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 Sequans Communications Announces Fourth Quarter and Full Year 2015 Financial Results
   Thursday, February 04, 2016 6:00:07 AM ET

4G chipmaker Sequans Communications S.A. (SQNS ) today announced financial results for the fourth quarter and full year ended December 31, 2015.

Fourth Quarter 2015 Highlights:

Revenue: Revenue of $11.0 million increased 18% compared to the third quarter of 2015, with lower product sales offset by higher other revenue, including both license and service revenues. Revenue increased 68% compared to the fourth quarter of 2014 due to higher sales of products for the LTE markets, as well as higher other revenue.

Gross margin: Gross margin was 43.4% (51.8% on a non-IFRS basis) compared to gross margin of 40.8% in the third quarter of 2015, and compared to 6.1% (34.7% on a non-IFRS basis) in the fourth quarter of 2014, due to a more favorable revenue mix. Non-IFRS gross margin excludes a provision for writing down the remaining WiMAX inventory.

Operating loss: Operating loss was $5.1 million compared to an operating loss of $4.2 million in the third quarter of 2015 and an operating loss of $9.2 million in the fourth quarter of 2014, reflecting higher revenues and higher gross profit offset by higher operating expenses.

Net loss: Net loss was $9.7 million, or ($0.16) per diluted share/ADS, compared to a net loss of $2.4 million, or ($0.04) per diluted share/ADS in the third quarter of 2015 and a net loss of $9.0 million, or ($0.15) per diluted share/ADS in the fourth quarter of 2014.

Non-IFRS Net loss: Excluding the non-cash items of stock-based compensation, the provision for WiMAX inventory, the fair-value and effective interest adjustments related to the convertible debt and its embedded derivative, and the impact of revaluation of an interest-free government loan, non-IFRS net loss was $4.2 million, or ($0.07) per diluted share/ADS, compared to a non-IFRS net loss of $4.6 million, or ($0.08) per diluted share/ADS in the third quarter of 2015, and a non-IFRS net loss of $7.0 million, or ($0.12) per diluted share/ADS, in the fourth quarter of 2014.

Cash and cash equivalents: Cash position of $8.7 million reflects the partial impact from strategic cooperation transactions finalized during the fourth quarter. At least $7 million in cash is expected to be received during the first quarter, of which over $5 million was received in January 2016.

                                                                                                                                                                                                                                                                                                        
In millions of US$ except percentages, shares and per share amounts                                                                                                                                                                                                              Key Metrics                                                                                                                                                                                         
                                                                                                              -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                  Q4 2015                       %*                  Q3 2015                       %*                  Q4 2014                       %*           Full year 2015                       %*           Full year 2014                       %*
------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Revenue                                                                                                                      $11.0                                                                                                                          $9.4                                                                                                                          $6.6                                                                                                                         $32.7                                                                                                                         $22.6
Gross profit                                                                                                                   4.8                                                          43.4%                                                            3.8                                                          40.8%                                                            0.4                                                           6.1%                                                           13.3                                                          40.5%                                                            6.8                                                          30.2%
Operating loss                                                                                                               (5.1)                                                        (46.6%)                                                          (4.2)                                                        (45.3%)                                                          (9.2)                                                       (139.2%)                                                         (23.6)                                                         -72.2%                                                         (34.1)                                                       (150.7%)
Net loss                                                                                                                     (9.7)                                                        (87.6%)                                                          (2.4)                                                        (26.0%)                                                          (9.0)                                                       (137.6%)                                                         (23.6)                                                         -72.2%                                                         (34.1)                                                       (150.7%)
Diluted EPS                                                                                                                ($0.16)                                                                                                                       ($0.04)                                                                                                                       ($0.15)                                                                                                                       ($0.46)                                                                                                                       ($0.58)
Weighted average number of diluted shares/ADS                                                                           59,145,393                                                                                                                    59,144,741                                                                                                                    59,144,741                                                                                                                    59,144,905                                                                                                                    59,141,716
Cash flow used in operations                                                                                                 (2.2)                                                                                                                         (2.4)                                                                                                                         (5.7)                                                                                                                        (16.4)                                                                                                                        (24.4)
Cash, cash equivalents and short-term deposit at quarter-end                                                                   8.7                                                                                                                          11.6                                                                                                                          12.5                                                                                                                           8.7                                                                                                                          12.5
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Additional information on non-cash items:
 - WiMAX inventory provision                                                                                                   0.8                                                                                                                             -                                                                                                                           1.9                                                                                                                           0.8                                                                                                                           1.9
 - Stock-based compensation included in operating result                                                                       0.2                                                                                                                           0.2                                                                                                                           0.2                                                                                                                           0.9                                                                                                                           1.3
 - Change in the fair value of convertible debt embedded derivative                                                            4.2                                                                                                                         (2.5)                                                                                                                             -                                                                                                                           2.0                                                                                                                             -
 - Interest on convertible debt                                                                                                0.3                                                                                                                           0.3                                                                                                                             -                                                                                                                           0.7                                                                                                                             -
 - Impact of revaluation of interest-free government loan                                                                        -                                                                                                                         (0.1)                                                                                                                             -                                                                                                                         (0.1)                                                                                                                             -
Non-IFRS diluted EPS (excludes stock-based compensation, inventory                                                         ($0.07)                                                                                                                       ($0.08)                                                                                                    ($0.12)                                                                                                                       ($0.39)                                                                                                                       ($0.52)
provision, fair value and effective interest adjustments related to
the convertible debt and its embedded derivative, and the impact of
revaluation of interest-free government loan)
                                                                                                            
------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
* Percentage of revenue
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

"We are pleased to report revenue growth of 45% in 2015, primarily from the home and mobile router business," said Georges Karam, Sequans CEO. "In addition to continued growth from this traditional market, we expect revenue from the M2M/IoT business to begin ramping in 2016 thanks to our LTE CAT1 leadership and secured design wins.

"Another major goal for 2016 is to remain at the forefront of LTE technology by introducing new LTE-M narrowband solutions that will further expand our available market, enable new product categories and help fuel revenue growth in the years to come. During Q4 we finalized three new strategic partnerships, including Verizon and Socle-Foxconn, with numerous benefits including the ability to accelerate time-to-market for new products, access to complementary technology, expanding our sales channels and global reach, as well as providing financial advantages. We are gratified that these successful companies have chosen to partner with Sequans, validating our leadership in single-mode LTE technology," added Karam.

2016 Outlook

The following statements are based on management’s current assumptions and expectations. These statements are forward-looking and actual results may differ materially. Sequans undertakes no obligation to update these statements.

Sequans expects revenue for the first quarter of 2016 to be in the range of $9.5 to $11.5 million, primarily reflecting typical seasonality, with non-IFRS gross margin above 40%. Based on this revenue range and expected gross margin, non-IFRS net loss per diluted share/ADS is expected to be between ($0.08) and ($0.10) for the first quarter of 2016, based on approximately 59.2 million weighted average number of diluted shares/ADSs. Non-IFRS EPS guidance excludes the impact of stock based compensation, the non-cash fair-value and effective interest adjustments related to the convertible debt and its embedded derivative, the impact of revaluation of an interest-free government loan and any other relevant non-cash or non-recurring expenses.

Meaningful sequential revenue growth is expected beginning in the second quarter as new devices are launched in addition to the product already shipping. In addition, discussions with several potential strategic partners are continuing. When finalized, these alliances are expected to contribute to company financing and incremental revenue.

Conference Call and Webcast

Sequans plans to conduct a teleconference and live webcast to discuss the financial results for the fourth quarter of 2015 today, February 4, 2016 at 8:00 a.m. EST /14:00 CET. To participate in the live call, analysts and investors should dial 800-230-1059 (or +1 612-234-9959 if outside the U.S.). A live and archived webcast of the call will be available from the Investors section of the Sequans website at www.sequans.com/investors/. A replay of the conference call will be available until March 4, 2016 by dialing toll free 800-475-6701 in the U.S., or +1 320-365-3844 from outside the U.S., using the following access code: 382913.

Forward-Looking Statements

This press release contains projections and other forward-looking statements regarding future events or our future financial performance. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: (i) the contraction or lack of growth of markets in which we compete and in which our products are sold, including LTE and WiMAX markets, (ii) unexpected increases in our expenses, including manufacturing expenses, (iii) our inability to adjust spending quickly enough to offset any unexpected revenue shortfall, (iv) delays or cancellations in spending by our customers, (v) unexpected average selling price reductions, (vi) the significant fluctuation to which our quarterly revenue and operating results are subject due to cyclicality in the wireless communications industry and transitions to new process technologies, (vii) our inability to anticipate the future market demands and future needs of our customers, (viii) our inability to achieve new design wins or for design wins to result in shipments of our products at levels and in the timeframes we currently expect, and (ix) other factors detailed in documents we file from time to time with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Use of Non-IFRS/non-GAAP Financial Measures

To supplement our unaudited consolidated financial statements prepared in accordance with IFRS, we disclose certain non-IFRS, or non-GAAP, financial measures. These measures exclude non-cash charges relating to stock-based compensation, the non-cash financial expense related to the convertible debt and its embedded derivative issued in April 2015 and the impact of revaluation of an interest-free government loan. We believe that these measures can be useful to facilitate comparisons among different companies. These non-GAAP measures have limitations in that the non-GAAP measures we use may not be directly comparable to those reported by other companies. We seek to compensate for this limitation by providing a reconciliation of the non-GAAP financial measures to the most directly comparable IFRS measures in the table attached to this press release.

About Sequans Communications

Sequans Communications S.A. (SQNS ) is a 4G chipmaker and leading provider of single-mode LTE chipset solutions to wireless device manufacturers worldwide. Founded in 2003, Sequans has developed and delivered six generations of 4G technology and its chips are certified and shipping in 4G networks, both LTE and WiMAX, around the world. Today, Sequans offers two LTE product lines: StreamrichLTE(TM), optimized for feature-rich mobile computing and home/portable router devices, and StreamliteLTE(TM), optimized for M2M devices and other connected devices for the Internet of Things. Sequans is based in Paris, France with additional offices in the United States, United Kingdom, Israel, Hong Kong, Singapore, Taiwan, South Korea, and China. Visit Sequans online at www.sequans.com; www.facebook.com/sequans; www.twitter.com/sequans

Condensed financial tables follow

                                                                                                                                                                                          
                                                                                                                                                                    SEQUANS COMMUNICATIONS S.A.
 
                                                                                                                                                     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                                                   
-------------------------------------------------------------------- -------------------- -------------------- ------------------------------------------------------------------------- -------------------- ------------------------------------------------------------------------- -------------------- -----------------------------------------------------
                                                                                                                                                                                                                               Three months ended
(in thousands of US$, except share and per share amounts)                                                                                                   Dec 31,                                                                                       Sept 30,                                                                                        Dec 31,
                                                                                                      2015                                                     2015                                                     2014
-------------------------------------------------------------------- -------------------- -------------------- ------------------------------------------------------------------------- -------------------- ------------------------------------------------------------------------- -------------------- -----------------------------------------------------
                                                                                                                                                                                                                                                                                                              
Revenue :
    Product revenue                                                                                                               $      6,551                                                                                   $      7,887                                                                                   $      5,759
    Other revenue                                                               4,496              1,471                813  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Total revenue                                                                  11,047              9,358              6,572  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Cost of revenue
    Cost of product revenue                                                                                                              5,628                                                                                          5,153                                                                                          6,036
    Cost of other revenue                                                         621                391                133  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Total cost of revenue                                                           6,249              5,544              6,169  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Gross profit                                                                    4,798              3,814                403  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Operating expenses :
    Research and development                                                                                                             6,892                                                                                          5,525                                                                                          6,595
    Sales and marketing                                                                                                                  1,509                                                                                          1,406                                                                                          1,255
    General and administrative                                                                                                           1,540                                                                                          1,119                                                                                          1,704
                                                                                                                                   
-------------------------------------------------------------------- -------------------- -------------------- ------------------------------------------------------------------------- -------------------- ------------------------------------------------------------------------- -------------------- -----------------------------------------------------
Total operating expenses                                                        9,941              8,050              9,554  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Operating loss                                                                 (5,143 )                              (4,236 )                              (9,151 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Financial income (expense):
    Interest income (expense), net                                                                                                        (541 )                                                                                         (509 )                                                                                          (23 )
    Other financial expense                                                                                                                 (4 )                                                                                            -                                                                                              -
    Change in the fair value of convertible debt embedded derivative                                                                    (4,249 )                                                                                        2,488                                                                                              -
    Foreign exchange gain (loss)                                                  234                (91 )                                 164  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Loss before income taxes                                                       (9,703 )                              (2,348 )                              (9,010 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Income tax expense (benefit)                                                      (23 )                                  81                 34  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Loss                                                                                                                              $     (9,680 )                                                                                 $     (2,429 )                                                                                       (9,044 )
Attributable to :
    Shareholders of the parent                                                                                                          (9,680 )                                                                                       (2,429 )                                                                                       (9,044 )
    Minority interests                                                              -                  -                  -  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Basic loss per share                                                           ($0.16 )                              ($0.04 )                              ($0.15 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Diluted loss per share                                                         ($0.16 )                              ($0.04 )                              ($0.15 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Weighted average number of shares used for computing:
-- Basic                                                                                                                59,145,393                                                                                     59,144,741                                                                                     59,144,741
-- Diluted                                                     59,145,393         59,144,741         59,144,741  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                              
 
                                                                                                                    SEQUANS COMMUNICATIONS S.A.
                                                                                                                                 
                                                                                                     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                             
-------------------------------------------------------------------- -------------------- -------------------- ------------------------------------------------------------------------- -------------------- -----------------------------------------------------
                                                                                                                                                                              Year ended December 31,
(in thousands of US$, except share and per share amounts)                                                                2015                                                     2014
-------------------------------------------------------------------- -------------------- -------------------- ------------------------------------------------------------------------- -------------------- -----------------------------------------------------
                                                                                                                                                                                                               
Revenue :
    Product revenue                                                                                                               $     24,669                                                                                   $     19,836
    Other revenue                                                               8,040              2,766  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Total revenue                                                                  32,709             22,602  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
    Cost of revenue
    Cost of product revenue                                                                                                             17,970                                                                                         15,435
    Cost of other revenue                                                       1,481                346  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Total cost of revenue                                                          19,451             15,781  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Gross profit                                                                   13,258              6,821  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Operating expenses :
    Research and development                                                                                                            25,445                                                                                         28,634
    Sales and marketing                                                                                                                  5,985                                                                                          5,278
    General and administrative                                                                                                           5,428                                                                                          6,969
                                                                                             
-------------------------------------------------------------------- -------------------- -------------------- ------------------------------------------------------------------------- -------------------- -----------------------------------------------------
Total operating expenses                                                       36,858             40,881  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Operating loss                                                                (23,600 )                             (34,060 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Financial income (expense):
    Interest income (expense), net                                                                                                      (1,516 )                                                                                          (20 )
    Other financial expense                                                                                                               (145 )                                                                                            -
    Change in the fair value of convertible debt embedded derivative                                                                    (2,036 )                                                                                            -
    Foreign exchange gain                                                         249                118  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Loss before income taxes                                                      (27,048 )                             (33,962 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Income tax expense (benefit)                                                                                                               177                                                                                            162
Loss                                                                                                                                   (27,225 )                                                                                      (34,124 )
Attributable to :
    Shareholders of the parent                                                                                                         (27,225 )                                                                                      (34,124 )
    Minority interests                                                              -                  -  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Basic loss per share                                                           ($0.46 )                              ($0.58 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Diluted loss per share                                                         ($0.46 )                              ($0.58 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Weighted average number of shares used for computing:
-- Basic                                                                                                                59,144,905                                                                                     59,141,716
-- Diluted                                                     59,144,905         59,141,716  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                               
 
                                                                                                                    SEQUANS COMMUNICATIONS S.A.
                                                                                                                                  
                                                                                                 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                                                                              
----------------------------------------------------------------------- -------------------- -------------------- ----------------------------------------------------------------------- -------------------- ---------------------------------------------------
                                                                                                                                                                                   At December 31,
(in thousands of US$)                                                                                                     2015                                                   2014
----------------------------------------------------------------------- -------------------- -------------------- ----------------------------------------------------------------------- -------------------- ---------------------------------------------------
                                                                                                                                                                                                                
ASSETS
    Non-current assets
    Property, plant and equipment                                                                                                    $    7,116                                                                                   $    8,743
    Intangible assets                                                                                                                     5,255                                                                                        3,440
    Deposits and other receivables                                                                                                          345                                                                                          320
    Available for sale assets                                                      321              597  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
        Total non-current assets                                                13,037           13,100  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
    Current assets
    Inventories                                                                                                                           4,065                                                                                        9,199
    Trade receivables                                                                                                                    16,674                                                                                        7,749
    Prepaid expenses and other receivables                                                                                                3,170                                                                                        2,988
    Recoverable value added tax                                                                                                             541                                                                                          447
    Research tax credit receivable                                                                                                        2,838                                                                                        3,443
    Deposit maturing in less than 90 days                                                                                                   393                                                                                          160
    Cash and cash equivalents                                                    8,288           12,329  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
        Total current assets                                                    35,969           36,315  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Total assets                                                                                                                         $   49,006                                                                                   $   49,415
                                                                                                                                                                                                                
EQUITY AND LIABILITIES
    Equity
    Issued capital, euro 0.02 nominal value, 59,166,741 shares                                                                       $    1,568                                                                                   $    1,568
    authorized, issued and outstanding at December 31, 2015 (59,144,741
    at December 31, 2014)
    Share premium                                                                                                                       165,536                                                                                      165,507
    Other capital reserves                                                                                                               16,864                                                                                       15,997
    Accumulated deficit                                                                                                                (184,589 )                                                                                   (157,363 )
    Other components of equity                                                    (450 )                              (594 )
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
        Total equity (deficit)                                                  (1,071 )                            25,115  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
    Non-current liabilities
    Government grant advances, loans and other liabilities                                                                                8,615                                                                                        4,013
    Finance lease obligations                                                                                                                 -                                                                                            9
    Provisions                                                                                                                            1,396                                                                                        1,228
    Deferred tax liabilities                                                                                                                 10                                                                                            2
    Convertible debt and accrued interest                                        8,984                -  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
        Total non-current liabilities                                           19,005            5,252  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
    Current liabilities
    Trade payables                                                                                                                        9,498                                                                                       11,231
    Interest-bearing receivables financing                                                                                                6,472                                                                                        2,133
    Convertible debt embedded derivative                                                                                                  6,091                                                                                            -
    Government grant advances                                                                                                               916                                                                                          603
    Finance lease obligations                                                                                                                12                                                                                          202
    Other current liabilities                                                                                                             4,604                                                                                        4,017
    Deferred revenue                                                                                                                      3,162                                                                                          314
    Provisions                                                                     317              548  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
        Total current liabilities                                               31,072           19,048  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------
Total equity and liabilities                                                                                                         $   49,006                                                                                   $   49,415
                                                                                                                                                                                                                
                                                                                                
                                                                                    SEQUANS COMMUNICATIONS S.A.
                                                                                                                                                                              
                                                                     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                                                                              
                                                                                                                                               Year ended December 31,
(in thousands of US$)                                                                   2015                     2014
------------------------------------------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- ---------------------
                                                                                                                                                                              
Operating activities
    Loss before income taxes                                                                                           $ (27,048 )                                                $ (33,962 )
    Non-cash adjustment to reconcile income before tax to net cash from
    (used in) operating activities
        Depreciation and impairment of property, plant and equipment                                                       3,408                                                      3,510
        Amortization and impairment of intangible assets                                                                   1,867                                                      1,790
        Share-based payment expense                                                                                          867                                                      1,276
        Increase (decrease) in provisions                                                                                    152                                                        308
        Financial expense (income)                                                                                         1,516                                                         20
        Change in the fair value of convertible debt embedded derivative                                                   2,036                                                          -
        Other financial expenses                                                                                             145                                                          -
        Foreign exchange loss (gain)                                                                                        (340 )                                                      (15 )
        Loss (Gain) on disposal of property, plant and equipment                                                               5                                                         34
    Working capital adjustments
        Decrease (Increase) in trade receivables and other receivables                                                    (9,268 )                                                   (1,619 )
        Decrease (Increase) in inventories                                                                                 5,134                                                     (2,617 )
        Decrease (Increase) in research tax credit receivable                                                                605                                                      4,563
        Increase (Decrease) in trade payables and other liabilities                                                        2,041                                                      3,424
        Increase (Decrease) in deferred revenue                                                                            2,848                                                        (29 )
        Increase (Decrease) in government grant advances                                                                    (197 )                                                     (816 )
    Income tax paid                                                                                                         (172 )                                                     (273 )
Net cash flow used in operating activities                                                                               (16,401 )                                                  (24,406 )
                                                                                                                                                                              
Investing activities
    Purchase of intangible assets and property, plant and equipment                                                       (5,483 )                                                   (6,242 )
    Sale (purchase) of financial assets                                                                                      345                                                        652
    Sale of short-term investments                                                                                          (233 )                                                     (160 )
    Interest received                                                                                                         26                                                        125
Net cash flow used in investments activities                                                                              (5,345 )                                                   (5,625 )
                                                                                                                                                                              
Financing activities
    Public equity offering, net of costs                                                                                       -                                                       (300 )
    Proceeds from issue of warrants and exercise of stock                                                                     29                                                         23
    options/warrants
    Proceeds from Interest-bearing receivables financing                                                                   4,339                                                      2,133
    Proceeds from interest-bearing research project financing                                                                  -                                                      3,648
    Proceeds from government loans, net of transaction cost                                                                2,134                                                          -
    Proceeds from convertible debt, net of transaction cost                                                               11,572                                                          -
    Repayment of borrowings and finance lease liabilities                                                                   (183 )                                                     (244 )
    Interest paid                                                                                                           (181 )                                                     (139 )
Net cash flows from financing activities                                                                                  17,710                                                      5,121
                                                                                                                                                                              
    Net increase (decrease) in cash and cash equivalents                                                                  (4,036 )                                                  (24,910 )
    Net foreign exchange difference                                                                                           (5 )                                                       (5 )
    Cash and cash equivalent at January 1                                                                                 12,329                                                     37,244
Cash and cash equivalents at end of the period                                                                         $   8,288                                                  $  12,329
                                                                                                                                                                              
 
                                                                                                                                                    SEQUANS COMMUNICATIONS S.A.
                                                                                                                                                               
                                                                                                                                      UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL RESULTS
                                                                                                        
-------------------------------------------------------------------- -------------------- -------------------- --------------------------------------------------------------------- -------------------- -------------------------------------------------- -------------------- -------------------------------------------------
                                                                                                                                                                                                                Three months ended
(in thousands of US$, except share and per share amounts)                                                                                               Dec 31,                                                                Sept 30,                                                                                    Dec 31,
                                                                                                  2015                              2015                                                 2014
-------------------------------------------------------------------- -------------------- -------------------- --------------------------------------------------------------------- -------------------- -------------------------------------------------- -------------------- -------------------------------------------------
Net IFRS loss as reported                                                                                                         $ (9,680 )                                                                                 $ (2,429 )                                                              $ (9,044 )
Add back
    WiMAX inventory provision (1)                                                                                                      760                                                                                          -                                                                   1,875
    Stock-based compensation expense according to IFRS 2 (2)                                                                           246                                                                                        186                                                                     217
    Change in the fair value of convertible debt embedded derivative                                                                 4,249                                                                                     (2,488 )                                                                     -
    Interest on Convertible debt and loans                                                                                             267                                                                                        254                                                                       -
    Impact of revaluation of interest-free government loan                                                                               -                                                                                       (121 )                                                                     -
Non-IFRS loss adjusted                                                                      $ (4,158 )                                           $ (4,598 )                        $ (6,952 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ - -------------------- -------------------- -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                   
IFRS basic loss per share as reported                                                                                               ($0.16 )                                                                                   ($0.04 )                                                                ($0.15 )
Add back
    WiMAX inventory provision                                                                                                     $   0.01                                                                                          -                                                                $   0.03
    Stock-based compensation expense according to IFRS 2                                                                          $   0.00                                                                                   $   0.00                                                                $   0.00
    Change in the fair value of convertible debt embedded derivative                                                              $   0.07                                                                                     ($0.04 )                                                                     -
    Interest on Convertible debt and loans                                                                                        $   0.01                                                                                   $   0.00                                                                       -
    Impact of revaluation of interest-free government loan                      -         ($0.00 )            -  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ - -------------------- -------------------- -------------------- ------ --------------------
Non-IFRS basic loss per share                                              ($0.07 )                          ($0.08 )       ($0.12 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ - -------------------- -------------------- -------------------- ------ --------------------
IFRS diluted loss per share                                                                                                         ($0.16 )                                                                                   ($0.04 )                                                                ($0.15 )
Add back
    WiMAX inventory provision                                                                                                     $   0.01                                                                                          -                                                                $   0.03
    Stock-based compensation expense according to IFRS 2                                                                          $   0.00                                                                                   $   0.00                                                                $   0.00
    Change in the fair value of convertible debt embedded derivative                                                              $   0.07                                                                                     ($0.04 )                                                                     -
    Interest on Convertible debt and loans                                                                                        $   0.01                                                                                   $   0.00                                                                       -
    Impact of revaluation of interest-free government loan                      -         ($0.00 )            -  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ - -------------------- -------------------- -------------------- ------ --------------------
Non-IFRS diluted loss per share                                            ($0.07 )                          ($0.08 )       ($0.12 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ - -------------------- -------------------- -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                   
    (1) All included in cost of goods sold in the IFRS loss
    (2) Included in the IFRS loss as follows:
       Cost of product revenue                                                                                                    $      3                                                                                   $      3                                                                $      9
       Research and development                                                                                                        107                                                                                         81                                                                     110
       Sales and marketing                                                                                                              29                                                                                         29                                                                     (18 )
       General and administrative                                                                                                      107                                                                                         73                                                                     116
                                                                                                                                                                                                                                                                                   
 
                                                                                                        SEQUANS COMMUNICATIONS S.A.
                                                                                                           
                                                                                          UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL RESULTS
                                                                       
-------------------------------------------------------------------- -------------------- -------------------- --------------------------------------------------- -------------------- --------------------------------------------------
                                                                                                                                                                 Year ended December 31,
(in thousands of US$, except share and per share amounts)                                                                                2015                                                                                        2014
Net IFRS loss as reported                                                                                                           (27,225 )                                                                (34,124 )
Add back
    WiMAX inventory provision (1)                                                                                                       760                                                                    1,875
    Stock-based compensation expense according to IFRS 2 (2)                                                                            867                                                                    1,277
    Change in the fair value of convertible debt embedded derivative                                                                  2,036                                                                        -
    Interest on Convertible debt and loans                                                                                              737                                                                        -
    Impact of revaluation of interest-free government loan                                                                             (121 )                                                                      -
Non-IFRS loss adjusted                                                     (22,946 )       (30,972 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------- - -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                         
IFRS basic loss per share as reported                                                                                                ($0.46 )                                                                 ($0.58 )
Add back
    WiMAX inventory provision                                                                                                     $    0.02                                                                $    0.03
    Stock-based compensation expense according to IFRS 2                                                                          $    0.01                                                                $    0.03
    Change in the fair value of convertible debt embedded derivative                                                              $    0.03                                                                        -
    Interest on Convertible debt and loans                                                                                        $    0.01                                                                        -
    Impact of revaluation of interest-free government loan                  ($0.00 )             -  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------- - -------------------- -------------------- -------------------- ------- --------------------
Non-IFRS basic loss per share                                               ($0.39 )        ($0.52 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------- - -------------------- -------------------- -------------------- ------- --------------------
IFRS diluted loss per share                                                                                                          ($0.46 )                                                                 ($0.58 )
Add back
    WiMAX inventory provision                                                                                                     $    0.02                                                                $    0.03
    Stock-based compensation expense according to IFRS 2                                                                          $    0.01                                                                $    0.03
    Change in the fair value of convertible debt embedded derivative                                                              $    0.03                                                                        -
    Interest on Convertible debt and loans                                                                                        $    0.01                                                                        -
    Impact of revaluation of interest-free government loan                  ($0.00 )             -  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------- - -------------------- -------------------- -------------------- ------- --------------------
Non-IFRS diluted loss per share                                             ($0.39 )        ($0.52 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ------- - -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                         
    (1) All included in cost of goods sold in the IFRS loss
    (2) Included in the IFRS loss as follows:
       Cost of product revenue                                                                                                    $      17                                                                $      47
       Research and development                                                                                                         372                                                                      559
       Sales and marketing                                                                                                              132                                                                      166
       General and administrative                                                                                                       346                                                                      505
                                                                                                                                                                                         

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SOURCE: Sequans Communications S.A."> <Property FormalName="PrimaryTwitterHandle" Value="@sequans

Sequans Communications S.A. 
Media Relations: 
Kimberly Tassin, +1-425-736-0569 
Kimberly@sequans.com 
or 
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Claudia@sequans.com


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