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 Sequans Communications Announces Third Quarter 2017 Financial Results
   Tuesday, October 31, 2017 6:00:04 AM ET

4G chipmaker Sequans Communications S.A. (SQNS ) today announced financial results for the third quarter ended September 30, 2017.

Third Quarter 2017 Highlights:

Revenue: Revenue was $11.3 million. Revenue for the third quarter of 2017 decreased 14.5% compared to the second quarter of 2017 and decreased 9.3% compared to the third quarter of 2016, reflecting decreases in both product and other revenue.

Gross margin: Gross margin was 44.3% compared to 42.1% in the second quarter of 2017 and compared to 46.8% in the third quarter of 2016, reflecting an increase in the proportion of chip sales in the product mix in the third quarter of 2017 compared to the prior quarter and the impact of fixed costs on a lower product revenue base in the third quarter of 2017 compared to the same quarter in the prior year.

Operating loss: Operating loss was $5.6 million compared to an operating loss of $4.1 million in the second quarter of 2017 and an operating loss of $4.0 million in the third quarter of 2016.

Net loss: Net loss was $6.9 million, or ($0.09) per diluted share/ADS, compared to a net loss of $6.0 million, or ($0.08) per diluted share/ADS, in the second quarter of 2017 and a net loss of $5.1 million, or ($0.08) per diluted share/ADS, in the third quarter of 2016.

Non-IFRS Net loss: Excluding the non-cash items of stock-based compensation and the effective interest adjustments related to the convertible debt and other financings, non-IFRS net loss was $5.9 million, or ($0.07) per diluted share/ADS, compared to a non-IFRS net loss of $4.9 million, or ($0.06) per diluted share/ADS in the second quarter of 2017, and a non-IFRS net loss of $4.3 million, or ($0.07) per diluted share/ADS, in the third quarter of 2016.

Cash: Cash, cash equivalents and short-term deposit at September 30, 2017 totaled $13.3 million compared to $19.5 million at June 30, 2017.

                                                                         
In millions of US$ except percentages, shares and per share amounts                                                                                                                                                                                                                                                                    Key Metrics
                                                                                                                                   ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Q3 2017                                  %*                                 Q2 2017                                  %*                                 Q3 2016                                  %*
------------------------------------------------------------------- -------------------- -------------------- -------------------------------------------------------- -------------------- ---------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- ---------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- --------------------------------
Revenue                                                                                                                                     $11.3                                                                       $13.2                                                                       $12.5                         
Gross profit                                                                                                                                  5.0                                                                      44.3                    %                                                      5.6                                                                      42.1                    %                                                      5.8                                                                      46.8         %
Operating loss                                                                                                                               (5.6 )                                                                   (49.2                   )%                                                     (4.1 )                                                                   (30.9                   )%                                                     (4.0 )                                                                   (31.7        )%
Net loss                                                                                                                                     (6.9 )                                                                   (61.2                   )%                                                     (6.0 )                                                                   (45.3                   )%                                                     (5.1 )                                                                   (41.1        )%
Diluted EPS                                                                                                                                ($0.09 )                                                                                                                                                ($0.08 )                                                                                                                                                ($0.08 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Weighted average number of diluted shares/ADS                                                                                          79,774,103                                                                                                                                              75,896,815                                                                                                                                              61,642,549
Cash flow from (used in) operations                                                                                                          (5.3 )                                                                                                                                                  (4.4 )                                                                                                                                                  (9.5 )
Cash, cash equivalents and short-term deposit at quarter-end                                                                                 13.3                                                                                                                                                    19.5                                                                                                                                                    24.7
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Additional information on non-cash items:
 - Stock-based compensation included in operating result                                                                                      0.3                                                                                                                                                     0.3                                                                                                                                                     0.2
 - Change in the fair value of convertible debt embedded derivative                                                                --                                                                                                                                          --                                                                                                                                          --
 - Non-cash interest on convertible debt and other financing                                                                                  0.8                                                                                                                                                     0.8                                                                                                                                                     0.6
Non-IFRS diluted EPS (excludes stock-based compensation, effective                ($0.07 )                                                 ($0.06 )                                                 ($0.07 )                         
interest adjustments related to the convertible and other debt and
embedded derivative)
------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------------------------------  -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------------------------------  -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------
* Percentage of revenue
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

"Our IoT business continues to grow as expected," said Georges Karam, Sequans’ CEO. "Our visibility is improving as our Cat 1 customers continue to ramp and are pursuing plans to serve more operators. We expect accelerating growth from IoT next year, based on a full year of Cat 1 revenue as well as the Cat M1/NB1 ramp from design wins already in hand. We also expect our broadband business to stabilize during Q4 and to improve during the course of 2018.

"We also reached an agreement with the institutional holders of our convertible notes maturing in April, 2018 and in April, 2019 to extend each maturity by one year in exchange for adjustments to certain terms, as described in the filing we made today on Form 6-K. We believe this agreement is in the best interests of all our shareholders because it removes a significant near-term cash requirement and allows us to focus on the business."

Q4 2017 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 fourth quarter of 2017 to be in the range of $11 to $13 million 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 ($0.06) and ($0.08) for the fourth quarter of 2017, based on approximately 79.8 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 other financings, and any other relevant non-cash or non-recurring expenses.

Conference Call and Webcast

Sequans plans to conduct a teleconference and live webcast to discuss the financial results for the third quarter of 2017 today, October 31, 2017 at 8:00 a.m. EDT / 13:00 CET. To participate in the live call, analysts and investors should dial 800-230-1074 (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 December 1, 2017 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: 430997.

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 and potential strategic partnerships, 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, (ii) unexpected increases in our expenses, including manufacturing expenses, (iii) our inability to adjust spending quickly enough to offset any unexpected revenue shortfall, (iv) delays or cancellations in spending by our customers, (v) unexpected average selling price reductions, (vi) the significant fluctuation to which our quarterly revenue and operating results are subject due to cyclicality in the wireless communications industry and transitions to new process technologies, (vii) our inability to anticipate the future market demands and future needs of our customers, (viii) our inability to achieve new design wins or for design wins to result in shipments of our products at levels and in the timeframes we currently expect, (ix) our inability to enter into and execute on strategic alliances, (x) the impact of natural disasters on our sourcing operations and supply chain, and (xi) 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 and the non-cash financial expense related to the convertible debt and its embedded derivative issued in April 2015 and April 2016. 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. We are not able to provide a non-GAAP reconciliation for forward-looking IFRS estimates for gross margin and net loss per diluted share without unreasonable efforts, because certain adjustments are not known until the end of the period. The impact of these adjustments could be significant to our actual IFRS results.

About Sequans Communications

Sequans Communications S.A. (SQNS ) is a leading provider of single-mode 4G LTE wireless semiconductor solutions for Internet of Things (IoT) and a wide range of broadband data devices. Founded in 2003, Sequans has developed and delivered seven generations of 4G technology and its chips are certified and shipping in 4G networks around the world. Today, Sequans offers two LTE product lines: StreamliteLTE(TM), optimized for IoT and M2M devices and StreamrichLTE(TM), optimized for feature-rich mobile computing and home and portable router devices. The company is based in Paris, France with additional offices in the United States, United Kingdom, Sweden, 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)                                                                                                                Sept 30,                                                       June 30,                                                       Sept 30,
                                                                                                                                                                             2017                                                                                                                    2017                                                                                                                    2016
                                            
--------------------------------------------------------- -------------------- -------------------- -------------------- ------------------------------------------------------   --------------------                                           ------------------------------------------------------   --------------------                                           ------------------------------------------------------
                                                                                                                                                                                                                                                                                        
Revenue :
    Product revenue                                                                                                                         $          8,869                                                                                                        $         10,159                                                                                                        $          9,523
    Other revenue                                                          2,430                    3,058                    2,934  
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Total revenue                                                             11,299                   13,217                   12,457  
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Cost of revenue
    Cost of product revenue                                                                                                                            5,678                                                                                                                   7,064                                                                                                                   5,900
    Cost of other revenue                                                    615                      591                      731  
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Total cost of revenue                                                      6,293                    7,655                    6,631  
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Gross profit                                                               5,006                    5,562                    5,826  
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Operating expenses :
    Research and development                                                                                                                           6,769                                                                                                                   6,254                                                                                                                   6,391
    Sales and marketing                                                                                                                                2,014                                                                                                                   2,072                                                                                                                   1,926
    General and administrative                                                                                                                         1,786                                                                                                                   1,323                                                                                                                   1,459
                                                                                                                                      
--------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------------------------------------- -------------------- -------------------- ----------------------------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------------
Total operating expenses                                                  10,569                    9,649                    9,776  
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Operating loss                                                                                                                                        (5,563 )                                                                                                                (4,087 )                                                                                                                (3,950 )
Financial income (expense):
    Interest income (expense), net                                                                                                                    (1,202 )                                                                                                                (1,194 )                                                                                                                (1,062 )
    Foreign exchange gain (loss)                                             (90 )                                      (626 )                                       (61 )
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Loss before income taxes                                                  (6,855 )                                    (5,907 )                                    (5,073 )
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Income tax expense (benefit)                                                  65                       83                       53  
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Loss                                                                                                                                        $         (6,920 )                                                                                                      $         (5,990 )                                                                                                      $         (5,126 )
Attributable to :
    Shareholders of the parent                                                                                                                        (6,920 )                                                                                                                (5,990 )                                                                                                                (5,126 )
    Minority interests                                            --           --           --  
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Basic loss per share                                                      ($0.09 )                                    ($0.08 )                                    ($0.08 )
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Diluted loss per share                                                    ($0.09 )                                    ($0.08 )                                    ($0.08 )
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Weighted average number of shares used for computing:
-- Basic                                                                                                                              79,774,103                                                                                                              75,896,815                                                                                                              61,642,549
-- Diluted                                                79,774,103               75,896,815               61,642,549  
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                              
 
                                                                                                                                   SEQUANS COMMUNICATIONS S.A.
 
                                                                                                                    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             Nine months ended Sept 30
(in thousands of US$, except share and per share amounts)                                            2017                                                         2016
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------------------------------------- -------------------- ---------------------------------------------------------
                                                                                                                                                                                                
Revenue :
    Product revenue                                                                                                                                    $         28,668                                                                                   $         22,634
    Other revenue                                                                     8,278                  8,992  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Total revenue                                                                        36,946                 31,626  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Cost of revenue
    Cost of product revenue                                                                                                                                      18,731                                                                                             14,695
    Cost of other revenue                                                             1,795                  2,282  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Total cost of revenue                                                                20,526                 16,977  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Gross profit                                                                         16,420                 14,649  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Operating expenses :
    Research and development                                                                                                                                     19,217                                                                                             20,007
    Sales and marketing                                                                                                                                           6,582                                                                                              4,922
    General and administrative                                                                                                                                    4,520                                                                                              4,598
                                                                                                   
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------------------------------------------------- -------------------- ---------------------------------------------------------
Total operating expenses                                                             30,319                 29,527  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Operating loss                                                                      (13,899 )                                 (14,878 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Financial income (expense):
    Interest income (expense), net                                                                                                                               (3,434 )                                                                                           (2,606 )
    Other financial expense                                                                                                                              --                                                                                                (83 )
    Change in the fair value of convertible debt embedded derivative                                                                                     --                                                                                             (1,583 )
    Foreign exchange gain (loss)                                                       (962 )                                     (77 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Loss before income taxes                                                            (18,295 )                                 (19,227 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Income tax expense (benefit)                                                            219                    189  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Loss                                                                                                                                                   $        (18,514 )                                                                                 $        (19,416 )
Attributable to :
    Shareholders of the parent                                                                                                                                  (18,514 )                                                                                          (19,416 )
    Minority interests                                                       --         --  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Basic loss per share                                                                 ($0.24 )                                  ($0.32 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Diluted loss per share                                                               ($0.24 )                                  ($0.32 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Weighted average number of shares used for computing:
-- Basic                                                                                                                                         76,918,723                                                                                         60,049,335
-- Diluted                                                           76,918,723             60,049,335  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
                                                                                                                                                                                                                                        
 
                                                                                                                                  SEQUANS COMMUNICATIONS S.A.
 
                                                                                                               UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      At Sept 30,                                              At December 31,
(in thousands of US$)                                                                                                        2017                                                         2016
------------------------------------------------------------------------ -------------------- -------------------- -------------------- ----------------------------------------------------------------------- -------------------- ---------------------------------------------------------
                                                                                                                                                                                                                                      
ASSETS
    Non-current assets
    Property, plant and equipment                                                                                                                          $    6,567                                                                                   $          6,659
    Intangible assets                                                                                                                                           8,752                                                                                              7,707
    Deposits and other receivables                                                                                                                                396                                                                                                332
    Available for sale assets                                                         347                    310  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
        Total non-current assets                                                   16,062                 15,008  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
    Current assets
    Inventories                                                                                                                                                 8,848                                                                                              8,693
    Trade receivables                                                                                                                                          16,327                                                                                             15,285
    Prepaid expenses and other receivables                                                                                                                      4,086                                                                                              3,172
    Recoverable value added tax                                                                                                                                   539                                                                                                470
    Research tax credit receivable                                                                                                                              2,386                                                                                              1,902
    Short term deposit                                                                                                                                            345                                                                                                345
    Cash and cash equivalents                                                      12,982                 20,202  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
        Total current assets                                                       45,513                 50,069  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Total assets                                                                                                                                               $   61,575                                                                                   $         65,077
                                                                                                                                                                                                                                      
EQUITY AND LIABILITIES
    Equity
    Issued capital, euro 0.02 nominal value, 79,842,318 shares                                                                                             $    2,030                                                                                   $          1,923
    authorized, issued and outstanding at September 30, 2017 (75,030,078
    at December 31, 2016)
    Share premium                                                                                                                                             204,936                                                                                            189,029
    Other capital reserves                                                                                                                                     29,215                                                                                             28,257
    Accumulated deficit                                                                                                                                      (228,067 )                                                                                         (209,553 )
    Other components of equity                                                       (634 )                                    (796 )
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
        Total equity                                                                7,480                  8,860  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
    Non-current liabilities
    Government grant advances, loans and other liabilities                                                                                                      6,245                                                                                              5,144
    Convertible debt and accrued interest                                                                                                                       5,953                                                                                             16,338
    Provisions                                                                                                                                                  1,687                                                                                              1,306
    Other Liabilities                                                                                                                                              24                                                                                                 22
    Deferred revenue                                                                1,405                  1,940  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
        Total non-current liabilities                                              15,314                 24,750  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
    Current liabilities
    Trade payables                                                                                                                                             11,587                                                                                             18,358
    Interest-bearing receivables financing                                                                                                                      7,581                                                                                              7,712
    Government grant advances                                                                                                                                     796                                                                                                601
    Convertible debt and accrued interest                                                                                                                      13,154                                                                                     --
    Other current liabilities                                                                                                                                   4,679                                                                                              4,415
    Deferred revenue                                                                                                                                              758                                                                                                335
    Provisions                                                                        226                     46  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
        Total current liabilities                                                  38,781                 31,467  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Total equity and liabilities                                                                                                                               $   61,575                                                                                   $         65,077
                                                                                                                                                                                                                                                                          
 
                                                                                                                                     SEQUANS COMMUNICATIONS S.A.
 
                                                                                                                      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                 Nine months ended Sept 30
(in thousands of US$)                                                                                                              2017                                                         2016
------------------------------------------------------------------------ -------------------- -------------------- -------------------- ----------------------------------------------------------------------------- -------------------- ---------------------------------------------------------
                                                                                                                                                                                                    
Operating activities
    Loss before income taxes                                                                                                                               $        (18,295 )                                                                                 $        (19,227 )
    Non-cash adjustment to reconcile income before tax to net cash from
    (used in) operating activities
    Depreciation and impairment of property, plant and equipment                                                                                                      2,025                                                                                              2,353
        Amortization and impairment of intangible assets                                                                                                              1,758                                                                                              1,532
        Share-based payment expense                                                                                                                                     958                                                                                                663
        Increase in provisions                                                                                                                                          675                                                                                                 50
        Financial expense (income)                                                                                                                                    3,434                                                                                              2,616
        Change in the fair value of convertible debt embedded derivative                                                                                     --                                                                                              1,583
        Foreign exchange loss (gain)                                                                                                                                    567                                                                                                181
    Working capital adjustments
        Decrease (Increase) in trade receivables and other receivables                                                                                               (2,057 )                                                                                            1,504
        Increase in inventories                                                                                                                                        (155 )                                                                                           (2,903 )
        Decrease (Increase) in research tax credit receivable                                                                                                          (484 )                                                                                              940
        Increase (Decrease) in trade payables and other liabilities                                                                                                  (7,299 )                                                                                            1,893
        Decrease in deferred revenue                                                                                                                                   (112 )                                                                                             (444 )
        Decrease in government grant advances                                                                                                                          (403 )                                                                                             (559 )
    Income tax paid                                                                        (206 )                                    (175 )
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Net cash flow used in operating activities                                              (19,594 )                                  (9,910 )
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
                                                                                                                                                                                                                                            
Investing activities
    Purchase of intangible assets and property, plant and equipment                                                                                                  (4,096 )                                                                                           (3,724 )
    Sale (purchase) of financial assets                                                                                                                                (101 )                                                                                              (11 )
    Sale of short-term deposit                                                                                                                               --                                                                                                 49
    Interest received                                                                        47                     10  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Net cash flow used in investments activities                                             (4,150 )                                  (3,676 )
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
                                                                                                                                                                                                                                            
Financing activities
    Proceeds from issue of warrants, exercise of stock options/warrants                                                                                                 906                                                                                                267
    Public equity offering proceeds, net of transaction costs paid                                                                                                   14,942                                                                                             23,445
    Repayment of interest-bearing receivables financing                                                                                                                (131 )                                                                                             (843 )
    Proceeds from interest-bearing research project financing                                                                                                         1,126                                                                                     --
    Proceeds from convertible debt, net of transaction cost                                                                                                  --                                                                                              6,932
    Repayment of government loans                                                                                                                                       (56 )                                                                                   --
    Repayment of borrowings and finance lease liabilities                                                                                                    --                                                                                                (12 )
    Interest paid                                                                          (272 )                                    (159 )
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Net cash flows from financing activities                                                 16,515                 29,630  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
                                                                                                                                                                                                                                            
    Net increase (decrease) in cash and cash equivalents                                                                                                             (7,229 )                                                                                           16,044
    Net foreign exchange difference                                                                                                                                       9                                                                                                (25 )
    Cash and cash equivalent at January 1                                                20,202                  8,288  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
Cash and cash equivalents at end of the period                                                    $         12,982                          $         24,307  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- -------------- --------------------
                                                                                                                                                                                                                                            
 
                                                                                                                                                                        SEQUANS COMMUNICATIONS S.A.
 
                                                                                                                                                          UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL RESULTS
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(in thousands of US$, except share and per share amounts)                                                                                                                           Three months ended
                                                                                                                Sept 30,                                             June 30,                                             Sept 30,
                                                                                                                                                          2017                                                                                       2017                                                                                       2016
                                                                    -------------------- -------------------- ----------------------------------------------   -------------------- -------------------- ----------------------------------------------   -------------------- -------------------- ----------------------------------------------
Net IFRS loss as reported                                                                                                                             $ (6,920 )                                           $ (5,990 )                                           $ (5,126 )
Add back
    Stock-based compensation expense according to IFRS 2 (1)                                                                                               310                                                                                        307                                                                                        183
    Non-cash interest on Convertible debt and other financing (2)                                                                                          756                                                                                        759                                                                                        626
Non-IFRS loss adjusted                                                                       $ (5,854 )                                           $ (4,924 )                                           $ (4,317 )
------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ --------------------
IFRS basic loss per share as reported                                                                                                                   ($0.09 )                                                                                   ($0.08 )                                                                                   ($0.08 )
Add back
    Stock-based compensation expense according to IFRS 2 (1)                                                                                          $   0.01                                                                                   $   0.01                                                                                   $   0.00
    Non-cash interest on Convertible debt and other financing (2)                            $   0.01                          $   0.01                          $   0.01  
------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ --------------------
Non-IFRS basic loss per share                                               ($0.07 )                          ($0.06 )                          ($0.07 )
------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ --------------------
IFRS diluted loss per share                                                                                                                             ($0.09 )                                                                                   ($0.08 )                                                                                   ($0.08 )
Add back
    Stock-based compensation expense according to IFRS 2 (1)                                                                                          $   0.01                                                                                   $   0.01                                                                                   $   0.00
    Non-cash interest on Convertible debt and other financing (2)                            $   0.01                          $   0.01                          $   0.01  
------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ --------------------
Non-IFRS diluted loss per share                                             ($0.07 )                          ($0.06 )                          ($0.07 )
------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                          
    (1) Included in the IFRS loss as follows:
        Cost of product revenue                                                                                                                       $      2                                                                                   $      2                                                                                   $      4
        Research and development                                                                                                                            87                                                                                         97                                                                                         79
        Sales and marketing                                                                                                                                 55                                                                                         65                                                                                         31
        General and administrative                                                                                                                         166                                                                                        143                                                                                         69
                                                                                                                                                                                                                                                                                                                          
    (2) Related to the difference between contractual and effective
    interests
                                                                                                                                                                                                                                                                                                                          
 
                                                                                                                               SEQUANS COMMUNICATIONS S.A.
 
                                                                                                                 UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL RESULTS
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(in thousands of US$, except share and per share amounts)                                                                                Nine months ended Sept 30
                                                                                                   2017                                                      2016
-------------------------------------------------------------------- -------------------- -------------------- ----------------------------------------------------------------------------- -------------------- --------------------------------------------------
Net IFRS loss as reported                                                                                                                              $        (18,514 )                                           $ (19,416 )
Add back
    Stock-based compensation expense according to IFRS 2 (1)                                                                                                        958                                                                                         663
    Change in the fair value of convertible debt embedded derivative                                                                                     --                                                                                       1,583
    Non-cash interest on Convertible debt and other financing (2)                                                                                                 2,119                                                                                       1,547
Non-IFRS loss adjusted                                                                        $        (15,437 )                                           $ (15,623 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
IFRS basic loss per share as reported                                                                                                                            ($0.24 )                                                                                    ($0.32 )
Add back
    Stock-based compensation expense according to IFRS 2 (1)                                                                                           $           0.01                                                                                   $    0.00
    Change in the fair value of convertible debt embedded derivative                                                                                   $           0.00                                                                                   $    0.03
    Non-cash interest on Convertible debt and other financing (2)                             $           0.03                          $    0.03  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Non-IFRS basic loss per share                                                        ($0.20 )                           ($0.26 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
IFRS diluted loss per share                                                                                                                                      ($0.24 )                                                                                    ($0.32 )
Add back
    Stock-based compensation expense according to IFRS 2 (1)                                                                                           $           0.01                                                                                   $    0.00
    Change in the fair value of convertible debt embedded derivative                                                                                   $           0.00                                                                                   $    0.03
    Non-cash interest on Convertible debt and other financing (2)                             $           0.03                          $    0.03  
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Non-IFRS diluted loss per share                                                      ($0.20 )                           ($0.26 )
-------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                                                                        
    (1) Included in the IFRS loss as follows:
        Cost of product revenue                                                                                                                        $              7                                                                                   $      12
        Research and development                                                                                                                                    293                                                                                         283
        Sales and marketing                                                                                                                                         199                                                                                         105
        General and administrative                                                                                                                                  459                                                                                         263
                                                                                                                                                                                                                                        
    (2) Related to the difference between contractual and effective
    interests

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20171031005636r1&sid=cmtx6&distro=nx&lang=en

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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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