Chairman, Audit Committee Member		112		-		-		112
Juan Hernandez Zayas	Former Board Member, Audit Committee Chairman, Strategy Committee Member		49		-		-		49
Dourgam Kummer^6^	Former Board Member		-		229		-		229
Jean-Philippe Ladisa	Board Member, Audit Committee Chairman		57		-		-		57
Eric Pellaton	Board Member, NCC Member		40		-		-		40
Total Board Members			339		229		-		568
1	Board members are remunerated in Swiss Francs (CHF).
---	---
2	Board fees can be paid in a mix of cash and options. The cash fee voted by the Board as remuneration to Board Members is disclosed in application of the accrual-based principle if not paid as at the end of the reporting period. In 2020, Board members received their full cash compensation up until December 31, 2020. Compensation in options on WIHN Class B Shares is disclosed in the period it was granted, regardless of whether it relates to Board fees from prior financial periods. The amount shown reflects the fair value of options granted in line with US GAAP standards. The options granted were valued using the Black-Scholes method, using the market price of WIHN shares at the relevant date. In 2020, Board members received the options relating to the following Board Term: 2019/2020 and 2020/2021 up until December 31, 2020. The recognition of the compensation in options on a grant-basis as opposed to an accrual-based principle may generate differences between the amount of Board fees accrued in a fiscal period and the amount of Board fees actually paid in respect of that period, at a later stage.<br><br> <br>The amount of Board fees includes employer social charges paid by the Company.
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3	Additional fees relate to services other than Board duties<br>rendered to the Company.
4	Other stock based compensation refers to stock based compensation<br>for services other than Board services. The amount shown reflects the fair value of options granted in line with US GAAP standards.<br>The options granted were valued using the Black-Scholes method, using the market price of WIHN shares at the relevant date.
---	---
5	Nomination & Compensation Committee
---	---
6	The amount disclosed under Additional Fees for Mr. Kummer<br>relates to his compensation as employee of WISeKey for the period from January 01, 2020 to November 30, 2020.
---	---
Compensation of the Executive Management of WISeKey International Holding AG for the 12 months ending December 31, 2020<br><br> <br>****
---	---	---	---	---	---	---	---
CHF'000 ^1^	Function	Base<br><br> <br>Salary^2^	Annual<br><br> <br>Incentive	Additional<br><br> <br>Fees^3^	Stock Based<br><br> <br>Compensation^4^	Other<br><br> <br>Compensation^5^	Total<br><br> <br>Compensation
Highest Paid Executive
Carlos Moreira	Chairman of the Board, Chief Executive Officer	780	2,241	-	-	500	3,521
Peter Ward	Board Member, Chief Financial Officer	585	425	-	-	149	1,159
Total Executive Management		1,365	2,666	-	-	649	4,680
1	The executive management members are remunerated in Swiss<br>Francs (CHF).
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2	Base salary includes employee social security costs.
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3	Additional Fees include fees paid for special services rendered<br>to the Company.
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4	The amount shown reflects the fair value of options granted<br>in line with US GAAP standards. The options granted are valued using the Black-Scholes method at the grant date, using the market<br>price of WIHN shares.
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5	Other compensation includes pension contributions, employer<br>social charges, lump-sum expenses and parking charges paid by the Company.
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Disclosure of the amount set aside by us to provide pension, retirement or similar benefits to members of our board of directors or executive officers is not required in Switzerland and is not otherwise disclosed by the Company.

Disclosure of compensation to our senior management is not required in Switzerland and is not otherwise publicly disclosed by the Company.

Annual IncentivePlan

Compensation for our executive directors and senior management includes a bonus. Our annual incentive plan is designed to encourage management to achieve pre-established performance goals, both short-term and long-term.

The annual incentive plan for our executive directors is approved by our nomination and compensation committee which then submits it for approval by our board of directors. It is included in the total compensation that the shareholders must vote on, on an annual basis, as described above.

Share-based Compensation

We maintain an Employee Stock Option Plan ("ESOP") which was transferred from WISeKey SA for the benefit of our directors, employees and consultants. Options issued under the ESOP to our directors for compensation entitle the participant to WISeKey Class B shares at the ratio of 1:1, at an exercise price equal to the nominal value of WISeKey Class B shares of CHF 0.05, with immediate vesting and expiring on the seventh anniversary of the grant date. Each grant is subject to the approval of the board of directors who may, in line with the terms and conditions of the ESOP, amend the terms of the grant.

C.	Board Practices

Our articles of association provide that our board of directors consists of a minimum of three and a maximum of 12 directors. Our board of directors currently consists of six members. Each director is elected for a one-year term. The current members of our board of directors were elected at an annual shareholders' meeting held on May 15, 2020 to serve until our next annual general shareholders meeting and until their successors are elected at such next annual general meeting. Please also refer to Item 6.A. Directors and Senior Management above for further details regarding the periods of service of each of our current directors and senior managers.

Other than with respect to our directors that are also executive officers, we do not have written agreements with any director providing for benefits upon the termination of his or her engagement with our company.

As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of those otherwise required under NASDAQ’s rules for domestic U.S. issuers, provided that we disclose which requirements we are not following and describe the equivalent home country requirement.

Board Independence

Currently, 4 of our 6 directors, Philippe Doubre, David Fergusson, Jean-Philippe Ladisa and Eric Pellaton, are considered "independent" under the NASDAQ rules, therefore we comply with NASDAQ Listing Rule 5605 (b)(1) which requires an issuer to maintain a majority of independent directors. Under the Swiss Code of Best Practice for Corporate Governance (the "Swiss Code"), which is a non-binding set of corporate governance recommendations issued by economiessuisse and addressed to Swiss public companies, the majority of the board of directors is recommended to be independent. Members of the board of directors are considered independent under the Swiss Code if they are non-executive members of the Board of Directors who have never been a member of the company's executive management, or who were not members of the company's executive management during the preceding three years, and who have no or only comparatively minor business relations with the company. The Swiss Code is not binding and follows a "comply or explain" principle. We are not subject to NASDAQ Listing Rule 5605 (b)(2) that requires that independent directors must have regularly scheduled meetings at which only independent directors are present.

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Board Committees

Our board of directors has established an audit committee, a nomination and compensation committee, and a strategy committee.

Audit Committee

The audit committee consists of Jean-Philippe Ladisa (Chairman) and David Fergusson. The Audit Committee currently consists of only two members. Swiss statutory law does not require a specific number of Audit Committee members and therefore our practice varies from NASDAQ Listing Rule 5605(c)(2) which requires an Audit Committee of at least three members. The audit committee consists exclusively of members of our board of directors who are financially literate. Our board of directors has determined that all members of the audit committee satisfy the "independence" requirements set forth in Rule 10A-3 under the Exchange Act and under the rules of NASDAQ. The members of the audit committee are appointed by our board of directors. The Audit Committee has a charter that complies with Swiss law, but does not fully comply with the requirements of NASDAQ Listing Rule 5605(c)(1).

The audit committee is responsible for, among other things:

·	overseeing our accounting and financial reporting processes and the audits of our financial statements;
·	the compensation, retention and oversight of the work of our independent registered public accounting<br>firm and statutory auditors who are appointed by the shareholders pursuant to Swiss corporate law;
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·	our accounting policies, financial reporting and disclosure controls and procedures;
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·	the quality, adequacy and scope of external audit;
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·	our accounting compliance with financial reporting requirements; and
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·	the management's approach to internal controls with respect to the production and integrity of<br>the financial statements and disclosure of our financial performance.
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Nomination andCompensation Committee

Our nomination and compensation committee consists of David Fergusson (Chairman), Philippe Doubre and Eric Pellaton. Our board of directors has determined that each of the members of the nomination and compensation committee is independent under NASDAQ’s listing standards. We follow our home country standards with respect to the responsibilities of our Nomination and Compensation Committee. Our board of directors has adopted a charter for the Nomination and Compensation Committee that complies with Swiss law but, which does not, however, fully comply with the requirements of NASDAQ Listing Rules 5605(d)(1) and (d)(3). Thus, the Nomination and Compensation Committee practice varies from the requirements of NASDAQ Listing Rules 5605(d)(1) and (d)(3).

The primary purpose of our nomination and compensation committee is to discharge our board of directors' responsibilities to oversee our compensation policies, plans and programs, and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. We are subject to the Swiss Ordinance against Excessive Compensation in Listed Companies (the "Compensation Ordinance") issued by the Swiss Federal Council, known as the "say-on-pay" rule. As a result of the say-on-pay rule, the members of the nomination and compensation committee must be elected by our shareholders at the annual general meeting for a one-year term and the aggregate compensation of our board of directors and executive officers must also be approved by our shareholders. Pursuant to the Swiss Code, all members of a nomination committee must be independent.

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The nomination and compensation committee is responsible, among other things to:

·	review and recommend to our board of directors the compensation of our directors based on the aggregate<br>compensation approved by our shareholders;
·	review and approve, or recommend that our board of directors approve, the terms of compensatory<br>arrangements with our executive officers;
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·	review and approve, or recommend that our board of directors approve, incentive compensation and<br>equity plans, and any other compensatory arrangements for our executive officers and other senior management, as appropriate;
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·	identify, evaluate and select, or recommend that our board of directors approve, nominees for election<br>to our board of directors and new members of the executive management and their terms of employment; and
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·	consider and make recommendations to our board of directors regarding the composition of the committees<br>of the board of directors.
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Strategy Committee

Our strategy committee currently consists of two members of the board of directors: Carlos Moreira (Chairman) and Peter Ward. The strategy committee advises the board of directors on all strategic matters, including acquisitions, divestments, joint ventures, restructurings and similar matters. The strategy committee continuously reviews our strategic direction and assesses the impact of changes in the environment on us. The members of the Strategy Committee are appointed by our board of directors.

Quorum requirements

In accordance with Swiss law and generally accepted business practices, our Articles of Association do not provide for quorum requirements generally applicable to general meeting of shareholders. Our practice varies from NASDAQ Listing Rule 5620(c), which requires an issuer to provide in its bylaws for a generally applicable quorum, and that such quorum may not be less than one-third of the outstanding voting stock.

Solicitation of proxies

Our Articles of Association provide for an independent proxy holder elected by the shareholders at a general meeting of shareholders and prohibit, in accordance with Swiss law, the institutional representation of shareholders by our corporate representatives at a general meeting of shareholders. We must further submit to shareholders an invitation to the general meeting twenty calendar days prior to the general meeting date, indicate in such invitation the items on the agenda of the general meeting and provide together therewith other relevant documents for the general meeting, such as our annual report, the meeting admission card and the proxy card. However, Swiss law does not have a regulatory regime for the solicitation of proxies and thus, our practice varies from NASDAQ Listing Rule 5620(b) that sets forth certain requirements regarding the solicitation of proxies.

Shareholder approval

Under Swiss law, we are not generally required to obtain shareholder approval for the issuance of securities in connection with certain events such as the acquisition of stock or assets of another company, the establishment of or amendments to equity-based compensation plans for employees, a change of control and certain private placements. While Swiss law does broadly require us to obtain shareholder approval for any issuance of new shares, irrespective of the relevant event, Swiss law permits us to rely in certain circumstances on a share issuance pre-authorization of shareholders granted to our board of directors prior to the occurrence of events of the aforementioned nature. Further, we have, in accordance with Swiss law, opted out from the statutory requirement that an acquirer of voting rights attached to our shares exceeding 33 1/3% - the relevant "change of control" threshold under Swiss law for public companies – submit a mandatory public takeover offer to our shareholders. To some extent, our practice therefore varies from the requirements of NASDAQ Listing Rule 5635, which generally requires an issuer to obtain shareholder approval for the issuance of securities in connection with such events.

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Third party compensation

Swiss law does not require that we disclose information regarding third party compensation of our directors or director nominees, except where, in each case with respect to serving directors, such compensation directly or indirectly affects (potential) assets of the Company or one of its subsidiaries, or where because of the third party compensation a risk of conflicts of interest or dependency of the director on such third party exists. As a result, our practice varies from the third party compensation requirements of NASDAQ Listing Rule 5250(b)(3).

Related party transactions

Our board of directors, or a committee of our board of directors composed of directors not subject to the potential conflict, is required to conduct an appropriate review and oversight of all related party transactions for potential conflict of interest situations on an ongoing basis.

Voting Rights

We do not have the authority to disparately reduce or restrict the voting rights of existing stockholders of our listed common stock (Class B), including by issuing (a) stock with voting rights that are superior to those of outstanding listed common stock or (b) stock with voting rights that are inferior to those of outstanding listed common stock through an exchange offer, except where the general meeting of shareholders resolves, with a majority of two-thirds of voting rights associated with the shares, and the absolute majority of the par value of the shares, in each case as represented at the general meeting of shareholders, on the issuance of privileged voting rights stock, including as part of a separate class of stock.

Code of Conduct

We have followed Swiss law which does not require a company to have a Code of Conduct applicable to all directors, officers and employees. As a result, our practice varies from NASDAQ Listing Rule 5610 which requires a publicly available Code of Conduct. We do, however, expect ethical behavior from all of our directors, officers and employees.

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D.	Employees

As at December 31, 2020, date of our last audited financial statements, we had 81 employees, of which 19 were located in Switzerland and 53 were located in France. The following table shows the breakdown of our workforce of employees and contractors by category of activity as at the dates indicated:

Headcount breakdown	As at December 31,
Area of Activity	2020		2019		2018
Cost of sales		5		4		13
Research and development		27		29		42
Selling and marketing		24		23		45
General and administrative		25		28		54
Total		81		84		154

With respect to French employees, French labor laws govern the length of the workday and workweek, minimum wages for employees, procedures for hiring and dismissing employees, determination of severance pay, annual leave, sick days, advance notice of termination of employment, equal opportunity and anti-discrimination laws and other conditions of employment. French labor laws also impose the creation of a worker's council for companies employing 50 people or more. One employee of WISeKey Semiconductors SAS represents labor unions at the workers' council.

As at December 31, 2020, we also have 17 independent contractors in Vietnam and 2 in France. We maintain close cooperation with each of these independent contractors.

We have never experienced any labor-related work stoppages or strikes and believe our relationships with our employees and independent contractors are agreeable.

E.	Share Ownership

See Item 7.A. MajorShareholders for a list of beneficial ownership of our shares as at December 31, 2020.

The table below shows the beneficial share ownership of the persons listed in above subsection 6.B, including any shareholding by their related parties.

****	Asat December 31, 2020
Name	Number of Class A Shares held	Percentage of Class A Shares^(1)^	Number of Class B Shares held	Percentage of Class B Shares^(1)^	Number of options held^(2)^
Non-Executive Directors
Philippe Doubre	701,695	1.8	*	*	72,694
David Fergusson	-	-	*	*	63,644
Jean-Philippe Ladisa	-	-	*	*	25,212
Eric Pellaton	-	-	*	*	7,231^(3)^
Executive Directors
Carlos Moreira	38,508,733	96.2	991,179^(4)^	2.1	22,000^(5)^
Peter Ward	*	*	*	*	573,400
Senior Management
Pedro Fuentes	-	-	-	-	123,495
Carlos Moreno	-	-	-	-	152,000
Benjamin Stump	-	-	-	-	100,000
Nathalie Verjus	-	-	*	*	-
---	---	---	---	---	---
Bernard Vian	-	-	-	-	-
Alexander Zinser	-	-	*	*	-

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*	Shareholding less than one percent of the class of shares<br>and that has not been disclosed to shareholders or otherwise made public.
(1)	Based on the total number of fully paid-in outstanding<br>shares, in line with our share capital registered with the commercial register of the Canton of Zug as at December 31, 2020.
---	---
(2)	Each option giving right to one Class B Share upon exercise.
---	---
(3)	Excluding 8,299 options pending agreement and therefore<br>not considered as granted under US GAAP as at December 31, 2020
---	---
(4)	Includes 44,000 shares held by an immediate family member.
---	---
(5)	Includes 22,000 options held by an immediate family<br>member.
---	---

The terms of the options held by directors and senior management are described in the following table:

Name	Number of options held^(2)^	Exercise price of option	Expiration date of options
Non-Executive Directors
Philippe Doubre	17,317	CHF 0.05	February 11, 2026
Philippe Doubre	18,996	CHF 0.05	December 23, 2026
Philippe Doubre	5,713	CHF 0.05	April 23, 2027
Philippe Doubre	7,033	CHF 0.05	August 23, 2027
Philippe Doubre	10,187	CHF 0.05	November 16, 2027
Philippe Doubre	13,448	CHF 0.05	December 23, 2027
David Fergusson	11,052	CHF 0.05	February 11, 2026
David Fergusson	18,214	CHF 0.05	December 23, 2026
David Fergusson	5,381	CHF 0.05	April 23, 2027
David Fergusson	6,624	CHF 0.05	August 23, 2027
David Fergusson	9,589	CHF 0.05	November 16, 2027
David Fergusson	12,784	CHF 0.05	December 23, 2027
Jean-Philippe Ladisa	2,296	CHF 0.05	August 23, 2027
Jean-Philippe Ladisa	7,572	CHF 0.05	November 16, 2027
Jean-Philippe Ladisa	15,344	CHF 0.05	December 23, 2027
Eric Pellaton	1,682	CHF 0.05	August 23, 2027
Eric Pellaton	5,549	CHF 0.05	November 16, 2027
Executive Directors
Carlos Moreira	22,000^(5)^	CHF 0.05	September 26, 2026
Peter Ward	573,400	CHF 0.05	September 26, 2026
Senior Management
Pedro Fuentes	123,495	CHF 0.05	September 26, 2026
Carlos Moreno	152,000	CHF 0.05	September 26, 2026
Benjamin Stump	100,000	CHF 0.05	June 30, 2027
(2)	Each option giving right to one Class B Share upon exercise.
---	---
(5)	Includes 22,000 options held by immediate family members.
---	---

Each Class A Share and each Class B Share give their respective owner one voting right.

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Summary of StockPlans

Employee Share OptionPlan

We have the WISeKey Employee Share Option Plan in place, last amended on September 29, 2016 (the "WISeKey Share Ownership Plan"). The WISeKey Share Ownership Plan was originally adopted by WISeKey SA on January 1, 2012 as a continuation of the existing Stock Option Plans approved on December 31, 2007 and December 31, 2011, respectively, and, upon the listing of the Class B Shares on the SIX, amended to reflect the fact that WISeKey International Holding Ltd is the ultimate parent of the Group.

Administration

Our board of directors administers the WISeKey Share Ownership Plan and has full power to construe and interpret the WISeKey Share Ownership Plan, establish and amend rules and regulations for the administration thereof, and perform all other actions relating thereto. Under the WISeKey Share Ownership Plan, the members of the board of directors and executive management as well as other employees, advisors, consultants and other persons providing services to us (the "Participants") may be granted options that entitle the respective Participant to receive a certain number of Class B Shares.

Subject in particular to the limitations which may be determined from time to time by the board of directors, options granted to Participants shall vest gradually on a straight line basis over a period of three years from the grant date, provided, however, that the Participant may not exercise any options during the first year of employment or contractual relationship. Our board of directors may set shorter vesting periods for any Participant. The exercise period shall be seven years. Subject to certain exceptions, upon termination of the employment or contractual relationship between us or any of its subsidiaries or by the Participant, all options that are not vested held by the Participant shall be immediately forfeited without value, while vested options may be exercised by the Participant pursuant to the WISeKey Share Ownership Plan during a period of thirty days after the end of the employment or contractual relationship. The board of directors may grant options to employees, members of management and consultants, whose terms and conditions deviate from the WISeKey Share Ownership Plan.

Authorized Shares

As at December 31, 2020, the maximum number of our Class B Shares that may be issued out of our conditional capital under our WISeKey Share Ownership Plan is 6,877,699 Class B Shares based on the share capital of the Company registered with the commercial register of the Canton of Zug as at December 31, 2020.

Under the current plan, as at December 31, 2020, we had a total number of 1,987,330 options outstanding, vested and nonvested, each of which entitles the respective Participant to receive an equal number of Class B Shares. Of these options, 559,886 have been granted to our advisors and 1,427,444 to our employees, contractors or Board members. As of December 31, 2020, no options had been exercised out of our conditional capital under our WISeKey Share Ownership Plan but not yet registered with the commercial register of the Canton of Zug as at December 31, 2020.

Plan Amendment orTermination

Our board of directors has the authority to amend, suspend, or terminate our WISeKey Share Ownership Plan, provided that such action does not materially impair the existing rights of any Participant without such Participant's written consent.

For further information on the compensation of our directors and executive officers, see "Item 6B. Compensation" and for further information on our shareholders and related party transactions policy, see "Item 7. Major Shareholders and Related Party Transactions."

Item 7.	Major Shareholders and Related Party Transactions
A.	Major Shareholders
---	---

The following table sets forth information with respect to the beneficial ownership of our Class A and Class B Shares as at December 31, 2020 for each beneficial owner of 3% or more of our Class A and Class B Shares in line with the Swiss Financial Market Infrastructure Act ("FMIA") and the rules and regulations promulgated thereunder.

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Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include shares issuable upon the exercise of options, warrants or other rights that are immediately exercisable or exercisable within 60 days of April 12, 2021. Percentage ownership calculations for each beneficial owner are based on 40,021,988 fully-paid and outstanding Class A Shares and 59,734,017 fully-paid and outstanding Class B Shares, as issued as at April 12, 2021, increased by the shares issuable to such beneficial owner within 60 days of April 12, 2021.

Name of beneficial owner	Total Class A Shares	Total Class B Shares	Total % of Outstanding Class A Shares^(1)^	Total % of Outstanding Class B Shares^(1)^	% Voting<br><br> <br>Power^(2)^
Carlos Moreira	38,508,733	1,019,179^(3)^	96.2	1.7	39.7
Pierre Vannineuse	-	3,163,102^(4)^	-	5.1	3.1
Terren S. Petzer	-	2,084,132^(5)^	-	3.4	2.1

(1) Based on the total number of fully paid-in outstanding Class A Shares and Class B Shares as issued as at April 12, 2021, increased, for each beneficial owner, by the shares issuable to such beneficial owner within 60 days of April 12, 2021.

(2)       Based on the total number of fully paid-in outstanding Class A Shares and Class B Shares as issued as at April 12, 2021, increased, for each beneficial owner, by the shares issuable to such beneficial owner within 60 days of April 12, 2021, less 214,599 Class B shares held as treasury shares as at April 12, 2021.

(3)       This total includes 44,000 shares and 22,000 options held by Mr. Moreira’s immediate family members. The options are immediately exercisable, subject to the holder not being in a restricted period. Each option gives the holder the right to acquire one Class B share. If Mr. Moreira were to convert all of his Class A Shares into Class B Shares assuming a conversion ratio of 5:1, he would beneficially own 8,720,925 Class B Shares, which would be 12.9% of the total percentage of outstanding Class B Shares increased by the 7,701,746 Class B Shares that would result from the conversion of Mr. Moreira’s Class A Shares and the 22,000 Class B Shares that would result from the conversion of the options held by an immediate family member, and 8.1% of the voting power based on the total number of fully paid-in outstanding Class A Shares and Class B Shares as issued as at April 12, 2021, increased by the 7,701,746 Class B Shares that would result from the conversion of Mr. Moreira’s Class A Shares and the 22,000 Class B Shares that would result from the conversion of the options held by an immediate family member, less 214,599 Class B shares held as treasury shares as at April 12, 2021.

(4)       This total is based on the information known to the Company and includes 2,546,864 Class B Shares that would be immediately issuable or issuable within 60 days of April 12, 2021 in relation to options and convertible instruments beneficially held by Mr. Vannineuse.

(5)       This total is based on the information known to the Company and includes 2,084,132 Class B Shares that would be immediately issuable or issuable within 60 days of April 12, 2021 in relation to options beneficially held by Mr. Petzer.

Regarding significant changes in the percentage ownership held by any major shareholders during the past three years, on incorporation in November 2015, our Chairman and CEO, Carlos Moreira contributed the full capital amount and was therefore the sole owner of the 10,000,000 Class A shares created in our company. On March 02, 2016, Mr. Moreira contributed his shares in WiseTrust SA to us in consideration for our issuance to him of 30,021,988 Class A Shares, which brought his total shareholding in our company to 40,021,988 Class A Shares (see below Item 7. Major Shareholders and Related Party Transactions – B. Related Party Transactions). As a result, prior to the reverse acquisition on March 22, 2016 whereby WISeKey International Holding AG acquired the operations of WISeKey SA, Carlos Moreira held 100% of the share capital and voting rights of the 'empty shell' company WISeKey International Holding Ltd consisting of 40,021,988 Class A Shares. With the reverse acquisition, Carlos Moreira converted his shareholding in WISeKey SA into WISeKey International Holding Ltd Class B Shares at the same terms and conditions of exchange offered to all WISeKey SA shareholders, which increased his shareholding in our company by 160,700 Class B Shares representing 1.2% of outstanding Class B Shares and bringing his voting rights to 74.3% as at March 22, 2016. Then upon the listing of our company on March 31, 2016, Carlos Moreira entered into a lock-up agreement with several shareholders of Class B Shares whereby Mr. Moreira exchanged 11,421,320 of his Class A Shares for 2,284,264 Class B Shares corresponding to a ratio of 5:1. This brought Mr. Moreira's holding respectively to 71.5% of outstanding Class A Shares and 16.6% of outstanding Class B Shares, and his voting right to 56.8%, after the listing, as at March 31, 2016. Simultaneously, each of the holders of Class A Shares entered into an agreement with the Company, according to which such shareholder had given an undertaking not to sell or otherwise dispose of the Class A Shares. During the year 2017, Mr. Moreira carried out another exchange of 1,956,602 Class B Shares for 9,783,015 Class A Shares, bringing his ownership to 95.9% of outstanding Class A Shares and 2.0% of outstanding Class B Shares, and his voting right to 60.2% as at December 31, 2017. In 2018, a combination of exchange of Class B Shares for Class A Shares and sale of Class B shares to the company as debt repayment changed Mr. Moreira's shareholding to 38,508,733 Class A Shares and 259,995 Class B Shares, respectively 96.2% of outstanding Class A Shares and 0.9% of outstanding Class B Shares. In 2019, Mr Moreira was granted 693,184 options under the company’s ESOP. In 2020, Mr. Moreira exercised the 693,184 ESOP options he held bringing Mr. Moreira's shareholding to the position disclosed in the above table as at December 31, 2020.

Our major shareholder does not have different voting rights than other shareholders of the same class of shares.

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As at December 31, 2020, based on the list of registered shareholders, there were 5 record holders of our Class B shares showing as residing in the U.S., holding 7,658,618 of our Class B Shares, representing approximately 16.1% of our outstanding Class B Shares. This includes 7,182,726 Class B Shares held under the name of The Bank of New York Mellon, the U.S. depositary bank for our ADSs, for which we have no information on the country of residency of the beneficial owners of such ADSs.

We are not aware of any arrangement that may, at a subsequent date, result in a change of our control.

B.	Related Party Transactions

Our Formation

WISeKey International Holdings Ltd. was constituted as our parent company through a series of transactions commencing in March 2016.

Contribution ofShares of WiseTrust SA

On incorporation in November 2015, our Chairman and CEO, Carlos Moreira contributed the full capital amount and was therefore the sole owner of the 10,000,000 Class A Shares created in our Company.

As of March 01, 2016, Carlos Moreira held 100% of the equity interests in WISeTrust SA, a company that held the following assets:

·	a 19.4% interest in WISeKey SA, our predecessor;
·	the U.S. distribution rights to technology offered by WISeKey SA; and
---	---
·	a 50% equity interest in WISeKey USA, Inc., an operating company incorporated in Delaware, with<br>a focus on business opportunities in the United States, with the other 50% interest being held by WISeKey SA.
---	---

On March 02, 2016, Mr. Moreira contributed his shares in WiseTrust SA to us in consideration for our issuance to him of 30,021,988 Class A Shares, which brought his total shareholding in our company to 40,021,988 Class A Shares. The valuation of WiseTrust SA was based on its net assets as at December 31, 2015.

In March 2016, WISeKey International Holding Ltd acquired the entire equity interest of WISe Trust SA against the issuance of 40,021,988 new shares, which, under the Articles, are now Class A Shares. As a result, the Company acquired:

·	the U.S. distribution rights pertaining to the technology offered by WISeKey;
·	WISeTrust SA's 50% equity interest in WISeKey USA, Inc., an operating company incorporated in Delaware,<br>with a focus on business opportunities in the United States; the other 50% interest in WISeKey USA, Inc., is held by WISeKey SA.
---	---
·	WISeTrust SA's entire equity interest in WISeKey SA, which at the time of the contribution represented<br>approximately 19.4% of WISeKey SA's issued share capital.
---	---

WISeTrust SA was originally the founders company incorporated before WISeKey SA and majority shareholders of WISeKey SA. When the founders incorporated WISeKey, they transferred the international distribution rights pertaining to the technology to WISeKey SA with the exclusion of the US territory. Now WISeKey International Holding Ltd owns 100% of all distributions rights.

________________________

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Structure of the company pre-contribution of the WiseTrust SA shares:

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Structure of the company post-contribution of the WiseTrust SA shares:

Contribution ofShares of WISeKey SA

In March 2016, immediately following the contribution of shares of WiseTrust SA by Carlos Moreira described above, the holders of 90.9% of the remaining outstanding shares of WISeKey SA, with a nominal value of CHF 0.01 per share, contributed their shares to us in exchange for 13,234,027 of our Class B Shares with a nominal value of CHF 0.05 per share. This represented an exchange ratio of one of our Class B Shares for each five shares of WISeKey SA contributed, corresponding to the ratio of the nominal value of one WISeKey SA share to the nominal value of one of our Class B Shares.

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The structure of our company after the March 2016 share exchange described above was as follows:

In September 2017, following bilateral negotiations, the holders of 4.51% of the shares of WISeKey SA that had not previously exchanged their shares contributed their shares to us in exchange for 841,069 of our Class B Shares. This represented an exchange ratio of one of our Class B Shares for each five shares of WISeKey SA. This ratio was determined based on a fairness opinion established by an independent financial advisor by applying the "Praktikermethode". According to this methodology, (i) the valuation of our assets and (ii) the revenues of each of our subsidiaries were valued relative to our total market capitalization as at September 20, 2017, and our total revenues for the six months ended June 30, 2017, respectively. The asset and revenues value have been weighted appropriately, and based on this relative value, the total equity value of WISeKey SA has been determined. The total equity value of WISeKey SA amounted to 22.4% of our market capitalization, which supported the exchange ratio of 1:5. Nearly all of these shareholders committed not to transfer, sell, or otherwise dispose of the Class B Shares obtained as a result of the share exchange until June 30, 2018.

In the year ending December 31, 2019, the holders of 0.23% of the shares of WISeKey SA that had not previously exchanged their shares contributed their shares to us in exchange for 60,394 of our Class B Shares. The exchange ratio of our Class B Shares for WISeKey SA shares was calculated based on the company’s capitalization at the time of the transaction.

In the year ending December 31, 2020, the holder of less than 0.01% of the shares of WISeKey SA that had not previously exchanged their shares contributed their shares to us in exchange for 16,323 of our Class B Shares. The exchange ratio of our Class B Shares for WISeKey SA shares was calculated based on the company’s capitalization at the time of the transaction.

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The structure of our company after the 2020 share exchange described above was as follows:

We do not currently hold the remaining 4.25% of the outstanding equity interest in WISeKey SA which is held by approximately 30 shareholders. We may elect to acquire these shares in the future through further bilateral negotiations or through a squeeze-out merger pursuant to the Swiss Merger Act. The exchange ratio in connection with either such transaction would be determined at the time.

The table below includes a brief description of our group subsidiaries:

					% ownership	% ownership
Group Company Name	Country of	Year of	Share Capital		as at December	as at December 31,	Nature of business
	incorporation	incorporation			31, 2020	2019
WISeKey SA	Switzerland	1999	CHF	933,436	95.75%	95.58%	Main operating company . Sales and R&D services
WISeKey Semiconductors SAS	France	2010	EUR	1,298,162	100.0%	100.0%	Chip manufacturing, sales & distribution
WiseTrust SA	Switzerland	1999	CHF	680,000	100.0%	100.0%	Non-operating investment company
WISeKey ELA SL	Spain	2006	EUR	4,000,000	100.0%	100.0%	Sales & support
WISeKey SAARC Ltd	U.K.	2016	GBP	100,000	51.0%	51.0%	Non trading
WISeKey USA Inc*	U.S.A	2006	USD	6,500	100% *	100% *	Sales & support
WISeKey India Private Ltd**	India	2016	INR	1,000,000	45.9%	45.9%	Sales & support
WISeKey IoT Japan KK	Japan	2017	JPY	1,000,000	100.0%	100.0%	Sales & distribution
WISeKey IoT Taiwan	Taiwan	2017	TWD	100,000	100.0%	100.0%	Sales & distribution
WISeCoin AG	Switzerland	2018	CHF	100,000	90.0%	90.0%	Sales & distribution
WISeKey Equities AG	Switzerland	2018	CHF	100,000	100.0%	100.0%	Financing, Sales & distribution
WISeCoin France R&D Lab SAS	France	2019	EUR	10,000	90.0%	90.0%	Research & development
WISeKey Semiconductors GmbH	Germany	2019	EUR	25,000	100.0%	100.0%	Sales & distribution
WISeKey Arabia - Information Technology Ltd	Saudi Arabia	2019	SAR	200,000.00	51.0%	51.0%	Sales & distribution
WiseAI AG	Switzerland	2020	CHF	100,000	51.0%	not incorporated	Sales & distribution

* 50% owned by WISeKey SA and 50% ow ned by WiseTrust SA

** 88% owned by WISeKey SAARC w hich is controlled by WISeKey International Holding AG

Sale of Class AShares

In September 2017 and February 2018, the board of directors released previous holders of Class A Shares from the contractual transfer restrictions existing pursuant to shareholders agreement to enable such holders to enter into private transactions with Carlos Moreira to exchange their Class A Shares for Class B Shares held by Carlos Moreira. The table below shows the composition of the holders of Class A Shares on the basis of the execution of these private share exchange transactions.

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Name of Shareholder	Number of Class<br><br> <br>A Shares Held		% of Share Capital Registered in the Commercial Register*			% Voting Rights**
Philippe Doubre		701,695		0.38	%		0.8	%
Dourgam Kummer		626,085		0.34	%		0.8	%
Carlos Moreira		38,508,733		20.91	%		46.5	%
Peter Ward		185,475		0.10	%		0.2	%
Total as a Group		40,021,988		21.73	%		48.3	%

*        Based on the total number of fully paid-in outstanding Class A Shares and Class B Shares, as reflected in our share capital registered with the commercial register of the Canton of Zug as at December 31, 2020.

**       Based on the total number of fully paid-in outstanding Class A Shares and Class B Shares, as reflected in our share capital registered with the commercial register of the Canton of Zug as at December 31, 2020, less 4,783,135 Class B shares held as treasury shares as at December 31, 2020.

Each of the above holders of Class A Shares is bound by an agreement with us, according to which such shareholder has made the undertaking not to sell or otherwise dispose of Class A Shares. However, each of the above shareholders has the right to request that at an item be included on the agenda of our annual general meeting of shareholders, according to which Class A Shares will be, at the discretion of each holder of Class A Shares, converted into Class B Shares, which are not subject to the agreed transfer restrictions.

Relationship withthe International Organization for Secure Electronic Transactions

The Organisation Internationale pour la Sécurité des Transactions Electroniques, or OISTE, is a Swiss non-profit foundation that owns the cryptographic rootkey we use. OISTE is acting as a trusted third party and not-for-profit entity in charge of ensuring that the Root of Trust remains neutral and trusted. Two members of the foundation board of OISTE are also board members of our company: Carlos Moreira and Philippe Doubre. The board of the OISTE foundation acts as a supervisory authority to ensure that the foundation acts in accordance with its purpose, and complies with its articles of association and Swiss law. It also reviews the audited annual accounts and the annual report of the foundation. Under Swiss law, the members of the board of a Swiss non-profit foundation are required to ensure that OISTE, as a Swiss non-profit foundation, is independent of control by any third party.

The OISTE foundation's board members are elected by a majority of the current active board members and, once elected, the member serves for an indeterminate period of time. The OISTE foundation has a full General Corporate Governance Manual which covers the distribution of responsibilities within the management structure, executive representation inclusive of the foundation Board Members and Policy Approval Authority Board Members, and the signing authorities of the foundation.

The OISTE foundation has no commercial activities and it uses its funding to organize events and launch Internet security projects with the UN, the World Economic Forum and other NGOs. The OISTE foundation board members do not make any decisions on behalf of the OISTE foundation and serve as guardians to ensure the foundation complies with its articles of association and carries out activities towards its stated purpose. We believe that this ensures that no conflicts of interest may arise for the three board members of WISeKey who serve as board members of the OISTE foundation.

The OISTE foundation has a second board, the “Policy Approval Authority Board”. The Policy Approval Authority Board is nominated by the foundation’s board or directors and serves as the policy approval and enforcement entity for a specific domain within the OISTE RootKey. The Policy Approval Authority Board is represented by members of the network of organizations using OISTE RootKey to secure their Certifications Authorities (“CAs”) and create interoperability between other PKI Domains and CAs external to the network. This policy represents Medium Assurance and Medium-Hardware Assurance Levels for public key digital certificates to ensure that the participating relying party can be certain of the identity binding between the public key and the individual whose subject name is cited in the certificate. In addition, it also reflects how well the relying party can be certain that the individual whose subject name is cited in the certificate is controlling the use of the private key that corresponds to the public key in the certificate, and how securely the system which was used to produce the certificate and (if appropriate) deliver the private key to the subscriber performs its task. This OISTE Policy Approval Authority Board is consistent with the Internet Engineering Task Force (IETF) Public Key Infrastructure X.509 (IETF PKIX) RFC 3647, Certificate Policy and Certification Practices Statement Framework. The Policy Approval Authority Board does not have any involvement in the appointment of members of the OISTE foundation’s board of directors. Pedro Fuentes, a member of the Policy Approval Authority Board is a related party of the Company because he is a member of senior management of the Company.

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In 2001, OISTE granted us a perpetual license to exclusively use the cryptographic rootkey and develop technologies and processes based on OISTE's trust model. The perpetual license agreement can only be terminated under limited circumstances, including if we were to move from the trust model developed by OISTE and/or changing the location of the Root of Trust from Switzerland to another country. We have to pay royalties to OISTE for the use of the cryptographic rootkey on the basis of the number of certificates issued to end users. Certain annual minimum payments apply.

The Collaboration Agreement signed between the OISTE and WISeKey SA on June 20, 2018 provides that:

a.	WISeKey shall be the preferred service provider of OISTE for the fulfilment of the OISTE objectives.<br>WISeKey shall benefit from the right to commercially exploit the Root Cryptographic Key Pairs and the associated Root Certification<br>Authorities held by OISTE, subject to the terms and conditions set forth in the Collaboration Agreement.
b.	WISeKey is the technical manager of the OISTE foundation for Global Cryptographic ROOTS Key, the<br>global certification authorities as well as the digital certificates for people, servers and objects as well as the storage of<br>the four Global Cryptographic ROOTS Key in WISeKey's Data Centre Bunker.
---	---

Those professional services and storage facilities are against a payment of a fee specified in the Collaboration Agreement dated June 20, 2018.

c.	WISeKey is appointed as operator with an exclusive for the duration of this Collaboration Agreement.
d.	WISeKey is granted a non-sublicensable worldwide license to commercially exploit the Root Cryptographic<br>Key Pair(s) by providing certification services in conformity with the OISTE objectives.
---	---
e.	OISTE is entitled to the following yearly fees (excl taxes):
---	---
i.	Management Fee: CHF 120,000 in 4 equal instalments of<br>CHF 30'000, due and payable at the beginning of each quarter.
---	---
ii.	License Fee: CHF 96,000 in 4 equal instalments of CHF<br>24'000, due and payable at the beginning of each quarter.
---	---
iii.	Royalty Fee: a certain percentage (the “Percentage”)<br>of any certificate fees collected by WISeKey for the issuance of certificates to end users (the “Certificate Fees”)<br>on any given year since the signature of this collaboration agreement (each, a “Contract Year”). The Percentage shall<br>be 2.50%, to be reduced by 0.25% for each tranche of Certificate Fees of CHF 1'000'000 in any given Contract Year, until it reaches<br>1.50%;
---	---
1.	CHF 1'000'000 at 2.50% = CHF 25'000.00
---	---
2.	CHF 2'000'000 at 2.25% = CHF 45'000.00
---	---
3.	CHF 3'000'000 at 2.00% = CHF 60'000.00
---	---
4.	CHF 4'000'000 at 1.75% = CHF 70'000.00
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5.	CHF 5'000'000 at 1.50% = CHF 75'000.00

In the years ended December 31, 2020, December 31, 2019 and December 31, 2018, OISTE invoiced WISeKey respectively CHF 351,125 (USD 374,300), CHF 217,923 (USD 219,332) and CHF 216,000 (USD 221,000).

In 2020 and 2019, WISeKey charged OISTE fees of, respectively, CHF 39,918 (USD 42,552) and CHF 138,610 (USD 139,506) for the facilities and personnel hosted by WISeKey SA on behalf of OISTE. During the year ended December 31, 2018, WISeKey waived the fees for these hosting services.

IndemnificationAgreements

We intend to enter into indemnification agreements with our directors and executive officers. The indemnification agreements and our Articles require us to indemnify our directors and executive officers to the fullest extent permitted by law.

Related-Party TransactionsPolicy

Swiss law does not have a specific provision regarding conflicts of interest. However, the Swiss Code of Obligations (“CO”) contains a provision that requires our directors and executive management to safeguard the company's interests and imposes a duty of loyalty and duty of care on our directors and executive management. This rule is generally understood to disqualify directors and executive management from participation in decisions that directly affect them. Our directors and executive officers are personally liable to us for breach of these provisions. In addition, Swiss law contains provisions under which directors and all persons engaged in the company's management are liable to the company, each shareholder and the company's creditors for damages caused by an intentional or negligent violation of their duties. Furthermore, Swiss law contains a provision under which payments made to any of the company's shareholders or directors or any person associated with any such shareholder or director, other than payments made at arm's length, must be repaid to the company if such shareholder, director or associated person acted in bad faith.

C.	Interests of experts and counsel

Not applicable.

Item 8.	Financial Information
A.	Consolidated Financial Statements and Other Financial Information
---	---

For a list of all financial statements filed as part of the annual report, see "Item 17. Financial Statements". For information on our dividend policy, see "Item 10B. Memorandum and Articles of Association".

Legal Proceedings

We are not aware of any legal or arbitration proceedings against our company or any of its affiliates.

B.	Significant Changes

For information on any significant changes that may have occurred since the date of our annual financial statements, see "Item 5. Operatingand Financial Review and Prospects” and Note 40 of our consolidated financial statements as at December 31, 2020.

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Item 9.	The Listing
A.	Listing Details
---	---

A discussion of the offering and listing details can be found under “Markets” below.

B.	Plan of Distribution

Not applicable.

C.	Markets

Our Class B Shares have been trading under the symbol "WIHN" on the SIX since March 2016. Our ADSs were quoted on the OTCQX under the symbol "WIKYY" from May 2018 until December 2018 and have been traded on the NASDAQ Capital Market since December 2019 under the symbol "WKEY."

Our Class B Shares, par value CHF 0.05 per share issued and outstanding, have been trading under the symbol "WIHN" on the SIX since March 2016. Our ADSs were quoted on the Over-the-Counter market under the symbol "WIKYY" from May 2018 until December 2018 and have been traded on the NASDAQ Capital Market since December 2019 under the symbol "WKEY."

On April 15, 2021 the closing price of our Class B Shares on the SIX was CHF 1.825 per ordinary share and the closing price of the ADS on the NASDAQ Capital Market was USD 9.36 per ADS.

D.	Selling Shareholders

Not applicable.

E.	Dilution

Not applicable.

F.	Expenses of the Issue

Not applicable.

Item 10.	Additional Information
A.	Share Capital
---	---

Not applicable.

B.	Memorandum and Articles of Association

Our Articles of Association provide that each share, irrespective of its par value and its class, has one vote. Economically, the Class A Shares and the Class B Shares are pari passu in all respects to each other, including in the entitlement to dividends, in the liquidation proceeds in the case of our liquidation and to preemptive rights.

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Class A Shares have a par value (CHF 0.01 per share) that is five times lower than the par value of Class B Shares (CHF 0.05 per share). While dividends and other distributions are made proportionally to the par value of the respective shares, each Class A Share and each Class B Share carries one vote at a general meeting of shareholders, irrespective of the difference in par value of Class A Shares and Class B Shares.

Approval of matters at general meetings of shareholders requires a majority of the shares present on the basis of one vote per share (each Class A Share and each Class B Shares having one vote) except that certain matters require approval by a majority of the par value of the shares represented at the general meeting (each Class A Share having a par value of CHF 0.01 per share and each Class B Share having a par value of CHF 0.05 per share).

Class A Shares

The Class A Shares are registered shares with a par value of CHF 0.01 each. The Class A Shares are fully paid-up. The Class A Shares have been issued in uncertificated form in accordance with article 973c of the Swiss Code of obligations (the “CO”) as uncertificated securities (Wertrechte), which have been entered into the main register of the SIS (SIX SIS Ltd - the Swiss securities settlement system) and constitute intermediated securities within the meaning of the Federal Act on Securities held with an Intermediary of October 3, 2008, as amended (the “FISA”) (Bucheffektengesetz). In accordance with article 973c of the CO, we maintain a register of uncertificated securities (Wertrechtebuch).

Each of the holders of our Class A Shares has signed a shareholder agreement with the Company pursuant to the terms of which the holder of the Class A Shares undertakes (i) not to create or permit the creation of any encumbrances over the Class A Shares, and (ii) not to transfer the Class A Shares except to a “permitted transferee” (which is defined to include certain family members and affiliates) of the shareholder who in turn agree to be bound by the shareholder agreement or to sign a new shareholder agreement with the Company. In addition, the holder of the Class A shares has the right to request the Company to convert the Class A Shares into Class B Shares (by putting the requested conversion on the agenda of the next annual meeting of the Company’s shareholders). The conversion of Class A shares into Class B shares is subject to approval by the Company’s shareholders holding Class A Shares and Class B Shares. The holders of Class A shares who have signed the shareholder agreement have undertaken to vote in favor of requests for conversions of Class A Shares into Class B Shares. Upon conversion, each five (5) Class A Shares are converted into one (1) Class B Share. Once Class A Shares are converted into Class B Shares, the Class B Shares are no longer subject to the restrictions of the shareholder agreement and may be transferred on the same terms as other Class B Shares.

Class B Shares

The Class B Shares are registered shares with a par value of CHF 0.05 each. The Class B Shares are fully paid-up. Except for 88,370 Class B Shares, which have been issued in certificated form and not been dematerialized hereof, the Class B Shares have been issued in uncertificated form in accordance with article 973c of the CO as uncertificated securities (Wertrechte), which have been entered into the main register of the SIS and constitute intermediated securities within the meaning of the FISA. In accordance with article 973c of the CO, we maintain a register of uncertificated securities (Wertrechtebuch).

So long as our shares constitute intermediated securities within the meaning of the FISA, the person deemed to be the holder of any share will be the person holding such share in a securities account in his, her or its own name or, in the case of intermediaries, the intermediary holding such share in a securities account that is in his, her or its name. No share certificates will be issued, and share certificates will not be available for individual physical delivery. A shareholder may, however, at any time request us to deliver an attestation of the number of shares held by him, her or it, as reflected in the share register.

So long as our shares constitute intermediated securities within the meaning of the FISA, shares may be transferred by crediting the relevant transferred shares to a securities account of the transferee or as otherwise permitted under applicable law. Class B Shares traded on the SIX will settle and clear through SIS.

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Ordinary CapitalIncrease, Authorized Share Capital and Conditional Share Capital

Under Swiss law, we may increase our share capital (Aktienkapital) with a resolution of the general meeting of shareholders (ordinary capital increase) that must be carried out by the board of directors within three months in order to become effective. Under our Articles of Association (the "Articles"), in the case of subscription and increase against payment of contributions in cash, when shareholders' statutory pre-emptive rights are safeguarded, a resolution passed by an absolute majority of the votes represented at the general meeting of shareholders is required. In the case of subscription and increase against contributions in kind or to fund acquisitions in kind, when shareholders' statutory pre-emptive rights are withdrawn or where transformation of reserves into share capital is involved, a resolution passed by two-thirds of the shares represented at a general meeting of shareholders and the absolute majority of the par value of the shares represented is required.

Furthermore, under the Swiss Code of Obligations (the "CO"), our shareholders, by a resolution passed by two-thirds of the shares present or represented at a general meeting of shareholders and the absolute majority of the par value of the shares present or represented, may authorize our board of directors to issue shares of a specific aggregate par value up to a maximum of 50% of the share capital registered in the commercial register in the form of:

·	conditional share capital (bedingtes Aktienkapital) for the purpose of issuing shares in<br>connection with, among other things, (1) option and conversion rights granted in connection with warrants and convertible bonds<br>of ours or one of our subsidiaries or (2) grants of rights to employees, members of our board of directors or consultants or our<br>subsidiaries to subscribe for new shares (conversion or option rights); or
·	authorized share capital (genehmigtes Kapital) to be utilized by our board of directors<br>within a period determined by the shareholders but not exceeding two years from the date of the shareholder approval.
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Pre-emptive Rights

Pursuant to the CO, shareholders have pre-emptive rights (Bezugsrechte) to subscribe for new issuances of shares in proportion to the respective par values of their holdings. With respect to conditional capital in connection with the issuance of conversion rights, convertible bonds or similar debt instruments, shareholders have advance subscription rights (Vorwegzeichnungsrechte) for the subscription of conversion rights, convertible bonds or similar debt instruments in proportion to the respective par values of their holdings.

A resolution passed at a general meeting of shareholders by two-thirds of the shares represented and the absolute majority of the par value of the shares represented may authorize our board of directors to withdraw or limit pre-emptive rights or advance subscription rights in certain circumstances for valid reasons.

If pre-emptive rights are granted, but not exercised, our board of directors may allocate the pre-emptive rights as it elects, subject to the particulars of the relevant shareholders' resolution or board resolution.

With respect to our authorized share capital, our board of directors is authorized by our Articles to withdraw or to limit the pre-emptive rights of shareholders, and to allocate them to third parties or to us, in the event that the newly issued shares are used for the purpose of:

·	issuing new shares if the issue price of the new shares is determined by reference to the market<br>price;
·	the acquisition of an enterprise, parts of an enterprise or participations or for new investment<br>projects or for purposes of financing or refinancing any such transactions;
---	---
·	broadening the shareholder constituency in certain financial or investor markets or in connection<br>with the listing of new shares on domestic or foreign stock exchanges;
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·	national and international offerings of shares for the purpose of increasing the free float or<br>to meet applicable listing requirements;
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·	the participation of strategic partners;
·	an over-allotment option ("greenshoe") being granted to one or more financial<br>institutions in connection with an offering of shares;
---	---
·	the participation of directors, officers, employees, contractors, consultants of, or other persons<br>providing services to the Company or a group company; or
---	---
·	raising capital in a fast and flexible manner which could only be achieved with great difficulty<br>without exclusion of the pre-emptive rights of the existing shareholders.
---	---

Our Authorized ShareCapital

Under our Articles in effect as of December 31, 2020, our board of directors is authorized at any time until May 15,2022, to increase our share capital by a maximum aggregate amount of CHF 390,445.30 through the issuance of not more than 7,808,906 shares, which would have to be fully paid-in, with a par value of CHF 0.05 each.

Increases in partial amounts are permitted. Our board of directors has the power to determine the type of contributions, the issue price and the date on which the dividend entitlement starts.

Our board of directors is also authorized to withdraw or limit pre-emptive rights as described above. This authorization is exclusively linked to the particular available authorized share capital set out in the respective article. If the period to increase the share capital lapses without having been used by our board of directors, the authorization to withdraw or to limit the pre-emptive rights lapses simultaneously with such capital.

Our ConditionalShare Capital

Our conditional share capital as registered with the commercial register of the Canton of Zug as at December 31, 2020 amounts to CHF 390,201.50, corresponding to 7,804,030 new Class B Shares, whereby CHF 46,316.55 of the conditional share capital is available for the issuance of up to 926,331 Class B Shares in connection with rights granted to third parties or shareholders in connection with Rights Bearing Obligations (as defined in art. 4b para. 1(a) of the Articles) and CHF 343,884.95, corresponding to 6,877,699 Class B Shares, is available for the issuance of Class B Shares in connection with the issuance of Class B Shares or Rights-Bearing Obligations granted to the members of the board of directors, members of the executive management, employees, consultants or other persons providing services to us or another company of the Group (art. 4b para. 1 (b) of the Articles).

General Meetingof Shareholders

The general meeting of shareholders is our supreme corporate body. Under Swiss law, ordinary and extraordinary general meetings of shareholders may be held. Under Swiss law, an ordinary general meeting of shareholders must be held annually within six months after the end of a corporation's financial year. In our case, this means on or before June 30 of any calendar year.

The following powers are vested exclusively in the general meeting of shareholders:

·	adopting and amending our Articles;
·	electing the members of the board of directors, the chairman of the board of directors, the members<br>of the nomination and compensation committee, the auditors and the independent proxy;
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·	approving the management report (annual report), the annual statutory financial statements and<br>consolidated financial statements;
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·	approving the appropriation of earnings, including the payments of dividends and any other distributions<br>of capital to shareholders;
·	discharge of the members of the board of directors and the members of the executive management<br>from liability for their business conduct during the previous fiscal year; and
---	---
·	the adoption of resolutions that are reserved to the general meeting of shareholders by law or<br>the Articles or that are submitted to the general meeting of the shareholders by the Board (unless the relevant matter is within<br>the exclusive competence of the board of directors pursuant to Swiss law).
---	---

An extraordinary general meeting of shareholders may be called by a resolution of the board of directors or, under certain circumstances, by our auditor. In addition, the board of directors is required to convene an extraordinary general meeting of shareholders if shareholders representing at least 10% of the share capital or, according to the views expressed in legal writing which is a persuasive authority in Switzerland, holding shares with an aggregate par value of CHF 1 million, request such general meeting of shareholders in writing. Such request must set forth the items to be discussed and the proposals to be acted upon. The board of directors must convene an extraordinary general meeting of shareholders and propose financial restructuring measures if, based on our stand-alone annual statutory balance sheet, half of our share capital and reserves are not covered by our assets.

Voting and QuorumRequirements

Dual Class VotingRights

Each share carries one vote at a general meeting of shareholders, irrespective of the difference in par value of Class A Shares (CHF 0.01 per share) and Class B Shares (CHF 0.05 per share). Our Class A Shares have a lower par value (CHF 0.01) than our Class B Shares (CHF 0.05) but have same voting right as the higher par value Class B Shares, namely one (1) vote per share. This means that, relative to their respective per share contribution to the Company’s capital, the holders of our Class A Shares have a greater relative per share voting power than the holders of our Class B Shares for matters that require approval on the basis of a specified majority of shares present at the shareholders meeting.

Some matters however, as further described below under “Voting Requirements,” require a vote on the basis of par value associated with the shares present at the meeting. To the extent shareholder resolutions require, as the relevant majority standard, a majority of the par value of the shares present at the meeting, Class A Shares have less voting power than Class B Shares.

Voting rights may be exercised by registered shareholders or by a duly appointed proxy of a registered shareholder or nominee, which proxy need not be a shareholder up to a specific qualifying day before the relevant general meeting (the "Record Date") designated by the board of directors.

The Articles do not limit the number of shares that may be voted by a single shareholder. Holders of treasury shares, whether ours or one of our majority-owned subsidiaries, will not be entitled to vote at general meetings of the shareholders.

Voting Requirements

Shareholder resolutions and elections (including elections of members of the board of directors) require the affirmative vote of an absolute majority of the votes represented (in person or by proxy) at a general meeting of shareholders (each Class A Share and each Class B Share having one vote), unless otherwise stipulated by law or our Articles. The following matters require approval by a majority of the par value of the shares present or represented at the general meeting (each Class A Share having a par value of CHF 0.01 per share and each Class B Share having a par value of CHF 0.05 per share):

·	electing our auditor;
·	appointing an expert to audit our business management or parts thereof;
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·	adopting any resolution regarding the instigation of a special investigation; and
·	adopting any resolution regarding the initiation of a derivative liability action.
---	---

Under Swiss corporate law and our Articles, approval by two-thirds of the shares present or represented at the meeting, and by the absolute majority of the par value of the shares present or represented is required for:

·	amending our corporate purpose;
·	creating or cancelling shares with preference rights;
---	---
·	restricting the transferability of registered shares;
---	---
·	restricting the exercise of the right to vote or the cancellation thereof;
---	---
·	creating authorized or conditional share capital;
---	---
·	increasing the share capital out of equity, against contributions in kind or for the purpose of<br>acquiring specific assets and granting specific benefits;
---	---
·	limiting or withdrawing shareholder's pre-emptive rights;
---	---
·	relocating our registered office;
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·	our dissolution or liquidation; and
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·	transactions among corporations based on Switzerland's Federal Act on Mergers, Demergers, Transformations<br>and the Transfer of Assets of 2003, as amended (the "Swiss Merger Act") including a merger, demerger or conversion of<br>a corporation.
---	---

In accordance with Swiss law and generally accepted business practices, our Articles do not provide attendance quorum requirements generally applicable to general meetings of shareholders.

Notice

General meetings of shareholders must be convened by the board of directors at least 20 calendar days before the date of the meeting. The general meeting of shareholders is convened by way of a notice appearing in our official publication medium, the Swiss Official Gazette of Commerce. Registered shareholders may also be informed by mail. The notice of a general meeting of shareholders must state the items on the agenda, the proposals to be acted upon and, in case of elections, the names of the nominated candidates. No resolutions may be passed at a shareholders meeting concerning agenda items for which proper notice was not given. This does not apply, however, to proposals made during a shareholders meeting to convene an extraordinary shareholders meeting or to initiate a special investigation. No previous notification will be required for proposals concerning items included on the agenda or for debates as to which no vote is taken. Under the CO, a general meeting of shareholders for which a notice of meeting has been duly published may not be adjourned without publishing a new notice of meeting.

Agenda Requests

Pursuant to Swiss law, one or more shareholders whose combined shareholdings represent the lower of (1) one tenth of the share capital or (2) an aggregate par value of at least CHF 1,000,000, may request that an item be included in the agenda for a general meeting of shareholders. To be timely, the shareholder's request must be received by us at least forty-five (45) calendar days in advance of the meeting. No previous notification will be required for proposals concerning items included on the agenda or for debates as to which no vote is taken.

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Our business report, including the Company's financial information, the compensation report and the auditor's reports thereon must be made available for inspection by the shareholders at our registered office no later than 20 calendar days prior to the ordinary general meeting. Shareholders of record must be notified of this in writing.

Dividends and OtherDistributions

We have never declared or paid cash dividends to our shareholders and we do not intend to pay cash dividends in the foreseeable future. However, on July 9, 2019, we commenced a public share repurchase program, whereby repurchase shares will be used for potential acquisitions and/or other future M&A transactions. On February 3, 2020, we expanded our share repurchase program to include our ADSs. Shares and ADSs repurchased under our repurchase program may be used as consideration in future potential M&A transactions and for (1) our existing employee share incentive program, (2) convertible loans entered into by us, and (3) on demand equity lines available to us. Otherwise, we currently intend to reinvest any earnings in developing and expanding our business. Any future determination relating to our dividend policy will be at the discretion of our board of directors.

Our board of directors may propose to shareholders that a dividend or other distribution be paid but cannot itself authorize the distribution. Under our Articles, dividend payments require a resolution passed by an absolute majority of the votes present or represented at a general meeting of shareholders. In addition, our auditor must confirm that the dividend proposal of our board of directors conforms to Swiss statutory law and our Articles.

Under Swiss law, we may pay dividends only if we have sufficient distributable profits brought forward from the previous business years, or if we have distributable reserves, each as evidenced by our audited stand-alone statutory balance sheet prepared pursuant to Swiss law, and after allocations to reserves required by Swiss law and the Articles have been deducted. We are not permitted to pay interim dividends out of profit of the current business year. Dividends and other distributions are made relative to nominal value of the shares.

Dividends paid on our shares out of available earnings are subject to Swiss withholding tax. See Item 10.E. Taxation.

Distributions out of issued share capital (i.e. the aggregate par value of our issued shares) may be made only by way of a share capital reduction. Such a capital reduction requires a resolution passed by an absolute majority of the shares present or represented at a general meeting of shareholders. The resolution of the shareholders must be recorded in a public deed and a special audit report must confirm that claims of our creditors remain fully covered despite the reduction in the share capital recorded in the commercial register. The share capital may be reduced below CHF 100,000 only if and to the extent that at the same time the statutory minimum share capital of CHF 100,000 is reestablished by sufficient new fully paid-up capital. Upon approval by the general meeting of shareholders of the capital reduction, the board of directors must give public notice of the capital reduction resolution in the Swiss Official Gazette of Commerce three times and notify creditors that they may request, within two months of the third publication, satisfaction of or security for their claims. The reduction of the share capital may be implemented only after expiration of this time limit.

Distributable reserves are booked either as "retained earnings" (Bilanzgewinn; Gewinnvortrag) or as reserves from capital contributions (Kapitaleinlagereserven). Under the CO, if our general reserves (réserve générale) amount to less than 20% of our share capital recorded in the commercial register (i.e., 20% of the aggregate par value of our issued capital), then at least 5% of our annual profit must be retained as general reserves. In addition, if our general reserves amount to less than 50% of our share capital, 10% of the amounts distributed beyond payment of a dividend of 5% must be retained as general reserves. The CO permits us to accrue additional general reserves. Further, a purchase of our own shares (whether by us or a subsidiary) reduces the equity and thus the distributable dividends in an amount corresponding to the purchase price of such own shares. Finally, the CO under certain circumstances requires the creation of revaluation reserves which are not distributable.

Dividends are usually due and payable shortly after the shareholders have passed a resolution approving the payment, but shareholders may also resolve at the annual general meeting of shareholders to pay dividends in quarterly or other instalments. The Articles provide that dividends that have not been claimed within five years after the due date become our property and are allocated to the general reserves. Dividends paid are subject to Swiss withholding tax, all or part of which can potentially be reclaimed under the relevant tax rules in Switzerland or double taxation treaties concluded between Switzerland and foreign countries. Distributions of cash or property that are based upon a capital reduction or that are made out of statutory capital reserves (Kapitaleinlage) are not subject to Swiss withholding tax.

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Transfer of Shares

Our shares constitute intermediated securities (Bucheffekten) based on uncertificated securities (Wertrechte) and entered into the main register of SIS or such other custodian as the case may be. Any transfer of Shares is effected by a corresponding entry in the securities deposit account of a bank or a depository institution. Shares cannot be transferred by way of assignment, nor can a security interest in any Shares be granted by way of assignment.

Voting rights may be exercised only after a shareholder has been entered in our share register (Aktienregister) with his, her or its name and address (in the case of legal entities, the registered office) as a shareholder with voting rights.

We maintain, through Computershare Switzerland Ltd., a share register, in which the full name, address and nationality (in the case of legal entities, the company name and registered office) of the shareholders and usufructuaries are recorded. A person entered into the share register must notify the share registrar of any change in address. Until such notification occurs, all written communication from us to persons entered in the share register is deemed to have been validly made if sent to the relevant address recorded in the share register.

Share RepurchaseProgram

On July 9, 2019, the Company commenced a public repurchase program with respect to our shares, which on February 3, 2020 was expanded to also include ADSs. Shares and ADSs repurchased under our repurchase program may be used as consideration in potential future M&A transactions and for (1) our existing employee share incentive program, (2) convertible loans entered into by us and (3) on demand equity lines available to us. Our share repurchase was approved by the Swiss Takeover Board under its notification procedure, will last up to 3 years, and allows us to repurchase up to 3,682,848 Ordinary Class B shares equivalent to 10% of the registered share capital of the Company at the relevant time.

Activity under the program is monitored on a daily basis, with all transactions being published on our website in line with Swiss Law.

Inspection of Booksand Records

Under the CO, a shareholder has a right to inspect our share register with respect to his, her or its own shares and otherwise to the extent necessary to exercise his, her or its shareholder rights. No other person has a right to inspect our share register. Our books and correspondence may be inspected with the express authorization of the general meeting of shareholders or by resolution of the board of directors and subject to the safeguarding of our business secrets.

Special Investigation

If the shareholder inspection rights as outlined above prove to be insufficient in the judgment of the shareholder, any shareholder may propose to the general meeting of shareholders that specific facts be examined by a special auditor in a special investigation. If the general meeting of shareholders approves the proposal, we or any shareholder may, within 30 calendar days after the general meeting of shareholders, request a court sitting at our registered office in Zug, Switzerland to appoint a special auditor. If the general meeting of shareholders rejects the request, one or more shareholders representing at least 10% of the share capital or holders of shares in an aggregate par value of at least CHF 2,000,000 may request that the court appoint a special auditor. The court will issue such an order if the petitioners can demonstrate that the board of directors, any member of the board of directors or our executive management infringed the law or our Articles and thereby caused damages to us or the shareholders. The costs of the investigation would generally be allocated to us and only in exceptional cases to the petitioners.

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Compulsory Acquisitions;Appraisal Rights

Business combinations and other transactions that are governed by the Swiss Merger Act, are binding on all shareholders. A statutory merger or demerger requires approval of two-thirds of the shares represented at a general meeting of shareholders and the absolute majority of the par value of the shares represented.

If a transaction under the Swiss Merger Act receives all of the necessary consents, all shareholders are compelled to participate in such transaction.

Swiss corporations may be acquired by an acquirer through the direct acquisition of shares. The Swiss Merger Act provides for the possibility of a so-called "cash-out" or "squeeze-out" merger if the acquirer controls 90% of the outstanding shares. In these limited circumstances, minority shareholders of the corporation being acquired may be compensated in a form other than through shares of the acquiring corporation (for instance, through cash or securities of a parent corporation of the acquiring corporation or of another corporation).

For business combinations effected in the form of a statutory merger or demerger and subject to Swiss law, the Swiss Merger Act provides that if equity rights have not been adequately preserved or compensation payments in the transaction are unreasonable, a shareholder may request the competent court to determine a reasonable amount of compensation. A decision issued by a competent court in this respect can be acted upon by any person who has the same legal status as the claimant.

In addition, under Swiss law, the sale of all or substantially all of our assets may be construed as a de facto dissolution of our company, and consequently require the approval of two-thirds of the shares present or represented at a general meeting of shareholders and the absolute majority of the par value of the shares present or represented. Whether a shareholder resolution is required depends on the particular transaction, whereas the following circumstances are generally deemed relevant in this respect:

·	a core part of the company's business is sold without which it is economically impracticable or<br>unreasonable to continue to operate the remaining business;
·	the company's assets, after the divestment, are not invested in accordance with the company's statutory<br>business purpose; and
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·	the proceeds of the divestment are not earmarked for reinvestment in accordance with the company's<br>business purpose but, instead, are intended for distribution to the company's shareholders or for financial investments unrelated<br>to the company's business.
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A shareholder of a Swiss corporation participating in certain corporate transactions governed by the Swiss Merger Act may, under certain circumstances, be entitled to appraisal rights. As a result, such shareholder may, in addition to the consideration (be it in shares or in cash) receive an additional amount to ensure that the shareholder receives the fair value of the shares held by the shareholder. Following a statutory merger or demerger, pursuant to the Swiss Merger Act, shareholders can file an appraisal action against the surviving company. If the consideration is deemed inadequate, the court will determine an adequate compensation payment.

Board of Directors

Our Articles provide that our Board of Directors (the "Board") shall consist of a minimum of three directors and a maximum of twelve directors.

The members of our Board and the chairman are elected annually by the general meeting of shareholders for a period until the completion of the subsequent ordinary general meeting of shareholders and are eligible for re-election. Each member of the Board must be elected individually.

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Powers

The Board has the following non-delegable and inalienable powers and duties:

·	the ultimate direction of the business of the company and issuing of the relevant directives;
·	laying down the organization of the Company;
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·	formulating accounting procedures, financial controls and financial planning;
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·	appointing and removing persons entrusted with the management and representation of the Company<br>and regulating the power to sign for the Company;
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·	the ultimate supervision of those persons entrusted with management of the Company, with particular<br>regard to adherence to law, our Articles as well as our regulations and directives;
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·	issuing the business report (including the financial statements) and the compensation report, and<br>preparing for the general meeting of shareholders and carrying out its resolutions;
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·	all duties of the board of directors pursuant to the Swiss Merger Act;
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·	informing the court in case of over-indebtedness; and
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·	passing resolutions regarding the increase of the share capital, provided that it has the authority<br>to do so and attesting to such capital increase, preparing of the capital increase report and the executing corresponding amendment<br>to our Articles.
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The Board may, while retaining such non-delegable and inalienable powers and duties, delegate some of its powers, in particular direct management, to a single or to several of its members, managing directors, committees or to third parties who need be neither members of the board of directors nor shareholders. Pursuant to Swiss law, details of the delegation must be set in the organizational rules issued by the Board. The organizational rules may also contain other procedural rules such as quorum requirements.

According to our organizational rules, resolutions of the Board are adopted upon the absolute majority of the votes cast. In the event of a tie of votes, the chairman has, in addition to his vote, the casting vote. To validly pass a resolution, more than half of the members of the Board have to attend the meeting in person, by telephone or similar communications equipment. Pursuant to the CO, no attendance quorum is required for confirmation resolutions and adaptations of our Articles in connection with capital increases.

Indemnificationof Executive Management and Directors

Subject to Swiss law, our Articles provide for indemnification of the existing and former members of the Board, executive management and their heirs, executors and administrators, against liabilities arising in connection with the performance of their duties in such capacity, and permits us to advance the expenses of defending any act, suit or proceeding to our directors and executive management.

In addition, under general principles of Swiss employment law, an employer may be required to indemnify an employee against losses and expenses incurred by such employee in the proper execution of his or her duties under the employment agreement with the employer.

We have entered or will enter into indemnification agreements with each of the members of our board of directors and executive management.

Conflict of Interest,Management Transactions

Swiss law does not have a specific provision regarding conflicts of interest. However, the CO contains a provision that requires our directors and executive management to safeguard the company's interests and imposes a duty of loyalty and duty of care on our directors and executive management. This rule is generally understood to disqualify directors and executive management from participation in decisions that directly affect them. Our directors and executive officers are personally liable to us for breach of these provisions. In addition, Swiss law contains provisions under which directors and all persons engaged in the company's management are liable to the company, each shareholder and the company's creditors for damages caused by an intentional or negligent violation of their duties. Furthermore, Swiss law contains a provision under which payments made to any of the company's shareholders or directors or any person associated with any such shareholder or director, other than payments made at arm's length, must be repaid to the company if such shareholder, director or associated person acted in bad faith.

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Principles of theCompensation of the Board of Directors and the Executive Management

We are subject to the Compensation Ordinance (the "Compensation Ordinance") and the Directive on Information Relating to the Corporate Governance issued by the SIX (the "Corporate Governance Directive"). The Compensation Ordinance requires a "say on pay" approval mechanism for the compensation of the Board and the Executive Management pursuant to which the shareholders must vote on the compensation of the Board and the Executive Management on an annual basis. In accordance therewith, the Articles provide that the general meeting of shareholders must, each year, vote separately on the proposals by the Board regarding the maximum aggregate amounts of:

·	the total compensation of the Board for the next term of office; and
·	the total compensation of the Executive Management for the period of the next fiscal year.
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If the general meeting of shareholders does not approve a proposal of the Board, the Board determines the maximum aggregate amount or maximum partial amounts taking into account all relevant factors and submits such amounts for approval to the same general meeting of shareholders, to an extraordinary general meeting of shareholders or to the next ordinary general meeting of shareholders for retrospective approval. If the maximum aggregate amount of compensation already approved by the general meeting of shareholders is not sufficient to also cover the compensation of persons newly appointed to or promoted within the Executive Management, such persons may be paid for each of the following purposes an aggregate of up to 40% in excess of the total annual compensation of the respective predecessor or for a similar pre-existing position: (i) as compensation for the relevant compensation period; and, in addition, (ii) as compensation for any prejudice incurred in connection with the change of employment.

The Compensation Ordinance further requires us to set forth in its Articles the principles for the determination of the compensation of the Board and the Executive Management. These principles have been included in the Articles as described further below.

The Compensation Ordinance also contains compensation disclosure rules. Pursuant to these rules, we are required to prepare an annual compensation report. The compensation report will, among other things, include the compensation of the members of the Board on an aggregate and on an individual basis and of the members of the Executive Management on an aggregate basis as well as the amount for the highest paid member of the Executive Management.

Pursuant to the Corporate Governance Directive, we are required to disclose basic principles and elements of compensation and shareholding programs for both acting and former members of the Board and the Executive Management as well as the authority and procedures for determining such compensation.

In accordance with the Compensation Ordinance, the Articles provide that loans may be granted to members of the Board and the Executive Management, provided such loans are granted at arm's length terms. In addition, the Articles provide that we may grant to members of the Executive Management post-retirement benefits beyond the occupational benefit scheme only if such post-retirement benefits do not exceed 50% of the base salary in the fiscal year immediately preceding the retirement.

The Compensation Ordinance generally prohibits certain types of compensation payments to the members of the board of directors, the Executive Management and the advisory board of listed companies, taking the form of severance pay, advance compensation (e.g. advance salary payments), incentive payments for certain acquisition transactions, loans, credits and pension benefits not based on occupational pension schemes, and performance-based compensation not provided for in the articles of association as well as equity securities and conversion and option rights awards not provided for in the articles of association.

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Board of Directors

The Articles set out the principles for the elements of the compensation of the members of the Board. The compensation of non-executive members of the Board consists of a fixed compensation and may consist of additional compensation elements and benefits. The compensation of the executive members of the Board may consist of fixed and variable compensation. The total compensation shall take into account the position and level of responsibility of the respective member of the Board. The general meeting of shareholders approves the proposals of the Board in relation to the maximum aggregate amount of the compensation of the Board for the term of office until the next annual general meeting of shareholders. Members of the Board who are our employees do not receive compensation for Board service. Consequently, Carlos Moreira, Peter Ward and Dourgam Kummer (since the start of his employment by the Group), the only members of the Board who are also members of the executive management and/or employees of the Group, do not receive compensation for their Board service.

Executive Management

The Articles set out the principles for the elements of the compensation of the members of the Executive Management. The compensation of the members of the Executive Management may consist of fixed and variable compensation elements. Fixed compensation may comprise the base salary and other non-variable compensation elements. Variable compensation may comprise short-term and long-term variable compensation elements. Short-term variable compensation elements may be governed by performance metrics that take into account the achievement of operational, strategic, financial or other objectives, our results, the WISeKey group or parts thereof and/or individual targets, and the achievement of which is generally measured during a one-year period. Depending on achieved performance, the compensation may amount to a multiplier of target level. Long-term variable compensation elements may be governed by performance metrics that take into account the development of the share price or share performance in absolute terms or in relation to peer groups or indices and/or our results, the group or parts thereof and/or the achievement of operational, strategic, financial or other objectives in absolute terms or in relation to the market, other companies or comparable benchmarks and/or retention elements. An achievement of the objectives will generally be measured over a period of several years. Depending on achieved performance, the compensation may amount to a multiplier of target level. The Board or, to the extent delegated to it, the Nomination and Compensation Committee will determine the performance metrics and target levels of the short- and long-term variable compensation elements, as well as their achievement. Compensation may be paid in the form of cash, shares, in the form of share-based instruments or units or in the form of other types of benefits. The general meeting of shareholders approves the proposals of the Board in relation to the maximum aggregate amounts of fixed and variable compensation, respectively, of the Executive Management.

Borrowing Powers

Neither Swiss law nor our Articles restrict in any way our power to borrow and raise funds. The decision to borrow funds is made by or under the direction of our Board, and no approval by the shareholders is required in relation to any such borrowing*.*

Repurchases of Sharesand Purchases of Own Shares

The CO limits our right to purchase and hold our own shares. We and our subsidiaries may purchase shares only if and to the extent that (1) we have freely distributable reserves in the amount of the purchase price; and (2) the aggregate par value of all shares held by us does not exceed 10% of our share capital. Pursuant to Swiss law, where shares are acquired in connection with a transfer restriction set out in the articles of association of a company, the foregoing upper limit is 20%. We currently do not have any transfer restriction in our Articles. If we own shares that exceed the threshold of 10% of our share capital, the excess must be sold or cancelled by means of a capital reduction.

Shares held by us or our subsidiaries are not entitled to vote at the general meeting of shareholders but are entitled to the economic benefits applicable to the shares generally, including dividends and pre-emptive rights in the case of share capital increases.

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In addition, selective share repurchases are only permitted under certain circumstances. Within these limitations, as is customary for Swiss corporations, we may purchase and sell our own shares from time to time in order to meet our obligations under our equity plans, to meet imbalances of supply and demand, to provide liquidity and to even out variances in the market price of shares.

Notification andDisclosure of Substantial Share Interests

Under the applicable provisions of the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading of 2015, or the Financial Market Infrastructure Act ("FMIA"), persons who directly, indirectly or in concert with other parties acquire or dispose of our shares, purchase rights or obligations relating to our shares (the "Purchase Positions") or sale rights or obligations relating to our shares (the "Sale Positions"), and thereby, directly, indirectly or in concert with other parties reach, exceed or fall below a threshold of 3%, 5%, 10%, 15%, 20%, 25%, 331⁄3%, 50% or 662⁄3% of our voting rights (whether exercisable or not) must notify us and the Disclosure Office of the SIX of such acquisition or disposal in writing within four trading days. Within two trading days of the receipt of such notification, we must publish such information via the SIX's electronic publishing platform. For purposes of calculating whether a threshold has been reached or crossed, shares and Purchase Positions, on the one hand, and Sale Positions, on the other hand, may not be netted. Rather, the shares and Purchase Positions and the Sale Positions must be accounted for separately and may each trigger disclosure obligations if the respective positions reach, exceed or fall below one of the thresholds. In addition, actual share ownership must be reported separately if it reaches, exceeds or falls below one of the thresholds.

Pursuant to Article 663c of the CO, Swiss corporations whose shares are listed on a stock exchange must disclose their significant shareholders and their shareholdings in the notes to their balance sheet, where this information is known or ought to be known. Significant shareholders are defined as shareholders and groups of shareholders linked through voting rights who hold more than 5% of all voting rights.

Mandatory Bid Rules

Pursuant to the applicable provisions of the FMIA, any person that acquires shares of a listed Swiss company, whether directly or indirectly or acting in concert with third parties, which shares, when taken together with any other shares of such company held by such person (or such third parties), exceed the threshold of 33 1/3% of the voting rights (whether exercisable or not) of such company, must make a takeover bid to acquire all the other newly issued shares of such company. A company's articles of association may either eliminate this provision of the FMIA or may raise the relevant threshold to 49% ("opting-out" or "opting-up", respectively).

We have an opting-out provision in Article 6 para. 9 of our Articles. Accordingly, an acquirer of Shares is not obliged to make a public offer pursuant to article 135 and 163 of the Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading.

The Swiss laws applicable to Swiss corporations and their shareholders differ from laws applicable to U.S. corporations and their shareholders. The following table summarizes significant differences in shareholder rights between the provisions of the Swiss Code of Obligations (SchweizerischesObligationenrecht) and the Compensation Ordinance and the Delaware General Corporation Law applicable to companies incorporated in Delaware and their shareholders. Please note that this is only a general summary of certain provisions applicable to companies in Delaware. Certain Delaware companies may be permitted to exclude certain of the provisions summarized below in their charter documents.

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Comparison of ShareholderRights

DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
Mergers and similar arrangements
Under the Delaware General Corporation Law, with certain exceptions, a merger, consolidation, sale, lease or transfer of all or substantially all of the assets of a corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon. A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which such shareholder may receive cash in the amount of the fair value of the shares held by such shareholder (as determined by a court) in lieu of the consideration such shareholder would otherwise receive in the transaction. The Delaware General Corporation Law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of which it owns at least 90.0% of each class of capital stock without a vote by the shareholders of such subsidiary. Upon any such merger, dissenting shareholders of the subsidiary would have appraisal rights.	Under Swiss law, with certain exceptions, a merger or a division of the corporation or a sale of all or substantially all of the assets of a corporation must be approved by two-thirds of the shares represented at the relevant general meeting of shareholders as well as the absolute majority of the par value of the shares represented at such shareholders' meeting. A shareholder of a Swiss corporation participating in a statutory merger or demerger pursuant to the Swiss Merger Act can file an appraisal right lawsuit against the surviving company. As a result, if the consideration is deemed "inadequate," such shareholder may, in addition to the consideration (be it in shares or in cash) receive an additional amount to ensure that such shareholder receives the fair value of the shares held by such shareholder. Swiss law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of which it owns at least 90.0% of the voting rights without a vote by shareholders of such subsidiary, if the shareholders of the subsidiary are offered the payment of the fair value in cash as an alternative to shares.
Shareholders' suits
Class actions and derivative actions generally are available to shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys' fees incurred in connection with such action.	Class actions and derivative actions as such are not available under Swiss law. Nevertheless, certain actions may, to a limited extent, have a similar effect. An appraisal lawsuit won by a shareholder can be acted upon by any person who has the same legal status as the claimant. Also, a shareholder is entitled to bring suit against directors for breach of, among other things, their fiduciary duties and claim the payment of damages. However, unless the company is subject to bankruptcy proceedings, or if the relevant shareholder can demonstrate having suffered a loss in a personal capacity, a shareholder will only be allowed to ask for payment of damages to the corporation. Under Swiss law, the winning party is generally entitled to recover attorneys' fees incurred in connection with such action, provided, however, that the court has discretion to permit the shareholder whose claim has been dismissed to recover attorneys' fees incurred to the extent he acted in good faith.

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DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
Shareholder vote on board and management compensation
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Under the Delaware General Corporation Law, the board of directors has the authority to fix the compensation of directors, unless otherwise restricted by the certificate of incorporation or bylaws.	Pursuant to the Swiss Ordinance against excessive compensation in listed stock corporations, the general meeting of shareholders has the non-transferable right, amongst others, to have a binding vote each year on the compensation due to the board of directors, executive management and advisory boards.
Annual vote on board renewal
Unless directors are<br> elected by written consent in lieu of an annual meeting, directors are elected in an annual meeting of stockholders on a date and<br> at a time designated by or in the manner provided in the bylaws. Re-election is possible.<br><br> <br><br><br> <br>Classified<br>boards are permitted.	The general meeting of shareholders elects annually (i.e. for the period between two annual ordinary general meeting of shareholders) the members of the board of directors, the chairman of the board and the members of the compensation committee individually for a term of office of one year. Re-election is possible.
Indemnification of directors and executive management and limitation of liability
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The Delaware General<br> Corporation Law provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability<br> of directors (but not other controlling persons) of the corporation for monetary damages for breach of a fiduciary duty as a director,<br> except no provision in the certificate of incorporation may eliminate or limit the liability of a director for:<br><br> <br><br><br> <br>·     any breach of a director's duty of loyalty to the corporation or its shareholders;<br><br> <br><br><br> <br>·     acts<br>or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;	Under Swiss corporate<br> law, an indemnification of a director or member of the executive management in relation to potential personal liability is not<br> effective to the extent the director or member of the executive management intentionally or grossly negligently violated his or<br> her corporate duties towards the corporation. Most violations of corporate law are regarded as violations of duties towards the<br> corporation rather than towards the shareholders. In addition, indemnification of other controlling persons is generally not permitted<br> under Swiss corporate law, including shareholders of the corporation.<br><br> <br><br><br> <br>Nevertheless,<br>a corporation may enter into and pay for directors' and officers' liability insurance which typically covers negligent acts as<br>well.

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DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
·    statutory<br>liability for unlawful payment of dividends or unlawful stock purchase or redemption; or<br><br> <br><br><br> <br>·     any transaction from which the director derived an improper personal benefit.<br><br> <br><br><br> <br>A Delaware corporation<br> may indemnify any person who was or is a party or is threatened to be made a party to any proceeding, other than an action by or<br> on behalf of the corporation, because the person is or was a director or officer, against liability incurred in connection with<br> the proceeding if the director or officer acted in good faith and in a manner reasonably believed to be in, or not opposed to,<br> the best interests of the corporation; and the director or officer, with respect to any criminal action or proceeding, had no reasonable<br> cause to believe his or her conduct was unlawful.<br><br> <br><br><br> <br>Unless ordered by a<br> court, any foregoing indemnification is subject to a determination that the director or officer has met the applicable standard<br> of conduct:<br><br> <br><br><br> <br>·     by a majority vote of the directors who are not parties to the proceeding, even though less than a quorum;<br><br> <br><br><br> <br>·     by a committee of directors designated by a majority vote of the eligible directors, even though less than a quorum;<br><br> <br><br><br> <br>·     by independent legal counsel in a written opinion if there are no eligible directors, or if the eligible directors so direct;<br>or<br><br> <br><br><br> <br>·    by<br>the shareholders.
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Moreover,<br>a Delaware corporation may not indemnify a director or officer in connection with any proceeding in which the director or officer<br>has been adjudged to be liable to the corporation unless and only to the extent that the court determines that, despite the adjudication<br>of liability but in view of all the circumstances of the case, the director or officer is fairly and reasonably entitled to indemnity<br>for those expenses which the court deems proper.
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Directors' fiduciary duties
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A director of a Delaware<br> corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components:<br><br> <br><br><br> <br>·     the duty of care; and<br><br> <br><br><br> <br>·     the duty of loyalty.<br><br> <br><br><br> <br>The duty of<br>care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar<br>circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably<br>available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes<br>to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty<br>prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence<br>over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In<br>general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that<br>the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach<br>of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove<br>the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.	A director of a Swiss<br> corporation has a fiduciary duty to the corporation only. This duty has two components:<br><br> <br><br><br> <br>·     the duty of care; and<br><br> <br><br><br> <br>·    <br> the duty of loyalty.<br><br> <br><br><br> <br>The duty of care requires<br> that a director act in good faith, with the care that an ordinarily prudent director would exercise under similar circumstances.<br><br> <br><br><br> <br>The duty of loyalty<br> requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use<br> his corporate position for personal gain or advantage. This duty prohibits in principle self-dealing by a director and mandates<br> that the best interest of the corporation take precedence over any interest possessed by a director or officer.<br><br> <br><br><br> <br>The burden of proof<br> for a violation of these duties is with the corporation or with the shareholder bringing a suit against the director.

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DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
	Directors also have an obligation to treat shareholders that are in similar situations equally.
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Shareholder action by written consent
A Delaware corporation may, in its certificate of incorporation, eliminate the right of shareholders to act by written consent.	Shareholders of a Swiss corporation may only exercise their voting rights in a general meeting of shareholders and may not act by written consents.
Shareholder proposals
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A shareholder of a Delaware corporation has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.	At any general meeting<br> of shareholders any shareholder may put proposals to the meeting if the proposal is part of an agenda item. Unless the articles<br> of association provide for a lower threshold or for additional shareholders' rights:<br><br> <br><br><br> <br>·    one or several shareholders whose combined shareholdings represent the lower of (1) one tenth of the share capital or (2)<br>an aggregate par value of at least CHF 1,000,000, may ask that a general meeting of shareholders be called for specific agenda<br>items and specific proposals; and<br><br> <br><br><br> <br>·    one or several shareholders representing 10.0% of the share capital or CHF 1.0 million of nominal share capital may ask<br>that an agenda item including a specific proposal be put on the agenda for a regularly scheduled general meeting of shareholders,<br>provided such request is made with appropriate notice.<br><br> <br><br><br> <br>Any shareholder<br>can propose candidates for election as directors at an annual general meeting without prior written notice.

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DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
	In addition, any shareholder is entitled, at a general meeting of shareholders and without advance notice, to (1) request information<br>from the Board on the affairs of the company (note, however, that the right to obtain such information is limited), (2) request information<br>from the auditors on the methods and results of their audit, (3) request the holding of an extraordinary general meeting of shareholders<br>and (4) request, under certain circumstances and subject to certain conditions, a special audit.
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Cumulative voting
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation provides for it.	Cumulative voting would be permitted under Swiss corporate law; however, we are not aware of any company that has cumulative voting. An annual individual election of all members of the board of directors for a term of office of one year (i.e. until the end of the following annual general meeting) is mandatory for listed Swiss companies.
Removal of directors
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A Delaware corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.	A Swiss corporation may remove, with or without cause, any director at any time with a resolution passed by an absolute majority of the shares represented at a general meeting of shareholders. The articles of association may require the approval by a qualified majority of the shares represented at a meeting for the removal of a director. .
Transactions with interested shareholders
The Delaware General Corporation Law generally prohibits a Delaware corporation from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15.0% or more of the corporation's outstanding voting stock within the past three years.	No such specific rule applies to a Swiss corporation.

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DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
Dissolution; Winding up
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Unless the board of<br> directors of a Delaware corporation approves the proposal to dissolve, dissolution must be approved by shareholders holding 100.0%<br> of the total<br><br> <br><br><br> <br>voting power<br>of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of<br>the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation<br>a supermajority voting requirement in connection with dissolutions initiated by the board.	A dissolution and winding up of a Swiss corporation requires the approval by two-thirds of the shares represented as well as the absolute majority of the par value of the shares represented at a general meeting of shareholders passing a resolution on such dissolution and winding up. The articles of association may increase the voting thresholds required for such a resolution.
Variation of rights of shares
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A Delaware corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise.	A Swiss corporation may modify the rights of a classes of shares with (1) a resolution passed by an absolute majority of the shares represented at the general meeting of shareholders and (2) a resolution passed by an absolute majority of the shares represented at the special meeting of the affected preferred shareholders. The issuance of shares that are granted more voting power requires the approval by two-thirds of the shares represented as well as the absolute majority of the par value of the shares represented at the relevant general meeting of shareholders.
Amendment of governing documents
A Delaware corporation's governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.	The articles of association of a Swiss corporation may be amended with a resolution passed by an absolute majority of the shares represented at such meeting, unless otherwise provided in the articles of association. There are a number of resolutions, such as an amendment of the stated purpose of the corporation and the introduction of authorized and conditional capital, that require the approval by two-thirds of the votes and an absolute majority of the par value of the shares represented at a shareholders' meeting. The articles of association may increase the voting thresholds.

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DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
Inspection of books and records
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Shareholders of a Delaware corporation, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose, and to obtain copies of list(s) of shareholders and other books and records of the corporation and its subsidiaries, if any, to the extent the books and records of such subsidiaries are available to the corporation.	Shareholders of a Swiss corporation may only inspect books and records if the general meeting of shareholders or the board of directors approved such inspection and only if confidential information possessed by a corporation is protected. A shareholder is only entitled to receive information to the extent required to exercise such shareholders' rights, subject to the interests of the corporation. The right to inspect the share register is limited to the right to inspect that shareholder's own entry in the share register.
Payment of dividends
The board of directors<br> may approve a dividend without shareholder approval. Subject to any restrictions contained in its certificate of incorporation,<br> the board may declare and pay dividends upon the shares of its capital stock either:<br><br> <br><br><br> <br>·     out of its surplus; or<br><br> <br><br><br> <br>·     in case there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared or the preceding<br> fiscal year.<br><br> <br><br><br> <br>Stockholder approval<br> is required to authorize capital stock in excess of that provided in the charter. Directors may issue authorized shares without<br> stockholder approval.	Dividend payments are<br> subject to the approval of the general meeting of shareholders. The board of directors may propose to shareholders that a dividend<br> shall be paid but cannot itself authorize the distribution.<br><br> <br><br><br> <br>Payments out of the<br> Company's stated share capital (in other words, the aggregate par value of the Company's registered share capital) in the form<br> of dividends are not allowed; payments out of stated share capital may be made by way of a capital reduction only. Dividends may<br> be paid only from the profits brought forward from the previous business years or if the Company has distributable reserves, each<br> as will be presented on the Company's audited annual stand-alone financial statements. The dividend may be determined only after<br> the allocations to reserves required by the law and the articles of association have been made.

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DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
Creation and issuance of new shares
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All creation of shares requires the board of directors to adopt a resolution or resolutions, pursuant to authority expressly vested in the board of directors by the provisions of the company's certificate of incorporation.	All creation of shares requires a shareholders' resolution. Authorized shares can be, once created by shareholder resolution, issued by the board of directors (subject to limitations of the authorization; the term of authorized share capital is at a maximum two years, and the amount of authorized share capital is capped at 50% of the share capital registered in the commercial register at the time the authorized share capital is adopted). Conditional share capital is the underlying for shares issued upon the exercise of options and conversion rights related to debt instruments issued by the board of directors or such rights issued to employees. The amount of conditional share capital is capped at 50% of the share capital registered in the commercial register at the time the conditional share capital is adopted.
Rights plans / poison pills
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	Under Swiss corporation law, shareholders have pre-emptive rights to subscribe for new issuances of shares in proportion to the respective par values of their holdings. Under certain circumstances, shareholders limit or withdraw, or authorize the board of directors to limit or withdraw, pre-emptive rights or advance subscription rights in certain circumstances. However, limitation or withdrawal of shareholders' pre-emptive rights can only be decided for valid reasons. Preventing a particular shareholder to exercise influence over the company is generally believed not to be a valid reason to limit or withdraw shareholders' pre-emptive rights
C.	Material Contracts
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Share Subscription Facility with GEM LLC

On January 19, 2016, the Company entered into the SSF with GEM, according to which the Company has the right, at any date after the date on which the Class B Shares are listed on the SIX, during the period expiring on the earlier of (i) January 19, 2021 and (ii) the date on which GEM has subscribed for Class B Shares with an aggregate subscription price of CHF 60,000,000, to request GEM, in one or several steps, to subscribe for Class B Shares up to an aggregate subscription amount of CHF 60,000,000. After drawdowns made under this facility in June, August and December 2017 in the aggregate amount of CHF 3,905,355, the remaining amount available for drawdown is CHF 56,094,645 as at December 31, 2020. The subscription price for each subscription request of the Company corresponds to 90% of the average of the closing bid prices for Class B Shares on the SIX (as adjusted for variations) as reported by Bloomberg during the respective pricing period. If the Company elects to exercise its rights under the SSF, the issuance of Class B Shares would dilute the Company's shareholders' interest in the Company. As at December 31, 2020, the remaining amount available for drawdown by the Company under the SSF is CHF 56,094,645 (USD 63,434,405 at closing rate) and the estimated maximum number of Class B Shares deliverable under the SSF is 50,856,432 Class B Shares at CHF 1.103 per Class B Share (calculated based on the closing price of a Class B Share on December 30, 2020 of CHF 1.225 per Class B Share, discounted by 10%). The actual price, at which the Company may drawdown under the SSF is subject to change, and, therefore, the number of Class B Shares deliverable to GEM may vary. On January 19, 2021, the SSF expired. The Company did not make any drawdown on the facility between January 1, 2021 and January 19, 2021.

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Options Issued to GEM

In connection with the SSF, the Company granted to GEM 1,459,127 options for the acquisition of an equal number of Class B Shares on May 06, 2016. The options may be exercised by GEM at any time on or before May 06, 2021, at an exercise price per option initially set to CHF 8.85432 per Class B Share (Initial Exercise Price). The Initial Exercise Price may be adjusted using certain agreed-upon formulae in case of (a) an alteration to the nominal value of the Class B Shares as a result of the consolidation or subdivision thereof; (b) an issue of any securities (other than Class B Shares or options, warrants or other rights to subscribe for or purchase or otherwise acquire any Class B Shares) to shareholders by way of rights, or a grant to shareholders by way of rights of any options, warrants or other rights to subscribe for or purchase or otherwise acquire any securities (other than Class B Shares or options, warrants or other rights to subscribe for or purchase or otherwise acquire any Class B Shares); (c) an issue of Class B shares to shareholders by way of rights, or an issue or grant to shareholders by way of rights of options, warrants or other rights to subscribe for or purchase any Class B Shares at less than the relevant price; (d) an issue of Class B Shares to shareholders by way of rights, by way of capitalization of profits or reserves other than as part of a cash dividend; (e) any capital distribution to shareholders by way of rights; (f) an issue (other than per above item c) wholly for cash or for no consideration of Class B Shares, or an issue or grant (other than per above item c) wholly for cash or for no consideration of any options, warrants or other rights to subscribe for or purchase any Class B Shares at less than the relevant price; (g) the company or any subsidiary or any other person shall issue wholly for cash or for no consideration any securities (or enter into any contractual arrangements which would have an equivalent economic effect to issuing securities) which by their terms of issue carry (directly or indirectly) rights of conversion into, or exchange or subscription for, Class B shares (other than Class B Shares already in issue at the time of the issue of the said securities) (or shall grant any such rights in respect of existing securities so issued) or securities which by their terms might be redesignated as Class B Shares, and the consideration per Class B Share receivable upon conversion, exchange, subscription or redesignation is less than the relevant price; (h) any modification of the rights of conversion, exchange or subscription of some securities; and (i) the company or any subsidiary or any other person shall offer any securities in connection with which offer, shareholders as a class are entitled to participate in arrangements whereby such securities may be acquired by them.

In application of adjustment provisions under the relevant warrant, the exercise price of the warrant has been adjusted from CHF 8.85342 to CHF 8.8264 and the number of Class B Shares that GEM is entitled to purchase upon exercise of the warrant has been increased by 4,612 Class B Shares to 1,463,739 as at December 31, 2020. The Class B Shares issued to GEM in connection with the GEM Options would be issued out of the Company's treasury shares or conditional share capital or authorized share capital without triggering the pre-emptive rights of the existing shareholders of the Company. The exercise of GEM Options will dilute the Company's shareholders' interests in the Company.

Yorkville Standby Equity Distribution Agreement

On February 8, 2018 the Company entered into the SEDA, as amended on September 28, 2018 with Yorkville. Pursuant to the SEDA, the Company has the right, at any time during a five-year period, to request Yorkville, in one or several steps, to subscribe for Class B Shares up to an aggregate subscription amount of CHF 50,000,000. After several drawdowns made by WISeKey under the SEDA in 2018, 2019 and 2020, in the aggregate amount of CHF 3,992,169, the remaining amount available for drawdown is CHF 46,007,831 as at December 31, 2020. As long as a sufficient number of Class B Shares is provided through share lending, WISeKey has the right to make drawdowns under the SEDA at its discretion by requesting Yorkville to subscribe for (if the Class B Shares are issued out of authorized share capital) or purchase (if the Class B Shares are delivered out of treasury) Class B Shares worth up to CHF 5,000,000 each, subject to certain exceptions and limitations (including the exception that a drawdown request by WISeKey shall in no event cause the aggregate number of Class B Shares held by Yorkville to meet or exceed 4.99% of the total number of shares registered with the commercial register of the Canton of Zug). The subscription price for each subscription request of the Company corresponds to 93% of the lowest daily volume-weighted average share price (the "VWAP") of a Class B Share, as traded and quoted on the SIX, over the five trading days following the drawdown request by WISeKey. If the Company elects to exercise its rights under the SEDA, the issuance of Class B Shares would dilute the Company's shareholders' interest in the Company. As at December 31, 2020, the remaining amount available for drawdown by the Company under the SEDA is CHF 46,007,831 (USD 52,027,772 at closing rate) and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the SEDA is 40,393,178 Class B Shares at CHF 1.139 per Class B Share (calculated based on the closing price of a Class B Share on December 30, 2020 of CHF 1.225 per Class B Share, discounted by 7%). The actual price, at which the Company may drawdown under the SEDA is subject to change, and, therefore, the number of Class B Shares deliverable to Yorkville may vary.

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As at December 31, 2020, the Company held 4,783,135 Class B Shares as treasury shares available for delivery under the SEDA, either directly or through a subsidiary. Depending on WISeKey's capital requirements, this amount of Class B Shares may not be sufficient, and the Company may issue Class B Shares out of its authorized share capital for further drawdowns under the SEDA and delivery to Yorkville. If such number of Class B Shares is not sufficient for delivery to Yorkville in connection with drawdowns under the SEDA, the Company may, instead of issuing the required additional number of Class B Shares to Yorkville directly, issue additional Class B Shares for delivery under the SEDA as follows. The additional Class B Shares would be subscribed for by WISeKey Equities AG (WISeKey Equities), a direct, wholly-owned subsidiary of the Company. WISeKey Equities would subscribe for the Class B Shares at nominal value and upon issuance of such Class B Shares, on-sell the Class B Shares back to the Company at nominal value plus a fee as consideration for providing the subscription service. The Company would hold the new Class B Shares in treasury and deliver them to Yorkville in accordance with the terms of the SEDA.

Options Issued to Yorkville

In connection with a convertible loan agreement WISeKey entered into with Yorkville on June 27, 2019, the Company granted to Yorkville 500,000 options for the acquisition of an equal number of Class B Shares. The options may be exercised by Yorkville at any time on or before June 27, 2022, at an exercise price per option initially set to CHF 3.00 per Class B Share (Initial Exercise Price). The Initial Exercise Price may be adjusted using certain agreed-upon formulae in case of (a) an increase of capital by means of capitalization of reserves, profits or premiums by distribution of Class B Shares, or division or consolidation of Class B Shares; (b) an issue of Class B Shares or other securities by way of conferring subscription or purchase rights; (c) spin-offs and capital distributions other than dividends; and (d) dividends. The Class B Shares issued to Yorkville in connection with the options would be issued out of the Company's conditional share capital or authorized share capital without triggering he pre-emptive rights of the existing shareholders of the Company.

Credit Agreement with Long State Investment Limited

On December 16, 2019, WISeKey entered into a Convertible Term Loan Facility Agreement (the “LSI Convertible Facility”) with Long State Investment Limited (“LSI”), a Hong Kong-based investment company, to borrow up to CHF 30,000,000 (the "LSI Principal Amount"). Under the terms of the LSI Convertible Facility, WISeKey is able to drawdown individual term loans of up to CHF 500,000 or, if so agreed between the parties, up to CHF 2,500,000 at an interest rate of 1.5% per annum (the "LSI Interest"), up to an aggregate amount of CHF 30,000,000 over a commitment period of 24 months. LSI have the right to convert a drawdown tranche into Class B Shares or, if so agreed among the parties and permitted by law, into ADSs, within a period of 21 SIX trading days after each individual drawdown at 95% of the higher of (i) the then prevailing market rate and (ii) the minimum conversion price of CHF 1.80. Any term loan not converted by LSI initially will automatically convert into Class B Shares, or ADSs, 20 SIX trading days before the expiration of the commitment period at the applicable conversion price. Under certain circumstances, interest payments may be “paid in kind” by capitalizing such interest and adding to it the aggregate principal balance of the loan outstanding. As at December 31, 2020, WISeKey has not made any drawdown under the LSI Convertible Facility, therefore the remaining amount available for drawdown is CHF 30,000,000. The conversion of the LSI Principal Amount and, if applicable, the LSI Interest, into Class B Shares will dilute the Company's shareholders' interest in the Company. The number of Class B Shares deliverable by the Company to LSI in connection with conversions of the LSI Principal Amount and the LSI Interest will depend on the applicable conversion price. As at December 31, 2020, the remaining amount available for drawdown by the Company under the LSI Convertible Facility is CHF 30,000,000 (USD 33,925,380 at closing rate) and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the LSI Convertible Facility is 17,543,860 Class B Shares at CHF 1.71 per Class B Share (calculated based on the higher of (i) the closing price of a Class B Share on the SIX on December 30, 2020 of CHF 1.225 per Class B Share and (ii) the minimum conversion price of CHF 1.80, discounted by 5%). Note that the actual price at which LSI may convert each tranche under the LSI Convertible Facility is subject to change, and, therefore, the number of Class B Shares deliverable to LSI may vary.

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Yorkville Convertible Loan Agreement

On March 04, 2020, WISeKey entered into the Yorkville Convertible Loan with Yorkville, pursuant to which Yorkville has committed to grant a loan to WISeKey in the amount of USD 4,000,000. The Yorkville Convertible Loan will mature on April 30, 2021 and bear interest at a yearly rate of 6%. The Yorkville Convertible Loan is to be repaid in cash in monthly instalments starting on March 30, 2020. However, Yorkville, in its sole and absolute discretion, may elect to convert any amount outstanding (principal and/or interests) into Class B Shares. The conversion price corresponds to the quotient of (i) the amount to be converted translated to CHF using the rate of exchange applicable on the date of the conversion, and (ii) a conversion price, initially set at CHF 3.00 per Class B Share but subject to adjustments under certain extraordinary circumstances. Yorkville did not effect any conversions in the year 2020. As at December 31, 2020 the remaining balance of the Yorkville Convertible Loan is USD 1,692,979.16. The conversion of the Yorkville Convertible Loan principal amount and, if applicable, the Yorkville Interest, into Class B Shares will dilute the Company's shareholders' interest in the Company. As at December 31, 2020, the remaining amount available for drawdown by the Company under the Yorkville Convertible Loan is USD 1,692,979.16 and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the Yorkville Convertible Loan is 507,431 Class B Shares at CHF 3.00 per Class B Share, assuming that the entire remaining amount of the Yorkville Convertible Loan (USD 1,692,979.16) would be converted in one step, together with all Yorkville Interest to be earned until the Yorkville Maturity. Note that the actual price at which Yorkville may convert each tranche under the Yorkville Convertible Loan is subject to change, and, therefore, the number of Class B Shares deliverable to Yorkville may vary.

As at December 31, 2020, the Company held 4,783,135 Class B Shares as treasury shares available for delivery under the Yorkville Convertible Loan, either directly or through a subsidiary. Depending on WISeKey's capital requirements, this amount of Class B Shares may not be sufficient, and the Company may issue Class B Shares out of its authorized share capital for further drawdowns under the Yorkville Convertible Loan, and delivery to Yorkville. If such number of Class B Shares is not sufficient for delivery to Yorkville in connection with drawdowns under the Yorkville Convertible Loan, the Company may, instead of issuing the required additional number of Class B Shares to Yorkville directly, issue additional Class B Shares for delivery under the Yorkville Convertible Loan as follows. The additional Class B Shares would be subscribed for by WISeKey Equities AG (WISeKey Equities), a direct, wholly-owned subsidiary of the Company. WISeKey Equities would subscribe for the Class B Shares at nominal value and upon issuance of such Class B Shares, on-sell the Class B Shares back to the Company at nominal value plus a fee as consideration for providing the subscription service. The Company would hold the new Class B Shares in treasury and deliver them to Yorkville in accordance with the terms of the Yorkville Convertible Loan.

COVID-19 Credit Facility with UBS SA

On March 26, 2020, two members of the Group entered into the Covid loans to borrow funds under the Swiss Government supported COVID-19 Credit Facility with UBS SA (“UBS”). Under the terms of the Agreement, UBS has lent such Group members a total of CHF 571,500 (USD 646,278 at closing rate). The loans are repayable in full by March 30, 2028, as amended, being the eighth anniversary of the date of deposit of the funds by UBS. Semi-annual repayments should start by March 31, 2022 and will be spread on a linear basis over the remaining term. The full repayment of the loans is permitted at any time. The interest rate is determined by Swiss COVID-19 Law and currently the Covid loans carry an interest rate of 0%. There were no fees or costs attributed to the Covid loans and as such there is no debt discount of debt premium associated with the loan facility. Under the terms of the loans, the relevant companies are required to use the funds solely to cover the liquidity requirements of the Company. In particular, the Company cannot use the funds for the distribution of dividends and directors' fees as well as the repayment of capital contributions, the granting of active loans; refinancing of private or shareholder loans; the repayment of intra-group loans; or the transfer of guaranteed loans to a group company not having its registered office in Switzerland, whether directly or indirectly linked to applicant. As at December 31, 2020, the outstanding balance on the loans was CHF 571,500 (USD 646,278).

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Agreement for the Issuance and Subscription of Convertible Notes with Nice & Green SA

On May 18, 2020, WISeKey entered into the Nice & Green Facility with Nice & Green, pursuant to which WISeKey has the right to draw down up to a maximum of CHF 10,000,000 in up to 25 tranches, each of which is divided into 25 convertible notes (the “Nice & Green Convertible Notes”), during a commitment period of 24 months commencing on May 20, 2020. The Nice & Green Convertible Notes do not bear interest. Subject to a cash redemption right of WISeKey, the Nice & Green Convertible Notes are mandatorily convertible into Class B Shares within a period of 12 months from issuance of the respective Nice & Green Convertible Notes (the “Nice & Green Conversion Period”). Conversion takes place upon request by Nice & Green during the Nice & Green Conversion Period, but in any case, no later than at the expiry of the Nice & Green Conversion Period, at a conversion price of 95% of the lowest daily volume-weighted average price of a Class B Share as traded on the SIX Swiss Exchange during the ten trading days preceding the relevant conversion date. WISeKey made several drawdowns in 2020 under the Nice & Green Facility and the remaining amount available for drawdown as at December 31, 2020 is CHF 1,083,111 (USD 1,224,832 at closing rate). The conversion of the drawdowns under the Nice & Green Facility into Class B Shares will dilute the Company's shareholders' interest in the Company. In 2020, Nice & Green requested to convert all Nice & Green Convertible Notes issued in 2020, therefore, as at December 31, 2020, there were no Nice & Green Convertible Notes outstanding. As at December 31, 2020, the remaining amount available for drawdown by the Company under the Nice & Green Facility is CHF 1,083,111 (USD 1,224,832 at closing rate) and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the Nice & Green Facility is 930,507 Class B Shares at CHF 1.164 per Class B Share (calculated based on the closing price of a Class B Share on the SIX on December 30, 2020 of CHF 1.225 per Class B Share discounted by 5%). Note that the actual price at which Nice & Green may convert each tranche under the Nice & Green Facility is subject to change, and, therefore, the number of Class B Shares deliverable to Nice & Green may vary.

Crede Convertible Loan Agreement

On August 07, 2020, WISeKey entered into the Crede Convertible Loan with Crede, pursuant to which Crede has committed to grant a loan to WISeKey in the amount of USD 5,000,000. The Crede Convertible Loan will mature on August 07, 2022 and bear interest at a yearly rate of 5% .. The Crede Convertible Loan is to be repaid at Crede Maturity by way of conversion into such number of Class B Shares as corresponds to the quotient of the (i) then outstanding Crede Convertible Loan and (ii) 92% of the lowest daily volume weighted average share prices of a Class B Share, quoted on the SIX Swiss Exchange during the ten trading days immediately preceding the relevant conversion date, converted into USD at the relevant exchange rate. Pursuant to the terms of the Crede Convertible Loan, the Company has the right, at its sole election, to pay interest accrued on the outstanding principal amount in cash or by delivery of such number of Class B Shares, determined in accordance with the aforementioned conversion methodology. Crede may effect the conversion of the Crede Convertible Loan any time before Crede Maturity. Crede effected several conversions in 2020. As at December 31, 2020, the remaining balance of the Crede Convertible Loan is USD 4,215,119.92. The conversion of the Crede Convertible Loan amount into Class B Shares will dilute the Company's shareholders' interest in the Company. As at December 31, 2020, the remaining amount available for drawdown by the Company under the Crede Convertible Loan is USD 4,215,119.92 and, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the Crede Convertible Loan is 3,625,726 Class B Shares at CHF 1.274 per Class B Share, assuming that the entire remaining amount of the Crede Convertible Loan (USD 4,215,119.92) would be converted in one step, together with all Crede Interest to be earned until the Crede Maturity. Note that the actual price at which Crede may convert each tranche under the Crede Convertible Loan is subject to change, and, therefore, the number of Class B Shares deliverable to Crede may vary.

As at December 31, 2020, the Company held 4,783,135 Class B Shares as treasury shares available for delivery under the Crede Convertible Loan, either directly or through a subsidiary. Depending on WISeKey's capital requirements, this amount of Class B Shares may not be sufficient, and the Company may issue Class B Shares out of its authorized share capital for further drawdowns under the Crede Convertible Loan, and delivery to Crede. If such number of Class B Shares is not sufficient for delivery to Crede in connection with drawdowns under the Crede Convertible Loan, the Company may, instead of issuing the required additional number of Class B Shares to Crede directly, issue additional Class B Shares for delivery under the Crede Convertible Loan as follows. The additional Class B Shares would be subscribed for by WISeKey Equities AG (WISeKey Equities), a direct, wholly-owned subsidiary of the Company. WISeKey Equities would subscribe for the Class B Shares at nominal value and upon issuance of such Class B Shares, on-sell the Class B Shares back to the Company at nominal value plus a fee as consideration for providing the subscription service. The Company would hold the new Class B Shares in treasury and deliver them to Crede in accordance with the terms of the Crede Convertible Loan.

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Options Issued to Crede

In connection with a convertible loan agreement WISeKey entered into with Crede on September 28, 2018, the Company granted to Crede, on September 28, 2018, 408,247 options for the acquisition of an equal number of Class B Shares. As a result, the maximum total number of Class B Shares that are issuable under the Crede Options as at December 31, 2020 is 408,247 Class B Shares. The Crede Options may be exercised by Crede at any time on or before October 29, 2023, as amended, at an exercise price per Crede Option equal to CHF 3.84 per Class B Share. The Class B Shares issued to Crede in connection with the Crede Options would be issued out of the Company's conditional share capital or authorized share capital without triggering the pre-emptive rights of the existing shareholders of the Company. The exercise of Crede Options will dilute the Company's shareholders' interests in the Company.

In connection with the Crede Convertible Loan, the Company granted to Crede, on August 07, 2020, 1,675,885 options (the "Second Crede Options") for the acquisition of an equal number of Class B Shares. As a result, the maximum total number of Class B Shares that are issuable under the Second Crede Options as at December 31, 2020 is 1,675,885 Class B Shares. The Second Crede Options may be exercised by Crede at any time on or before September 14, 2023, as amended, at an exercise price per option equal to CHF 1.375 per Class B Share. The Class B Shares issued to Crede in connection with the Second Crede Options would be issued out of the Company's conditional share capital or authorized share capital without triggering the pre-emptive rights of the existing shareholders of the Company. The exercise of the Second Crede Options will dilute the Company's shareholders' interests in the Company.

Agreement for the Issuance and Subscription of Convertible Notes with Global Tech Opportunities 8

On December 08, 2020, WISeKey entered into the GTO Facility with GTO pursuant to which GTO committed to grant a loan to WISeKey by way of subscribing to convertible notes (the “GTO Convertible Notes”), for up to a maximum amount of CHF 15,500,000, subject to certain conditions, over a period of 18 months. The GTO Convertible Notes do not bear any interest. Each GTO Convertible Note may be converted within a period of 12 months after its issuance (the “GTO Conversion Period”). Conversion takes place upon request by GTO during the GTO Conversion Period, but in any case no later than at the expiry of the GTO Conversion Period, into such number of Class B Shares as corresponds to the principal amount of the GTO Convertible Note divided by the higher of (i) CHF 0.05 and (ii) 97% of the lowest five trading day volume weighted average price of Class B Shares as traded on the SIX Swiss Exchange over the twenty trading days immediately preceding the relevant conversion date. The GTO Convertible Notes are only repayable in cash in an event of default under the terms of the GTO Facility or if WISeKey so elects. GTO made several subscriptions in 2020 under the GTO Facility and the remaining amount available for subscription as at December 31, 2020 is CHF 10,840,000 (USD 12,258,371 at closing rate). The conversion of the drawdowns under the GTO Facility into Class B Shares will dilute the Company's shareholders' interest in the Company. GTO requested to convert some but not all GTO Convertible Notes issued in 2020. As at December 31, 2020, GTO Convertible Notes in an aggregate amount of CHF 3,910,000 (USD 4,421,608 at closing rate) remained unconverted and the remaining amount available for subscription by the Company under the GTO Facility is CHF 10,840,000 (USD 12,258,371 at closing rate), therefore, as at December 31, 2020, the estimated maximum number of Class B Shares deliverable under the GTO Facility is 12,415,824 Class B Shares at CHF 1.188 per Class B Share (calculated based on the closing price of a Class B Share on the SIX on December 30, 2020 of CHF 1.225 per Class B Share discounted by 3%). Note that the actual price at which GTO may convert each tranche under the GTO Facility is subject to change, and, therefore, the number of Class B Shares deliverable to GTO may vary.

As at December 31, 2020, the Company held 4,783,135 Class B Shares as treasury shares available for delivery under the GTO Facility, either directly or through a subsidiary. Depending on WISeKey's capital requirements, this amount of Class B Shares may not be sufficient, and the Company may issue Class B Shares out of its authorized share capital for further drawdowns under the GTO Facility, and delivery to GTO. If such number of Class B Shares is not sufficient for delivery to GTO in connection with conversions under the GTO Facility, the Company may, instead of issuing the required additional number of Class B Shares to GTO directly, issue additional Class B Shares for delivery under the GTO Facility as follows: The additional Class B Shares would be subscribed for by WISeKey Equities AG (WISeKey Equities), a direct, wholly-owned subsidiary of the Company. WISeKey Equities would subscribe for the Class B Shares at nominal value and upon issuance of such Class B Shares, on-sell the Class B Shares back to the Company at nominal value plus a fee as consideration for providing the subscription service. The Company would hold the new Class B Shares in treasury and deliver them to GTO in accordance with the terms of the GTO Facility.

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Options Issued to GTO

In connection with the GTO Facility, the Company granted GTO the option to acquire Class B Shares at an exercise price of the higher of (a) 120% of the 5-trading day VWAP of the Class B Shares on the SIX Swiss Stock Exchange over the 5 trading days immediately preceding the relevant subscription request and (b) CHF 1.50 (the “GTO Option Exercise Price”). The number of options granted at each tranche subscription is calculated as 15% of the principal amount of each subscription divided by the GTO Warrant Exercise Price. Each warrant agreement has a 5-year exercise period starting on the relevant subscription date. As at December 31, 2020, a total of 466,000 options for the acquisition of an equal number of Class B Shares. As a result, the maximum total number of Class B Shares that are issuable under the GTO Options as at December 31, 2020 is 466,000 Class B Shares. The GTO Options may be exercised by GTO at any time until the fifth anniversary of their respective grant at an exercise price per option equal to CHF 1.50 per Class B Share. Should the remaining amount available for subscription by the Company under the GTO Facility of CHF 10,840,000 (USD 12,258,371 at closing rate) be subscribed for, the estimated maximum number of options deliverable under the GTO Facility is 7,226,666 for the acquisition of an equal number of Class B Shares. As a result, assuming the GTO Facility is fully subscribed for, the maximum total number of Class B Shares that are issued and issuable under the GTO Facility as at December 31, 2020 is 7,692,666 Class B Shares (the “Total GTO Options”). The Class B Shares issued to GTO in connection with the Total GTO Options would be issued out of the Company's conditional share capital or authorized share capital without triggering the pre-emptive rights of the existing shareholders of the Company. The exercise of the Total GTO Options will dilute the Company's shareholders' interests in the Company. Note that the actual GTO Warrant Exercise Price at each subscription used to calculate the number of options granted to GTO is subject to change, and, therefore, the number of Class B Shares deliverable to GTO may vary.

Convertible Loan with arago

On August 11, 2020 WISeKey entered into a convertible loan agreement with arago GmbH (“arago”) (the “arago First Convertible Loan”), a private German company leader in artificial intelligence automation, to acquire 5% of arago’s fully diluted share capital against an investment of CHF 5 million to be paid in five monthly installments of CHF 1 million starting August 12, 2020. The arago First Convertible Loan bore an interest of 5% per annum, did not contain any lender’s fees, and had no maturity date. WISeKey or arago could request conversion of the arago Second Convertible Loan into arago shares representing 5% of arago’s fully diluted share capital provided that either the full CHF 5 million was paid by WISeKey or that WISeKey had terminated the agreement. On August 12, 2020, WISeKey made an initial payment of CHF 1 million. On September 10, 2020, WISeKey terminated the arago First Convertible Loan and signed a new convertible loan agreement with arago on September 18, 2020 (the “arago Second Convertible Loan”).

Per arago Second Convertible Loan, WISeKey intends to acquire 5% of arago’s fully diluted share capital against an investment of CHF 5 million made up of the CHF 1 million paid on August 12, 2020 and four monthly installments of CHF 1 million starting September 18, 2020. The arago Second Convertible Loan bore an interest of 5% per annum, did not contain any lender’s fees, and had no maturity date. WISeKey or arago could request conversion of the arago Second Convertible Loan into arago shares representing 5% of arago’s fully diluted share capital once the full CHF 5 million was paid by WISeKey, or, should WISeKey terminate the agreement, the conversion shall take place within the next financing round of arago. On September 21, 2020, WISeKey made a payment of CHF 1 million. On October 09, 2020, WISeKey terminated the arago Second Convertible Loan and signed a new convertible loan agreement with arago on November 18, 2020 (the “arago Third Convertible Loan”).

Per arago Third Convertible Loan, WISeKey intends to acquire 51% of arago’s fully diluted share capital against (i) an investment of CHF 5 million made up of the CHF 1 million paid on August 12, 2020, the CHF 1 million paid on September 21, 2020 and three monthly installments of CHF 1 million starting November 20, 2020 subject to adjustment in accordance with arago’s working capital needs, and (ii) a guarantee on arago’s existing indebtedness. The arago Third Convertible Loan bore an interest of 5% per annum, did not contain any lender’s fees, and had no maturity date. WISeKey can request conversion of the arago Third Convertible Loan into arago shares representing 51% of arago’s fully diluted share capital at any time provided that the full CHF 5 million was paid by WISeKey and that WISeKey pays the nominal value of the newly issued shares in cash. In case WISeKey has not exercised its conversion right by December 31, 2020, arago can request the conversion at any time. WISeKey made three payments under the arago Third Convertible Loan as follows:

-	CHF 600,000 on November 20, 2020,

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-	CHF 400,000 on December 01, 2020, and
-	CHF 400,000 on December 22, 2020 out of which arago<br>returned EUR 300,000 (CHF 324,708 at historical rate) unrequired funds on December 30, 2020.
---	---

Therefore, as at December 31, 2020, WISeKey had paid a total of CHF 3,075,292 (USD 3,477,682) to arago under the arago Third Convertible Loan.

In 2021, WISeKey made three more payments to arago in the framework of the arago Third Convertible Loan: on January 04, 2021 for EUR 300,000 (USD 367,646), on February 17, 2021 for CHF 800,000 and on March 10, 2021 for CHF 800,000 (USD 858,751). These payments brought the arago Third Convertible Loan balance to CHF 5 million as at March 10, 2021.

On January 18, 2021, WISeKey requested to convert the arago Third Convertible Loan into 51% of arago’s share capital carrying 51% of the voting rights, which resulted in the issue of 136,072 new arago shares with a nominal value of EUR 1 to WISeKey in exchange for the payment by WISeKey of the aggregate nominal value of the newly issued shares of EUR 136,072 (USD 164,275 at historical cost).

OISTE Collaboration Agreement

Our subsidiary, WISeKey SA and the Organisation Internationale pour la Sécurité de Transactions Electroniques (OISTE), a foundation created under Swiss law, entered into a cooperation agreement, dated June 20, 2018 (OISTE Collaboration Agreement), which amended and restated prior agreements between us and OISTE.  Under the terms of the OISTE Collaboration Agreement, we are granted a worldwide license to commercialize its Root Global Cryptographic Key Pairs or Root of Trust. Roots of Trust (RoT) is a set of functions in the trusted computing module of a computer's operating system (OS). The RoT serves as separate computing engine controlling the trusted computing platform cryptographic processor on the PC or mobile device it is embedded in. The OISTE RoT was created in 1999 as part of a partnership with the International Telecommunication Union which is the International UN organization in charge of standards used on the Internet, IoT and mobile networks.

WISeKeys uses the OISTE RoT to provide trust to its digital identity technology used to authenticate users, and encrypt and decrypt messages among users. It is also used for WISeKey's Certify ID and WISeID technology to provide Digital Certificates for people, servers and IoT objects by providing certification technology and services in conformity with OISTE directives and standards.  The OISTE RoT is audited annually by webtrust.org. The OISTE Foundation owns and regulates the "OISTE Global Trust Model", which includes as "Root of Trust" a number of Root Certification Authorities|, globally recognized. OISTE delegates to the Swiss company, WISeKey SA, the operation of the systems and infrastructures supporting the Trust Model. The OISTE Foundation doesn't issue certificates to end subscribers, but grants to WISeKey a license as subordinate certification authority, allowing the delivery of Trust Services for Persons, Applications and Objects. In return for this license, we agree to pay a license fee and a royalty fee to OISTE.  In addition, the OISTE Collaboration Agreement delegates to us the technical management of the OISTE Root Global Cryptographic Key pairs, the OISTE global Root Certification Authority as well as its Digital Certificates, including the safekeeping of the OISTE Root Global Cryptographic Key Pairs in our data center bunker.  In return for this management service, we are paid a management fee by OISTE.

WebTrust is an assurance service jointly developed by the American Institute of Certified Public Accountants (AICPA). WebTrust relies on a series of principles and criteria designed to promote confidence and trust between consumers and companies conducting business on the Internet. Public accounting firms and practitioners, who obtain a WebTrust business license from the AICPA or the Canadian Institute of Chartered Accountants (CICA), can provide assurance services to evaluate and test whether a particular web site meets any one of the Trust Services principles and criteria.

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D.	Exchange Controls

There are currently no exchange controls restrictions in effect in Switzerland.

E.	Taxation

Material U.S. Federal Income Tax Considerations for U.S. Holders

The following is a description of the material U.S. federal income tax consequences to U.S. Holders, as defined below, of owning and disposing of our ADSs. It does not describe all tax considerations that may be relevant to a particular person's decision to acquire, hold or dispose of ADSs. This discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), administrative pronouncements, judicial decisions, final, temporary and proposed Treasury regulations, and the income tax treaty between Switzerland and the United States (the "Treaty"), all as of the date hereof, any of which is subject to change or differing interpretations, possibly with retroactive effect.

This discussion applies only to a U.S. Holder that holds ADSs as capital assets for U.S. federal income tax purposes. Furthermore, it does not describe all of the U.S. federal income tax consequences that may be relevant in light of a U.S. Holder's particular circumstances, including consequences for purposes of the alternative minimum tax and the potential application of the Medicare contribution tax. Furthermore, it does not address classes of U.S. holders that may be subject to special rules, such as:

·	banks, insurance companies, and certain other financial institutions;
·	dealers or traders in securities who use a mark-to-market method of tax accounting;
---	---
·	persons holding ADSs as part of a hedging transaction, straddle, wash sale, conversion transaction<br>or other integrated transaction or persons entering into a constructive sale with respect to the ADSs;
---	---
·	regulated investment companies or real estate investment trusts;
---	---
·	U.S. expatriates and certain former citizens or long-term residents of the United States;
---	---
·	U.S. Holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
---	---
·	entities or arrangements classified as partnerships for U.S. federal income tax purposes;
---	---
·	tax-exempt entities, including an "individual retirement account" or "Roth IRA";
---	---
·	persons that own or are deemed to own ten percent or more of our shares by vote or value; or
---	---
·	persons holding ADSs in connection with a trade or business conducted outside of the United States.
---	---

If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds ADSs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding ADSs and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of the ADSs.

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A "U.S. Holder" is a holder who, for U.S. federal income tax purposes, is a beneficial owner of ADSs, who is eligible for the benefits of the Treaty and who is:

·	a citizen or individual resident of the United States;
·	a corporation, or other entity taxable as a corporation, created or organized in or under the laws<br>of the United States, any state therein or the District of Columbia; or
---	---
·	an estate or trust the income of which is subject to U.S. federal income taxation regardless of<br>its source.
---	---

Generally, a U.S. Holder of an ADS should be treated for U.S. federal income tax purposes as holding the Class B Shares represented by the ADS. Accordingly, no gain or loss will be recognized upon an exchange of ADSs for Class B Shares.

U.S. Holders should consult their tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of ADSs in their particular circumstances.

Taxation of Distributions

As stated above under "Item 10B. Memorandum and Articles of Association," we do not intend to pay cash dividends in the foreseeable future. If we do make distributions of cash or property with respect to ADSs, subject to the passive foreign investment company rules described below, any such distributions (before reduction for any amounts withheld in respect of Swiss withholding tax), other than certain pro rata distributions of ADSs, will generally be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends.

For so long as our ADSs are listed on NASDAQ or we are eligible for benefits under the Treaty, dividends paid to certain non-corporate U.S. Holders will be eligible for taxation as "qualified dividend income" and therefore, subject to applicable limitations, will be taxable at rates not in excess of the long-term capital gain rate applicable to such U.S. Holder. U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends in their particular circumstances.

The amount of a dividend will include any amounts withheld by us in respect of Swiss income taxes. The amount of the dividend will be treated as foreign-source dividend income to U.S. Holders and will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Dividends will be included in a U.S. Holder's income on the date of the depositary's receipt of the dividend. The amount of any dividend income paid in foreign currency will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars at that time. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.

Subject to applicable limitations, some of which vary depending upon the U.S. Holder's particular circumstances, Swiss income taxes withheld from dividends on ADSs at a rate not exceeding the rate provided by the Treaty will be creditable against the U.S. Holder's U.S. federal income tax liability. The rules governing foreign tax credits are complex and U.S. Holders should consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, U.S. Holders may, at their election, deduct foreign taxes, including any Swiss income tax, in computing their taxable income, subject to generally applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year.

Sale or Other Dispositionof ADSs

Subject to the passive foreign investment company rules described below, gain or loss realized on the sale or other disposition of ADSs will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the ADSs for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder's tax basis in the ADSs disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to various limitations.

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Passive ForeignInvestment Company Rules

We will be a PFIC for any taxable year in which, after the application of certain "look-through" rules with respect to subsidiaries, either (i) 75% or more of our gross income consists of "passive income," or (ii) 50% or more of the average quarterly value of our assets consist of assets that produce, or are held for the production of, "passive income." For purposes of the above calculations, we will be treated as if we hold our proportionate share of the assets of, and receive directly our proportionate share of the income of, any other corporation in which we directly or indirectly own at least 25%, by value, of the shares of such corporation. Passive income generally includes interest, dividends, rents, certain non-active royalties and capital gains.

Based on our financial statements, business plan and certain estimates and projections, including as to the relative values of our assets, we do not believe that we were a PFIC for our 2020 taxable year and do not expect to be a PFIC in the foreseeable future. However, there can be no assurance that the IRS will agree with our conclusion regarding our PFIC status, and whether we are or will be classified as a PFIC in any particular year is uncertain because, among other things, we currently own a substantial amount of passive assets, including cash, and the valuation of certain of our assets may depend in part on the price of our ordinary shares, which is uncertain and may vary substantially over time. Accordingly, there can be no assurance that we will not be a PFIC for any taxable year. If a U.S. Holder holds ADSs in any year in which we are treated as a PFIC, we generally will continue to be treated as a PFIC with respect to that U.S. Holder for all succeeding years during which the U.S. Holder holds ADSs, even if we cease to meet the threshold requirements for PFIC status.

If we are a PFIC in any taxable year during which a U.S. Holder holds ADSs (assuming such U.S. Holder had not made a timely mark-to-market election, as described below), gain recognized by such U.S. Holder on a sale or other disposition (including certain pledges) of the ADSs will be allocated ratably over the U.S. Holder's holding period for the ADSs. The amounts allocated to the taxable year of the disposition and to any year before we become a PFIC will be taxed as ordinary income. The amount allocated to each other taxable year will be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge will be imposed on such amount. Further, to the extent that any distribution received by the U.S. Holder on its ADSs exceeds 125% of the average of the annual distributions on the ADSs received during the preceding three years or the U.S. Holder's holding period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain recognized on the disposition of the ADSs (as described earlier in this paragraph).

A U.S. Holder can avoid certain of the adverse rules described above by making a mark-to-market election with respect to its ADSs, provided that the ADSs are "marketable." ADSs will be marketable if they are "regularly traded" on a "qualified exchange" or other market within the meaning of applicable Treasury regulations. If a U.S. Holder makes the mark-to-market election, it generally will recognize as ordinary income any excess of the fair market value of the ADSs at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of the ADSs over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder makes the election, the holder's tax basis in the ADSs will be adjusted to reflect the income or loss amounts recognized. Any gain recognized on the sale or other disposition of ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election).

In addition, in order to avoid the application of the foregoing rules, a United States person that owns stock in a PFIC for U.S. federal income tax purposes may make a "qualified electing fund" election (a "QEF Election") with respect to such PFIC if the PFIC provides the information necessary for such election to be made. If a United States person makes a QEF Election with respect to a PFIC, the United States person will be currently taxable on its pro rata share of the PFIC's ordinary earnings and net capital gain (at ordinary income and capital gain rates, respectively) for each taxable year that the entity is classified as a PFIC and will not be required to include such amounts in income when actually distributed by the PFIC. We do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections.

In addition, if we pay a dividend to a U.S. Holder with respect to which we are treated as a PFIC, the preferential dividend rates discussed above with respect to dividends paid to certain non-corporate U.S. Holders will not apply.

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If a U.S. Holder owns ADSs during any year in which we are a PFIC, the holder generally must file annual reports containing such information as the U.S. Treasury may require on IRS Form 8621 (or any successor form) with respect to us, generally with the holder's federal income tax return for that year.

U.S. Holders should consult their tax advisers concerning our potential PFIC status and the potential application of the PFIC rules.

Information Reportingand Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.

The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the holder's U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS.

Information WithRespect to Foreign Financial Assets

A U.S. Holder who is an individual and, in certain cases, an entity, and who holds certain specified foreign financial assets (which may include the ADSs) with an aggregate value in excess of certain thresholds, is generally required to report information related to such interests by attaching a completed IRS Form 8938 (Statement of Specified Foreign Financial Assets) with such U.S. Holder's tax return for each year in which such U.S. Holder held an interest in the specified foreign financial assets, subject to certain exceptions (including an exception for ADSs held in accounts maintained by U.S. financial institutions). Persons who are required to report foreign financial assets and fail to do so may be subject to substantial penalties. U.S. Holders should consult their tax advisors regarding these information reporting requirements.

SWISS TAX CONSIDERATIONS

Swiss Federal, Cantonal and Communal Individual Income Tax and Corporate Income Tax

Non-Resident Shareholders

Holders of or shares or ADSs representing our shares who are not resident in Switzerland for tax purposes, and who, during the relevant taxation year, have not engaged in a trade or business carried on through a permanent establishment or fixed place of business situated in Switzerland for tax purposes (all such shareholders are hereinafter referred to as the "Non-Resident Shareholders"), will not be subject to any Swiss federal, cantonal and communal income tax on dividends and similar cash or in-kind distributions on ADSs representing our shares (including dividends on liquidation proceeds and stock dividends) (hereinafter referred to as the "Dividends"), distributions based upon a capital reduction (Nennwertrückzahlungen) or paid out of reserves from capital contributions (Reserven aus Kapitaleinlagen) on shares underlying the ADSs, or capital gains realized on the sale or other disposition of ADSs (see, however, paragraph 1.3 "Swiss Federal Withholding Tax" for a summary of Swiss federal withholding tax on Dividends).

Resident Private Shareholders

Swiss resident individuals who hold their ADSs as private assets all such shareholders are hereinafter referred to as the "Resident Private Shareholders") are required to include Dividends, but not distributions based upon a capital reduction (Nennwertrückzahlungen) or paid out of reserves from capital contributions (Reserven aus Kapitaleinlagen) of the shares underlying the ADSs, in their personal income tax return and are subject to Swiss federal, cantonal and communal income tax on any net taxable income for the relevant taxation period, including the Dividends, but not the distributions based upon a capital reduction (Nennwertrückzahlungen) or paid out of reserves from capital contributions (Reserven aus Kapitaleinlagen). Capital gains resulting from the sale or other dispositions of ADSs are not subject to Swiss federal, cantonal and communal income tax, and conversely, capital losses are not tax-deductible for Resident Private Shareholders. See paragraph 1.1(C) "Domestic Commercial Shareholders" for a summary of the taxation treatment applicable to Swiss resident individuals, who, for income tax purposes, are classified as "professional securities dealers".

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Domestic Commercial Shareholders

Corporate and individual shareholders who are resident in Switzerland for tax purposes and corporate and individual shareholder who are not resident in Switzerland, and who, in each case, hold their ADSs as part of a trade or business carried on in Switzerland, in the case of corporate and individual shareholders not resident in Switzerland, through a permanent establishment or fixed place of business situated, for tax purposes, in Switzerland, are required to recognize Dividends, distributions based upon a capital reduction (Nennwertrückzahlungen) or paid out of reserves from capital contributions (Reserven aus Kapitaleinlagen) received on shares underlying the ADSs and capital gains or losses realized on the sale or other disposition of ADSs in their income statement for the relevant taxation period and are subject to Swiss federal, cantonal and communal individual or corporate income tax, as the case may be, on any net taxable earnings for such taxation period. The same taxation treatment also applies to Swiss-resident private individuals who, for income tax purposes, are classified as "professional securities dealers" for reasons of, inter alia, frequent dealing, or leveraged investments in ADSs and other securities (the shareholders referred to in this paragraph 1.1.(C), hereinafter for the purposes of this section, as the "Domestic Commercial Shareholders"). Domestic Commercial Shareholders who are corporate taxpayers may be eligible for dividend relief (Beteiligungsabzug) in respect of Dividends and distributions based upon a capital reduction (Nennwertrückzahlungen) or paid out of reserves from capital contributions (Reservenaus Kapitaleinlagen) if the shares underlying the ADSs held by them as part of a Swiss business have an aggregate market value of at least CHF 1 million.

Swiss Cantonal and Communal Private Wealth Tax and Capital Tax

Non-Resident Shareholders

Non-Resident Shareholders are not subject to Swiss cantonal and communal private wealth tax or capital tax.

Resident Private Shareholders and Domestic Commercial Shareholders

Resident Private Shareholders and Domestic Commercial Shareholders who are individuals are required to report their ADSs as part of private wealth or their Swiss business assets, as the case may be, and will be subject to Swiss cantonal and communal private wealth tax on any net taxable wealth (including the ADSs), in the case of Domestic Commercial Shareholders to the extent the aggregate taxable wealth is allocated in Switzerland. Domestic Commercial Shareholders who are corporate taxpayers are subject to Swiss cantonal and communal capital tax on taxable capital to the extent the aggregate taxable capital is allocated to Switzerland.

Swiss Federal Withholding Tax

Dividends that the Company pays on the shares underlying the ADSs are subject to Swiss Federal withholding tax (Verrechnungssteuer) at a rate of 35% on the gross amount of the Dividend. The Company is required to withhold the Swiss federal withholding tax from the Dividend and remit it to the Swiss Federal Tax Administration. Distributions based upon a capital reduction (Nennwertrückzahlungen) or paid out of reserves from capital contributions (Reserven aus Kapitaleinlagen) are not subject to Swiss federal withholding tax.

The Swiss federal withholding tax on a Dividend will be refundable in full to a Resident Private Shareholder and to a Domestic Commercial Shareholder, who, in each case, inter alia, as a condition to refund, duly reports the Dividend in his or her individual income tax return as income or recognizes the Dividends in its income statement as earnings, as applicable.

A Non-Resident Shareholder may be entitled to a partial refund of the Swiss federal withholding tax on Dividend if the country of his or her residence for tax purposes has entered into a bilateral treaty for the avoidance of double taxation with Switzerland and the conditions of such treaty are met. Such shareholders should be aware that the procedures for claiming tax treaty benefits (and the time required for obtaining a refund) might be different from country to country. For example, a shareholder who is resident of the U.S. for the purposes of the bilateral treaty between the U.S. and Switzerland is eligible for a refund of the amount of the withholding tax in excess of the 15% treaty rate, provided such shareholder: (i) qualifies for benefits under this treaty and qualifies as beneficial owner of the Dividends; (ii) hold, directly or indirectly, less than 10% of the voting stock of the Company; (iii) does not qualify as a pension scheme or retirement arrangement for the purpose of the bilateral treaty; and (iv) does not conduct business through a permanent establishment or fixed base in Switzerland to which the ADSs are attributable. Such an eligible U.S. shareholder may apply for a refund of the amount of the withholding tax in excess of the 15% treaty rate. The applicable refund request form may be filed with the Swiss Federal Tax Administration following receipt of the dividend and the relevant deduction certificate, however no later than December 31 of the third year following the calendar year in which the dividend was payable.

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Swiss Federal Stamp Taxes

Any dealings in the ADSs, where a bank or another securities dealer in Switzerland, as defined in the Swiss Federal Stamp Tax Act, acts as intermediary or is a party to the transaction, are, subject to certain exemptions provided for in the Swiss Federal Stamp Tax Act, subject to Swiss securities turnover tax at an aggregate tax rate of up to 0.15% of the consideration paid for such ADSs.

International Automatic Exchange of Information in Tax Matters

On November 19, 2014, Switzerland signed the Multilateral Competent Authority Agreement, which is based on article 6 of the OECD/Council of Europe administrative assistance convention and is intended to ensure the uniform implementation of automatic exchange of information (the "AEOI"). The Federal Act on the International Automatic Exchange of Information in Tax Matters (the "AEOI Act") entered into force on January 1, 2017. The AEOI Act is the legal basis for the implementation of the AEOI standard in Switzerland.

The AEOI is being introduced in Switzerland through bilateral agreements or multilateral agreements. The agreements have, and will be, concluded on the basis of guaranteed reciprocity, compliance with the principle of specialty (i.e., the information exchanged may only be used to assess and levy taxes (and for criminal tax proceedings)) and adequate data protection.

Based on such multilateral agreements and bilateral agreements and the implementing laws of Switzerland, Switzerland exchanges data in respect of financial assets, including the Shares, held in, and income derived thereon and credited to, accounts or deposits with a paying agent in Switzerland for the benefit of individuals resident in a EU member state or in a treaty state.

Swiss Facilitation of the Implementation of the U.S. Foreign Account Tax Compliance Act

Switzerland has concluded an intergovernmental agreement with the U.S. to facilitate the implementation of FATCA. The agreement ensures that the accounts held by U.S. persons with Swiss financial institutions are disclosed to the U.S. tax authorities either with the consent of the account holder or by means of group requests within the scope of administrative assistance. Information will not be transferred automatically in the absence of consent, and instead will be exchanged only within the scope of administrative assistance on the basis of the double taxation agreement between the U.S. and Switzerland. On 8 October 2014, the Swiss Federal Council approved a mandate for negotiations with the U.S. on changing the current direct-notification-based regime to a regime where the relevant information is sent to the Swiss Federal Tax Administration, which in turn provides the information to the U.S. tax authorities.

F.	Dividends and Paying Agents

Not applicable.

G.	Statement by Experts

Not applicable.

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H.	Documents on Display

Under the Exchange Act, we are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F within 120 days of each fiscal year. Copies of reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Our financial statements have been prepared in accordance with U.S. GAAP.

We will make available to our shareholders annual reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP. Our documents may be available at our corporate headquarters at General-Guisan-Strasse 6, 6300 Zug, Switzerland.

I.	Subsidiary Information

Not applicable.

Item 11.	Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to market risks primarily related to foreign currency exchange rates, commodity prices, and changes in the value of investment securities. The Company is not exposed to interest rate risks because all its financial instruments have fixed interest rate terms.

The table below shows the balances of our market risk sensitive instruments, which are financial instruments, as at the end of the latest fiscal year grouped by functional currency, and the expected cash flows from these instruments for each of the next five years. The contractual cash flows are presented on an undiscounted cash flow basis, including interest expense. For those instruments where the lender has the choice to settle the repayment of principal and interests in cash or in shares, we have assumed that all amounts would be repaid in cash; this table therefore shows the maximum expected cash flows. Additional details on the financial instruments considered are available in Note 25. Loans and line of credit of our consolidated financial statements for the years ended December 31, 2020 and 2019.

							Expected<br> cash flows by period
Market<br> risk sensitive instruments ('000)		Principal<br> amount and interests		Weighted<br> average effective interest rate per annum			Total		Less<br> than 1 year		Between<br> 1 and 2 years		Between<br> 2 and 3 years		Between<br> 3 and 4 years		Between<br> 4 and 5 years		More<br> than 5 years
Debt and convertible note<br> obligations:
- held<br> by entities with CHF functional currency	5,640		5,752		7	%		5,752		5,752		-		-		-		-		-
-<br> held by entities with functional currency	85		85		0	%		85		85		-		-		-		-		-
Total<br> contractual obligations	5,725		5,837		-			5,837		5,837		-		-		-		-		-

All values are in British Pounds.

Foreign currency exchange rate risk

For information about the foreign currency exchange rate risk see Item 5. Operating and Financial Review and Prospects – A. Operating Results.

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Commodity price risk

The Company has only a very limited exposure to price risk related to anticipated purchases of certain commodities used as raw material. Our raw material inventory was USD 543,000 as at December 31, 2020. A change in those prices may affect our gross margin, however because the inventory balance is relatively small in comparison with our total assets, the Company does not enter into commodity futures, forwards or any other hedge instrument to manage fluctuations in prices of anticipated purchases.

Risk of changes in the value of investment securities

As at December 31, 2020, the Company had two investment securities apart from the investments in consolidated subsidiaries: an investment in equity securities at fair value of USD 301,301 (see Note 20 of our consolidated financial statement as at December 31, 2020), and an investment in equity securities at cost of USD 7,000,000 (see Note 19 of our consolidated financial statement as at December 31, 2020). The Company has not entered into any instrument to hedge against the fluctuation in value of these equity instruments.

For the equity instrument held at fair value, the Company manages the risk of fluctuation of its market price by regularly reviewing the share prices and financial position of the issuer. Changes in the fair value of the equity are recorded in the income statement in the period in which they occur.

For the equity instrument held at cost, the Company is in regular contact with the management of the issuer to review its financial position, so as to manage the risk of fluctuation.

Item 12.	Description of Securities Other than Equity Securities
A.	Debt Securities
---	---

Not applicable.

B.	Warrants and Rights

Not applicable.

C.	Other Securities

Not applicable.

D.	American Depositary Shares

Fees and Expenses

Persons depositing or withdrawing Class B Shares or ADS holders must pay:	For:
USD5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	• Issuance of ADSs, including issuances<br> resulting from a distribution of Class B Shares or rights or other property<br><br> <br><br><br> <br>• Cancellation of ADSs for the<br>purpose of withdrawal, including if the deposit agreement terminates
USD0.05 (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 Class B Shares and the Class B Shares had been deposited for issuance of ADSs	• Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders

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Persons depositing or withdrawing Class B Shares or ADS holders must pay:	For:
USD0.05 (or less) per ADSs per calendar year	• Depositary services
---	---
Registration or transfer fees	• Transfer and registration of Class B Shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw Class B Shares
Expenses of the depositary	• Cable, telex and facsimile transmissions<br> (when expressly provided in the deposit agreement)<br><br> <br><br><br> <br>• Converting foreign currency<br>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

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing Class B Shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may generally refuse to provide fee-based services until its fees for these services are paid.

From time to time, the depositary may make payments to us to reimburse and/or class B share revenue from the fees collected from ADS holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing its duties under the deposit agreement, the depositary may use brokers, dealers or other service providers that are affiliates of the depositary and that may earn or share fees or commissions.

Depositary Payments

In 2020, we did not receive any payments or reimbursements from The Bank of New York Mellon, the depositary bank of our ADS program.

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Item 13.	Defaults, Dividend Arrearages and Delinquencies

None.

Item 14.	Material Modifications to The Rights of Security Holders<br>and Use of Proceeds

None.

Item 15.	Controls and Procedures

(a) Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this annual report, have concluded that, as of such date, our disclosure controls and procedures were effective.

(b) Management’s annual report on internal control over financial reporting: Our Board of Directors and management are responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting was designed to provide reasonable assurance to our management and Board of Directors regarding the reliability of financial reporting and the preparation and fair presentation of its published consolidated financial statements.

Internal controls over financial reporting, no matter how well designed, have inherent limitations. Therefore, even those internal controls over financial reporting determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. In making this assessment, it used the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, management concluded that, as of December 31, 2020, our internal control over financial reporting is effective based on those criteria.

(c) Not applicable.

(d) There were no changes to our internal control over financial reporting that occurred during the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16.	[RESERVED]
Item 16A.	Audit Committee Financial Expert
---	---

Our Board of Directors has determined that Mr. Jean-Philippe Ladisa possesses specific accounting and financial management expertise and that he is an Audit Committee Financial Expert as defined by the SEC. Mr. Ladisa is also “independent” in accordance with the applicable requirements of Rule 10A-3 of the Exchange Act.

Item 16B.	Code of Ethics

We have followed Swiss law which does not require a company to have a code of ethics applicable to all directors, officers and employees. We do, however, expect ethical behavior from all our directors, officers and employees.

Item 16C.	Principal Accounting Fees and Services

(a) Audit Fees: The aggregate fees billed for professional services rendered by the principal accountant for the audit of our annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements amounted to CHF 764,092 (USD 814,523) and CHF 698,946 (USD 703,466) respectively for the years ended December 31, 2020 and 2019.

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(b) Audit-RelatedFees: None.

(c) Tax Fees: None.

(d) All Other Fees: None.

(e) Audit committee’spre-approval policies and procedures: Our audit committee is responsible for overseeing the activities of BDO, our principal accountant. The audit committee regularly evaluates the performance of BDO and, based on this, once a year determines whether BDO should be proposed to the shareholders for election. To assess the performance of BDO, the audit committee holds meetings with the CFO. Criteria applied for the performance assessment of BDO include an evaluation of its technical and operational competence; its independence and objectivity; the sufficiency of the resources it has employed; its focus on areas of significant risk; its willingness to probe and challenge; its ability to provide effective, practical recommendations; and the openness and effectiveness of its communications and coordination with the audit committee.

In the years ended December 31, 2020 and 2019, BDO has not provided services other that those rendered for the audit of our annual financial statements or in connection with statutory and regulatory filings or engagements.

(f) Not applicable.

Item 16D.	Exemptions from the Listing Standards for Audit Committees

None.

Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated<br>Purchasers

In the year ended December 31, 2020, the Company purchased its own Class B Shares as per detail below:

Period	(a) Total Number of Shares Purchased^1^	(b) Average Price Paid per Share	(d) Maximum Number of Shares that may Yet Be Purchased Under the Plans or Programs
January 01 to January 31, 2020	105,000	USD 2.02	3,375,848
February 01 to February 28, 2020	100,000	USD 1.67	3,275,848
March 01 to March 31, 2020	41,140	USD 1.28	3,234,708
May 01 to May 31, 2020	7,585	USD 0.88	3,227,123
September 01 to September 30, 2020	4,500	USD 1.29	3,222,623
October 01 to October 31, 2020	196,720	USD 1.25	3,025,903
Total	454,945	USD 1.40	3,025,903

1 Column (a) shows shares purchased as part of our share buyback program which was approved by the Board of directors on June 18, 2019 and publicly announced on July 08, 2019. WISeKey has received approval from the Swiss Takeover Board to purchase up to 3,682,848 of its class B shares. This maximum amount of shares is equivalent to 10% of the registered share capital of the Company. The shares will be purchased in the open market starting July 09, 2019 for a period of 3 years until July 07, 2022. WISeKey has the right to terminate the buyback program early.

Item 16F.	Change in Registrant's<br>Certifying Accountant

None.

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Item 16G.	Corporate Governance

See “Item6.C. Board Practices” for significant ways in which our corporate governance practices differ from NASDAQ’s standards.

Item 16H.	Mine Safety Disclosure

Not applicable.

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Item 17.	Financial Statements

The Company has elected to furnish the financial statements and related information specified in Item 18.

Item 18.	Financial Statements

The consolidated financial statements and related notes required by this Item 18 are included in this annual report beginning on page F-1.

Item 19.	Exhibits

Index to Exhibits

Exhibit No.	Description
1.1*	Amended and Restated Articles of Association of the Registrant (incorporated by reference to Exhibit 1.1 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
2.1*	Form of Specimen Certificate for Class B Shares of the Registrant (incorporated by reference to Exhibit 2.1 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
2.2*	Form of Registrant's American Depositary Receipt (incorporated by reference to form of ADR filed pursuant to Rule 424(b)(3) on November 13, 2019 under the F-6 Registration Statement for the Registrant’s American Depositary Shares (Reg No. 333-224780)).
2.4*	Deposit Agreement, dated as of May 16, 2018, among the Registrant, the Depositary and the Owners and Beneficial Owners of the American Depositary Shares issued thereunder (incorporated by reference to Exhibit 2.4 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
2.5	Description of Securities registered under Section 12 of the Exchange Act.
4.1*	WISeKey Employee Share Option Plan, dated September 29, 2016 (incorporated by reference to Exhibit 4.1 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
4.2*	Form of indemnification agreement by and between Registrant and each of its directors and executive officers  (incorporated by reference to Exhibit 4.2 of Amendment No.1 to WISeKey International Holding AG’s registration statement on the Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
4.3*	Convertible Loan Agreement by and between Registrant and Crede CG III, Ltd., dated as of September 28, 2018 (incorporated by reference to Exhibit 4.3 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
4.4*	Warrant Agreement by and between Registrant and Crede CG III, Ltd., dated as of September 28, 2018 (incorporated by reference to Exhibit 4.4 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
4.5*	Convertible Loan Agreement by and between Registrant and YA II PN, Ltd., dated as of June 27, 2019 (incorporated by reference to Exhibit 4.5 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
4.6*	Warrant Agreement by and between Registrant and YA II PN, Ltd., dated as of June 27, 2019 (incorporated by reference to Exhibit 4.6 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).

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4.7*	Standby Equity Distribution Agreement by and between Registrant and YA II PN, Ltd., dated as of February 8, 2018 (incorporated by reference to Exhibit 4.7 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
4.8*	Share Subscription Facility Agreement by and among Registrant, GEM Global Yield Fund LLC SCS and GEM Investments America, LLC, dated as of January 19, 2016 (incorporated by reference to Exhibit 4.8 of WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on October 30, 2019).
4.9*	Warrant to Purchase Ordinary Shares by and between Registrant and GEM Global Yield Fund LLC SCS, dated as of May 6, 2016 (incorporated by reference to Exhibit 4.9 of WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on October 30, 2019).
4.10*	Master Purchase Agreement by and between Cisco Systems International B.V. and INSIDE Secure, dated as of August 25, 2014 (incorporated by reference to Exhibit 4.10 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
4.11*	Buffer Stock Agreement by and between WISeKey Semiconductors and Key Tronic Corporation, dated as of June 9, 2017 (incorporated by reference to Exhibit 4.11 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
4.12*	Supplier Agreement by and between Vault-IC France and UTAC Headquarters Pte. Ltd, dated as of September 19, 2016 (incorporated by reference to Exhibit 4.12 of WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on October 30, 2019).
4.13*	Service Level Agreement by and among Inside Secure, Presto Engineering HVM and Presto Engineering, Inc., dated as of June 30, 2015 (incorporated by reference to Exhibit 4.13 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019). (1)
4.14*	First Amendment to Service Level Agreement, by and among Inside Secure, Presto Engineering HVM and Presto Engineering, Inc., dated as of May 26, 2016 (incorporated by reference to Exhibit 4.14 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019). (1)
4.15*	Second Amendment to Service Level Agreement, by and among WISeKey Semiconductors, Presto Engineering HVM and Presto Engineering, Inc., dated as of June 25, 2018 (incorporated by reference to Exhibit 4.15 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019). (1)
4.16*	SafeNet Supplier Agreement by and between SafeNet, Inc. and Inside Secure SA, dated as of March 26, 2012 (incorporated by reference to Exhibit 4.16 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019).
4.17*	PicoPass License Agreement by and between Inside Secure and HID Global Corporation, dated as of December 8, 2014 (incorporated by reference to Exhibit 4.17 of Amendment No.1 to WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on November 8, 2019). (1)
4.18*	Collaboration Agreement by and between Organisation Internationale pour la Sécurité de Transactions Electroniques OISTE and WISeKey SA, dated as of June 20, 2018 (incorporated by reference to Exhibit 4.18 of WISeKey International Holding AG’s registration statement on Form 20-F (File No. 333-39115) as filed with the SEC on October 30, 2019).
4.19*	Credit Agreement, dated as of April 4, 2019, by and between ExWorks Capital Fund I, L.P. and WISeCoin AG. (incorporated by reference to Exhibit 4.19 to the Form 20-F for the year ended December 31, 2019, as filed with the SEC on March 13, 2020). (1)

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4.20*	Convertible Term Loan Facility Agreement, dated as of December 16, 2019, by and between Long State Investment Limited and WISeKey International Holding AG. (incorporated by reference to Exhibit 4.20 to the Form 20-F for the year ended December 31, 2019, as filed with the SEC on March 13, 2020). (1)
4.21*	Convertible Loan Agreement, dated as of March 4, 2020, between WISeKey International Holding AG and YA II PN, LTD. (incorporated by reference to Exhibit 4.21 to the Form 20-F for the year ended December 31, 2019, as filed with the SEC on March 13, 2020). (1)
4.22	English summary of Credit COVID-19 Loan Agreement, dated March 26, 2020, between WISeKey International Holding AG and UBS SA.
4.23	English summary of Credit COVID-19 Loan Agreement, dated March 26, 2020, between WISeKey SA and UBS SA.
4.24	Agreement for the Issuance and Subscription of Convertible Notes, dated May 18, 2020, between WISeKey International Holding AG and Nice & Green SA.
4.25	Convertible Loan Agreement, dated August 07, 2020, between WISeKey International Holding AG and Crede CG III, Ltd.
4.26	Warrant Agreement, dated August 07, 2020, between WISeKey International Holding AG and Crede CG III, Ltd.
4.27	First Amendment, dated September 18, 2020, to the Warrant Agreement dated September 28, 2018, between WISeKey International Holding AG and Crede CG III, Ltd.
4.28	First Amendment,<br> dated September 18, 2020, to the Warrant Agreement dated August 07, 2020, between WISeKey International Holding AG and Crede<br> CG III, Ltd.
4.29	Agreement for the Issuance and Subscription of Convertible Notes, dated December 08, 2020, between WISeKey International Holding AG and GLOBAL TECH OPPORTUNITIES 8.
4.30	Third Convertible Loan Agreement, dated November 18, 2020, between WISeKey International Holding AG, arago GmbH, Aquilon Invest GmbH, and OGARA GmbH.
8.1	List of significant subsidiaries of the Registrant.
12.1	Certification of Carlos Moreira, Chief Executive Officer of WISeKey International Holding AG, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
12.2	Certification of Peter Ward, Chief Financial Officer of WISeKey International Holding AG, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
13.1	Certification of Carlos Moreira, Chief Executive Officer of WISeKey International Holding AG, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2	Certification of Peter Ward, Chief Financial Officer of WISeKey International Holding AG, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*	Previously filed
---	---
(1)	Portions of this exhibit have been omitted.
---	---

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing of Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

WISEKEY INTERNATIONAL HOLDING AG
By:	/s/ Carlos Moreira	/s/ Peter Ward
	Carlos Moreira	Peter Ward
	Chief Executive Officer	CFO
Date: April 29, 2021

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Index to Financial Statements

Consolidated Financial Statements for Years Ended December 31, 2018, 2019 and 2020	F-1
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Statement of Comprehensive Income / (Loss)	F-3
Consolidated Balance Sheet	F-4
Consolidated Statements of Changes on Shareholders' Equity (Deficit)	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7

Table of Contents

WISeKey Consolidated Financial Statements

for Years Ended December 31, 2018, 2019 and 2020

F-1
Table of Contents

1.	Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

WISeKey International Holding AG

6300 Zug

Switzerland

Opinion on the Consolidated FinancialStatements

We have audited the accompanying consolidated balance sheets of WISeKey International Holding AG (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of comprehensive income /(loss), of changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020**,** in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Zurich, Switzerland, April 29, 2021

BDO AG

/s/ Christoph Tschumi	/s/ Philipp Kegele
Christoph Tschumi	Philipp Kegele

We have served as the Company's auditor since 2015.

F-2
Table of Contents

2.	Consolidated Statement of Comprehensive Income/(Loss)
	12 months ended December 31,			12 months ended December 31,			12 months ended December 31,			Note
---	---	---	---	---	---	---	---	---	---	---	---
USD'000	2020			2019			2018			ref.
Net sales		14,779			22,652			34,280			30
Cost of sales		(8,578	)		(12,871	)		(17,607	)
Depreciation of production assets		(736	)		(325	)		(712	)
Gross profit		5,465			9,456			15,961
Other operating income		43			180			289			31
Research & development expenses		(6,012	)		(6,422	)		(5,306	)
Selling & marketing expenses		(7,355	)		(7,929	)		(5,772	)
General & administrative expenses		(10,673	)		(15,789	)		(14,232	)
Total operating expenses		(23,997	)		(29,960	)		(25,021	)
Operating loss		(18,532	)		(20,504	)		(9,060	)
Non-operating income		1,127			1,918			2,181			33
Gain on derivative liability		44			214			-			6/25
Gain / (loss) on debt extinguishment		-			(233	)		-
Interest and amortization of debt discount		(458	)		(742	)		(150	)		25
Non-operating expenses		(11,079	)		(3,670	)		(2,826	)		34
Loss from continuing operations before income tax expense		(28,898	)		(23,017	)		(9,855	)
Income tax expense		(9	)		(13	)		(53	)		35
Loss from continuing operations, net		(28,907	)		(23,030	)		(9,908	)
Discontinued operations:
Net sales from discontinued operations		-			1,934			19,412
Cost of sales from discontinued operations		-			(791	)		(6,196	)
Total operating and non-operating expenses from discontinued operations		-			(1,801	)		(19,778	)
Income tax recovery from discontinued operations		-			42			205
Gain on disposal of a business, net of tax on disposal		-			31,100			-
Income / (loss) on discontinued operations		-			30,484			(6,357	)
Net income / (loss)		(28,907	)		7,454			(16,265	)
Less: Net income / (loss) attributable to noncontrolling interests		(248	)		(733	)		13
Net income / (loss) attributable to WISeKey International Holding AG		(28,659	)		8,187			(16,278	)
Earnings per share
Earnings from continuing operations per share - Basic		(0.68	)		(0.64	)		(0.29	)		37
Earnings from continuing operations per share - Diluted		(0.68	)		(0.64	)		(0.29	)		37
Earnings from discontinued operations per share - Basic		-			0.84			(0.19	)		32
Earnings from discontinued operations per share - Diluted		-			0.81			(0.19	)		32
Earning per share attributable to WISeKey International Holding AG
Basic		(0.67	)		0.23			(0.48	)		37
Diluted		(0.67	)		0.23			(0.48	)		37
Other comprehensive income / (loss), net of tax:
---	---	---	---	---	---	---	---
Foreign currency translation adjustments	1,729		516		108
Change in unrealized gains related to available-for-sale debt securities	5,385		-		-		10
Defined benefit pension plans:							26
Net gain (loss) arising during period	1,189		(2,199	)	287
Other comprehensive income / (loss)	8,303		(1,683	)	395
Comprehensive income / (loss)	(20,604	)	5,771		(15,870	)
Other comprehensive income / (loss) attributable to noncontrolling interests	(95	)	(127	)	(23	)
Other comprehensive income / (loss) attributable to WISeKey International Holding AG	8,398		(1,556	)	418
Comprehensive income / (loss) attributable to noncontrolling interests	(343	)	(860	)	(10	)
Comprehensive income / (loss) attributable <br> to WISeKey International Holding AG	(20,261	)	6,631		(15,860	)

The accompanying notes are an integral part of these consolidated financial statements.

F-3
Table of Contents

3.	Consolidated Balance Sheet
	As at December 31,		As at December 31,		Note
---	---	---	---	---	---	---
USD'000	2020		2019		ref.
ASSETS
Current assets
Cash and cash equivalents		19,650		12,121		7
Restricted cash, current		2,113		2,525		8
Accounts receivable, net of allowance for doubtful accounts		2,900		3,770		9
Notes receivable from employees		37		-
Available-for-sale debt security		9,190		-		10
Inventories		2,474		2,787		11
Contract assets		-		15
Prepaid expenses		649		690
Deferred charges, current		836		207		25
Other current assets		814		1,469		12
Total current assets		38,663		23,584
Noncurrent assets
Restricted cash, noncurrent		-		2,000		8
Notes receivable, noncurrent		183		23		13
Deferred income tax assets		3		6
Deferred tax credits		1,312		2,488		14
Property, plant and equipment net of accumulated depreciation		1,000		1,801		15
Intangible assets, net of accumulated amortization		9		600		16
Finance lease right-of-use assets		246		289		17
Operating lease right-of-use assets		2,502		2,780		17
Goodwill		8,317		8,317		18
Deferred charges, noncurrent		169		30		25
Equity securities, at cost		-		7,000		19
Equity securities, at fair value		301		756		20
Other noncurrent assets		176		230		21
Total noncurrent assets		14,218		26,320
TOTAL ASSETS		52,881		49,904
LIABILITIES
Current Liabilities
Accounts payable		13,099		10,713		22
Notes payable		4,115		4,104		23
Convertible note payable, current		5,633		3,226		25
Deferred revenue, current		302		89		30
Current portion of obligations under finance lease liabilities		119		103		17
Current portion of obligations under operating lease liabilities		601		556		17
Income tax payable		3		11
Derivative liabilities		-		44		6
Other current liabilities		1,105		1,304		24
Total current liabilities		24,977		20,150
Noncurrent liabilities
Bonds, mortgages, convertible note payable and other long-term debt		646		-		25
Convertible note payable, noncurrent		3,710		-		25
Deferred revenue, noncurrent		19		10		30
Finance lease liabilities, noncurrent		67		169		17
Operating lease liabilities, noncurrent		1,901		2,223		17
Employee benefit plan obligation		6,768		6,880		26
Other deferred tax liabilities		38		25
Other noncurrent liabilities		329		3
Total noncurrent liabilities		13,478		9,310
TOTAL LIABILITIES		38,455		29,460
Commitments and contingent liabilities					27
---	---	---	---	---	---
SHAREHOLDERS' EQUITY
Common stock - Class A	400		400		28
CHF 0.01 par value
Authorized - 40,021,988 and 40,021,988 shares
Issued and outstanding - 40,021,988 and 40,021,988 shares
Common stock - Class B	2,490		1,475		28
CHF 0.05 par value
Authorized - 63,234,625 and 41,066,298
Issued - 47,622,689 and 28,824,086
Outstanding - 42,839,554 and 27,621,895
Share subscription in progress	1		6
Treasury stock, at cost (4,783,135 and 1,202,191 shares held)	(505	)	(1,288	)	28
Additional paid-in capital	224,763		212,036
Accumulated other comprehensive income / (loss)	6,940		(1,453	)	29
Accumulated deficit	(217,820	)	(189,161	)
Total shareholders'equity attributable to WISeKey shareholders	16,269		22,015
Noncontrolling interests in consolidated subsidiaries	(1,843	)	(1,571	)
Total shareholders'equity	14,426		20,444
TOTAL LIABILITIES AND EQUITY	52,881		49,904

The accompanying notes are an integral part of these consolidated financial statements.

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4.	Consolidated Statements of Changes in Shareholders’<br>Equity
	Number of common shares		Common Share Capital
---	---	---	---	---	---	---	---	---	---	---	---	---	---
USD'000	Class A	Class B	Class A	Class B	Total share capital	Treasury Shares	Additional paid-in<br> capital	Share subscription<br> in progress	Accumulated deficit	Accumulated other<br> comprehensive income / (loss)	Total<br> stockholders' equity	Non controlling<br> interests	Total<br> equity
As at December 31, 2018	40,021,988	28,769,797	400	1,472	1,872	(1,139)	201,373	-	(197,348)	100	4,858	(883)	3,975
Common stock<br> issued^1^	-	-	-	-	-	-	-	-	-	-	-	-	-
Options exercised	-	54,289	-	3	3	-	3,375	-	-	-	3,378	-	3,378
Stock-based compensation	-	-	-	-	-	-	5,414	6	-	-	5,420	-	5,420
Changes in treasury shares	-	-	-	-	-	(534)	-	-	-	-	(534)	-	(534)
Sale of QuoVadis Group	-	-	-	-	-	-	-	-	-	34	34	131	165
Change in Ownership in WISeKey SA	-	-	-	-	-	29	(159)	-	-	(10)	(140)	41	(99)
Liquidation of subsidiaries	-	-	-	-	-	-	-	-	-	(21)	(21)	-	(21)
Yorkville SEDA	-	-	-	-	-	296	632	-	-	-	928	-	928
Crede convertible loan	-	-	-	-	-	549	1,075	-	-	-	1,624	-	1,624
Yorkville convertible loan	-	-	-	-	-	-	326	-	-	-	326	-	326
Share buyback program	-	-	-	-	-	(489)	-	-	-	-	(489)	-	(489)
Net loss	-	-	-	-	-	-	-	-	8,187	-	8,187	(733)	7,454
Other comprehensive income<br> / (loss)	-	-	-	-	-	-	-	-	-	(1,556)	(1,556)	(127)	(1,683)
As at December 31, 2019	40,021,988	28,824,086	400	1,475	1,875	(1,288)	212,036	6	(189,161)	(1,453)	22,015	(1,571)	20,444
Common stock<br> issued^1^	-	8,261,363	-	448	448	-	-	-	-	-	448	-	178
Options exercised	-	2,537,240	-	126	126	-	-	-	-	-	126	-	126
Stock-based compensation	-	-	-	-	-	-	393	(5)	-	-	388	-	388
Changes in treasury shares	-	8,000,000	-	441	441	(439)	-	-	-	-	2	-	2
Yorkville SEDA	-	-	-	-	-	1,252	(228)	-	-	-	1,024	-	1,024
Crede convertible loan	-	-	-	-	-	517	2,007	-	-	-	2,524	-	2,524
LSI convertible loan	-	-	-	-	-	20	1,242	-	-	-	1,262	-	1,262
Nice & Green loan	-	-	-	-	-	106	8,749	-	-	-	8,855	-	8,855
GTO facility	-	-	-	-	-	23	593	-	-	-	616	-	616
Change in Ownership in WISeKey SA	-	-	-	-	-	-	(29)	-	-	(5)	(34)	71	37
Share buyback program	-	-	-	-	-	(696)	-	-	-	-	(696)	-	(696)
Net loss	-	-	-	-	-	-	-	-	(22,105)	-	(22,105)	(248)	(22,353)
Other comprehensive income<br> / (loss)	-	-	-	-	-	-	-	-	-	8,844	8,844	(95)	8,749
As at December 31, 2020	40,021,988	47,622,689	400	2,490	2,890	(505)	224,763	1	(211,266)	7,386	23,268	(1,843)	21,426

1. The articles of association of the Company had not been fully updated as of December 31, 2020 with the shares issued out of conditional capital.

The accompanying notes are an integral part of these consolidated financial statements.

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5.	Consolidated Statements of Cash Flows
	12 months ended December 31,			12 months ended December 31,			12 months ended December 31,
---	---	---	---	---	---	---	---	---	---
USD'000	2020			2019			2018
Cash Flows from operating activities:
Net Income (loss)		(28,907	)		7,454			(16,265	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of property, plant & equipment		988			821			1,437
Amortization of intangible assets		604			534			2,047
Impairment charge		7,000			-			-
Interest and amortization of debt discount		458			783			1,165
Loss / (gain) on derivative liability		(44	)		(214	)		-
Loss on debt extinguishment		-			1,326			-
Stock-based compensation		393			5,414			1,660
Bad debt expense		24			99			276
Inventory obsolescence impairment		457			535			284
Deferred tax asset write-off		-			-			161
Income tax expense / (recovery) net of cash paid		9			(17	)		(152	)
Release of provision		(52	)		-			(218	)
Other non cash expenses /(income)
Expenses settled in equity		14			40			1,685
Gain on disposal of a business		-			(31,100	)		-
Other		455			80			-
Unrealized and non cash foreign currency transactions		800			157			(201	)
Changes in operating assets and liabilities, net of effects of businesses acquired
Decrease (increase) in accounts receivables		870			1,346			(2,898	)
Decrease (increase) in inventories		313			1,399			(722	)
Decrease (increase) in other current assets, net		46			(84	)		(4,385	)
Decrease (increase) in deferred research & development tax credits, net		1,176			19			279
Decrease (increase) in other noncurrent assets, net		53			(77	)		(63	)
Increase (decrease) in accounts payable		2,386			(1,765	)		(126	)
Increase (decrease) in deferred revenue, current		213			25			3,007
Increase (decrease) in income taxes payable		(8	)		(362	)		349
Increase (decrease) in other current liabilities		(199	)		(217	)		1,312
Increase (decrease) in deferred revenue, noncurrent		9			2,247			2,985
Increase (decrease) in defined benefit pension liability		66			258			(109	)
Increase (decrease) in other noncurrent liabilities		326			(2,592	)		-
Net cash provided by (used in) operating activities		(12,550	)		(13,891	)		(8,492	)
CashFlows from investing activities:
---	---	---	---	---	---	---
Sale / (acquisition) of equity securities	-		(4,000	)	(3,000	)
Sale / (acquisition) of property, plant and equipment	(52	)	(293	)	(1,244	)
Sale of a business, net of cash and cash equivalents divested	-		40,919		-
Acquisition of debt securities or investments	(3,845	)	-		-
Net cash provided by (used in) investing activities	(3,897	)	36,626		(4,244	)
Cash Flows from financing activities:
Proceeds from options exercises	68		3,412		217
Proceeds from issuance of Common Stock	2,194		1,112		2,904
Proceeds from convertible loan issuance	22,053		2,860		3,000
Proceeds from debt	646		4,030		7,656
Repayments of debt	(2,344	)	(27,631	)	(1,001	)
Payments of debt issue costs	-		(42	)	-
Repurchase of treasury shares	(1,135	)	(1,025	)	(900	)
Net cash provided by (used in) financing activities	21,482		(17,284	)	11,876
Effect of exchange rate changes on cash and cash equivalents	82		41		(200	)
Cash and cash equivalents
Net increase (decrease) during the period	5,117		5,492		(1,060	)
Balance, beginning of period	16,646		11,154		12,214
Balance, end of period	21,763		16,646		11,154
Reconciliation to balance sheet
Cash and cash equivalents from continuing operations	19,650		12,121		9,146
Restricted cash, current from continuing operations	2,113		2,525		618
Restricted cash, noncurrent from continuing operations	-		2,000		-
Cash and cash equivalents from discontinued operations	-		-		1,390
Balance, end of period	21,763		16,646		11,154
Supplemental cash flow information
Cash paid for interest, net of amounts capitalized	250		756		772
Cash paid for incomes taxes	46		12		72
Noncash conversion of convertible loans into common stock	12,946		1,771		-
Restricted cash received for share subscription in progress	1		5		2,020
Purchase of equity securities	-		-		(500	)
ROU assets obtained from finance lease	-		321		-
ROU assets obtained from operating lease	544		3,768		-

The accompanying notes are an integral part of these consolidated financial statements.

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6.	Notes to the Consolidated Financial Statements
Note 1.	The WISeKey Group
---	---

WISeKey International Holding AG, together with its consolidated subsidiaries (“WISeKey” or the “Group” or the “WISeKey Group”), has its headquarters in Switzerland. WISeKey International Holding AG, the ultimate parent of the WISeKey Group, was incorporated in December 2015 and is listed on the Swiss Stock Exchange, SIX SAG with the valor symbol “WIHN” since March 2016 and on the NASDAQ Capital Market exchange with the valor symbol “WKEY” since December 2019.

The Group develops, markets, hosts and supports a range of solutions that enable the secure digital identification of people, content and objects, by generating digital identities that enable its clients to monetize their existing user bases and at the same time, expand its own eco-system. WISeKey generates digital identities from its current products and services in Cybersecurity Services, IoT (internet of Things), Digital Brand Management and Mobile Security.

The Group leads a carefully planned vertical integration strategy through acquisitions of companies in the industry. The strategic objective is to provide integrated services to its customers and also achieve cross-selling and synergies across WISeKey. Through this vertical integration strategy, WISeKey anticipates being able to generate profits in the near future.

Note 2.	Future operations and going concern

The Group experienced a loss from operations in this reporting period. Although the WISeKey Group does anticipate being able to generate profits in the near future, this cannot be predicted with any certainty. The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern.

The Group incurred a net operating loss of USD 18.5 million and had positive working capital of USD 13.7 million as at December 31, 2020, calculated as the difference between current assets and current liabilities. Based on the Group’s cash projections for the next 12 months to March 31, 2022, it will need approximately USD 1 million to fund operations and financial commitments. Historically, the Group has been dependent on equity financing to augment the operating cash flow to cover its cash requirements. Any additional equity financing may be dilutive to shareholders.

In the year 2020, the Group secured three loans (see Note 25 for detail):

-	On March 04, 2020, WISeKey entered into a new convertible loan agreement (the “SecondYorkville Convertible Loan”) with YA II PN, Ltd. a fund managed by Yorkville Advisors Global, LLC (“Yorkville”)<br>for a total amount of USD 4 million repayable in monthly instalments starting March 30, 2020 in cash or, at Yorkville’s election,<br>in class B shares. The Second Yorkville Convertible Loan bears an interest rate of 6% per annum payable monthly in arrears and<br>matures on April 30, 2021. The Second Yorkville Convertible Loan replaces the existing convertible loan signed on June 27, 2019<br>(the “Yorkville Convertible Loan”). The remaining balance of USD 2.3 million under the Yorkville Convertible<br>Loan was rolled over into the new agreement, which means that the loan generated a net cash inflow of USD 1.7 million.
-	On March 26, 2020, two members of the Group entered into agreements to borrow funds under the Swiss<br>Government supported COVID-19 Credit Facility (the “Covid loans”) with UBS SA. Under the terms of the Agreement,<br>UBS has lent such Group members a total of CHF 571,500. The loans are repayable in full on March 30, 2028, as amended, although<br>UBS reserves the right to implement instalments before this date. The interest rate is determined by Swiss COVID-19 Law and currently<br>the Covid loans carry an interest rate of 0%.
---	---
-	On August 07, 2020, WISeKey entered into Convertible Loan Agreement (the “New Crede ConvertibleLoan”) with Crede CG III, Ltd (“Crede”) for an amount of USD 5 million. The loan bears a 5% p.a. interest<br>rate, payable in arrears on a quarterly basis starting September 30, 2020, and is repayable in WIHN class B shares any time between<br>September 23, 2020 and the maturity date of August 07, 2022, at Crede’s election. Accrued interests are payable, at WISeKey’s<br>sole election, either in cash or in WIHN class B shares.
---	---

These loans demonstrate the availability of lenders to support the WISeKey Group in its activities and development. See Note 25 for detail on these loans.

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On February 08, 2018 the Group entered into a Standby Equity Distribution Agreement (“SEDA”) with Yorkville (see Note 25 for detail). Pursuant to the SEDA, Yorkville commits to provide equity financing to WISeKey in the aggregate amount of up to CHF 50.0 million in exchange for Class B Shares over a three-year period. Provided that a sufficient number of Class B Shares is provided through share lending, WISeKey has the right to make drawdowns under the SEDA, at its discretion, by requesting Yorkville to subscribe for (if the Class B Shares are issued out of authorized share capital) or purchase (if the Class B Shares are delivered out of treasury) Class B Shares worth up to CHF 5.0 million by drawdown, subject to certain exceptions and limitations. In the year 2020, WISeKey made six drawdowns for CHF 1.1 million (USD 1.2 million). As at December 31, 2020, the outstanding equity financing available was CHF 46.0 million. On March 04, 2020, the SEDA was extended by 24 months to March 31, 2023.

On December 16, 2019, WISeKey entered into a Convertible Term Loan Facility Agreement (the “LSI Convertible Facility”) with Long State Investment Limited (“LSI”), a Hong Kong-based investment company, to borrow up to CHF 30.0 million over a commitment period of 24 months (see Note 25 for detail). WISeKey will be able to drawdown individual term loans of up to CHF 500,000 or, if so agreed between the parties, up to CHF 2.5 million at an interest rate of 1.5% p.a., up to an aggregate amount of CHF 30 million. LSI will have the right to convert a drawdown tranche into existing or newly issued WIHN class B shares or, if so agreed among the parties and permitted by law, into American Depositary Shares (“ADSs”) representing WIHN class B shares. Any term loan not converted by LSI initially will automatically convert into WIHN class B shares, or (to the extent permissible under applicable securities laws) ADSs, 20 SIX trading days before the expiration of the commitment period at the applicable conversion price. As at December 31, 2020, the Group has made no drawdowns under the LSI Convertible Facility and so the outstanding facility available was CHF 30.0 million.

On May 18, 2020, the Group entered into an Agreement for the Issuance and Subscription of Convertible Notes (the “Nice & Green Facility”) with Nice & Green SA (“Nice & Green”) (see Note 25 for detail.) Pursuant to the Nice & Green Facility, Nice & Green commits to subscribe for up to CHF 10.0 million of interest-free convertible notes, over a two-year period. Subject to a cash redemption right of WISeKey, the convertible notes are mandatorily convertible into WIHN class B shares within a period of 12 months from issuance. In year 2020, WISeKey made six subscriptions. As at December 31, 2020, the outstanding Nice & Green Facility available was CHF 1,083,111 (USD 1,224,832) and there were no unconverted outstanding loan amounts.

On December 08, 2020, WISeKey entered into an Agreement for the Issuance and Subscription of Convertible Notes (the "GTO Facility") with GLOBAL TECH OPPORTUNITIES 8 ("GTO"), Grand Cayman, Cayman Islands, pursuant to which GTO commits to grant a loan to WISeKey for up to a maximum amount of CHF 15.5 million divided into tranches of variable sizes, during a commitment period of 18 months ending June 09, 2022. The dates and amounts of the first 3 tranches were agreed in advance in the GTO Facility agreement; for the remaining facility, GTO has the right to request the subscription of 2 tranches, all other tranches are to be subscribed for by WISeKey during the commitment period, subject to certain conditions. Each tranche is divided into convertible notes that do not bear interest. Subject to a cash redemption right of WISeKey, the convertible notes are mandatorily convertible into WIHN class B shares within a period of 12 months from issuance. GTO made three subscriptions in 2020 under the GTO Facility. As at December 31, 2020, the outstanding GTO Facility available was CHF 10,840,000 (USD 12,258,371). Convertible notes in an aggregate amount of CHF 3,910,000 (USD 4,421,608) remained unconverted.

The SEDA, the LSI Convertible Facility, the Nice & Green Facility and the GTO Facility will be used as a safeguard should there be any additional cash requirements not covered by other types of funding.

Based on the foregoing, Management believe it is correct to present these figures on a going concern basis.

Note 3.	Basis of presentation

The consolidated financial statements are prepared in accordance with the Generally Accepted Accounting Principles in the United States of America (“US GAAP”) as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC). All amounts are in United States dollars (“USD”) unless otherwise stated.

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Note 4.	Summary of significant accounting policies

Fiscal Year

The Group’s fiscal year ends on December 31.

Principles of Consolidation

The consolidated financial statements include the accounts of WISeKey and its wholly-owned or majority-owned subsidiaries over which the Group has control.

The consolidated comprehensive loss and net loss of non-wholly owned subsidiaries is attributed to owners of the Group and to the noncontrolling interests in proportion to their relative ownership interests.

Intercompany income and expenses, including unrealized gross profits from internal group transactions and intercompany receivables, payables and loans have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make certain estimates, judgments and assumptions. We believe these estimates, judgements and assumptions are reasonable, based upon information available at the time they were made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are differences between these estimates, judgments or assumptions and the actual results, our consolidated financial statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by US GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting from available alternatives would not produce a materially different result.

Foreign Currency

In general, the functional currency of a foreign operation is the local currency. Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive income/loss. The Group's reporting currency is USD.

Cash and Cash Equivalents

Cash consists of deposits held at major banks that are readily available. Cash equivalents consist of highly liquid investments that are readily convertible to cash and with original maturity dates of three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.

Accounts Receivable

Receivables represent rights to consideration that are unconditional and consist of amounts billed and currently due from customers, and revenues that have been recognized for accounting purposes but not yet billed to customers. The Group extends credit to customers in the normal course of business and in line with industry practices.

Allowance for Doubtful Accounts

We recognize an allowance for credit losses to present the net amount of receivables expected to be collected as of the balance sheet date. The allowance is based on the credit losses expected to arise over the asset’s contractual term taking into account historical loss experience, customer-specific data as well as forward looking estimates. Expected credit losses are estimated individually.

Accounts receivable are written off when deemed uncollectible and are recognized as a deduction from the allowance for credit losses. Expected recoveries, which are not to exceed the amount previously written off, are considered in determining the allowance balance at the balance sheet date.

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Inventories

Inventories are stated at the lower of cost or net realizable value. Costs are calculated using standard costs, approximating average costs. Finished goods and work-in-progress inventories include material, labor and manufacturing overhead costs. The Group records write-downs on inventory based on an analysis of obsolescence or a comparison to the anticipated demand or market value based on a consideration of marketability and product maturity, demand forecasts, historical trends and assumptions about future demand and market conditions.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives which range from 1 to 8 years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the improvements or the lease terms, as appropriate. Property, plant and equipment are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Intangible Assets

Those intangible assets that are considered to have a finite useful life are amortized over their useful lives, which generally range from 1 to 14 years. Each period we evaluate the estimated remaining useful lives of intangible assets and whether events or changes in circumstances require a revision to the remaining periods of amortization or that an impairment review be carried out. As at December 31, 2020 and 2019, all intangible assets held by the Group have been determined to have a finite life.

Leases

In line with ASC 842, the Group, as a lessee, recognizes right-of-use assets and related lease liabilities on its balance sheet for all arrangements with terms longer than twelve months, and reviews its leases for classification between operating and finance leases. Obligations recorded under operating and finance leases are identified separately on the balance sheet. Assets under finance leases and their accumulated amortization are disclosed separately in the notes. Operating and finance lease assets and operating and finance lease liabilities are measured initially at an amount equal to the present value of minimum lease payments during the lease term, as at the beginning of the lease term.

We have elected the short-term lease practical expedient whereby we do not present short-term leases on the consolidated balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we are reasonably certain to exercise.

We have also elected the practical expedients related to lease classification of leases that commenced before the effective date of ASC 842.

We adopted ASC 842 as of January 01, 2019 using the cumulative effect adjustment approach. Accordingly, previously reported financial statements, including footnote disclosures, have not been restated to reflect the application of the new standard to all comparative periods presented.

Goodwill and Other Indefinite-LivedIntangible Assets:

Goodwill and other indefinite-lived intangible assets are not amortized, but are subject to impairment analysis at least once annually.

Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. A reporting unit is an operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by segment management. We review our goodwill and indefinite lived intangible assets annually for impairment, or sooner if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We use October 1^st^ as our annual impairment test measurement date.

Equity Securities

Equity securities are any security representing an ownership interest in an entity or the right to acquire or dispose of an ownership interest in an entity at fixed or determinable prices, in accordance with ASC 321, i.e. investments that do not qualify for accounting as a derivative instrument, an investment in consolidated subsidiaries, or an investment accounted for under the equity method.

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We account for these investments in equity securities at fair value at the reporting date, except for those investments without a readily determinable fair value where we have elected the measurement at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, in line with ASC 321. Changes in fair value are accounted for in the income statement as a non-operating income/expense.

Available-for-sale debt securities

Available-for-sale debt securities are investments in debt securities that have readily determinable fair values and are not classified as trading securities or as held-to-maturity securities.

We account for these investments in available-for-sale debt securities at fair value at the reporting date and subject to impairment testing. Other than impairment losses, unrealized gains and losses are reported, net of the related tax effect, in other comprehensive income as change in unrealized gains related to available-for-sale debt securities.

Revenue Recognition

WISeKey’s policy is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, WISeKey applies the following steps:

-	Step 1: Identify the contract(s) with a customer.
-	Step 2: Identify the performance obligations in the<br>contract.
---	---
-	Step 3: Determine the transaction price.
---	---
-	Step 4: Allocate the transaction price to the performance<br>obligations in the contract.
---	---
-	Step 5: Recognize revenue when (or as) the entity<br>satisfies a performance obligation
---	---

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. We typically allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract. If a standalone price is not observable, we use estimates.

The Group recognizes revenue when it satisfies a performance obligation by transferring control over goods or services to a customer. The transfer may be done at a point in time (typically for goods) or over time (typically for services). The amount of revenue recognized is the amount allocated to the satisfied performance obligation. For performance obligations satisfied over time, the revenue is recognized over time, most frequently on a prorata temporis basis as most of the services provided by the Group relate to a set performance period.

If the Group determines that the performance obligation is not satisfied, it will defer recognition of revenue until it is satisfied.

We present revenue net of sales taxes and any similar assessments.

The Group delivers products and records revenue pursuant to commercial agreements with its customers, generally in the form of an approved purchase order or sales contract.

Where products are sold under warranty, the customer is granted a right of return which, when exercised, may result in either a full or partial refund of any consideration received, or a credit that can be applied against amounts owed, or that will be owed, to WISeKey. For any amount received or receivable for which we do not expect to be entitled to because the customer has exercised its right of return, we recognize those amounts as a refund liability.

Contract Assets

Contract assets consists of accrued revenue where WISeKey has fulfilled its performance obligation towards the customer but the corresponding invoice has not yet been issued. Upon invoicing, the asset is reclassified to trade accounts receivable until payment.

Deferred Revenue

Deferred revenue consists of amounts that have been invoiced and paid but have not been recognized as revenue. Deferred revenue that will be realized during the succeeding 12-month period is recorded as current and the remaining deferred revenue recorded as non-current. This would relate to multi-year certificates or licenses.

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Contract Liability

Contract liability consists of either:

-	amounts that have been invoiced and not yet paid, nor recognized as revenue. Upon payment, the<br>liability is reclassified to deferred revenue if the amounts still have not been recognized as revenue. Contract liability that<br>will be realized during the succeeding 12-month period is recorded as current and the remaining contract liability recorded as<br>non-current. This would relate to multi-year certificates or licenses.
-	advances from customers not supported by invoices.
---	---

Sales Commissions

Sales commission expenses where revenue is recognized are recorded in the period of revenue recognition.

Cost of Sales

Our cost of sales consists primarily of expenses associated with the delivery and distribution of our services and products. These include expenses related to the license to the Global Cryptographic ROOT Key, the global Certification authorities as well as the digital certificates for people, servers and objects, expenses related to the preparation of our secure elements and the technical support provided on the Group's ongoing production and on the ramp-up phase, including materials, labor, test and assembly suppliers, and subcontractors, freights costs, as well as the amortization of probes, wafers and other items that are used in the production process.

Research and Development and SoftwareDevelopment Costs

All research and development costs and software development costs are expensed as incurred.

Advertising Costs

All advertising costs are expensed as incurred.

Pension Plan

The Group maintains four defined benefit post retirement plans:

-	one that covers all employees working for WISeKey SA in Switzerland,
-	one that covers all employees working for WISeKey International Holding Ltd. in Switzerland,
---	---
-	one for the French employees of WISeKey Semiconductors SAS, and
---	---
-	one for the French employees of WISeCoin R&D Lab SAS.
---	---

In accordance with ASC 715-30, DefinedBenefit Plans – Pension, the Group recognizes the funded status of the plan in the balance sheet. Actuarial gains and losses are recorded in accumulated other comprehensive income / (loss).

Stock-based Compensation

Stock-based compensation costs are recognized in earnings using the fair-value based method for all awards granted. Fair values of options and awards granted are estimated using a Black-Scholes option pricing model. The model’s input assumptions are determined based on available internal and external data sources. The risk-free rate used in the model is based on the Swiss treasury rate for the expected contractual term. Expected volatility is based on historical volatility of WIHN class B shares.

Compensation costs for unvested stock options and awards are recognized in earnings over the requisite service period based on the fair value of those options and awards at the grant date.

Nonemployee share-based payment transactions are measured by estimating the fair value of the equity instruments that an entity is obligated to issue and the measurement date will be consistent with the measurement date for employee share-based payment awards (i.e., grant date for equity-classified awards).

Income Taxes

Taxes on income are accrued in the same period as the revenues and expenses to which they relate.

Deferred taxes are calculated on the temporary differences that arise between the tax base of an asset or liability and its carrying value in the balance sheet of our companies prepared for consolidation purposes, with the exception of temporary differences arising on investments in foreign subsidiaries where WISeKey has plans to permanently reinvest profits into the foreign subsidiaries.

Deferred tax assets on tax loss carry-forwards are only recognized to the extent that it is “more likely than not” that future profits will be available and the tax loss carry-forward can be utilized.

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Changes to tax laws or tax rates enacted at the balance sheet date are taken into account in the determination of the applicable tax rate provided that they are likely to be applicable in the period when the deferred tax assets or tax liabilities are realized.

WISeKey is required to pay income taxes in a number of countries. WISeKey recognizes the benefit of uncertain tax positions in the financial statements when it is more likely than not that the position will be sustained on examination by the tax authorities. The benefit recognized is the largest amount of tax benefit that is greater than 50 percent likely of being realized on settlement with the tax authority, assuming full knowledge of the position and all relevant facts. WISeKey adjusts its recognition of these uncertain tax benefits in the period in which new information is available impacting either the recognition or measurement of its uncertain tax positions.

Research Tax Credits

Research tax credits are provided by the French government to give incentives for companies to perform technical and scientific research. Our subsidiary WISeKey Semiconductors SAS is eligible to receive such tax credits.

These research tax credits are presented as a reduction of Research & development expenses in the income statement when companies that have qualifying expenses can receive such grants in the form of a tax credit irrespective of taxes ever paid or ever to be paid, the corresponding research and development efforts have been completed and the supporting documentation is available. The credit is deductible from the entity’s income tax charge for the year or payable in cash the following year, whichever event occurs first. The tax credits are included in noncurrent deferred tax credits in the balance sheet in line with ASU 2015-17.

Earnings per Share

Basic earnings per share are calculated using WISeKey International Holding AG’s weighted-average outstanding common shares. When the effects are not antidilutive, diluted earnings per share is calculated using the weighted-average outstanding common shares and the dilutive effect of stock options as determined under the treasury stock method.

Segment Reporting

Our chief operating decision maker, who is also our Chief Executive Officer, regularly reviews information collated into two segments for purposes of allocating resources and assessing budgets and performance. We report our financial performance based on this segment structure described in Note 35.

Recent Accounting Pronouncements

Adoption of new FASB Accounting Standard in the current year – Prior-Year Financial Statements not restated:

In 2020, the Group adopted ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820 as follows:

The following disclosure requirements were removed from Topic 820:

·	The amount of and reasons for transfers between Level<br>1 and Level 2 of the fair value hierarchy; The policy for timing of transfers between levels;
·	The valuation processes for Level 3 fair value measurements;.
---	---

The following disclosure requirements were added to Topic 820:

·

The changes in unrealized gains and losses for the period included in other comprehensive income for<br>recurring Level 3 fair value measurements held at the end of the reporting period; and the range and weighted average of significant<br>unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other<br>quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that<br>other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs<br>used to develop Level 3 fair value measurements. There was no material impact on the Group’s disclosures in 2020 upon adoption<br>of the new standard.

As of January 1, 2020, the Group adopted Accounting Standards Update ASU 2016-13, Financial Instruments - Credit Losses, which requires the measurement of expected lifetime credit losses, rather than incurred losses, for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts. There was no material impact on the Group's results upon adoption of the standard.

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The Group also adopted ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, Codification improvements, which clarifies and improves areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement of financial instruments to ASU 2016-01, 2016-13 & 2017-12. Since issuance of these standards, the FASB has identified areas that need clarification and correction, resulting in changes similar to those issues under its ongoing Codification improvements. There was no material impact on the Group’s results of operations in 2020 upon adoption of the new standard.

New FASB Accounting Standard to be adopted in the future:

In August 2018, The FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changesto the Disclosure Requirements for Defined Benefit Plans.

Summary: ASU 2018-14 applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

ASU 2018-14 deletes the following disclosure requirements:

The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan.

For public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for postretirement health care benefits.

ASU 2018-14 adds/clarifies disclosure requirements related to the following:

The weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates; An explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period; The projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets; The accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets.

Effective Date: The amendments are effective for fiscal years ending after December 15, 2020 for public business entities. Early adoption is permitted. The Group expects to adopt all of the aforementioned guidance when effective. Management does not expect the aforementioned guidance to have an impact on its consolidated financial statements, other than the required changes in disclosures.

In December 2019, The FASB issued Accounting Standards Update (ASU) no 2019-12, ​Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ​(the ASU), as part as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. The FASB’s amendments primarily impact ASC 740, ​Income Taxes, ​ and may impact both interim and annual reporting periods.

It eliminates the need for an organization to analyze whether the following apply in a given period:

•	Exception to the incremental approach for intraperiod<br>tax allocation;
•	Exceptions to accounting for basis differences when<br>there are ownership changes in foreign investments; and
---	---
•	Exception in interim period income tax accounting<br>for year-to-date losses that exceed anticipated losses.
---	---

The ASU also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for:

•	Franchise taxes that are partially based on income;
•	Transactions with a government that result in a step<br>up in the tax basis of goodwill;
---	---
•	Separate financial statements of legal entities that<br>are not subject to tax; and
---	---
•	Enacted changes in tax laws in interim periods.
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Effective Date: The amendments related to ASU 2019-12 are effective for public business entities for annual reporting periods beginning after December 15, 2020, and interim periods within those reporting periods. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption.

The Company expects to adopt all of the aforementioned guidance when effective. Management is assessing the impact of the aforementioned guidance on its consolidated financial statements but does not expect it to have a material impact.

In January 2020, the FASB issued Accounting Standards Update (ASU) no 2020-01, Investments- Equity securities (Topic 321), Investments – equity method and joint ventures (Topic 323), and derivatives and hedging (topic 815).

Summary: ASU 2020-01 provides additional guidance as a result of the adoption of ASU 2016-01, which added Topic 321, Investments – Equity Securities and provided an entity with the option to measure certain equity securities without a readily determinable fair value at cost, minus impairment. ASU 2020-01 amended the current guidance. In particular, the FASB clarified that entities seeking to apply the measurement alternative found in Topic 321 should first consider whether there are observable transactions that would require the reporting entity to either apply or discontinue the equity method of accounting in accordance with Topic 323. With respect to certain forward contracts and purchase options, the FASB explained an entity should not consider whether the underlying securities would be accounted for under Topic 323 or the fair value option found in Topic 825 upon the settlement of the contract or purchase option. Entities should instead consider the characteristics of these contracts and options based on the guidance found in 815-10-15-141 to determine the appropriate accounting treatment.

Effective Date: The amendments related to ASU 2020-01 are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for public business entities for periods in which financial statements have not been issued and for other entities in periods in which financial statements are not yet available for issuance.

The Company expects to adopt all of the aforementioned guidance when effective. Management is assessing the impact of the aforementioned guidance on its consolidated financial statements but does not expect it to have a material impact.

In August 2020, the FASB issued Accounting Standards Update (ASU) no 2020-06, 'Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

Summary: ASU 2020-06 simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas.

Effective Date: ASU No. 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption will be permitted.

The Company expects to adopt all of the aforementioned guidance when effective. Management is assessing the impact of the aforementioned guidance on its consolidated financial statements but does not expect it to have a material impact.

In October 2020, the FASB issued Accounting Standards Update (ASU) no 2020-10, Codifications improvements.

Summary: ASU 2020-10 further clarify and improve the Codification by codifying all guidance that requires or provides the option for an entity to disclose information within the footnotes. This clarification is meant to reduce the likelihood of a preparer missing required disclosure requirements. While the amendments do not introduce new topics or subtopics or change existing GAAP, all entities should review the changes found in the ASU to assess the impact it may have on their financial reporting requirements.

Effective date: Amendments in ASU 2020-10 are effective for public business entities for fiscal years beginning after December 15, 2020. Early adoption is permitted for all financial statements not yet issued for public business entities. The amendments should be applied on a retrospective basis as of the beginning of the period including the adoption date.

The Company expects to adopt all of the aforementioned guidance when effective. Management is assessing the impact of the aforementioned guidance on its consolidated financial statements but does not expect it to have a material impact.

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Note 5.	Concentration of credit risks

Financial instruments that are potentially subject to credit risk consist primarily of cash and cash equivalents and trade accounts receivable. Our cash is held with large financial institutions. Management believes that the financial institutions that hold our investments are financially sound and accordingly, are subject to minimal credit risk. Deposits held with banks may exceed the amount of insurance provided on such deposits.

The Group sells to large, international customers and, as a result, may maintain individually significant trade accounts receivable balances with such customers during the year. We generally do not require collateral on trade accounts receivable. Summarized below are the clients whose revenue were 10% or higher than the respective total consolidated net sales for fiscal years 2020, 2019 and 2018, and the clients whose trade accounts receivable balances were 10% or higher than the respective total consolidated trade accounts receivable balance for fiscal years 2020 and 2019:

	Revenue concentration(% of total net sales)			Receivables concentration (% of total accounts receivable)
	Year to December 31, 2020	Year to December 31, 2019	Year to December 31, 2018	As at December 31,<br><br> <br>2020	As at December 31,<br><br> <br>2019
IoT operating segment
Multinational electronics contract manufacturing company	18%	12%	8%	14%	19%
International luxury watch company	0%	6%	2%	2%	13%
International packaging solutions, technology and chips	8%	11%	3%	2%	0%
International equipment and software manufacturer	0%	2%	0%	0%	11%
Note 6.	Fair value measurements
---	---

ASC 820 establishes a three-tier fair value hierarchy for measuring financial instruments, which prioritizes the inputs used in measuring fair value. These tiers include:

·	Level 1, defined as observable inputs such as quoted prices in active markets;
·	Level 2, defined as inputs other than quoted prices in active markets that are either directly or<br>indirectly observable; and
---	---
·	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring<br>an entity to develop its own assumptions.
---	---
	As at December 31, 2020		As at December 31, 2019		Far<br><br> <br>value<br><br> <br>level
---	---	---	---	---	---	---
USD'000	Carrying amount	Fair value	Carrying amount	Fair value		Note ref.
Nonrecurring fair value measurements
Accounts receivable	2,900	2,900	3,770	3,770	3	9
Notes receivable from related parties	37	37	-	-	3
Notes receivable, noncurrent	183	183	23	23	3	13
Equity securities, at cost	-	-	7,000	7,000	3	19
Accounts payable	13,099	13,099	10,713	10,713	3	22
Notes payable	4,115	4,115	4,104	4,104	3	23
Convertible note payable, current	5,633	5,633	3,226	3,226	3	25
Convertible note payable, noncurrent	3,710	3,710	-	-	3	25
Recurring fair value measurements
Available-for-sale debt security	9,190	9,190	-	-	1	10
Equity securities, at fair value	301	301	756	756	1	20
Derivative liabilities, current	-	-	44	44	3	6

In addition to the methods and assumptions we use to record the fair value of financial instruments as discussed in the Fair Value Measurements section above, we used the following methods and assumptions to estimate the fair value of our financial instruments:

-	Accounts receivable – carrying amount approximated fair value due to their short-term nature.
-	Notes receivable from related parties – carrying amount approximated fair value due to their<br>short-term nature.
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-	Notes receivable, noncurrent- carrying amount approximated fair value because time-value considerations<br>are immaterial to the accounts.
-	Equity securities, at cost - no readily determinable fair value, measured at cost minus impairment.
---	---
-	Accounts payable – carrying amount approximated fair value due to their short-term nature.
---	---
-	Notes payable – carrying amount approximated fair value due to their short-term nature.
---	---
-	Convertible note payable current and noncurrent- carrying amount approximated fair value.
---	---
-	Available-for-sale debt security - fair value remeasured as at reporting period.
---	---
-	Equity securities, at fair value - fair value remeasured as at reporting period.
---	---
-	Derivative liabilities, current - fair value remeasured as at reporting period.
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Derivative liabilities

In 2020, the Group held one derivative instrument which was measured at estimated fair value on a recurring basis and linked to the conversion option originally embedded in the convertible loan signed with Yorkville on June 27, 2019 (the “First Yorkville Convertible Loan”) and modified on March 04, 2020 via the Second Yorkville Convertible Loan (see Note 25).

The Second Yorkville Convertible Loan has a maturity date of April 30, 2021. It contains a conversion option into WIHN Class B shares at the election of the Yorkville covering any amount outstanding (principal and/or interests) that may be settled. The exercise price is set at CHF 3.00 with antidilution provision adjustments as further described in Note 25.

In line with ASU 2014-16, both the First Yorkville Convertible Loan and the Second Yorkville Convertible Loan were assessed as a hybrid instrument, being a debt instrument with an equity-linked component (the conversion option). Per ASC 815-10, the embedded conversion option met the definition of a derivative and was accounted for separately.

The hosting debt instruments were recorded using the residual method.

The derivative component (the conversion option) was fair valued using a binomial lattice model, building in quoted market prices of WIHN class B shares on the SIX Swiss Stock Exchange, and inputs such as time value of money, volatility, and risk-free interest rate. It was valued at inception of the First Yorkville Convertible Loan on June 27, 2019 at USD 257,435 and revalued at fair value at each reporting date in line with ASC 815-15-30-1. At inception of the Second Yorkville Convertible Loan on March 04, 2020, following the modification accounting detailed in Note 25, the derivative liability was fair valued at USD nil.

In 2020, WISeKey made one final cash repayment of the principal amounting to USD 37,392 for the First Yorkville Convertible Loan. This repayment did not result in any gain or loss on derivative because the derivative was fair valued at USD nil at that date.

In 2020, WISeKey made twelve repayments in cash of the Second Yorkville Convertible Loan as per below. These repayments did not result in any gain or loss on derivative because the derivative was fair valued at USD nil at all repayment and reporting dates.

-	On April 16, 2020, WISeKey repaid USD 259,250 of the principal.
-	On May 15, 2020, WISeKey repaid USD 256,417 of the principal.
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-	On May 29, 2020, WISeKey repaid USD 125,000 of the principal.
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-	On June 16, 2020, WISeKey repaid USD 125,000 of the principal.
---	---
-	On June 30, 2020, WISeKey repaid USD 50,073 of the principal.
---	---
-	On July 15, 2020, WISeKey repaid USD 139,152 of the principal.
---	---
-	On July 16, 2020, WISeKey repaid USD 59,043 of the principal.
---	---
-	On August 05, 2020, WISeKey repaid USD 272,546 of the principal.
---	---
-	On September 09, 2020, WISeKey repaid USD 270,539 of the principal.
---	---
-	On September 30, 2020, WISeKey repaid USD 250,000 of the principal.
---	---
-	On October 30, 2020, WISeKey repaid USD 250,000 of the principal.
---	---
-	On November 30, 2020, WISeKey repaid USD 250,000 of the principal.
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The derivative component was measured at fair value at the reporting date at USD nil. Therefore, for the year ended December 31, 2020, WISeKey recorded in the income statement, a net gain on derivative of USD 43,655 and a net debt discount amortization expense of USD 280,736.

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Derivative liabilities	USD'000
Balance as at December 31, 2018	-
Fair value of the derivative instrument (conversion option)	258
Gain on derivative recognized as a separate line in the statement of loss	(214)
Balance as at December 31, 2019	44
Fair value of the derivative instrument (conversion option)	-
Gain on derivative recognized as a separate line in the statement of loss	(44)
Balance as at December 31, 2020	-
Note 7.	Cash and cash equivalents
---	---

Cash consists of deposits held at major banks.

Note 8.	Restricted cash

Restricted cash as at December 31, 2020 is made up of:

-	USD 2.0 million of the consideration for the sale of WISeKey (Bermuda) Holding Ltd (formerly named<br>QV Holdings Ltd) and its affiliates (together “QuoVadis”) in 2019, which is held in an escrow account, and to be released<br>in an amount of up to USD 2.0 million on January 16, 2021 (see Note 40 Subsequent events), and
-	A balance of CHF 100,000 (USD 113,085) held by the 51% owned subsidiary WiseAI AG, and corresponding<br>to the payment of the share capital at incorporation which is being held on a blocked account.
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Note 9.	Accounts receivable

The breakdown of the accounts receivable balance is detailed below:

	As at December 31,	As at December 31,
USD'000	2020	2019
Trade accounts receivable	2,608	3,643
Allowance for doubtful accounts	(42)	(25)
Accounts receivable from shareholders	14	-
Accounts receivable from other related parties	95	119
Accounts receivable from underwriters, promoters, and employees	1	-
Other accounts receivable	224	33
Total accounts receivable net of allowance for doubtful accounts	2,900	3,770

As at December 31, 2020, accounts receivable from shareholders consisted of a receivable from Dourgam Kummer, a former Board member of the Group and shareholder, relating to outstanding employee social charges for the exercise of ESOP options granted in 2019 (see Notes 32 and 39).

As at December 31, 2020, accounts receivable from other related parties consisted of a receivable from OISTE in relation to the facilities and personnel hosted by WISeKey SA on behalf of OISTE. (see Note 39).

Note 10.	Available-for-sale debt security

Convertible Loan with arago

On August 11, 2020 WISeKey entered into a convertible loan agreement with arago GmbH (“arago”) (the “arago First Convertible Loan”), a private German company leader in artificial intelligence automation, to acquire 5% of arago’s fully diluted share capital against an investment of CHF 5 million to be paid in five monthly installments of CHF 1 million starting August 12, 2020. The arago First Convertible Loan bore an interest of 5% per annum, did not contain any lender’s fees, and had no maturity date. WISeKey or arago could request conversion of the arago Second Convertible Loan into arago shares representing 5% of arago’s fully diluted share capital provided that either the full CHF 5 million was paid by WISeKey or that WISeKey had terminated the agreement. On August 12, 2020, WISeKey made an initial payment of CHF 1 million. On September 10, 2020, WISeKey terminated the arago First Convertible Loan and signed a new convertible loan agreement with arago on September 18, 2020 (the “arago Second Convertible Loan”).

Per arago Second Convertible Loan, WISeKey intends to acquire 5% of arago’s fully diluted share capital against an investment of CHF 5 million made up of the CHF 1 million paid on August 12, 2020 and four monthly installments of CHF 1 million starting September 18, 2020. The arago Second Convertible Loan bore an interest of 5% per annum, did not contain any lender’s fees, and had no maturity date. WISeKey or arago could request conversion of the arago Second Convertible Loan into arago shares representing 5% of arago’s fully diluted share capital once the full CHF 5 million was paid by WISeKey, or, should WISeKey terminate the agreement, the conversion shall take place within the next financing round of arago. On September 21, 2020, WISeKey made a payment of CHF 1 million. On October 09, 2020, WISeKey terminated the arago Second Convertible Loan and signed a new convertible loan agreement with arago on November 18, 2020 (the “arago Third Convertible Loan”).

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Per arago Third Convertible Loan, WISeKey intends to acquire 51% of arago’s fully diluted share capital against (i) an investment of CHF 5 million made up of the CHF 1 million paid on August 12, 2020, the CHF 1 million paid on September 21, 2020 and three monthly installments of CHF 1 million starting November 20, 2020 subject to adjustment in accordance with arago’s working capital needs, and (ii) a guarantee on arago’s existing indebtedness. The arago Third Convertible Loan bore an interest of 5% per annum, did not contain any lender’s fees, and had no maturity date. WISeKey can request conversion of the arago Third Convertible Loan into arago shares representing 51% of arago’s fully diluted share capital at any time provided that the full CHF 5 million was paid by WISeKey and that WISeKey pays the nominal value of the newly issued shares in cash. In case WISeKey has not exercised its conversion right by December 31, 2020, arago can request the conversion at any time. WISeKey made three payments under the arago Third Convertible Loan as follows:

-	CHF 600,000 on November 20, 2020,
-	CHF 400,000 on December 01, 2020, and
---	---
-	CHF 400,000 on December 22, 2020 out of which arago returned EUR 300,000 (CHF 324,708<br>at historical rate) unrequired funds on December 30, 2020.
---	---

Therefore, as at December 31, 2020, WISeKey had paid a total of CHF 3,075,292 (USD 3,477,682) to arago under the arago Third Convertible Loan.

To determine the appropriate accounting treatment for our convertible debt investment, we performed a variable interest entity (“VIE”) analysis and concluded that arago does not meet the definition of a VIE. After we reviewed all of the terms of the investment, we concluded the appropriate accounting treatment to be that of an available-for-sale debt security.

The investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income. We estimate the fair value of our investment at each reporting date by utilizing an option pricing model, as well as a present value of expected cash flows from the debt security utilizing the risk-free rate and the estimated credit spread as of the valuation date as the discount rate. The valuation analysis utilizes certain key assumptions such as the estimated credit spread, the expected life of the option, and the valuation of arago all of which are significant unobservable inputs and thus represent a Level 3 measurement within the fair value hierarchy. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of the investment, which would result in different impacts to our consolidated balance sheet and comprehensive income. Actual results may differ from our estimates. The fair value of the convertible debt investment is recorded in debt securities, at fair value on our consolidated balance sheets.

The table below sets forth the changes in the balance of the convertible debt investment for the years ended December 31, 2020 and 2019.

Available-for sale debt security	USD'000
Balance as at December 31, 2018	-
Balance as at December 31, 2019	-
Available-for sale debt security acquired in the year	3,805
Change in unrealized gains related to available-for-sale debt securities recorded in other comprehensive income	5,385
Balance as at December 31, 2020	9,190
Note 11.	Inventories
---	---

Inventories consisted of the following:

	As at December 31,	As at December 31,
USD'000	2020	2019
Raw materials	543	636
Work in progress	1,931	2,151
Total inventories	2,474	2,787

In the years ended December 31, 2020, 2019 and 2018, the Group recorded inventory obsolescence charges in the income statement of respectively USD 156,188 USD 26,249 and USD 90,567 on raw materials, and USD 301,215 USD 508,938 and USD 193,213 on work in progress.

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Note 12.	Other current assets

Other current assets consisted of the following:

	As at December 31,	As at December 31,
USD'000	2020	2019
Value-Added Tax Receivable	762	1,449
Advanced payment to suppliers	43	7
Deposits, current	5	9
Other currrent assets	4	4
Total other current assets	814	1,469
Note 13.	Notes receivable, noncurrent
---	---

Notes receivable, noncurrent consisted of the following:

	As at December 31,	As at December 31,
USD'000	2020	2019
Long-term receivable from, and loan, to shareholders	144	-
Long-term receivable from, and loan to, other related parties	39	23
Total notes receivable, noncurrent	183	23

As at December 31, 2020, the noncurrent notes receivable were made up of:

-	several loans to employees who are shareholders in relation to the outstanding employee social<br>charges and tax deducted at source for the exercise of their ESOP options (see Note 32). These loans do not bear interest. The<br>total loan amount as at December 31, 2020 was CHF 127,521 (USD 144,207).
-	several loans to employees in relation to the outstanding employee social charges for the exercise<br>of their ESOP options (see Note 32). These loans do not bear interest. The total loan amount as at December 31, 2020 was CHF 34,640<br>(USD 39,172).
---	---

As at December 31, 2019, the noncurrent notes receivable consisted of a loan to an employee for CHF 21,780 (USD 22,504), corresponding to the monthly loan amounts of CHF 2,420 per month from April 01, 2019 until December 31, 2019. The loan bears an interest rate of 0.5% per annum. The loan and accrued interest are to be repaid in full on or before December 31, 2021. In exchange for the loan, the employee has pledged the 60,000 ESOP options that he holds on WIHN class B shares (see Note 32).This loan was reclassified as current as at December 31, 2020.

Note 14.	Deferred tax credits

Deferred tax credits consisted of the following:

	As at December 31,	As at December 31,
USD'000	2020	2019
Deferred research & development tax credits	1,311	2,487
Deferred other tax credits	1	1
Total deferred tax credits	1,312	2,488

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WISeKey Semiconductors SAS and WISeCoin France R&D Lab SAS are eligible for Research tax credits provided by the French government (see Note 4 Summary of significant accounting policies). As at December 31, 2020, and 2019, the receivable balances in respect of these Research tax credits were respectively USD 560,162 and USD 1,934,539 for WISeKey Semiconductors SAS, and USD 750,523 and USD 552,067 for WISeCoin France R&D Lab SAS. The credit is deductible from the entity’s income tax charge for the year or payable in cash the following year, whichever event occurs first.

Note 15.	Property, plant and equipment

Property, plant and equipment, net consisted of the following.

	As at December 31,	As at December 31,
USD'000	2020	2019
Machinery & equipment	3,925	4,029
Office equipment and furniture	2,900	2,505
Computer equipment and licences	1,171	1,069
Total property, plant and equipment gross	7,996	7,603
Accumulated depreciation for:
Machinery & equipment	(3,290)	(2,508)
Office equipment and furniture	(2,573)	(2,270)
Computer equipment and licences	(1,133)	(1,024)
Total accumulated depreciation	(6,996)	(5,802)
Total property, plant and equipment from continuing operations, net	1,000	1,801
Depreciation charge from continuing operations for the year	988	821

The depreciation charge from continuing operations for the year 2018 was USD 855,163.

In 2020, WISeKey did not identify any events or changes in circumstances indicating that the carrying amount of any asset may not be recoverable. As a result, WISeKey did not record any impairment charge on Property, plant and equipment in the year 2020.

The useful economic life of property plant and equipment is as follow:

·	Office equipment and furniture:	2 to 5 years
·	Production masks	5 years
---	---	---
·	Production tools	3 years
---	---	---
·	Licenses	3 years
---	---	---
·	Software	1 year
---	---	---
Note 16.	Intangible assets
---	---

Intangible assets and future amortization expenses consisted of the following:

	As at December 31,	As at December 31,
USD'000	2020	2019
Trademarks	142	130
Patents	2,281	2,281
License agreements	11,626	10,758
Other intangibles	6,641	6,152
Total intangible assets gross	20,690	19,321
Accumulated amortization for:
Trademarks	(142)	(129)
Patents	(2,281)	(1,683)
License agreements	(11,617)	(10,757)
Other intangibles	(6,641)	(6,152)
Total accumulated amortization	(20,681)	(18,721)
Total intangible assets from continuing operations, net	9	600
Amortization charge from continuing operations for the year	604	534

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The amortization charge from continuing operations for the year 2018 was USD 459,575.

The useful economic life of intangible assets is as follow:

·	Trademarks:	5 to 10 years
·	Patents	5 to 10 years
---	---	---
·	License agreements:	3 to 5 years
---	---	---
·	Other intangibles:	5 to 10 years
---	---	---

Future amortization charges are detailed below:

Future estimated aggregate amortization expense from continuing operations
Year	USD'000
2021	5
2022	3
2023	1
Total intangible assets, net	9
Note 17.	Leases
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WISeKey has historically entered into a number of lease arrangements under which it is the lessee. As at December 31, 2020, WISeKey holds one finance lease for IT equipment in our datacenter, 9 operating leases, and 4 short-term leases. One of its short-term leases is for a vehicle, whilst all other short-term and operating leases relate to premises. We do not sublease. All of our operating leases include multiple optional renewal periods which are not reasonably certain to be exercised. The finance lease contains an option to purchase the assets at the end of the lease which we have assumed will be exercised and so has been included in the calculation of the right of use asset and lease liability.

We have elected the short-term lease practical expedient related to leases of various premises and equipment. We have elected the practical expedients related to lease classification of leases that commenced before the effective date of ASC 842.

In the years 2020, 2019, and 2018 we recognized rent expenses associated with our leases as follows:

	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
USD'000	2020	2019	2018
Finance lease cost:
Amortization of right-of-use assets	66	31	-
Interest on lease liabilities	12	8	-
Operating lease cost:
Fixed rent expense	602	567	561
Short-term lease cost	22	63	61
Net lease cost	702	669	622
Lease cost - Cost of sales	-	-	-
Lease cost - General & administrative expenses	702	669	622
Net lease cost	702	669	622

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In the years 2020 and 2019, we had the following cash and non-cash activities associated with our leases:

	As at December 31,	As at December 31,
USD'000	2020	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	106	47
Operating cash flows from operating leases	632	550
Financing cash flows from finance leases	12	8
Non-cash investing and financing activities :
Net lease cost	702	669
Additions to ROU assets obtained from:
New finance lease liabilities*	-	321
New operating lease liabilities*	544	3,768

*In line with the new standard ASC 842 “Leases” and its transition guidance, we considered all leases as new leases in 2019.

As at December 31, 2020, future minimum annual lease payments were as follows:

	USD'000	USD'000	USD'000	USD'000
Year	Operating	Short-term	Finance	Total
2021	629	4	125	759
2022	449	-	64	513
2023	357	-	-	357
2024	357	-	-	357
2025 and beyond	1,201			1,200
Total future minimum operating and short-term lease payments	2,993	4	189	3,186
Less effects of discounting	(491)	-	(3)	(494)
Less effects of practical expedient	-	(4)	-	(4)
Lease liabilities recognized	2,502	-	186	2,688

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In line with ASU 2018-11, future minimum lease payments under legacy ASC 840 are disclosed in the table below:

Year	USD'000
2021	759
2022	513
2023	357
2024	357
2025 and beyond	1,200
Total future minimum operating and short-term lease payments	3,186
Less effects of discounting	(498)
Lease liabilities recognized	2,688

As of December 31, 2020, the weighted-average remaining lease term was 1.5 years for our finance lease and 6.58 years for operating leases.

For our finance lease, the implicit rate was calculated as 5.17%. For our operating leases and because we generally do not have access to the implicit rate in the lease, we calculated an estimate rate based upon the estimated incremental borrowing rate of the entity holding the lease. The weighted average discount rate associated with operating leases as of December 31, 2020 was 3.09%.

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Note 18.	Goodwill

We test goodwill for impairment annually on October 1st, or as and when indicators of impairment arise. As at October 01, 2020, the fair value of the net assets of the reporting unit concerned by goodwill was superior to the carrying value of the net assets and goodwill allocated. After October 01, 2020, there were no impairment indicators identified triggering a new impairment test. Therefore, no impairment loss was recorded in 2020.

An impairment review has been conducted for the item of goodwill allocated to the reporting unit (“RU”) relating to the acquisition of WISeKey Semiconductors SAS in 2016. Fair value has been determined based on the income approach. Cash flows have been projected over 5 years from the date of the assessment and have been discounted at the pre-tax weighted average cost of capital of the RU. The fair value is higher than its carrying value. The WISeKey Semiconductors SAS RU has a negative carrying amount.

USD'000	IoT Segment	mPKI Segment	Total
Goodwill balance as at December 31, 2018	8,317	-	8,317
Goodwill acquired during the year	-	-	-
Impairment losses	-	-	-
As at December 31, 2019
Goodwill	8,317	-	8,317
Accumulated impairment losses	-	-	-
Goodwill balance as at December 31, 2019	8,317	-	8,317
Goodwill acquired during the year	-	-	-
Impairment losses	-	-	-
As a December 31, 2020
Goodwill	8,317	-	8,317
Accumulated impairment losses	-	-	-
Goodwill balance as at December 31, 2020	8,317	-	8,317

The assumptions included in the impairment tests require judgment, and changes to these inputs could impact the results of the calculations. Other than management's projections of future cash flows, the primary assumptions used in the impairment tests were the weighted-average cost of capital and long-term growth rates. Although the Group's cash flow forecasts are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management is using to operate the underlying businesses, there are significant judgments in determining the expected future cash flows attributable to a reporting unit.

Note 19.	Equity securities, at cost

Warrant agreement in Tarmin

On September 27, 2018 WISeKey purchased a warrant agreement in Tarmin Inc. from ExWorks as part of the eleventh amendment of the ExWorks Credit Agreement (see Note 25). As a result, WISeKey entered into a warrant agreement with Tarmin Inc (“Tarmin”) (the “Tarmin Warrant”), a private Delaware company, leader in data & software defined infrastructure to acquire 22% of common stock deemed outstanding at the time of exercise. The warrant may be exercised in parts or in full, at an exercise price of USD 0.01 per share at nominal value USD 0.0001. The purchase price of the Tarmin Warrant was USD 7,000,000, of which USD 3,000,000 was paid in cash on October 05, 2018 and the remaining USD 4,000,000 was paid on April 08, 2019.

The Tarmin Warrant was assessed as an equity investment without a readily determinable fair value and we elected the measurement at cost less impairment, adjusted for observable price changes for identical or similar investments of the same issuer as permitted by ASU 2016-01. As such, the Tarmin Warrant was initially recognized on the balance sheet at USD 7,000,000.

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As at December 31, 2020, we performed a qualitative assessment to consider potential impairment indicators. We made reasonable efforts to identify any observable transactions of identical or similar investments, but did not identify any such transaction. Although there are positive indicators on the business performance of Tarmin, we identified a deterioration in the earnings performance and liquidity position and, as a result, assessed that the asset should be fully impaired. Therefore, we recorded an impairment loss of the full USD 7,000,000 carrying value of Tarmin in 2020, included in non-operating expenses in the income statement (see Note 34). The carrying value of the Tarmin Warrant as at December 31, 2020 was USD nil.

Note 20.	Equity securities, at fair value

On March 29, 2017, the Group announced that the respective boards of directors of WISeKey and OpenLimit Holding AG (DE: O5H) (“OpenLimit“) had decided that discussions in relation to a possible merger transaction between WISeKey and OpenLimit as previously announced on July 25, 2016 were not being further pursued. The interim financing provided by WISeKey to OpenLimit in a principal amount of EUR 750,000 was, in accordance with applicable terms of a convertible loan agreement, converted into OpenLimit Shares issued by OpenLimit out of its existing authorized share capital. The conversion price was set at 95% of the volume weighted average price (“VWAP”) of the OpenLimit shares traded on the Frankfurt stock exchange as reported by the Frankfurt stock exchange for the ten trading days immediately preceding and including March 29, 2017. WISeKey received 2,200,000 newly issued fully fungible listed OpenLimit Shares representing – post issuance of these new shares – an 8.4% stake in OpenLimit on an issued share basis. The effective conversion ratio was EUR 0.3409 per share. The equity securities were fair valued at market price on the date of the transaction to USD 846,561.

As at December 31, 2020, the fair value was recalculated using the closing market price on the XETRA of EUR 0.112 (USD 0.137) and amounted to USD 301,301. The difference of USD 454,501 from the fair value at December 31, 2019 (USD 755,802) was accounted for in the income statement as a non-operational expense.

Note 21.	Other noncurrent assets

Other noncurrent assets consisted of noncurrent deposits. Deposits are primarily made up of rental deposits on the premises rented by the Group.

Note 22.	Accounts payable

The accounts payable balance consisted of the following:

	As at December 31,	As at December 31,
USD'000	2020	2019
Trade creditors	4,608	5,482
Factors or other financial institutions for borrowings	178	888
Accounts payable to Board Members	1,580	117
Accounts payable to other related parties	172	2
Accounts payable to underwriters, promoters, and employees	2,985	2,229
Other accounts payable	3,576	1,995
Total accounts payable	13,099	10,713

As at December 31, 2020, accounts payable to Board Members are made up of accrued salaries and bonus of CHF 1,397,135 (USD 1,579,945) payable to Carlos Moreira (see Note 39 for detail).

As at December 31, 2020, accounts payable to other related parties are made up of a CHF 151,992 (USD 171,879) payable to OISTE (see Note 39 for detail).

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Accounts payable to employees consist primarily of holiday, bonus and 13th month accruals across WISeKey. As at December 31, 2020, Accounts payable to underwriters, promoters, and employees.

Other accounts payable are mostly amounts due or accrued for professional services (e.g. legal, accountancy, and audit services) and accruals of social charges in relation to the accrued liability to employees.

Note 23.	Notes payable

Notes payable consisted of the following:

	As at December 31,	As at December 31,
USD'000	2020	2019
Short-term loan	4,030	4,022
Short-term loan from shareholders	85	82
Total notes payable	4,115	4,104

As at December 31, 2020, the current notes payable balance was made up of:

-	a USD 4,030,000 short-term loan with ExWorks (see detail in Note 25).
-	short-term loans from the noncontrolling shareholders of WISeKey SAARC for a total amount of USD 84,721<br>at closing rate (USD 82,268 as at December 31, 2019). These loans do not bear interests.
---	---

The weighted–average interest rate on current notes payable, excluding loans from shareholders at 0%, was respectively 10% and 10% per annum as at December 31, 2020 and 2019.

Note 24.	Other current liabilities

Other current liabilities consisted of the following:

	As at December 31,	As at December 31,
USD'000	2020	2019
Value-Added Tax payable	312	706
Other tax payable	137	65
Customer contract liability, current	367	255
Other current liabilities	289	278
Total other current liabilities	1,105	1,304
Note 25.	Loans and line of credit
---	---

Share Subscription Facility withGEM LLC

On January 19, 2016 the Group closed a Share Subscription Facility (“the GEM Facility”) with GEM LLC, (Global Equity Markets, “GEM”), which is a CHF 60 million facility over 5 years and allows the Group to draw down funds at its option in exchange for WIHN class B shares. The mechanics of the deal allow for a drawdown essentially 18 times in a year, the amount being in a range related to the trading volume and price of the WIHN class B share trading on the Swiss SIX Stock Exchange. The drawdown amount is based on 90% of the average closing price of the last 15 trading days multiplied by 1,000% of the average volume of the last 15 trading days. GEM can then elect to purchase between 50% and 200% of this figure.

The instrument was assessed under ASC 815 as an equity instrument. The drawdowns were reflected as increases in Common Share Capital with an increase in the value of common stock issued and the difference between the nominal value of the shares and the funds received being recorded against Additional Paid-In Capital ("APIC").

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In 2017, WISeKey made three drawdowns for a total of CHF 3,905,355 in exchange for a total of 825,000 WIHN class B shares issued out of authorized share capital.

There were no drawdowns made in 2018, 2019, nor in 2020.

Therefore, as at December 31, 2020 the outstanding facility available is CHF 56,094,645.

Standby Equity Distribution Agreementwith YA II PN, Ltd.

On February 08, 2018 WISeKey entered into a Standby Equity Distribution Agreement (“SEDA”) with YA II PN, Ltd., a fund managed by Yorkville Advisors Global, LLC (“Yorkville”). Under the terms of the SEDA as amended, Yorkville has committed to provide WISeKey, upon a drawdown request by WISeKey, up to CHF 50,000,000 in equity financing originally over a period of three-year period ending March 01, 2021, now over a period of five years ending March 31, 2023 in line with the amendment signed by the parties on March 04, 2020. Provided that a sufficient number of class B shares is provided through share lending, WISeKey has the right to make drawdowns under the SEDA, at its discretion, by requesting Yorkville to subscribe for (if the class B shares are issued out of authorized share capital) or purchase (if the class B shares are delivered out of treasury) class B shares worth up to CHF 5,000,000 by drawdown, subject to certain exceptions and limitations (including the exception that a drawdown request by WISeKey shall in no event cause the aggregate number of class B shares held by Yorkville to meet or exceed 4.99% of the total number of shares registered with the commercial register of the Canton of Zug). The purchase price will be 93% of the relevant market price at the time of the drawdown, determined by reference to a ten-day trading period following the draw down request by WISeKey.

The instrument was assessed under ASC 815 as an equity instrument. WISeKey paid a one-time commitment fee of CHF 500,000 (USD 524,231 at historical rate) on April 24, 2018 in 100,000 WIHN class B shares. In line with ASU 2015-15 the commitment fee was capitalized as deferred charges to be amortized over the original duration of the contract as a reduction of equity.

In 2018, WISeKey made 4 drawdowns for a total of CHF 1,749,992 (USD 1,755,378 at historical rate) in exchange for a total of 540,539 WIHN class B shares issued out of authorized share capital or treasury share capital.

In 2020, WISeKey made the following drawdowns:

-	On April 16, 2020 one drawdown for CHF 250,000 (USD 259,250 at historical rate) in exchange for<br>306,372 WIHN class B shares issued out of treasury share capital.
-	On May 15, 2020 one drawdown for CHF 249,433 (USD 256,417 at historical rate) in exchange for<br>343,572 WIHN class B shares issued out of treasury share capital.
---	---
-	On July 14, 2020 one drawdown for CHF 72,313 (USD 76,652 at historical rate) in exchange for<br>74,396 WIHN class B shares issued out of treasury share capital.
---	---
-	On July 16, 2020 one drawdown for CHF 62,500 (USD 66,250 at historical rate) in exchange for<br>61,035 WIHN class B shares issued out of treasury share capital.
---	---
-	On August 5, 2020 one drawdown for CHF 250,000 (USD 275,000 at historical rate) in exchange for<br>198,255 WIHN class B shares issued out of treasury share capital.
---	---
-	On September 9, 2020 one drawdown for CHF 250,000 (USD 275,000 at historical rate) in exchange<br>for 182,215 WIHN class B shares issued out of treasury share capital.
---	---

The amortization charge for the capitalized fee recognized in APIC amounted to USD 184,134 for the year to December 31, 2020 and the remaining deferred charge balance was USD 30,188 which was all current.

As at December 31, 2020 the outstanding equity financing available was CHF 46,007,830.

Facility Agreement with YA II PN,Ltd.

On September 28, 2018 WISeKey entered into short-term Facility Agreement (the “Yorkville Loan”) with Yorkville to borrow USD 3,500,000 repayable by May 01, 2019 in monthly cash instalments starting in November 2018. The loan bears an interest rate of 4% per annum payable monthly in arrears. A fee of USD 140,000 and debt issuance costs of USD 20,000 paid at inception.

The debt instrument was assessed as a term debt. A discount of USD 160,000 was recorded at inception and will be amortized using the effective interest method over the life of the debt.

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The remaining loan balance at December 31, 2018 was USD 2,717,773 including unamortized debt discount of USD 57,007.

The discount amortization expense recorded for the period to December 31, 2018 was USD 102,993.

In the period to December 31, 2018, WISeKey repaid USD 725,220 of the principal loan amount in cash.

On June 27, 2019, WISeKey entered into a Convertible Loan Agreement (the “Yorkville Convertible Loan”) with Yorkville to borrow USD 3,500,000 repayable by August 01, 2020 in monthly instalments starting in August 01, 2019 either in cash or in WIHN class B Shares. The loan bears an interest rate of 6% per annum payable monthly in arrears. Total fees of USD 160,000 were paid at inception.

The conversion option into WIHN Class B shares is exercisable at the election of Yorkville and may be exercised at each monthly repayment date, covering any amount outstanding, be it principal and/or accrued interests. The initial exercise price is set at CHF 3.00 per WIHN class B Share but may be adjusted as a result of specific events so as to prevent any dilutive effect. The events triggering anti-dilution adjustments are: (a) increase of capital by means of capitalization of reserves, profits or premiums by distribution of WIHN Shares, or division or consolidation of WIHN Shares, (b) issue of WIHN shares or other securities by way of conferring subscription or purchase rights, (c) spin-offs and capital distributions other than dividends, and (d) dividends.

At the date of inception of the Yorkville Convertible Loan, on June 27, 2019, an unpaid balance of USD 500,000 remained on the Yorkville Loan. There was no unamortized debt discount on the Yorkville Loan as it was amortized in accordance with the planned repayment schedule, i.e. by May 01, 2019.

In line with ASC 470-50, we compared the present value of the new debt (the Yorkville Convertible Loan) to the present value of the old debt (the Yorkville Loan) using the net method and concluded that the difference was below the 10% threshold. Therefore the Yorkville Convertible Loan was analyzed as a debt modification and accounted for under ASC 470-50-40-14.

In line with ASU 2014-16, the convertible note was assessed as a hybrid instrument, being a debt instrument with an equity-linked component (the conversion option). Per ASC 815-10, the embedded conversion option met the definition of a derivative and was accounted for separately, thereby creating a debt discount.

The derivative liability component (the conversion option) was fair valued using a binomial lattice model, building in quoted market prices of WIHN class B shares, and inputs such as time value of money, volatility, and risk-free interest rates. It was valued at inception at USD 257,435, and was allocated between current and noncurrent on a prorata temporis basis according to the monthly repayment schedule. The derivative component will be revalued at fair value at each reporting date in line with ASC 815-15-30-1.

On the date of the agreement, WISeKey signed an option agreement granting Yorkville the option to acquire up to 500,000 WIHN class B shares at an exercise price of CHF 3.00, exercisable between June 27, 2019 and June 27, 2022. In order to prevent any dilutive effect, the exercise price may be adjusted as a result of the same specific events listed above as adjustments to the conversion price of the principal amount. In line with ASC 470-20-25-2, the proceeds from the convertible debt with a detachable warrant was allocated to the two elements based on the relative fair values of the debt instrument net of the warrant and the embedded conversion separated out on the one side, and the warrant at time of issuance on the other side. The option agreement was assessed as an equity instrument and was fair valued at grant for an amount of USD 373,574 using the Black-Scholes model and the market price of WIHN class B shares on the date of grant, June 27, 2019, of CH 2.35. The fair value of the debt was calculated using the discounted cash flow method as USD 3,635,638. Applying the relative fair value method per ASC 470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of USD 326,126, and the credit entry was booked in APIC.

As a result of the above accounting entries, the total debt discount recorded at inception was USD 743,561, made up of USD 160,000 fees to Yorkville, USD 257,435 from the bifurcation of the embedded conversion option into derivative liabilities, and USD 326,126 from the recognition of the warrant agreement.

On March 04, 2020, WISeKey entered into the Second Yorkville Convertible Loan with Yorkville to borrow USD 4,000,000 repayable by April 30, 2021 in monthly instalments starting on March 30, 2020 either in cash or in WIHN class B Shares. The loan bears an interest rate of 6% per annum payable monthly in arrears. Total fees of USD 68,000 will be paid in monthly instalments over the life of the loan.

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The conversion option into newly issued or existing WIHN Class B shares is exercisable at the election of Yorkville and may be exercised at any time until all amounts have been repaid in full, covering any amount outstanding, be it principal and/or accrued interests. The initial exercise price is set at CHF 3.00 per WIHN class B Share but may be adjusted as a result of specific events so as to prevent any dilution effect. The events triggering anti-dilution adjustments are: (a) increase of capital by means of capitalization of reserves, profits or premiums by distribution of WIHN Shares, or division or consolidation of WIHN Shares, (b) issue of WIHN shares or other securities by way of conferring subscription or purchase rights, (c) spin-offs and capital distributions other than dividends, and (d) dividends.

At the date of inception of the Second Yorkville Convertible Loan on March 04, 2020, an unpaid balance of USD 2,300,000 and an unamortized debt discount of USD 104,469 remained on the Yorkville Convertible Loan.

Per ASC 470-50, we compared the present value of the new debt (the Second Yorkville Convertible Loan) to the present value of the old debt (the Yorkville Convertible Loan) using the net method and concluded that the difference was below the 10% threshold. Therefore, the Second Yorkville Convertible Loan was analyzed as a debt modification and accounted for under ASC 470-50-40-14.

In line with ASU 2014-16, the convertible note was assessed as a hybrid instrument, being a debt instrument with an equity-linked component (the conversion option). Per ASC 815-10, the embedded conversion option met the definition of a derivative and was accounted for separately, thereby creating a debt discount.

The derivative liability component (the conversion option) was fair valued using a binomial lattice model, building in quoted market prices of WIHN class B shares, and inputs such as time value of money, volatility, and risk-free interest rates. It was valued at inception at USD nil. The derivative component will be revalued at fair value at each reporting date in line with ASC 815-15-30-1 and will be allocated between current and noncurrent on a prorata temporis basis according to the monthly repayment schedule (see Note 6).

In 2020, WISeKey’s repayments amounted to a total of USD 2,307,021. As at December 31, 2020, the principal amount outstanding was USD 1,692,979 with an unamortized debt discount of USD 82,560, and the derivative component measured at fair value at the reporting date at USD nil. No conversion rights were exercised in 2020.

For the year ended December 31, 2020, WISeKey recorded in the income statement a net loss on derivative of USD 43,655 and a debt discount amortization expense of USD 280,736.

Convertible Loan with Crede CG III,Ltd

On September 28, 2018 the Group closed a Convertible Loan Agreement (the “Crede Convertible Loan”) with Crede for an amount of USD 3,000,000. The funds were made available on October 31, 2018. The loan bears a 10% p.a. interest rate, payable in arrears on a quarterly basis starting December 31, 2018, and is repayable in WIHN class B shares any time between November 30, 2018 and the maturity date of September 28, 2020, at Crede’s election. Accrued interests are payable, at WISeKey’s sole election, either in cash or in WIHN class B Shares. The conversion price applicable to the prepayment of the principal amount or accrued interest is calculated as 93% of the average of the 2 lowest daily volume-weighted average prices quoted on the SIX Stock Exchange during the 10 Trading Days immediately preceding the relevant conversion date or interest payment date respectively, disregarding any day on which Crede (or its Affiliates or related party) has effected any trade, converted into USD at the exchange rate reported by Bloomberg at 9 a.m. Swiss time on the relevant conversion date or interest payment date.

Due to Crede’s option to convert the loan in part or in full at any time before maturity, the Crede Convertible Loan was assessed as a share-settled debt instrument with an embedded put option. Because the value that Crede will receive at settlement does not vary with the value of the shares, the settlement provision is not considered a conversion option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the Crede Convertible Loan was accounted for as a liability measured at fair value using the discounted cash flow method at inception.

On the date of the agreement, WISeKey signed an option agreement granting Crede the option to acquire up to 408,247 WIHN class B shares at an exercise price of CHF 3.84, exercisable between October 31, 2018 and October 29, 2021. Per the option agreement’s term, the date of grant under US GAAP is October 29, 2018 upon issuance of a Tax Ruling from the Swiss Federal Tax Administration and the Zug tax authority. In line with ASC 470-20-25-2, the proceeds from the convertible debt with a detachable warrant was allocated to the two elements based on the relative fair values of the debt instrument without the warrant and of the warrant at time of issuance. The option agreement was assessed as an equity instrument and was fair valued at grant for an amount of USD 408,056 using the Black-Scholes model and the market price of WIHN class B shares on the date of grant, October 29, 2018, of CH 3.06. The fair value of the debt was calculated using the discounted cash flow method as USD 2,920,556. Applying the relative fair value method per ASC 470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of USD 367,771, and the credit entry was booked in APIC.

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In 2020, Crede issued three exercise notices, resulting in the following conversions:

-	On January 10, 2020 for 150,000 WIHN class B shares delivered on January 14, 2020 for a conversion<br>of USD 259,436.
-	On April 03, 2020 for 200,428 WIHN class B shares delivered on April 06, 2020 for a conversion of<br>USD 152,490.
---	---
-	On June 15, 2020 for 970,555 WIHN class B shares delivered on June 18, 2020 for a final conversion<br>of USD 816,974.
---	---

The loan was fully converted after the last conversion on June 18, 2020. Therefore, there were no outstanding balance on this loan as at December 31, 2020.

For the year to December 30, 2020, the Group recorded a net debt discount amortization expense in the income statement of USD 29,055.

Credit Agreement with ExWorks CapitalFund I, L.P

On April 04, 2019 WISeCoin AG (“WISeCoin”), an affiliate of the Company, signed a credit agreement with ExWorks. Under this credit agreement, WISeCoin was granted a USD 4,000,000 term loan and may add up to USD 80,000 accrued interest to the loan principal, hence a maximum loan amount of USD 4,080,000. The loan bears an interest rate of 10% p.a. payable monthly in arrears. The maturity date of the arrangement is April 04, 2020 therefore all outstanding balances are classified as current liabilities in the balance sheet. ExWorks can elect to have part of or all of the principal loan amount and interests paid either in cash or in WISeCoin Security Tokens (the “WCN Token”) as may be issued by WISeCoin from time to time. As at June 30, 2019, the conversion price is set at CHF 12.42 per WCN Token based on a non-legally binding term sheet.

Under the terms of the credit agreement, WISeCoin is required to not enter into agreements that would result in liens on property, assets or controlled subsidiaries, in indebtedness other than the exceptions listed in the credit agreement, in mergers, consolidations, organizational changes except with an affiliate, contingent and third party liabilities, any substantial change in the nature of its business, restricted payments, insider transactions, certain debt payments, certain agreements, negative pledge, asset transfer other than sale of assets in the ordinary course of business, or holding or acquiring shares and/or quotas in another person other than WISeCoin R&D. Furthermore, WISeCoin is required to maintain its existence, pay all taxes and other liabilities.

Borrowings under the line of credit are secured by first ranking security interests on all material assets and personal property of WISeCoin, and a pledge over the shares in WISeCoin representing 90% of the capital held by the Company. Under certain circumstances, additional security may be granted over the intellectual property rights of WISeCoin and WISeCoin R&D, and the shares held by WISeCoin in WISeCoin R&D.

Total debt issue costs of USD 160,000 were recorded as debt discount and amortized over the duration of the loan.

In the year 2020, WISeKey recorded a total debt amortization charge of USD 8,657 and the debt discount was fully amortized as at December 31, 2020.

As at December 31, 2020, the loan had not been repaid and the outstanding borrowings were USD 4,030,000, meaning that the loan is past due under the terms of the credit agreement with ExWorks. The Company is currently in negotiation with ExWorks regarding a potential sale of its investment in Tarmin, a Company in which ExWorks is also a significant shareholder. It is the view of the management of the Company that the sale of the investment in Tarmin and the repayment of the credit agreement are codependent and therefore the loan will be repaid at such time as the investment is sold. ExWorks continues to charge interest on the loan at the rate of 10% p.a. and has not launched any formal recovery proceedings as of the date of this report.

Credit Agreement with Long StateInvestment Limited

On December 16, 2019, WISeKey entered into a Convertible Term Loan Facility Agreement (the “LSI Convertible Facility”) with Long State Investment Limited (“LSI”), a Hong Kong-based investment company, to borrow up to CHF 30 million. Under the terms of the LSI Convertible Facility, WISeKey will be able to drawdown individual term loans of up to CHF 500,000 or, if so agreed between the parties, up to CHF 2.5 million at an interest rate of 1.5% p.a., up to an aggregate amount of CHF 30 million over a commitment period of 24 months. LSI will have the right to convert a drawdown tranche into WIHN class B shares or, if so agreed among the parties and permitted by law, into American Depositary Shares (“ADSs”) representing WIHN class B shares, within a period of 21 SIX trading days after each individual drawdown at 95% of the higher of (i) the then prevailing market rate and (ii) the minimum conversion price of CHF 1.80. Any term loan not converted by LSI initially will automatically convert into WIHN class B shares, or ADSs, 20 SIX trading days before the expiration of the commitment period at the applicable conversion price. Under certain circumstances, interest payments may be “paid in kind” by capitalizing such interest and adding to it the aggregate principal balance of the loan outstanding.

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Under the arrangement, WISeKey and LSI plan to establish a Joint Venture in Hong Kong in the first quarter of 2020 to focus on business opportunities in Asia. A memorandum of understanding has been executed between WISeKey and LSI to that effect.

Due to LSI’s option to convert the loan in part at each drawdown before maturity, the LSI Convertible Facility was assessed as a debt instrument with an embedded put option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the LSI Convertible Facility will be accounted for as a liability measured at fair value using the discounted cash flow method for each term loan (corresponding to each drawdown).

Total debt issue costs amounting to CHF 56,757 in legal fees and expense allowance were paid by WISeKey in 2019 and 2020, and a commitment fee payable in 400,000 WIHN class B shares was settled on January 23, 2020 with a fair value of CHF 759,200 based on the market price of the WIHN shares at settlement. The debt issue costs and commitment fee will be recorded as a debt discount proportionately to each drawdown. However, as at December 31, 2020, WISeKey had not yet drawn down on the LSI Convertible Facility, therefore, in application of ASC 340-10-S99-1, WISeKey accounted for the debt issue costs of CHF 56,757 and the commitment fee of CHF 759,200 as a deferred asset to be amortized on a straight-line basis over the access period of the LSI Convertible Facility.

In 2020, WISeKey did not make any drawdowns under the LSI Convertible Facility.

The amortization charge for the capitalized costs and fee recognized in APIC amounted to CHF 443,484 (USD 472,754) for the year to December 31, 2020 and the remaining deferred charge balance was CHF 372,473 (USD 421,210) which was all current.

As at December 31, 2020 the outstanding LSI Convertible Facility available was CHF 30.0 million (USD 33.9 million).

Loan Agreements with UBS SA

On March 26, 2020, two members of the Group entered into the Covid loans to borrow funds under the Swiss Government supported COVID-19 Credit Facility with UBS SA. Under the terms of the Agreement, UBS has lent such Group members a total of CHF 571,500. The loans are repayable in full by March 30, 2028, as amended, being the eight anniversary of the date of deposit of the funds by UBS. Semi-annual repayments should start by March 31, 2022 and will be spread on a linear basis over the remaining term. The full repayment of the loans is permitted at any time. The interest rate is determined by Swiss COVID-19 Law and currently the Covid loans carry an interest rate of 0%. There were no fees or costs attributed to the Covid loans and as such there is no debt discount of debt premium associated with the loan facility.

Under the terms of the loans, the relevant companies are required to use the funds solely to cover the liquidity requirements of the Company. In particular, the Company cannot use the funds for the distribution of dividends and directors' fees as well as the repayment of capital contributions, the granting of active loans; refinancing of private or shareholder loans; the repayment of intra-group loans; or the transfer of guaranteed loans to a group company not having its registered office in Switzerland, whether directly or indirectly linked to applicant.

As at December 31, 2020, the outstanding balance on the loans was CHF 571,500 (USD 646,278).

Credit Agreement with Nice &Green SA

On May 18, 2020, the Group entered into the Nice & Green Facility, an Agreement for the Issuance and Subscription of Convertible Notes with Nice & Green pursuant to which WISeKey has the right to draw down up to a maximum of CHF 10 million during a commitment period of 24 months commencing on May 20, 2020, in up to 25 tranches based upon 60% of the traded volume of the WIHN class B share on the SIX Swiss Stock Exchange over the 5 trading days preceding the subscription date. Each tranche is divided into 25 convertible notes that do not bear interest. Subject to a cash redemption right of WISeKey, the convertible notes are mandatorily convertible into WIHN class B shares within a period of 12 months from issuance (the “Nice & Green Conversion Period”). Conversion takes place upon request by Nice & Green during the Nice & Green Conversion Period, but in any case no later than at the expiry of the Nice & Green Conversion Period, at a conversion price of 95% of the lowest daily volume-weighted average price of a WIHN class B share as traded on the SIX Swiss Exchange during the 10 trading days preceding the relevant conversion date.

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Due to Nice & Green’s option to convert the loan in part at any time before maturity, and as there is no limit on the number of shares to be delivered, the Nice & Green Facility was assessed as a share-settled debt instrument with an embedded put option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the Nice & Green Facility will be accounted for as a liability measured at cost for each term loan (corresponding to each drawdown).

Per the terms of the Nice & Green Facility, WISeKey pays to Nice & Green, in cash, a commitment fee of 5% of the amount of each subscription which will be recorded as a debt discount against each subscription (principal). Nice & Green also undertake to pay to WISeKey an incentive fee equal to 10% of the positive difference between the net capital gain and the net capital loss generated by Nice & Green on the sales of WIHN class B shares. The incentive fee income is recorded in the income statement in other non-operating income (see Note 33).

During the year to December 31, 2020, the Group made a total of six subscriptions under the terms of the agreement as follows:

-	On June 17, 2020 for CHF 1,931,355 (USD 2,029,927 at historical rate).
-	On July 22, 2020 for CHF 1,239,226 (USD 1,333,867 at historical rate).
---	---
-	On August 17, 2020 for CHF 2,521,308 (USD 2,783,403 at historical rate).
---	---
-	On September 18, 2020 for CHF 1,075,000 (USD 1,181,972 at historical rate).
---	---
-	On October 22, 2020 for CHF 1,075,000 (USD 1,184,872 at historical rate).
---	---
-	On November 20, 2020 for CHF 1,075,000 (USD 1,179,242 at historical rate).
---	---

In 2020, Nice & Green issued a total of eleven conversion notices, resulting in the following conversions:

-	On June 18, 2020 for 2,313,000 WIHN class B shares delivered on June 18, 2020 for a conversion<br>of CHF 1,931,355 (USD 2,030,992 at historical rate).
-	On July 30, 2020 for 676,941 WIHN class B shares delivered on July 30, 2020 for a conversion of CHF<br>793,105 (USD 869,571 at historical rate).
---	---
-	On August 6, 2020 for 346,555 WIHN class B shares delivered on August 6, 2020 for a conversion of<br>CHF 446,121 (USD 489,965 at historical rate).
---	---
-	On August 24, 2020 for 115,722 WIHN class B shares delivered on August 24, 2020 for a conversion of<br>CHF 201,705 (USD 221,441 at historical rate).
---	---
-	On September 11, 2020 for 143,971 WIHN class B shares delivered on September 11, 2020 for a conversion<br>of CHF 201,705 (USD 221,837 at historical rate).
---	---
-	On September 15, 2020 for 427,340 WIHN class B shares delivered on September 15, 2020 for a conversion<br>of CHF 504,262 (USD 555,103 at historical rate).
---	---
-	On September 21, 2020 for 427,340 WIHN class B shares delivered on September 21, 2020 for a conversion<br>of CHF 504,262 (USD 550,300 at historical rate).
---	---
-	On September 29, 2020 for 927,804 WIHN class B shares delivered on September 29, 2020 for a conversion<br>of CHF 1,008,523 (USD 1,094,600 at historical rate).
---	---
-	On October 12, 2020 for 1,081,740 WIHN class B shares delivered on October 12, 2020 for a conversion<br>of CHF 1,175,852 (USD 1,292,574 at historical rate).
---	---
-	On November 5, 2020 for 1,158,405 WIHN class B shares delivered on November 5, 2020 for a conversion<br>of CHF 1,075,000 (USD 1,185,993 at historical rate).
---	---
-	On November 24, 2020 for 1,069,651 WIHN class B shares delivered on November 24, 2020 for a conversion<br>of CHF 1,075,000 (USD 1,178,545 at historical rate).
---	---

During the year to December 31, 2020, debt discount in the amount of CHF 12,101 (USD 12,900) was amortized to the income statement, whilst CHF 433,743 (USD 490,497) was booked to APIC as per ASC 470-02-40-4. There was no unamortized debt discount outstanding at December 31, 2020.

As at December 31, 2020, the outstanding Nice & Green Facility available was CHF 1,083,111 (USD 1,224,832) and there were no unconverted outstanding loan amounts.

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New Convertible Loan with Crede CGIII, Ltd

On August 07, 2020, WISeKey entered into the New Crede Convertible Loan with Crede for an amount of USD 5 million. The funds were made available on September 23, 2020. The loan bears a 5% p.a. interest rate, payable in arrears on a quarterly basis starting September 30, 2020, and is repayable in WIHN class B shares any time between September 23, 2020 and the maturity date of August 07, 2022, at Crede’s election. Accrued interests are payable, at WISeKey’s sole election, either in cash or in WIHN class B shares. The conversion price applicable to the prepayment of the principal amount or accrued interest is calculated as 92% of the lowest daily volume weighted average share prices quoted on the SIX Stock Exchange during the 10 trading days immediately preceding the relevant conversion date or interest payment date respectively, disregarding any day on which Crede (or its Affiliates or related party) has effected any trade, converted into USD at the exchange rate reported by Bloomberg at 9 a.m. Swiss time on the relevant conversion date or interest payment date.

Due to Crede’s option to convert the loan in part or in full at any time before maturity, the New Crede Convertible Loan was assessed as a share-settled debt instrument with an embedded put option. Because the value that Crede will receive at settlement does not vary with the value of the shares, the settlement provision is not considered a conversion option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the New Crede Convertible Loan was accounted for as a liability measured at fair value using the discounted cash flow method at inception.

On the date of the New Crede Convertible Loan, WISeKey signed an option agreement granting Crede the option to acquire up to 1,675,885 WIHN class B shares at an exercise price set initially at CHF 1.65 but revised down to CHF 1.375 in an amendment signed by both parties on September 18, 2020, exercisable between September 24, 2020 and September 14, 2023. Per the option agreement’s term, the date of grant under US GAAP is September 14, 2020 upon issuance of a Tax Ruling from the Swiss Federal Tax Administration and the Zug tax authority. In line with ASC 470-20-25-2, the proceeds from the convertible debt with a detachable warrant was allocated to the two elements based on the relative fair values of the debt instrument without the warrant and of the warrant at time of issuance. The option agreement was assessed as an equity instrument and was fair valued at grant at an amount of USD 866,046 using the Black-Scholes model and the market price of WIHN class B shares on the date of the amendment, September 18, 2020, of CHF 1.25. The fair value of the debt was calculated using the discounted cash flow method as USD 5,387,271. Applying the relative fair value method per ASC 470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of USD 692,469, and the credit entry was booked in APIC.

In 2020, Crede issued two exercise notices under the New Crede Convertible Loan, resulting in the following conversions:

-	On November 20, 2020 for 220,143 WIHN class B shares delivered on November 25, 2020 for a conversion<br>of USD 219,680.
-	On December 18, 2020 for 549,190 WIHN class B shares delivered on December 23, 2020 for a conversion<br>of USD 565,200.
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As at December 31, 2020, the principal amount outstanding under the New Crede Convertible Loan was USD 4,215,120, with unamortized debt discount of USD 504,855. For the year to December 31, 2020, the Group recorded a net debt discount amortization expense in the income statement of USD 90,901.

Credit Agreement with GLOBAL TECHOPPORTUNITIES 8

On December 08, 2020, WISeKey entered into the GTO Facility, an Agreement for the Issuance and Subscription of Convertible Notes with GTO, pursuant to which GTO commits to grant a loan to WISeKey for up to a maximum amount of CHF 15.5 million divided into tranches of variable sizes, during a commitment period of 18 months ending June 09, 2022. The dates and amounts of the first 3 tranches were agreed in advance in the GTO Facility agreement; for the remaining facility, GTO has the right to request the subscription of 2 tranches, all other tranches are to be subscribed for by WISeKey during the commitment period, subject to certain conditions. Each tranche is divided into convertible notes of CHF 10,000 each that do not bear interest. Subject to a cash redemption right of WISeKey, the convertible notes are mandatorily convertible into WIHN class B shares within a period of 12 months from issuance (the “GTO Conversion Period”). Conversion takes place upon request by GTO during the GTO Conversion Period, but in any case no later than at the expiry of the GTO Conversion Period, at a conversion price of the higher of (i) CHF 0.05 and (ii) 97% of the average of the 5 lowest closing volume-weighted average price of a Class B Share as traded on the SIX Swiss Exchange during the 20 trading days preceding the relevant conversion date.

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Due to GTO’s option to convert the loan in part or in full at any time before maturity, the GTO Facility was assessed as a share-settled debt instrument with an embedded put option. Because the value that GTO will receive at settlement does not vary with the value of the shares, the settlement provision is not considered a conversion option. We assessed the put option under ASC 815 and concluded that it is clearly and closely related to its debt host and therefore did not require bifurcation. Per ASC 480-10-25, the GTO Facility was accounted for as a liability measured at fair value using the discounted cash flow method at inception.

Debt issue costs made up of legal expenses of commitment fee of CHF 697,500, representing 4.5% of the maximum GTO Facility, were due to GTO at inception, payable throughout the commitment period but no later than June 08, 2022. At inception on December 08, 2020, in application of ASC 340-10-S99-1, WISeKey accounted for the debt issue costs of and the commitment fee of CHF 697,500 as a deferred asset to be amortized on a straight-line basis over the commitment period (access period) of the GTO Facility. Upon subscription of each tranche, the debt issue costs and commitment fee are recorded as a debt discount proportionately to each tranche amount.

Additionally, per the terms of the GTO Facility, upon each tranche subscription, WISeKey will grant GTO the option to acquire WIHN class B shares at an exercise price of the higher of (a) 120% of the 5-trading day VWAP of the WIHN class B shares on the SIX Swiss Stock Exchange over the 5 trading days immediately preceding the relevant subscription request and (b) CHF 1.50 (the “GTO Warrant Exercise Price”). The number of options granted at each tranche subscription is calculated as 15% of the principal amount of each Tranche divided by the GTO Warrant Exercise Price. Each warrant agreement has a 5-year exercise period starting on the relevant subscription date. In line with ASC 470-20-25-2, for each subscription, the proceeds from the convertible notes with a detachable warrant were allocated to the two elements based on the relative fair values of the debt instrument without the warrant and of the warrant at time of issuance. When assessed as an equity instrument, the option agreement is fair valued at grant using the Black-Scholes model and the market price of WIHN class B shares on the date of the subscription. The fair value of the debt is calculated using the discounted cash flow method.

During the year to December 31, 2020, the Group made a total of three subscriptions under the terms of the GTO Facility as follows:

-	On December 09, 2020 for convertibles notes in the amount CHF 750,000 (USD 842,302 at historical rate).<br>The funds were received on December 11, 2020. On December 09, 2020, in line with the terms of the GTO Facility, WISeKey<br>issued GTO with 75,000 warrants on WIHN class B shares at an exercise price of CHF 1.50. The option agreement was assessed<br>as an equity instrument and was fair valued at grant at an amount of CHF 30,000 (USD 33,692) using the Black-Scholes<br>model and the market price of WIHN class B shares on the date of grant of CHF 0.99. The fair value of the debt was calculated<br>using the discounted cash flow method as CHF 726,445 (USD 815,848). Applying the relative fair value method per ASC 470-20-25-2,<br>the recognition of the option agreement created a debt discount on the debt host in the amount of CHF 29,744 (USD 33,405),<br>and the credit entry was booked in APIC.
-	On December 21, 2020 for convertibles notes in the amount CHF 1,750,000 (USD 1,975,678 at historical<br>rate). The funds were received on December 28, 2020. On December 21, 2020, in line with the terms of the GTO Facility, WISeKey<br>issued GTO with 175,000 warrants on WIHN class B shares at an exercise price of CHF 1.50. The option agreement was assessed<br>as an equity instrument and was fair valued at grant at an amount of CHF 78,750 (USD 88,906) using the Black-Scholes<br>model and the market price of WIHN class B shares on the date of grant of CHF 1.065. The fair value of the debt was calculated<br>using the discounted cash flow method as CHF 1,695,038 (USD 1,913,628). Applying the relative fair value method per ASC<br>470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of CHF 76,773<br>(USD 86,674), and the credit entry was booked in APIC.
---	---
-	On December 24, 2020 for convertibles notes in the amount CHF 2,160,000 (USD 2,422,792 at<br>historical rate). The funds were received on December 31, 2020. On December 24, 2020, in line with the terms of the GTO Facility,<br>WISeKey issued GTO with 216,000 warrants on WIHN class B shares at an exercise price of CHF 1.50. The option agreement was assessed<br>as an equity instrument and was fair valued at grant at an amount of CHF 103,680 (USD 116,294) using the Black-Scholes<br>model and the market price of WIHN class B shares on the date of grant of CHF 1.105. The fair value of the debt was calculated<br>using the discounted cash flow method as CHF 2,118,422 (USD 2,376,156). Applying the relative fair value method per ASC<br>470-20-25-2, the recognition of the option agreement created a debt discount on the debt host in the amount of CHF 100,782<br>(USD 113,043), and the credit entry was booked in APIC.
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During the year to December 31, 2020, GTO issued a total of five conversion notices, resulting in the following conversions:

-	On December 14, 2020 for 50,607 WIHN class B shares delivered on December 18, 2020 for a conversion<br>of CHF 50,000 (USD 56,487).
-	On December 18, 2020 for 102,986 WIHN class B shares delivered on December 23, 2020 for a conversion<br>of CHF 100,000 (USD 112,582).
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-	On December 21, 2020 for 205,973 WIHN class B shares delivered on December 28, 2020 for a conversion<br>of CHF 200,000 (USD 224,801).
---	---
-	On December 23, 2020 for 205,973 WIHN class B shares delivered on December 28, 2020 for a conversion<br>of CHF 200,000 (USD 224,801).
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-	On December 29, 2020 for 205,973 WIHN class B shares delivered on December 30, 2020 for a conversion<br>of CHF 200,000 (USD 226,444).
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We note that GTO sent a conversion notice on December 30, 2020 for 1,802,265 WIHN class B shares representing a conversion of CHF 1,750,000 (USD 1,978,980 at closing rate). The shares were not delivered by December 31, 2020.

During the year to December 31, 2020, a debt discount charge of CHF 4,483 (USD 4,779) and deferred charges in the amount of CHF 28,724 (USD 30,620) were amortized to the income statement, and commitment fees of CHF 62,243 (USD 66,351) were booked to APIC as per ASC 470-02-40-4.

As at December 31, 2020 the outstanding GTO Facility available was CHF 10,840,000 (USD 12,258,371). Convertible notes in an aggregate amount of CHF 3,910,000 (USD 4,421,608) remained unconverted and the unamortized debt discount balance was CHF 352,912 (USD 399,089), hence a carrying value of CHF 3,557,088 (USD 4,022,519). as at December 31, 2020. The deferred charge balance was CHF 489,437 (USD 553,478).

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Note 26.	Employee benefit plans

Defined benefit post-retirementplan

The Group maintains four pension plans: one maintained by WISeKey SA and one by WISeKey International Holding Ltd, both covering its employees in Switzerland, as well as one maintained by WISeKey Semiconductors SAS and one by WISeCoin France R&D Lab SAS, both covering WISeKey’s French employees.

All plans are considered defined benefit plans and accounted for in accordance with ASC 715 Compensation – Retirement Benefits. This model allocates pension costs over the service period of employees in the plan. The underlying principle is that employees render services ratably over this period, and therefore, the income statement effects of pensions should follow a similar pattern. ASC 715 requires recognition of the funded status or difference between the fair value of plan assets and the projected benefit obligations of the pension plan on the balance sheet, with a corresponding adjustment recorded in the net loss. If the projected benefit obligation exceeds the fair value of the plan assets, then that difference or unfunded status represents the pension liability.

The Group records net service cost as an operating expense and other components of defined benefit plans as a non-operating expense in the statement of comprehensive loss.

The liabilities and annual income or expense of the pension plan are determined using methodologies that involve several actuarial assumptions, the most significant of which are the discount rate and the long-term rate of asset return (based on the market-related value of assets). The fair value of plan assets is determined based on prevailing market prices.

The defined benefit pension plan maintained by WISeKey Semiconductors SAS and WISeCoin France R&D Lab SAS, and their obligations to employees in terms of retirement benefits, are limited to a lump sum payment based on remuneration and length of service, determined for each employee. The plans are not funded.

The pension liability calculated as at December 31, 2020 is based on annual personnel costs and assumptions as of December 31, 2020.

Personnel Costs	As at December 31,	As at December 31,	As at December 31,
USD'000	2020	2019	2018
Wages and Salaries	12,145	11,161	9,738
Social security contributions	3,230	2,813	2,974
Net service costs	646	281	372
Other components of defined benefit plans, net	248	132	140
Total	16,268	14,387	13,224
	As at December 31,
---	---	---	---	---	---	---	---	---	---
Assumptions	2020	2020	2020	2019	2019	2019	2018	2018	2018
	France	Switzerland	India	France	Switzerland	India	France	Switzerland	India
Discount rate	0.30%	0.15%	n/a	0.70%	0.25%	7.30%	1.50%	0.80% - 0.90%	7.72%
Expected rate of return on plan assets	n/a	1.50%	n/a	n/a	1.50%	n/a	n/a	1.50% - 2%	n/a
Salary increases	3%	1.50%	n/a	3%	1.50%	9%	3%	0.5% - 1.50%	9%

For WISeKey SA’s funded plan, the expected long-term rate of return on assets is based on the pension fund policy which is based on approximately +0.5% in addition to the minimum interest by law in Switzerland (“Min LPP”). In 2020, Min LPP is 1.0% hence an assumption of 1.5%.

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As at December 31, 2020 the Group’s accumulated benefit obligation amounted to USD 18,483,000.

Reconciliation to Balance Sheet start of year
'000
Fiscal year	2019
Fair value of plan assets	(8,275)
Projected benefit obligation	12,740
Surplus/deficit	4,465
Opening balance sheet asset/provision (funded status)	4,465
Reconciliation of benefit obligation during the year
Projected benefit obligation at start of year	12,740
Net Service cost	412
Interest expense	107
Plan participant contributions	216
Net benefits paid to participants	1,377
Prior service costs	0
Actuarial losses/(gains)	2,487
Reclassifications	0
Currency translation adjustment	227
Projected benefit obligation at end of year	17,566
Reconciliation of plan assets during year
Fair value of plan assets at start of year	(8,275)
Employer contributions paid over the year	(347)
Plan participant contributions	(216)
Net benefits paid to participants	(1,401)
Interest income	(123)
Return in plan assets, excl. amounts included in net interest	(136)
Currency translation adjustment	(188)
Fair value of plan assets at end of year	(10,686)
Reconcilation to balance sheet end of year
Fair value of plan assets	(10,686)
Defined benefit obligation - funded plans	17,566
Surplus/deficit	6,880
Closing balance sheet asset/provision (funded status)	6,880

All values are in US Dollars.

Estimated amount to be amortized from accumulated OCI into NPBC over next fiscal year
Net loss (gain)	286	283
Unrecognized transition (asset)/obligation	0	0
Prior service cost/(credit)	61	61
Amounts recognized in accumulated OCI
---	---	---
Net loss (gain)	4,237	4,258
Unrecognized transition (asset)/obligation	0	0
Prior service cost/(credit)	(440)	300
Deficit	3,797	4,558

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Movement in Funded Status
'000
Fiscal year	2019	2018
Opening balance sheet liability (funded status)	4,465	4,585
Net Service cost	412	372
Interest cost/(credit)	107	86
Expected return on Assets	(123)	(116)
Amortization on Net (gain)/loss	88	108
Amortization on Prior service cost/(credit)	62	62
Currency translation adjustment	(2)	1
Total Net Periodic Benefit Cost/(credit)	544	512
Actuarial (gain)/loss on liabilities due to experience	1,056	272
Actuarial gain/loss on liab. from changes to fin. assump	1,431	(309)
Actuarial (gain)/loss on liab. from changes to demo. assump	0	1
Return in plan assets, excl. amounts included in net interest	(136)	(56)
Prior service cost/(credit)	0	0
Amortization on Net (gain)/loss	(88)	(108)
Amortization on Prior service cost/(credit)	(62)	(62)
Currency translation adjustment	(2)	(0)
Total gain/loss recognized via OCI	2,200	(262)
Employer contributions paid in the year	(371)	(293)
Total cashflow	(371)	(293)
Currency translation adjustment	43	(77)
Reclassification	0	0
Closing balance sheet liability (funded status)	6,880	4,465
Reconciliation of Net Gain / Loss
Amount at beginning of year	1,964	2,187
Amortization during the year	(86)	(109)
Asset (gain) / loss	(136)	(56)
Liability (gain) / loss	2,487	(37)
Reclassifications	0	0
Currency translation adjustment	29	(21)
Amount at year-end	4,258	1,964
Reconciliation of prior service cost/(credit)
Amount at beginning of year	357	423
Amortization during the year	(62)	(62)
Prior service costs for the current period	0	0
Currency translation adjustment	5	(4)
Amount at year-end	300	357

All values are in US Dollars.

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All of the assets are held under the collective contract by the plan’s re-insurer company and are invested in a mix of Swiss and International bond and equity securities. In line with ASC 820’s three-tier fair value hierarchy, pension assets belong to the fair value level 3.

The table below shows the breakdown of expected future contributions payable to the Plan :

PeriodUSD'000	France	Switzerland
2021	-	1,843
2022	126	398
2023	36	424
2024	8	2,037
2025	25	541
2026-2030	359	3,082

The Group expects to make contributions of approximately $248,000 in 2021.

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Note 27.	Commitments and contingencies

Lease commitments

The future payments due under leases are shown in Note 17.

Guarantees

Our software and hardware product sales agreements generally include certain provisions for indemnifying customers against liabilities if our products infringe a third party’s intellectual property rights. Certain of our product sales agreements also include provisions indemnifying customers against liabilities in the event we breach confidentiality or service level requirements. It is not possible to determine the maximum potential amount under these indemnification agreements due to our lack of history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, we have not incurred any costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in our consolidated financial statements.

Note 28.	Stockholders’ equity
WISeKey International Holding Ltd	As at December 31, 2020		As at December 31, 2019
---	---	---	---	---
Share Capital	Class A Shares	Class B Shares	Class A Shares	Class B Shares
Par value per share (in CHF)	0.01	0.05	0.01	0.05
Share capital (in USD)	400,186	2,490,403	400,186	1,475,000
Per Articles of association and Swiss capital categories
Authorized Capital - Total number of authorized shares	-	7,808,906	-	8,881,829
Conditional Share Capital - Total number of conditional shares	-	7,804,030	-	11,840,090
Total number of fully paid-in shares	40,021,988	47,622,689	40,021,988	28,824,086
Per US GAAP
Total number of authorized shares	40,021,988	63,234,625	40,021,988	41,066,298
Total number of fully paid-in issued shares	40,021,988	47,622,689	40,021,988	28,824,086
Total number of fully paid-in outstanding shares	40,021,988	42,839,554	40,021,988	27,621,895
Par value per share (in CHF)	0.01	0.05	0.01	0.05
Share capital (in USD)	400,186	2,490,403	400,186	1,475,000
Total share capital (in USD)	2,890,589		1,875,186
Treasury Share Capital
Total number of fully paid-in shares held as treasury shares	-	4,783,135	-	1,202,191
Treasury share capital (in USD)	-	505,154	-	1,288,591
Total treasury share capital (in USD)	-	505,154	-	1,288,591
Note: unregistered conversion of conditional capital NOT deducted from total number of conditional shares, i.e. as if the issue had not taken place.

In the years to December 31, 2020 and 2019 respectively, WISeKey purchased a total of 8,458,273 and 593,824 treasury shares at an average purchase price of USD 0.15 and USD 2.75 per share, and sold a total of 4,877,329 and 1,479,694 treasury shares at an average sale price of USD 0.99 and USD 2.40 per share.

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Share buyback program

On July 09, 2019, the Group started a share buyback program on the SIX Swiss Exchange to buy back WIHN class B shares up to a maximum 10.0% of the share capital and 5.35% of the voting rights. In compliance with Swiss Law, at no time will the group hold more than 10% of its own registered shares. The share buyback program will end on July 08, 2022 but WISeKey may terminate the buyback program early.

As at December 31 ,2020, WISeKey’s treasury share balance included 35,500 WIHN class B shares purchased through the share buyback program.

Voting rights

Each share carries one vote at a general meeting of shareholders, irrespective of the difference in par value of class A shares (CHF 0.01 per share) and class B shares (CHF 0.05 per share). Our class A shares have a lower par value (CHF 0.01) than our class B shares (CHF 0.05) but have same voting right as the higher par value class B shares, namely one (1) vote per share. This means that, relative to their respective per share contribution to the Company’s capital, the holders of our class A shares have a greater relative per share voting power than the holders of our class B shares for matters that require approval on the basis of a specified majority of shares present at the shareholders meeting.

Shareholder resolutions and elections (including elections of members of the board of directors) require the affirmative vote of an absolute majority of the votes represented (in person or by proxy) at a general meeting of shareholders (each class A share and each class B share having one vote), unless otherwise stipulated by law or our Articles. The following matters require approval by a majority of the par value of the shares represented at the general meeting (each class A share having a par value of CHF 0.01 per share and each class B share having a par value of CHF 0.05 per share):

-	electing our auditor;
-	appointing an expert to audit our business management or parts thereof;
---	---
-	adopting any resolution regarding the instigation of a special investigation; and
---	---
-	adopting any resolution regarding the initiation of a derivative liability action.
---	---

In addition, under Swiss corporation law and our Articles, approval by two-thirds of the shares represented at the meeting, and by the absolute majority of the par value of the shares represented is required for:

-	amending our corporate purpose;
-	creating or cancelling shares with preference rights;
---	---
-	restricting the transferability of registered shares;
---	---
-	restricting the exercise of the right to vote or the cancellation thereof;
---	---
-	creating authorized or conditional share capital;
---	---
-	increasing the share capital out of equity, against contributions in kind or for the purpose of<br>acquiring specific assets and granting specific benefits;
---	---
-	limiting or withdrawing shareholder's pre-emptive rights;
---	---
-	relocating our registered office;
---	---
-	converting registered shares into bearer shares and vice versa;
---	---
-	our dissolution or liquidation; and
---	---
-	transactions among corporations based on Switzerland's Federal Act on Mergers, Demergers, Transformations<br>and the Transfer of Assets of 2003, as amended (the "Swiss Merger Act") including a merger, demerger or conversion of<br>a corporation.
---	---

In accordance with Swiss law and generally accepted business practices, our Articles do not provide attendance quorum requirements generally applicable to general meetings of shareholders.

Both categories of Shares confer equal entitlement to dividends and liquidation rights relative to the nominal value of the class A shares and the class B shares, respectively.

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Only holders of Shares (including nominees) that are recorded in the share register as of the record date communicated in the invitation to the General Meeting are entitled to vote at a General Meeting.

Any acquirer of Shares who is not registered in the share register as a shareholder with voting rights may not vote at or participate in any General Meeting, but will still be entitled to dividends and other rights with financial value with respect to such Shares.

Each holder of class A shares has entered into an agreement (each such agreement a "Shareholder Agreement") with WISeKey, pursuant to which such holder of class A shares has given the undertaking vis-à-vis WISeKey not to (i) directly or indirectly offer, sell, transfer or grant any option or contract to purchase, purchase any option or contract to sell, grant instruction rights with respect to or otherwise dispose of, or (ii) solicit any offers to purchase, otherwise acquire or be entitled to, any of his/her/its class A shares or any right associated therewith (collectively a "Transfer"), except if such Transfer constitutes a "Permitted Transfer", as defined hereafter. A Permitted Transfer is defined as a Transfer by a holder of class A share to his/her spouse or immediate family member (or a trust related to such immediate family member) or a third party for reasonable estate planning purposes, the transfer to an affiliate and any transfer following conversion of his/her/its class A shares into class B shares. Each holder of a class A share has the right to request that, at WISeKey's annual General Meeting, an item be included on the agenda according to which class A shares are, at the discretion of each holder of class A shares, converted into class B shares.

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Note 29.	Accumulated other comprehensive income
'000
---	---	---
Accumulated other comprehensive income as at December 31, 2018		100
	643
	(2,199)
	(21)
	34
	(10)
Total Other comprehensive income/(loss), net		(1,553)
Accumulated other comprehensive income as at December 31, 2019		(1,453)
	1,824
	5,385
	1,189
	(5)
Total Other comprehensive income/(loss), net		8,393
Accumulated other comprehensive income as at December 31, 2020		6,940

All values are in US Dollars.

Note 30.	Revenue

Nature of goods and services

The following is a description of the principal activities – separated by reportable segment – from which the Group generates its revenue. For more detailed information about reportable segments, see note 36 - Segment Information and Geographic Data.

-	IoT Segment

The IoT segment of the Group principally generates revenue from the sale of semiconductors secure chips. Although they may be sold in connection with other services of the Group, they always represent distinct performance obligations.

The Group recognizes revenue when a customer takes possession of the chips, which usually occurs when the goods are delivered. Customers typically pay once goods are delivered.

-	mPKI Segment

The mPKI Segment of the Group generates revenues from Digital Certificates, Software as a Service, Software license and Post-Contract Customer Support (PCS) for cybersecurity applications. Products and services are sold principally separately and more in bundled packages.

For bundled packages, the Group accounts for individual products and services separately if they are distinct – i.e. if a product or service is separately identified from other items in the bundled package and if a customer can benefit from it. The consideration is allocated between separate products and services in a bundle based on their stand-alone selling prices. The stand-alone selling prices are determined based on the list prices when available or estimated based on the Adjusted Market Assessment approach (e.g. licenses), or the Expected Cost-Plus Margin approach (e.g. PCS).

Product and services	Nature, timing of satisfaction of performance obligations and significant payment terms
Certificates	The Group recognizes revenue on a straight-line basis over the validity period of the certificate, which is usually one to three years. This period starts after the certificate has been issued by the Certificate Authority and may be used by the customer for authentication and signature, by checking the certificate validity against the Root of Trust which is maintained by the Group on its IT infrastructure. Customers pay certificates when certificates are issued and invoiced. The excess of payments over recognized revenue is shown as deferred revenue.
SaaS	The Group’s SaaS arrangement cover the provision of cloud-based certificate life-cycle-management solutions and signing and authentication solutions. The Group recognizes revenue on a straight-line basis over the service period which is usually yearly renewable. Customers usually pay ahead of quarterly or yearly service periods; the paid amounts which have not yet been recognized are shown as deferred revenue.

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Software

The Group provides software for certificates life-cycle management and signing and authentication solutions. The Group recognizes license revenue when the software has been delivered and PCS revenue over the service period which is usually one-year renewable. Customers pay upon delivery of the software or over the PCS.

Implementation, integration and other services

The Group provides services to implement<br> and integrate multi-element cybersecurity solutions. Most of the time the solution elements are off-the-shelve non-customized components<br> which represent distinct performance obligations. Implementation and integration services are payable when rendered, while other<br> revenue elements are payable and recognized as per their specific description in this section.<br><br> <br><br><br> <br>WISeKey also provides hosting<br>and monitoring of infrastructure services which are distinct performance obligations and are paid and recognized over the service<br>period.

Disaggregation of revenue

The following table shows the Group’s revenues disaggregated by reportable segment and by product or service type:

Disaggregation of revenue	At one point in time			Over time			Total
'000	2020	2019	2018	2020	2019	2018	2020	2019	2018
IoT Segment
Payment at one point in time:
Secure chips	14,317	20,504	29,404	-	-	-	14,317	20,504	29,404
Total<br> IoT segment revenue	14,317	20,504	29,404	-	-	-	14,317	20,504	29,404
mPKI Segment
Certificates	-	-	-	175	172	338	175	172	338
Licenses and integration	287	1,976	4,538	-	-	-	287	1,976	4,538
SaaS, PCS and hosting	-	-	-	-	-	-	-	-	-
Total<br> mPKI segment revenue	287	1,976	4,538	175	172	338	462	2,148	4,876
Total Revenue	14,604	22,480	33,942	175	172	338	14,779	22,652	34,280

All values are in US Dollars.

For the years ended December 31, 2020, 2019, and 2018 the Group recorded no revenues related to performance obligations satisfied in prior periods.

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The following table shows the Group’s revenues disaggregated by geography, based on our customers’ billing addresses:

Net sales by region	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
USD'000	2020	2019	2018
IoT Segment
Switzerland	278	708	1,171
Rest of EMEA	4,228	7,508	10,695
North America	8,217	9,547	15,165
Asia Pacific	1,526	2,503	2,257
Latin America	68	238	116
Total IoT segment revenue	14,317	20,504	29,404
mPKI Segment
Switzerland	314	1,428	1,341
Rest of EMEA	93	539	3,428
North America	43	144	-
Asia Pacific	-	1	49
Latin America	12	36	58
Total mPKI segment revenue	462	2,148	4,876
Total Net sales	14,779	22,652	34,280
*EMEA means Europe, Middle East and Africa

Contract assets, deferred revenue andcontract liability

Our contract assets, deferred revenue and contract liability consist of:

Contract assets and contract liabilities
	As at December 31,	As at December 31,
USD'000	2020	2019
Trade accounts receivables
Trade accounts receivable - IoT segment	2,227	2,843
Trade accounts receivable - mPKI segment	381	800
Total trade accounts receivables	2,608	3,643
Contract assets	-	15
Total contract assets	-	15
Contract liabilities - current	367	255
Contract liabilities - noncurrent	23	2
Total contract liabilities	390	257
Deferred revenue
Deferred revenue - mPKI segment	171	92
Deferred revenue - IoT segment	150	7
Total Deferred revenue	321	99
Revenue recognized in the year from amounts included in the deferred revenue of the mPKI segment at the beginning of the year	84	83

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Increases or decreases in trade accounts receivable, contract assets, deferred revenue and contract liability were primarily due to normal timing differences between our performance and customer payments.

Remaining performance obligations

As of December 31, 2020, approximately USD 710,225 is expected to be recognized from remaining performance obligations for mPKI contracts. We expect to recognize revenue for these remaining performance obligations during the next three years approximately as follows:

Estimated mPKI revenue from remaining performance obligationsas at December 31, 2020	USD'000
2021	669
2022	41
Total remaining performance obligation	710
Note 31.	Other operating income
---	---
	12 months ended December 31,	12 months ended December 31,
---	---	---
USD'000	2020	2019
Other operating income from related parties	43	140
Other operating income - other	-	40
Total other operating income	43	180

In the year 2020, other operating income from related parties was made up of the amounts invoiced by WISeKey to the OISTE Foundation for the use of its premises and equipment.

Note 32.	Stock-based compensation

Employee stock option plans

The Stock Option Plan (“ESOP 1”) was approved on December 31, 2007 by the stockholders of WISeKey SA, representing 2,632,500 options convertible into WISeKey SA shares with an exercise price of CHF 0.01 per share.

The Stock Option Plan (“ESOP 2”) was approved on December 31, 2011 by the stockholders of WISeKey SA, representing 16,698,300 options convertible into WISeKey SA shares with an exercise price of CHF 0.01 per share.

At March 22, 2016 as part of the reverse acquisition transaction, both ESOP plans in existence in WISeKey SA were transferred to WISeKey International Holding Ltd at the same terms, with the share exchange term of 5:1 into WIHN class B shares.

Grants

In the 12 months to December 31, 2018, the Group granted a total of 851,131 options exercisable in WIHN class B shares. Each warrant is exercisable into one class B share.

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The warrants granted consist of:

-	113,750 options with immediate vesting granted to employees, all of which had been exercised as<br>of December 31, 2018;
-	100,000 options with immediate vesting granted to an external advisor, all of which had been exercised<br>as of December 31, 2018;
---	---
-	214,000 options with immediate vesting granted to external advisors, none of which had been exercised<br>as of December 31, 2018;
---	---
-	13,167 options granted to an employee, which vested on February 01, 2018 but were not exercised<br>and were forfeited on September 30, 2019;
---	---
-	13,167 options granted to an employee, which vested on August 01, 2018 but were not exercised and<br>were forfeited on September 30, 2019.
---	---
-	132,346 options vesting on December 31, 2018 granted to employees, none of which had been exercised<br>as of December 31, 2018;
---	---
-	132,349 options vesting on December 31, 2019 granted to employees;
---	---
-	132,352 options vesting on December 31, 2020 granted to employees.
---	---

The warrants granted were valued at grant date using the Black-Scholes model. Unexercised warrants to external advisers at December 31, 2018 were revalued to their fair value at December 31, 2018 using the same model.

In the 12 months to December 31, 2019, the Group granted a total of 2,292,539 options exercisable in WIHN class B shares. Each warrant is exercisable into one class B share.

The warrants granted consisted of:

-	2,074,770 options with immediate vesting granted to employees and Board members, none of which<br>had been exercised as of December 31, 2019.
-	145,854 options with immediate vesting granted to employees and Board members, all of which had<br>been exercised as of December 31, 2019;
---	---
-	60,394 options with immediate vesting granted in exchange for WISeKey SA shares, all of which had<br>been exercised as of December 31, 2019; and
---	---
-	11,521 options with immediate vesting granted to an external advisor and which had not been exercised<br>as of December 31, 2019.
---	---

The warrants granted were valued at grant date using the Black-Scholes model.

In the 12 months to December 31, 2020, the Group granted a total of 467,617 options exercisable in WIHN class B shares. Each warrant is exercisable into one class B share.

The warrants granted consisted of:

-	279,017 options with immediate vesting granted to employees and Board members, none of which had<br>been exercised as of December 31, 2020.
-	5,381 options with immediate vesting granted to employees and Board members, all of which had been<br>exercised as of December 31, 2020;
---	---
-	16,667 options vesting on November 10, 2021 granted to employees;
---	---
-	16,666 options vesting on November 10, 2022 granted to employees;
---	---
-	33,334 options vesting on June 30, 2021 granted to employees;
---	---
-	33,333 options vesting on June 30, 2022 granted to employees;
---	---
-	33,333 options vesting on June 30, 2023 granted to employees;
---	---
-	16,323 options with immediate vesting granted in exchange for WISeKey SA shares, all of which had<br>been exercised as of December 31, 2020; and
---	---
-	33,563 options with immediate vesting granted to external advisors and which had not been exercised<br>as of December 31, 2020.
---	---

The warrants granted were valued at grant date using the Black-Scholes model.

Stock option charge to the incomestatement

The Group calculates the fair value of options granted by applying the Black-Scholes option pricing model. Expected volatility is based on historical volatility of WIHN class B shares.

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In the fiscal year 2020, a total charge of USD 392,772 was recognized in the consolidated income statement calculated by applying the Black-Scholes model at grant, in relation to options:

-	USD 362,911 for options granted to employees and Board members; and
-	USD 29,861 for options granted to nonemployees
---	---

The following assumptions were used to calculate the compensation expense and the calculated fair value of stock options granted:

Assumption	December 31, 2020	December 31, 2019	December 31, 2018
Dividend yield	None	None	None
Risk-free interest rate used (average)	1.00%	1.00%	1.00%
Expected market price volatility	37.61% - 65.38%	51.59% - 56.86%	46.11% - 58.22%
Average remaining expected life of stock options (years)	3.43	3.01	3.10

Unvested options to employees as at December 31, 2020 were recognized prorata temporis over the service period (grant date to vesting date).

The following table illustrates the development of the Group’s non-vested options for the years ended December 31, 2020 and 2019.

Non-vested options	Number of WIHN Class B Shares under options	Weighted-average grant date fair value (USD)
Non-vested options as at December 31, 2018	431,368	2.99
Granted	2,292,539	2.45
Vested	(2,464,232)	2.41
Non-vested forfeited or cancelled	(254,649)	3.75
Non-vested options as at December 31, 2019	5,026	3.65
Granted	467,617	1.08
Vested	(339,310)	1.01
Non-vested forfeited or cancelled	-	-
Non-vested options as at December 31, 2020	133,333	1.20

As at December 31, 2020, there was a USD 122,100 unrecognized compensation expense related to non-vested stock option-based compensation arrangements. Non-vested stock options outstanding as at December 31, 2020 were accounted for using the graded-vesting method, as permitted under ASC 718-10-35-8, and we therefore recognized compensation costs calculated using the Black-Scholes model and the market price of WIHN class B shares at grant date, over the requisite service period.

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The following table summarizes the Group’s stock option activity for the years ended December 31, 2020 and 2019.

Options on WIHN Shares	WIHN Class B Shares under options	Weighted-average exercise price(USD)	Weighted average remaining contractual term(in years)	Aggregate intrinsic value(USD)
Outstanding as at December 31, 2018	1,342,819	2.76	3.00	(895,404)
Of which vested	911,451	3.28	2.26	(1,082,233)
Of which non-vested	431,368	-	-	-
Granted	2,292,539	0.99	-	-
Exercised or converted	(259,338)	1.00	-	581,477
Forfeited or cancelled	(333,905)	0.05	-	-
Expired	(199,000)	5.17	-	-
Outstanding as at December 31, 2019	2,843,115	0.99	5.19	3,693,941
Of which vested	2,838,089	1.00	5.19	3,682,672
Of which non-vested	5,026	-	-
Granted	467,617	1.48	-	-
Exercised or converted	(1,214,402)	1.57	-	2,046,219
Forfeited or cancelled	-	-	-	-
Expired	-	-	-	-
Outstanding as at December 31, 2020	2,096,330	1.48	4.44	554,377
Of which vested	1,962,997	1.57	4.31	329,716
Of which non-vested	133,333	-	-

Summary of stock-based compensationexpenses

Stock-based compensation expenses	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
USD’000	2020	2019	2018
In relation to Employee Stock Option Plans (ESOP)	363	5,386	1,278
In relation to non-ESOP Option Agreements	30	28	382
Total	393	5,414	1,660

Stock-based compensation expenses are recorded under the following expense categories in the income statement.

Stock-based compensation expenses	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
USD’000	2020	2019	2018
Research & development expenses	6	786	121
Selling & marketing expenses	209	1,269	571
General & administrative expenses	178	3,359	967
Total	393	5,414	1,660

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Note 33.	Non-operating income

Non-operating income consisted of the following:

	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
USD'000	2020	2019	2018
Foreign exchange gain	839	1,761	1,664
Financial income	8	74	85
Interest income	16	-	-
Other	264	83	432
Total non-operating income from continuing operations	1,127	1,918	2,181

Non-operating income – Other includes total income of CHF 204,547 (USD 218,047) from Nice & Green corresponding to the agreed incentive fee included in the Nice & Green Facility (see Note 25).

Note 34.	Non-operating expenses

Non-operating expenses consisted of the following:

	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
USD'000	2020	2019	2018
Impairment of equity securities at cost	7,000
Foreign exchange losses	2,195	2,401	1,984
Financial charges	104	341	104
Interest expense	685	643	244
Other components of defined benefit plans, net	248	132	140
Other	847	153	354
Total non-operating expenses from continuing operations	11,079	3,670	2,826

The impairment of equity securities at cost relate to the Tarmin warrant (see Note 19).

Non-operating expenses – Other include a USD 454,501 expense for the fair value adjustment as at December 31, 2020 of the investment in OpenLimit (see Note 20).

Note 35.	Income taxes

The components of income before income taxes are as follows:

Income / (Loss)	As at December 31,	As at December 31,	As at December 31,
USD'000	2020	2019	2018
Switzerland	(15,723)	(19,179)	(11,428)
Foreign	(6,621)	(3,838)	(4,989)
Less discontinued operations	-	-	6,562
Income/(loss) before income tax	(22,344)	(23,017)	(9,855)

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Income taxes relating to the Group are as follows:

Income taxes	As at December 31,	As at December 31,	As at December 31,
USD'000	2020	2019	2018
Switzerland	0	(42)	328
Foreign	9	13	(479)
Less discontinued operations	0	42	205
Income tax expense	9	13	53

Income tax at the Swiss statutory rate compared to the Group’s income tax expenses as reported are as follows:

Deferred income tax assets/(liabilities)	As at December 31,	As at December 31,
USD'000	2020	2019
Foreign	3	6
Deferred income tax assets/(liabilities)	3	6

Income tax at the Swiss statutory rate compared to the Group’s income tax expenses as reported are as follows:

Income taxes at the Swiss statutory rate	As at December 31,	As at December 31,	As at December 31,
USD'000	2020	2019	2018
Net income/(loss) from continuing operations before income tax	(28,898)	(23,017)	(9,855)
Statutory tax rate	14%	24%	24%
Expected income tax (expense)/recovery	4,043	5,524	2,365
Income tax (expense)/recovery	(9)	(13)	(53)
Change in valuation allowance	(631)	(2,129)	4,228
Permanent Difference	(1)	0	(9)
Change in expiration of tax loss carryforwards	(3,411)	(3,395)	(6,584)
Income tax (expense) / recovery	(9)	(13)	(53)

The Group assesses the recoverability of its deferred tax assets and, to the extent recoverability does not satisfy the “more likely than not” recognition criterion under ASC 740, records a valuation allowance against its deferred tax assets. The Group considered its recent operating results and anticipated future taxable income in assessing the need for its valuation allowance.

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The Group’s deferred tax assets and liabilities consist of the following:

Deferred tax assets and liabilities	As at December 31,	As at December 31,
USD'000	2020	2019
Stock-based compensation	1	-
Defined benefit accrual	1,089	1,100
Tax loss carry-forwards	12,655	11,264
Deferred tax liability on change in unrealized gains<br> related to available-for-sale debt securities	(753)	-
Valuation allowance	(12,989)	(12,358)
Deferred tax assets / (liabilities)	3	6

As of December 31, 2020, the Group’s operating cumulated loss carry-forwards of all jurisdictions for its continuing operations are as follows:

Operating loss-carryforward as of December 31, 2020
'000	USA		Switzerland		Spain		France		UK		Germany		India		Total
		-		7,139		224		860		32		-		-		8,255
		-		7,135		1,303		-		2		-		-		8,440
		-		10,150		1,337		1,121		1		-		-		12,609
		-		5,848		-		5,157		1		-		-		11,006
		-		10,778		-		7,778		-		-		361		18,917
		-		6,373		-		-		-		-		277		6,650
		-		14,097		-		-		-		-		170		14,267
		91		-		-		-		-		-		210		301
		9		-		25		-		-		-		-		34
		2		-		25		-		-		-		-		27
		54		-		75		-		-		-		-		129
		89		-		86		-		-		-		-		175
		-		-		98		-		-		-		-		98
		-		-		202		-		-		-		-		202
		247		-		112		-		-		-		-		359
		-		-		-		-		-		-		-		-
		159		-		-		-		-		-		-		159
		-		-		-		-		-		-		-		-
		221		-		-		-		-		-		-		221
		90		-		-		-		-		-		-		90
		962		61,520		3,487		14,917		36		-		1,016		81,938

All values are in US Dollars.

The following tax years remain subject to examination:

Significant jurisdictions	Open years
Switzerland	2016 - 2020
USA	2020
France	2017 - 2020
Spain	2017 - 2020
Japan	2020
Taiwan	2019 - 2020
India	2018 - 2020
Germany	2020
UK	2018 - 2020

As at December 31, 2019, WISeKey Semiconductors SAS had recorded a USD 118,294 tax provision following a tax audit started in 2018 in relation to prior years. Although the final conclusions have not yet been communicated formally, management believes that it is more probable than not that the entity will have to pay additional taxes and has calculated the provision based on preliminary discussions with the tax authorities.

As at December 31, 2020, WISeKey Semiconductors SAS still had the provision of USD 118,294 which was neither utilized nor released and there was no additional accrual in the year 2020.

The Group has no unrecognized tax benefits.

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Note 36.	Segment information and geographic data

The Group has two segments: Internet of Things (“IoT”, previously referred to as “Semiconductors”) and managed Public Key Infrastructure (“mPKI”, previously referred to as “Others”). The Group’s chief operating decision maker, who is its Chief Executive Officer, reviews financial performance according to these two segments for purposes of allocating resources and assessing budgets and performance.

The IoT segment encompasses the design, manufacturing, sales and distribution of microprocessors operations. The mPKI segment includes all operations relating to the provision of secured access keys, authentication, signing software, certificates and digital security applications.

12 months to December 31,	2020			2019			2018
'000	IoT	mPKI	Total	IoT	mPKI	Total	IoT	mPKI	Total
Revenues from external customers	14,317	462	14,779	20,504	2,148	22,652	29,404	4,876	34,280
Intersegment revenues	-	6,786	6,786	344	6,169	6,513	725	2,563	3,288
Interest revenue	8	59	67	36	38	74	37	167	204
Interest expense	12	707	718	29	695	724	275	2,608	2,883
Depreciation and amortization	1,501	91	1,592	1,298	57	1,355	1,299	16	1,315
Segment income /(loss) before income taxes	(2,038)	(19,983)	(22,021)	130	(22,837)	(22,707)	(1,232)	(8,466)	(9,698)
Profit / (loss) from intersegment sales	-	323	323	16	294	310	35	122	157
Income tax recovery /(expense)	-	(9)	(9)	-	(13)	(13)	2	(55)	(53)
Other significant non cash items
	-	393	393	-	5,414	5,414	-	1,660	1,660
	-	44	44	-	214	214	-	-	-
	-	458	458	-	742	742	-	150	150
Segment assets	11,031	470,327	518,358	15,794	29,919	45,713	19,082	52,675	71,757

All values are in US Dollars.

12 months to December 31,	2020	2019	2018
	USD'000	USD'000	USD'000
Revenue reconciliation
Total revenue for reportable segment	21,565	29,165	37,568
Elimination of intersegment revenue	(6,786)	(6,513)	(3,288)
Total consolidated revenue	14,779	22,652	34,280
Loss reconciliation
Total profit / (loss) from reportable segments	(28,575)	(22,707)	(9,698)
Elimination of intersegment profits	(323)	(310)	(157)
Loss before income taxes	(28,898)	(23,017)	(9,855)
As at December 31,	2020	2019	2018
	USD'000	USD'000	USD'000
Asset reconciliation
Total assets from reportable segments	51,358	45,713	71,757
Elimination of intersegment receivables	(10,515)	(6,794)	(6,430)
Elimination of intersegment investment and goodwill	12,038	10,985	(19,533)
Total assets held for sale from discontinued operations	-	-	32,659
Consolidated total assets	52,881	49,904	78,453

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Revenue and property, plant andequipment by geography

The following tables summarize geographic information for net sales based on the billing address of the customer, and for property, plant and equipment.

Net sales by region from continuing operations	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
USD'000	2020	2019	2018
Switzerland	592	2,137	2,512
Rest of EMEA*	4,321	8,046	14,122
North America	8,260	9,691	15,165
Asia Pacific	1,526	2,504	2,306
Latin America	80	274	175
Total Net sales from continuing operations	14,779	22,652	34,280
* EMEA means Europe, Middle East and Africa
Property, plant and equipment, net of depreciation, by region	As at December 31,	As at December 31,
---	---	---
USD'000	2020	2019
Switzerland	37	44
Rest of EMEA*	953	1,742
North America	1	1
Asia Pacific	9	14
Total Property, plant and equipment, net of depreciation	1,000	1,801
* EMEA means Europe, Middle<br> East and Africa
Note 37.	Earnings/(Loss) per share
---	---

The computation of basic and diluted net earnings/(loss) per share for the Group is as follows:

	12 months ended December 31,	12 months ended December 31,	12 months ended December 31,
Earnings / (loss) per share	2020	2019	2018
Net income / (loss) attributable to WISeKey International Holding AG (USD'000)	(28,659)	8,187	(16,278)
Effect of potentially dilutive instruments on net gain (USD'000)	N/A	335	N/A
Net income / (loss) attributable to WISeKey International Holding AG after effect of potentially dilutive instruments (USD'000)	N/A	8,522	N/A
Shares used in net earnings / (loss) per share computation:
Weighted average shares outstanding - basic	42,785,300	36,079,000	33,904,659
Effect of potentially dilutive equivalent shares	N/A	1,399,458	N/A
Weighted average shares outstanding - diluted	N/A	37,478,458	N/A
Net earnings / (loss) per share
Basic weighted average loss per share attributable to WIHN (USD)	(0.67)	0.23	(0.48)
Diluted weighted average loss per share attributable to WIHN (USD)	(0.67)	0.23	(0.48)

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For purposes of the diluted net loss per share calculation, stock options, convertible instruments and warrants are considered potentially dilutive securities and are excluded from the calculation of diluted net loss per share, because their effect would be anti-dilutive.

The following table shows the number of stock equivalents that were excluded from the computation of diluted earnings per share because the effect would have been anti-dilutive.

Dilutive vehicles with anti-dilutive effect	2020	2019	2018
Total stock options	1,333,434	-	1,342,819
Warrants	-	-	2,942,374
Total convertible instruments	20,369,716	-	6,821,804
Total number of shares from dilutive vehicles with anti-dilutive effect	21,703,150	-	11,106,997

The following table shows the number of stock equivalents that were included in the computation of diluted earnings per share:

Dilutive vehicles	2020	2019	2018
Total stock options	-	2,327,115	-
Warrants	-	-	-
Total convertible instruments	-	693,230	-
Total number of shares from dilutive vehicles	-	3,020,345	-
Note 38.	Legal proceedings
---	---

We are currently not party to any legal proceedings and claims.

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Note 39.	Related parties disclosure

Subsidiaries

The consolidated financial statements of the Group include the entities listed in the following table:

Group Company Name	Country of incorporation	Year of incorporation	Share Capital	% ownership as at December 31, 2020	% ownership as at December 31, 2019	Nature of business
WISeKey SA	Switzerland	1999	CHF           933,436	95.75%	95.58%	Main operating company.<br> Sales and R&D services
WISeKey Semiconductors<br> SAS	France	2010	EUR        1,298,162	100.0%	100.0%	Chip manufacturing,<br> sales & distribution
WiseTrust SA	Switzerland	1999	CHF           680,000	100.0%	100.0%	Non-operating investment<br> company
WISeKey ELA SL	Spain	2006	EUR        4,000,000	100.0%	100.0%	Sales & support
WISeKey SAARC Ltd	U.K.	2016	GBP           100,000	51.0%	51.0%	Non trading
WISeKey USA Inc*	U.S.A	2006	USD               6,500	100%*	100%*	Sales & support
WISeKey India Private<br> Ltd**	India	2016	INR         1,000,000	45.9%	45.9%	Sales & support
WISeKey IoT Japan<br> KK	Japan	2017	JPY         1,000,000	100.0%	100.0%	Sales & distribution
WISeKey IoT Taiwan	Taiwan	2017	TWD          100,000	100.0%	100.0%	Sales & distribution
WISeCoin AG	Switzerland	2018	CHF           100,000	90.0%	90.0%	Sales & distribution
WISeKey Equities AG	Switzerland	2018	CHF           100,000	100.0%	100.0%	Financing, Sales &<br> distribution
WISeCoin France R&D<br> Lab SAS	France	2019	EUR             10,000	90.0%	90.0%	Research & development
WISeKey Semiconductors<br> GmbH	Germany	2019	EUR             25,000	100.0%	100.0%	Sales & distribution
WISeKey Arabia - Information<br> Technology Ltd	Saudi Arabia	2019	SAR      200,000.00	51.0%	51.0%	Sales & distribution
WiseAI AG	Switzerland	2020	CHF           100,000	51.0%	not incorporated	Sales & distribution

* 50% owned by WISeKey SA and 50% owned by WiseTrust SA

** 88% owned by WISeKey SAARC which is controlled by WISeKey International Holding AG

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Related party transactions andbalances

		Receivables as at		Payables as at		Net expenses to			Net income from
	Related Parties	December 31,	December 31,	December 31,	December 31,	in the year ended December 31,			in the year ended December 31,
	(in USD'000)	2020	2019	2020	2019	2020	2019	2018	2020	2019	2018
1	Carlos Moreira	-	-	1,580	-	-	-	-	-	-	209
2	Maryla Shingler-Bobbio	-	-	-	-	-	123	80	-	-	-
3	Philippe Doubre	-	-	-	40	86	114	80	-	-	-
4	Juan Hernández Zayas	-	-	-	37	52	165	88	-	-	-
5	Thomas Hürlimann	-	-	-	16	-	63	24	-	-	-
6	Dourgam Kummer	14	-	-	2	-	52	264	-	-	-
7	David Fergusson	-	-	-	22	119	161	47	-	-	-
8	Eric Pellaton	-	-	-	-	42	-	-	-	-	-
9	Jean-Philippe Ladisa	-	-	-	-	61	-	-	-	-	-
10	Roman Brunner	-	-	-	-	-	426	242	-	87	-
11	Anthony Nagel	-	-	-	-	-	5	164	-	58	-
12	Harald Steger	-	-	-	-		-	445	-	-	-
13	Don Tapscott	-	-	-	-	8	-	394	-	-	-
14	Wei Wang	-	-	-	-	-	-	187	-	10	-
15	OISTE	95	119	172	-	374	219	221	32	140	-
16	Edmund Gibbons Limited	-	-	-	-	-	479	173	-	36	434
17	Terra Ventures Inc	-	-	33	33	-	-	-	-	-	-
18	SAI LLC (SBT Ventures)	-	-	34	33	-	-	-	-	-	-
19	GSP Holdings Ltd	-	-	18	17	-	-	-	-	-	-
20	Indian Potash Limited	-	-	-	-	-	-	-	-	-	42
21	ACXIT Capital	-	-	-	-	-	-	-	-	-	696
22	Philippe Gerwill	-	-	-	-	-	14	-	-	-	-
23	Related parties of Carlos Moreira	-	-	-	2	223	360	-	-	-	-
24	Todd Ruppert	-	-	-	-	-	-	353	-	-	-
25	Cristina Dolan	-	-	-	-	1	-	-	-	-	-
26	Maria Pia Aqueveque Jabbaz	-	-	-	-	1	-	-	-	-	-
	Total	109	119	1,837	202	967	2,181	2,762	32	331	1,381

1. Carlos Moreira is the Chairman of the Board and CEO of WISeKey. A short-term payable in an amount of CHF 1,397,135 (USD 1,579,945) to Carlos Moreira was outstanding as at December 31, 2020, made up of accrued salary and bonus.

2. Maryla Shingler Bobbio is a former Board member of the Group, and former member of the Group’s audit committee and nomination & compensation committee.

3. Philippe Doubre is a Board member of the Group, and member of the Group’s nomination & compensation committee, as well as a shareholder. The expenses recorded in the income statement in the year to December 31, 2020 relate to his Board fee.

4. Juan Hernandez-Zayas is a former Board member of the Group, and former member of the Group’s audit committee and the strategy committee, as well as a shareholder. Mr. Hernandez-Zayas did not seek reelection at the Group’s last Annual General Meeting on May 15, 2020.

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5. Thomas Hürlimann is a former Board member of the Group.

6. Dourgam Kummer is a former Board member of the Group, as well as a shareholder. The receivable from Dourgam Kummer as at December 31, 2020 relates to outstanding employee social charges for the exercise of ESOP options granted in 2019.

7. David Fergusson is a Board member of the Group, and member of the Group’s audit committee and nomination & compensation committee, as well as a shareholder. The expenses recorded in the income statement in the year to December 31, 2020 relate to his Board fee.

8. Eric Pellaton is a Board member of the Group, and member of the Group’s nomination & compensation committee, as well as a shareholder. The expenses recorded in the income statement in the year to December 31, 2020 relate to his Board fee.

9. Jean-Philippe Ladisa is a Board member of the Group, and member of the Group’s audit committee. The expenses recorded in the income statement in the year to December 31, 2020 relate to his Board fee.

10. Roman Brunner is the former Chief Revenue Officer of the Group.

11. Anthony Nagel is the former Chief Operations Officer of QuoVadis.

12. Harald Steger is a former member of the Group’s advisory committee.

13. Don Tapscott is a member of the Group’s advisory committee, and cofounder of The Tapscott Group Inc. The Blockchain Research Institute (the “BRI”) is a division of The Tapscott Group Inc. On December 20, 2018 WISeKey and the BRI entered into an agreement to establish BlockChain Centers of Excellence and promote BlockChain technology worldwide. The expenses recorded in the income statement in the year to December 31, 2020 relate to his advisory committee fee.

14. Wei Wang is a former member of the Group’s advisory committee.

15. The Organisation Internationale pour la Sécurité des Transactions Electroniques (“OISTE”) is a Swiss non-profit making foundation that owns a cryptographic rootkey. In 2001 WISeKey SA entered into a contract with OISTE to operate and maintain the global trust infrastructures of OISTE. In line with the contract, WISeKey pays a regular fee to OISTE for the use of its cryptographic rootkey. A member of the Board of Directors of WISeKey is also a member of the Counsel of the Foundation which gives rise to the related party situation.

OISTE is also the minority shareholder in WISeCoin AG with a 10% ownership.

The receivable from OISTE as at December 31, 2020 and income recorded in the income statement in the year to December 31, 2020 relate to the facilities and personnel hosted by WISeKey SA on behalf of OISTE. In the year 2020, WISeKey SA invoiced OISTE CHF 29,918 (USD 31,893).

The payable to OISTE as at December 31, 2020 and expenses relating to OISTE recognized in 2020 are made up of license and royalty fees for the year 2020 under the contract agreement with WISeKey SA.

16. Edmund Gibbons Limited had a 49% shareholding in QuoVadis Services Ltd which was 51% owned by WISeKey until the divestiture of QuoVadis in 2019.

17. Terra Ventures Inc has a 49% shareholding in WISeKey SAARC Ltd. Terra Ventures granted a GBP 24,507 loan to WISeKey SAARC Ltd on January 24, 2017. The loan is non-interest bearing and has no set repayment date.

18. SAI LLC, doing business as SBT Ventures, is a former shareholder in WISeKey SAARC Ltd. SAI LLC granted a GBP 25,000 loan to WISeKey SAARC Ltd on January 25, 2017. The loan is non-interest bearing and has no set repayment date.

19. GSP Holdings Ltd is a former shareholder in WISeKey SAARC Ltd. GSP Holdings Ltd granted a GBP 12,500 loan to WISeKey SAARC Ltd on February 02, 2017. The loan is non-interest bearing and has no set repayment date.

20. Indian Potash Limited has a 10% shareholding in WISeKey India Private Ltd.

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21. ACXIT Capital Partners, an international corporate finance and investment advisory firm, has provided advisory services to WISeKey.

22. Philipp Gerwill is an external consultant for the Group.

23. Two immediate family members of Carlos Moreira are employed by WISeKey SA. In line with ASC 850-10-50-5, transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis. The aggregate employment remuneration of these two immediate family members amounted to USD 219,892 recorded in the income statement in 2020.

Additionally, one other immediate family member of Carlos Moreira has access to WISeKey’s facilities for a cost of CHF 2,760 (USD 2,942) per annum.

24. Todd Ruppert is a former investor in WISeKey.

25. Cristina Dolan is a member of the Group’s advisory committee. The expenses recorded in the income statement in the year to December 31, 2020 relate to her advisory committee fee.

26. Maria Pia Aqueveque Jabbaz is a member of the Group’s advisory committee. The expenses recorded in the income statement in the year to December 31, 2020 relate to her advisory committee fee.

Note 40.	Subsequent events

GTO Facility

After December 31, 2020, the Group made two subscriptions under the terms of the GTO Facility as follows:

-	On February 11, 2021 for convertibles notes in the amount CHF 4,840,000 (USD 5,433,229 at<br>historical rate). The funds were received on February 19, 2021. In line with the terms of the GTO Facility, WISeKey issued<br>GTO with 458,332 warrants on WIHN class B shares at an exercise price of CHF 1.584.
-	On March 22, 2021 for convertible notes in the amount of CHF 1,500,000 (USD 1,624,664 at historical rate). The funds were received on<br>March 24, 2021. In line with the terms of the GTO Facility, WISeKey issued GTO with 102,599 warrants on WIHN class B shares at an exercise<br>price of CHF 2.193.

On March 25, 2021, GTO exercised their right to request the subscription of 2 tranches for convertible notes in the amount of CHF 3,000,000 (USD 3,193,098 at historical rate). The funds were received on March 31, 2021. In line with the terms of the GTO Facility, WISeKey issued GTO with 187,188 warrants on WIHN class B shares at an exercise price of CHF 2.40.

In 2021, GTO issued a total of ten conversion notices, resulting in the following conversions after December 31, 2020:

-	On December 30, 2020 for 1,802,265 WIHN class B shares delivered on January 04, 2021 for a conversion<br>of CHF 1,750,000 (USD 1,985,363).
-	On January 08, 2021 for 102,986 WIHN class B shares delivered on January 11, 2021 for a conversion<br>of CHF 100,000 (USD 112,399).
---	---
-	On January 11, 2021 for 2,059,731 WIHN class B shares of which 401,446 were delivered on January 13,<br>2021 and 1,658,285 on January 19, 2021 for a conversion of, respectively, CHF 389,805 (USD 439,274) and CHF 1,610,195<br>(USD 1,811,772).
---	---
-	On January 27, 2021 for 46,210 WIHN class B shares delivered on February 01, 2021 for a conversion<br>of CHF 50,000 (USD 55,778).
---	---
-	On February 15, 2021 for 2,919,579 WIHN class B shares delivered on February 23, 2021 for a conversion<br>of CHF 3,340,000 (USD 3,732,727).
---	---
-	On March 18, 2021 for 441,306 WIHN class B shares delivered on March 22, 2021 for a conversion of CHF 500,000 (USD 541,555).
-	On March 19, 2021 for 882,612 WIHN class B shares delivered on March 22, 2021 for a conversion of CHF 1,000,000 (USD 1,083,109).
-	On March 23, 2021 for 441,306 WIHN class B shares delivered on March 25, 2021 for a conversion of CHF 500,000 (USD 532,183).
-	On March 25, 2021 for 882,612 WIHN class B shares delivered on March 29, 2021 for a conversion of CHF 1,000,000 (USD 1,066,166).
-	On March 30, 2021 for 2,647,836 WIHN class B shares delivered on April 01, 2021 for a conversion of CHF 3,000,000 (USD 3,187,380).

Crede Convertible Loan

On January 06, 2021 Crede exercised a conversion in the amount of USD 1,038,627 in exchange for 1,000,000 WIHN class B shares issued out of treasury shares and delivered on January 06, 2021.

On February 15, 2021 Crede exercised a conversion in the amount of USD 3,176,493 in exchange for 3,058,358 WIHN class B shares issued out of conditional capital. This last conversion was for the remaining balance of the loan, therefore, as at February 17, 2021 when the shares were delivered to Crede, the balance of the loan was USD nil.

Release of restricted cash

On January 16, 2021, as per the terms of the SPA relating to the sale of WISeKey (Bermuda) Holding Ltd and its affiliates to Digicert Inc,, USD 2.0 million of the consideration retained on an escrow account was released to WISeKey. The funds were received on January 29, 2021 together with USD 46,557 interest earned on the restricted cash account until its release.

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GEM Facility

On January 19, 2021, the GEM facility expired. There was no drawdown in 2021 before expiration. Therefore, the GEM Facility expired with an unused balance of CHF 56,094,645.

Options granted under WISeKey ESOP

After December 31, 2020, a total of 8,299 options were granted under the Group’s ESOP.

Conversion of arago Third ConvertibleLoan and acquisition of 51% of arago’s share capital

Arago is a private German company, leader in artificial intelligence automation. In 2021, WISeKey made three more payments to arago in the framework of the arago Third Convertible Loan (see Note 10): on January 04, 2021 for EUR 300,000 (USD 367,646), on February 17, 2021 for CHF 800,000, and on March 10, 2021 for CHF 800,000 (USD 858,751). These payments brought the arago Third Convertible Loan balance to CHF 5 million as at March 10, 2021.

On January 18, 2021, WISeKey requested to convert the arago Third Convertible Loan (see Note 10) into 51% of arago’s share capital carrying 51% of the voting rights, which resulted in the issue of 136,072 new arago shares with a nominal value of EUR 1 to WISeKey in exchange for the payment by WISeKey of the aggregate nominal value of the newly issued shares of EUR 136,072 (USD 164,275 at historical cost).

The arago Shareholders’ Resolution relating to the capital increase to create 136,072 new arago shares to be transferred to WISeKey, the amendment of the articles of association of arago GmbH and the subscription by WISeKey International Holding AG for the acquisition of the 136,072 newly-created arago shares took place on January 27, 2021. The Investment and Shareholders’ Agreement between WISeKey International Holding AG, arago and arago’s existing shareholders for the acquisition by WISeKey of 51% of arago’s share capital was registered at the notary office on January 27, 2021. On February 01, 2021, Carlos Moreira was appointed Managing Director of arago. The registration of WISeKey as a shareholder of arago holding 136,072 arago shares occurred on February 15, 2020. At the date when these financial statements are released, there remains an uncertainty about the acquisition date as defined by ASC 805.

Once the acquisition date is determined, the assets, liabilities and results of arago will be consolidated in WISeKey’s financial statements from the acquisition date. The amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed, as well as for the fair value of the remaining noncontrolling interest and goodwill cannot be ascertained at the time these financial statements are released because of the uncertainty around the acquisition date and because the audited US GAAP financial statements of arago are not yet available.

The consideration will include the fair value of the arago Third Convertible Loan at the acquisition date, the payment by WISeKey of the aggregate nominal value of the newly issued shares of EUR 136,072 (USD 164,275 at historical cost), and any additional costs meeting the definition of acquisition-related costs per ASC 805. Any gain or loss recognized as a result of remeasuring the arago Third Convertible Loan to fair value on the acquisition date will be disclosed.

Second Yorkville Convertible Loan

At the time of release of this annual report, WISeKey has repaid another USD 1,123,438 toward the Second Yorkville Convertible Loan and the remaining balance is USD 569,541.

Investment in FOSSA SYSTEMS s.l.

On April 8, 2021, WISeKey E.L.A. s.l. invested EUR 440,000 (USD 475,673 at historical rate) to acquire 15% of the share capital of FOSSA SYSTEMS s.l., a Spanish aerospace company providing picosatellites for Low Earth Orbit (LEO) services as a vertically integrated service: from design to launch and operations.

SEDA Drawdown

On April 15, 2021 WISEKey made one drawdown from CHF 363,876 (USD 394,370 at historical rate) in exchange for 219,599 WIHN class B shares issued out of treasury share capital.

Note 41.	Business Update Related to COVID-19

In March 2020, the World Health Organization declared the Coronavirus (COVID-19) a pandemic. The outbreak spread quickly around the world, including in every geography in which the Company operates. The pandemic has created uncertainty around the impact of the global economy and has resulted in impacts to the financial markets and asset values. Governments implemented various restrictions around the world, including closure of non-essential businesses, travel, shelter-in-place requirements for citizens and other restrictions.

The Company took a number of precautionary steps to safeguard its businesses and colleagues from COVID-19, including implementing travel restrictions, working from home arrangements and flexible work policies. Through the end of the first half of the year, the majority of the Company’s colleagues continued working either fully or partially in a remote work environment, with virtually no disruption to the Company as a whole and its ability to serve clients. The Company started to return to offices around the world, in line with the guidelines and orders issued by national, state and local governments, implementing a phased approach in its main offices in Switzerland and in France. We continue to prioritize the safety and well-being of our colleagues during this time.

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The Company’s major production centers, located in Taiwan and Vietnam, were quick to implement controls and safeguards around their processes that enabled us to continue delivering products with minimal interruption to our clients. At the end of the second quarter, we started to see the first impact of the pandemic upon our activities with certain clients reducing or delaying their orders. At this stage, the impact upon the Company has been limited and we remain confident that we will be able to fulfil all current client orders.

The Company retains a strong liquidity position and believes that it has sufficient cash reserves to support the entity for the foreseeable future (see note 2 for further details.) The Company continues to review its costs and suspended its share buy-back programs in order to reduce the cash burn. The Company has applied for, and received, support under the schemes announced by the Swiss government and is applying for similar support under the schemes announced by the French government. Currently the Company remains able to meet its commitments and does not foresee any significant challenges in the near future. The Company currently does not anticipate any material impact on its liquidity position and outlook.

At this stage it remains impossible to predict the extent of the impact of the COVID-19 pandemic as this will depend on numerous evolving factors and future developments that the Company is not able to predict.

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Exhibit 2.5

DESCRIPTION OF SECURITIES

REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT

As of December 31, 2020 WISeKey International Holding AG (“WISeKey,” “we,” “us,” and “our”) had the following series of securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading<br><br>Symbols	Name of each exchange and on which registered
American Depositary Shares, each representing<br> five<br><br> Class B Shares, par value CHF 0.05 per share<br><br> <br><br><br> <br>Class B Shares, par value CHF<br> 0.05 per share*	WKEY	The Nasdaq Stock Market LLC

__________________________

* Not for trading, but only in connection with the registrationof the American Depositary Shares.

Our American Depositary Shares (“ADSs”), each representing five (5) Class B Shares of WISeKey, par value CHF 0.05 per share (the “Class B Shares”), have been available in the United States through an American Depositary Share (“ADS”) program established pursuant to the deposit agreement (“Deposit Agreement”) that we entered into with Bank of New York Mellon, as depositary (the “Depositary”). Our ADSs have been listed on the Nasdaq Stock Market LLC (“NASDAQ”) since December 2019 and are traded under the symbol “WKEY.” Our Class B Shares are listed in Switzerland on the SIX Swiss Exchange Ltd (“SIX”). In connection with this listing (but not for trading), the Class B Shares are registered under Section 12(b) of the Exchange Act. This exhibit contains a description of the rights of (i) the holders of Class B Shares and (ii) the holders of ADSs. Class B Shares underlying the ADSs are held by the Depositary, and holders of ADSs will not be treated as holders of Class B Shares.

We have further issued registered shares with a par value of CHF 0.01 each (“Class A Shares”). Class A Shares have a par value (CHF 0.01 per share) that is five times lower than the par value of Class B Shares (CHF 0.05 per share). While dividends and other distributions are made proportionally to the par value of the respective shares, each Class A Share and each Class B Share carries one vote at a general meeting of shareholders, irrespective of the difference in par value of Class A Shares and Class B Shares. Class A Shares are not registered under Section 12(b) of the Exchange Act.

The following summary is subject to and qualified in its entirety by our Articles of Association (the “Articles”) and by Swiss laws and regulations. This is not a summary of all the significant provisions of the Articles or of Swiss laws and regulations and does not purport to be complete. Capitalized terms used but not defined herein have the meanings given to them in WISeKey’s annual report on Form 20-F for the fiscal year ended December 31, 2020 and in the Deposit Agreement, which is an exhibit to our registration statement on Form 20-F filed with the SEC on November 8, 2019.

CLASS B SHARES

Item 9. General

9.A.3 Pre-emptive rights

Pursuant to the Swiss Code of obligations (the "CO"), shareholders have pre-emptive rights (Bezugsrechte) to subscribe for new issuances of shares in an amount proportional to the nominal value of the shares they already hold. With respect to conditional capital in connection with the issuance of conversion rights, convertible bonds or similar debt instruments, shareholders have advance subscription rights (Vorwegzeichnungsrechte) for the subscription of conversion rights, convertible bonds or similar debt instruments in an amount proportional to the nominal value of the shares they hold.

If pre-emptive rights are granted, but not exercised, our board of directors may allocate the preemptive rights as it elects, subject to the particulars of the relevant shareholders' resolution or board resolution.

Preemptive rights, if not excluded (as further described below), are transferable during the subscription period relating to a particular offering of shares. Depending on the particulars of the offering, the preemptive rights may be tradable on the SIX. US holders of shares, or US holders of ADSs, may not be able to exercise the preemptive rights attached to the shares or to the shares underlying their ADSs unless a registration statement under the US Securities Act of 1933, as amended (the “Securities Act”), is effective with respect to such rights and the related shares, or an exemption from this registration requirement is available. If preemptive rights could not be exercised by an ADS holder, the depositary would, if possible, sell the holder’s preemptive rights and distribute the net proceeds of the sale to the holder. If the Depositary determines, in its discretion, that the rights could not be sold, the Depositary might allow such rights to lapse.

The general meeting of shareholders may resolve to withdraw or limit preemptive rights in certain limited circumstances for valid reasons. The relevant majority for such approval is two-thirds of the shares represented and the absolute majority of the par value of the shares represented.

With respect to our authorized share capital, our board of directors is authorized by our Articles to withdraw or to limit the preemptive rights of shareholders, and to allocate them to third parties or to us, in the event that the newly issued shares are used for the purpose of:

·	issuing new shares if the issue price of the new shares is determined by reference to the market<br>price;
·	the acquisition of an enterprise, parts of an enterprise or participations or for new investment<br>projects or for purposes of financing or refinancing any such transactions;
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·	broadening the shareholder constituency in certain financial or investor markets or in connection<br>with the listing of new shares on domestic or foreign stock exchanges;
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·	national and international offerings of shares for the purpose of increasing the free float or<br>to meet applicable listing requirements;
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·	the participation of strategic partners;
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·	an over-allotment option ("greenshoe") being granted to one or more financial institutions<br>in connection with an offering of shares;
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·	the participation of directors, officers, employees, contractors, consultants of, or other persons<br>providing services to the Company or a group company; or
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·	raising capital in a fast and flexible manner which could only be achieved with great difficulty<br>without exclusion of the preemptive rights of the existing shareholders.
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Under our Articles of Association as at December 31, 2020, our authorized share capital relates to 7,808,906 Class B Shares. Our current authority to issue shares out of the authorized share capital will expire on May 15, 2022. A renewal of our authority under the authorized share capital requires approval by our shareholders at our 2021 annual general meeting or at an extraordinary general meeting. The relevant majority for such approval is two-thirds of the shares represented and the absolute majority of the par value of the shares represented.

9.A.5 Type and class of securities

The Class B Shares are registered shares with a par value of CHF 0.05 each. Our Class B Shares have been trading under the symbol "WIHN" on the SIX since March 2016. As of December 31, 2020, we had 47,622,689^1^Class B Shares issued, 42,839,554 of which were outstanding. All Class B Shares, except for the Class B Shares held by our affiliates and certain Class B Shares sold in private placement transactions in the U.S. exempt from registration under the Securities Act, are freely transferrable in the U.S. The Company estimates that (as of December 31, 2020) the total number of Class B Shares held by affiliates together with privately placed Class B Shares that remain subject to resale restrictions in the U.S. is approximately 1,308,107 Class B Shares. None of the Class B Shares are subject to lock-up agreements.

__________________________

^1^ Since December 16, 2020, the date of reference for the last formal recording in the Articles and the commercial register of the Canton of Zug, Switzerland, an aggregate number of 359,566 Class B Shares has been issued out of the Company's conditional share capital as at December 31, 2020. These 359,566 Class B Shares are not included in the total of shares issued and outstanding.

The Class B Shares are fully paid-up. Except for 88,370 Class B Shares, which have been issued in certificated form and not been dematerialized hereof, the Class B Shares have been issued in uncertificated form in accordance with article 973c of the CO as uncertificated securities (Wertrechte), which have been entered into the main register of the SIX SIS Ltd (“SIS”) and constitute intermediated securities within the meaning of the FISA. In accordance with article 973c of the CO, we maintain a register of uncertificated securities (Wertrechtebuch).

So long as our shares constitute intermediated securities within the meaning of the FISA, the person deemed to be the holder of any share will be the person holding such share in a securities account in his, her or its own name or, in the case of intermediaries, the intermediary holding such share in a securities account that is in his, her or its name. No share certificates will be issued, and share certificates will not be available for individual physical delivery. A shareholder may, however, at any time request us to deliver an attestation of the number of shares held by him, her or it, as reflected in the share register.

So long as our shares constitute intermediated securities within the meaning of the FISA, shares may be transferred by crediting the relevant transferred shares to a securities account of the transferee or as otherwise permitted under applicable law. Class B Shares traded on the SIX will settle and clear through SIS.

Item 9.A.6. Limitations or qualifications

Not applicable.

Item 9.A.7. Other rights

Not applicable.

Item 10.B Memorandum and articles of association

10.B.3 Shareholder rights

Voting Right

Each Class B Share carries one vote at a general meeting of shareholders. Voting rights may be exercised by registered shareholders or by a duly appointed proxy of a registered shareholder or nominee, which proxy need not be a shareholder, up to a specific qualifying day before the relevant general meeting (the "Record Date") designated by the board of directors. The Articles do not limit the number of shares that may be voted by a single shareholder.

Voting Requirements

Shareholder resolutions and elections (including elections of members of the board of directors) require the affirmative vote of an absolute majority of the votes represented (in person or by proxy) at a general meeting of shareholders, unless otherwise stipulated by law or our Articles. The following matters require approval by a majority of the par value of the shares present or represented at the general meeting:

·	electing our auditor;
·	appointing an expert to audit our business management or parts thereof;
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·	adopting any resolution regarding the instigation of a special investigation; and
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·	adopting any resolution regarding the initiation of a derivative liability action.
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Under Swiss corporate law and our Articles, approval by two-thirds of the shares present or represented at the meeting, and by the absolute majority of the par value of the shares present or represented is required for:

·	amending our corporate purpose;
·	creating or cancelling shares with preference rights;
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·	restricting the transferability of registered shares;
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·	restricting the exercise of the right to vote or the cancellation thereof;
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·	creating authorized or conditional share capital;
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·	increasing the share capital out of equity, against contributions in kind or for the purpose of<br>acquiring specific assets and granting specific benefits;
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·	limiting or withdrawing shareholder's pre-emptive rights;
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·	relocating our registered office;
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·	our dissolution or liquidation; and
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·	transactions among corporations based on Switzerland's Federal Act on Mergers, Demergers, Transformations<br>and the Transfer of Assets of 2003, as amended (the "Swiss Merger Act") including a merger, demerger or conversion of<br>a corporation.
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In accordance with Swiss law and generally accepted business practices, our Articles do not provide attendance quorum requirements generally applicable to general meetings of shareholders.

Dividends and Other Distributions

We have never declared or paid cash dividends to our shareholders and we do not intend to pay cash dividends in the foreseeable future. However, on July 9, 2019, we commenced a public share repurchase program, whereby repurchase shares will be used for potential acquisitions and/or other future M&A transactions. On February 3, 2020, we expanded our share repurchase program to include our ADSs. Shares and ADSs repurchased under our repurchase program may be used as consideration in future potential M&A transactions and for (1) our existing employee share incentive program, (2) convertible loans entered into by us, and (3) on demand equity lines available to us. Otherwise, we currently intend to reinvest any earnings in developing and expanding our business. Any future determination relating to our dividend policy will be at the discretion of our board of directors.

Our board of directors may propose to shareholders that a dividend or other distribution be paid but cannot itself authorize the distribution. Under our Articles, dividend payments require a resolution passed by an absolute majority of the votes present or represented at a general meeting of shareholders. In addition, our auditor must confirm that the dividend proposal of our board of directors relating to an appropriation of available earnings conforms to Swiss statutory law and our Articles.

Under Swiss law, we may pay dividends only if we have sufficient distributable profits brought forward from the previous business years, or if we have distributable reserves, each as evidenced by our audited stand-alone financial statements prepared pursuant to Swiss statutory law, and after allocations to reserves required by Swiss law and the Articles have been deducted. We are not permitted to pay interim dividends out of profit of the current business year. Dividends and other distributions are made relative to nominal value of the shares.

Dividends paid on our shares out of available earnings are subject to Swiss withholding tax. See Item 10.E. Taxation of WISeKey’s annual report on Form 20-F for the fiscal year ended December 31, 2020*.*

Distributions out of issued share capital (i.e. the aggregate par value of our issued shares) may be made only by way of a share capital reduction. Such a capital reduction requires a resolution passed by an absolute majority of the shares present or represented at a general meeting of shareholders. The resolution of the shareholders must be recorded in a public deed and a special audit report must confirm that claims of our creditors remain fully covered despite the reduction in the share capital recorded in the commercial register. The share capital may be reduced below CHF 100,000 only if and to the extent that at the same time the statutory minimum share capital of CHF 100,000 is reestablished by sufficient new fully paid-up capital. Upon approval by the general meeting of shareholders of the capital reduction, the board of directors must give public notice of the capital reduction resolution in the Swiss Official Gazette of Commerce three times and notify creditors that they may request, within two months of the third publication, satisfaction of or security for their claims. The reduction of the share capital may be implemented only after expiration of this time limit.

Distributable reserves are booked either as "retained earnings" (Bilanzgewinn; Gewinnvortrag; freie Reserven) or as reserves from capital contributions (Kapitaleinlagereserven). Under the CO, if our general reserves (allgemeine gesetzliche Reserven) amount to less than 20% of our share capital recorded in the commercial register (i.e., 20% of the aggregate par value of our issued capital), then at least 5% of our annual profit must be retained as general reserves. In addition, if our general reserves amount to less than 50% of our share capital, 10% of the amounts distributed beyond payment of a dividend of 5% must be retained as general reserves. The CO permits us to accrue additional general reserves. Further, a purchase of our own shares (whether by us or a subsidiary) reduces the equity and thus the distributable dividends in an amount corresponding to the purchase price of such own shares. Finally, the CO under certain circumstances requires the creation of revaluation reserves which are not distributable.

Dividends are usually due and payable shortly after the shareholders have passed a resolution approving the payment, but shareholders may also resolve at the annual general meeting of shareholders to pay dividends in quarterly or other instalments. The Articles provide that dividends that have not been claimed within five years after the due date become our property and are allocated to the general reserves. Dividends paid are subject to Swiss withholding tax, all or part of which can potentially be reclaimed under the relevant tax rules in Switzerland or double taxation treaties concluded between Switzerland and foreign countries. Distributions of cash or property that are based upon a capital reduction or that are made out of statutory capital reserves (Kapitaleinlagereserve) are not subject to Swiss withholding tax.

Transfer of Shares

Our shares constitute intermediated securities (Bucheffekten) based on uncertificated securities (Wertrechte) and entered into the main register of SIS or such other custodian as the case may be. Any transfer of Shares is effected by a corresponding entry in the securities deposit account of a bank or a depository institution. Shares cannot be transferred by way of assignment, nor can a security interest in any Shares be granted by way of assignment.

Voting rights may be exercised only after a shareholder has been entered in our share register (Aktienbuch) with his, her or its name and address (in the case of legal entities, the registered office) as a shareholder with voting rights.

We maintain, through Computershare Switzerland Ltd., a share register, in which the full name, address and nationality (in the case of legal entities, the company name and registered office) of the shareholders and usufructuaries are recorded. A person entered into the share register must notify the share registrar of any change in address. Until such notification occurs, all written communication from us to persons entered in the share register is deemed to have been validly made if sent to the relevant address recorded in the share register.

Share Repurchase Program

On July 9, 2019, the Company commenced a public repurchase program with respect to our shares, which on February 3, 2020 was expanded to also include ADSs. Shares and ADSs repurchased under our repurchase program may be used as consideration in potential future M&A transactions and for (1) our existing employee share incentive program, (2) convertible loans entered into by us and (3) on demand equity lines available to us. Our share repurchase was approved by the Swiss Takeover Board under its notification procedure, will last up to 3 years, and allows us to repurchase up to 3,682,848 Class B shares equivalent to 10% of the registered share capital of the Company at the relevant time.

Activity under the program is monitored on a daily basis, with all transactions being published on our website in line with Swiss Law. Inspection of Books and Records

Under the CO, a shareholder has a right to inspect our share register with respect to his, her or its own shares and otherwise to the extent necessary to exercise his, her or its shareholder rights. No other person has a right to inspect our share register. Our books and correspondence may be inspected with the express authorization of the general meeting of shareholders or by resolution of the board of directors and subject to the safeguarding of our business secrets.

Special Investigation

If the shareholder inspection rights as outlined above prove to be insufficient in the judgment of the shareholder, any shareholder may propose to the general meeting of shareholders that specific facts be examined by a special auditor in a special investigation. If the general meeting of shareholders approves the proposal, we or any shareholder may, within 30 calendar days after the general meeting of shareholders, request a court at our registered office in Zug, Switzerland, to appoint a special auditor. If the general meeting of shareholders rejects the request, one or more shareholders representing at least 10% of the share capital or holders of shares in an aggregate par value of at least CHF 2,000,000 may request that the court appoint a special auditor. The court will issue such an order if the petitioners can demonstrate that the board of directors, any member of the board of directors or our executive management infringed the law or our Articles and thereby caused damages to us or the shareholders. The costs of the investigation would generally be allocated to us and only in exceptional cases to the petitioners.

Repurchases of Shares and Purchases of Own Shares

The CO limits our right to purchase and hold our own shares. We and our subsidiaries may purchase shares only if and to the extent that (1) we have freely distributable reserves in the amount of the purchase price; and (2) the aggregate par value of all shares held by us does not exceed 10% of our share capital. Pursuant to Swiss law, where shares are acquired in connection with a transfer restriction set out in the articles of association of a company, the foregoing upper limit is 20%. We currently do not have any transfer restriction in our Articles. If we own shares that exceed the threshold of 10% of our share capital, the excess must be sold or cancelled by means of a capital reduction.

Shares held by us or our subsidiaries are not entitled to vote at the general meeting of shareholders but are entitled to the economic benefits applicable to the shares generally, including dividends and pre-emptive rights in the case of share capital increases, unless resolved otherwise by the general meeting of shareholders.

In addition, selective share repurchases are only permitted under certain circumstances. Within these limitations, as is customary for Swiss corporations, we may purchase and sell our own shares from time to time in order to meet our obligations under our equity plans, to meet imbalances of supply and demand, to provide liquidity and to even out variances in the market price of shares.

10.B.4 Changes to shareholder rights

Ordinary Capital Increase, Authorized Share Capital and Conditional Share Capital

Under Swiss law, we may increase our share capital (Aktienkapital) with a resolution of the general meeting of shareholders (ordinary share capital increase) that must be carried out by the board of directors within three months in order to become effective. Under our Articles of Association (the "Articles"), in the case of subscription and increase against payment of contributions in cash, when shareholders' statutory preemptive rights are safeguarded, a resolution passed by an absolute majority of the votes represented at the general meeting of shareholders is required. In the case of subscription and increase against contributions in kind or to fund acquisitions in kind, when shareholders' statutory preemptive rights are withdrawn or where transformation of reserves into share capital is involved, a resolution passed by two-thirds of the shares represented at a general meeting of shareholders and the absolute majority of the par value of the shares represented is required.

Furthermore, under the Swiss Code of Obligations (the "CO"), our shareholders, by a resolution passed by two-thirds of the shares present or represented at a general meeting of shareholders and the absolute majority of the par value of the shares present or represented, may authorize our board of directors to issue shares of a specific aggregate par value up to a maximum of 50% of the share capital registered in the commercial register in the form of:

·	conditional share capital (bedingtes Aktienkapital) for the purpose of issuing shares in<br>connection with, among other things, (1) option and conversion rights granted in connection with warrants and convertible bonds<br>of ours or one of our subsidiaries or (2) grants of rights to employees, members of our board of directors or consultants or our<br>subsidiaries to subscribe for new shares (conversion or option rights); or
·	authorized share capital (genehmigtes Kapital) to be utilized by our board of directors<br>within a period determined by the shareholders but not exceeding two years from the date of the shareholder approval.
---	---

Our Authorized Share Capital

Under our Articles in effect as of December 31, 2020, our board of directors is authorized at any time until May 15, 2022, to increase our share capital by a maximum aggregate amount of CHF 390,445.30 through the issuance of not more than 7,808,906 shares, which would have to be fully paid-in, with a par value of CHF 0.05 each.

Increases in partial amounts are permitted. Our board of directors has the power to determine the type of contributions, the issue price and the date on which the dividend entitlement starts.

Our board of directors is also authorized to withdraw or limit pre-emptive rights as described above. This authorization is exclusively linked to the particular available authorized share capital set out in the respective article. If the period to increase the share capital lapses without having been used by our board of directors, the authorization to withdraw or to limit the pre-emptive rights lapses simultaneously with such capital.

Our Conditional Share Capital

Our conditional share capital as registered with the commercial register of the Canton of Zug as at December 31, 2020 amounts to CHF 390,201.50^[2]^, corresponding to 7,804,030 new Class B Shares, whereby CHF 46,316.55 of the conditional share capital is available for the issuance of up to 926,331 Class B Shares in connection with rights granted to third parties or shareholders in connection with Rights Bearing Obligations (as defined in art. 4b para. 1(a) of the Articles) and CHF 343,884.95, corresponding to 6,877,699 Class B Shares, is available for the issuance of Class B Shares in connection with the issuance of Class B Shares or Rights-Bearing Obligations granted to the members of the board of directors, members of the executive management, employees, consultants or other persons providing services to us or another company of the Group (art. 4b para. 1 (b) of the Articles).

10.B.6 Limitations

There are no limitations under the Swiss CO or our Articles on the right of non-Swiss residents or nationals to own or vote shares other than the restrictions applicable to all shareholders.

10.B.7 Change in control

Compulsory Acquisitions; Appraisal Rights

Business combinations and other transactions that are governed by the Swiss Merger Act, are binding on all shareholders. A statutory merger or demerger requires approval of two-thirds of the shares represented at a general meeting of shareholders and the absolute majority of the par value of the shares represented.

__________________________

^2^ Since December 16, 2020, the date of reference for the last formal recording in the Articles and the commercial register of the Canton of Zug, Switzerland, an aggregate number of 359,566 Class B Shares has been issued out of the Company's conditional share capital as at December 31, 2020. These 359,566 Class B Shares have not been deducted from the available conditional capital.

If a transaction under the Swiss Merger Act receives all of the necessary consents, all shareholders are compelled to participate in such transaction.

Swiss corporations may be acquired by an acquirer through the direct acquisition of shares. The Swiss Merger Act provides for the possibility of a so-called "cash-out" or "squeeze-out" merger if the acquirer controls 90% of the outstanding shares. In these limited circumstances, minority shareholders of the corporation being acquired may be compensated in a form other than through shares of the acquiring corporation (for instance, through cash or securities of a parent corporation of the acquiring corporation or of another corporation).

For business combinations effected in the form of a statutory merger or demerger and subject to Swiss law, the Swiss Merger Act provides that if equity rights have not been adequately preserved or compensation payments in the transaction are unreasonable, a shareholder may request the competent court to determine a reasonable amount of compensation. A decision issued by a competent court in this respect can be acted upon by any person who has the same legal status as the claimant.

In addition, under Swiss law, the sale of all or substantially all of our assets may be construed as a de facto dissolution of our company, and consequently require the approval of two-thirds of the shares present or represented at a general meeting of shareholders and the absolute majority of the par value of the shares present or represented. Whether a shareholder resolution is required depends on the particular transaction, whereas the following circumstances are generally deemed relevant in this respect:

·	a core part of the company's business is sold without which it is economically impracticable or<br>unreasonable to continue to operate the remaining business;
·	the company's assets, after the divestment, are not invested<br>in accordance with the company's statutory business purpose; and
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·	the proceeds of the divestment are not earmarked for reinvestment<br>in accordance with the company's business purpose but, instead, are intended for distribution to the company's shareholders or<br>for financial investments unrelated to the company's business.
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A shareholder of a Swiss corporation participating in certain corporate transactions governed by the Swiss Merger Act may, under certain circumstances, be entitled to appraisal rights. As a result, such shareholder may, in addition to the consideration (be it in shares or in cash) receive an additional amount to ensure that the shareholder receives the fair value of the shares held by the shareholder. Following a statutory merger or demerger, pursuant to the Swiss Merger Act, shareholders can file an appraisal action against the surviving company. If the consideration is deemed inadequate, the court will determine an adequate compensation payment.

10.B.8 Disclosure of shareholdings

Notification and Disclosure of Substantial Share Interests

Under the applicable provisions of the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading of 2015, or the Financial Market Infrastructure Act ("FMIA"), as amended, persons who directly, indirectly or in concert with other parties acquire or dispose of our shares, purchase rights or obligations relating to our shares (the "Purchase Positions") or sale rights or obligations relating to our shares (the "Sale Positions"), and thereby, directly, indirectly or in concert with other parties reach, exceed or fall below a threshold of 3%, 5%, 10%, 15%, 20%, 25%, 331⁄3%, 50% or 662⁄3% of our voting rights (whether exercisable or not) must notify us and the Disclosure Office of the SIX of such acquisition or disposal in writing within four trading days. Within two trading days of the receipt of such notification, we must publish such information via the SIX's electronic publishing platform. For purposes of calculating whether a threshold has been reached or crossed, shares and Purchase Positions, on the one hand, and Sale Positions, on the other hand, may not be netted. Rather, the shares and Purchase Positions and the Sale Positions must be accounted for separately and may each trigger disclosure obligations if the respective positions reach, exceed or fall below one of the thresholds. In addition, actual share ownership must be reported separately if it reaches, exceeds or falls below one of the thresholds.

Pursuant to Article 663c of the CO, Swiss corporations whose shares are listed on a stock exchange must disclose their significant shareholders and their shareholdings in the notes to their balance sheet, where this information is known or ought to be known. Significant shareholders are defined as shareholders and groups of shareholders linked through voting rights who hold more than 5% of all voting rights.

Mandatory Bid Rules

Pursuant to the applicable provisions of the FMIA, any person that acquires shares of a listed Swiss company, whether directly or indirectly or acting in concert with third parties, which shares, when taken together with any other shares of such company held by such person (or such third parties), exceed the threshold of 33 1/3% of the voting rights (whether exercisable or not) of such company, must make a takeover bid to acquire all the other newly issued shares of such company. A company's articles of association may either eliminate this provision of the FMIA or may raise the relevant threshold to 49% ("opting-out" or "opting-up", respectively).

We have an opting-out provision in Article 6 para. 9 of our Articles. Accordingly, an acquirer of Shares is not obliged to make a public offer pursuant to article 135 and 163 of the Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading.

The Swiss laws applicable to Swiss corporations and their shareholders differ from laws applicable to U.S. corporations and their shareholders. The following table summarizes significant differences in shareholder rights between the provisions of the CO and the Compensation Ordinance and the Delaware General Corporation Law applicable to companies incorporated in Delaware and their shareholders. Please note that this is only a general summary of certain provisions applicable to companies in Delaware. Certain Delaware companies may be permitted to exclude certain of the provisions summarized below in their charter documents.

10.B.9 Differences in the law

<br><br> <br>DELAWARE CORPORATE LAW<br><br> <br>	SWISS CORPORATE LAW
Mergers and similar arrangements
Under the Delaware General Corporation Law, with certain exceptions, a merger, consolidation, sale, lease or transfer of all or substantially all of the assets of a corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon. A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which such shareholder may receive cash in the amount of the fair value of the shares held by such shareholder (as determined by a court) in lieu of the consideration such shareholder would otherwise receive in the transaction. The Delaware General Corporation Law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of which it owns at least 90.0% of each class of capital stock without a vote by the shareholders of such subsidiary. Upon any such merger, dissenting shareholders of the subsidiary would have appraisal rights.	Under Swiss law, with certain exceptions, a merger or a division of the corporation or a sale of all or substantially all of the assets of a corporation must be approved by two-thirds of the shares represented at the relevant general meeting of shareholders as well as the absolute majority of the par value of the shares represented at such shareholders' meeting. A shareholder of a Swiss corporation participating in a statutory merger or demerger pursuant to the Swiss Merger Act can file an appraisal right lawsuit against the surviving company. As a result, if the consideration is deemed "inadequate," such shareholder may, in addition to the consideration (be it in shares or in cash) receive an additional amount to ensure that such shareholder receives the fair value of the shares held by such shareholder. Swiss law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of which it owns at least 90.0% of the voting rights without a vote by shareholders of such subsidiary, if the shareholders of the subsidiary are offered the payment of the fair value in cash as an alternative to shares.
Shareholders' suits
Class actions and derivative actions generally are available to shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys' fees incurred in connection with such action.	Class actions and derivative actions as such are not available under Swiss law. Nevertheless, certain actions may, to a limited extent, have a similar effect. An appraisal lawsuit won by a shareholder can be acted upon by any person who has the same legal status as the claimant. Also, a shareholder is entitled to bring suit against directors for breach of, among other things, their fiduciary duties and claim the payment of damages. However, unless the company is subject to bankruptcy proceedings, or if the relevant shareholder can demonstrate having suffered a loss in a personal capacity, a shareholder will only be allowed to ask for payment of damages to the corporation. Under Swiss law, the winning party is generally entitled to recover attorneys' fees incurred in connection with such action, provided, however, that the court has discretion to permit the shareholder whose claim has been dismissed to recover attorneys' fees incurred to the extent he acted in good faith.
DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
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Shareholdervote on board and management compensation
Under the Delaware General Corporation Law, the board of directors has the authority to fix the compensation of directors, unless otherwise restricted by the certificate of incorporation or bylaws.	Pursuant to the Swiss Ordinance against excessive compensation in listed stock corporations, the general meeting of shareholders has the non-transferable right, amongst others, to have a binding vote each year on the compensation due to the board of directors, executive management and advisory boards.
Annualvote on board renewal
Unless directors are<br> elected by written consent in lieu of an annual meeting, directors are elected in an annual meeting of stockholders on a date and<br> at a time designated by or in the manner provided in the bylaws. Re-election is possible.<br><br> <br><br><br> <br>Classified<br>boards are permitted.	The general meeting of shareholders elects annually (i.e. for the period between two annual ordinary general meeting of shareholders) the members of the board of directors, the chairman of the board and the members of the compensation committee individually for a term of office of one year. Re-election is possible.
Indemnification of directors and executive management and limitation of liability
The Delaware General<br> Corporation Law provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability<br> of directors (but not other controlling persons) of the corporation for monetary damages for breach of a fiduciary duty as a director,<br> except no provision in the certificate of incorporation may eliminate or limit the liability of a director for:<br><br> <br><br><br> <br>·    any<br>breach of a director's duty of loyalty to the corporation or its shareholders;<br><br> <br><br><br> <br>·    acts<br>or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;<br><br> <br><br><br> <br>·    statutory<br>liability for unlawful payment of dividends or unlawful stock purchase or redemption; or<br><br> <br><br><br> <br>·    any<br>transaction from which the director derived an improper personal benefit.	Under Swiss corporate<br> law, an indemnification of a director or member of the executive management in relation to potential personal liability is not<br> effective to the extent the director or member of the executive management intentionally or grossly negligently violated his or<br> her corporate duties towards the corporation. Most violations of corporate law are regarded as violations of duties towards the<br> corporation rather than towards the shareholders. In addition, indemnification of other controlling persons is generally not permitted<br> under Swiss corporate law, including shareholders of the corporation.<br><br> <br><br><br> <br>Nevertheless, a corporation<br> may enter into and pay for directors' and officers' liability insurance which typically covers negligent acts as well.
DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
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A Delaware corporation<br> may indemnify any person who was or is a party or is threatened to be made a party to any proceeding, other than an action by or<br> on behalf of the corporation, because the person is or was a director or officer, against liability incurred in connection with<br> the proceeding if the director or officer acted in good faith and in a manner reasonably believed to be in, or not opposed to,<br> the best interests of the corporation; and the director or officer, with respect to any criminal action or proceeding, had no reasonable<br> cause to believe his or her conduct was unlawful.<br><br> <br><br><br> <br>Unless ordered by<br> a court, any foregoing indemnification is subject to a determination that the director or officer has met the applicable standard<br> of conduct:<br><br> <br><br><br> <br>·    by<br>a majority vote of the directors who are not parties to the proceeding, even though less than a quorum;<br><br> <br><br><br> <br>·    by<br>a committee of directors designated by a majority vote of the eligible directors, even though less than a quorum;<br><br> <br><br><br> <br>·    by<br>independent legal counsel in a written opinion if there are no eligible directors, or if the eligible directors so direct; or<br><br> <br><br><br> <br>·   <br> by the shareholders.<br><br> <br><br><br> <br>Moreover, a Delaware<br> corporation may not indemnify a director or officer in connection with any proceeding in which the director or officer has been<br> adjudged to be liable to the corporation unless and only to the extent that the court determines that, despite the adjudication<br> of liability but in view of all the circumstances of the case, the director or officer is fairly and reasonably entitled to indemnity<br> for those expenses which the court deems proper.
Directors' fiduciary duties
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A director of a Delaware<br> corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components:<br><br> <br><br><br> <br>·      <br> the duty of care; and<br><br> <br><br><br> <br>·      <br> the duty of loyalty.<br><br> <br><br><br> <br>The duty<br>of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar<br>circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably<br>available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes<br>to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty<br>prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence<br>over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In<br>general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that<br>the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach<br>of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove<br>the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.	A director of a Swiss<br> corporation has a fiduciary duty to the corporation only. This duty has two components:<br><br> <br><br><br> <br>·      <br> the duty of care; and<br><br> <br><br><br> <br>·      <br> the duty of loyalty.<br><br> <br><br><br> <br>The duty of care requires<br> that a director act in good faith, with the care that an ordinarily prudent director would exercise under similar circumstances.<br><br> <br><br><br> <br>The duty of loyalty<br> requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use<br> his corporate position for personal gain or advantage. This duty prohibits in principle self-dealing by a director and mandates<br> that the best interest of the corporation take precedence over any interest possessed by a director or officer.<br><br> <br><br><br> <br>The burden of proof<br> for a violation of these duties is with the corporation or with the shareholder bringing a suit against the director.<br><br> <br><br><br> <br>Directors also have<br> an obligation to treat shareholders that are in similar situations equally.
DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
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Shareholder action by written consent
A Delaware corporation may, in its certificate of incorporation, eliminate the right of shareholders to act by written consent.	Shareholders of a Swiss corporation may only exercise their voting rights in a general meeting of shareholders and may not act by written consents.
Shareholder proposals
A shareholder of a Delaware corporation has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of shareholders' rights: directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.	At any general meeting<br> of shareholders any shareholder may put proposals to the meeting if the proposal is part of an agenda item. Unless the articles<br> of association provide for a lower threshold or for additional<br><br> <br><br><br> <br>·    one<br>or several shareholders whose combined shareholdings represent the lower of (1) one tenth of the share capital or (2) an aggregate<br>par value of at least CHF 1,000,000, may ask that a general meeting of shareholders be called for specific agenda items and specific<br>proposals; and<br><br> <br><br><br> <br>·    one<br>or several shareholders representing 10.0% of the share capital or CHF 1.0 million of nominal share capital may ask that an agenda<br>item including a specific proposal be put on the agenda for a regularly scheduled general meeting of shareholders, provided such<br>request is made with appropriate notice.<br><br> <br><br><br> <br>Any<br> shareholder can propose candidates for election as directors at an annual general meeting without prior written notice.<br><br> <br><br><br> <br>In addition,<br>any shareholder is entitled, at a general meeting of shareholders and without advance notice, to (1) request information from<br>the Board on the affairs of the company (note, however, that the right to obtain such information is limited), (2) request information<br>from the auditors on the methods and results of their audit, (3) request the holding of an extraordinary general meeting of shareholders<br>and (4) request, under certain circumstances and subject to certain conditions, a special audit.
DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
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Cumulative voting
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation provides for it.	Cumulative voting would be permitted under Swiss corporate law; however, we are not aware of any company that has cumulative voting. An annual individual election of all members of the board of directors for a term of office of one year (i.e. until the end of the following annual general meeting) is mandatory for listed Swiss companies.
Removal of directors
A Delaware corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.	A Swiss corporation may remove, with or without cause, any director at any time with a resolution passed by an absolute majority of the shares represented at a general meeting of shareholders. The articles of association may require the approval by a qualified majority of the shares represented at a meeting for the removal of a director.
Transactions with interested shareholders
The Delaware General Corporation Law generally prohibits a Delaware corporation from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15.0% or more of the corporation's outstanding voting stock within the past three years.	No such specific rule applies to a Swiss corporation.
Dissolution; Winding up
Unless the board of directors of a Delaware corporation approves the proposal to dissolve, dissolution must be approved by shareholders holding 100.0% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.	A dissolution and winding up of a Swiss corporation requires the approval by two-thirds of the shares represented as well as the absolute majority of the par value of the shares represented at a general meeting of shareholders passing a resolution on such dissolution and winding up. The articles of association may increase the voting thresholds required for such a resolution.
Variation of rights of shares
A Delaware corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise.	A Swiss corporation may modify the rights of a classes of shares with (1) a resolution passed by an absolute majority of the shares represented at the general meeting of shareholders and (2) a resolution passed by an absolute majority of the shares represented at the special meeting of the affected preferred shareholders. The issuance of shares that are granted more voting power requires the approval by two-thirds of the shares represented as well as the absolute majority of the par value of the shares represented at the relevant general meeting of shareholders.
DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
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Amendment of governing documents
A Delaware corporation's governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.	The articles of association of a Swiss corporation may be amended with a resolution passed by an absolute majority of the shares represented at such meeting, unless otherwise provided in the articles of association. There are a number of resolutions, such as an amendment of the stated purpose of the corporation and the introduction of authorized and conditional capital, that require the approval by two-thirds of the votes and an absolute majority of the par value of the shares represented at a shareholders' meeting. The articles of association may increase the voting thresholds.
Inspection of books and records
Shareholders of a Delaware corporation, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose, and to obtain copies of list(s) of shareholders and other books and records of the corporation and its subsidiaries, if any, to the extent the books and records of such subsidiaries are available to the corporation.	Shareholders of a Swiss corporation may only inspect books and records if the general meeting of shareholders or the board of directors approved such inspection and only if confidential information possessed by a corporation is protected. A shareholder is only entitled to receive information to the extent required to exercise such shareholders' rights, subject to the interests of the corporation. The right to inspect the share register is limited to the right to inspect that shareholder's own entry in the share register.
Payment of dividends
The board of directors<br> may approve a dividend without shareholder approval. Subject to any restrictions contained in its certificate of incorporation,<br> the board may declare and pay dividends upon the shares of its capital stock either:<br><br> <br><br><br> <br>·     out<br>of its surplus; or<br><br> <br>·     in<br>case there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared or the preceding fiscal<br>year.<br><br> <br><br><br> <br>Stockholder approval<br> is required to authorize capital stock in excess of that provided in the charter. Directors may issue authorized shares without<br> stockholder approval.	Dividend payments<br> are subject to the approval of the general meeting of shareholders. The board of directors may propose to shareholders that a dividend<br> shall be paid but cannot itself authorize the distribution.<br><br> <br><br><br> <br>Payments<br>out of the Company's stated share capital (in other words, the aggregate par value of the Company's registered share capital)<br>in the form of dividends are not allowed; payments out of stated share capital may be made by way of a capital reduction only.<br>Dividends may be paid only from the profits brought forward from the previous business years or if the Company has distributable<br>reserves, each as will be presented on the Company's audited annual stand-alone financial statements. The dividend may be determined<br>only after the allocations to reserves required by the law and the articles of association have been made.
Creation and issuance of new shares
All creation of shares requires the board of directors to adopt a resolution or resolutions, pursuant to authority expressly vested in the board of directors by the provisions of the company's certificate of incorporation.	All creation of shares requires a shareholders' resolution. Authorized shares can be, once created by shareholder resolution, issued by the board of directors (subject to limitations of the authorization; the term of authorized share capital is at a maximum two years, and the amount of authorized share capital is capped at 50% of the share capital registered in the commercial register at the time the authorized share capital is adopted). Conditional share capital is the underlying for shares issued upon the exercise of options and conversion rights related to debt instruments issued by the board of directors or such rights issued to employees. The amount of conditional share capital is capped at 50% of the share capital registered in the commercial register at the time the conditional share capital is adopted.
DELAWARE CORPORATE LAW	SWISS CORPORATE LAW
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Rights plans / poison pills
	Under Swiss corporation law, shareholders have preemptive rights to subscribe for new issuances of shares in proportion to the respective par values of their holdings. Under certain circumstances, shareholders limit or withdraw, or authorize the board of directors to limit or withdraw, pre-emptive rights or advance subscription rights in certain circumstances. However, limitation or withdrawal of shareholders' pre-emptive rights can only be decided for valid reasons. Preventing a particular shareholder to exercise influence over the company is generally believed not to be a valid reason to limit or withdraw shareholders' pre-emptive rights.

10.B.10 Changes in capital

The requirements of the Articles regarding changes in capital are not more stringent than the requirements of Swiss law.

AMERICAN DEPOSITARY SHARES

Item 12. Other securities

Disclosures under Items 12.A, 12.B, and 12.C are not applicable.

12.D. American Depositary Shares.

The Bank of New York Mellon, as depositary, registers and delivers ADSs. Each ADS represents five (5) Class B Shares (or a right to receive five (5) Class B Shares) deposited with Credit Suisse Group AG, as custodian for the depositary in Switzerland. Each ADS also represents any other securities, cash or other property which may be held by the depositary. The depositary's corporate trust office at which the ADSs are administered is located at 101 Barclay Street, New York, NY 10286. The depositary's principal executive office is located at 225 Liberty Street, New York, New York 10286.

You may hold ADSs either (A) directly (i) by having an American Depositary Receipt, or ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (ii) by having ADSs registered in your name in the Direct Registration System, or (B) indirectly by holding a security entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as an ADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, or DTC, pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership is confirmed by periodic statements sent by the depositary to the registered holders of uncertificated ADSs.

As an ADS holder, we do not treat you as one of our shareholders and you do not have shareholder rights. Swiss law governs shareholder rights. The depositary is the holder of Class B Shares underlying your ADSs. As a registered holder of ADSs, you have ADS holder rights. A deposit agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs sets out ADS holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs.

The following is a summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement which has been filed as an exhibit to this registration statement, and the form of ADR, attached thereto.

Dividends and Other Distributions

The depositary has agreed to pay to ADS holders the cash dividends or other distributions it or the custodian receives on Class B Shares or other deposited securities, after deducting its fees and expenses. You will receive these distributions in proportion to the number of Class B Shares your ADSs represent.

·

Cash. The depositary will convert any cash dividend or other cash distribution we pay on<br>the Class B Shares underlying the ADSs into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars<br>to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the deposit agreement<br>allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold<br>the foreign currency it cannot convert for the account of the ADS holders who have not been paid. It will not invest the foreign<br>currency and it will not be liable for any interest

Before making a distribution, any withholding taxes, or other governmental charges that must be paid will be deducted. See Item 10.E. Taxation of WISeKey’s annual report on Form 20-F for the fiscal year ended December 31, 2020. It will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannotconvert the foreign currency, you may lose some or all of the value of the distribution.

·	Distribution of Class B Shares. The depositary may distribute additional ADSs representing<br>any Class B shares we distribute as a dividend or free distribution. The depositary will only distribute whole ADSs. It will try<br>to sell Class B Shares which would require it to deliver a fractional ADS and distribute the net proceeds in the same way as it<br>does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new Class B<br>Shares. The depositary may sell a portion of the distributed Class B Shares sufficient to pay its fees and expenses in connection<br>with that distribution.
·	Rights to Purchase Additional Class B Shares. If we offer holders of our securities any<br>rights to subscribe for additional shares or any other rights, the depositary may make these rights available to ADS holders. If<br>the depositary decides it is not legal and practical to make the rights available but that it is practical to sell the rights,<br>the depositary will use reasonable efforts to sell the rights and distribute the proceeds in the same way as it does with cash.<br>The depositary will allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them.
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If the depositary makes rights available to ADS holders, it will exercise the rights and purchase the shares on your behalf. The depositary will then deposit the Class B Shares and deliver ADSs to the persons entitled to them. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.

U.S. securities laws may restrict transfers and cancellation of the ADSs represented by Class B Shares purchased upon exercise of rights. For example, you may not be able to trade these ADSs freely in the United States. In this case, the depositary may deliver restricted depositary shares that have the same terms as the ADSs described in this section except for changes needed to put the necessary restrictions in place.

·

Other Distributions. The depositary will send to ADS holders anything else we distribute<br>on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the<br>depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does<br>with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property.<br>However, the depositary is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory<br>evidence from us that it is legal to make that distribution. The depositary may sell a portion of the distributed securities or<br>property sufficient to pay its fees and expenses in connection with that distribution.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have no obligation to register ADSs, shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, Class B Shares, rights or anything else to ADS holders. This means that you may not receivethe distributions we make on our Class B Shares or any value for them if it is illegal or impractical for us to make them availableto you.

Deposit, Withdrawal and Cancellation

The depositary will deliver ADSs if you or your broker deposit Class B Shares or evidence of rights to receive Class B Shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names you request and will deliver the ADSs to or upon the order of the person or persons that made the deposit.

You may surrender your ADSs at the depositary's corporate trust office. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the Class B shares and any other deposited securities underlying the ADSs to the ADS holder or a person the ADS holder designates at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities at its corporate trust office, if feasible.

You may surrender your ADR to the depositary for the purpose of exchanging your ADR for uncertificated ADSs. The depositary will cancel that ADR and will send to the ADS holder a statement confirming that the ADS holder is the registered holder of uncertificated ADSs. Alternatively, upon receipt by the depositary of a proper instruction from a registered holder of uncertificated ADSs requesting the exchange of uncertificated ADSs for certificated ADSs, the depositary will execute and deliver to the ADS holder an ADR evidencing those ADSs.

Voting Rights

ADS holders may instruct the depositary to vote the number of deposited Class B Shares their ADSs represent. The depositary will provide notice to ADS holders of shareholders' meetings and arrange to deliver our voting materials to them if we ask it to. Those materials will describe the matters to be voted on and explain how ADS holders must instruct the depositary how to vote. For instructions to be valid, they must reach the depositary by a date set by the depositary.

Otherwise, you would not be able to exercise your right to vote unless you withdraw Class B Shares. However, you may not know about the meeting enough in advance to withdraw Class B Shares.

The depositary will try, as far as practical, subject to the laws of Switzerland and of our Articles or similar documents, to vote or to have its agents vote Class B Shares or other deposited securities as instructed by ADS holders.

If the depositary does not receive your voting instructions in a timely manner you will nevertheless be treated as having instructed the depositary to give a discretionary proxy to the independent proxy holder elected by the Company's shareholders to vote the Class B Shares represented by your ADSs. The depositary will deliver such discretionary proxy only to the extent permitted by applicable law and if:

(i)	we instruct the depositary, and the depositary complies with<br>such instruction, to disseminate the shareholders' meetings materials,
(ii)	no voting instructions are received by the depositary from you by the deadline established by the<br>depositary, and
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(iii)	we have timely delivered written confirmation to the depositary that:
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a.        we wish a discretionary proxy to be given,

b.       we reasonably do not know of any substantial opposition to the matter(s) to be voted on, and

c.        the matter(s) to be voted on is/are not materially adverse to the interests of the shareholders.

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your Class B Shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing you can do if your shares are not voted as you requested.

In order to give you a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if we request the Depositary to act, we agree to give the Depositary notice of any such meeting and details concerning the matters to be voted upon at least 30 days in advance of the meeting date.

Fees and Expenses

Persons depositing or withdrawing Class B Shares or ADS holders must pay:	For:
USD5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	• Issuance of ADSs, including issuances resulting from<br> a distribution of Class B Shares or rights or other property<br><br> <br><br><br> <br>• Cancellation of ADSs for the purpose of withdrawal, including<br> if the deposit agreement terminates
USD0.05 (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 Class B Shares and the Class B Shares had been deposited for issuance of ADSs	• Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders
USD0.05 (or less) per ADSs per calendar year	• Depositary services
Registration or transfer fees	• Transfer and registration of Class B Shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw Class B Shares
Expenses of the depositary	• Cable, telex and facsimile transmissions (when expressly<br> provided in the deposit agreement)<br><br> <br><br><br> <br>• 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

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing Class B Shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may generally refuse to provide fee-based services until its fees for these services are paid.

From time to time, the depositary may make payments to us to reimburse and/or class B share revenue from the fees collected from ADS holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing its duties under the deposit agreement, the depositary may use brokers, dealers or other service providers that are affiliates of the depositary and that may earn or share fees or commissions.

Depositary Payments

In 2020, we did not receive any payments or reimbursements from The Bank of New York Mellon, the depositary bank of our ADS program.

Payment of Taxes

You will be responsible for any taxes or other governmental charges payable on your ADSs or on the deposited securities represented by any of your ADSs. The depositary may refuse to register any transfer of your ADSs or allow you to withdraw the deposited securities represented by your ADSs until such taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented by your ADSs to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to ADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.

Reclassifications, Recapitalizations and Mergers

If we:	Then:
· Change the nominal or par value of our Class B Shares	· The<br>cash, Class B Shares or other securities received by the depositary will become deposited securities. Each ADS will automatically<br>represent its equal share of the new deposited securities.
· Reclassify, split up or consolidate any of the deposited securities	· The depositary may distribute some or all of the cash, Class B ADRs or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities.
· Distribute securities on Class B Shares that are not distributed to you
· Recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action

Amendment and Termination

We may agree with the depositary to amend the deposit agreement and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of ADS holders, it will not become effective for outstanding ADSs until thirty (30) days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended.

The depositary will terminate the deposit agreement at our direction by mailing notice of termination to the ADS holders then outstanding at least ninety (90) days prior to the date fixed in such notice for such termination. The depositary may terminate the deposit agreement (i) by mailing notice of termination to us and the ADS holders if ninety (90) days have passed since the depositary told us it wants to resign but a successor depositary has not been appointed and accepted its appointment, (ii) an insolvency event or delisting event (each as further described in the deposit agreement) occurs with respect to us, or (iii) a termination option event (as further described in the deposit agreement) has occurred or will occur.

After termination, the depositary and its agents will do the following under the deposit agreement but nothing else: collect distributions on the deposited securities, sell rights and other property, and deliver Class B Shares and other deposited securities upon cancellation of ADSs. After termination, the depositary may sell any remaining deposited securities by public or private sale. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADS holders that have not surrendered their ADSs. It will not invest the money and has no liability for interest. After making the sale, the depositary shall be discharged from all obligations under the deposit agreement, except to account for the net proceeds of such sale and other cash (after deducting fees and expenses and applicable taxes and governmental charges). The depositary's only obligations will be to account for the money and other cash. After termination our only obligations will be to indemnify the depositary and to pay fees and expenses of the depositary that we agreed to pay.

Limitations on Obligations and Liability

The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:

·	are only obligated to take the actions specifically set forth in the deposit agreement without<br>negligence or bad faith;
·	are not liable if we are or it is prevented or delayed by law or circumstances beyond our control<br>from performing our or its obligations under the deposit agreement;
---	---
·	are not liable if we or it exercises discretion permitted under the deposit agreement;
---	---
·	are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited<br>securities that is not made available to holders of ADSs under the terms of the deposit agreement, or for any special, consequential<br>or punitive damages for any breach of the terms of the deposit agreement;
---	---
·	have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the<br>deposit agreement on your behalf or on behalf of any other person;
---	---
·	may rely upon any documents we believe or it believes in good faith to be genuine and to have been<br>signed or presented by the proper person.
---	---

In the deposit agreement, we and the depositary agree to indemnify each other under certain circumstances. Requirements for Depositary Actions

Before the depositary will deliver or register a transfer of an ADS, make a distribution on an ADS, or permit withdrawal of Class B Shares, the depositary may require:

·	payment of stock transfer or other taxes or other governmental charges and transfer or registration<br>fees charged by third parties for the transfer of any Class B Shares or other deposited securities;
·	satisfactory proof of the identity and genuineness of any signature or other information it deems<br>necessary; and
---	---
·	compliance with regulations it may establish, from time to time, consistent with the deposit agreement,<br>including presentation of transfer documents.
---	---

The depositary may refuse to deliver ADSs or register transfers of ADSs generally when the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable to do so.

Your Right to Receive Class B Shares Underlying your ADSs

ADS holders have the right to cancel their ADSs and withdraw the underlying Class B Shares at any time except:

·	When temporary delays arise because: (i) the depositary has closed its transfer books or we have<br>closed our transfer books; (ii) the transfer of Class B Shares is blocked to permit voting at a shareholders' meeting; or (iii)<br>we are paying a dividend on our Class B Shares.
·	When you owe money to pay fees, taxes and similar charges.
---	---
·	When it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations<br>that apply to ADSs or to the withdrawal of Class B Shares or other deposited securities.
---	---

This right of withdrawal may not be limited by any other provision of the deposit agreement.

Waiver of Jury Trial

As a party to the deposit agreement, you irrevocably waive, to the fullest extent permitted by applicable law, your right to trial by jury in any legal proceeding arising out of the shares or other deposited securities, the ADSs or ADRs, as applicable, the deposit agreement or any transaction contemplated therein or any breach thereof against us and/or the depositary.

English summary of Loan Agreement between WISeKey International Holding AG, General-Guisan-Strasse 6, CH-6300 Zug (Borrower) und UBS, Rue des Noirettes 35, CH-1206 Geneva (Lender)

Credit amount: CHF293,000.

1.	Confirmation:

By confirming and signing this loan agreement, the Borrower declares:

• The Borrower has not yet received a loan in accordance with the COVID-19 solidarity guarantee regulation.

• The Borrower has no other pending applications for loans guaranteed under the COVID-19 Solidarity Guarantee Ordinance.

• The Borrower assures that at the time of submitting the application, he has not already secured liquidity based on other emergency legal regulations of the federal government in the fields of sport and culture.

• At the time of filing this Loan Agreement, the Borrower is not in bankruptcy, debt restructuring or liquidation.

• Due to the COVID-19 pandemic, the Borrower is economically significantly affected, particularly with regard to his sales.

• The Borrower will use the loan amount granted under this loan agreement exclusively to secure his ongoing liquidity needs.

• All information on the company's sales revenue is based on the individual financial statements (no group view).

• The Borrower confirms that all information is complete and true.

• The Borrower is aware that, through incorrect or incomplete information due to fraud (Art. 146 Criminal Code), forgery (Art. 251 Criminal code) etc. can be held criminally responsible and punishable by imprisonment of up to five years or a fine. In addition the Borrower might be punished with a fine of up to 100,000 francs if the Borrower willfully obtain a loan according to the COVID-19 Solidarity Guarantee Ordinance with false information or do not use the loan funds to meet the above-mentioned liquidity needs.

2. Purpose of Loan

The loan may only be used to secure ongoing liquidity needs of the Borrower. The bank is not obliged to check that the use is in accordance with the agreement.

3. Conditions and interest calculation

The borrower must pay the claimed loan at the interest rate in accordance with Art. 13 of the COVID-19 Solidarity Guarantee Ordinance. The calculation of interest and the closing of the account with interest debited are carried out in accordance with the bank's usual practice.

4. Term / repayment of loan

The term of the loan is 60 months from the granting of the loan by the Bank. The loan amount is to be repaid in full at the latest at the end of the term, together with the then outstanding interest. The bank reserves the right to introduce amortization or limit reductions during the term of the loan.

5. Cancellation

The Borrower has the right to terminate this loan agreement at any time with immediate effect The bank has the right to terminate this loan agreement for regulatory or legal reasons (e.g. violation of the AMLA or this loan agreement) at any time with immediate effect. Amounts outstanding upon termination under this loan agreement become due and payable immediately.

6. Collateral

The loan amount plus the interest effectively accrued under the loan agreement up to a maximum of one annual interest rate is exclusively through a joint and several guarantee in accordance with the COVID-19 Solidarity Guarantee Ordinance

7. Terms of loan approval

The loan can only be claimed if a copy of the present loan agreement signed by the Borrower is valid at the latest and was submitted to the bank on July 31, 2020.

8. General Terms and Conditions

The bank's general terms and conditions form part of this loan agreement.

9. Applicable law and place of jurisdiction

This loan agreement is subject to Swiss law. The seat of the bank is the sole place of jurisdiction for all proceedings. This is also the place of performance. Mandatory legal places of jurisdiction remain reserved.

English summary of Loan Agreement between WISeKey SA, Route de Pré-Bois, 29 CH-1215 Meyrin Switzerland (Borrower) und UBS, Rue des Noirettes 35, CH-1206 Geneva (Lender)

Credit amount: CHF278,500.

1.       Confirmation:

By confirming and signing this loan agreement, the Borrower declares:

• The Borrower has not yet received a loan in accordance with the COVID-19 solidarity guarantee regulation.

• The Borrower has no other pending applications for loans guaranteed under the COVID-19 Solidarity Guarantee Ordinance.

• The Borrower assures that at the time of submitting the application, he has not already secured liquidity based on other emergency legal regulations of the federal government in the fields of sport and culture.

• At the time of filing this Loan Agreement, the Borrower is not in bankruptcy, debt restructuring or liquidation.

• Due to the COVID-19 pandemic, the Borrower is economically significantly affected, particularly with regard to his sales.

• The Borrower will use the loan amount granted under this loan agreement exclusively to secure his ongoing liquidity needs.

• All information on the company's sales revenue is based on the individual financial statements (no group view).

• The Borrower confirms that all information is complete and true.

• The Borrower is aware that, through incorrect or incomplete information due to fraud (Art. 146 Criminal Code), forgery (Art. 251 Criminal code) etc. can be held criminally responsible and punishable by imprisonment of up to five years or a fine. In addition the Borrower might be punished with a fine of up to 100,000 francs if the Borrower willfully obtain a loan according to the COVID-19 Solidarity Guarantee Ordinance with false information or do not use the loan funds to meet the above-mentioned liquidity needs.

2. Purpose of Loan

The loan may only be used to secure ongoing liquidity needs of the Borrower. The bank is not obliged to check that the use is in accordance with the agreement.

3. Conditions and interest calculation

The borrower must pay the claimed loan at the interest rate in accordance with Art. 13 of the COVID-19 Solidarity Guarantee Ordinance. The calculation of interest and the closing of the account with interest debited are carried out in accordance with the bank's usual practice.

4. Term / repayment of loan

The term of the loan is 60 months from the granting of the loan by the Bank. The loan amount is to be repaid in full at the latest at the end of the term, together with the then outstanding interest. The bank reserves the right to introduce amortization or limit reductions during the term of the loan.

5. Cancellation

The Borrower has the right to terminate this loan agreement at any time with immediate effect The bank has the right to terminate this loan agreement for regulatory or legal reasons (e.g. violation of the AMLA or this loan agreement) at any time with immediate effect. Amounts outstanding upon termination under this loan agreement become due and payable immediately.

6. Collateral

The loan amount plus the interest effectively accrued under the loan agreement up to a maximum of one annual interest rate is exclusively through a joint and several guarantee in accordance with the COVID-19 Solidarity Guarantee Ordinance

7. Terms of loan approval

The loan can only be claimed if a copy of the present loan agreement signed by the Borrower is valid at the latest and was submitted to the bank on July 31, 2020.

8. General Terms and Conditions

The bank's general terms and conditions form part of this loan agreement.

9. Applicable law and place of jurisdiction

This loan agreement is subject to Swiss law. The seat of the bank is the sole place of jurisdiction for all proceedings. This is also the place of performance. Mandatory legal places of jurisdiction remain reserved.

Exhibit 4.24

Confidential

Table of Contents

Agreement for the Issuance and Subscription ofConvertible Notes

dated as of May 18^th^, 2020

by and between

WISeKey International Holding Ltd	(hereinafter Issuer)
General-Guisan-Strasse 6, 6300 Zug
a company incorporated under the laws of Switzerland and reg-
istered in the commercial registry under the federal number
CHE-143.782.707

and

Nice & Green SA	(hereinafter Investor)
Chemin du Joran 10, 1260 Nyon,
a company incorporated under the laws of Switzerland and reg-
istered in the commercial registry under the federal number
CHE-114.814.512

The Issuer and the Investor are hereinafter referred to as a Party and together as the Parties regarding the grant of a convertible loan facility denominated in notes convertible into registered shares, par value CHF 0.05 each, of the Issuer

Confidential

Whereas:

A.	The Investor is a company specialized in providing corporate<br>services relating to flexible financings.
B.	The Issuer is a Swiss corporation limited by shares<br>listed on SIX Swiss Exchange and with ADSs traded on Nasdaq.
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C.	As at the date of this Agreement, the Issuer issued<br>shares with a nominal value of CHF 0.01 each (the Class A Shares) and with a nominal value of CHF 0.05 each (the ClassB Shares). The Class B Shares are listed on SIX Swiss Exchange. As of the date of this Agreement, the Issuer has an authorized<br>share capital of CHF 425,152.05 divided in 8,503,041 Class B Shares and a conditional share capital of CHF 296,497.30 divided<br>in 5,929,946 Class B Shares reserved for rights granted in connection with Rights Bearing Obligations (as such term is defined<br>in Article 4b of the Issuer’s articles of association).
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D.	The Issuer and the Investor have agreed to enter into<br>this Agreement with respect to the commitment of the Investor to subscribe, over the course of a period of twenty-four (24) months<br>(subject to acceleration as set out herein) starting from the first Subscription Date (as defined below), for loan notes issued<br>by the Issuer with an aggregate principal value of up to a maximum of CHF 10,000,000 (the Maximum Commitment) convertible<br>into Shares, such convertible loan notes divided into twenty-five (25) tranches (the Tranches) and such tranches further<br>subdivided into twenty-five (25) sub-notes (each a Convertible Note). The applicable Terms are set out in Schedule 1.
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It is therefore agreed as follows:
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1.	Definitions and Interpretation
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In this Agreement, the following terms, when written<br>with a capital initial letter, have the meaning ascribed to them below, in the Terms or elsewhere in the Agreement. In case of<br>a discrepancy between the definition appearing in this Clause 1 and that appearing in a specific provision of this Agreement,<br>such latter definition will prevail.
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ADSs	American Depositary Shares representing Class B Shares;
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Affiliate	shall mean a person or entity that directly or indirectly Controls, is Controlled by, or is under common Control with, another person or entity;
Agreement	means this agreement, as amended from time to time;
Backstop Date	shall have the meaning ascribed to it in Clause 8(c);
Bloomberg	means Bloomberg LP, or should Bloomberg LP cease to exist, any other financial news and data service provider of reference publishing reliable data on the Shares;

1
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

Board of Directors	means the board of directors of the Issuer;
Business Day	shall have the meaning set forth in the Terms;
Calculation Period	shall have the meaning set forth in Clause 8(d);
Cash Redemption Formula	shall have the meaning set forth in Clause 9;
Change of Control	shall have the meaning set forth in the Terms;
Class B Shares	shall have the meaning set forth in recital C;
Commitment Fee(s)	shall have the meaning set forth in Clause 16;
Commitment Period	means a period starting on the second Business Day following the Signing Date and ending on the date falling seven hundred and thirty (730) calendar days thereafter;
Control	means the possession, directly or indirectly, of the power to direct or influence the direction of the management or policies of a person, whether through ownership or otherwise, and the terms “Controlling” and “Controlled” shall have a correlative meaning;
Convertible Notes	shall have the meaning set forth in recital D;
Conversion	shall have the meaning set forth in the Terms;
Conversion Amount	means the amount payable for each New Share upon Conversion of a Tranche or any part thereof into New Shares;
Conversion Date	means the date on which Conversion is requested;
Conversion Notice	shall have the meaning set forth in Clause (a), and having the form set out in Schedule 3  and<br> to be sent to via email to: exercise.notice@wisekey.com;
Conversion Period	means the period during which Conversion may be made according to the Terms and being for each Convertible Note issued under a Tranche the period from the Subscription Date and ending on the twelve (12)-month anniversary of the Subscription Date (provided that the Conversion Period may be shortened as set out herein);
Conversion Price	shall have the meaning set forth in the Terms;

2
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

Daily VWAP	shall have the meaning set forth in the Terms;
Event of Default	shall have the meaning set forth in Clause 13(a) below;
Exchange	shall have the meaning set forth in the Terms;
Final Statement	shall have the meaning set forth in Clause 17(e);
Floor Price	shall have the meaning set forth in Clause 5.2(i);
FMIA	means the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading of June 19, 2015, as amended from time to time;
Group Companies	means the Issuer and its subsidiaries;
HMT	shall have the meaning set forth in Clause 11;
Incentive Fee	shall have the meaning set forth in Clause (a);
Indebtedness	means any indebtedness for or in respect of:
	(i)	any monies borrowed pursuant to one or more credit facility agreements or the issue of bonds, notes, debentures, loan stock or<br>any similar instrument;
	(ii)	the amount of any liability in respect of any guarantee for any of the items referred to in paragraph (i) above,
	it being understood that any amount calculated under this definition may only be counted once, even if an item may qualify under various<br>paragraphs;
Indemnified Liabilities	shall have the meaning set forth in Clause 22;
Investor Indemnities	shall have the meaning set forth in Clause 22;
Investor Suspension Period	shall have the meaning set forth in Clause 3.1(b);
Issuer Suspension Period	shall have the meaning set forth in Clause 7(b);
Lien	means any mortgage, lien, pledge, charge or any other security interest or encumbrance of any kind, except the interest of a vendor or lessor arising out of the acquisition of or agreement to acquire any property or asset under any conditional sale agreement, lease purchase agreement, sale in view of and subsequent leaseback arrangement or other similar title retention agreement;

3
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

Material Adverse Change	shall have the meaning set forth in the Terms;
Maximum Commitment	shall have the meaning set forth in recital D;
Net Capital Gain	shall have the meaning set forth in Clause 17(b);
Net Capital Loss	shall have the meaning set forth in Clause 17(b);
New Shares	shall have the meaning set forth in the Terms;
OFAC SDN List	shall have the meaning set forth in Clause 11;
Parties	shall have the meaning set forth on the cover page of this Agreement;
Quarterly Statement	shall have the meaning ascribed to it in Clause 17(d);
Redemption	shall have the meaning ascribed to it in Clause 15;
Reference Date	shall mean the respective Trading Day immediately preceding the relevant Subscription Date;
Restricted Period	shall have the meaning set forth in Clause 12(e).
Sanctions	shall have the meaning set forth in Clause 11;
Sanctions Programs	shall have the meaning set forth in Clause 11;
Securities Act	shall have the meaning set forth in Clause 12(e).
Shares	shall have the meaning set forth in the Terms;
Sharing Basis	shall have the meaning set forth in Clause 17(b);
Signing Date	is the date of this Agreement;
Step Plan	shall have the meaning set forth in Clause 8(e).
Subscription Dates	the dates on which the Tranches are subscribed for by the Investor;
Subscription Price	shall have the meaning set forth in Clause 2(b);
Subscription Request	means the request in the form as set out in Schedule 2 pursuant to which the Issuer requests the Investor to subscribe for a Tranche;

4
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

Terms	means the terms and conditions of the Convertible Notes set out in Schedule 1.
Trading Day	shall have the meaning set forth in the Terms;
Tranche	shall have the meaning set forth in recital D;
Transaction Costs	means all reasonable costs (including fees and charges) incurred by the Investor in connection with the sale of New Shares; and
UNSC	shall have the meaning set forth in Clause 11.
U.S. Person(s)	shall have the meaning set forth in Clause 12(e).
2.	Commitment to Subscribe for the Convertible Notes
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(a)	Subject to the terms of this Agreement and the Terms,<br>the Investor undertakes to subscribe for up to twenty-five (25) Tranches during the Commitment Period up to the amount of the<br>Maximum Commitment. For the avoidance of doubt, the Investor shall not be obliged to subscribe for Convertible Notes in excess<br>of the Maximum Commitment. The Terms for the Convertible Notes issued under each Tranche shall be as set out in Schedule 1.
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(b)	The subscription price for each Tranche shall be equal<br>to its respective nominal value, such nominal value corresponding to the higher of (i) the aggregated value (“traded value”<br>as reported by Bloomberg) of the Shares traded on SIX Swiss Exchange during the five (5) Trading Days preceding the respective<br>Reference Date of each Tranche multiplied by 0.6; or (ii) CHF 125,000 (the Subscription Price). Accordingly, the nominal<br>value of each Convertible Note issued under the respective Tranche shall correspond to the relevant Subscription Price divided<br>by twenty-five (25).
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(c)	The Issuer commits to drawing at least three (3) Tranches<br>during the Commitment Period.
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(d)	Unless stipulated in this Agreement otherwise, each<br>Tranche shall be converted into New Shares during the Conversion Period.
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(e)	For each Tranche, the Investor shall pay the Subscription<br>Price to the Issuer upon the issuance of twenty-five (25) Convertible Notes, whereby each Convertible Note has a nominal value<br>corresponding to the relevant Subscription Price divided by twenty-five (25).
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(f)	The Issuer shall procure that the Board of Directors<br>(i) passes a resolution to issue the Convertible Notes under a Tranche at the latest at the date of the relevant Subscription<br>Request, and (ii) reserves out of the conditional share capital of the Issuer the Shares required to cover the relevant Subscription<br>Request. The Issuer shall procure that the Board of Directors resolves to allot the Convertible Notes so subscribed to the Investor<br>without undue delay following payment.
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5
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(g)	The Issuer is not required to deliver physical certificates<br>representing the Convertible Notes to the Investor. Payment of the Subscription Price for each Tranche will evidence that the<br>Investor, until the Convertible Notes issued under a Tranche has been fully Converted, is the holder and owner of the issued Convertible<br>Notes. The Issuer will keep a written ledger in which each Convertible Note issued is recorded. If and when so requested by the<br>Investor, the Issuer shall deliver a copy of the ledger, certified by the CFO and CEO to be a true copy of the ledger, without<br>delay to the Investor.
3.	Early Termination and Suspension
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3.1	Right to Early Terminate or Suspend the Agreement
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(a)	The Investor has the right to terminate the Agreement<br>by written notice to the Issuer if:
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(i)	the Share market closing price as published by Bloomberg<br>at any time during the Commitment Period is equal to or lower than CHF 0.075;
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(ii)	a Suspension Period (as defined below) exceeds three (3)<br>months.
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(b)	In cases of Clause 3.1(a)(i), in addition to the termination<br>right, the Investor may alternatively elect, at its own discretion, to suspend the Agreement until the Share market price as published<br>by Bloomberg again equals or exceeds CHF 0.075 by written suspension notice to the Issuer (such time period, the Investor SuspensionPeriod). Notwithstanding any suspension, the Investor is at any time entitled to terminate this Agreement according to Clause<br>3.1(a).
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3.2	Consequences of the Termination of the Agreement
---	---
(a)	If the Agreement is terminated, the Maximum Commitment<br>ceases to exist and the issued Convertible Notes shall, at the Issuer’s discretion (by giving notice to the Investor), be<br>either (i) Converted within a maximum of thirty (30) calendar days, or (ii) repaid in cash by the Issuer, whereby the amount to<br>be repaid shall be calculated using the Cash Redemption Formula (as defined below).
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(b)	To the extent the Issuer requests Conversion as per<br>Clause 3.2(a), the Investor, irrespective of the formal Conversion Period following from the Terms but subject to an Event of<br>Default not having occurred and being outstanding and subject to the Investor’s rights pursuant to Clause 15, irrevocably<br>undertakes to request and execute Conversion of all outstanding Convertible Notes within the stipulated time period. Should the<br>Investor fail to execute such Conversion, the Issuer shall be authorized to require Conversion on behalf of the Investor during<br>the last ten (10) Business Days of the stipulated time period. Such Conversion shall be made through the Issuer (or any person<br>designated by the Issuer) completing a Conversion Notice on behalf of the Investor. A copy of such Conversion Notice shall immediately<br>be sent to the Investor. The Conversion Price shall be calculated as described in Clause 8(d).
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6
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

3.3	Consequences of a Suspension of the Agreement by the Investor
If the Investor suspends the Agreement pursuant to Clause<br>3.1(b), the Issuer shall not be entitled to request the Investor to subscribe for further Tranches during the duration of the<br>Investor Suspension Period. The Commitment Period shall be extended, on a day-by-day basis, by such number of days as corresponds<br>to the duration of the Investor Suspension Period.
---
4.	Purpose
---	---
The Issuer shall use all amounts received from subscriptions<br>hereunder for general corporate purposes. The Investor is not bound to monitor or verify the application of any such amount.
---
5.	Conditions Precedent
---	---
5.1	Initial Conditions Precedent
---	---
The Investor shall only be obliged to subscribe for<br>the first Tranche if it has received all of the documents set out below in form and substance reasonably satisfactory to it.
---
(a)	minutes from a meeting of the Board of Directors evidencing<br>that the Board of Directors has resolved (i) to enter into this Agreement, and (ii) to reserve out of the conditional share capital<br>of the Issuer the Shares required to cover the relevant Subscription Request for the Convertible Notes.
---	---
5.2	Further Conditions Precedent
---	---
(a)	The Investor shall only be obliged to subscribe for<br>the first Tranche and each subsequent Tranche if on the Subscription Date:
---	---
(i)	the closing price for the Shares as published by Bloomberg<br>is equal to or higher than CHF 0.075 (the Floor Price);
---	---
(ii)	the Issuer has complied with the covenants of the Issuer<br>set forth in Clause 10 hereunder;
---	---
(iii)	there is no event or change rendering any one of the representations<br>and warranties set forth in Clause 11 untrue or incorrect in any material respect;
---	---
(iv)	no Event of Default is outstanding;
---	---
(v)	the Commitment Period has not elapsed;
---	---
(vi)	there is a sufficient amount of treasury shares or listed<br>conditional share capital reserved with respect to the New Shares expected to be issuable pursuant to the Subscription Request;<br>and
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7
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(vii)	the Shares continue to be listed on SIX Swiss Exchange<br>and/or on any other Exchange, as the case may be, and the listing of the Issuer’s Shares has not been suspended or threatened<br>to be suspended from listing on SIX Swiss Exchange and/or on any other Exchange, as the case may be, as of the relevant<br>date, by SIX Swiss Exchange and/or any other Exchange, as the case may be.
(b)	The Investor has the discretionary right to waive the<br>total or partial satisfaction of any one of the above-mentioned conditions.
---	---
6.	Utilization
---	---
The Issuer may utilize the Maximum Commitment by delivery<br>to the Investor of a duly completed Subscription Request not later than 10.00 a.m. eleven (11) days before the proposed Subscription<br>Date.
---
7.	Maximum Number of Subscription Requests and Suspension
---	---
(a)	The Issuer may only deliver one Subscription Request<br>every twenty-one (21) Business Days beginning on the second Business Day following the Signing Date. Notwithstanding the above,<br>if market conditions make it possible, the Investor and the Issuer may agree on one or more additional Subscription Request(s)<br>to be made by the Investor before the end of the twenty-one (21) Business Days period until the Maximum Commitment is reached.
---	---
(b)	If the closing price for the Shares as published by<br>Bloomberg falls below the Floor Price, the Issuer shall have the right to suspend the subscription of the Tranches for a time<br>period until such closing price again equals or exceeds the Floor Price (such time period, the Issuer Suspension Period). The<br>Issuer shall immediately notify the Investor of such suspension as well as of the end of such Issuer Suspension Period. During<br>the Issuer Suspension Period, the Investor shall not have any obligation to subscribe for Tranches.
---	---
8.	Conversion of the Convertible Notes
---	---
(a)	The Investor may, by delivering to the Issuer a Conversion<br>Notice, request Conversion of each Convertible Note or part thereof held by the Investor into fully paid New Shares at any time<br>during the Conversion Period (the Conversion Notice).
---	---
(b)	The Investor is obliged to request Conversion of each<br>Convertible Note held by the Investor no later than at the expiration of the Conversion Period except in case an Event of Default<br>has occurred and is outstanding and subject to the Investor’s rights pursuant to Clause 15 and the Investor hence irrevocably<br>undertakes to request Conversion of all outstanding Convertible Notes prior to the expiration of the Conversion Period. To the<br>extent the Investor fails to request Conversion prior to the date falling ten (10) Business Days prior to the expiration of the<br>Conversion Period, the Issuer is entitled to request Conversion during the last ten (10) Business Days of the Conversion Period.
---	---
(c)	It is understood and agreed that to the extent the formal<br>Conversion Period pursuant to the Terms would extend beyond the date that falls twelve (12) months following the expiration of<br>the Commitment Period (the Backstop Date), the Investor is nonetheless obliged to request Conversion of each Convertible<br>Note held by the Investor prior to the Backstop Date except in case an Event of Default has occurred and is outstanding and subject<br>to the Investor’s rights pursuant to Clause 15 and the Investor hence irrevocably undertakes to request Conversion of all<br>outstanding Convertible Notes prior to the Backstop Date. To the extent the Investor has failed to request Conversion prior to<br>the date falling ten (10) Business Days prior to the Backstop Date, the Issuer shall be authorized to request Conversion on behalf<br>of the Investor during the last ten (10) Business Days immediately prior to the Backstop Date. Such Conversion shall be made through<br>the Issuer (or any person designated by the Issuer) completing a Conversion Notice on behalf of the Investor. A copy of such Conversion<br>Notice shall immediately be sent to the Investor.
---	---

8
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(d)	The Conversion Price (and hence the price for each New<br>Share) that will be applied at Conversion is set out in the Terms (it is noted that the Conversion Price shall never be lower<br>than CHF 0.05). The Conversion Price shall be calculated in accordance with the Terms which stipulate that ninety-five (95) percent<br>of the lowest Daily VWAP for a Share during the ten (10) Trading Days immediately preceding the Conversion Date (the CalculationPeriod) shall be used.
(e)	The issuance of New Shares will be made by the Issuer<br>within twenty-four (24) hours from the receipt of a Conversion Notice in accordance with the Terms and the step plan for creation<br>of the New Shares (the Step Plan) attached hereto as Schedule 4.
---	---
(f)	In order to deliver the New Shares to be received by<br>the Investor upon Conversion, the Issuer shall, through SIS SIX AG, the Swiss central securities depository, and/or through the<br>relevant responsible organization in case that the Issuer’s Shares are listed on an Exchange other than SIX Swiss Exchange,<br>deliver or procure to be delivered, no later than within twenty-four (24) hours from the receipt of a Conversion Notice, the New<br>Shares to the securities account of the Investor notified to the Issuer. The Issuer shall deliver such New Shares out of treasury<br>or conditional capital or any other manner compliant with Swiss law, under exclusion of any pre-emptive rights of existing shareholders.
---	---
9.	Repayment of the Tranches
---	---
As set out in the Terms, when the Issuer receives a<br>Conversion Notice, the Issuer has the right, instead of issuing New Shares, to redeem the Convertible Note in cash using the following<br>formula:
---
V = Vn / 0.97, where:
---
“V”: the amount redeemed to the Investor;<br>and
---
“Vn”: nominal value of the Convertible Note
---
(the Cash Redemption Formula).
---

9
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

The repayment shall be made in accordance with the provisions<br>set out in the Terms.
10.	Covenants of the Issuer
---	---
The Issuer covenants and agrees, in respect of the period<br>from the Signing Date and as long as any Convertible Note is outstanding:
---
(a)	It will following Conversion take all necessary actions<br>to procure that the New Shares are delivered to the securities account of the Investor as designated by the Investor.
---	---
(b)	It will take all necessary steps in order to comply<br>in all material respects with all applicable Swiss legal requirements and all applicable rules and regulations of any competent<br>authority in Switzerland and with legal requirements applicable to the Issuer in case of a listing on an Exchange other than SIX<br>Swiss Exchange in connection with the issue of the Convertible Notes and the Conversion and issue of New Shares.
---	---
(c)	At all times and in all material respect uphold, it<br>will comply and act in accordance with the relevant provisions of the Issuer’s listing agreement with SIX Swiss Exchange<br>and/or with any other Exchange, as the case may be, the rules applying to companies whose shares are listed on SIX Swiss Exchange<br>and/or on any other Exchange, as the case may be, the articles of association of the Issuer, and any and all other rules and regulations<br>applicable to the Issuer from time to time.
---	---
(d)	It will take any necessary steps and measures in order<br>for the New Shares to be listed and tradable upon issuance.
---	---
(e)	The Issuer will, and the Issuer will cause the other<br>Group Companies to:
---	---
(i)	insure their assets and businesses in such manner and<br>to such extent as is customary for companies engaged in the same or similar business in similar locations; and
---	---
(ii)	pay and discharge all taxes, assessments and governmental<br>charges or levies imposed upon them or upon their income or profits, or upon any of their properties; provided that it shall not<br>be required to pay or discharge any such tax, assessment, charge, levy or claim which is being contested in good faith or on which<br>an agreement would be found by the relevant authorities.
---	---
(f)	subject to Clause 10(g), the Issuer shall give the Investor<br>promptly notice of any draw-down with respect to any of its existing or future other standby equity distribution agreements, equity<br>lines or similar instruments.
---	---
(g)	The Issuer shall refrain from disclosing, and shall<br>cause its officers, directors, employees, advisors and agents to refrain from disclosing, any material non-public information<br>to the Investor without also disseminating such information to the public.
---	---

10
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

11.	Representations and Warranties of the Issuer
The Issuer hereby represents and warrants to the Investor<br>that the representations and warranties given in this Clause shall be true and correct at the Signing Date and at each Subscription<br>Date:
---
(a)	The Issuer is duly incorporated and validly existing<br>under the laws of Switzerland and has the requisite power and authority to enter into and perform its obligations under this Agreement,<br>the Convertible Notes and pursuant to any certificate or other document furnished or to be furnished under this Agreement. The<br>Issuer has full corporate power and all necessary licenses, permits and authorizations to carry on its business as now conducted<br>and to own, lease and operate the assets and properties necessary in connection therewith. All issued shares of the Issuer are<br>fully paid-in and non-assessable.
---	---
(b)	The Issuer or any of the Material Subsidiaries have<br>not filed any petition for their winding-up, are not insolvent within the meaning of applicable laws (subject to subordination<br>declarations, as per the most recent reports), and have not made any assignment or initiated any arrangement with their creditors,<br>nor has any petition for receivership or any administration order been presented in respect of any of the Group Companies. No<br>receiver or liquidator has been appointed in respect of the Group Companies or any of their material assets. A Material Subsidiary<br>is any subsidiary or affiliate which contributes for more than 25% of the total turnover of the Issuer group.
---	---
(c)	This Agreement, and any certificate or other document<br>furnished or to be furnished under this Agreement and the performance by the Issuer of its obligations under them have been duly<br>authorized by all necessary corporate action on the part of the Issuer, and this Agreement and any other document or instrument<br>executed in connection with this Agreement including each Tranche will, when executed, constitute valid and binding and enforceable<br>obligations of the Issuer in accordance with their respective terms.
---	---
(d)	The execution by the Issuer of this Agreement and any<br>other document or instrument in connection with it, and the performance by the Issuer of its obligations under the Agreement and<br>the consummation of the transaction provided for in this Agreement, do not and will not result in a breach of any provision of<br>the articles of association of the Issuer or, to the best of the Issuer’s knowledge of any applicable law, order, judgement<br>or decree of any court or governmental agency or of any agreement to which the Issuer is a party or by which the Issuer is bound.
---	---
(e)	The Issuer has fully complied with all reporting requirements<br>and other obligations in accordance with Swiss securities laws and regulations of SIX, in particular with Articles 49 through<br>56 of the SIX listing regulations. The Issuer’s consolidated financial statements as of and for the period ended December<br>31, 2019 and 2018 fairly present, in all material respects, the consolidated financial position of the Issuer as at December 31,<br>2019 and 2018, respectively, and its consolidated results of operations and its consolidated cash flows for the years then ended<br>in accordance with U.S. GAAP. From December 31, 2019 until the date hereof, the business of the Issuer has been conducted in the<br>ordinary course of business in a manner consistent with past practice, unless otherwise disclosed by the Issuer in public announcements<br>made in accordance with the pertinent stock exchange rules.
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11
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(f)	The Investor has solely relied on publicly available<br>information disclosed by the Issuer. Taking the respective dates of, and the periods referred to in, such information into account,<br>including the timing of the regular reporting duties, such information does, at such dates and for such periods, not contain any<br>untrue statement of material fact or omit to state a material fact necessary to make the statements therein (except to the extent<br>deferral of disclosure is permissible under applicable law, including SIX regulations) and are, in the light of the circumstances<br>under which they are made, not misleading.
(g)	The Issuer is not required to obtain any consent, waiver,<br>authorization or order of, or make any filing or registration with, any court or other federal, state, provincial, local or other<br>governmental or regulatory authority in connection with the execution, delivery and performance by the Issuer of this Agreement<br>and the delivery of the New Shares to the Investor, nor to issue of a prospectus according to Swiss law or the listing rules of<br>SIX Swiss Exchange and/or according to the rules of any other Exchange, if applicable.
---	---
(h)	The Shares are, and the New Shares will upon issuance<br>be, listed on SIX Swiss Exchange and/or on any other Exchange, as the case may be.
---	---
(i)	There are no material suits, administrative, arbitration<br>or other proceedings (including but not limited to tax proceedings) pending or to the Issuer’s knowledge threatened against<br>any of the Group Companies, and there are no such material suits or proceedings pending or to the Issuer’s knowledge threatened<br>by the Group Companies against any other person, nor are there to the Issuer’s knowledge any circumstances which may result<br>in such material suits, administrative, arbitration or other proceedings, the outcome of which, if it were unfavorable, would<br>individually have a Material Adverse Change.
---	---
(j)	Each Convertible Note will constitute direct, unconditional,<br>unsecured and unsubordinated obligations of the Issuer and, at all times so long as any amount thereunder is outstanding, shall<br>rank equally with all other present or future unsecured and unsubordinated debt securities of the Issuer.
---	---
(k)	The Issuer has not, directly or indirectly, made any<br>agreement or commitment with or to any investors where as a result of the issuance or sale of Shares under this Agreement any<br>person or entity would have (i) pre-emptive rights or rights of first refusal with respect to the Shares to be delivered to the<br>Investor or (ii) other rights to purchase or receive Shares or other securities of the Issuer.
---	---
(l)	Neither the Issuer and its Affiliates nor, to the knowledge<br>of the Issuer, any director, officer, agent, employee or Affiliate of any of them is a person or entity that is, or is owned fifty<br>(50) percent or more or controlled by one or more persons or entities that are:
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12
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(i)	on the list of Specially Designated Nationals and Blocked<br>Persons maintained by the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC SDN List);
(ii)	the subject of any economic sanctions administered or<br>enforced by OFAC or the U.S. State Department, the United Nations Security Council (UNSC), the European Union **(EU),**Her Majesty’s Treasury (HMT), or other relevant sanctions authority (collectively, Sanctions), nor has<br>a place of business in, or is operating, organized, resident or doing business in, a country or territory that is, or whose government<br>is, the subject of OFAC’s sanctions programs (including, without limitation, Crimea, Cuba, Iran, North Korea, Sudan and<br>Syria) (Sanctions Programs).
---	---
The Issuer and its Affiliates shall not, directly or<br>indirectly, use the proceeds received under this Agreement, or lend, contribute, facilitate or otherwise make available such proceeds,<br>directly or indirectly, to any Person: (a) to fund, directly or indirectly, any activities or business of or with any Person that<br>is identified on the OFAC SDN List or that is an entity that is owned fifty (50) percent or more by one or more persons that are<br>on the OFAC SDN List, or in any country or territory, that, during the time of such funding activities, is, or whose government<br>is, the subject of Sanctions or Sanctions Programs; or (b) in any other manner that will result in a violation of Sanctions. The<br>Issuer is not in violation of any of the sanctions imposed pursuant to CAATSA.
---
12.	Representations and Warranties and Covenants by the Investor
---	---
The Investor hereby represents and warrants to the Issuer<br>that the representations and warranties given in this Clause shall be true and correct at the Signing Date and at each Subscription<br>Date:
---
(a)	The Investor is duly incorporated and validly existing<br>under the laws of Switzerland and has the requisite power and authority to enter into and perform its obligations under this Agreement,<br>the Convertible Notes and in any certificate or other document furnished or to be furnished under this Agreement. The Investor<br>has full corporate power and all necessary licenses, permits and authorizations to carry on its business as now conducted and<br>to own, lease and operate the assets and properties necessary in connection therewith.
---	---
(b)	The Investor has not filed any petition for winding-up,<br>is not insolvent within the meaning of applicable laws, and has not made any assignment or initiated any arrangement with its<br>creditors, nor has any petition for receivership or any administration order been presented in respect of the Investor. No receiver<br>or liquidator has been appointed in respect of the Investor or any of its material assets.
---	---
(c)	This Agreement, and any certificate or other document<br>furnished or to be furnished under this Agreement and the performance by the Investor of its obligations under them have been<br>duly authorized by all necessary corporate actions on the part of the Investor, and this Agreement and any other document or instrument<br>executed in connection with this Agreement including each Tranche will, when executed, constitute valid and binding and enforceable<br>obligations of the Investor in accordance with their respective terms.
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13
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(d)	The execution by the Investor of this Agreement and<br>any other document or instrument in connection with it, and the performance by the Investor of its obligations under the Agreement<br>and the consummation of the transaction provided for in this Agreement, do not and will not result in a breach of any provision<br>of the articles of association of the Investor or, to the best of the Investor’s knowledge of any applicable law, order,<br>judgement or decree of any court or governmental agency or of any agreement to which the Investor is a party or by which the Investor<br>is bound.
(e)	The Investor is a person other than a “U.S. person”<br>(as defined in Regulation S (Regulation S) under the U.S. Securities Act of 1933, as amended (the Securities Act) -U.S. Person(s)) and is located outside the United States. The Investor understands that the Convertible Notes offered to or<br>purchased by it are subject to restrictions on resale into the United States and to U.S. Persons for a period of 40 days after<br>the issuance of such Convertible Notes in the name of the Investor (each such period, the Restricted Period), and agrees<br>that, during the Restricted Period, it will not (x) offer, sell, pledge or otherwise transfer such Convertible Notes into the<br>United States or to U.S. Persons, and that any such sale, offer, sale, pledge or transfer will be conducted in an “offshore<br>transaction” (as defined in Regulation S) and without “directed selling efforts” (as defined in Regulation S)<br>in the United States or (z) deposit the New Shares in an unrestricted depositary receipt facility (including the Company’s<br>ADS facility in the United States). The Investor understands that the Convertible Notes and the New Shares are being offered and<br>sold to it pursuant to an exemption from registration under the Securities Act, or transaction not subject to, the registration<br>requirements of the Securities Act in a transaction not involving a public offering of securities in the United States and that<br>the Convertible Notes and the New Shares have not been and will not be registered under the Securities Act or with any state or<br>other jurisdiction of the United States. The Investor agrees to notify any transferee to whom it subsequently reoffers, resells,<br>pledges or otherwise transfers the Convertible Notes or New Shares during the Restricted Period of the restrictions set forth<br>herein. In addition, prior to any such subsequent reoffer, resale, pledge or other transfer of the Convertible Notes or New Shares,<br>the Investor will obtain from such transferee a written undertaking to comply with the transfer restrictions set forth herein.
---	---
13.	Events of Default
---	---
(a)	Event of Default means any of the following occurrences<br>during the Conversion Period:
---	---
(i)	default by the Issuer in the payment of any cash amount<br>due to the Investor under the Agreement (including, for the avoidance of doubt, the payment of the Investor’s legal fees<br>and the Commitment Fee) or a breach of a covenant of the Issuer set forth in Clause 10 (not waived in writing by the Investor)<br>and which, if curable, is not cured within thirty (30) days as from the first of the following dates: (i) the date on which the<br>Issuer becomes aware of this breach and (ii) the date on which the Investor notifies such breach to the Issuer, requesting that<br>it be cured;
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14
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(ii)	the de-listing of the Shares from SIX Swiss Exchange and/or<br>from any other Exchange, as the case may be, at the request of the Issuer; for the avoidance of doubt, as long as the Shares are<br>listed on one Exchange, a delisting of the Shares from another Exchange shall not be an Event of Default;
(iii)	The issuance of the New Shares and their transfer via<br>book-entry to the Investor share account is no longer legally permitted by all laws and regulations to which the Issuer is subject;
---	---
(iv)	the Investor becomes entitled according to Clause 8.1<br>or 8.2 of the Terms to request immediate repayment of the Convertible Notes;
---	---
(v)	a Material Adverse Change or Change of Control has occurred;
---	---
(b)	Upon the occurrence of an Event of Default, the Investor<br>shall be entitled, at its sole discretion, to terminate this Agreement, in which case the Parties shall be under no further liability<br>arising out of the Agreement (except as otherwise specifically provided and except for any liability arising before or in relation<br>to such termination).
---	---
Upon such termination:
---
(i)	the Investor shall not have any obligation to subscribe<br>for any further Tranches; and
---	---
(ii)	the outstanding amount of each Tranche shall become automatically<br>redeemable in cash and the principal amount shall be paid back to the Investor within ten (10) Business Days as of the date of<br>termination of this Agreement.
---	---
14.	Listing of the Shares
---	---
As long as any Convertible Notes are outstanding and<br>for a period of sixty-three (63) Business Days thereafter, the Issuer commits to keep the Shares listed on SIX Swiss Exchange<br>and/or at any other Exchange, as the case may be.
---
15.	Redemption of the Convertible Notes
---	---
The Investor is entitled by notice to the Issuer to<br>request the immediate repayment in cash (the Redemption) of the Convertible Notes in the event of a Material Adverse Effect,<br>a Change of Control of the Issuer or an Event of Default.
---
16.	Commitment Fee
---	---
The Issuer will pay to the Investor a commitment fee<br>equal to five (5) percent of each Draw Down (the Commitment Fee). The Commitment Fee will be payable in cash pro ratavaloris of each Tranche being issued within five (5) Business Days upon receipt of invoice by the Investor.
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15
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

17.	Incentive Fee
(a)	The Investor undertakes to pay to the Issuer an incentive<br>fee equal to ten (10) percent of the Sharing Basis, as calculated according to Clause 17(b), generated on the sale of the New<br>Shares (the Incentive Fee). Any Redemption of a Tranche at the Issuer’s request shall be excluded from this incentive<br>program.
---	---
(b)	The sharing basis (the Sharing Basis) shall be<br>the positive difference between the Net Capital Gain and the Net Capital Loss.
---	---
Where:
---
Net Capital Gain is the positive difference between<br>the sale price of all New Shares sold by the Investor (during a calendar quarter as regards the Quarterly Statement and in the<br>aggregate under this Agreement as regards the Final Statement) and the Conversion Price paid for the relevant sold New Shares<br>minus the Transaction Costs.
---
Net Capital Loss is the negative difference between<br>the sale price of all New Shares sold by the Investor (during a calendar quarter as regards the Quarterly Statement and in the<br>aggregate under this Agreement as regards the Final Statement) and the Conversion Price paid for the relevant New Shares minus<br>Transaction Costs.
---
(c)	The Investor undertakes to provide to the Issuer, five<br>(5) Business Days after the end of each month, a statement setting out all transactions made by the Investor during such month.
---	---
(d)	No later than five (5) Business Days after the expiration<br>of each calendar quarter, a statement of the New Shares sold during the previous calendar quarter (the **Quarterly Statement)**shall be sent by the Investor to the Issuer in order to determine the amount of the Incentive Fee for such calendar quarter.
---	---
(e)	No later than five (5) Business Days after the date<br>on which all the New Shares have been sold, a final statement of the New Shares sold during the Commitment Period (the FinalStatement) shall be sent by the Investor to the Issuer in order to determine the amount of the Incentive Fee. To the extent<br>such final Incentive Fee would differ from the aggregate amount paid under the Quarterly Statement, the difference shall be paid<br>to the Investor or the Issuer, as the case may be.
---	---
(f)	The amount of the Incentive Fee to be paid by the Investor<br>to the Issuer according to this Clause 17, will be paid twice a year within five (5) Business Days upon receipt of invoice by<br>the Investor.
---	---
18.	Bank Accounts and Payments
---	---
(a)	All payments pursuant to this Agreement shall be made<br>to the following bank accounts: Issuer’s bank account:
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16
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

***

IBAN: ***

BIC: ***

Clearing No: ***

Account holder: WISeKey International Holding AG

Investor’s bank account:

***

***

***

***

Account holder: Nice & Green SA, Chemin du Joran 10, 1260 Nyon

or any other bank accounts indicated by the Parties.

(b)	All payments to be made by the Issuer pursuant to this<br>Agreement shall be made without (and free and clear of any deduction for) set-off or counterclaim.
(c)	Any payment which is due to be made on a day that is<br>not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business<br>Day (if there is not).
---	---
(d)	The Investor may set-off any matured obligation due<br>from the Issuer under this Agreement against any matured obligation owed by the Investor to the Issuer provided that the Investor<br>shall not be entitled to set-off any amounts against the obligation to pay the Subscription Price for a Tranche.
---	---
19.	Investor Meetings
---	---
During the Commitment Period, the Investor will, without<br>separate consideration, arrange four (4) non-deal investor road show meetings in Geneva, Paris, Frankfurt and Monaco. The investors<br>invited shall comprise high net worth individuals, family offices and fund managers interested in investing in growth companies<br>and technology companies. The organization of such meetings is complimentary and excludes catering. The details of the investor<br>meetings will be regulated in a separate agreement to be mutually agreed upon between the Parties.
---
20.	Miscellaneous
---	---
20.1	Notices
---	---
(a)	All notices, requests, demands, approvals, waivers and<br>other communications required or permitted under this Agreement must be in writing in English and shall be deemed to have been<br>received by a Party when:
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17
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(i)	if delivered by post, unless actually received earlier,<br>on the fifth (5th) Business Day (provided that a copy of the notice has also been sent by e-mail on the date of dispatch);
(ii)	if delivered by hand, on the day of delivery; and
---	---
(iii)	if delivered by e-mail, upon confirmation by the receiving<br>Party.
---	---
(b)	The address and e-mail address for notices shall be:
---	---
(i)	if to the Issuer:
---	---

WISeKey International Holding AG

Address: General-Guisan-Strasse 6, 6300 Zug, Switzerland

Attention: Chief Financial Officer

E-mail address: pward@wisekey.com

Copy:

Homburger AG

Address: Prime Tower, Hardstrasse 201, 8005 Zurich, Switzerland Attention to: David Oser

E-Mail addresses: david.oser@homburger.ch

(ii)	if to the Investor:

Nice & Green S.A

Address: Chemin du Joran 10, 1260 Nyon, Switzerland

Attention to: Marc Cattelani andlor Benoit Villers

E-mail addresses: mcattelani@nicengreen.ch

• bvillers@nicengreen.ch

Each Party shall provide three (3) Business Days’<br>prior notice to the other Party of any change in address or e-mail address.
20.2	Waivers and Amendments; Non-Contractual Remedies; Preservation<br>of Remedies
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(a)	This Agreement may be amended, superseded, cancelled,<br>renewed or extended, and the terms hereof may be waived, only by a written instrument signed by authorized representatives of<br>the Parties or, in the case of a waiver, by an authorized representative of the Party waiving a condition or compliance. No such<br>written instrument shall be effective unless it expressly recites that it is intended to amend, supersede, cancel, renew or extend<br>this Agreement or to waive a condition or compliance with one or more of the terms hereof, as the case may be.
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(b)	No delay on the part of either Party in exercising any<br>right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either Party of any<br>such right, power or privilege, or any single or partial exercise of any such right, power or privilege, preclude any further<br>exercise thereof or the exercise of any other such right, power or privilege.
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18
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(c)	The rights and remedies herein provided are cumulative<br>that either Party based upon, arising out of or otherwise in respect of any inaccuracy in or breach of any representation, warranty,<br>covenant or agreement contained in this Agreement shall in no way be limited by the fact that the act, omission, occurrence or<br>other facts upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation,<br>warranty, covenant or agreement contained in this Agreement (or in any other agreement between the Parties) as to which there<br>is no inaccuracy or breach.
20.3	Binding Effect; No Assignment; No Transfer of Convertible<br>Notes
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(a)	This Agreement will be binding upon and inure to the<br>benefit of the Parties and their respective successors and permitted assigns. This Agreement is not assignable except by operation<br>of law; provided that the Investor may assign all or any of its rights under this Agreement to one or more of its Affiliates,<br>it being understood that if the Investor makes such an assignment, it shall nonetheless remain liable for the performance of its<br>obligations pursuant to this Agreement.
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(b)	The Investor may not transfer the Convertible Notes.
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20.4	Interpretation
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In case of any discrepancy between the provisions of<br>this Agreement and the Terms the provisions of this Agreement prevail. The Parties undertake to take the necessary actions to<br>implement the foregoing, including but not limited to consenting to registration of changes to the Terms.
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20.5	Captions
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All Clause titles or captions contained in this Agreement<br>are for convenience only, shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this<br>Agreement. All references herein to sections or clauses shall be deemed references to such parts of this Agreement, unless the<br>context shall otherwise require.
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20.6	Market Abuse Regulation
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The Parties confirm that they are aware of the laws<br>and regulations in force applicable to the communication or use of inside information within the meaning of Article 142 FMIA,<br>and the financial and administrative penalties incurred in the event of violation of these rules and undertake to comply with<br>all regulations applicable to the communication and use of inside information.
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20.7	Fees and Expenses
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Each Party shall pay its own costs and expenses, incurred<br>in relation to the negotiation, preparation, signing and carrying into effect of this Agreement provided however that, as compensation<br>for the Investor’s services in connection with the issuance of the Tranches, the Issuer shall pay to the Investor the following<br>non-refundable fees and expenses:
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19
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(a)	the Commitment Fee payable according to the terms and<br>conditions of Clause 16 above; and
(b)	reimbursement of documented legal expenses reasonably<br>incurred by the Investor, capped at CHF 30,000 (plus any VAT) in connection with the entering into this Agreement payable by the<br>Issuer within thirty (30) days of the invoice date.
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20.8	Advisors
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Each Party acknowledges that the other Party has not<br>acted as an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. Each Party confirms that:
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(a)	its own independent investigation and appraisal of the<br>transactions contemplated hereby as it deems necessary has been made by it; and
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(b)	all documentation, including this Agreement has been<br>reviewed and discussed with its own advisors concerning such matters.
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Investment Agreement between W SeKey International Holding<br>AG and Nice & Green S.A. 21 1 32 A Party shall therefore not have any responsibility or liability to the other Party with<br>respect thereto.
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20.9	Confidentiality
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Each of the Parties to this Agreement hereby severally<br>undertakes to each other that it will not make any public announcement or statement or communication or disclosure of whatever<br>nature regarding this Agreement without the prior written consent of the other Party (save where required by the SIX Swiss Exchange<br>rules, or any applicable law or the rules of any regulatory body, in which event the relevant Party will consult to the extent<br>legally permitted and practically possible with the other Party prior to the making of such announcement, statement, communication<br>or disclosure but will not be required to obtain the prior consent of the other Party). It is understood and agreed that the Investor<br>has prior to the Signing Date approved a press release to be issued by the Issuer immediately following the Signing Date.
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21.	Taxes
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All payments under the Convertible Notes will be made<br>without deduction or withholding of any applicable taxes. Any stamp taxes or securities transfer taxes will be borne by the Issuer.
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22.	Indemnification
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To the extent permissible under Swiss law, the Issuer<br>agrees to defend, protect, indemnify and hold harmless the Investor, and all of its officers, directors, partners, employees and<br>agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively<br>the Investor Indemnities) from and against any damages, and expenses in connection therewith, including reasonable attorneys’<br>fees (the Indemnified Liabilities), incurred by the Investor Indemnitees or any of them as a result of, or arising out<br>of, or relating to (a) any material misrepresentation or breach of any representation or warranty made by the Issuer in this Agreement<br>or any other certificate, instrument or document contemplated hereby, (b) any material breach of any covenant, agreement or obligation<br>of the Issuer contained in this Agreement or any other certificate, instrument or document contemplated hereby executed by the<br>Issuer.
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20
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

23.	Entire Agreement
This Agreement together with the terms and conditions<br>for the Terms represents the full agreement of the Parties. It is a substitute for and replaces all agreements and negotiations,<br>oral or written, past and present dealing and agreements with respect to the matters discussed herein.
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24.	Force Majeure and Limitation
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A Party shall not be held responsible for any damage<br>arising out of any legal enactment, or any measure undertaken by a public authority, or war, strike, lockout, boycott, blockade<br>or any similar circumstance. The reservation in respect of strikes, lockouts, boycotts and blockades applies even if the Party<br>takes such measures, or is subject to such measures. A Party shall not in any case be held responsible for any indirect damage,<br>consequential damage and/or loss of profit. Should there be an obstacle as described above for a Party to take any action in compliance<br>with this Agreement, such action may be postponed until the obstacle has been removed.
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25.	Execution
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This Agreement may be executed in any number of counterparts,<br>and by the Parties on separate counterparts, each of which, when so executed and delivered, shall be an original, but together<br>the counterparts shall constitute one document.
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26.	Governing Law and Jurisdiction
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(a)	This Agreement (including the below jurisdiction clause)<br>shall be governed by and construed in accordance with the substantive laws of Switzerland, excluding its conflict of laws principles<br>providing for the application of the laws of any other jurisdiction.
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(b)	Any dispute, controversy or claim arising out of, or<br>in connection with, this Agreement, or the breach, termination or invalidity thereof, shall be submitted to the jurisdiction of<br>the ordinary courts of Zurich, Switzerland.
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21
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

(c)

The Parties undertake and agree that all proceedings<br>conducted with reference to this jurisdiction clause will be kept strictly confidential. This confidentiality undertaking shall<br>cover all information disclosed in the course of such proceedings, as well as any decision or ruling that is made or declared<br>during the proceedings. Information covered by this confidentiality undertaking may not, in any form, be disclosed to a third<br>party without the written consent of the other Party. This notwithstanding, a Party shall not be prevented from disclosing such<br>information in order to safeguard in the best possible way his rights vis-a-vis the other Party in connection with the dispute,<br>or if the Party is obliged to so disclose pursuant to statute, regulation, a decision by an authority, a stock exchange contract<br>or similar rule or regulation.

[Remainder of page intentionallyleft blank][Signatures follow on next page]

22
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

/s/ Carlos Moreira	/s/ Peter Ward
Name: Carlos Moreira<br><br> <br>Function: CEO	Name: Peter Ward<br><br> <br>Function: CFO
/s/ Marc Cattelani
Marc Cattelani<br><br> <br>Chairman of the Board of Directors

23
Investment Agreement between WISeKey International Holding AG and Nice & Green S.A.

Schedule 1

Terms and Conditions for the Convertible Notes

[Separate document]

24

1/11

Confidential

TERMS AND CONDITIONS FOR CONVERTIBLE NOTES

1.	Definitions
In these terms and conditions, the following means:
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ADSs	American Depositary Shares representing Class B Shares
Business Day	a Trading Day when banks in Switzerland are open for general banking business (other than over the internet only).
Cash Redemption Formula	shall have the meaning ascribed to it in Section 4(g).
Change of Control	means:
	(a)          <br> an event or series of events resulting in one or more persons acting in concert (except for Mr. Carlos Creus Moreira) owning or<br> controlling 50.01 percent or more of the votes in the Company;<br><br> <br><br><br> <br>(b)          <br> the Company ceasing to be listed on any market administered by SIX Swiss Exchange and/or any other Exchange; or<br><br> <br><br><br> <br>(c)          <br> any person being obliged under the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives<br> Trading of June 19, 2015, as amended from time to time (the FMIA), to make a public offer for all the shares in the Company.<br><br> <br><br><br> <br>For the purposes of this definition "acting<br> in concert" means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively<br> cooperate, through the acquisition directly or indirectly of shares of the Issuer by any of them, either directly or indirectly,<br> to obtain control of the Company.
Commitment Period	the Commitment Period pursuant to the Investment Agreement.

2/11

Company	WISeKey International Holding Ltd.
Conversion	exchange of debt pursuant to a Convertible against New Shares pursuant to these terms and conditions.
Conversion Notice	shall have the meaning set forth in the Investor Agreement and to be sent to via email to: exercise_notice@WISEKEY.COM;
Conversion Period	the period during which notice of Conversion can be given and must be received according to these terms and conditions, as further specified in the Investment Agreement.
Conversion Price	means the price per New Share payable at Conversion and calculated according to these terms and conditions.
Convertible	a debenture issued by the Company pursuant to these terms and conditions and which entitles the Convertible Holder to convert its debt into New Shares pursuant to these terms and conditions.
Convertible Holder	the holder of a Convertible.
Daily Volume Weighted Average Price	means the daily volume weighted average price as published by Bloomberg LP (or should Bloomberg LP cease to exist or cease to publish daily volume weighted average price, by any other financial news and data service provider of reference publishing reliable data on the Shares).
Event of Default	shall have the meaning ascribed to it in Section 7.
Exchange	shall mean any stock exchange, which shall include at least one of Euronext, LSE or Nasdaq.
Investment Agreement	the Investment Agreement entered into between the Company and the Investor on or around May 11, 2020.
Investor	Nice & Green SA.
Material Adverse Change	any event external to the Company having an effect on the value of the business, operations, properties, or financial condition of the Company that is material and adverse to the Company and its affiliates, taken as a whole and/or any condition, circumstance or situation that would prohibit or materially and significantly impact the ability of the Company to enter into and perform any of its obligations under the Investment Agreement in any material respect.

3/11

	For the purpose of this definition, "affiliate" shall mean a person or entity that directly or indirectly controls, is controlled by, or is under common control with, another person or entity.
New Shares	means the Shares (including, for the avoidance of doubt, Shares held in treasury) issued to the Investor following Conversion.
Reference Date	shall mean the Trading Day immediately preceding the day on which the Investor subscribes for the loan.
Restricted Period	shall have the meaning ascribed to it in Section 4(k).
Securities Act	shall have the meaning ascribed to it in Section 4(k).
Shares	shall mean, collectively, the Company's current Class B shares as issued by the Company with a nominal value of CHF 0.05 each and listed on the SIX Swiss Exchange (Class B Shares), and any new shares of the Company issued after the date of the Investment Agreement, in each case to the extent listed and tradeable on an Exchange.  For the avoidance of doubt, the Company's ADSs shall not be considered Shares.
Trading Day	any day on which the Shares are traded on SIX Swiss Exchange and/or on any other Exchange, provided that "Trading Day" shall not include (i) any day on which the Company's shares are scheduled to trade on such market for less than 4.5 hours (it being specified for the avoidance of doubt that any day during which there would be no effective trading is considered a Trading Day if such suspension is not due to a suspension requested by the Company or by SIX Swiss Exchange or any other Exchange at which the Shares might be listed) or (ii) any day that the Company's shares are suspended from trading at the request of the Company or SIX Swiss Exchange or any other Exchange at which the Shares might be listed during the final hour of trading on such market unless such day is otherwise designated as a Trading Day in writing by the Convertible Holder.
U.S. Person(s)	shall have the meaning ascribed to it in Section 4(k).
2.	Loan Amount, Interest Rate, Maturity, etc.
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(a)	The loan, which is represented by Convertibles, amounts to the higher of (i) the aggregated value<br>("traded value" as reported by Bloomberg LP) of the Shares traded on SIX Swiss Exchange during the five (5) Trading Days<br>preceding the respective Reference Date multiplied by 0.6; or (ii) CHF 125,000.
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(b)	The loan does not bear any interest.
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4/11

(c)	The Company will register the Convertibles in a debt book and hence no physical promissory notes<br>representing the Convertibles will be issued. The Convertibles will thus be considered to be issued to a certain person.
(d)	The Company assumes liability for payment of the loan and undertakes to effect payment and Conversion<br>pursuant to these terms and conditions and the Investment Agreement.
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(e)	The Company shall pay the loan amount on the due date or, if the due date is not a Business Day,<br>on the Business Day immediately after such date. The Convertible Holder is obliged to designate a bank account for payment and<br>payment shall be made to the bank account most recently designated.
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3.	Pre-Mature Repayment
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(a)	The Convertible Holder has the right to request immediate cash repayment of all Convertibles outstanding<br>upon the occurrence of a Material Adverse Effect, a Change of Control of the Company or an Event of Default, provided that a request<br>for repayment in case of an Event of Default may only be made as long as the Event of Default is outstanding.
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(b)	As set out in Sections 8.1 and 8.2, the Convertible Holder is also entitled to request premature<br>repayment in case of a merger or a de-merger.
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(c)	Following a request for premature repayment in accordance with this Section 3, payment shall be<br>made no later than ten (10) Business Days following the request for premature repayment.
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4.	Conversion
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(a)	The Convertible Holder is entitled to request Conversion during the period as from the subscription<br>of the Convertibles to and including twelve (12) months after the date of its subscription.
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(b)	The Company and the Convertible Holder may agree to shorten or prolong the Conversion Period as<br>per Clause 4(a).
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(c)	The Company may request Conversion during the ten (10) last Business Days of the Conversion Period<br>as per Clause 4(a). To the extent that the Convertible Holder has not requested Conversion during the Conversion Period, the Convertible<br>Holder shall be deemed to have requested Conversion of the Convertibles on the last Business Day of the Conversion Period as per<br>Clause 4(a).
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(d)	Conversion must always cover the entire nominal value of the Convertible for which request for<br>Conversion is made.
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(e)	The Conversion Price shall correspond to ninety-five (95) percent of the lowest Daily Volume Weighted<br>Average Price for a Share during the ten (10) Trading Days immediately preceding the day for the request for Conversion.
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(f)	Upon Conversion, one new Share shall be received for each full amount of the total nominal value<br>of the Convertibles for which Conversion is exercised corresponding to the Conversion Price. If this amount is not evenly divisible<br>by the Conversion Price, the surplus amount is waived by the Convertible Holder in connection with the Conversion.
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5/11

(g)	Upon request for Conversion, the Company, in its sole discretion, shall be entitled to, in whole<br>or in part, pay a cash consideration to the Convertible Holder instead of issuing shares in accordance with Clause 4(f). The cash<br>consideration shall be calculated using the following formula:

V = Vn / 0.97, where:

"V": the amount redeemed to the Convertible Holder; and

"Vn": nominal value of the Convertible Note

(the Cash Redemption Formula).

Any cash consideration in accordance with this Section 4(g) shall be paid no later than ten (10) Business Days following receipt of the request for Conversion.

(h)	Conversion requested by the Convertible Holder is made by submitting an application form in the<br>form stipulated and provided by the Company, duly completed and signed, to the Company at the e-mail address specified in the application<br>form. Should such application form (notice of Conversion), not have been received by the Company within the Conversion Period,<br>the right to Conversion will lapse. The notice of Conversion is binding and may not be revoked.
(i)	Conversion requested by the Company is effected by the Company in writing by informing the Convertible<br>Holder that Conversion has been requested.
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(j)	For the avoidance of doubt, the Parties agree that a Conversion into ADSs will not be available<br>to the Convertible Holder, except upon specific request by the Convertible Holder and subject to the availability of ADSs under<br>the terms of the deposit agreement for the issuance of ADSs and the written consent of the Company.
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(k)	The Investor is a person other than a "U.S. person" (as defined in Regulation S (Regulation<br>S) under the U.S. Securities Act of 1933, as amended (the Securities Act) - U.S. Person(s)) and is located outside<br>the United States. The Investor understands that the Convertible Notes offered to or purchased by it are subject to restrictions<br>on resale into the United States and to U.S. Persons for a period of 40 days after the issuance of such Convertible Notes in the<br>name of the Investor (each such period, the Restricted Period), and agrees that, during the Restricted Period, it will not<br>(x) offer, sell, pledge or otherwise transfer such Convertible Notes into the United States or to U.S. Persons, and that any such<br>sale, offer, sale, pledge or transfer will be conducted in an "offshore transaction" (as defined in Regulation S) and<br>without "directed selling efforts" (as defined in Regulation S) in the United States or (z) deposit the New Shares in<br>an unrestricted depositary receipt facility (including the Company's ADS facility in the United States ). The Investor understands<br>that the Convertible Notes and the New Shares are being offered and sold to it pursuant to an exemption from registration under<br>the Securities Act, or transaction not subject to, the registration requirements of the Securities Act in a transaction not involving<br>a public offering of securities in the United States and that the Convertible Notes and the New Shares have not been and will not<br>be registered under the Securities Act or with any state or other jurisdiction of the United States. The Investor agrees to notify<br>any transferee to whom it subsequently reoffers, resells, pledges or otherwise transfers the Convertible Notes or New Shares during<br>the Restricted Period of the restrictions set forth herein. In addition, prior to any such subsequent reoffer, resale, pledge or<br>other transfer of the Convertible Notes or New Shares, the Investor will obtain from such transferee a written undertaking to comply<br>with the transfer restrictions set forth herein.
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6/11

5.	Effectuation of Conversion

Following a request for Conversion, the issuance of new shares of the Company to the Convertible Holder, including the allocation of the new shares on the Convertible Holder's securities account, shall be effected by the Company within twenty-four (24) hours, on business days applicable in the Canton where the Company and or the Company's banks reside from receipt of such request for Conversion as set forth in the following step plan which will be executed in accordance with the standard business practices of the banks involved:

Step #	Time	Action	Responsible Party<br><br> <br>****
1	T	Nice & Green (N&G) delivers Conversion Notice to WISeKey International Holding Ltd (WISeKey), copying Zürcher Kantonalbank (ZKB), indicating, among others, the number of shares of WISeKey (WISeKey Shares) to be received.	N&G
2		ZKB sets up DB-DI instruction to SIX SIS SECOM system, indicating number of shares to be registered into SIX SIS SECOM system.	ZKB
3		ZKB informs WISeKey's share register (Computershare) and WISeKey on the execution of step #2.	ZKB
4		WISeKey confirms vis-a-vis Computershare the relevant number of WISeKey Shares to be entered into the share register.	WISeKey
5		Computershare creates relevant number of WISeKey Shares in the share register in the form of intermediated securities (Bucheffekten), registered as "Dispo-Shares".	Computershare
6		Computershare confirms (i) in SIX SIS SECOM<br> system creation of shares as instructed by ZKB is step #2 and (ii) vis-à-vis ZKB that relevant number of WISeKey Shares<br> has been created and registered in the share register as "Dispo-Shares".<br><br> <br><br><br> <br>Relevant number of WISeKey Shares is reflected<br> in SIX SIS SECOM System and WISeKey Shares are at ZKB's disposal for further steps.	Computershare
7	T + max. 24h	ZKB allocates relevant number of WISeKey Shares in tradable form of intermediated securities (Bucheffekten) on the securities account of N&G with CS.	ZKB

7/11

Step #	Time	Action	Responsible Party<br><br> <br>****
8	CS/bank of purchaser of WISeKey Shares sold by N&G instructs Computershare to enter N&G/purchaser as holder of WISeKey Shares (replacing former registration of newly created WISeKey Shares as "Dispo-Shares").	CS
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9	Computershare amends the share register accordingly.	Computershare
6.	Dividend on New Shares
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Shares created through Conversion convey right to dividend as from the first record date for dividends that occurs following effectuation of Conversion and registration of such shares into the Company's share ledger.

7.	Events of Default

The following shall constitute events of default (Events of Default):

(a)	default by the Company in the payment of any cash amount due to the Convertible Holder under the<br>Investment Agreement (including, for the avoidance of doubt, the payment of the Convertible Holder's legal fees and the Commitment<br>Fee (as defined in the Investment Agreement)) or a breach of a covenant of the Company under the Investment Agreement (not waived<br>in writing by the Convertible Holder) and which, if curable, is not cured within thirty (30) days as from the first of the following<br>dates: (i) the date on which the Company becomes aware of this breach and (ii) the date on which the Convertible Holder notifies<br>such breach to the Company, requesting that it be cured;
(b)	the delisting of the Shares from SIX Swiss Exchange and/or any other Exchange; for the avoidance<br>of doubt, as long as the Shares are listed on one Exchange, a delisting of the Shares from another Exchange shall not be an Event<br>of Default
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(c)	The issuance of the New Shares and their transfer via book-entry to the Convertible Holder share<br>account is no longer legally permitted by all laws and regulations to which the Company is subject;
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(d)	the Convertible Holder becomes entitled to request immediate repayment in accordance with Clauses<br>8.1 or 8.2;
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(e)	a Material Adverse Change or Change of Control has occurred; or
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(f)	the Company or any of its material subsidiaries voluntarily suspends or discontinues substantially<br>all of its business, liquidates substantially all of its assets except for fair consideration or on an arm's length basis, or is<br>declared bankrupt, enters into liquidation or becomes subject to company re-organization.
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8/11

8.	Merger, De-Merger, Winding-Up and Bankruptcy
8.1	Merger
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(a)	If (i) the shareholders' meeting resolves to approve a merger pursuant to which the Company shall<br>merge into another company or (ii) all shareholders of the Company sign a such merger, the Convertible Holders shall receive at<br>least equivalent rights in the absorbing company as in the Company (the absorbed company), provided that the Convertible Holders<br>are not entitled to have their Convertibles redeemed pursuant to the merger plan.
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(b)	Notwithstanding the provisions in Clause 2 above concerning maturity date, the Convertible Holders<br>may during a period of sixty (60) calendar days starting on the day after the resolution of the shareholders' meeting to approve<br>the merger plan or, when applicable, the signing of such a merger plan by all shareholders, demand immediate payment of the nominal<br>value of their Convertibles.
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(c)	The provisions in this Clause 8.1 shall not in any way limit the rights that the Convertible Holders<br>may have under law in their capacity as creditors in connection with the merger.
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8.2	De-Merger
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(a)	If (i) the shareholders' meeting resolves to approve a de-merger plan pursuant to which the Company<br>shall dissolve by means of some or all of the Company's assets and liabilities are transferred to one or several other companies<br>or (ii) all shareholders in the Company sign such a de-merger plan, the Convertible Holders shall receive at least equivalent rights<br>in the acquiring company, or when applicable, the acquiring companies, as in the Company (the transferring company), provided that<br>the Convertible Holders are not entitled to have their Convertibles redeemed pursuant to the de-merger plan.
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(b)	Notwithstanding the provisions in Clause 2 above concerning maturity date, the Convertible Holders<br>may during a period of sixty (60) calendar days starting on the day after the resolution of the shareholders' meeting to approve<br>the de-merger plan or, when applicable, the signing of such a de-merger plan by all shareholders, demand immediate payment of the<br>nominal value of their Convertibles.
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(c)	The provisions in this Clause 8.2 shall not in any way limit the rights that the Convertible Holders<br>may have under law in their capacity as creditors in connection with the de-merger.
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8.3	Winding-Up
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(a)	If it is resolved that the Company shall be wound-up, no notice of Conversion may thereafter be<br>given and no Conversion may thereafter be effected. The right to give notice of Conversion and the obligation to effect Conversion<br>ceases with the winding-up resolution, regardless of the grounds for the resolution and whether the same shall have gained legal<br>force.
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(b)	If the winding-up is not carried through, notice of Conversion may again be made and Conversion<br>again be effected in accordance with these terms and conditions.
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(c)	No later than twenty-one (21) calendar days prior to the shareholders' meeting to consider a voluntary<br>winding-up pursuant to Article 736 Number 2 of the Swiss Code of Obligations of March 30, 1911, as amended from time to time, the<br>Convertible Holders shall be notified of the contemplated winding-up. The notice shall contain a reminder of that no notice of<br>Conversion may be given nor conversion be effected after that the shareholders' meeting having resolved that the Company shall<br>be wound-up.
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9/11

(d)	The provisions in this Clause 8.3 shall not in any way limit the rights that the Convertible Holders<br>may have under law in their capacity as creditors in connection with the winding-up.
8.4	Bankruptcy
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(a)	If a court of law declares the Company bankrupt, no notice of Conversion may thereafter be given<br>and no conversion thereafter be effected. The right to give notice of Conversion and the obligation to effect Conversion ceases<br>with the bankruptcy order, regardless of the grounds for the order and whether the same shall have gained legal force.
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(b)	If the bankruptcy order is revoked, notice of Conversion may again be made and Conversion again<br>be effected in accordance with these terms and conditions.
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9.	Limitation Period for Receiving Payment
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The right to receive payment of the loan amount shall lapse ten (10) years after the due date. Funds allocated for lapsed payments shall vest in the Company.

10.	Notices

Notices concerning the Convertibles shall be sent by e-mail to each Convertible Holder at the e-mail address most recently known to the Company. The Convertible holders are obliged to inform the Company of their name and current e-mail address.

11.	Interpretation

In case of any discrepancy between the provisions of these terms and conditions and the Investment Agreement the provisions of the Investment Agreement prevail.

12.	Variation of the Terms and Conditions

The Company shall be entitled to vary these terms and conditions to the extent required by legislation, decisions of courts of law or authorities. The Convertible Holders shall be notified of any variations without unnecessary delay.

13.	Limitation of Liability
(a)	With respect to the actions incumbent on the Company, the Company shall not be held liable for<br>damage arising as a result of Swiss or foreign legislation, any action of a Swiss or foreign authority, acts of war, strikes, blockades,<br>boycotts, lockouts, or similar circumstances.
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(b)	If the Company is hindered from taking any measure due to a circumstance referred to in the first<br>paragraph, the taking of such measure may be postponed until such hinder no longer exists.
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14.	Taxes
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All payments under the Convertibles will be made without deduction or withholding of any applicable taxes. Any stamp taxes or securities transfer taxes will be borne by the Company.

10/11

15.	Governing Law and Jurisdiction
(a)	These terms and conditions and any legal issues arising thereof, shall be governed by and construed<br>in accordance with the laws of Switzerland, excluding its conflict of laws principles providing for the application of the laws<br>of any other jurisdiction.
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(b)	Any dispute, controversy or claim arising out of, or in connection with, these terms and conditions,<br>or the breach, termination or invalidity thereof, shall be submitted to the jurisdiction of the ordinary courts of Zurich, Switzerland.
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(c)	All proceedings conducted pursuant to Section 15(b), all information disclosed and all documents<br>submitted or issued by or on behalf of any of the disputing parties or the court in any such proceedings as well as all decisions<br>and awards made or declared in the course of any such proceedings shall be kept strictly confidential and may not be used for any<br>other purpose than these proceedings or the enforcement of any such decision or ruling nor be disclosed to any third party without<br>the prior written consent of the party to which the information relates or, as regards to a decision or award, the prior written<br>consent of all the other disputing parties.
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11/11

__________________________

Exhibit 4.25

Draft of 5 August 2020

CONVERTIBLE LOAN AGREEMENT

WISeKey International Holdings Ltd, a stock corporation (Aktiengesellschaft) incorporated in Switzerland and registered in the commercial register of the Canton of Zug under registration number CHE-143.782.707, with its registered office at General-Guisan-Strasse 6, 6300 Zug (the Borrower) and Crede CG III, Ltd, a limited company incorporated under [the laws of Bermudas, with registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda (the Lender; the Borrower and the Lender each a Party and together the Parties)**,**enter into this Convertible Loan Agreement (as amended, restated, supplemented or otherwise modified from time to time, the Agreement) as of August 07, 2020,

WHEREAS

(A)	The Lender intends to grant the Borrower a loan in the principal amount of USD 5,000,000 (the Loan),<br>convertible into registered shares, par value CHF 0.05 each (the Class B Shares (which term shall, for the avoidance of<br>doubt, exclude ADSs**)**), of the Borrower, subject to the terms and conditions of this Agreement;
(B)	The Borrower intends to accept the Loan, subject to the terms and conditions of this Agreement;<br>and
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(C)	This Agreement documents the terms and conditions upon which the Lender is willing to extend the<br>Loan to the Borrower, and the Borrower is willing to accept the Loan from the Lender.
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Now, therefore, the Parties agree as follows:

Definitions

Capitalized terms used in this Agreement have the meanings assigned to such terms as set forth in the body of this Agreement and referenced on Schedule 1 to this Agreement

2.	Effective Date

This Agreement, and the rights and obligations hereunder of the Parties, shall become effective subject to and upon the Borrower receiving from the Swiss Federal Tax Administration (the SFTA) and the competent cantonal tax authority a ruling (the Tax Ruling) confirming, among other things, the Swiss federal withholding tax neutrality of the Loan grant, the interest payment under the terms hereof, the Conversion and the creation of reserves from capital contributions upon the Conversion if the Conversion Shares are to be created through the subscription by an Affiliate of the Borrower of Class B Shares newly issued at par value out of the Borrower’s authorized share capital and held in treasury during the term of this Agreement (the date on which the Borrower notifies the Lender in accordance with Section 7.1 of the receipt of the Tax Ruling, the Effective Date); provided, however, that if the Tax Ruling has not been obtained within a period of thirty-five (35) Business Days after the date hereof or if the SFTA, before the expiry of the aforementioned forty-five (45)-Business Day period, rejects the Borrower’s request for a positive Tax Ruling, this Agreement and all rights and obligations of the Parties hereunder, with the exception of the provisions pursuant to Section 6(c) and Section 7, shall lapse, without any liability of one Party to the other Party.

Convertible Loan Agreement	2	14
3.	Terms of the Loan
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(a)	Loan │ Principal Amount. The principal amount of the Loan owed by the Borrower to the<br>Lender under this Agreement (the Principal Amount) shall be USD 5,000,000 (in words: five million U.S. dollars). Any amounts<br>repaid, in whatever form, shall reduce the Principal Amount and may not be re-borrowed.
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(b)	Disbursement. Subject to the satisfaction of all terms and conditions of this Agreement,<br>the Lender shall be required to make a disbursement of the Loan in the Principal Amount (the Disbursement) to the account<br>designated by the Borrower no later than 3 (in words: three) Business Days after the Effective Date (the Disbursement Date).
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(c)	Interest. The Principal Amount shall bear interest at the Interest Rate. The Borrower shall<br>pay accrued interest at the Interest Rate on the Principal Amount in arrears on the last Business Day of each calendar year quarter<br>(each an Interest Payment Date), with the first interest payment accrued on the outstanding Principal Amount due on September<br>30, 2020. The Borrower may, at its sole election, pay interest on the outstanding Principal Amount by delivering such number of<br>Class B Shares held in treasury (the Interest Payment Conversion Shares) as corresponds to the quotient of the relevant<br>interest payment amount due at the relevant Interest Payment Dante and the Interest Conversion Price. The interest accruing on<br>the outstanding Principal Amount of the Loan shall be calculated on the basis of a 360-day year for the actual number of days elapsed.
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(d)	Maturity Date. Except as otherwise provided in this Agreement, the obligations pursuant<br>to this Agreement shall become due and payable on the Maturity Date in accordance with the terms and conditions of this Agreement.
---	---
(e)	Repayment of Principal. The Principal Amount shall be repaid through a delivery of such<br>number of Class B Shares (the Conversion), as corresponds to the quotient of the Principal Amount then outstanding and the<br>Conversion Price (the Class B Shares into which the Conversion occurs hereinafter, together with the Interest Payment Conversion<br>Shares, if any, the Conversion Shares). In order to confirm the Conversion, the Lender shall be required to deliver to the<br>Borrower at the relevant Conversion Date an exercise notice, duly executed, substantially in the form set forth on Schedule<br>3(e) (the Exercise Notice). Upon the Conversion, any fraction of a Class B Share shall be rounded down to the next whole<br>Class B Share. The Conversion Shares shall be delivered to the Lender within 2 (in words: two) Trading Days after receipt of the<br>Exercise Notice by the Borrower.
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Convertible Loan Agreement	3	14
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(f)	Conversion Date. The Lender may request a Conversion of the Principal Amount by delivery<br>of the Exercise Notice at any time after the expiry of 30 (in words: thirty) calendar days after the Disbursement Date and any<br>time thereafter on or before the Maturity Date (the date on which Conversion is requested by delivery of the Exercise Notice to<br>the addressees indicated thereon the Conversion Date, it being understood that the delivery of the relevant number of Class<br>B Shares to the Lender may take up to 2 (in words: two) Trading Days.
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4.	Representations and Warranties
---	---
4.1	Representations and Warranties of the Borrower
---	---

The Borrower represents and warrants (sichert zu) to the Lender as of the date hereof, the Disbursement Date and the Conversion Date with reference to the facts and circumstances then subsisting as follows:

(a)	Organization. The Borrower is a stock corporation (Aktiengesellschaft) duly formed<br>and existing under the laws of Switzerland, and the execution, delivery and performance of this Agreement is within its organizational<br>powers, has been duly authorized, is not in contravention of applicable law or its articles of association and does not require<br>the consent or approval of any third party, including any governmental body, agency or authority.
(b)	Absence of Conflicting Obligations. The execution of this Agreement and compliance with<br>its terms will not (i) result in a breach of any of the terms and conditions of any material agreement or instrument to which Borrower<br>is a party or its assets are subject, or (ii) result in the imposition of any lien, charge, or encumbrance upon any property of<br>Borrower pursuant to, or constituting a default under, any indenture or other agreement or instrument to which Borrower is a party<br>or by which it is bound.
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(c)	Qualification to do Business. The Borrower and each of its Affiliates has the full power<br>and authority to own, lease and operate its properties and assets and to conduct its business, and is lawfully qualified to do<br>business in those jurisdictions in which business is conducted by it.
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(d)	Capacity. The Borrower has full corporate power and capacity to deliver the Conversion Shares<br>to be delivered upon conversion of the Loan.
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(e)	No Winding-up. The Borrower has not taken any action, nor have any other steps been taken<br>or legal proceedings commenced or, so far as the Borrower is aware, threatened against it seeking to adjudicate it insolvent or<br>for its winding up or dissolution or for any similar or analogous proceeding in any jurisdiction, or for it to enter into any arrangement<br>or composition for the benefit of creditors, or for the appointment of an insolvency administrator, a receiver, administrative<br>receiver, examiner, trustee or similar officer.
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Convertible Loan Agreement	4	14
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(f)	Capitalization, Shares.
---	---
(i)	The share capital of the Borrower registered in the commercial register amounts to CHF 2,131,110.53,<br>consisting of (A) 34,617,813 Class B Shares and (B) 40,021,988 registered shares with a nominal value of CHF 0.01 each (the shares<br>pursuant to (A) and (B) collectively the Existing Shares);
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(ii)	The Class B Shares are freely tradable and admitted to trading on the SIX; all Existing Shares<br>have been duly and validly issued, are fully paid and non-assessable;
---	---
(iii)	Other than as publicly disclosed by the Borrower from time to time, there are no securities or<br>other rights in issue of the Borrower or any of its subsidiaries that are convertible into or exchangeable for shares of the Borrower<br>(it being acknowledged by the Lender that the Borrower has issued, and will be issuing after the date hereof, options and other<br>rights to acquire Class B Shares in accordance with the terms of its equity compensation plans), and there are neither any claims<br>against the Borrower to buy nor any obligations of the Borrower or any of its subsidiaries to issue, any shares of the Borrower;<br>other than publicly disclosed, there are no restrictions on the transfer or voting of any of the Existing Shares of the Borrower<br>pursuant to the Borrower’s Articles of Association, any applicable law or any agreement to which the Borrower is a party;
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(iv)	Subject to compliance with the statutory provisions of Swiss corporate law, there are no restrictions<br>on the payment of dividends on the Existing Shares;
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(v)	The Conversion Shares to be delivered upon Conversion in accordance with the terms of this Agreement:
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(A)	will, if and when an Exercise Notice is delivered in accordance with the terms of this Agreement,<br>be validly issued, fully paid and non-assessable; and
---	---
(B)	will, if and when an Exercise Notice is delivered in accordance with the terms of this Agreement,<br>rank pari passu and be fungible with the outstanding Class B Shares and/or the outstanding rights representing Class B Shares<br>in issue on the relevant Conversion Date;
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(vi)	(A) No material public statement contains an untrue statement of material fact or omits to state<br>a fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they<br>were made, not misleading in any material respect, in each case as at the date it was made; and (B) in respect of each such public<br>statement, when taken together with all other such public statements, no circumstances have arisen which would result in such statement<br>containing an untrue statement of material fact or omitting to state a fact required to be stated therein or necessary to make<br>the statements therein, in light of the circumstances under which they were made, not misleading in any material respect as at<br>each date on which this representation is made or repeated;
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Convertible Loan Agreement	5	14
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(vii)	All expressions of intention or expectation contained in the Borrower’s public statements<br>are truly and honestly held and have been made on reasonable grounds after due and careful consideration and enquiry;
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(viii)	To the best knowledge of the Borrower as of the respective dates on which this representation is<br>given, no false or materially misleading information has been provided by the Borrower to the Lender or their advisors which has<br>not been subsequently corrected prior to the date on which this representation is given;
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(ix)	Except for the transactions contemplated by this Agreement, the Borrower is not aware of any price-sensitive<br>information required to be disclosed pursuant to the rules and regulations of the SIX with respect to the Borrower or its securities;
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(g)	Financial Information. The Borrower’s audited consolidated financial statements for<br>the financial years ended on 31 December 2019 give a true and fair view of the assets, the liabilities and the financial position<br>of the Borrower and its group as at the date as of which they were prepared (the Relevant Date) and of the results of the<br>operations of the Borrower and its group for the financial year or, as the case may be, period ended on the Relevant Date;
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(h)	Material Adverse Effect. Since 31 December 2019, there has been, save as publicly disclosed<br>by the Borrower as of the date of this Agreement, no Material Adverse Effect;
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(i)	Monitoring. The Borrower (A) makes and keeps accurate books, accounts, records which fairly<br>reflect the transactions and dispositions of assets of such entity and (B) maintains internal accounting controls which provide<br>reasonable assurance that (i) transactions are executed in accordance with management’s authorisation, (ii) transactions<br>are recorded as necessary to permit preparation of its financial statements and to maintain accountability for its assets and (iii)<br>access to its assets is permitted only in accordance with management’s authorization; and
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(j)	Stabilisation/Manipulation: Neither the Borrower nor any of its Affiliates, nor any Person<br>acting on its or their behalf has taken, or will take, directly or indirectly, any action which was designed to (or which might<br>reasonably be expected to) cause or result in or caused or resulted in the stabilisation or manipulation of the price of the Class<br>B Shares or any securities or other documents that embody the right to receive Class B Shares or other securities of the Issuer.
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Convertible Loan Agreement	6	14
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4.2	Representations and Warranties of the Lender
---	---

The Lender represents and warrants (sichert zu) to the Borrower as of the date hereof, the Disbursement Date and the Conversion Date with reference to the facts and circumstances then subsisting as follows as follows:

(a)	Organization. The Lender is a limited company duly formed and existing under the laws of<br>Bermuda and the execution, delivery and performance of this Agreement is within its organizational powers, has been duly authorized,<br>is not in contravention of applicable law or its articles of association and does not require the consent or approval of any third<br>party, including any governmental body, agency or authority.
(b)	Swiss Federal Withholding Tax. The Lender is considered one (1) creditor only for Swiss<br>federal withholding tax purposes.
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(c)	ADSs. The Lender represents and warrants to the Borrower that it is (i) a person other than<br>a “U.S. person” as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the **Securities Act)**and hereinafter used as so defined) located outside the United States and (ii) an “accredited investor” (as defined<br>in Regulation D under the Securities Act).
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5.	Conditions Precedent to Disbursement
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Notwithstanding any other terms of this Agreement, the Lender shall not be required to make the Disbursement unless all of the following conditions are met at or prior to the Disbursement Date of the Loan:

(a)	Continued Listing. The Class B Shares continue to be listed on the SIX and the Borrower<br>continues to satisfy the prerequisites for a continued listing on the SIX.
(b)	Representations True. The Borrower’s representations and warranties (Zusicherungen)<br>in this Agreement are in all material respects true as of the Disbursement Date, unless the applicable representation or warranty<br>is made as of a specific date, in which case the representation was true and correct in all material respects as of that date.
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(c)	Compliance With Covenants. The Borrower shall have complied with its covenants and obligations<br>under this Agreement in all material respects.
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(d)	No Event of Default. No Event of Default under this Agreement exists.
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6.	Other Covenants and Agreements
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(a)	Option to Acquire Class B Shares. The Borrower and the Lender shall, on or before the Disbursement<br>Date, with effect as of and subject to the Disbursement, execute the warrant agreement in the form attached hereto as Schedule<br>6(a).
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Convertible Loan Agreement	7	14
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(b)	Payments. All payments with respect to this Agreement to be made in cash shall be made to<br>the Lender by wire transfer of immediately available funds denominated in U.S. dollars to an account as specified by the Lender<br>reasonably prior to the maturity for any payment hereunder.
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(c)	Expenses. Each Party bears its own costs incurred in connection with this Agreement; provided,however, that the Borrower shall be responsible and liable to the Lender for the payment of the Legal Expenses.
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(d)	Tax Indemnity. The Borrower shall indemnify the Lender for any withholding or deduction<br>for or on account of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld<br>or assessed by or on behalf of Switzerland, or any political subdivision or any authority thereof or therein having power to tax,<br>in connection with the issuance and/or delivery of the Conversion Shares.
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(e)	Lender Trading Limitation. For as long as the Lender holds any Conversion Shares, the Lender<br>undertakes to limit on any Trading Day its, its Affiliates’ or any related Person’s trading in any of the Class B Shares<br>or rights representing Class B Shares to 20% or less of the daily trading volume in Class B Shares or rights representing Class<br>B Shares on and as reported by the SIX or, as the case may be, on and as reported by any other stock exchange.
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(f)	ADSs. For the avoidance of doubt, the Parties agree that a Conversion into ADSs representing<br>Conversion Shares will not be available to the Lender, except subject to the availability of ADSs under the terms of the relevant<br>deposit agreement for the issuance of ADSs and the written consent of the Borrower. The Lender further acknowledges that any Conversion<br>into ADSs is only permissible if the Borrower concludes in its discretion that the Conversion Shares (in the form of ADSs), at<br>the time of Conversion, are not “Restricted Securities” (as such is defined in Rule 144(a)(3) under the Securities<br>Act. The Lender further acknowledges and understands that any Conversion Shares acquired by it under the terms of this Agreement<br>(for purposes of this Section 6(f), the Relevant Shares) may be issued as “Restricted Securities”, and agrees<br>that so long as any Relevant Shares are “Restricted Securities”, it will segregate any Relevant Shares from any other<br>Shares or ADS that it holds that are not “Restricted Securities”, will not deposit any Relevant Shares in an unrestricted<br>depositary receipt facility (including the Borrower’s ADSs facility in the United States) and will only transfer any Relevant<br>Shares as further set forth below in this Section 6(f). The Lender further acknowledges and understands that any Relevant Shares<br>are being offered and sold to it pursuant to an exemption from registration under the Securities Act, or a transaction not subject<br>to, the registration requirements of the Securities Act in a transaction not involving a public offering of securities in the United<br>States and that any Relevant Shares have not been and will not be registered under the Securities Act or with any state or other<br>jurisdiction of the United States. The Lender agrees and covenants that so long as any Relevant Shares are “Restricted Securities”,<br>they may not be reoffered, resold, pledged or otherwise transferred except (i) outside the United States in an offshore transaction<br>in accordance with Rule 903 or 904 of Regulation S under the Securities Act or (b) pursuant to Rule 144 under the Securities Act<br>(if available) or pursuant to another available exemption, if any, from registration under the Securities Act, and that, in each<br>case, such offer, sale, pledge or transfer must be made in accordance with all applicable securities laws of each state of the<br>United States and the securities laws of any other relevant jurisdiction, as then in effect. The Lender agrees to notify any transferee<br>to whom it subsequently reoffers, resells, pledges or otherwise transfers the Relevant Shares of the restrictions set forth herein.<br>In addition, prior to any such subsequent reoffer, resell, pledge or otherwise transfer the Relevant Shares, the Lender will obtain<br>from such transferee a written undertaking to comply with the transfer restrictions set forth herein.
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Convertible Loan Agreement	8	14
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7.	General Provisions
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7.1	Notices
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(a)	All notices or other communications to be given under or in connection with this Agreement shall<br>be in writing and delivered by hand or sent (postage prepaid) by registered, certified or express mail (return receipt requested),<br>courier, facsimile or by electronic transmission in .pdf format or similar format as follows:
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if to the Lender:	Ariel Davis<br><br> <br>Crede CG III, Ltd<br><br> <br>2120 Colorado Blvd Suite 230<br><br> <br>Santa Monica, CA 90404, United States<br><br> <br>Tel.: +1 (310) 444-4346<br><br> <br>Email: ariel@crede.com<br><br> <br>Fax: +1 (310) 444-4394
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with a copy to:	Michael Wachs<br><br> <br>Crede CG III, Ltd<br><br> <br>211 East 43rd Street -4th Floor,<br><br> <br>NY, NY 10017<br><br> <br>Tel: +1 (646) 278-6785<br><br> <br>E-Mail: michael@crede.com<br><br> <br>Fax: +1 (212) 732-1131
Convertible Loan Agreement	9	14
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if<br>to the Borrower:	Peter<br>Ward, Chief Financial Officer<br><br><br><br>WISeKey International Holding Ltd<br><br><br><br>Chief Financial Officer<br><br><br><br>General-Guisan-Strasse 6, 6300 Zug<br><br><br><br>Switzerland<br><br><br><br>E-mail: pward@wisekey.com<br><br><br><br>Fax: +41 22 594 30 01
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with<br>a copy to:	David Oser<br><br><br><br>Homburger AG<br><br><br><br>Prime Tower<br><br><br><br>Hardstrasse 201<br><br><br><br>8005 Zurich, Switzerland<br><br><br><br>Email: david.oser@homburger.ch<br><br><br><br>Fax: +41 43 222 15 00
(b)	Notices delivered by hand shall be deemed delivered when actually delivered. Notices given by courier<br>shall be deemed delivered on the date delivery is promised by the courier. Notices given by facsimile or by electronic transmission<br>shall be deemed given on the date of receipt (if a Business Day), otherwise the first Business Day following receipt; provided<br>that a notice delivered by facsimile or electronic transmission shall only be effective if such notice is also delivered by hand,<br>registered mail, or given by courier on or before two (2) Business Days after its delivery by facsimile or electronic transmission.
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7.2	Entire Agreement
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This Agreement, including the Schedules, Annexes and any other documents referred to herein, constitutes the entire agreement and understanding among the Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements and understandings of the Parties relating to such subject matter.

7.3	Amendment and Waiver

This Agreement may only be modified or amended by a document signed by both Parties. Compliance with any term or provision contained in this Agreement by the Party that was or is obligated to comply or perform with such term or provision may only be waived by a document signed by the Party waiving such compliance.

7.4	No Assignment

The Lender shall not have the right to assign this Agreement or any rights or obligations hereunder without the prior written consent of the Borrower.

7.5	Confidentiality

The Lender agrees to keep all information under or in connection with this Agreement confidential and not to disclose such information to anyone other than its agents, Affiliates, and counsel, as long as it remains non-public, save to the extent required by law, regulation, administrative or court order. For the avoidance of doubt, nothing in this Agreement shall limit the Borrower from complying with its applicable disclosure obligations based on applicable law and regulations, including stock exchange regulations.

Convertible Loan Agreement	10	14
7.6	Severability
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If any part or provision of this Agreement or the application of any such part or provision to any Person or circumstance shall be held to be invalid, illegal or unenforceable in any respect by any competent arbitral tribunal, court, governmental or administrative authority, (a) such invalidity, illegality or unenforceability shall not affect any other part or provision of this Agreement or the application of such part or provision to any other Person or circumstances, and (b) the Parties shall endeavour to negotiate a substitute provision that best reflects the economic intentions of the Parties without being invalid, illegal or unenforceable, and shall execute all agreements and documents required for its implementation.

7.7	Counterparts; Delivery by Electronic Transmission

This Agreement may be executed and delivered by each party in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which taken together shall constitute one and the same Agreement. This Agreement and any other transaction document relating to this Agreement, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or other electronic transmission (e.g., email delivery in .pdf format or similar format), shall be treated in all manner and respects as an original contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person.

8.	Governing Law and Jurisdiction
(a)	Governing Law. This Agreement and any claim, controversy or dispute arising out of or related<br>to this Agreement, any of the transactions contemplated hereby, the relationship of the Parties hereunder, or the interpretation<br>and enforcement of the rights and duties of the Parties, whether arising in contract, tort or otherwise, shall be governed by and<br>construed in accordance with the substantive laws of Switzerland.
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(b)	Jurisdiction. The exclusive place of jurisdiction for any dispute, claim or controversy<br>arising under, out of or in connection with or related to this Agreement (or subsequent amendments thereof), including, without<br>limitation, disputes, claims or controversies regarding its existence, validity, interpretation, performance, breach or termination,<br>shall be the city of Zurich, Switzerland.
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[Signatures on the Next Page]

Convertible Loan Agreement	11	14

IN WITNESS WHEREOF, the Borrower and the Lender, each by its duly authorized officers, have executed this Agreement as of the day and year first written above.

WISeKey International Holding Ltd	****
/s/ Carlos MoreiraCarlos Moreira<br><br>Chief Executive Officer│Chairman of the Board of Directors	/s/ Peter WardPeter Ward<br><br>Chief Financial Officer│Member of the Board of Directors
Crede CG III, Ltd
/s/ Terren PeizerTerren Peizer<br><br>Chief Executive Officer│
Convertible Loan Agreement	12	14
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Schedule 1│Definitions

A.       Terms Defined in the Body of the Agreement

Agreement	1	Interest Payment Conversion Shares	2
Borrower	1	Interest Payment Date	2
Class B Shares	1, 15	Lender	1
Conversion	2	Loan	1
Conversion Date	3	Parties	1
Conversion Shares	2	Party	1
Converted Amount	15	Principal Amount	2
Convertible Loan Agreement	15	Relevant Date	5
Convertible Note	15	Relevant Shares	7
Disbursement	2	Securities Act	6
Disbursement Date	2	SFTA	1
Effective Date	1	Share Conversion VWAP Period	12
Exercise Notice	2	Tax Ruling	1
Existing Shares	4	VWAP	12
Interest Conversion VWAP Period	13

B.       Other Definitions

As used in this Agreement in capitalized form, the following terms shall have the following meaning:

ADSs means American Depositary Shares representing Class B Shares.

Affiliate shall mean a Person that exercises Control over a second Person, or is under Control by it, or is under common Control by the same Person.

Business Day means a day (other than a Saturday, Sunday or public holiday) when banks in Zurich, Switzerland, are open for business.

Control shall be deemed to exist if a Person (either alone or with its Affiliates) owns more than half of the voting rights or equity capital of a Person, or is otherwise able to exercise a controlling influence over another Person.

Conversion Price shall mean 92% of the lowest daily volume-weighted average price of the Class B Shares (VWAP) quoted on the SIX during the 10 (in words: ten) Trading Days immediately preceding the relevant Conversion Date or, as the case may be, the date on which an Event of Default occurs (any such period the Share Conversion VWAP Period), disregarding for purposes of determining the Conversion Price any Trading Day during the Share Conversion VWAP Period on which the Lender, any of its Affiliates or any Person related to the Lender or its Affiliates has effected any trade in Class B Shares or securities related to Class B Shares, converted into U.S. dollars at the exchange rate on the relevant Conversion Date, using as exchange rate the exchange rate reported by Bloomberg at 9 a.m. Swiss time on the Conversion Date.

Convertible Loan Agreement	13	14

Event of Default means any of the following events: (i) the Borrower’s Class B Shares are delisted from the SIX, or (ii) the Borrower’s inability, or the admission by the Borrower of its inability, to pay its debt as they fall due (zahlungsunfähig), the Borrower’s suspension of, or threat to suspend, payments on any of its debt, the Borrower’s over-indebtedness (Überschuldung) not cured within the applicable grace period, or the initiation against the Borrower or the initiation by the Borrower of: (1) bankruptcy proceedings (Konkurs) ending with the opening of bankruptcy (Konkurseröffnung), (2) proceedings leading to a provisional or a definitive composition moratorium (provisorische oder definitive Nachlassstundung) if such moratorium is granted, (3) proceedings leading to an emergency moratorium (Notstundung), (4) proceedings for a postponement of bankruptcy pursuant to Article 725a of the Swiss Code of Obligations (Konkursaufschub) or (5) any proceeding pursuant to Article 731b of the Swiss Code of Obligations if the judge orders any such measures.

Legal Expenses means all documented legal fees reasonably incurred by Lender in connection with this Agreement up to an amount of USD 30,000.

Interest Conversion Price shall mean 92% of lowest daily volume-weighted average price quoted on the SIX during the 10 (in words: ten) Trading Days immediately preceding the relevant Interest Payment Date (the Interest Conversion VWAP Period), disregarding for purposes of determining the Interest Conversion Price any Trading Day during the Interest Conversion VWAP Period on which the Lender, any of its Affiliates or any Person related to the Lender or its Affiliates has effected any trade in Class B Shares or securities related to Class B Shares, converted into U.S. dollars at the exchange rate on the relevant Interest Payment Date, using as exchange rate the exchange rate reported by Bloomberg at 9 a.m. Swiss time on the Interest Payment Date.

Interest Rate means a per annum rate of interest equal to five percent (5%).

Material Adverse Effect shall mean an event, change or occurrence which, individually or together with any other event, change or occurrence, could have a material adverse effect on the business, assets, liabilities or financial position of the Borrower and its assets taken as a whole.

Maturity Date shall mean the two-year anniversary date of the date hereof (or if such date is not a Business Day, the next Business Day) or, in the event of an Event of Default, the date on which the Event of Default occurred (or if such date is not a Business Day, the next Business Day).

Person means any individual, sole proprietorship, partnership, joint venture, trust, limited liability company, unincorporated organization, association, corporation, government, or any agency or political division thereof, or any other entity.

SIX means SIX Swiss Exchange Ltd. and the stock exchange operated by it.

Trading Days means any day that is a trading day on the SIX Swiss Exchange.

Convertible Loan Agreement	14	14

Schedule 3(e)│Form of Exercise Notice

Ladies and Gentlemen:

The undersigned is the holder of a convertible instrument (the Convertible Note) granted to it by the Borrower on August 07, 2020, pursuant to the terms of the convertible loan agreement (the Convertible Loan Agreement), such Convertible Note representing the right of the Lender to purchase and receive from the Borrower, and the obligation of the Borrower to issue to the Lender, a specified number of registered shares, par value CHF 0.05 each (the Class B Shares), at an issue price per Class B Share corresponding to the Conversion Price of CHF _______ by way of set-off with the Principal Amount. A copy of the Convertible Note as included in the Convertible Loan Agreement is attached hereto as Annex 1.

Capitalized terms shall have the meaning set forth in the Convertible Loan Agreement dated as of August 07, 2020.

We hereby exercise the right to Conversion pursuant to Section 3(e) of the Convertible Loan Agreement in respect of the Principal Amount, corresponding to CHF ____ (the ConvertedAmount). We hereby declare to set off the Converted Amount with our obligation to pay in the aggregate issue price of CHF _____ for _____ Class B Shares (such number of Class B Shares calculated by dividing the Converted Amount by Conversion Price (i.e., CHF _____).

[We hereby confirm that neither we, any of our Affiliates or any Person related to us or our Affiliates has, during the Share Conversion VWAP Period, effected any trade in Class B Shares or securities related to Class B Shares.][We [or, as applicable: one of our Affiliates, a Person related to us or our Affiliates] has effected a trade in Class B Shares or securities related to Class B Shares on the following Trading Days during the Share Conversion VWAP Period: [■]. The Conversion Price used in this Exercise Period has therefore been determined, in compliance with the requirements pursuant to the Convertible Loan Note as outlined in the “Conversion Price” definition, without any regard to any such Trading Day(s).]

The newly issued Class B Shares shall be delivered via Euroclear to: ____________

Yours sincerely,

Crede CG III, Ltd

_________________________

Exhibit 4.26

5 August 2020

Warrant Agreement

dated as of August 07, 2020

by and between

WISeKey International Holdings Ltd<br><br> <br>General-Guisan-Strasse 6, 6300 Zug, Switzerland	(hereinafter the Company)
and
Crede CG III, Ltd<br><br> <br>Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda	(hereinafter the Warrant Holder)
	(the Company and the Warrant Holder each a Party and together the Parties)

regarding the grant by the Company of the Warrant Right (as defined herein)

Warrant Agreement	2	10

WHEREAS

A.	The Company is a Swiss stock corporation (Aktiengesellschaft), registered with the commercial<br>register of the Canton of Zug, Switzerland, under identification number CHE143.782.707 and with registered office at General-Guisan-Strasse<br>6, 6300 Zug, Switzerland.
B.	As of the date hereof, the Company’s share capital registered in the commercial register<br>of the Canton of Zug, Switzerland, consists of (i) 34,617,813 registered shares, par value CHF 0.05 each (including any newly issued<br>registered shares with a nominal value of CHF 0.05, the Class B Shares) and (ii) 40,021,988 registered shares with a nominal<br>value of CHF 0.01 each. The Class B Shares are listed on the SIX (ISIN: CH0314029270).
---	---
C.	The Warrant Holder is a limited company incorporated in Bermuda, with registered office at Clarendon<br>House, 2 Church Street, Hamilton HM 11, Bermuda, and is providing financing to the Company under the terms of a certain convertible<br>loan agreement, dated as of [■], 2020 (the Convertible Loan Agreement) executed by and between the Parties concurrently<br>with this warrant agreement (the Agreement).
---	---
D.	As provided under the Convertible Loan Agreement, the Parties wish to enter into this Agreement<br>to provide for the terms and conditions pursuant to which the Warrant Holder is entitled to acquire Class B Shares in the Company<br>based on a warrant right granted by the Company to the Warrant Holder.
---	---

Now, therefore, the Parties agree as follows:

1.	Definitions

Capitalized terms used in this Agreement have the meanings assigned to such terms as set forth in the body of this Agreement and referenced in Annex 1 to this Agreement.

2.	Warrant Grant
(a)	The Company hereby grants the Warrant Holder the right (such right, the Warrant Right) to<br>acquire, upon delivery by the Warrant Holder of the Exercise Notice in accordance with Section 3, 1,675,885 Class B Shares (such<br>Class B Shares, subject to the adjustments pursuant to the terms of Section 6, the Warrant Shares) at the Exercise Price<br>during the Exercise Period. For the avoidance of doubt, the Warrant Holder shall not have any right to acquire ADSs.
---	---
(b)	The Warrant Right shall be deemed granted subject to the Convertible Loan Agreement becoming effective<br>pursuant to the terms thereof (such date hereinafter referred to as the Effective Date), with effect as of the Effective<br>Date. If the Convertible Loan Agreement does not become effective pursuant to its terms, this Agreement and all rights and obligations<br>of the Parties hereunder, with the exception of the provisions pursuant to Section 7, shall lapse, without any liability of one<br>Party to the other Party.
---	---
(c)	The Warrant may be exercised at any date and time between effective Disbursement pursuant to the<br>terms of the Convertible Loan Agreement and the close of business on the third anniversary of the Effective Date (the ExercisePeriod).
---	---
(d)	The Parties agree that the Company grants the Warrant Holder the Warrant Right as additional consideration<br>for the Warrant Holder’s provision of financing under the terms of the Convertible Loan Agreement and accordingly, no additional<br>consideration shall be due and payable by the Warrant Holder to the Company in respect of the grant of the Warrant Right hereunder.
---	---
Warrant Agreement	3	10
---	---
3.	Warrant Exercise
---	---
(a)	In order to exercise the Warrant Right, the Warrant Holder shall:
---	---
(i)	submit to the Company (and/or to such other office, agency or bank of the Company as the Company<br>may designate by giving written notice to the Warrant Holder) during the Exercise Period an exercise notice substantially in the<br>form as set forth in Annex 2 (the Exercise Notice); and
---	---
(ii)	pay a USD amount by wire transfer of immediately available funds corresponding to the result of<br>(A) the Exercise Price, multiplied by (B) the number of the Warrant Shares (the Aggregate Exercise Price) to the<br>account of the Company held with a Swiss bank, as notified to the Warrant Holder by the Company.
---	---
(b)	The Company shall deliver any objection to the Exercise Notice within two (2) Trading Days after<br>receipt of the Exercise Notice, after which the Parties shall agree in good faith on any issue raised by the Company within another<br>two (2) Trading Days.
---	---
4.	Issue and Delivery of the Warrant Shares
---	---
(a)	As soon as reasonably practicable after receipt of the Exercise Notice and the receipt of the Aggregate<br>Exercise Price, but in no event later than two (2) Trading Days after the receipt of the Exercise Notice and the receipt of the<br>Aggregate Exercise Price, the Company shall (or cause its transfer agent or other agent to) deliver via Euroclear the Warrant Shares<br>to the Warrant Holder by crediting the deposit account of the Warrant Holder (as designed by the Warrant Holder) and register the<br>Warrant Holder, subject to applicable general limitations in the Company’s Articles of Association as in effect from time<br>to time, in the Company’s share register for the number of Warrant Shares to which the Warrant Holder is entitled pursuant<br>to the terms of this Agreement and the Exercise Notice.
---	---
(b)	The Company may deliver the Warrant Shares at its discretion out of the Company’s conditional<br>share capital or out of Class B Shares held by it or any of its subsidiaries in treasury. No fractional shares shall be issued<br>under this Agreement.
---	---
(c)	The Company represents and warrants that the Warrant Shares when delivered to the Warrant Holder<br>in accordance with the terms of this Agreement shall be freely transferable and fully fungible with the Class B Shares outstanding<br>at that time.
---	---
(d)	The Company shall indemnify the Warrant Holder for any withholding or deduction for or on account<br>of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed<br>by or on behalf of Switzerland, or any political subdivision or any authority thereof or therein having power to tax, in connection<br>with the issuance and/or delivery of the Warrant Shares.
---	---
5.	Availability of Share Capital
---	---

As long as the Warrant Right remains exercisable under this Agreement, the Company shall at all times have reserved a sufficient number of Class B Shares under its conditional share capital (bedingtes Aktienkapital) and/or hold, directly or indirectly through one of its subsidiaries, Class B Shares in treasury deliverable for purposes of this Agreement. The Company represents that all Warrants Shares issuable and/or deliverable hereunder will, subject to and upon submission of the Exercise Notice and payment of the Aggregate Exercise Price as set forth in Section 3(a)(ii), be duly authorized, validly issued, fully paid and non-assessable.

Warrant Agreement	4	10
6.	Adjustments
---	---
(a)	If at any time during which the Warrant Right remains outstanding and unexpired, the Class B Shares<br>are split, subdivided or combined into a different number of shares or securities of the same class, the number of Warrant Shares<br>to which the Warrant Holder is entitled upon exercise of the Warrant Right shall be proportionately increased in case of a split<br>or subdivision, and conversely, the number of Warrant Shares issuable upon exercise of the Warrant Right shall be proportionately<br>decreased in case of a combination.
---	---
(b)	If at any time during which the Warrant Right remains outstanding and unexpired, the Company, by<br>reclassification of shares or otherwise, changes any of the Class B Shares into the same or a different number of shares or securities<br>of any other class or classes, the Warrant Right shall, upon effectiveness of such reclassification, represent the right to purchase<br>such number and kind of shares or securities as would have been issuable and/or deliverable as the result of such change with respect<br>to the shares or securities that were subject to the purchase rights under the Warrant Right immediately prior to such reclassification<br>or other change and the number of Warrant Shares shall therefore be adjusted, to the extent required, to maintain the entitlements<br>under the Warrant Right as at the time the Warrant Right has been granted.
---	---
(c)	In the event of a merger, combination or reorganization of the Company, as a result of which an<br>entity other than the Company becomes the listed parent of the current group headed by the Company {including in case of a combination<br>with a listed company through a reverse merger or otherwise), the Company shall undertake reasonable best efforts to procure, to<br>the extent in its power, that the Warrant Right is replaced by warrants or similar rights of the new (listed) parent that confer<br>substantially the same rights.
---	---
(d)	For the avoidance of doubt, if at any time during which the Warrant Right remains outstanding and<br>unexpired the Company:
---	---
(i)	increases its ordinary share capital; and/or
---	---
(ii)	increases or creates additional authorized share capital and/or conditional share capital; and/or
---	---
(iii)	issues new conversion, exchange, option or other exercise rights that are not covered by existing<br>or newly created ordinary share capital, authorized share capital and/or conditional share capital,
---	---

the number of Warrant Shares issuable and/or deliverable upon exercise of the Warrant Right shall not be adjusted.

(e)	Irrespective of any protection rights set forth in this Section 5, article 653d para. 2 of the<br>Swiss Code of Obligations shall remain reserved.
7.	Other Provisions
---	---
7.1	Taxes
---	---

The issuance and/or delivery of Warrant Shares shall be made without charge to the Warrant Shares of any issue or transfer tax in respect of the issuance and/or delivery of such Warrant Shares (other than, for the avoidance of doubt, standard banking costs customarily charged to the recipient of securities), all of which taxes shall be paid by the Company.

Warrant Agreement	5	10
7.2	Representations │Covenants of the Warrant Holder
---	---

The Warrant Holder represents and warrants to the Company that it is (i) a person other than a “U.S. person” as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the Securities Act) and hereinafter used as so defined) and located outside the United States and (ii) an “accredited investor” (as defined in Regulation D under the Securities Act).

The Warrant Holder acknowledges and understands that any Warrant Shares acquired by it under the terms of this Agreement (for purposes of this Section 7.2, the Relevant Shares) may be issued as “Restricted Securities”, and agrees that so long as any Relevant Shares are “Restricted Securities”, it will segregate any Relevant Shares from any other Company shares or ADS that it holds that are not “Restricted Securities”, will not deposit any Relevant Shares in an unrestricted depositary receipt facility (including the Company’s ADSs facility in the United States) and will only transfer any Relevant Shares as further set forth below in this Section 7.2. The Warrant Holder further acknowledges and understands that any Relevant Shares are being offered and sold to it pursuant to an exemption from registration under the Securities Act, or a transaction not subject to, the registration requirements of the Securities Act in a transaction not involving a public offering of securities in the United States and that any Relevant Shares have not been and will not be registered under the Securities Act or with any state or other jurisdiction of the United States. The Warrant Holder agrees and covenants that so long as any Relevant Shares are “Restricted Securities”, they may not be reoffered, resold, pledged or otherwise transferred except (i) outside the United States in an offshore transaction in accordance with Rule 903 or 904 of Regulation S under the Securities Act or (b) pursuant to Rule 144 under the Securities Act (if available) or pursuant to another available exemption, if any, from registration under the Securities Act, and that, in each case, such offer, sale, pledge or transfer must be made in accordance with all applicable securities laws of each state of the United States and the securities laws of any other relevant jurisdiction, as then in effect. The Warrant Holder agrees to notify any transferee to whom it subsequently reoffers, resells, pledges or otherwise transfers the Relevant Shares of the restrictions set forth herein. In addition, prior to any such subsequent reoffer, resell, pledge or otherwise transfer the Relevant Shares, the Warrant Holder will obtain from such transferee a written undertaking to comply with the transfer restrictions set forth herein.

7.3	Notices
(a)	All notices or other communications to be given under or in connection with this Agreement shall<br>be in writing and delivered by hand or sent (postage prepaid) by registered, certified or express mail (return receipt requested),<br>courier, facsimile or by electronic transmission in .pdf format or similar format as follows:
---	---
if to the Warrant Holder:	Ariel Davis<br><br> <br>Crede CG III, Ltd<br><br> <br>2120 Colorado Blvd, Suite 230<br><br> <br>Santa Monica, CA 90404<br><br> <br>Los Angeles, CA 90025<br><br> <br>Tel: +1 (310) 444-4346<br><br> <br>Email: Ariel@crede.com<br><br> <br>Fax: +1 (310) 444-4394
---	---
with a copy to:	Michael Wachs<br><br> <br>Crede Capital Group, LLC<br><br> <br>211 East 43rd Street -4th Floor,<br><br> <br>NY, NY 10017<br><br> <br>Tel: +1 (646) 278-6785<br><br> <br>Email: michael@crede.com<br><br> <br>Fax: +1 (212) 732-1131
Warrant Agreement	6	10
---	---
if to the Company:	Peter Ward, Chief Financial Officer<br><br> <br>WISeKey International Holding Ltd<br><br> <br>Chief Financial Officer<br><br> <br>General-Guisan-Strasse 6, 6300 Zug<br><br> <br>Switzerland<br><br> <br>Email: pward@wisekey.com<br><br> <br>Fax: +41 22 594 30 01
---	---
with a copy to:	David Oser<br><br> <br>Homburger AG<br><br> <br>Prime Tower<br><br> <br>Hardstrasse 201<br><br> <br>8005 Zurich, Switzerland<br><br> <br>Email: david.oser@homburger.ch<br><br> <br>Fax: +41 43 222 15 00
(b)	Notices delivered by hand shall be deemed delivered when actually delivered. Notices given by courier<br>shall be deemed delivered on the date delivery is promised by the courier. Notices given by facsimile or by electronic transmission<br>shall be deemed given on the date of receipt (if a Business Day), otherwise the first Business Day following receipt; provided<br>that a notice delivered by facsimile or electronic transmission shall only be effective if such notice is also delivered by hand,<br>registered mail, or given by courier on or before two (2) Business Days after its delivery by facsimile or electronic transmission.
---	---
7.4	Entire Agreement
---	---

This Agreement, including the Schedules, Annexes and any other documents referred to herein, constitutes the entire agreement and understanding among the Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements and understandings of the Parties relating to such subject matter.

7.5	Amendment and Waiver

This Agreement may only be modified or amended by a document signed by both Parties. Compliance with any term or provision contained in this Agreement by the Party that was or is obligated to comply or perform with such term or provision may only be waived by a document signed by the Party waiving such compliance.

7.6	No Assignment

The Warrant Holder shall not have the right to assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company.

7.7	Confidentiality

The Warrant Holder agrees to keep all information under or in connection with this Agreement confidential and not to disclose such information to anyone other than its agents, Affiliates, and counsel, as long as it remains non-public, save to the extent required by law, regulation, administrative or court order. For the avoidance of doubt, nothing in this Agreement shall limit the Company from complying with its applicable disclosure obligations based on applicable law and regulations, including stock exchange regulations.

Warrant Agreement	7	10
7.8	Severability
---	---

If any part or provision of this Agreement or the application of any such part or provision to any Person or circumstance shall be held to be invalid, illegal or unenforceable in any respect by any competent arbitral tribunal, court, governmental or administrative authority, (a) such invalidity, illegality or unenforceability shall not affect any other part or provision of this Agreement or the application of such part or provision to any other Person or circumstances, and (b) the Parties shall endeavour to negotiate a substitute provision that best reflects the economic intentions of the Parties without being invalid, illegal or unenforceable, and shall execute all agreements and documents required for its implementation.

7.9	Counterparts; Delivery by Electronic Transmission

This Agreement may be executed and delivered by each party in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which taken together shall constitute one and the same Agreement. This Agreement and any other transaction document relating to this Agreement, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or other electronic transmission (e.g., email delivery in .pdf format or similar format), shall be treated in all manner and respects as an original contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person.

8.	Governing Law and Jurisdiction
(a)	This Agreement and any claim, controversy or dispute arising out of or related to this Agreement,<br>any of the transactions contemplated hereby, the relationship of the Parties hereunder, or the interpretation and enforcement of<br>the rights and duties of the Parties, whether arising in contract, tort or otherwise, shall be governed by and construed in accordance<br>with the substantive laws of Switzerland.
---	---
(b)	The exclusive place of jurisdiction for any dispute, claim or controversy arising under, out of<br>or in connection with or related to this Agreement (or subsequent amendments thereof), including, without limitation, disputes,<br>claims or controversies regarding its existence, validity, interpretation, performance, breach or termination, shall be the city<br>of Zurich, Switzerland.
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Warrant Agreement	8	10

IN WITNESS WHEREOF, the Company and the Warrant Holder, each by its duly authorized officers, have executed this Agreement as of the day and year first written above.

WISeKey International Holding Ltd<br><br> <br><br><br> <br>/s/ Carlos Moreira	****
****Carlos Moreira<br><br>Chief Executive Officer and Chairman of the <br><br>Board of Directors	/s/ Peter Ward <br><br>Peter Ward<br><br>Chief Financial Officer and Member of the Board of Directors
Crede CG III, Ltd<br><br> <br><br> /s/ Terren Peizer
****Terren Peizer<br><br>Chief Executive Officer and Chairman
Warrant Agreement	9	10
---	---

Annex 1 │Definitions

A.       Terms Definedin the Body of the Agreement

Aggregate Exercise Price	3	Parties	1
Agreement	2	Party	1
Class B Shares	2, 12	Relevant Shares	5
Company	1	Warrant Agreement	12
Convertible Loan Agreement	2	Warrant Holder	1
Effective Date	2	Warrant Right	2, 12
Exercise Notice	3	Warrant Shares	2
Exercise Period	3

B.        Other Definitions

As used in this Agreement in capitalized form, the following terms shall have the following meaning:

ADS means American Depositary Shares representing Class B Shares.

Affiliate shall mean a Person that exercises Control over a second Person, or is under Control by it, or is under common Control by the same Person.

Business Day means a day (other than a Saturday, Sunday or public holiday) when banks in Zurich, Switzerland, are open for business.

Control shall be deemed to exist if a Person (either alone or with its Affiliates) owns more than half of the voting rights or equity capital of a Person, or is otherwise able to exercise a controlling influence over another Person.

Exercise Price shall be CHF 1.65.

Person means any individual, sole proprietorship, partnership, joint venture, trust, limited liability company, unincorporated organization, association, corporation, government, or any agency or political division thereof, or any other entity.

SIX means SIX Swiss Exchange Ltd. and the stock exchange operated by it.

Trading Days means any day that is a trading day on the SIX.

Warrant Agreement	10	10

Peter Ward, Chief Financial Officer

WISeKey International Holding Ltd

Chief Financial Officer

General-Guisan-Strasse 6, 6300 Zug

Switzerland

E-mail: pward@wisekey.com

[bank designated by the Company]

Annex 2 | Form of Exercise Notice

Ladies and Gentlemen:

The undersigned is the holder of a warrant right (the Warrant Right) granted to it by the Company on July 30, 2020 pursuant to the terms of the warrant agreement (the Warrant Agreement), such Warrant Right representing the right of the undersigned to purchase and receive from the Company, and the obligation of the Company to issue and/or deliver to the Warrant Holder, _____ registered shares, par value CHF 0.05 each (the Class B Shares), subject to and upon payment by the Warrant Holder of the Aggregate Exercise Price to the Company or the bank designated by the Company by wire transfer of immediately available funds. A copy of the Warrant Agreement is attached hereto as Annex 2.1.

Capitalized terms shall have the meaning set forth in the Warrant Agreement dated as of [■], 2020.

We refer to the conditional share capital of the Company pursuant to article 4b of the Articles of Association of the Company and hereby exercise our Warrant Right pursuant to Section 2 of the Warrant Agreement. Concurrently with such exercise, we confirm that irrevocable instructions in relation to the payment of the Aggregate Exercise Payment by wire transfer in immediately available funds have been made to the following bank account of the Company: ___________.

The newly issued Class B Shares shall be delivered via Euroclear to: _________________

Yours sincerely,

Crede CG III, Ltd

_______________________________

Exhibit 4.27

First Amendment to the Warrant Agreement

dated as of September 18, 2020

by and between

WISeKey International Holdings Ltd<br><br>General-Guisan-Strasse 6, 6300 Zug, Switzerland	(hereinafter the Company)
And
Crede CG III, Ltd.<br><br>Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda	(hereinafter the Warrant Holder)
	(the Company and the Warrant Holder each a Party and together the Parties)

regarding the grant by the Company of the Warrant Right (as defined herein)

WHEREAS

A.	The Company and the Warrant Holder are parties to a Warrant Agreement dated as of September 28,2018 (as further amended hereby<br>or as amended in the future, the "Warrant Agreement”)

Now, therefore, the Parties agree as follows:

1.	Amendments to the Warrant Agreement

Section 2 (c) is amended in its entirety to read as follows:

The Warrant may be exercised at any date and time between effective Disbursement pursuant to the terms of the Convertible Loan Agreement and the close of business on the fifth anniversary of the Effective Date (the Exercise Period).

2.	General Terms
(a)	Except as amended hereby, all terms and conditions of the Warrant Agreement remain in full force and effect.
---	---
(b)	This document contains the entire agreement of the Parties in connection with the subject matter of this Amendment and cannot<br>be changed or terminated orally.
---	---
(c)	If there is an express conflict between the terms of this Amendment and the terms of the Warrant Agreement, the terms of this<br>Amendment will govern and control.
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[Signatures on the Next Page]

IN WITNESS WHEREOF, the Company and the Warrant Holder, each by its duly authorized officers, have executed this Agreement as of the day and year first written above.

WISeKey International Holding Ltd	****
/s/ Carlos Moreira	/s/ Peter Ward
Carlos Moreira<br><br> <br>Chief Executive Officer and Chairman of the Board of Directors	Peter Ward<br><br> <br>Chief Financial Officer and Member of the Board of Directors
Crede CG III, Ltd.
/s/ Terren Peizer
Terren Peizer<br><br> <br>Chief Executive Officer

Exhibit 4.28

First Amendment to the Warrant Agreement

dated as of September 18, 2020

by and between

WISeKey International Holdings Ltd<br><br> <br>General-Guisan-Strasse 6, 6300 Zug, Switzerland	(hereinafter the Company)
And
Crede CG III, Ltd. <br><br>Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda	(hereinafter the Warrant Holder)
	(the Company and the Warrant Holder each a Party and together the Parties)

regarding the grant by the Company of the Warrant Right (as defined herein)

WHEREAS

A.	The Company and the Warrant Holder are parties to a Warrant Agreement dated as of August 7, 2020 (as further amended hereby<br>or as amended in the future, the "Warrant Agreement")

Now, therefore, the Parties agree as follows:

1.	Amendments to the Warrant Agreement

Annex 1, B. Other Definitions, the term Exercise Price is amended to read as follows:

Exercise Price shall be CHF 1.375.

2.	General Terms
(a)	Except as amended hereby, all terms and conditions of the Warrant Agreement remain in full force and effect.
---	---
(b)	This document contains the entire agreement of the Parties in connection with the subject matter of this Amendment and cannot<br>be changed or terminated orally.
---	---
(c)	If there is an express conflict between the terms of this Amendment and the terms of the Warrant Agreement, the terms of this<br>Amendment will govern and control.
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[Signatures on the Next Page]

IN WITNESS WHEREOF, the Company and the Warrant Holder, each by its duly authorized officers, have executed this Agreement as of the day and year first written above.

WISeKey International Holding Ltd.
/s/ Carlos Moreira	/s/ Peter Ward
Carlos Moreira<br><br>Chief Executive Officer and Chairman of the Board of Directors	Peter Ward<br><br>Chief Financial Officer and Member of the Board of Directors
Crede CG III, Ltd.
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/s/ Terren Peizer
Terren S. Peizer<br><br>Chief Executive Officer

Exhibit 4.29

Agreement for the Issuance and Subscription of Convertible Notes	1

Executed Version

Agreement for the Issuance and Subscription of

Convertible Notes

dated as of December 8, 2020

by and between

WISeKey International Holding Ltd.	(hereinafter the “Issuer”)
General-Guisan-Strasse 6, 6300 Zug
a company incorporated under the laws of Switzerland and
registered in the commercial registry under the federal number
CHE-143.782.707
and
GLOBAL TECH OPPORTUNITES 8, a Cayman Island	(hereinafter the “Investor”)
Company with its registered office situated at ARKA Corporate
Services (Cayman) Limited, 71 Fort Street, 1st Floor Appleby
Tower, P.O. Box 950 Grand Cayman KY1-1102, Cayman Islands

The Issuer and the Investor are hereinafter referred individually as a “Party” and together as the “Parties”.

regarding the grant of a convertible loan facility denominated in notes convertible into registered shares, par value CHF 0.05 each, of the Issuer

Agreement for the Issuance and Subscription of Convertible Notes	2

Whereas:

A.	The Issuer is a Swiss company limited by shares listed on SIX Swiss Exchange and with ADSs traded on Nasdaq.
B.	As at the date of this Agreement, the Issuer has issued shares with a nominal value of CHF 0.01 each (the “Class AShares”) and with a nominal value of CHF 0.05 each (the “Class B Shares”). The Class B Shares are<br>listed and traded on SIX Swiss Exchange. As of the date of this Agreement, the Issuer has an authorized share capital of CHF 640,445.30<br>divided into 12,808,906 Class B Shares and a conditional share capital of CHF 46,316.55 divided in 926,331 Class B Shares reserved<br>for rights granted in connection with Rights Bearing Obligations (as such term is defined in Article 4b of the Issuer's articles<br>of association).
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C.	The Issuer and the Investor have agreed to enter into this Agreement with respect to the commitment of the Investor to subscribe,<br>over the course of a period of eighteen (18) months (subject to acceleration as set out herein) starting from the date of this<br>Agreement, for loan notes issued by the Issuer with an aggregate principal value of up to a maximum of fifteen million five hundred<br>thousand Swiss Francs (CHF 15,500,000) (the “Maximum Commitment”) convertible into Shares, such convertible<br>loan notes divided into tranches comprising (i) the first tranche in the amount of seven hundred and fifty thousand Swiss Francs<br>(CHF 750,000) (the “First Tranche”), (ii) a second tranche in the amount of one million seven hundred and fifty<br>thousand Swiss Francs (CHF 1,750,000) (the “Second Tranche”), (iii) a third tranche in the amount of the Third<br>Tranche Amount (as defined below) (the “Third Tranche”), (iv) a fourth tranche in the amount of the Fourth Tranche<br>Amount (as defined below) (the “Fourth Tranche”) and (v) six (6) tranches subsequent to the First Tranche, the<br>Second Tranche, the Third Tranche and the Fourth Tranche in the amount of one million five hundred thousand Swiss Francs (CHF 1,500,000)<br>(collectively the “Subsequent Tranches”, and together with the First Tranche, the Second Tranche, the Third<br>Tranche and the Fourth Tranche, collectively the “Tranches”). The amount of each Tranche may be decreased at<br>the option of the Investor by 50% (and number of Tranche’s accordingly increased) if certain conditions are met in accordance<br>with the terms of this Agreement (a “Tranche Size Decrease”). Each Tranche is comprised of sub-notes with a<br>principal amount of ten thousand Swiss Francs (CHF 10,000) each (each a “Convertible Note”). By way of example,<br>the First Tranche is comprised of seventy five (75) Convertible Notes. The applicable Terms (as defined below) with respect to<br>the Convertible Notes are set out in Schedule 1.
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It is therefore agreed as follows:

1.	Definitions and Interpretation
(a)	In this Agreement, the following terms, when written with a capital initial letter, have the meaning ascribed to them below,<br>in the Terms or elsewhere in the Agreement. In case of a discrepancy between the definition appearing in this Clause 1 and that<br>appearing in a specific provision of this Agreement, such latter definition will prevail.
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Agreement for the Issuance and Subscription of Convertible Notes	3
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10 Non-Bank Rule	shall mean the rule that the aggregate number of creditors under this Agreement which are not Qualifying Banks must not at any time exceed ten (10), if and as long as a violation of this rule results in Swiss Withholding Tax consequences for the Issuer, in each case in accordance with the meaning of the Guidelines or the applicable legislation or explanatory notes addressing the same issues that are in force at such time;
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20 Non-Bank Rule	shall mean the rule that (without duplication) the aggregate number of lenders (including the Lender) other than Qualifying Banks, of the Issuer under all its outstanding debts relevant for classification as debenture (Kassenobligation) must not at any time exceed twenty (20), if and as long as a violation of this rule results in Swiss Withholding Tax consequences for the Issuer, in each case in accordance with the meaning of the Guidelines or the applicable legislation or explanatory notes addressing the same issues that are in force at such time;
ADSs	American Depositary Shares representing Class B Shares;
Affiliate	shall mean a person or entity that directly or indirectly Controls, is Controlled by, or is under common Control with, another person or entity;
Agreement	means this agreement, as amended from time to time;
Backstop Date	shall have the meaning ascribed to it in Clause 7(c);
Bloomberg	means Bloomberg LP, or should Bloomberg LP cease to exist, any other financial news and data service provider of reference publishing reliable data on the Shares;
Board of Directors	means the board of directors of the Issuer;
Business Day	shall have the meaning set forth in the Terms;
Cash Redemption Formula	shall have the meaning set forth in Clause 8;
Change of Control	shall have the meaning set forth in the Terms;
Class B	Shares shall have the meaning set forth in recital B;
Agreement for the Issuance and Subscription of Convertible Notes	4
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Closing Date	means with respect to a given Tranche, the date on which the Subscription Price with respect to such Tranche is transferred to the Issuer by the Investor in accordance with the terms of this Agreement;
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Commitment Fee(s)	shall have the meaning set forth in Clause 16;
Commitment Period	means a period starting on the second Business Day following the Signing Date and ending on the date falling eighteen (18) calendar months thereafter;
Control means	the possession, directly or indirectly, of the power to direct or influence the direction of the management or policies of a person, whether through ownership or otherwise, and the terms "Controlling" and "Controlled" shall have a correlative meaning;
Convertible Notes	shall have the meaning set forth in recital C;
Conversion	shall have the meaning set forth in the Terms;
Conversion Amount	shall have the meaning set forth in the Terms;
Conversion Date	shall have the meaning set forth in the Terms;
Conversion Notice	shall have the meaning set forth in Clause 8(a), and having the form set out in Schedule 3 and to be sent to via email to: exercise_notice@wisekey.com and wihn_ihn@zkb.ch;
Conversion Period	means the period during<br> which Conversion may be made according to the Terms and being for each Convertible Note issued under a Tranche the period<br> from the Subscription Date and ending on the twelve (12) month anniversary of the Subscription Date (provided that the<br> Conversion Period may be shortened as set out herein);
Conversion Price	shall have the meaning set forth in the Terms;
Cool Down Period	means a period following a Closing Date during which the Issuer may only issue a new Tranche at the Investor’s option which shall be (a) with respect to the First Tranche, the period from the First Issuance Date up to the Second Issuance Date, (b) with respect to the Second Tranche, the period from the Second Issuance Date up to the Third Issuance Date, (c) with respect to the Third Tranche, a period of fifty (50) Trading Days following the Closing Date of the Third Tranche and (d) with respect to the Fourth Tranche and each Subsequent Tranche the lesser of (i) thirty (30) Trading Days following the Closing Date of the relevant Tranche and (ii) the period defined by the formula below and expressed in Trading Days:
Agreement for the Issuance and Subscription of Convertible Notes	5
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Cool Down Period =
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Where:
V = Value of the tranche to be issuedin CHF<br><br> <br>K =1/5<br><br> <br><br><br> <br>= 40 – day average daily value traded (trimmed for 5% of the outliers) in CHF
	In the<br> case where a Cool Down Period is ongoing, and:<br><br> <br><br><br> <br>(i)             the<br>Issuer fails to deliver the Shares resulting from the conversion of the Notes within two Trading Days (or if the Shares have been<br>suspended from trading for any reason, two (2) Business Days) from a Conversion Notice;<br><br> <br><br><br> <br>(ii)           the shares are suspended from trading for any reason; or<br><br> <br><br><br> <br>(iii)           more generally in any case where the Investor is prevented<br> from trading on the Shares (including in the case where any insider information (with the meaning provided by article 142 FMIA)<br> has been disclosed by the Issuer to the Investor),<br><br> <br><br><br> <br>the duration of the ongoing Cool Down Period shall be automatically<br> extended by the duration of the event mentioned in (i), (ii) or (iii) above.
Event of Default	shall have the meaning set forth in Clause 12(a) below;
Exchange	shall have the meaning set forth in the Terms;
Floor Price	shall have the meaning set forth in Clause 5.2(a)(i);
First Issuance Date	means the first Business Day following the date of this Agreement;
First Tranche	shall have the meaning given in recital C;
Agreement for the Issuance and Subscription of Convertible Notes	6
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FMIA	means the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading of June 19, 2015, as amended from time to time;
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Fourth Tranche	shall have the meaning given in recital C;
Fourth Tranche Amount	means the sum of (i) one million five hundred thousand Swiss Francs (CHF 1,500,000) plus (ii) the amount by which (if any) that the Third Tranche Amount was less than two million five hundred thousand Swiss Francs (CHF 2,500,000) (or 50% of such sum in the event that there has been a reduction of Tranche size in accordance with Clause 2.2);
Group Companies	means the Issuer and its subsidiaries;
Guidelines	shall mean, together, guideline S-02.123 in relation to interbank loans of 22 September 1986 (Merkblatt 'Verrechnungssteuer auf Zinsen von Bankguthaben, deren Gläubiger Banken sind (Interbankguthaben)" vom 22. September 1986), guideline S-02.130.1 in relation to money market instruments and book claims of April 1999 (Merkblatt vom April 1999 betreffend Geldmarktpapiere und Buchforderungen inländischer Schuldner), circular letter No. 34 of 26 July 2011 (1-034-V-201 1) in relation to deposits (Kreisschreiben Nr. 34 'Kundenguthaben' vom 26. Juli 2011) and the circular letter No. 15 of 3 October 2017 in relation to bonds and derivative financial instruments as subject matter of taxation of Swiss federal income tax, Swiss withholding tax and Swiss stamp taxes (Kreisschreiben Nr. 15 'Obligationen und derivative Finanzinstrumente als Gegenstand der direkten Bundessteuer, der Verrechnungssteuer und der Stempelabgaben' vom 3. Oktober 2017), circular letter No. 46 of 24 July 2019 (1-046-VS-2019) in relation to syndicated credit facilities (Kreisschreiben Nr. 46 betreffend
HMT	shall have the meaning set forth in Clause 10;
Indebtedness	means any indebtedness for or in respect of:<br><br> <br><br><br> <br>(i)    <br> any monies borrowed pursuant to one or more credit facility agreements or the issue of bonds, notes, debentures,<br> loan stock or any similar instrument; and<br><br> <br><br><br><br> <br><br><br> <br>(ii)  <br> the amount of any liability in respect of any guarantee for any of the items referred to in paragraph (i) above,<br><br> <br><br><br> <br>it being understood that any amount calculated under this definition<br> may only be counted once, even if an item may qualify under various paragraphs;
Agreement for the Issuance and Subscription of Convertible Notes	7
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Indemnified Liabilities	shall have the meaning set forth in Clause 21;
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Investor Indemnities	shall have the meaning set forth in Clause 21;
Investor Suspension Period	shall have the meaning set forth in Clause 3.1(b);
Lien	means any mortgage, lien, pledge, charge or any other security interest or encumbrance of any kind, except the interest of a vendor or lessor arising out of the acquisition of or agreement to acquire any property or asset under any conditional sale agreement, lease purchase agreement, sale in view of and subsequent leaseback arrangement or other similar title retention agreement;
Material Adverse Change	shall have the meaning set forth in the Terms;
Maximum Commitment	shall have the meaning set forth in recital C;
New Shares	shall have the meaning set forth in the Terms;
Non-Bank Rules	shall mean, together, the 10 Non-Bank Rule and the 20 Non-Bank Rule;
OFAC SDN List	shall have the meaning set forth in Clause 10;
Parties	shall have the meaning set forth on the cover page of this Agreement;
Pricing Period	shall have the meaning ascribed to it in the Terms;
Qualifying Bank	shall mean (a) any bank as defined in the Swiss Federal Code for Banks and Savings Banks dated 8 November 1934 (Bundesgesetz über die Banken und Sparkassen) or (b) a person or entity which effectively conducts banking activities with its own infrastructure and staff as its principal business purpose and which has a banking license in full force and effect issued in accordance with the banking laws in force in its jurisdiction of incorporation, or if acting through a branch, issued in accordance with the banking laws in the jurisdiction of such branch, all and in each case within the meaning of the Guidelines;
Agreement for the Issuance and Subscription of Convertible Notes	8
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Redemption	shall have the meaning ascribed to it in Clause 16;
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Reference Date	shall mean the respective Trading Day immediately preceding the relevant Subscription Date;
Restricted Period	shall have the meaning set forth in Clause 11(e);
Sanctions	shall have the meaning set forth in Clause 10;
Sanctions Programs	shall have the meaning set forth in Clause 10;
Second Tranche	shall have the meaning given in recital C;
Second Issuance Date	means 16 December 2020;
Securities Act	shall have the meaning set forth in Clause 11(e).
Shares	shall have the meaning set forth in the Terms;
Signing Date	is the date of this Agreement;
Step Plan	shall have the meaning set forth in Clause 7(e).
Subscription Dates	the dates on which the Tranches are subscribed for by the Investor;
Subscription Price	shall have the meaning set forth in Clause 2.1;
Subscription Request	shall have the meaning given in Clause 2.1;
Subsequent Tranche	shall have the meaning given in Recital C;
Swiss Withholding Tax	shall mean the tax imposed based on the Swiss Federal Act on Withholding Tax of 13 October 1965 (Bundesgesetz über die Verrechnungssteuer) together with the related ordinances, regulations and guidelines;
Tax	shall mean any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) imposed by any jurisdiction, government, state or agency of a state;
Agreement for the Issuance and Subscription of Convertible Notes	9
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Tax Deduction	shall mean a deduction or withholding for or on account of Tax from a payment (in cash or in kind) under this Agreement or the Warrant Agreement;
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Terms	means the terms and conditions of the Convertible Notes set out in Schedule 1;
Third Issuance Date	means 30 December 2020;
Third Tranche	shall have the meaning given in recital C;
Third Tranche Amount	shall mean the lower of (i) two million five hundred thousand Swiss Francs (CH F 2,500,000) (or 50% of such amount in the event that there has been a reduction of Tranche size in accordance with Clause 2.2) and (ii) an amount equal to 70% of the market value of the 5,000,000 Shares held by the Issuer in treasury (created previously out of the Issuer's authorized capital (referred to in Clause 5.2(a)(vi)), plus any Shares remaining out of the Issuer's conditional share capital (reserved for rights granted to third parties or shareholders in connection with Rights Bearing Obligations (as such term is defined in Article 4b of the Issuer's articles of association) that have not yet been used for the purpose of the conversion of the Convertible Notes issued pursuant to the First Tranche, in each case determined by reference to the 5-Trading Day VWAP per Share as of December 28, 2020 for the purpose of settling outstanding Convertible Notes minus the sum of the principal amount of outstanding Convertible Notes from the First Tranche and the Second Tranche (rounded down to the nearest CHF 10,000) (or 50% of such amount in the event that there has been a reduction of Tranche size in accordance with Clause 2.2);
Trading Day	shall have the meaning set forth in the Terms;
Tranche	shall have the meaning set forth in recital C;
Transaction Costs	means all reasonable costs (including fees and charges) incurred by the Investor in connection with the sale of New Shares;
Tranche Size Decrease	shall have the meaning set forth in recital C;
UNSC	shall have the meaning set forth in Clause 10;
U.S. Person(s)	shall have the meaning set forth in Clause 11(e);
VWAP	means the per Share volume weighted average price derived by dividing the total value of Shares traded by the total volume of Shares traded, as displayed under the heading “Bloomberg VWAP” on the relevant page of the Bloomberg screen (or its equivalent successor if the relevant page is no longer available and, if no such page is available, the market value of a Share determined by the Board of Directors in good faith using a volume weighted average method);
Agreement for the Issuance and Subscription of Convertible Notes	10
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Warrant Agreement	shall have the meaning set forth in clause 2.8; and
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Warrants	shall have the meaning set forth in clause 2.8.
(b)	References in this Agreement to the Clauses and Schedules are to the Clauses of, and Schedules to, this Agreement and references<br>to Paragraphs are to paragraphs in a Schedule. The Schedules form part of and are deemed to be incorporated in this Agreement and<br>the Issuer and the Investor are bound by the terms and conditions set out therein as if they were part of the body of this Agreement.
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(c)	References in this Agreement to any act, statute or statutory provision include references to any such provision as amended,<br>re-enacted or replaced (with or without modification) provided that this Clause 1.3 will not operate to impose any greater financial<br>or other liability on any Party than it would have been under but for such amendment, re-enactment, replacement or modification.
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(d)	References in this Agreement to the singular include references to the plural and vice versa and references to the masculine<br>gender include references to the feminine and neuter gender and vice versa.
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(e)	Headings in this Agreement are inserted for convenience only and will not affect the interpretation of this Agreement or any<br>part of it.
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(f)	In this Agreement the words “includes”, “including” and “included” will be construed without<br>limitation.
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(g)	The words “hereof”, “herein”, “herewith” and “hereunder” and words of similar<br>import, when used in this Agreement, shall, in the absence of a specific provision to the contrary, refer to this Agreement as<br>a whole.
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(h)	Any reference in this Agreement to a “person” includes any individual, body corporate, trust, partnership, joint<br>venture, unincorporated association or governmental, quasi-governmental, judicial or regulatory entity (or any department, agency<br>or political subdivision of any such entity), in each case whether or not having a separate legal personality.
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2.	The Convertible Notes and Warrants
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2.1	Issuance
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(a)	On the First Issuance Date, subject to the satisfaction or waiver by the Investor of the conditions set out in Clause 5, the<br>Issuer shall issue to the Investor the First Tranche comprised of seventy five (75) Convertible Notes in the aggregate principal<br>amount of seven hundred and fifty thousand Swiss Francs (CHF 750,000).
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Agreement for the Issuance and Subscription of Convertible Notes	11
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(b)	On the Second Issuance Date, subject to the satisfaction or waiver by the Investor of the conditions set out in Clause 5, the<br>Issuer shall issue to the Investor the Second Tranche comprised of one hundred and seventy-five (175) Convertible Notes in the<br>aggregate principal amount of one million seven hundred and fifty thousand Swiss Francs (CHF 1,750,000).
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(c)	On the Third Issuance Date, subject to the satisfaction or waiver by the Investor of the conditions set out in Clause 5, the<br>Issuer shall issue to the Investor the Third Tranche in the aggregate principal amount of the Third Tranche Amount, comprised of<br>Convertible Notes in the amount of the Third Tranche Amount divided by ten thousand (10,000).
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(d)	On the Fourth Issuance Date, subject to the satisfaction or waiver by the Investor of the conditions set out in Clause 5, the<br>Issuer shall issue to the Investor the Fourth Tranche in the aggregate principal amount of the Fourth Tranche Amount, comprised<br>of Convertible Notes in the amount of the Fourth Tranche Amount divided by ten thousand (10,000).
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(e)	Following the issuance of the Fourth Tranche up to the end of the Commitment Period, subject to the satisfaction or waiver<br>by the Investor of the conditions set out in Clause 5, the Issuer shall have the right (but not the obligation) to require the<br>Investor to subscribe for up to six (6) Subsequent Tranches (or such additional number of Tranches as may be allowed under this<br>Agreement in the event that there has been a reduction of Tranche size in accordance with Clause 2.2) in the amount of one million<br>five hundred thousand Swiss Francs (CHF 1,500,000) (or 50% of such amount in the event that there has been a reduction of Tranche<br>size in accordance with Clause 2.2) by submitting a written notice in accordance with Clause 19.1 (a “Subscription Request”)<br>to the Investor in the form attached hereto as Schedule 2.
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(f)	For the avoidance of doubt, the total amount of Convertible Notes with respect to all Tranches shall not exceed the principal<br>amount of fifteen million five hundred thousand Swiss Francs (CHF 15,500,000).
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(g)	The Convertible Notes comprising each Tranche shall be issued at a subscription price per Convertible Note equal to one hundred<br>per cent (100%) of their principal amount (the “Subscription Price”). Certain legal fees of the Investor shall be deducted<br>from the Subscription Price to be paid by the Investor with respect to the First Tranche in accordance with Clause 19.7. The Convertible<br>Notes shall each have the terms and conditions set out in Schedule 1 and in this Agreement.
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Agreement for the Issuance and Subscription of Convertible Notes	12
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2.2	Reduction of Tranche Size
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(a)	Should the average daily value traded of the Shares (excluding ten per cent (10%) of the data points from the top and ten per<br>cent (10%) of the data points from the bottom of the data set) for the twenty (20) Trading Days immediately prior to the date of<br>the Subscription Request be lower than fifty thousand Swiss Francs (CHF 50,000), the Investor shall have the right with respect<br>to the Second Tranche and the relevant Subsequent Tranche to which such Subscription Request relates to reduce the Principal Amount<br>of such Second Tranche or Subsequent Tranche, as the case may be, by fifty percent (50%) (i.e. the principal amount of the relevant<br>Subsequent Tranche shall be reduced from one million five hundred thousand Swiss Francs (CHF 1,500,000) to seven hundred and fifty<br>thousand Swiss Francs (CHF 750,000)). Upon exercise of such right by the Investor, the number of Tranches remaining available for<br>issuance under this Agreement shall be adjusted upward accordingly so that the total Swiss Franc amount of the Commitment shall<br>remain unchanged.
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(b)	The Tranche size shall always be rounded down to the nearest ten thousand Swiss Francs (CHF 10,000) in the event of a reduction<br>of the size of a Tranche in accordance with this Clause 2.2.
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2.3	Subscription of the First Tranche
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The Investor shall subscribe on the First Issuance Date for the First Tranche by delivering the subscription form in the form attached as Schedule 4 and paying to the Issuer the Subscription Price (being 100% of the aggregate Principal Amount of the Convertible Notes, or seven hundred and fifty thousand Swiss Francs (CHF 750,000)) as follows:

(a)	thirty three thousand Swiss Francs (CHF 33,000) shall be paid by the Investor to the Issuer by way of set-off against the certain,<br>liquid and due receivable amounting to thirty three thousand Swiss Francs (CHF 33,000) held by the Investor against the Issuer<br>corresponding to the amount of the Investor's legal fees remaining as provided for in Clause 19.1 (as evidenced by an invoice issued<br>by the Investor to the Issuer);
(b)	one hundred and eleven thousand seven hundred and fifty Swiss Francs (CHF 111,750) shall be paid by the Issuer to the Investor<br>by way of set-off against the certain, liquid and due receivable amounting to the same amount held by the Investor against the<br>Issuer corresponding to a part of the amount of the Commitment Fee payable upon disbursement of the First Tranche as provided for<br>in Clause 16; and
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(c)	the balance of the Subscription Price shall be paid by electronic wire transfer in immediately available and freely transferable<br>funds in Swiss Francs to the Issuer Account.
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2.4	Subscription of the Second Tranche
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The Investor shall subscribe for the Second Tranche on the Second Issuance Date, by delivering the subscription form in the form attached as Schedule 4 and paying to the Issuer the Subscription Price (being 100% of the aggregate Principal Amount of the Convertible Notes) as follows:

Agreement for the Issuance and Subscription of Convertible Notes	13
(a)	two hundred and sixty thousand seven hundred and fifty Swiss Francs (CHF 260,750) shall be paid by the Investor to the Issuer<br>by way of set-off against the certain, liquid and due receivable amounting to the same amount held by the Investor against the<br>Issuer corresponding to a part of the amount of the Commitment Fee payable upon disbursement of the Second Tranche as provided<br>for in Clause 16; and
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(b)	the balance of the Subscription Price shall be paid by electronic wire transfer in immediately available and freely transferable<br>funds in Swiss Francs to the Issuer Account.
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2.5	Subscription of the Third Tranche, the Fourth Tranche, and the Subsequent Tranches
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The Investor shall subscribe on each subsequent Closing Date following the Second Issuance Date to the number of Convertible Notes specified in the relevant Subscription Request (subject to the limitations and conditions set forth in this Agreement), by delivering the subscription form in the form attached as Schedule 4 and paying to the Issuer the aggregate Subscription Price for the Convertible Notes as follows:

(a)	An amount equal to 2.5% of the Subscription Price for such Tranche shall be paid by the Investor to the Issuer by way of set-off<br>against the certain, liquid and due receivable in the same amount held by the Investor against the Issuer corresponding to a part<br>of the amount of the Commitment Fee with respect to the relevant Tranche as provided for in Clause 16; and
(b)	the balance of the Subscription Price shall be paid by electronic wire transfer in immediately available and freely transferable<br>funds in Swiss Francs to the Issuer Account.
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2.6	Investor Call
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The Investor shall have the right to require the issue of a maximum of two (2) Tranches following the Third Tranche (either both at once or each separately) by submitting a written notice via email to the Issuer to the email address exercise_notice@wisekey.com in the form attached hereto as Schedule 5.

2.7	Other Terms Related to the Convertible Notes
(a)	On or before the date hereof, the Issuer shall procure or have procured that the Board of Directors has passed a resolution<br>to (i) authorize the execution and performance of this Agreement and the issuance of the Tranches and Convertible Notes issuable<br>under this Agreement as well as the execution and performance of the Warrant Agreement (as defined below) and the issuance of the<br>Warrants (as defined below) issuable under the Warrant Agreement and (ii) exclude the advance subscription rights of shareholders<br>(Vorwegzeichnungsrecht) in connection with the issuance of these Convertible Notes and Warrants.
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Agreement for the Issuance and Subscription of Convertible Notes	14
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(b)	Further, the Issuer shall procure that the Board of Directors, as of each relevant Subscription Request, has reserved, or continues<br>to reserve or have reserved, for the Investor out of the then issued and outstanding conditional share capital of the Issuer (reserved<br>for rights granted to third parties or shareholders in connection with Rights Bearing Obligations (as such term is defined in Article<br>4b of the Issuer's articles of association)) and/or out of Shares held in treasury by the Company or one of its Subsidiaries, in<br>each case in a manner compliant with Swiss law, at least (A) 130% with respect to the First Tranche, the Second Tranche and the<br>Third Tranche, and (B) 140% with respect to the Fourth Tranche and each Subsequent Tranche, in each case of such number of Shares<br>as would be required to be delivered by the Company to the Investor upon conversion of all outstanding Convertible Notes together<br>with the Convertible Notes to be issued pursuant to the relevant Subscription Request calculated by dividing the aggregate principal<br>amount of all such Convertible Notes by the VWAP as of the date of such Subscription Request or the relevant Closing Date (as the<br>case may be). The Issuer shall procure that the Board of Directors resolves to allot the Convertible Notes so subscribed to the<br>Investor without undue delay following payment.
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(c)	The Issuer is not required to deliver physical certificates representing the Convertible Notes to the Investor. Payment of<br>the Subscription Price for each Tranche will evidence that the Investor, until the Convertible Notes issued under a Tranche has<br>been fully Converted, is the holder and owner of the issued Convertible Notes. The Issuer will keep a written ledger in which each<br>Convertible Note issued is recorded. If and when so requested by the Investor, the Issuer shall deliver a copy of the ledger, certified<br>by the CFO and CEO to be a true copy of the ledger, without delay to the Investor.
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2.8	Warrants
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On the date of this Agreement, the Issuer and the Investor executed the warrant agreement (the “Warrant Agreement”) pursuant to which warrants giving the holder rights to acquire shares shall be issued to the Investor upon the issuance of each Tranche (the “Warrants”).

3.	Early Termination and Suspension
3.1	Right to Early Terminate or Suspend the Agreement
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(a)	The Investor has the right to terminate the Agreement by written notice to the Issuer if the Share market closing price as<br>published by Bloomberg for at least ten consecutive Trading Days during the Commitment Period is equal to or lower than CHF 0.15.
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Agreement for the Issuance and Subscription of Convertible Notes	15
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(b)	In cases of Clause 3.1(a)(a), in addition to the termination right, the Investor may alternatively elect, at its own discretion,<br>to suspend the Agreement until the Share market price as published by Bloomberg again equals or exceeds CHF 0.15 by written suspension<br>notice to the Issuer (such time period, the “Investor Suspension Period”). Notwithstanding any suspension, the<br>Investor is at any time entitled to terminate this Agreement according to Clause 3.1(a). The Investor shall also be entitled to<br>unilaterally end an Investor Suspension Period by way of written notice to the Issuer.
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3.2	Consequences of the Termination of the Agreement
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If the Agreement is terminated, the Maximum Commitment ceases to exist and the issued Convertible Notes shall be repaid in cash by the Issuer, whereby the amount to be repaid equals 105% of the nominal value of the Convertible Notes outstanding.

3.3	Consequences of a Suspension of the Agreement by the Investor

If the Investor suspends the Agreement pursuant to Clause 3.1(b), the Issuer shall not be entitled to request the Investor to subscribe for further Tranches during the duration of the Investor Suspension Period. The Commitment Period shall be extended, on a day-by-day basis, by such number of days as corresponds to the duration of the Investor Suspension Period.

4.	Purpose

The Issuer shall use all amounts received from subscriptions hereunder for general corporate purposes, including, for the avoidance of doubt, for purposes of financing the loan and guarantee commitments made to arago GmbH. The Investor is not bound to monitor or verify the application of any such amount.

5.	Conditions Precedent
5.1	Initial Conditions Precedent
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The Investor shall only be obliged to subscribe for the First Tranche if:

(a)	the average daily value traded of the Class B Shares (excluding ten per cent. (10%) of the data points from the top and ten<br>per cent. (10%) of the data points from the bottom of the data set) for the twenty (20) Trading Days immediately prior to the first<br>Closing Date (with respect to the First Tranche), as published by Bloomberg, is higher than fifty thousand Swiss Francs (CHF 50,000);<br>and
(b)	it has received all of the documents set out below in form and substance reasonably satisfactory to it:
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(i)	the Issuer has complied with the covenants of the Issuer set forth in this Agreement, as well as any of its other obligations<br>hereunder or under the Warrant Agreement; and
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Agreement for the Issuance and Subscription of Convertible Notes	16
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(ii)	minutes from a meeting of the Board of Directors evidencing that the Board of Directors has resolved to (A) enter into this<br>Agreement and the Warrant Agreement, (B) either (x) has reserved conditional share capital (reserved for rights granted to third<br>parties or shareholders in connection with Rights Bearing Obligations (as such term is defined in Article 4b of the Issuer's articles<br>of association)) to cover the relevant Subscription Request and related Warrants in relation to those Tranches that the Issuer<br>is required to (and does not only have a right to) issue to the Investor and/or (y) has created through an authorized share capital<br>increase subscribed by one of the Company's subsidiaries Shares held in treasury, whereby such Shares are earmarked to cover the<br>relevant Subscription Request, and (C) to withdraw existing shareholders' advance subscription rights in connection with the Agreement<br>and the Tranches and Convertible Notes issuable thereunder.
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5.2	Further Conditions Precedent
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(a)	The Investor shall only be obliged to subscribe for the First Tranche and each Subsequent Tranche if on the relevant Subscription<br>Date and Closing Date:
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(i)	It has received a copy of the resolutions of the Issuer's Board of Directors referred to in Section 2.7(a);
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(ii)	It has received a copy of the resolutions of the Issuer's Board of Directors or any other appropriate document (including,<br>as the case may be, the resolutions of the Issuer's Board of Directors referred to in Section 2.7(a)) showing compliance with in<br>Section 2.7(b);
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(iii)	the Issuer has received from the Swiss Federal Tax Administration a ruling, substantially in the form attached hereto as Annex<br>5.2;
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(iv)	the conditional capital of the Issuer (reserved for rights granted to third parties or shareholders in connection with Rights<br>Bearing Obligations (as such term is defined in Article 4b of the Issuer's articles of association)) has been amended to provide<br>for the issuance of up to 16,613,543 Shares, and such conditional capital increase has been submitted for registration in the Commercial<br>Register no later than on 31 January 2021, provided that the condition in this Section5.2(iv) shall only apply to the obligation<br>to subscribe for the Fourth Tranche and each Subsequent Tranche;
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(v)	with respect to the First Tranche only, the Issuer has 926,331 Shares immediately available out of conditional share capital<br>(reserved for rights granted in connection with Rights Bearing Obligations (as such term is defined in Article 4b of the Issuer's<br>articles of association)) for the purpose of the conversion of the Convertible Notes issued pursuant to the First Tranche, which<br>Shares shall be freely tradeable on the Exchange upon transfer to the Investor;
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Agreement for the Issuance and Subscription of Convertible Notes	17
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(vi)	with respect to the Second Tranche only, the Issuer has issued 5,000,000 Shares (out of its authorized share capital) and these<br>Shares are held by the Issuer in treasury for the purpose of the conversion of the Convertible Notes issued pursuant to the Second<br>Tranche, the Third Tranche and, if applicable, any Subsequent Tranche (and the exercise of the related Warrants), which Shares<br>shall be freely tradeable on the Exchange upon delivery to the Investor;
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(vii)	with respect to the Third Tranche only, the Issuer has immediately available 5,000,000 Shares, plus any Shares remaining out<br>of conditional share capital (reserved for rights granted to third parties or shareholders in connection with Rights Bearing Obligations<br>(as such term is defined in Article 4b of the Issuer's articles of association) that have not yet been used for the purpose of<br>the conversion of the Convertible Notes issued pursuant to the First Tranche, minus such number of Shares which have been delivered<br>to the Issuer pursuant to the conversion of any of the Convertible Loan Notes issued pursuant to the Second Tranche, which Shares<br>are held by the Issuer in treasury for the purpose of the conversion of the Convertible Notes issued pursuant to the Second Tranche,<br>Third Tranche and, if applicable, any Subsequent Tranche (and exercise of the related Warrants), which Shares shall be freely tradeable<br>on the Exchange upon delivery to the Investor;
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(viii)	with respect to the Fourth Tranche and each Subsequent Tranche, the Board of Directors and the Issuer having the required authority<br>(out of the conditional share capital of the Issuer (reserved for rights granted to third parties or shareholders in connection<br>with Rights Bearing Obligations (as such term is defined in Article 4b of the Issuer's articles of association) and/or based on<br>Shares held in treasury by the Company or one of its Subsidiaries) for the issue or delivery of at least 140% of such number of<br>Shares as would be required upon conversion of all outstanding Convertible Notes together with the Convertible Notes to be issued<br>pursuant to the relevant Subscription Request calculated by dividing the aggregate principal amount of all such Convertible Notes<br>by the VWAP as of the date of such Subscription Request or Closing Date (as the case may be) , which Shares shall be freely tradeable<br>on the Exchange upon transfer to the Investor;
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(ix)	the closing price for the Shares as published by Bloomberg is equal to or higher than CHF 0.15 for at least ten (10) consecutive<br>Trading Days (the “Floor Price”);
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(x)	the Issuer has complied with the covenants of the Issuer set forth in this Agreement, as well as any of its other obligations<br>hereunder or under the Warrant Agreement;
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(xi)	there is no event or change rendering any one of the representations and warranties set forth in Clause 10 untrue or incorrect<br>in any material respect;
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Agreement for the Issuance and Subscription of Convertible Notes	18
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(xii)	no Event of Default is outstanding;
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(xiii)	the Commitment Period has not elapsed;
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(xiv)	either the applicable Cool Down Period having run or all the outstanding Convertible Notes issued to the Investor pursuant<br>to this Agreement having been converted into freely tradeable Shares, and such Shares having been transferred to the relevant Convertible<br>Note holder within two Trading Days;
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(xv)	no payment is due by the Issuer to the Investor (or any of its Affiliates) and no delivery of Shares) resulting from a conversion<br>of Notes or exercise of any Warrants by the Investor (or any of its Affiliates) is outstanding under this Agreement and/or under<br>the Warrant Agreement;
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(xvi)	the Shares continue to be listed on SIX Swiss Exchange and/or on any other Exchange, as the case may be, and the listing of<br>the Issuer's Shares has not been suspended or threatened to be suspended from listing on SIX Swiss Exchange and/or on any other<br>Exchange, as the case may be, as of the relevant date, by SIX Swiss Exchange and/or any other Exchange, as the case may be.
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(b)	The Investor has the discretionary right to waive the total or partial satisfaction of any one of the above-mentioned conditions.
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6.	Utilisation
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The Issuer may utilize the Maximum Commitment by delivery to the Investor of a duly completed Subscription Request not later than 10.00 a.m. one (1) day before the proposed Subscription Date (subject in each case to the terms and conditions set forth in this Agreement).

7.	Conversion of the Convertible Notes
(a)	The Investor may, by delivering to the Issuer a Conversion Notice, request Conversion of each Convertible Note or part thereof<br>held by the Investor into fully paid New Shares at any time during the Conversion Period (the “Conversion Notice”).
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(b)	The Investor is obliged to request Conversion of each Convertible Note held by the Investor no later than at the expiration<br>of the Conversion Period except in case an Event of Default has occurred and is outstanding and subject to the Investor's rights<br>pursuant to Clause 15 and the Investor hence irrevocably undertakes to request Conversion of all outstanding Convertible Notes<br>prior to the expiration of the Conversion Period. To the extent the Investor fails to request Conversion prior to the date falling<br>ten (10) Business Days prior to the expiration of the Conversion Period and an Event of Default has not occurred and is not outstanding<br>and subject to the Investor’s rights pursuant to Clause 16, the Issuer is entitled to request Conversion during the last<br>ten (10) Business Days of the Conversion Period.
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Agreement for the Issuance and Subscription of Convertible Notes	19
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(c)	lt is understood and agreed that to the extent the formal Conversion Period pursuant to the Terms would extend beyond the date<br>that falls twelve (12) months following the expiration of the Commitment Period (the “Backstop Date”), the Investor<br>is nonetheless obliged to request Conversion of each Convertible Note held by the Investor prior to the Backstop Date except in<br>case an Event of Default has occurred and is outstanding and subject to the Investor's rights pursuant to Clause 15 and the Investor<br>hence irrevocably undertakes to request Conversion of all outstanding Convertible Notes prior to the Backstop Date. To the extent<br>the Investor has failed to request Conversion prior to the date falling ten (10) Business Days prior to the Backstop Date, the<br>Issuer shall be authorized to request Conversion on behalf of the Investor during the last ten (10) Business Days immediately prior<br>to the Backstop Date. Such Conversion shall be made through the Issuer (or any person designated by the Issuer) completing a Conversion<br>Notice on behalf of the Investor. A copy of such Conversion Notice shall immediately be sent to the Investor.
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(d)	The Conversion Price (and hence the price for each New Share) that will be applied at Conversion is set out in the Terms (it<br>is noted that the Conversion Price shall never be lower than CHF 0.05. The Conversion Price shall be calculated in accordance with<br>the Terms.
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(e)	The issuance of New Shares will be made by the Issuer within two Trading Days (or if the Shares have been suspended from trading<br>for any reason, within two Business Days) from the receipt of a Conversion Notice in accordance with the Terms and the step plan<br>for creation of the New Shares (the “Step Plan”) included in the Terms.
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(f)	In order to deliver the New Shares to be received by the Investor upon Conversion, the Issuer shall deliver or procure to be<br>delivered, no later than with two (2) Trading Days (or if the Shares have been suspended from trading for any reason, two (2) Business<br>Days) from the receipt of a Conversion Notice, the New Shares to the securities account of the Investor notified to the Issuer.<br>The Issuer shall deliver such New Shares out of treasury or conditional capital or any other manner compliant with Swiss law, under<br>exclusion of any pre-emptive rights of existing shareholders.
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8.	Repayment of the Tranches
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As set out in the Terms, when the Issuer receives a Conversion Notice, the Issuer has the right, instead of issuing New Shares, to redeem the Convertible Note in cash using the following formula:

Agreement for the Issuance and Subscription of Convertible Notes	20
Reimbursement =	(	Conversion Amount	)	* Closing VWAP on the Conversion Date
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		Conversion Price

(the Cash Redemption Formula).

The repayment shall be made in accordance with the provisions set out in Terms.

9.	Covenants of the Issuer

The Issuer covenants and agrees, in respect of the period from the Signing Date and as long as any Convertible Note is outstanding:

(a)	The Issuer will, following Conversion, take all necessary actions to procure that the New Shares are delivered to the securities<br>account of the Investor as designated by the Investor.
(b)	The Issuer will take all necessary steps in order to comply in all material respects with all applicable Swiss legal requirements<br>and all applicable rules and regulations of any competent authority in Switzerland and with legal requirements applicable to the<br>Issuer in case of a listing on an Exchange other than SIX Swiss Exchange in connection with the issue of the Convertible Notes<br>and the Conversion and issue of New Shares.
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(c)	At all times and in all material respect uphold, the Issuer will comply and act in accordance with the relevant provisions<br>of the Issuer's listing agreement with SIX Swiss Exchange and/or with any other Exchange, as the case may be, the rules applying<br>to companies whose shares are listed on SIX Swiss Exchange and/or on any other Exchange, as the case may be, the articles of association<br>of the Issuer, and any and all other rules and regulations applicable to the Issuer from time to time.
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(d)	To the extent permissible under applicable law, and subject to the obligation of the Issuer to comply with its obligations<br>under applicable ad hoc publicity rules, Issuer shall provide to the Investor a draft of any press release (in English) to be issued<br>by the Issuer in connection with the Convertible Notes and/or the Warrants or otherwise in connection with this Agreement and/or<br>the Warrant Agreement at the latest two (2) calendar days prior to its contemplated date of circulation.
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(e)	The Issuer will take any necessary steps and measures in order for the New Shares to be listed and tradable upon issuance.
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(f)	Subject to Clause 10(d) and to the extent permissible under applicable law and stock exchange regulations, the Issuer shall<br>give the Investor promptly notice of any draw-down with respect to any of its existing or future other standby equity distribution<br>agreements, equity lines or similar instruments.
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(g)	The Issuer shall refrain from disclosing, and shall cause its officers, directors, employees, advisors and agents to refrain<br>from disclosing, any material non-public information to the Investor without also disseminating such information to the public.
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Agreement for the Issuance and Subscription of Convertible Notes	21
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(h)	The Issuer shall ensure that it is at all times in compliance with the Non-Bank Rules.
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(i)	With respect to any deduction on account of Swiss Withholding Tax, paragraph (h) above shall not be breached if the number<br>of creditors of the Issuer in respect of either the 10 Non-Bank Rule or the 20 Non-Bank Rule is exceeded solely as a result of<br>a failure by the Investor to comply with its obligations under clause 18.3, the Investor having given an incorrect information<br>as to its status as Qualifying Bank or having lost its status as Qualifying Bank or as one (1) creditor only for the purposes of<br>the Non-Bank Rules. For the avoidance of doubt, the Issuer acknowledges that it is aware of the fact that the Investor does not<br>qualify as Qualifying Bank but counts as one (1) creditor for the purposes of the Non-Bank Rules.
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10.	Representations and Warranties of the Issuer
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The Issuer hereby represents and warrants to the Investor that the representations and warranties given in this Clause shall be true and correct at the Signing Date, each Closing Date, each Conversion Date and at each Subscription Date:

(a)	The Issuer is duly incorporated and validly existing under the laws of Switzerland and has the requisite power and authority<br>to enter into and perform its obligations under this Agreement, the Convertible Notes and pursuant to any certificate or other<br>document furnished or to be furnished under this Agreement. The Issuer has full corporate power and all necessary licenses, permits<br>and authorizations to carry on its business as now conducted and to own, lease and operate the assets and properties necessary<br>in connection therewith. All issued shares of the Issuer are fully paid-in and non-assessable.
(b)	The Issuer or any of the material subsidiaries have not filed any petition for their winding-up, are not insolvent within the<br>meaning of applicable laws (subject to subordination declarations, as per the most recent reports), and have not made any assignment<br>or initiated any arrangement with their creditors, nor has any petition for receivership or any administration order been presented<br>in respect of any of the Group Companies. No receiver or liquidator has been appointed in respect of the Group Companies or any<br>of their material assets. A “material subsidiary” as used in this Agreement is any subsidiary or affiliate which contributes<br>for more than 25% of the total turnover of the Issuer group.
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(c)	This Agreement, and any certificate or other document furnished or to be furnished under this Agreement and the performance<br>by the Issuer of its obligations under them have been duly authorized by all necessary corporate action on the part of the Issuer,<br>and this Agreement and any other document or instrument executed in connection with this Agreement including each Tranche will,<br>when executed, constitute valid and binding and enforceable obligations of the Issuer in accordance with their respective terms.
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Agreement for the Issuance and Subscription of Convertible Notes	22
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(d)	The execution by the Issuer of this Agreement, the Warrant Agreement and any other document or instrument in connection with<br>them, and the performance by the Issuer of its obligations under the Agreement, the Warrant Agreement and any other document or<br>instrument in connection with them and the consummation of the transaction provided for in this Agreement, the Warrant Agreement<br>and any other document or instrument in connection with them, do not and will not result in a breach of any provision of the articles<br>of association of the Issuer or of any applicable law, order, judgement or decree of any court or governmental agency or of any<br>agreement to which the Issuer is a party or by which the Issuer is bound.
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(e)	The Issuer has fully complied with all reporting requirements and other obligations in accordance with Swiss securities laws<br>and regulations of SIX. The Issuer's consolidated financial statements as of and for the period ended December 31, 2019 and 2018<br>fairly present, in all material respects, the consolidated financial position of the Issuer as at December 31, 2019 and 2018, respectively,<br>and its consolidated results of operations and its consolidated cash flows for the years then ended in accordance with U.S. GAAP.<br>From December 31, 2019 until the date hereof, the business of the Issuer has been conducted in the ordinary course of business<br>in a manner consistent with past practice, unless otherwise disclosed by the Issuer in public announcements made in accordance<br>with applicable law and the pertinent stock exchange rules.
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(f)	The Issuer acknowledges that the Investor has solely relied on publicly available information disclosed by the Issuer. Taking<br>the respective dates of, and the periods referred to in, such information into account, including the timing of the regular reporting<br>duties, such information does, at such dates and for such periods, not contain any untrue statement of material fact or omit to<br>state a material fact necessary to make the statements therein (except to the extent deferral of disclosure is permissible under<br>applicable law, including SIX regulations) and are, in the light of the circumstances under which they are made, not misleading.
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(g)	The Issuer is not required to obtain any consent, waiver, authorization or order of, or make any filing or registration with,<br>any court or other federal, state, provincial, local or other governmental or regulatory authority in connection with the execution,<br>delivery and performance by the Issuer of this Agreement and the delivery of the New Shares to the Investor (other than the registration<br>of New Shares with the competent commercial register and obtaining approval from SIX Exchange Regulation with respect to the listing<br>and initial trading of the New Shares.
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(h)	The Shares are, and the New Shares will upon issuance be, listed on SIX Swiss Exchange and/or on any other Exchange, as the<br>case may be.
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Agreement for the Issuance and Subscription of Convertible Notes	23
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(i)	There are no material suits, administrative, arbitration or other proceedings (including but not limited to tax proceedings)<br>pending or to the Issuer's knowledge threatened against any of the Group Companies, and there are no such material suits or proceedings<br>pending or to the Issuer's knowledge threatened by the Group Companies against any other person, nor are there to the Issuer's<br>knowledge any circumstances which may result in such material suits, administrative, arbitration or other proceedings, the outcome<br>of which, if it were unfavorable, would individually have a Material Adverse Change.
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(j)	Each Convertible Note will constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer and, at<br>all times so long as any amount thereunder is outstanding, shall rank equally with all other present or future unsecured and unsubordinated<br>debt securities of the Issuer.
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(k)	The Issuer has not, directly or indirectly, made any agreement or commitment with or to any investors where as a result of<br>the issuance or sale of Shares under this Agreement any person or entity would have (i) pre-emptive rights or rights of first refusal<br>with respect to the Shares to be delivered to the Investor or (ii) other rights to purchase or receive Shares or other securities<br>of the Issuer.
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(l)	Other than as publicly disclosed by the Issuer, and other than any options granted to directors, officers, employees, advisors<br>and persons providing services to the Company or any of its subsidiaries under the Issuer's share option compensation plans, there<br>are no securities or other rights in issue of the Issuer or any of its subsidiaries that are convertible into or exchangeable for<br>Shares, and there are neither any claims against the Issuer to buy nor any obligations of the Issuer or any of its subsidiaries<br>to issue, any Shares;
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(m)	Neither the Issuer and its Affiliates nor, to the knowledge of the Issuer, any director, officer, agent, employee or Affiliate<br>of any of them is a person or entity that is, or is owned fifty (50) percent or more or controlled by one or more persons or entities<br>that are:
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(i)	on the list of Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of Treasury’s Office<br>of Foreign Asset Control (OFAC SDN List);
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(ii)	the subject of any economic sanctions administered or enforced by OFAC or the U.S. State Department, the United Nations Security<br>Council (UNSC), the European Union (EU), Her Majesty’s Treasury (HMT), or other relevant sanctions authority<br>(collectively, the “Sanctions”), nor has a place of business in, or is operating, organized, resident or doing<br>business in, a country or territory that is, or whose government is, the subject of OFAC’s sanctions programs (including,<br>without limitation, Crimea, Cuba, Iran, North Korea, Sudan and Syria) (the “Sanctions Programs”).
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Agreement for the Issuance and Subscription of Convertible Notes	24
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The Issuer and its Affiliates shall not, directly or indirectly, use the proceeds received under this Agreement, or lend, contribute, facilitate or otherwise make available such proceeds, directly or indirectly, to any Person: (a) to fund, directly or indirectly, any activities or business of or with any Person that is identified on the OFAC SDN List or that is an entity that is owned fifty (50) percent or more by one or more persons that are on the OFAC SDN List, or in any country or territory, that, during the time of such funding activities, is, or whose government is, the subject of Sanctions or Sanctions Programs; or (b) in any other manner that will result in a violation of Sanctions. The Issuer is not in violation of any of the sanctions imposed pursuant to CAATSA.

11.	Representations and Warranties and Covenants by the Investor

The Investor hereby represents and warrants to the Issuer that the representations and warranties given in this Clause shall be true and correct at the Signing Date and at each Subscription Date:

(a)	The Investor is duly incorporated and validly existing under the laws of Cayman Islands and has the requisite power and authority<br>to enter into and perform its obligations under this Agreement, the Convertible Notes and in any certificate or other document<br>furnished or to be furnished under this Agreement. The Investor has full corporate power and all necessary licenses, permits and<br>authorizations to carry on its business as now conducted and to own, lease and operate the assets and properties necessary in connection<br>therewith.
(b)	The Investor has not filed any petition for winding-up, is not insolvent within the meaning of applicable laws, and has not<br>made any assignment or initiated any arrangement with its creditors, nor has any petition for receivership or any administration<br>order been presented in respect of the Investor. No receiver or liquidator has been appointed in respect of the Investor or any<br>of its material assets.
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(c)	This Agreement, and any certificate or other document furnished or to be furnished under this Agreement and the performance<br>by the Investor of its obligations under them have been duly authorized by all necessary corporate actions on the part of the Investor,<br>and this Agreement and any other document or instrument executed in connection with this Agreement including each Tranche will,<br>when executed, constitute valid and binding and enforceable obligations of the Investor in accordance with their respective terms.
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(d)	The execution by the Investor of this Agreement and any other document or instrument in connection with it, and the performance<br>by the Investor of its obligations under the Agreement and the consummation of the transaction provided for in this Agreement,<br>do not and will not result in a breach of any provision of the articles of association of the Investor or, to the best of the Investor's<br>knowledge of any applicable law, order, judgement or decree of any court or governmental agency or of any agreement to which the<br>Investor is a party or by which the Investor is bound.
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Agreement for the Issuance and Subscription of Convertible Notes	25
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(e)	The Investor is a person other than a “U.S. person” (as defined in Regulation S (the “Regulation S”)<br>under the U.S. Securities Act of 1933, as amended (the “Securities Act” - U.S. Person(s)) and is located outside<br>the United States. The Investor understands that the Convertible Notes offered to or purchased by it are subject to restrictions<br>on resale into the United States and to U.S. Persons for a period of 40 days after the issuance of such Convertible Notes in the<br>name of the Investor (each such period, the “Restricted Period”), and agrees that, during the Restricted Period,<br>it will not (i) offer, sell, pledge or otherwise transfer such Convertible Notes into the United States or to U.S. Persons, and<br>that any such sale, offer, sale, pledge or transfer will be conducted in an “offshore transaction” (as defined in Regulation<br>S) and without “directed selling efforts” (as defined in Regulation S) in the United States or (ii) deposit the New<br>Shares in an unrestricted depositary receipt facility (including the Company’s ADS facility in the United States). The Investor<br>understands that the Convertible Notes and the New Shares are being offered and sold to it pursuant to an exemption from registration<br>under the Securities Act, or transaction not subject to, the registration requirements of the Securities Act in a transaction not<br>involving a public offering of securities in the United States and that the Convertible Notes and the New Shares have not been<br>and will not be registered under the Securities Act or with any state or other jurisdiction of the United States. The Investor<br>agrees to notify any transferee to whom it subsequently reoffers, resells, pledges or otherwise transfers the Convertible Notes<br>or New Shares during the Restricted Period of the restrictions set forth herein. In addition, prior to any such subsequent reoffer,<br>resale, pledge or other transfer of the Convertible Notes or New Shares, the Investor will obtain from such transferee a written<br>undertaking to comply with the transfer restrictions set forth herein.
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12.	Events of Default
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(a)	Event of Default means any of the following occurrences during the Conversion Period:
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(i)	default by the Issuer in the payment of any cash amount due to the Investor under the Agreement (including, for the avoidance<br>of doubt, the payment of the Investor's legal fees and the Commitment Fee) or any other breach of a covenant or any obligation<br>under this Agreement or the Warrant Agreement (not waived in writing by the Investor) and which, if curable, is not cured within<br>thirty (30) days as from the first of the following dates: (i) the date on which the Issuer becomes aware of this breach and (ii)<br>the date on which the Investor notifies such breach to the Issuer, requesting that it be cured;
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(ii)	failure by the Issuer to issue New Shares to the Investor in accordance with the terms of the Agreement (for example in case<br>of late delivery of the new Shares to the Investor) due within five (5) Trading Days following a Conversion Date or Warrant Exercise<br>Date;
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Agreement for the Issuance and Subscription of Convertible Notes	26
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(iii)	the de-listing of the Shares from SIX Swiss Exchange and/or from any other Exchange, as the case may be, at the request of<br>the Issuer; for the avoidance of
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(iv)	doubt, as long as the Shares are listed on one Exchange, a delisting of the Shares from another Exchange shall not be an Event<br>of Default;
---	---
(v)	the suspension from trading of the Shares on the Market, except where the suspension from trading is either with the prior<br>written consent of the Investor and suspension from trading is no longer than twenty (20) calendar days;
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(vi)	The issuance of the New Shares and their transfer via book-entry to the Investor share account is no longer legally permitted<br>by all laws and regulations to which the Issuer is subject;
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(vii)	the Investor becomes entitled in accordance with the Terms to request immediate repayment of the Convertible Notes;
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(viii)	a Material Adverse Change or Change of Control has occurred; and
---	---
(ix)	the Issuer or any of its material subsidiaries liquidates substantially all of its assets except for fair consideration or<br>on an arm's length basis, or is declared bankrupt, enters into liquidation or becomes subject to company re-organization.
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(b)	Upon the occurrence of an Event of Default, the Investor shall be entitled, at its sole discretion, to terminate this Agreement,<br>in which case the Parties shall be under no further liability arising out of the Agreement (except as otherwise specifically provided<br>and except for any liability arising before or in relation to such termination).
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Upon such termination:

(i)	the Investor shall not have any obligation to subscribe for any further Tranches; and
(ii)	the outstanding amount of each Tranche shall become automatically redeemable in cash at 105% of the nominal value of the Convertible<br>Notes outstanding and the total amount shall be paid back to the Investor within ten (10) Business Days as of the date of termination<br>of this Agreement.
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13.	Covenant of the Investor
---	---

The Investor hereby covenants that with respect to any given Trading Day during the term of this Agreement, the Investor shall not trade Shares which represent more than twenty per cent (20%) of the total trading volume of such Trading Day (as measured by total trading volume on the exchange on which the Shares being traded are listed).

Agreement for the Issuance and Subscription of Convertible Notes	27
14.	Listing of the Shares
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As long as any Convertible Notes are outstanding and for a period of sixty-three (63) Business Days thereafter, the Issuer commits to keep the Shares listed on SIX Swiss Exchange and/or at any other Exchange, as the case may be.

15.	Redemption of the Convertible Notes

Without prejudice to the right of the Investor to terminate this Agreement in accordance with Clause 12(b) above, the Investor is entitled by notice to the Issuer to request the immediate repayment in cash equal to 105% of the principal amount of the relevant Convertible Notes (the “Redemption”) of the Convertible Notes in the event of a Material Adverse Effect, a Change of Control of the Issuer or an Event of Default.

16.	Commitment Fee
(a)	In consideration for the Maximum Commitment, the Issuer shall pay to the Investor a commitment fee (the “CommitmentFee”) equal to four and a half per cent (4.5%) of the total amount of the Commitment (six hundred ninety-seven thousand<br>five hundred Swiss Francs (CHF 697,500)) as follows:
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(i)	ninety three thousand Swiss Francs (CHF 93,000) shall be paid by the Issuer on the First Issuance Date by way of set off from<br>the cash Subscription Price to be paid by the Investor with respect to the First Tranche, corresponding to 30% of a two-percent<br>(2%) fee on the total amount of the Commitment (three hundred ten thousand Swiss Francs (CHF 310,000);
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(ii)	two hundred and seventeen thousand Swiss Francs (CHF 217,000) shall be paid by the Issuer on the Second Issuance Date by way<br>of set off from the cash Subscription Price to be paid by the Investor with respect to the Second Tranche, corresponding to 70%<br>of a two-per-cent (2%) fee on the total amount of the Commitment (three hundred ten thousand Swiss Francs (CHF 310,000); and
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(iii)	two and a half per cent (2.5%) of the total amount of the Commitment (three hundred and eighty seven thousand five hundred<br>Swiss Francs (CHF 387,500) shall be paid on a pro rata basis by the Issuer on each Closing Date by way of set-off from the cash<br>Subscription Price to be paid by the Investor with respect to each Tranche (by way of example, if (i) the Tranche size is one million<br>five hundred thousand Swiss Francs (CHF 1,500,000), such Commitment Fee to be paid under this sub paragraph (ii) shall be thirty<br>seven thousand five hundred Swiss Francs (CHF 37,500) and (ii) if the Tranche Size has been reduced in accordance with Clause 2.2<br>and a given Tranche size is only seven hundred fifty thousand Swiss France (CHF 750,000), such Commitment Fee to be paid under<br>this sub paragraph (ii) shall be eighteen thousand seven hundred fifty Swiss Francs (CHF 18,750).
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Agreement for the Issuance and Subscription of Convertible Notes	28
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(b)	Notwithstanding anything to the contrary in this Agreement, any amount of the total Commitment Fee which has not been paid<br>by the Issuer on or before the date which falls 18 calendar months from the date of this Agreement shall be paid by the Issuer<br>to the Investor in cash by way of transfer to the Investor on or prior to the date which falls 12 calendar months from the date<br>of this Agreement.
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17.	Bank Accounts and Payments
---	---
(a)	All payments pursuant to this Agreement to the Issuer shall be made to the following bank accounts:
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Issuer's bank account:

***

***

***

***

Account holder: WISeKey International Holding AG

(b)	Any payment to the Investor shall be made to such bank account notified by the Investor to the Issuer in writing no later than<br>on the third Business Day prior to the date on which the transfer is to be made.
(c)	All payments to be made by the Issuer pursuant to this Agreement shall be made without (and free and clear of any deduction<br>for) set-off or counterclaim.
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(d)	Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same<br>calendar month (if there is one) or the preceding Business Day (if there is not).
---	---
(e)	The Investor may set-off any matured obligation due from the Issuer under this Agreement against any matured obligation owed<br>by the Investor to the Issuer provided that the Investor shall not be entitled to set-off any amounts against the obligation to<br>pay the Subscription Price for a Tranche.
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18.	Miscellaneous
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18.1	Notices
---	---
(a)	Other than with respect to a Conversion Notice and a Subscription Notice (each of which shall be sent via email in English<br>and shall be deemed delivered on the date of transmission), all notices, requests, demands, approvals, waivers and other communications<br>required or permitted under this Agreement must be written in English and shall be deemed to have been received by a Party when:
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(i)	if delivered by post, unless actually received earlier, on the fifth (5th) Business Day (provided that a copy of the notice<br>has also been sent by e-mail on the date of dispatch);
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Agreement for the Issuance and Subscription of Convertible Notes	29
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(ii)	if delivered by hand, on the day of delivery; and
---	---
(iii)	if delivered by e-mail with acknowledgement of receipt, on the day following the day of transmission,
---	---

provided however that, if it is delivered by hand or e-mail on a day which is not a Business Day or after 6.00 pm CET on a Business Day, it will instead be deemed to have been given or made at 8.00 am CET on the next Business Day.

(b)	The address and e-mail address for notices shall be:
(i)	if to the Issuer:
---	---

WISeKey International Holding AG

Address: General-Guisan-Strasse 6, 6300 Zug, Switzerland

Attention: Chief Financial Officer

E-mail address: pward@wisekey.com, johara@wisekey.com,

nverjus@wisekey.com

Copy:

Homburger AG

Address: Prime Tower, Hardstrasse 201, 8005 Zurich, Switzerland

Attention to: David Oser

E-Mail addresses: david.oser@homburger.ch

(ii)	if to the Investor:

GLOBAL TECH OPPORTUNITIES 8

Address: ARKA Corporate Services (Cayman) Limited, 71 Fort Street, 1st Floor Appleby Tower, P.O. Box 950 Grand Cayman KY1-1102, Cayman Islands Attention to: Pierre Vannineuse, Hugo Pingray, Amaury Mamou-Mani and Ben Pershick

E-mail addresses: p.vannineuse@abo.co, h.pingray@abo.co and a.mamou-mani@abo.co; bpershick@calderwood.ky

Copy via email (which shall not constitute notice):

Edward Keller, General Counsel

E-mail address: e.keller@abo.co

Each Party shall provide three (3) Business Days' prior notice to the other Party of any change in address or e-mail address.

18.2	Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies
(a)	This Agreement may be amended, superseded, cancelled, renewed or extended, and the terms hereof may be waived, only by a written<br>instrument signed by authorized representatives of the Parties or, in the case of a waiver, by an authorized representative of<br>the Party waiving a condition or compliance. No such written instrument shall be effective unless it expressly recites that it<br>is intended to amend, supersede, cancel, renew or extend this Agreement or to waive a condition or compliance with one or more<br>of the terms hereof, as the case may be.
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Agreement for the Issuance and Subscription of Convertible Notes	30
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(b)	No delay on the part of either Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof,<br>nor shall any waiver on the part of either Party of any such right, power or privilege, or any single or partial exercise of any<br>such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege.
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(c)	The rights and remedies herein provided are cumulative that either Party based upon, arising out of or otherwise in respect<br>of any inaccuracy in or breach of any representation, warranty, covenant or agreement contained in this Agreement shall in no way<br>be Limited by the fact that the act, omission, occurrence or other facts upon which any claim of any such inaccuracy or breach<br>is based may also be the subject matter of any other representation, warranty, covenant or agreement contained in this Agreement<br>(or in any other agreement between the Parties) as to which there is no inaccuracy or breach.
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18.3	Binding Effect
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(a)	This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
---	---
(b)	The Issuer may not assign or transfer its rights under this Agreement without the prior written consent of the Investor.
---	---
(c)	If the Investor intends to transfer or assign its rights under any of the Tranches or Convertible Notes, it shall provide due<br>notice to the Issuer reasonably prior to any such transfer.
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18.4	Interpretation
---	---

In case of any discrepancy between the provisions of this Agreement and the Terms the provisions of this Agreement prevail. The Parties undertake to take the necessary actions to implement the foregoing, including but not limited to consenting to registration of changes to the Terms.

18.5	Captions

All Clauses, titles or captions contained in this Agreement are for convenience only, shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement. All references herein to sections or clauses shall be deemed references to such parts of this Agreement, unless the context shall otherwise require.

Agreement for the Issuance and Subscription of Convertible Notes	31
18.6	Market Abuse Regulation
---	---

The Parties confirm that they are aware of the laws and regulations in force applicable to the communication or use of inside information within the meaning of Article 142 FMIA, and the financial and administrative penalties incurred in the event of violation of these rules and undertake to comply with all regulations applicable to the communication and use of inside information.

18.7	Fees and Expenses

Each Party shall pay its own costs and expenses, incurred in relation to the negotiation, preparation, signing and carrying into effect of this Agreement provided however that, as compensation for the Investor's services in connection with the issuance of the Tranches, the Issuer shall pay to the Investor the following non-refundable fees and expenses:

(a)	the Commitment Fee payable according to the terms and conditions of Clause 16 above; and
(b)	any legal fees in connection with the preparation and negotiation of this Agreement (up to a maximum of thirty-three thousand<br>Swiss Francs (CHF 33,000) (excluding any VAT) as set forth in Clause 9.4.3) in accordance with the following paragraph, upon presentation<br>of an invoice issued by the Investor to the Issuer with respect to such legal fees.
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18.8	Advisors
---	---

Each Party acknowledges that the other Party has not acted as an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. Each Party confirms that:

(a)	its own independent investigation and appraisal of the transactions contemplated hereby as it deems necessary has been made<br>by it; and
(b)	all documentation, including this Agreement has been reviewed and discussed with its own advisors concerning such matters.
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A Party shall therefore not have any responsibility or liability to the other Party with respect thereto.

18.9	Confidentiality

Each of the Parties to this Agreement hereby severally undertakes to each other that it will not make any public announcement or statement or communication or disclosure of whatever nature regarding this Agreement without the prior written consent of the other Party (save where required by the SIX Swiss Exchange rules, or any applicable law or the rules of any regulatory body, in which event the relevant Party will consult to the extent legally permitted and practically possible with the other Party prior to the making of such announcement, statement, communication or disclosure but will not be required to obtain the prior consent of the other Party). It is understood and agreed that the Investor has prior to the Signing Date approved a press release to be issued by the Issuer immediately following the Signing Date.

Agreement for the Issuance and Subscription of Convertible Notes	32
18.10	Ultimate Beneficial Owners of the Investor
---	---

The Investor hereby represents and warrants to the Issuer that the ultimate beneficial owner of the Investor is 100% Mr. Pierre Vannineuse. The Investor also acknowledges that there are reporting requirements with respect to the ultimate beneficial owner(s) of the Investor, and shall notify the Issuer if the ultimate beneficial owner(s) of the Investor change.

19.	Taxes
19.1	Tax Gross-Up
---	---
(a)	The Issuer shall make all payments (in cash or in kind) to be made by it under this Agreement or the Warrant Agreement without<br>any Tax Deduction, unless a Tax Deduction is required by law.
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(b)	The Issuer shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or<br>the basis of a Tax Deduction) notify the Investor accordingly.
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(c)	If a Tax Deduction is required by law to be made by the Issuer, the amount of the payment due from the Issuer shall be increased<br>to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction<br>had been required.
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(d)	If the Borrower is required to make a Tax Deduction, it shall make that Tax Deduction and any payment required in connection<br>with that Tax Deduction within the time allowed and in the minimum amount required by law.
---	---
(e)	Within thirty (30) days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the<br>Issuer shall deliver to the Investor evidence satisfactory to the Investor that the Tax Deduction has been made or (as applicable)<br>any appropriate payment paid to the relevant taxing authority.
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19.2	Transfer Taxes
---	---

Any stamp taxes or securities transfer taxes will be borne by the Issuer.

20.	VAT
(a)	All amounts expressed to be payable under this Agreement by the Issuer to the Investor which (in whole or in part) constitute<br>the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and<br>accordingly, if VAT is or becomes chargeable on any supply made by the Investor to the Issuer under this Agreement and the Investor<br>is required to account to the relevant tax authority for the VAT, the Issuer must pay to the Investor (in addition to and at the<br>same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and the Investor must promptly<br>provide an appropriate VAT invoice to the Issuer).
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Agreement for the Issuance and Subscription of Convertible Notes	33
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(b)	Where this Agreement requires the Company to reimburse or indemnify the Warrant Holder for any cost or expense, the Company<br>shall reimburse or indemnify (as the case may be) the Warrant Holder for the full amount of such cost or expense, including such<br>part thereof as represents VAT, save to the extent that the Warrant Holder reasonably determines that it is entitled to credit<br>or repayment in respect of such VAT from the relevant tax.
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21.	Indemnification
---	---

To the extent permissible under Swiss law, the Issuer agrees to defend, protect, indemnify and hold harmless the Investor, and all of its officers, directors, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively the “Investor Indemnities”) from and against any damages, and expenses in connection therewith, including reasonable attorneys’ fees (the “Indemnified Liabilities”), incurred by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any material misrepresentation or breach of any representation or warranty made by the Issuer in this Agreement or any other certificate, instrument or document contemplated hereby, (b) any material breach of any covenant, agreement or obligation of the Issuer contained in this Agreement or any other certificate, instrument or document contemplated hereby executed by the Issuer.

22.	Entire Agreement

This Agreement together with the terms and conditions for the Terms represents the full agreement of the Parties. It is a substitute for and replaces all agreements and negotiations, oral or written, past and present dealing and agreements with respect to the matters discussed herein.

23.	Force Majeure and Limitation

A Party shall not be held responsible for any damage arising out of any legal enactment, or any measure undertaken by a public authority, or war, strike, lockout, boycott, blockade or any similar circumstance. The reservation in respect of strikes, lockouts, boycotts and blockades applies even if the Party takes such measures, or is subject to such measures. A Party shall not in any case be held responsible for any indirect damage, consequential damage and/or loss of profit. Should there be an obstacle as described above for a Party to take any action in compliance with this Agreement, such action may be postponed until the obstacle has been removed.

24.	Execution

This Agreement may be executed in any number of counterparts, and by the Parties on separate counterparts, each of which, when so executed and delivered, shall be an original, but together the counterparts shall constitute one document.

Agreement for the Issuance and Subscription of Convertible Notes	34
25.	Governing Law and Jurisdiction
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(a)	This Agreement (including the below jurisdiction clause) shall be governed by and construed in accordance with the substantive<br>laws of Switzerland, excluding its conflict of laws principles providing for the application of the laws of any other jurisdiction.
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(b)	Any dispute, controversy or claim arising out of, or in connection with, this Agreement, or the breach, termination or invalidity<br>thereof, shall be submitted to the jurisdiction of the ordinary courts of Zurich, Switzerland.
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(c)	The Parties undertake and agree that all proceedings conducted with reference to this jurisdiction clause will be kept strictly<br>confidential. This confidentiality undertaking shall cover all information disclosed in the course of such proceedings, as well<br>as any decision or ruling that is made or declared during the proceedings. Information covered by this confidentiality undertaking<br>may not, in any form, be disclosed to a third party without the written consent of the other Party. This notwithstanding, a Party<br>shall not be prevented from disclosing such information in order to safeguard in the best possible way his rights vis-a-vis the<br>other Party in connection with the dispute, or if the Party is obliged to so disclose pursuant to statute, regulation, a decision<br>by an authority, a stock exchange contract or similar rule or regulation.
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Agreement for the Issuance and Subscription of Convertible Notes	35
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IN WITNESS WHEREOF, the Parties, each by its duly authorized officers, have executed this Agreement as of the day and year first written above

WISEKEY INTERNATIONAL HOLDING AG<br><br> <br><br><br> <br><br><br> <br>/s/ Carlos Moreira	GLOBAL TECH OPPORTUNITIES 8
Signed by Carlos Moreira, in his capacity of CEO:	Signed by Benjamin Pershick, in his capacity as Director:
/s/ Peter Ward
Signed by Peter Ward, in his capacity of CFO:

[Remainder of page intentionally leftblank]

Agreement for the Issuance and Subscription of Convertible Notes	36

IN WITNESS WHEREOF, the Parties, each by its duly authorized officers, have executed this Agreement as of the day and year first written above

WISEKEY INTERNATIONAL HOLDING AG	GLOBAL TECH OPPORTUNITIES 8<br><br> <br>****<br><br> <br>/s/ Benjamin Pershick
Signed by Carlos Moreira, in his capacity of CEO:	Signed by Benjamin Pershick, in his capacity as Director:
Signed by Peter Ward, in his capacity of CFO:

[Remainder of page intentionally leftblank]

Agreement for the Issuance and Subscription of Convertible Notes	37

Schedule 1

Terms and Conditions for the Convertible Notes

Agreement for the Issuance and Subscription of Convertible Notes	1

TERMS AND CONDITIONS FOR CONVERTIBLE NOTES

1.	Definitions

Unless the context otherwise requires, any capitalized terms which are not defined herein shall have the meaning given to them in the Agreement. In these Terms, the following means:

ADSs	American Depositary Shares representing Class B Shares.
Agreement	means the Issuance and Subscription of Convertible Notes agreement dated December 8, 2020.
Business Day	a day when banks in Zurich (Switzerland), New York (New York State, the United States), Dubai (United Arab Emirates) and London (England) are open for general banking business (other than over the inter-net only).
Cash Redemption Formula	shall have the meaning ascribed to it in Clause 3 of this Terms.
Change of Control	means:<br><br> <br><br><br> <br>(a)     <br> an event or series of events resulting in one or more persons acting in concert (except for Mr. Carlos Creus Moreira if<br> such person or persons acts together with Mr. Carlos Creus Moreira) owning or controlling 50.01 per cent or more of the votes in<br> the Issuer; for the avoidance of doubt, holders of Class A Shares are not considered a group acting in concert.<br><br> <br><br><br> <br>(b)     <br> the Shares ceasing to be listed on any market administered by SIX Swiss Exchange and/or any other Exchange; or<br><br> <br><br><br> <br>(c)     <br>any person being obliged under the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities<br>and Derivatives Trading of June 19, 2015, as amended from time to time (the FMIA), to make a mandatory public offer for<br>all the shares in the Issuer.
Agreement for the Issuance and Subscription of Convertible Notes	2
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	For the purposes of this definition “acting in concert”<br> means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through<br> the acquisition directly or indirectly of shares of the Issuer by any of them, either directly or indirectly, to obtain control<br> of the Issuer.
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Class A Shares	shall mean, collectively, the Issuer's current Class A shares as issued by the Issuer with a nominal value of CHF 0.01 each.
Closing VWAP	means, as of any Pricing Period and Conversion Date, the daily VWAP of a Share on the Market on which the Shares are traded throughout the trading day
Commitment Period	the Commitment Period pursuant to the Agreement.
Conversion	exchange of debt pursuant to a Convertible against New Shares pursuant to these terms and conditions.
Conversion Amount	shall have the meaning set forth in Clause 3 of these Terms;
Conversion Cash Payment	Shall have the meaning set forth in Clause 3 of these Terms.
Conversion Date	shall have the meaning set forth in Clause 4 of these Terms;
Conversion Notice	shall have the meaning set forth in Clause 4 of these Terms;
Conversion Period	the period during which notice of Conversion can be given and must be received according to these terms and conditions, as further specified in the Agreement.
Conversion Price	means the higher of (i) CHF 0.05 and (ii) ninety-seven per cent. (97%) of the average of the five lowest Closing VWAPs during the Pricing Period preceding the Conversion Date. The Conversion Price will be determined by truncation after three decimal places.
Agreement for the Issuance and Subscription of Convertible Notes	3
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Conversion Ratio	shall have the meaning set forth in Clause 5 of these Terms.
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Convertible Note	a debenture issued by the Issuer pursuant to these terms and conditions and which entitles the Convertible Holder to convert its debt into New Shares pursuant to these terms and conditions.
Convertible Holder	the holder of a Convertible Note.
Event of Default	shall have the meaning set forth in the Agreement.
Exchange	SIX Swiss Exchange.
Investor	Global Tech Opportunities 8.
Issuer	WISeKey International Holding Ltd.
Material Adverse Change	any event external to the<br> Issuer having an effect on the value of the business, operations, properties, or financial condition of the Issuer that is material<br> and adverse to the Issuer and its affiliates, taken as a whole and/or any condition, circumstance or situation that would prohibit<br> or materially and significantly impact the ability of the Issuer to enter into and perform any of its obligations under the Agreement<br> in any material respect.<br><br> <br><br><br> <br>For the purpose of this definition, “affiliate”<br>shall mean a person or entity that directly or indirectly controls, is controlled by, or is under common control with, another<br>person or entity.
New Shares	means the Shares (including, for the avoidance of doubt, Shares held in treasury) issued to the Convertible Holder following Conversion.
Pricing Period	shall mean a period of twenty (20) Trading Days immediately preceding the relevant date to be considered in order to determine the Conversion Price.
Restricted Period	shall have the meaning set forth in Clause 7(g) of these Terms.
Securities Act	shall have the meaning set forth in Clause 7(g) of these Terms.
Agreement for the Issuance and Subscription of Convertible Notes	4
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Shares	shall mean, collectively, the Issuer's current Class B shares as issued by the Issuer with a nominal value of CHF 0.05 each and listed on the Exchange (Class B Shares), and any new shares of the Issuer issued after the date of the Agreement, in each case to the extent listed and tradeable on an Exchange. For the avoidance of doubt, the Issuer's ADSs shall not be considered Shares.
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Trading Day	any day on which the Shares are traded on the Exchange, provided that “Trading Day” shall not include (i) any day on which the Issuer’s shares are scheduled to trade on such market for less than 4.5 hours (it being specified for the avoidance of doubt that any day during which there would be no effective trading is considered a Trading Day if such suspension is not due to a suspension requested by the Issuer or by the Exchange or any other Exchange at which the Shares might be listed) or (ii) any day that the Issuer’s shares are suspended from trading at the request of the Issuer or the Exchange during the final hour of trading on such market unless such day is otherwise designated as a Trading Day in writing by the Convertible Holder.
Terms	means these terms and conditions of Notes as may be amended from time to time.
U.S. Person(s)	shall have the meaning set forth in Clause 7(g) of these Terms.
2.	Loan Amount, Interest Rate, Maturity, etc.
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(a)	Each Convertible Note shall have a principal amount of ten thousand Swiss Francs (CHF 10,000).
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(b)	The Convertible Notes do not bear any interest.
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(c)	The Issuer will register the Convertible Notes in a debt book and hence no physical promissory notes representing the Convertible<br>Notes will be issued. The Convertible Notes will thus be considered to be issued to a certain person.
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(d)	The Issuer assumes liability for payment of the loan represented by the Convertible Notes and undertakes to effect payment<br>and Conversion pursuant to these Terms and the Agreement.
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(e)	The Issuer shall pay the loan amount represented by the Convertible Notes (their principal amount) on the due date or, if the<br>due date is not a Business Day, on the Business Day immediately after such date, subject to and in accordance with these Terms<br>and this Agreement. The Convertible Holder is obliged to designate a bank account for payment and payment shall be made to the<br>bank account most recently designated.
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Agreement for the Issuance and Subscription of Convertible Notes	5
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(f)	Except as otherwise expressly provided for in the Agreement and/or in these Terms, the Issuer shall not be entitled to prepay<br>the loan amount represented by the Convertible Notes (nor to redeem the Convertible Notes) prior to Conversion or the maturity<br>of the relevant Convertible Notes.
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3.	Conversion of the Convertible Notes into Shares of the Issuer;<br>Conversion Period
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Each Convertible Holder shall have the right at any time during the Conversion Period to convert all or any of the Convertible Notes into New Shares, and to determine the number of its Convertible Notes to be converted, and the corresponding aggregate Principal Amount so converted (the “ConversionAmount”).

At the Issuer's option, the Issuer shall have then the right, upon receipt of a Conversion Notice sent by the Convertible Holder, to:

(i)	deliver New Shares to the Convertible Holder in accordance with the provisions of Clause 4 of these Terms; or
(ii)	pay to the Convertible Holder one hundred percent (100%) of any Conversion Notice, in cash, calculated as per the following<br>formula:
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Reimbursement =	(	Conversion Amount	)	* Closing VWAP on the Conversion Date
---	---	---	---	---
		Conversion Price

(the “Cash Redemption Formula”)

4.	Conversion

Each Convertible Holder may convert all or any of its Convertible Notes on any Trading Day (or if the Shares are suspended from trading, any Business Day) of its choice during the Conversion Period, effective at the date of the sending by a Convertible Holder of a Conversion Notice via email to the Issuer to the following email address: exercise_notice@wisekey.com and wihn_ihk@zkb.com (such date, the “Conversion Date”).

On each chosen Conversion Date, each Convertible Holder shall convert all or any of its Convertible Notes by giving notice to the Issuer (the “Conversion Notice”) via email in accordance with the immediately preceding paragraph, using the form attached in Schedule 3 to the Agreement and specifying the number of Convertible Notes to be converted and the corresponding Conversion Amount in accordance with Clause 3 of these Terms.

Agreement for the Issuance and Subscription of Convertible Notes	6

The Issuer, after updating the register in which the Convertible Notes are registered, shall in turn procure the issue of the relevant number of New Shares to the relevant Convertible Holder and the consideration therefor shall be the release by the Convertible Holder of an amount of debt equal to the Conversion Amount (by way of set-off with the issue price for the New Shares).

Upon conversion the Issuer shall promptly issue the relevant number of New Shares and credit them to the Convertible Holder’s custodian account within two (2) Trading Days (or if the Shares are suspended from trading, two (2) Business Days) following the Conversion Date. The Issuer shall liaise with the custodian of the Convertible Holder and the Convertible Holder will procure that the Custodian will liaise with the Issuer to ensure prompt delivery.

5.	Conversion Ratio

Upon conversion of Convertible Notes, if the relevant Convertible Holder does not receive the relevant number of New Shares as provided for in the paragraphs above, at the Convertible Holder’s discretion, the Issuer shall pay to the relevant Convertible Holder an amount equal to (i) the difference (if positive) between the closing middle market price two (2) Trading Days (or if the Shares have been suspended from trading, two (2) Business Days) after the Conversion Date and the closing middle market price on the Trading Day immediately prior to the date on which the relevant Shares are credited to the account of the custodian of the relevant Convertible Holder, for each new Share which was issued upon the relevant conversion of Convertible Notes together with the amount of any dividend to which they would have been entitled should that entitlement be lost due to a delay in issue plus (ii) a flat fee of one thousand Swiss Francs (CHF 1000) for each day of delay with respect to the conversion of the Convertible Notes in full.

The number of New Shares issued by the Issuer to the relevant Convertible Holder upon conversion of one or several Convertible Notes in accordance with Clause 4 of these Terms will be calculated as the Conversion Amount divided by the Conversion Price (the “Conversion Ratio”).

If the issue of New Shares upon conversion of any Convertible Notes issued would result in the issue of a fraction of a Share, the Issuer shall round such fraction of a Share down to the nearest whole Share.

The New Shares issued shall be issued credited as fully paid. The conversion shall not require the payment of any fee or charge by the relevant Convertible Holder.

Any payment to a Convertible Holder made by the Issuer in accordance with these Terms shall be made by the Issuer to the relevant Convertible Holder by wire transfer to a bank account notified by the relevant Convertible Holder to the Issuer, in immediately available, freely transferable funds in Swiss Francs.

6.	Pre-Mature Repayment
(a)	Without prejudice to the right of the Convertible Holder to terminate the Agreement in accordance with the terms of the Agreement,<br>the Convertible Holder has the right to request immediate cash repayment of all Convertible Notes outstanding upon the occurrence<br>of a Material Adverse Effect, a Change of Control of the Issuer or an Event of Default, provided that a request for repayment in<br>case of an Event of Default may only be made as long as the Event of Default remains outstanding at the time of such request of<br>the Convertible Holder.
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Agreement for the Issuance and Subscription of Convertible Notes	7
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(b)	As set out in these Terms, the Convertible Holder is also entitled to request pre-mature repayment in case of a merger, other<br>than any merger transaction where the voting rights attached to the Shares and the Class A Shares outstanding immediately prior<br>to such transaction constitute, or are converted into or exchanged for, voting rights representing more than 50% of the combined<br>voting power of the surviving person immediately after giving effect to such transaction. For avoidance of doubt, the acquisition<br>of arago GmbH by WISeKey International Holding AG does not constitute a merger and therefore does not give rise to pre-mature repayment.
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(c)	Following a request for pre-mature repayment in accordance with this Section 6, payment shall be made no later than ten (10)<br>Business Days following the request for pre-mature repayment.
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7.	Conversion
---	---
(a)	The Convertible Holder is entitled to request Conversion during the period as from the subscription of the Convertible Notes<br>to and including twelve (12) months after the date of its subscription.
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(b)	The Issuer and the Convertible Holder may agree to shorten or prolong the Conversion Period as per Clause 7.
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(c)	The Issuer may request Conversion during the ten (10) last Business Days of the Conversion Period as per Clause 7. To the extent<br>that the Convertible Holder has not requested Conversion during the Conversion Period, the Convertible Holder shall be deemed to<br>have requested Conversion of the Convertibles on the last Business Day of the Conversion Period as per Clause 4.
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(d)	Conversion must always cover the entire nominal value of the<br> Convertible Note for which request for Conversion is made. Upon request for Conversion,<br> the Issuer, in its sole discretion, shall be entitled to, in whole or in part, pay a<br> cash consideration in the amount of the Cash Conversion Payment as calculated using the<br> Cash Redemption Formula to the Convertible Holder instead of issuing shares in accordance<br> with Clause 7.
---	---

Any cash consideration in accordance with this 7(e) shall be paid no later than ten (10) Business Days following receipt of the request for Conversion.

(e)	For the avoidance of doubt, the Parties agree that a Conversion into ADSs will not be available to the Convertible Holder.
Agreement for the Issuance and Subscription of Convertible Notes	8
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(f)	The Investor is a person other than a “U.S. person” (as defined in Regulation S (Regulation S) under the U.S. Securities<br>Act of 1933, as amended (the “Securities Act” - U.S. Person(s)) and is located outside the United States. The<br>Investor understands that the Convertible Notes offered to or purchased by it are subject to restrictions on resale into the United<br>States and to U.S. Persons for a period of 40 days after the issuance of such Convertible Notes in the name of the Investor (each<br>such period, the “Restricted Period”), and agrees that, during the Restricted Period, it will not (x) offer,<br>sell, pledge or otherwise transfer such Convertible Notes into the United States or to U.S. Persons, and that any such sale, offer,<br>sale, pledge or transfer will be conducted in an “offshore transaction” (as defined in Regulation S) and without “directed<br>selling efforts” (as defined in Regulation S) in the United States or (z) deposit the New Shares in an unrestricted depositary<br>receipt facility (including the Issuer’s ADS facility in the United States). The Investor understands that the Convertible<br>Notes and the New Shares are being offered and sold to it pursuant to an exemption from registration under the Securities Act,<br>or transaction not subject to, the registration requirements of the Securities Act in a transaction not involving a public offering<br>of securities in the United States and that the Convertible Notes and the New Shares have not been and will not be registered under<br>the Securities Act or with any state or other jurisdiction of the United States. The Investor agrees to notify any transferee to<br>whom it subsequently reoffers, resells, pledges or otherwise transfers the Convertible Notes or New Shares during the Restricted<br>Period of the restrictions set forth herein. In addition, prior to any such subsequent reoffer, resale, pledge or other transfer<br>of the Convertible Notes or New Shares, the Investor will obtain from such transferee a written undertaking to comply with the<br>transfer restrictions set forth herein.
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8.	Effectuation of Conversion
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Following a request for Conversion, the issuance of New Shares of the Issuer to the Convertible Holder, including the allocation of the New Shares on the Convertible Holder's securities account, shall be effected by the Issuer within two (2) Trading Days (or if the Shares are suspended from trading, two (2) Business Days) from receipt of such request for Conversion as set forth in the following step plan which will be executed in accordance with the standard business practices of the banks involved:

Step#	Time	Action	Responsible Party
1	T	The Convertible Holder delivers<br> Conversion Notice to the Issuer, copying Zürcher Kantonalbank (ZKB) using the following email address: wihn_ihk@zkb.ch,<br> Bar-	The Convertible  Holder
Agreement for the Issuance and Subscription of Convertible Notes	9
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Step#	Time	Action	Responsible Party
---	---	---	---
		bara.Tschan@zkb.ch,<br> Dominic.Enzler@zkb.ch<br><br> <br><br><br> <br>and indicating, among others, the number of New Shares to be<br> received.
---	---	---	---
2		ZKB sets up DB-DI instruction to SIX SIS SECOM sys tem, indicating number of shares to be registered into SIX SIS SECOM system.	ZKB
3		ZKB informs the Issuer’s share register (Computershare) and WISeKey on the execution of step #2.	ZKB
4		The Issuer confirms vis-a-vis Computershare the relevant number of New Shares to be entered into the share register.	Issuer
5		Computershare creates relevant number of New Shares in the share register in the form of intermediated securities (Bucheffekten), registered as “Dispo-Shares”.	Computershare
6		Computershare confirms (i) in SIX SIS SECOM system creation<br> of shares as instructed by ZKB is step #2 and (ii) vis-à-vis ZKB that relevant number of WISeKey Shares has been created<br> and registered in the share register as “Dispo-Shares”.<br><br> <br><br><br> <br>Relevant number of New Shares is reflected in SIX SIS SECOM<br> System and New Shares are at ZKB's disposal for further steps.	Computershare
7	T + max. two Trading Days	ZKB allocates relevant number of New Shares in trad- able form of intermediated securities (Bucheffekten) on the securities account with CS.	ZKB
8		Bank of the Convertible Holder of New Shares sold by instructs Computershare to enter the Convertible Holder as holder of New Shares (replacing former registration of newly created New Shares as "Dispo-Shares").	Bank of the Convertible Holder
Agreement for the Issuance and Subscription of Convertible Notes	10
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Step#	Time	Action	Responsible Party
---	---	---	---
9	Computershare amends the share register accordingly.	Computershare
---	---	---
9.	Dividend on New Shares
---	---

Shares created through Conversion convey right to dividend as from the first record date for dividends that occurs following effectuation of Conversion and registration of such shares into the Issuer’s share ledger.

10.	Merger, De-Merger, Winding-Up and Bankruptcy
10.1	Merger
---	---
(a)	If the shareholders’ meeting resolves to approve a merger pursuant to which the Issuer shall merge into another company,<br>the Convertible Holders shall receive at least equivalent rights in the absorbing company as in the Issuer (the absorbed company),<br>provided that the Convertible Holders are not entitled to have their Convertible Notes redeemed pursuant to the merger plan.
---	---
(b)	Notwithstanding the provisions in Clause 2 above concerning maturity date, the Convertible Holders may during a period of sixty<br>(60) calendar days starting on the day after the resolution of the shareholders’ meeting to approve the merger plan demand<br>immediate payment of the nominal value of their Convertible Notes, except with respect to a merger transaction where the voting<br>rights attached to the Shares and the Class A Shares outstanding immediately prior to such transaction constitute, or are converted<br>into or exchanged for, voting rights representing more than 50% of the combined voting power of the surviving person immediately<br>after giving effect to such transaction.
---	---
(c)	The provisions in this Clause 11.1 shall not in any way limit the rights that the Convertible Holders may have under law in<br>their capacity as creditors in connection with the merger.
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10.2	De-Merger
---	---
(a)	If the shareholders’ meeting resolves to approve a de-merger plan pursuant to which the Issuer shall dissolve by means<br>of some or all of the Issuer’s assets and liabilities are transferred to one or several other companies, the Convertible<br>Holders shall receive at least equivalent rights in the acquiring company, or when applicable, the acquiring companies, as in the<br>Issuer (the transferring company), provided that the Convertible Holders are not entitled to have their Convertible Notes redeemed<br>pursuant to the de-merger plan.
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Agreement for the Issuance and Subscription of Convertible Notes	11
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(b)	The provisions in this Clause 11.2 shall not in any way limit the rights that the Convertible Holders may have under law in<br>their capacity as creditors in connection with the de-merger.
---	---
10.3	Winding-Up
---	---
(a)	If it is resolved that the Issuer shall be wound-up, no notice of Conversion may thereafter be given and no Conversion may<br>thereafter be effected. The right to give notice of Conversion and the obligation to effect Conversion ceases with the winding-up<br>resolution, regardless of the grounds for the resolution and whether the same shall have gained legal force.
---	---
(b)	If the winding-up is not carried through, notice of Conversion may again be made and Conversion again be effected in accordance<br>with these Terms.
---	---
(c)	No later than twenty-one (21) calendar days prior to the shareholders’ meeting to consider a voluntary winding-up pursuant<br>to Article 736 Number 2 of the Swiss Code of Obligations of March 30, 1911, as amended from time to time, the Convertible Holders<br>shall be notified of the contemplated winding-up. The notice shall contain a reminder of that no notice of Conversion may be given<br>nor conversion be effected after that the shareholders’ meeting having resolved that the Issuer shall be wound-up.
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(d)	The provisions in this Clause 11.3 shall not in any way limit the rights that the Convertible Holders may have under law in<br>their capacity as creditors in connection with the winding-up.
---	---
10.4	Bankruptcy
---	---
(a)	If a court of law declares the Issuer bankrupt, no notice of Conversion may thereafter be given and no conversion thereafter<br>be effected. The right to give notice of Conversion and the obligation to effect Conversion ceases with the bankruptcy order, regardless<br>of the grounds for the order and whether the same shall have gained legal force.
---	---
(b)	If the bankruptcy order is revoked, notice of Conversion may again be made and Conversion again be effected in accordance with<br>these Terms.
---	---
11.	Limitation Period for Receiving Payment
---	---

The right to receive payment of the loan amount shall lapse ten (10) years after the due date. Funds allocated for lapsed payments shall vest in the Issuer.

12.	Notices

Notices concerning the Convertible Notes shall be sent by e-mail to each Convertible Holder at the e-mail address most recently known to the Issuer. The Convertible Holders are obliged to inform the Issuer of their name and current e-mail address.

Agreement for the Issuance and Subscription of Convertible Notes	12
13.	Interpretation
---	---

In case of any discrepancy between the provisions of these Terms and the Agreement the provisions of the Agreement prevail.

14.	Variation of the Terms and Conditions/Transfers

The Issuer shall be entitled to vary these Terms to the extent required by legislation, decisions of courts of law or authorities. The Convertible Holders shall be notified of any variations without unnecessary delay.

If the Investor intends to transfer or assign its rights under any of the Convertible Notes, it shall provide due notice to the Issuer reasonably prior to any such transfer.

15.	Limitation of Liability
(a)	With respect to the actions incumbent on the Issuer, the Issuer shall not be held liable for damage arising as a result of<br>Swiss or foreign legislation, any action of a Swiss or foreign authority, acts of war, strikes, blockades, boycotts, lockouts,<br>or similar circumstances.
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(b)	If the Issuer is hindered from taking any measure due to a circumstance referred to in the first paragraph, the taking of such<br>measure may be postponed until such hinder no longer exists.
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16.	Taxes
---	---

All payments under the Convertible Notes will be made without deduction or withholding of any applicable taxes. Any stamp taxes or securities transfer taxes will be borne by the Issuer.

17.	Governing Law and Jurisdiction
(a)	These Terms and any legal issues arising thereof, shall be governed by and construed in accordance with the laws of Switzerland,<br>excluding its conflict of laws principles providing for the application of the laws of any other jurisdiction.
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(b)	Any dispute, controversy or claim arising out of, or in connection with, these Terms, or the breach, termination or invalidity<br>thereof, shall be submitted to the jurisdiction of the ordinary courts of Zurich, Switzerland.
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All proceedings conducted pursuant to this Clause 19, all information disclosed and all documents submitted or issued by or on behalf of any of the disputing parties or the court in any such proceedings as well as all decisions and awards made or declared in the course of any such proceedings shall be kept strictly confidential and may not be used for any other purpose than these proceedings or the enforcement of any such decision or ruling nor be disclosed to any third party without the prior written consent of the party to which the information relates or, as regards to a decision or award, the prior written consent of all the other disputing parties.

13

Exhibit 4.30

ExecutionCopy 18 November 2020

WISeKey InternationalHolding AG

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arago GmbH

Aquilon Invest GmbH

OGARA GmbH

THIRD

CONVERTIBLE LOAN AGREEMENT

1

Third Convertible Loan Agreement

by and between

1.	arago GmbH, a German limited liability company (Gesellschaft mit beschränkter Haftung), organized and existing<br>under the laws of Germany, registered with the commercial register of the local court of Frankfurt under registration no. HRB 100909,<br>with its business address at Esch-ersheimer Landstraße 526, 60433 Frankfurt am Main, Germany

• hereinafter the “Borrower” and/or the “Company” -

2.	WISeKey International Holding AG, a Swiss public limited company (Aktiengesellschaft), organized and existing<br>under the laws of Switzerland, with its business address at General-Guisan-Strasse 6, 6300 Zug, Switzerland

• hereinafter the “Lender”

3.	Aquilon Invest GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) under the laws<br>of Germany, registered with the commercial register of the local court of Darmstadt under registration no. HRB 96862, with its<br>business address at Heinrich-Delp-Straße 196, 64297 Darmstadt, Germany

• hereinafter the “Existing Shareholder1” -

4.	OGARA GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) under the laws of Germany,<br>registered with the commercial register of the local court of Frankfurt am Main under registration no. HRB 107907, with its business<br>address at Heinrich-Delp-Straße 196, 64297 Darmstadt, Germany

• hereinafter the “Existing Shareholder2” -

• Existing Shareholder 1 and Existing Shareholder 2 hereinafter each an “Existing Shareholder” and collectively the “Existing Shareholders”

• Borrower and Lender hereinafter each a “Party” and collectively the “Parties” -

  2

Table of Content

1.	Interpretation and Definitions	5
2.	First Convertible Loan Agreement	6
3.	Second Convertible Loan Agreement	6
4.	Grant of Convertible Loan	7
5.	Interest Rate	8
6.	Term and Termination	8
7.	Repayment	9
8.	Harbert Financing	9
9.	Conversion	9
10.	Securities; Subordination, Covenant not to Issue New Shares	11
11.	Representation and Warranties	12
12.	Confidentiality	13
13.	No Joint Liability	13
14.	Assignment	13
15.	Notices	13
16.	Costs	14
17.	Existing Shareholders’ Undertaking	14
18.	Shareholders’ Resolution	14
19.	Miscellaneous	14

3

PREAMBLE

(B)	The Borrower is a technology company which aims to provide the benefits of artificial intelligence to enterprise customers<br>globally through knowledge automation. Founded in Frankfurt am Main 1995 the company uses modern technologies such as inference<br>and machine learning in order to automatically operate the entire IT stack – from heterogeneous environments to individual<br>applications. The Existing Shareholders are the sole shareholders of the Borrower.
(C)	On 17 September 2018, the Borrower entered into a Framework Subscription Agreement for the purchase of bearer bonds as the<br>issuer of certain bonds (including a warrant to purchase shares in the Borrower at certain terms (the “Harbert Warrant”))<br>to HARBERT EUROPEAN SPECIALTY LENDING COMPANY II, S.À R.L. (together with its affiliated entities “Harbert”)<br>as the bond purchaser (together with all related agreements in this context the “Harbert Financing”).
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(D)	On 11 August 2020, the Parties entered into a convertible loan agreement in the amount of CHF 5,000,000.00 (“FirstConvertible Loan Agreement”). The Lender has issued a termination notice for the First Convertible Loan Agreement with<br>effect as of 30 September 2020. The Parties are in agreement that this termination was made only as a precautionary measure by<br>the Lender to protect its interests with regard to its intended investment in the Borrower.
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(E)	On 18 September 2020, the Parties entered into a convertible loan agreement in the amount of CHF 4,000,000.00 (“SecondConvertible Loan Agreement”). The Lender has issued a termination notice for the Second Convertible Loan Agreement with<br>effect as of 30 October 2020. The Parties are in agreement that this termination was made only as a precautionary measure by the<br>Lender to protect its interests with regard to its intended investment in the Borrower.
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(F)	On 2 November 2020, the Parties signed a term sheet regarding the further process of the Lender’s investment in the Borrower<br>(“Term Sheet”). In accordance with the Term Sheet, the Parties intend to recommence the contractual relationship<br>with regard to the convertible loan granted under the First and the Second Convertible Loan Agreements. However, the parties intend<br>to substantially alter the terms and conditions of the First and the Second Convertible Loan Agreements, which shall therefore<br>no longer be in force and shall no longer have any legal effect, but shall be restated and replaced by this third convertible loan<br>agreement (“Agreement”).
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(G)	In accordance with the Term Sheet, the Parties intend to combine the businesses of the Lender and the Borrower. In a first<br>step, the Lender shall (i) grant further funds by way of the Convertible Loan and (i) shall provide the Borrower with a comfort<br>letter (Patronatserklärung) with respect to the Harbert Financing (the “LoC”), each as set forth in more<br>detail in this Agreement. Subsequently, the Parties intend to convert the Convertible Loan into a 51% participation of the Lender<br>in the Borrower, taking into account the provision to the Borrower of the LoC with respect to the Harbert Financing. As consideration,<br>the Lender shall pay the nominal value of the newly issued shares in cash, and contribute the Convertible Loan in the amount of<br>CHF 5,000,000.00 into the Borrower’s free capital reserves pursuant to Sec. 272(2) no. 4 German Commercial Code (andere Zuzahlung<br>in das Eigenkapital), and continue to provide to the Borrower the LoC with respect to the Harbert Financing. To agree on the process<br>of such Conversion and the future relationship between the Existing Shareholders and the Lender as shareholders of the Borrower,<br>the Parties intend to enter into an investment and shareholders’ agreement as soon as reasonably possible after the date<br>hereof. It is intended that upon the Conversion, Mr. Hans-Christian Boos shall be offered the role as an executive member of the<br>board of directors of the Lender.
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4

(H)	After the Conversion, and to complete the business combination of the Lender and the Borrower, the Lender intends to acquire<br>all shares in the Borrower against issuance of 12,327,506 Class B Shares in the Lender (the “Consideration Shares”)<br>to the Existing Shareholders (such number calculated on the assumption that the Lender will not be required to assume and/or pay<br>for (including in kind) any obligations of the Borrower upon exercise by Harbert of the Harbert Warrant granted to it in connection<br>with the Harbert Financing). It is the understanding of the Parties that the Consideration Shares will definitively vest with the<br>Existing Shareholders (through an exercise of a put option or an alternative structure, in each case as to be further discussed<br>amongst the parties) in the context of a public offering of shares or ADSs of the Lender in the U.S. on the basis of the then combined<br>businesses of the Lender and the Borrower.
(I)	The Existing Shareholders intend to approve the granting of the convertible loan and the execution of this Agreement as part<br>of this Agreement by a respective extraordinary shareholders’ resolution.
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NOW THEREFORE, in consideration of the foregoing, the Parties hereby agree as follows:

1.	Interpretation and Definitions
1.2	Terms defined in this Agreement shall be interpreted and construed consistently and have the same meaning throughout this Agreement.
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1.3	In addition to the terms previously defined and defined throughout this Agreement, the following terms used in this Agreement<br>shall have the meaning assigned to them as set forth below:
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“Banking Day”	means any day (other than Saturday or Sunday) on which banks are open for business in Frankfurt am Main (Germany), Geneva and/or Zurich (Switzerland).
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“Event of Default”	means an event, in which (i) the Company has suspended payments of its debtors (allgemeine Zahlungseinstellung), (ii) an application for the opening of insolvency proceedings over the assets of the Company has been filed by the Company (Insolvenzantragstellung) or the rejection of the opening of insolvency proceedings has been announced due to a lack of assets, (iii) assets of the Company are seized or enforcement proceedings are otherwise initiated against assets of the Company and such enforcement proceedings are not finally levied within two months, (iv) shares held by the Existing Shareholders in the Company are seized or are subject to (alleged) third party rights, (v) the Company is in material breach of its obligations under the terms of this Agreement or has made a misrepresentation under the terms of this Agreement, or (v) an event of default has occurred under any financing agreement or arrangement entered into by the Company or any of the Existing Shareholders.
“Text Form”	means the form requirement stipulated by Sec. 126b German Civil Code (Bürgerliches Gesetzbuch) (i.e., in particular, letter, facsimile or email).

5

1.4	The headings contained in this Agreement are for convenience and reference purposes only and shall not affect the meaning or<br>construction of any of the provisions hereof.
2.	First Convertible Loan Agreement
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2.1	The First Convertible Loan Agreement shall no longer have any legal effect between the parties, but shall be replaced in its<br>entirety by this Agreement. This shall include a waiver of all secondary and consequential claims in connection therewith.
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2.2	In particular, the Lender shall no longer be entitled to convert the amounts disbursed under the First Convertible Loan Agreement<br>under the terms of the First Convertible Loan Agreement but only in accordance with Section 7 of this Agreement. The Lender shall<br>not be entitled to reclaim the amount already disbursed under the First Convertible Loan Agreement. The amount already disbursed<br>under the First Convertible Loan Agreement shall be deemed to be disbursed under this Agreement.
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3.	Second Convertible Loan Agreement
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3.1	The Second Convertible Loan Agreement shall no longer have any legal effect between the parties, but shall be replaced in its<br>entirety by this Agreement. This shall include a waiver of all secondary and consequential claims in connection therewith.
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3.2	In particular, the Lender shall no longer be entitled to convert the amounts disbursed under the Second Convertible Loan Agreement<br>under the terms of the Second Convertible Loan Agreement but only in accordance with Section 7 of this Agreement. The Lender shall<br>not be entitled to reclaim the amount already disbursed under the Second Convertible Loan Agreement. The amount already disbursed<br>under the Second Convertible Loan Agreement shall be deemed to be disbursed under this Agreement
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6

4.	Grant of Convertible Loan
4.1	Subject to the terms and conditions set forth in this Agreement, the Lender hereby grants to the Borrower a convertible loan<br>in an aggregate amount of (the “Convertible Loan”).
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CHF 5,000,000.00

(in words: Swiss Franconia five million)

4.2	An amount of CHF 1,000,000.00 of the Convertible Loan has already been paid out through the disbursement of the respective<br>amount under the First Convertible Loan Agreement.
4.3	An amount of CHF 1,000,000.00 of the Convertible Loan has already been paid out through the disbursement of the respective<br>amount under the Second Convertible Loan Agreement.
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4.4	Notwithstanding Sections 4.2. and 4.3, the outstanding amount of CHF 3,000,000.00 shall be divided into three (3) tranches<br>each with the due date (each the “Due Date”) and a partial loan amount as follows (each the "Partial Loan Amount"):
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Due Date	Partial Loan Amount in CHF
---	---
20 November 2020	1,000,000.00
16 December 2020	1,000,000.00
16 January 2021	1,000,000.00
Total Loan Amount Outstanding	3,000,000.00
4.5	The Due Dates and the amounts of the Partial Loan Amounts as set forth in Section 4.4 shall be subject to adjustment in accordance<br>with the Borrower’s working capital needs as follows: The Borrower shall confirm to the Lender at the latest five (5) days<br>prior to the Due Date of each Partial Loan Amount that it has respective working capital needs. Upon request of the Lender, the<br>Borrower shall provide the Lender with adequate and plausible evidence of such working capital needs. If there is no corresponding<br>working capital need, the Lender may demand the Partial Loan Amounts to be disbursed later than at the Due Dates and/or in amounts<br>lower than the Partial Loan Amounts as set forth in Section 4.4 in accordance with the actual working capital requirements of the<br>Borrower and if the corresponding working capital need is higher than the respective scheduled Partial Loan Amount, the Borrower<br>may demand the Partial Loan Amounts to be disbursed earlier than at the Due Dates and/or that the respective Partial Loan Amount<br>is increased in such amount as is required to cover the actual working capital need, but in no case shall the sum of the disbursed<br>Partial Loan Amounts exceed an amount of CHF 3,000,000.00.
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7

4.6	The Borrower shall use the Convertible Loan exclusively to finance its ongoing operations.
4.7	Subject to Section 4.5:
---	---
(a)	each Partial Loan Amount shall be due and payable on the respective Due Date.
---	---
(b)	The Lender shall be entitled to pay out Partial Loan Amounts partly or in whole any time before the respective Due Date.
---	---
4.8	Each Partial Loan Amount shall be paid by irrevocable wire transfer of immediately available funds free of any bank and other<br>charges to the following bank account of the Borrower or any other bank account of the Borrower as previously specified to the<br>Lender (the “Bank Account”):
---	---
Account Holder:	arago GmbH
---	---
Bank:	***
IBAN:	***
BIC:	***
5.	Interest Rate
---	---
5.1	The Convertible Loan shall bear interest at a rate of five per cent (5%) per annum. The<br>amount already disbursed under the First and the Second Convertible Loan Agreements shall continue to bear interest at this<br>rate.
---	---
5.2	Interest shall accrue from the date of receipt on the Bank Account of the respective Partial Loan Amount and shall be converted<br>in accordance with Sec. 7 below.
---	---
5.3	Interest shall be computed pro rata temporis on the basis of the actual number<br>of days elapsed (actual/actual).
---	---
6.	Term and Termination
---	---
6.1	Unless converted in accordance with Sec. 8 below or terminated in accordance with Section 6.2 below, the Convertible Loan shall<br>have an indefinite term. This Agreement shall become effective upon the date of its execution, provided, however, that Harbert<br>or its relevant affiliate shall have confirmed to the Company and the Lender in writing that a Conversion in accordance with the<br>terms and conditions of this Agreement, or any other provision or agreement included in this Agreement, will not cause the occurrence<br>of an “Event of Default” pursuant to and as defined in the terms and conditions for the bearer bonds of arago GmbH,<br>dated 17 September 2018, as amended on 28 May 2020 (the “Bond Terms”), among other things because of the occurrence<br>of a Change of Control (as defined in the Bond Terms).
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8

6.2	This Agreement may be terminated by the Lender with effect as of 30 November 2021 (“Long Stop Date”), provided<br>that written notice of termination (“Termination Notice”) must be given not earlier than 30 June 2021.
6.3	Notwithstanding the provisions in Sec. 6.2, this Agreement may be terminated at any time by each Party for cause (aus wichtigemGrund) with prior Termination Notice to the respective other Party. In particular, the following events shall be deemed a cause<br>for the Lender to terminate this Agreement pursuant to this Sec. 6.2:
---	---
(a)	the liquidation, dissolution or winding-up of the Borrower; or
---	---
(b)	an Event of Default.
---	---
7.	Repayment
---	---

In the event of a termination pursuant to Sections 6.2 and 6.3, the Convertible Loan, or in case the Convertible Loan was not paid out completely until then, the paid out Partial Loan Amounts, and any interest accrued thereon (the Lender’s “Repayment Claim“) shall become due and payable to the Lender without premium or prepayment penalty within fifteen (15) Banking Days after the Long Stop Date by irrevocable wire transfer of immediately available funds and free of any bank and other charges to the bank account specified by the Lender to the Borrower.

8.	Harbert Financing
8.1	The Lender hereby provides the Borrower with the LoC attached hereto in Annex 1 with respect to the Borrower’s<br>obligations under the Harbert Financing.
---	---
8.2	The undertaking set forth in Section 8.1 shall be separate from and in addition to the undertaking to disburse the Partial<br>Loan Amounts as set forth in Section 4 and the contribution of disbursed and undisbursed (if any) Partial Loan Amounts as set forth<br>in Section 9.4.
---	---
9.	Conversion
---	---
9.1	The conversion of the Convertible Loan will take place subject to and in accordance with the following provisions (“Conversion”).
---	---
9.2	The Lender shall have the right at any time and subject to the further terms of this Agreement to<br>request the Conversion without undue delay resulting in the Lender holding, directly or indirectly, such amount of shares in the<br>Borrower corresponding to 51% of the Borrower’s share capital and 51% of the voting rights associated with the Borrower’s<br>share capital, calculated on a fully diluted basis, taking into consideration, for such purposes, the impact of any unexercised<br>share options or other capital instruments convertible into or exchangeable or exercisable for arago shares (including, for the<br>avoidance of doubt, the Harbert Warrant), after consummation of the Conversion (“Conversion Shares”). In case<br>the Lender has not exercised its right by 31 December 2020, the Borrower shall have a corresponding right to request the Conversion<br>at any time. If at the time of the Conversion the number of Company shares issuable to a third party, such as (but not limited<br>to) Harbert, cannot be definitively determined, and upon issuance to any such third party the Lender’s equity interest falls<br>below 51% of the Borrower’s share capital and 51% of the voting rights associated with the Borrower’s share capital,<br>calculated on a fully diluted basis (as further described above), the Lender shall have the right to require, at no consideration,<br>the Borrower to issue to it such number of additional shares in the Borrower as is necessary to ensure it continues to hold 51%<br>of the Borrower’s share capital and 51% of the voting rights associated with the Borrower’s share capital, calculated<br>on a fully diluted basis.
---	---

9

9.3	In the course of the Conversion, the nominal value for each Conversion Share shall be paid-in in cash by the Lender, and the<br>Convertible Loan shall be contributed into the Borrower’s free capital reserves pursuant to Sec. 272(2) no. 4 German Commercial<br>Code (andere Zuzahlung in das Eigenkapital). If the Convertible Loan has not been fully disbursed by the time of Conversion,<br>the Lender shall contribute - in addition to the Convertible Loan - the undisbursed amounts to the Borrower’s free capital<br>reserves pursuant to Sec. 272(2) no. 4 German Commercial Code (andere Zuzahlung in das Eigenkapital).
9.4	As soon as reasonably possible after the date hereof, but in any event prior to the Conversion, the<br>Existing Shareholders will resolve upon a restatement of the Borrower’s Articles of Association mutually agreed between the<br>Lender and the Existing Shareholders. The restated Articles of Association of the Borrower shall provide for (i) a unified class<br>of common shares by conversion of any preference shares into common shares and for (i) for a list of actions and measures requiring<br>an unanimous decisions of all shareholders of the Borrower, in particular:
---	---
(a)	nomination or dismissal of any managing director, save that the Existing Shareholders will not unreasonably withhold consent<br>to the nomination or dismissal of a managing director as a representative of the Lender;
---	---
(b)	consent to any transfer of shares in the Borrower;
---	---
(c)	any amendment or restatement of the rules of procedure for the Borrower’s management; and
---	---
(d)	any subsequent restatement or amendment of the Borrower’s restated Articles of Association.
---	---
9.5	As soon as reasonably possible after the date hereof, but in any event prior to the Conversion, the Existing Shareholders will<br>adopt the necessary resolutions for the Lender to be represented on the Borrower’s board of management (Geschäftsführung)<br>with one representative. The Parties agree that the initial managing director representing the Lender on the Borrower’s board<br>of management (Geschäftsführung) shall be Peter Ward, Chief Financial Officer of the Lender. All members of the<br>Borrower’s board of management shall have joint signature authority by two. Further, the Existing Shareholders will resolve<br>upon rules of procedure for the Borrower’s management, substantially in the form attached hereto in Annex 2, it being<br>understood, that any such rules of procedures must be in a form that ensures that the Lender can consolidate the Company in its<br>U.S. GAAP financial statements.
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10

9.6	The Parties agree that the items set forth in Sections 9.5 and 9.6 shall furthermore<br>be reflected in the shareholders’ agreement to be concluded amongst the Parties.
10.	Securities; Subordination, Covenant not to Issue New Shares
---	---
10.1	The Convertible Loan shall be unsecured, subordinated (in the sense as set out in Section 10.2), and no security, guarantee,<br>pledge or charge shall be furnished by the Borrower in connection with the grant of the Convertible Loan.
---	---
10.2	In order to avoid an over-indebtedness (Überschuldung) of the Company within the meaning of Sec. 19(2) German Insolvency<br>Act (Insolvenzordnung) the Lender hereby subordinates any and all of its present and future claims under or in connection<br>with this Agreement, including (without limitation) its repayment claim to all present and future claims of any other creditor<br>of the Company pursuant to Sec. 39(1) nos. 1 through 5 German Insolvency Act, provided, however, that the repayment<br>claim shall rank pari passu with any other financial instrument (including, without limitation, any convertible loan, (convertible)<br>promissory notes and alike) convertible into equity of the Company, and further provided that the Company shall procure that repayment<br>claim shall be satisfied prior to any distributions to the Existing Shareholders, including for the avoidance of the doubt the<br>subordinated shareholder loan granted by the Existing Shareholder 1 on 27 May 2020 in the principal amount of EUR 1,918,047.09.<br>The repayment claims shall be paid only after all present and future claims of other higher-ranking creditors of the Company have<br>been settled. The Lender may only require payments in relation to the repayment claim if (i) such payments can be made out of balance<br>sheet profits (annual profit plus profit carried forward), any surplus assets on winding-up or any other disposable assets that<br>exceed the assets necessary to maintain the Company’s registered share capital (son-stiges freies Vermögen),<br>and (ii) the Company is neither illiquid or over-indebted, nor would become or is threatened to become illiquid or over-indebted<br>as a result of such payment.
---	---
10.3	The Company may request from the Lender to formally issue any appropriate declaration of subordination (Rangrücktrittserklärung)<br>at any time as may be required in order to comply with all legal requirements regarding the validity and effectiveness of such<br>subordination as may, from time to time, be established by German legislation and jurisprudence.
---	---
10.4	The Company and the Existing Shareholders hereby undertake, subject to the commitment of the Company pursuant to the terms<br>of the Harbert Warrant, not to issue any shares (of whatever class or series) in the Company to any person, other than to the Lender<br>upon the Conversion. Further, the Existing Shareholders’ undertake to procure that the Borrower complies with its restrictions<br>on making distributions to the Existing Shareholders pursuant to Section 1(c) of the LoC.
---	---

11

11.	Representation and Warranties
11.1	The Company and the Existing Shareholders (hereinafter in this Sec. 9 collectively the “Guarantors”), represent<br>and warrant by way of an independent guarantee in the meaning of section 311 of the German Civil Code (BGB) to the Lender (provided,<br>however, that the Lender do not represent and warrant vis-à-vis themselves), to the extent legally permissible, as<br>of the date hereof and the date of Conversion that:
---	---
(a)	The Company is a corporation duly organized, validly existing under the laws of Germany and has all corporate power and corporate<br>authority required to execute, deliver and perform its obligations under this Agreement (“Guarantee”);
---	---
(b)	The acquisition by the Lender of a majority of the share capital of the Company upon Conversion will not lead to any termination<br>or acceleration of any outstanding financial indebtedness of the Company or any of the Existing Shareholders;
---	---
(c)	The Company has not issued any warrants or any other instrument or right convertible into, or exchangeable or exercisable for<br>any class or series of shares in the Company, other than that certain warrant issued to Harbert.
---	---
(d)	There are no actions, suits or proceedings pending or, to the knowledge of the Borrower or any of the Existing Shareholders,<br>threatened with respect to the Company or the Existing Shareholders.
---	---
(e)	No insolvency or similar proceedings have been initiated with respect to the Company or any of the Existing Shareholders.
---	---
(f)	Set forth in Annex 4 are listed all IP Rights and Technology (as such terms are<br>defined in the Pledge of IP Rights and Assignment of Use Rights by and between the Company and Harbert dated as of 17 September<br>2018 (the “IP Pledge Agreement”) owned or licensed to the Company. The representations and warranties as contained<br>in the Section 12 of the IP Pledge Agreement are hereby repeated for the benefit of the Lender as if given to it as of the date<br>hereof and the date of Conversion.
---	---
11.2	The Guarantee shall under no circumstances be considered as an agreement on the legal and factual nature (Beschaffenheitsvereinbarungen)<br>as defined in section 434 paragraph 1 of the German Civil Code or as a guarantee for certain features of goods sold (Garantie für<br>die Beschaffenheit der Sache) as defined in section 443 para. 1 and section 444 of the German Civil Code. Subject to mandatory<br>law, in particular section 123 and section 276 of the German Civil Code (BGB) and except as otherwise expressly provided in this<br>Agreement the Guarantees as set out in this Sec. 9 are exhaustive and no further representations and warranties are deemed to be<br>given by the Guarantors.
---	---

12

11.3	If the Guarantee turns out to be not true or accurate, then the Lender shall have the right to raise a claim for the breach<br>of such Guarantee against the respective Guarantor. Within two (2) weeks following such claim having been made in writing towards<br>the respective Guarantor, the respective Guarantor shall put the Lender in such a position as they would have been in, had the<br>respective Guarantee been true and accurate in every respect (restitution in kind; Nat-uralrestitution). In the event of<br>a breach of the Guarantees and if the respective Guarantor is unable to achieve the remediation pursuant to the preceding sentence,<br>each of the Guarantors shall be liable to the Lender for any of the losses, costs or expenses incurred by the Lender or the Borrower)<br>resulting from a breach of the Guarantees, Sec. 249 et seq. BGB shall apply accordingly. The aggregate liability of the<br>Guarantors shall be limited to an amount equal to the Convertible Loan and accrued interests thereunder.
11.4	Notwithstanding anything to the contrary herein, nothing in this Agreement shall have the effect of limiting any liability<br>of the respective Guarantor arising from misconduct (Vorsatz) or fraudulent misrepresentation (arglistige Täuschung).
---	---
12.	Confidentiality
---	---

The Parties shall treat all information in connection with this Agreement, including the conclusion of this Agreement and its content, strictly confidential. However, the Parties are entitled to disclose information (i) to advisors, accountants and auditors of each Party who themselves are subject to a comparable confidentiality obligation and (ii) to tax and other public authorities to the extent stipulated by statutory law. The Lender’s authority to make ad hoc releases to the public in accordance with Swiss law and SIX Exchange Regulation regulations shall be expressly reserved.

13.	No Joint Liability

Except with respect to the Existing Shareholders, which shall have joint and several liability, any obligation of any Party under this Agreement, including any and all rights and remedies of any legal nature, shall not be joint and several (keine gesamtschuldnerische Haftung), but shall always be several (teilschuldnerisch).

14.	Assignment

Except as expressly provided otherwise in this Agreement, any assignment of rights and/or obligations resulting from or in connection with this Agreement, other than an assignment to a Related Party of an assigning Lender, requires the prior written consent of the Borrower.

15.	Notices
15.1	Unless stipulated otherwise in this Agreement, all declarations, notices or other communications hereunder (the “Notices”)<br>shall be made in Text Form in English, and delivered to the Parties at the addresses set forth in the parties section of this Agreement<br>or such other addresses as may be designated by the respective Party to the other Party in the same manner.
---	---

13

15.2	Each Party shall inform the other Party about any change of its address as soon as possible. Until a Party has been informed<br>about a change of address in accordance with the provisions of this Sec. 13, the addresses set forth in this Sec. 13 or the last<br>address communicated in accordance with this Sec. 13 shall be relevant.
16.	Costs
---	---

Each Party shall bear its own costs arising in connection with the conclusion of this Agreement.

17.	Existing Shareholders’ Undertaking
17.1	The Parties undertake towards each other to take all measures and make all declarations necessary to implement the Conversion<br>of the Convertible Loan and to bring into full effect the respective Party’s claims under and in respect of this Agreement.
---	---
17.2	In particular, the Existing Shareholders hereby undertake to participate in and resolve in favor of an increase of the Company’s<br>registered share capital in order to implement the Conversion and to this end and to the extent necessary waive their subscription<br>rights and rights of first refusal or similar rights.
---	---
17.3	Further, all Existing Shareholders hereby undertake to confer the foregoing obligations with respect to the implementation<br>of the Conversion on any future shareholders which acquire or subscribe to shares in the Company, and not to admit any new shareholders<br>in the Company unless the new shareholder accedes, or has otherwise become a party, to this Agreement beforehand or simultaneously<br>with the acquisition of the shares in the Borrower.
---	---
18.	Shareholders’ Resolution
---	---

The Existing Shareholders hereby hold an extraordinary shareholders’ meeting of the Company, waiving all statutory or other requirements regarding form and timing pertaining to calling, convening and holding a shareholders’ meeting, and unanimously resolve as follows:

“We hereby unconditionally and irrevocablyconsent to the execution of this Convertible Loan Agreement.”

No further resolutions shall be adopted. The extraordinary shareholders’ meeting is thus concluded.

19.	Miscellaneous
19.1	This Agreement shall be governed by and construed in accordance with the laws of the Federal Republic of Germany without giving<br>effect to any conflict of law provisions and excluding the United Nations Convention on the Contracts of the International Sale<br>of Goods (CISG).
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14

19.2	The courts of the city of Zurich, Canton of Zurich, Switzerland, shall have exclusive jurisdiction to settle any disputes arising<br>under or in connection with this Agreement.
19.3	Any amendment or supplementation of this Agreement, including this provision, and any waiver under this Agreement shall be<br>valid only if made in writing, except where a stricter form is required under applicable law.
---	---
19.4	This Agreement constitutes the entire agreement of the Parties relating to the subject matter hereof and supersedes all prior<br>agreements, whether written or oral, that may exist between the Parties in respect of the subject matter of this Agreement or parts<br>thereof. There are no side agreements between the Parties to this Agreement.
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19.5	Should any provision of this Agreement be or become invalid, ineffective or unenforceable as a whole or in part, the validity,<br>effectiveness and enforceability of the remaining provisions shall not be affected thereby. Any such invalid, ineffective or unenforceable<br>provision shall be deemed replaced by such valid, effective and enforceable provision as comes closest to the economic intent and<br>the purpose of such invalid, ineffective or unenforceable provision as regards subject-matter, amount, time, place and extent.<br>The aforesaid shall apply mutatis mutandis to any unintended gap in this Agreement.
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[Signature page follows]

15

Frankfut, 18.11.20	/s/ Hans-Christian Boos
Place, Date<br><br> <br><br><br> <br>Geneva, 18 November 2020	arago GmbH<br><br> <br><br>/s/ Carlos Moreira
Geneva, 18 November 2020<br><br> <br>Place, Date<br><br> <br><br><br> <br>Geneva, 18 November 2020	WISeKey International Holding AG<br><br> <br>Carlos Moreira, CEO<br><br> <br>****<br><br> <br>/s/ Peter Ward ****
Geneva, 18 November 2020<br><br> <br>Place, Date<br><br> <br><br><br> <br>Frankfut, 18.11.20	WISeKey International Holding AG<br><br> <br>Peter Ward, CFO<br><br> <br><br>/s/ Hans-Christian Boos
Place, Date<br><br> <br><br><br> <br>Frankfut, 18.11.20	Aguilon Invest GmbH<br><br> <br><br><br> <br>/s/ Hans-Christian Boos
Place, Date	OGARA GmbH

* * *

List of significant subsidiaries of the Registrant

Group Company Name	Country of incorporation
WISeKey SA	Switzerland
WISeKey Semiconductors SAS	France
WiseTrust SA	Switzerland
WISeKey ELA SL	Spain
WISeKey SAARC Ltd	U.K.
WISeKey USA Inc*	U.S.A
WISeKey India Private Ltd**	India
WISeKey IoT Japan KK	Japan
WISeKey IoT Taiwan	Taiwan
WISeCoin AG	Switzerland
WISeKey Equities AG	Switzerland
WISeCoin France R&D Lab SAS	France
WISeKey Semiconductors GmbH	Germany
WISeKey Arabia - Information Technology Ltd	Saudi Arabia
WiseAI AG	Switzerland

*50% owned by WISeKey SA and 50% owned by WiseTrust SA

** 88% owned by WISeKey SAARC which is controlled by WISeKey International Holding AG

CERTIFICATION

I, Carlos Moreira, certify that:

1.	I have reviewed this annual report on Form 20-F of WISeKey International Holding AG;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact<br>necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with<br>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<br>all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods<br>presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and<br>procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined<br>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<br>supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known<br>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<br>under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of<br>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<br>about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on<br>such evaluation; and
---	---
d.	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the<br>period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s<br>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<br>over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or<br>persons performing the equivalent functions):
---	---
a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting<br>which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial<br>information; and
---	---
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s<br>internal control over financial reporting.
---	---

Date: April 29, 2021

By: /s/ CARLOS MOREIRA

Carlos Moreira

Chief Executive Officer

CERTIFICATION

I, Peter Ward, certify that:

1.	I have reviewed this annual report on Form 20-F of WISeKey International Holding AG;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact<br>necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with<br>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<br>all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods<br>presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and<br>procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined<br>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<br>supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known<br>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<br>under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of<br>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<br>about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on<br>such evaluation; and
---	---
d.	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the<br>period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s<br>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<br>over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or<br>persons performing the equivalent functions):
---	---
a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting<br>which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial<br>information; and
---	---
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s<br>internal control over financial reporting.
---	---

Date: April 29, 2021

By: /s/ PETER WARD

Peter Ward

Chief Financial Officer

CERTIFICATION

The certification set forth below is being submitted in connection with the annual report of WISeKey International Holding AG (the “Company”) on Form 20-F for the period ending December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Carlos Moreira, the Chief Executive Officer of the Company, certifies that, to the best of his knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations<br>of the Company.
---	---

By: /s/ CARLOS MOREIRA

Carlos Moreira

Chief Executive Officer

Date: April 29, 2021

CERTIFICATION

The certification set forth below is being submitted in connection with the annual report of WISeKey International Holding AG (the “Company”) on Form 20-F for the period ending December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Peter Ward, the Chief Financial Officer of the Company, certifies that, to the best of his knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations<br>of the Company.
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By: /s/ PETER WARD

Peter Ward

Chief Financial Officer

Date: April 29, 2021