{"url_path":"/sec/sqns/10-k/2026/item-19","section_key":"item-19","section_title":"Item 19 Exhibits","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-11","source_url":"https://www.sec.gov/Archives/edgar/data/1383395/0001383395-26-000082-index.html","accession_number":"0001383395-26-000082","cik":"0001383395","ticker":"SQNS","issuer_name":"SEQUANS COMMUNICATIONS","edgar_url":"https://www.sec.gov/Archives/edgar/data/1383395/0001383395-26-000082-index.html","primary_entity_key":"0001383395","primary_entity_name":"SEQUANS COMMUNICATIONS"},"word_count":37600,"has_tables":true,"body_markdown":"Item 19. Exhibits\n\nExhibit\n\nNumber\nDescription of Exhibit\n\n[1.1*](exhibit11-bylawsapril282026.htm)\n\nBy-laws (statuts) of Sequans Communications S.A. effective April 28, 2026 (English translation)\n\n[2.2](http://www.sec.gov/Archives/edgar/data/1383395/000138339520000051/exhibit41-depositagreement.htm)\nDeposit Agreement among Sequans Communications S.A., The Bank of New York Mellon and owners and holders of American Depositary Shares (incorporated by reference to Exhibit 4.1 to Sequans Communications S.A.’s Report on Form 6-K filed with the SEC on November 16, 2020)\n\n[2.3](http://www.sec.gov/Archives/edgar/data/1712301/000101915525000355/sequans424.htm)\nForm of American Depositary Receipt (incorporated by reference from Prospectus filed on September 8, 2025, File No. 333-288375)\n\n[2.](exhibit24-descriptionofrig.htm)[4](exhibit24-descriptionofrig.htm)*\nDescription of Rights of Each Class of Securities Registered under Section 12 of the Securities Exchange Act of 1934\n\n[2.5](http://www.sec.gov/Archives/edgar/data/1201935/000101915523000170/sequans1b.htm)\nAmendment to amended and restated Deposit Agreement among Sequans Communications S.A., The Bank of New York Mellon and owners and holders of American Depositary Shares (incorporated by reference to Exhibit B to the Form F-6 filed by Sequans Communications S.A. with the SEC on September 11, 2023).\n\n[4.1(](https://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex991.htm)[a](https://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex991.htm)[)](https://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex991.htm)\nStock Option Subscription Plan—2016-1 (incorporated by reference to Exhibit 99.1 to Registration No. 333-214444, filed with the SEC on November 4, 2016)\n\n[4.2(](https://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex993.htm)[a](https://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex993.htm)[)](https://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex993.htm)\nBSA (Warrants) Subscription Plan 2016-1 (incorporated by reference to Exhibit 99.3 to Registration No. 333-214444, filed with the SEC on November 4, 2016)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex994.htm)[b](http://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex994.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex994.htm)\nBSA (Warrants) Subscription Plan 2016-2 (incorporated by reference to Exhibit 99.4 to Registration No. 333-214444, filed with the SEC on November 4, 2016)\n\n[4.2](https://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex995.htm)[(c](https://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex995.htm)[)](https://www.sec.gov/Archives/edgar/data/1383395/000119312516760167/d285144dex995.htm)\nBSA (Warrants) Issuance Agreement, dated June 28, 2016 (incorporated by reference to Exhibit 99.5 to Registration No. 333-214444, filed with the SEC on November 4, 2016)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000119312517233863/d410442dex995.htm)[d](http://www.sec.gov/Archives/edgar/data/1383395/000119312517233863/d410442dex995.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312517233863/d410442dex995.htm)\nBSA (Warrants) Issuance Agreement, dated June 30, 2017 (incorporated by reference to Exhibit 99.5 to Registration No. 333-219430, filed with the SEC on July 24, 2017)\n\n[4.2](http://www.sec.gov/Archives/edgar/data/1383395/000119312518233157/d566812dex994.htm)[(e](http://www.sec.gov/Archives/edgar/data/1383395/000119312518233157/d566812dex994.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312518233157/d566812dex994.htm)\n\nBSA 2018-1 (Warrants) Issuance Agreement (incorporated by reference to Exhibit 99.4 to Registration No. 333-226458, filed with the SEC on July 31, 2018)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000119312518233157/d566812dex996.htm)[f](http://www.sec.gov/Archives/edgar/data/1383395/000119312518233157/d566812dex996.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312518233157/d566812dex996.htm)\n\nBSA (Warrants) Issuance Agreement, dated June 29, 2018 (incorporated by reference to Exhibit 99.6 to Registration No. 333-226458, filed with the SEC on July 31, 2018)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000119312519230216/d782050dex996.htm)[g](http://www.sec.gov/Archives/edgar/data/1383395/000119312519230216/d782050dex996.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312519230216/d782050dex996.htm)\nBSA (Warrants) Issuance Agreement, dated July 1, 2019 (incorporated by reference to Exhibit 99.6 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-233473, filed with the SEC on August 27, 2019)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000119312520195822/d924201dex994.htm)[h](http://www.sec.gov/Archives/edgar/data/1383395/000119312520195822/d924201dex994.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312520195822/d924201dex994.htm)\nBSA 2020-1 (Warrants) Issuance Agreement (incorporated by reference to Exhibit 99.4 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-239968, filed with the SEC on July 21, 2020)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000119312520195822/d924201dex996.htm)[i](http://www.sec.gov/Archives/edgar/data/1383395/000119312520195822/d924201dex996.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312520195822/d924201dex996.htm)\nBSA (Warrants) Issuance Agreement, dated June 29, 2020 (incorporated by reference to Exhibit 99.6 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-239968, filed with the SEC on July 21, 2020)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000119312521287963/d216272dex996.htm)[j](http://www.sec.gov/Archives/edgar/data/1383395/000119312521287963/d216272dex996.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312521287963/d216272dex996.htm)\nDirector Warrants Issuance Agreement, Dated June 25, 2021 (incorporated by reference to Exhibit 99.6 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-259914, filed with the SEC on September 30, 2021\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex994.htm)[k](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex994.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex994.htm)\nPartner Warrants 2022-1 Issuance Agreement (incorporated by reference to Exhibit 99.4 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-266481, filed with the SEC on August 3, 2022)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex996.htm)[l](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex996.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex996.htm)\nDirector Warrants Issuance Agreement, Dated June 24, 2022 (incorporated by reference to Exhibit 99.6 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-266481, filed with the SEC on August 3, 2022)\n\n105\n\nExhibit\n\nNumber\nDescription of Exhibit\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit42z-directorwarrant.htm)[m](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit42z-directorwarrant.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit42z-directorwarrant.htm)\nDirector Warrants Issuance Agreement, Dated June 27, 2023 (incorporated by reference to Exhibit 99.7 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-289027, filed with the SEC on July 29, 2025)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit42aa-partnerwarrant.htm)[n](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit42aa-partnerwarrant.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit42aa-partnerwarrant.htm)\nPartner Warrants 2023-1 Issuance Agreement (incorporated by reference to Exhibit 99.4 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-289027, filed with the SEC on July 29, 2025)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit42p-directorwarrant.htm)[o](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit42p-directorwarrant.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit42p-directorwarrant.htm)\nDirector Warrants Issuance Agreement, Dated June 28, 2024 (incorporated by reference to Exhibit 99.6 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-289027, filed with the SEC on July 29, 2025)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit42q-partnerwarrants.htm)[p](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit42q-partnerwarrants.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit42q-partnerwarrants.htm)\nPartner Warrants 2024 Issuance Agreement (incorporated by reference to Exhibit 99.3 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-289027, filed with the SEC on July 29, 2025)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000077/exhibit995-directorwarrant.htm)[q](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000077/exhibit995-directorwarrant.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000077/exhibit995-directorwarrant.htm)\nDirector Warrants Issuance Agreement, Dated June 30, 2025 (incorporated by reference to Exhibit 99.5 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-289027, filed with the SEC on July 29, 2025)\n\n[4.2(](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000077/exhibit992-partnerwarrants.htm)[r](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000077/exhibit992-partnerwarrants.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000077/exhibit992-partnerwarrants.htm)\nPartner Warrants 2025 Issuance Agreement (incorporated by reference to Exhibit 99.2 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-289027, filed with the SEC on July 29, 2025)\n\n[4.3(](http://www.sec.gov/Archives/edgar/data/1383395/000119312521287963/d216272dex992.htm)[a](http://www.sec.gov/Archives/edgar/data/1383395/000119312521287963/d216272dex992.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312521287963/d216272dex992.htm)\nRestricted Share Award Plan 2021-1 (incorporated by reference to Exhibit 99.2 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-259914, filed with the SEC on September 30, 2021\n\n[4.3(](http://www.sec.gov/Archives/edgar/data/1383395/000119312521287963/d216272dex993.htm)[b](http://www.sec.gov/Archives/edgar/data/1383395/000119312521287963/d216272dex993.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312521287963/d216272dex993.htm)\nRestricted Share Award Plan 2021-2 (incorporated by reference to Exhibit 99.3 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-259914, filed with the SEC on September 30, 2021\n\n[4.3(](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex992.htm)[c](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex992.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex992.htm)\nRestricted Share Award Plan 2022-1 (incorporated by reference to Exhibit 99.2 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-266481, filed with the SEC on August 3, 2022)\n\n[4.3(](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex993.htm)[d](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex993.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000119312522210815/d350151dex993.htm)\nRestricted Share Award Plan 2022-2 (incorporated by reference to Exhibit 99.3 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-266481, filed with the SEC on August 3, 2022)\n\n[4.3(](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit43i-restrictedshare.htm)[e](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit43i-restrictedshare.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit43i-restrictedshare.htm)\nRestricted Share Award Plan 2023-1 (incorporated by reference to Exhibit 4.3(i) to Sequans Communications S.A.'s Annual Report on Form 20-F or the fiscal year ended December 31, 2023, filed with the SEC on May 15, 2024)\n\n[4.3(](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit43h-restrictedshare.htm)[f](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit43h-restrictedshare.htm)[)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit43h-restrictedshare.htm)\nRestricted Share Award Plan 2024 (incorporated by reference to Exhibit 4.3(h) to the Form 20-F for the year ended December 31, 2024 filed by Sequans Communications S.A. with the SEC on April 30, 2025)\n\n[4.3(g)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000077/exhibit991-restrictedshare.htm)\nRestricted Share Award Plan 2025 (incorporated by reference to Exhibit 99.1 to Sequans Communications S.A.’s Registration Statement on Form S-8, File Number 333-289027, filed with the SEC on July 29, 2025)\n\n[4.4(a)](http://www.sec.gov/Archives/edgar/data/1383395/000138339521000012/exhibit44c-covidx19support.htm)\n\nCOVID-19 economic support loan agreement by and between Bpifrance Financement and Sequans Communications S.A. dated April 30, 2020 (English translation) (incorporated by reference to Exhibit 4.4(c) to Sequans Communications S.A.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2020, filed with the SEC on April 1, 2021\n\n[4.9(a)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit49a-materialagreeme.htm)\nAsset Purchase Agreement by and among Sequans Communications S.A., Qualcomm Technologies, Inc., Qualcomm France S.A.R.L., and Qualcomm Technologies International, Ltd. dated August 22, 2024 (incorporated by reference to Exhibit 4.9(a) to the Form 20-F for the year ended December 31, 2024 filed by Sequans Communications S.A. with the SEC on April 30, 2025)\n\n[4.9(b)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000018/exhibit49bmaterialagreemen.htm)\nLicense of Acquired IP by and between Sequans Communications S.A. and Qualcomm Technologies, Inc. dated September 30 2024 (incorporated by reference to Exhibit 4.9(b) to the Form 20-F for the year ended December 31, 2024 filed by Sequans Communications S.A. with the SEC on April 30, 2025)\n\n[4.9(c)](http://www.sec.gov/Archives/edgar/data/1383395/000162828025035103/exhibit101-securitiespurch.htm)\nSecurities Purchase Agreement, dated as of June 22, 2025, between Sequans Communications S.A. and the purchasers listed therein (incorporated by reference to Exhibit 10.1 to the Form F-3, file number 333-288709, filed by Sequans Communications S.A. with the SEC on July 16, 2025).\n\n[4.9(d)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000046/exhibit41-termsandconditio.htm)\nTerms and Conditions of the Pre-Funded Warrants (incorporated by reference from Exhibit 4.1 to Sequans Communications S.A.'s Form 6-K/A filed with the SEC on June 23, 2025, File No. 001-35135)\n\n[4.9(e)](http://www.sec.gov/Archives/edgar/data/1383395/000162828025035102/exhibit101-securedconverti.htm)\nSecured Convertible Debenture Purchase Agreement, dated as of June 22, 2025, between Sequans Communications S.A., the Collateral Agent defined therein, and the purchasers listed therein (incorporated by reference to Exhibit 10.1 to the Form F-3, file number 333-288708, filed by Sequans Communications S.A. with the SEC on July 16, 2025).\n\n[4.9(f)](exhibit49f-amendmentno1and.htm)*\nAmendment No. 1 and Consent to the Secured Convertible Debenture Purchase Agreement, dated as of October 27, 2025, between Sequans Communications S.A., the Collateral Agent defined therein, and the Required Holders\n\n[4.9(g)](exhibit49g-amendmentno2and.htm)*\nAmendment No. 2 and Consent to the Secured Convertible Debenture Purchase Agreement, dated as of February 10, 2026, between Sequans Communications S.A., the Collateral Agent defined therein, and the Required Holders\n\n106\n\nExhibit\n\nNumber\nDescription of Exhibit\n\n[4.9(h)](http://www.sec.gov/Archives/edgar/data/1383395/000138339525000046/exhibit42-commonwarrantfor.htm)\nTerms and Conditions of the Warrants (incorporated by reference from Exhibit 4.2 to Sequans Communications S.A's Form 6-K/A filed with the SEC June 23, 2025, File No. 001-35135)\n\n[8.1](exhibit81-listofsubsidiari.htm)*\nList of Subsidiaries\n\n[11.1](exhibit111-corporateinside.htm)*\nCorporate Insider Trading Policy, updated October 28, 2025\n\n[12.1](exhibit121ceosoxcertificat.htm)*\nCertificate of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002\n\n[12.2](exhibit122cfosoxcertificat.htm)*\nCertificate of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002\n\n[13.1](exhibit131-ceosoxcertifica.htm)*\nCertificate of Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002\n\n[13.2](exhibit132cfosoxcertificat.htm)*\nCertificate of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002\n\n[15.1](exhibit151eyconsentfy2025.htm)*\nConsent of Ernst & Young Audit, independent registered public accounting firm\n\n[97.1](http://www.sec.gov/Archives/edgar/data/1383395/000138339524000034/exhibit971-compensationrec.htm)\nCompensation Recovery Policy (incorporated by reference to Exhibit 97.1(i) to Sequans Communications S.A.'s Annual Report on Form 20-F or the fiscal year ended December 31, 2023, filed with the SEC on May 15, 2024)\n\n*Filed herewith.\n\nThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.\n\n \n\nSequans Communications S.A.\n\nBy: /s/ Dr. Georges Karam\n\nName: Dr. Georges Karam\n\nTitle: Chief Executive Officer and Chairman\n\nDate: May 11, 2026\n\n107\n\n[Table of Contents](#id7a36a459db940a6aa2751de859fa394_163)\n\nSequans Communications S.A.\n\nIndex to the Consolidated Financial Statements\n\n Page\n\nF-[2](#id7a36a459db940a6aa2751de859fa394_166)\n\n[Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareholders of Sequans Communications S.A.](#id7a36a459db940a6aa2751de859fa394_166) (PCAOB ID 1692)\n\nF-[5](#id7a36a459db940a6aa2751de859fa394_172)\n\n[Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 202](#id7a36a459db940a6aa2751de859fa394_175)[3](#id7a36a459db940a6aa2751de859fa394_175)[, 202](#id7a36a459db940a6aa2751de859fa394_175)[4](#id7a36a459db940a6aa2751de859fa394_175)[and 202](#id7a36a459db940a6aa2751de859fa394_175)[5](#id7a36a459db940a6aa2751de859fa394_175)\n\nF-[6](#id7a36a459db940a6aa2751de859fa394_175)\n\n[Consolidated Statements of Financial Position at December 31, 202](#id7a36a459db940a6aa2751de859fa394_178)[3](#id7a36a459db940a6aa2751de859fa394_178)[, 202](#id7a36a459db940a6aa2751de859fa394_178)[4](#id7a36a459db940a6aa2751de859fa394_178)[and 202](#id7a36a459db940a6aa2751de859fa394_178)[5](#id7a36a459db940a6aa2751de859fa394_178)\n\nF-[7](#id7a36a459db940a6aa2751de859fa394_178)\n\n[Consolidated Statements of Changes in Equity at December 31, 202](#id7a36a459db940a6aa2751de859fa394_181)[3](#id7a36a459db940a6aa2751de859fa394_181)[, 202](#id7a36a459db940a6aa2751de859fa394_181)[4](#id7a36a459db940a6aa2751de859fa394_181)[and 202](#id7a36a459db940a6aa2751de859fa394_181)[5](#id7a36a459db940a6aa2751de859fa394_181)\n\nF-[9](#id7a36a459db940a6aa2751de859fa394_181)\n\n[Consolidated Statements of Cash Flows for the years ended December 31, 202](#id7a36a459db940a6aa2751de859fa394_184)[3](#id7a36a459db940a6aa2751de859fa394_184)[, 202](#id7a36a459db940a6aa2751de859fa394_184)[4](#id7a36a459db940a6aa2751de859fa394_184)[and 202](#id7a36a459db940a6aa2751de859fa394_184)[5](#id7a36a459db940a6aa2751de859fa394_184)\n\nF-[11](#id7a36a459db940a6aa2751de859fa394_184)\n\n[Notes to the Consolidated Financial Statements](#id7a36a459db940a6aa2751de859fa394_187)\n\nF-[12](#id7a36a459db940a6aa2751de859fa394_187)\n\nF-1\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Shareholders and the Board of Directors of Sequans Communications S.A.:\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated statements of financial position of Sequans Communications S.A. (the Company) as of December 31, 2023, 2024 and 2025, the related consolidated statements of operations, comprehensive income (loss), changes in equity (deficit) and cash flow for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, 2024 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.\n\nThe Company's Ability to Continue as a Going Concern\n\nThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2.1 to the financial statements, the Company has suffered recurring losses from operations, has a working capital deficiency, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2.1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.\n\nBasis for Opinion\n\nThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.\n\nOur audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial\n\nstatements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matters\n\nThe critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\n\nF-2\n\nValuation of Hudson Bay secured convertible debentures (the “Hudson Bay et al Notes”) and related common warrants\n\nDescription of the Matter\nAs described in Notes 2.3, 2.4, 17 and 17.1 to the consolidated financial statements, on July 7, 2025, the Company issued secured convertible debentures to a group of institutional investors led by Hudson Bay (“Hudson Bay et al Notes”), which are convertible into ordinary shares or pre-funded warrants. In addition, the investors also received common warrants exercisable either into ordinary shares or pre-funded warrants. The Hudson Bay et al Notes were accounted for as compound financial instruments, consisting of a liability component of $56.4 million and an embedded derivative with a fair value of $10.8 million as of December 31, 2025. The embedded derivative is accounted for as a liability, with subsequent changes in fair value recognized in financial income or expense at each statement of financial position date.\n\nAuditing the fair value measurement of these instruments at inception and at subsequent remeasurement dates, including the valuation of the embedded conversion option and the common warrants, required significant auditor judgment due to the use of complex valuation techniques and significant unobservable inputs. Key assumptions included the Company’s share price volatility and the credit spread. These assumptions are inherently subjective and highly sensitive to changes in market conditions and Company specific risk factors.\n\nHow We Addressed the Matter in Our Audit\nOur audit procedures included, among others, reading the underlying secured convertible debenture agreements to understand the contractual terms and provisions impacting the Company’s valuations. We evaluated the significant assumptions used by management in estimating the fair value of the convertible debt and the embedded derivative. This included assessing the consistency of assumptions with observable market data, where available, and with the Company’s specific facts and circumstances. With the support of our valuation specialists, we assessed the valuation methodology used, the completeness and accuracy of the underlying data supporting the assumptions, and the appropriateness of the key assumptions by comparing them to our independently developed assumptions for volatility and credit spread.\n\nExistence and Rights to Digital Assets Held with a Third‑Party Custodian\n\nDescription of the MatterAs described in Notes 2.1 and 11 to the consolidated financial statements, during 2025 the Company acquired digital assets, which are held entirely with a third-party custodian in segregated or commingled public addresses. A portion of these digital assets acquired was pledged as collateral in connection with secured convertible debentures. As of December 31, 2025, the carrying value of the Company’s digital assets was $187.2 million.\n\nWe identified a critical audit matter due to a high degree of auditor judgment involved in determining the nature and extent of evidence required to assess the existence of, and the Company’s rights to, its digital assets.\n\nHow We Addressed the Matter in Our AuditOur audit procedures included, among others, obtaining an understanding of the Company’s digital asset custody arrangements, including reading the relevant financing and collateral agreements to understand the contractual terms governing custody, pledging, access, and the exercise of control over the Company’s digital assets. We evaluated the custodial arrangements and the Company’s ability to access the private keys that provide control of the digital assets held in segregated or commingled public addresses to assess the Company’s rights to their digital assets.\n\nWe involved our digital asset and blockchain technology subject matter professionals to assist us in assessing the existence of digital assets, by confirming the Company’s digital asset holdings with the third‑party custodian, reconciling the Company’s records of digital asset holdings held in segregated public addresses to the public blockchain, reconciling purchase and sale transactions against third‑party custodian statements and bank statements and evaluating that such transactions were appropriately authorized.\n\nF-3\n\n/s/ Ernst & Young Audit\n\nWe have served as the Company’s auditor since 2008.\n\nParis-La Défense, France\n\nMay 11, 2026\n\nF-4\n\n[Table of Contents](#id7a36a459db940a6aa2751de859fa394_172)\n\nSequans Communications S.A.\n\nConsolidated Statements of Operations\n\n  Year ended December 31,\n\n Note20232024\n2025 (1)\n\n  (in thousands, except share, ADS and per share and ADS amounts)\n\nRevenue533,616 36,831 26,325 \n\nCost of revenue6.2(9,476)(9,092)(12,213)\n\nGross profit24,140 27,739 14,112 \n\nOperating income (expenses):\n\nGain on sale of 4G intangible and tangible assets, net4— 153,129 — \n\nResearch and development6.4(26,124)(28,527)(31,183)\n\nSales and marketing(11,861)(11,773)(8,598)\n\nGeneral and administrative(15,993)(14,402)(12,008)\n\nDigital assets impairment losses11— — (67,375)\n\nDigital assets losses on sales, net11— — (6,102)\n\nImpairment of 5G broadband platform intangible and tangible assets10— (56,633)— \n\nOther operating income (expenses), net— — (738)\n\nTotal operating income (expenses)6.2(53,978)41,794 (126,004)\n\nOperating income (loss)(29,838)69,533 (111,892)\n\nFinancial income (expense):\n\nInterest expense6.1(11,409)(23,728)(12,498)\n\nInterest income6.1176 850 1,401 \n\nGain (loss) on debt extinguishment17.1- 17-3247 13,952 (29,348)\n\nChange in fair value of derivative financial instruments17.13,200 3 45,000 \n\nForeign exchange gain (loss), net6.1(692)494 (1,110)\n\nIncome (loss) before income taxes(38,316)61,104 (108,447)\n\nIncome tax expense7(2,674)(3,537)(832)\n\nNet profit (loss)$(40,990)$57,567 $(109,279)\n\nAttributable to:\n\nShareholders of the parent$(40,990)$57,567 $(109,279)\n\nBasic earnings (loss) per ordinary share8$(0.18)$0.23 $(0.13)\n\nDiluted earnings (loss) per ordinary share8$(0.18)$0.20 $(0.13)\n\nWeighted average number of shares used for computing:\n\nBasic per ordinary share225,183,996 248,290,190 867,366,665 \n\nDiluted per ordinary share225,183,996 284,021,015 867,366,665 \n\nBasic earnings (loss) per ADS$(18.20)$23.19 $(12.60)\n\nDiluted earnings (loss) per ADS$(18.20)$20.27 $(12.60)\n\nWeighted average number of ADS used for computing:\n\nBasic per ADS2,251,840 2,482,902 8,673,667 \n\nDiluted per ADS2,251,840 2,840,210 8,673,667 \n\n(1) The changes primarily relate to the timing and amount of revenue recognized, adjustments related to the accounting for the compound financial instruments issued in July 2025 and related embedded derivative, the classification of digital asset losses between impairment and losses on sale, the accounting for acquired licenses, property plant and equipment, and new leases, and other adjustments attributable to normal year-end closing procedures, audit adjustments, and the completion of management’s review.\n\nF-5\n\nSequans Communications S.A.\n\nConsolidated Statements of Comprehensive Income (Loss)\n\n Year ended December 31,\n\n 20232024\n2025 (1)\n\n (in thousands)\n\nProfit (loss) for the year$(40,990)$57,567 $(109,279)\n\nOther comprehensive income (loss)\n\nOther comprehensive income (loss) to be reclassified to profit or loss in subsequent years :\n\nNet gain (loss) on cash flow hedge(76)(183)113 \n\nExchange differences on translation of foreign operations97 (158)937 \n\nNet other comprehensive income (loss) to be reclassified to profit or loss in subsequent years21 (341)1,050 \n\nOther comprehensive income (loss) not to be reclassified to profit or loss in subsequent years :\n\nRe-measurement gains (losses) on defined benefit plans(46)(39)30 \n\nNet other comprehensive income (loss) not to be reclassified to profit or loss in subsequent years(46)(39)30 \n\nTotal other comprehensive income (loss)(25)(380)1,080 \n\nTotal comprehensive income (loss)$(41,015)$57,187 $(108,199)\n\nAttributable to:\n\nShareholders of the parent$(41,015)$57,187 $(108,199)\n\nNon-controlling interests— — — \n\n(1) The changes primarily relate to the timing and amount of revenue recognized, adjustments related to the accounting for the compound financial instruments issued in July 2025 and related embedded derivative, the classification of digital asset losses between impairment and losses on sale, the accounting for acquired licenses, property plant and equipment, and new leases, and other adjustments attributable to normal year-end closing procedures, audit adjustments, and the completion of management’s review.\n\nThe following notes form an integral part of the annual financial statements\n\nF-6\n\n[Table of Contents](#id7a36a459db940a6aa2751de859fa394_178)\n\nSequans Communications S.A.\n\nConsolidated Statements of Financial Position\n\n At December 31,\n\n Note20232024\n2025 (1)\n\n (in thousands)\n\nASSETS\n\nNon-current assets:\n\nProperty, plant and equipment9 $6,815 $4,308 $4,299 \n\nIntangible assets10 64,300 5,641 8,522 \n\nGoodwill3-10— — 3,676 \n\nDigital assets, pledged as collateral for convertible debt11 — — 141,505 \n\nDigital assets, unrestricted11 — — 45,686 \n\nDeposits and other receivables23.1 801 3,246 2,161 \n\nPrepaid expenses22 — — 2,213 \n\nOther non-current financial assets23.1 360 353 409 \n\nTotal non-current assets72,276 13,548 208,471 \n\nCurrent assets:\n\nInventories12 6,335 2,874 3,933 \n\nTrade receivables13 8,115 4,809 3,278 \n\nContract assets13 497 122 98 \n\nPrepaid expenses1,422 1,410 2,564 \n\nOther receivables4,958 17,492 5,953 \n\nResearch tax credit receivable6.4 9,864 4,184 5,898 \n\nShort-term deposits14 — 53,000 — \n\nCash and cash equivalents14 5,705 9,093 13,386 \n\nTotal current assets36,896 92,984 35,110 \n\nTotal assets$109,172 $106,532 $243,581 \n\nEQUITY (DEFICIT) AND LIABILITIES\n\nEquity (deficit):\n\nIssued capital, euro 0.01 nominal value, 1,599,589,702 ordinary shares issued and outstanding at December 31, 2025 (251,408,922 at December 31, 2024 and 246,262,004 at December 31, 2023)\n15 $2,878 $2,934 $18,718 \n\nShare premium15 14,568 14,512 185,598 \n\nOther capital reserves15-1670,261 74,504 77,515 \n\nTreasury shares15 — — (9,363)\n\nAccumulated deficit(93,362)(35,795)(145,074)\n\nOther components of equity(416)(796)284 \n\nTotal equity (deficit)(6,071)55,359 127,678 \n\nNon-current liabilities:\n\nGovernment loans19 173 616 — \n\nGovernment research financing19 3,083 5,669 3,297 \n\nLease liabilities18 1,645 333 1,225 \n\nProvisions20 2,222 1,400 2,112 \n\nTrade payables and other non-current liabilities21 — — 1,360 \n\nDeferred tax liabilities22 264 173 129 \n\nContract liabilities22 — 809 3,157 \n\nTotal non-current liabilities7,387 9,000 11,280 \n\nCurrent liabilities:\n\nTrade payables21 16,281 6,106 10,081 \n\nInterest-bearing financing of receivables17 9,544 3,742 — \n\nConvertible debt17 52,278 — 56,422 \n\nF-7\n\n[Table of Contents](#id7a36a459db940a6aa2751de859fa394_178)\n\nSequans Communications S.A.\n\nConsolidated Statements of Financial Position\n\nConvertible debt embedded derivative17 3 — 10,800 \n\nLease liabilities18 1,471 1,439 601 \n\nUnsecured related party loan17 8,922 — — \n\nGovernment loans19 1,727 1,802 979 \n\nGovernment research financing19 2,879 4,062 4,308 \n\nOther current liabilities and provisions21 8,899 11,174 11,084 \n\nIncome tax liabilities of the parent company7 — 2,827 3,124 \n\nContract liabilities21 5,852 11,021 7,224 \n\nTotal current liabilities107,856 42,173 104,623 \n\nTotal equity and liabilities$109,172 $106,532 $243,581 \n\n(1) The changes primarily relate to the timing and amount of revenue recognized, adjustments related to the accounting for the compound financial instruments issued in July 2025 and related embedded derivative, the classification of digital asset losses between impairment and losses on sale, the accounting for acquired licenses, property plant and equipment, and new leases, and other adjustments attributable to normal year-end closing procedures, audit adjustments, and the completion of management’s review.\n\nThe following notes form an integral part of the annual financial statements\n\nF-8\n\n[Table of Contents](#id7a36a459db940a6aa2751de859fa394_181)\n\nSequans Communications S.A.\n\nConsolidated Statements of Changes in Equity (Deficit)\n\n Attributable to the shareholders of the parent\n\n Ordinary sharesShare\npremiumOther\ncapital\nreservesTreasury sharesAccumulated\ndeficitCumulative\ntranslation\nadjustmentsAccumulated other comprehensive income (loss)Total\nequity\n(deficit)\n\n SharesAmount\n\n (Note 15)(Note 15)(Note 15)(Notes 16 and 17)(Note 15)    \n\n (in thousands, except share and per share amounts)\n\nAt January 1, 2023193,426,478 $2,306 $2,418 $62,870 $— $(65,099)$(700)$309 $2,104 \n\nLoss for the year(40,990)(40,990)\n\nRe-measurement gains (losses) on defined benefit plans(46)(46)\n\nForeign currency translation97 97 \n\nNet gain on cash flow hedge(76)(76)\n\nTotal comprehensive income (loss)(40,990)97 (122)(41,015)\n\nIssue of shares in connection with the vesting of restricted shares awards5,520,010 60 (60)— \n\nIssue of shares in connection with a private placement on April 2023 (Note 15)38,834,952 423 19,577 20,000 \n\nIssue of shares in connection with a private placement on September 2023 (Note 15)8,480,564 89 5,911 6,000 \n\nTransaction costs(551)(551)\n\nIncorporation of losses(12,727)12,727 — \n\nBridge loans from related party205 205 \n\nWarrants issued to Nokomis in August 202282 82 \n\nShare-based payments7,104 7,104 \n\nAt December 31, 2023246,262,004 $2,878 $14,568 $70,261 $— $(93,362)$(603)$187 $(6,071)\n\nLoss for the year57,567 57,567 \n\nRe-measurement gains (losses) on defined benefit plans(39)(39)\n\nForeign currency translation(158)(158)\n\nNet loss on cash flow hedge(183)(183)\n\nTotal comprehensive income (loss)57,567 (158)(222)57,187 \n\nIssue of shares in connection with the vesting of restricted shares awards5,146,918 56 (56)— \n\nBridge loans from related party153 153 \n\nShare-based payments4,090 4,090 \n\nAt December 31, 2024251,408,922 $2,934 $14,512 $74,504 $— $(35,795)$(761)$(35)$55,359 \n\nProfit for the year(109,279)(109,279)\n\nF-9\n\n[Table of Contents](#id7a36a459db940a6aa2751de859fa394_181)\n\nSequans Communications S.A.\n\nConsolidated Statements of Changes in Equity (Deficit)\n\nRe-measurement gains (losses) on defined benefit plans30 30 \n\nForeign currency translation937 937 \n\nNet loss on cash flow hedge113 113 \n\nTotal comprehensive income (loss)(109,279)937 143 (108,199)\n\nIssue of shares in connection with the vesting of restricted shares awards8,923,730 100 (100)— \n\nIssue of shares in connection with a private placement on July 2025 (Note 15)1,171,987,620 13,737 150,342 164,079 \n\nTransactions costs(13,992)(13,992)\n\nExercise of 2025 warrants issued in July 2025 (Note 15)10,875,000 126 1,396 1,522 \n\nExercise of pre-funded warrants issued in July 2025 (Note 15)125,943,130 1,467 29,531 30,998 \n\nIssuance of shares in consideration for private placement services (Note 15)30,451,300 354 3,909 4,263 \n\nAcquisition of treasury shares (Note 15)(9,363)(9,363)\n\nShare-based payments3,011 3,011 \n\nAt December 31, 2025 (1)\n1,599,589,702 $18,718 $185,598 $77,515 $(9,363)$(145,074)$176 $108 $127,678 \n\n(1) The changes primarily relate to the timing and amount of revenue recognized, adjustments related to the accounting for the compound financial instruments issued in July 2025 and related embedded derivative, the classification of digital asset losses between impairment and losses on sale, the accounting for acquired licenses, property plant and equipment, and new leases, and other adjustments attributable to normal year-end closing procedures, audit adjustments, and the completion of management’s review.\n\nThe following notes form an integral part of the annual financial statements\n\nF-10\n\n[Table of Contents](#id7a36a459db940a6aa2751de859fa394_184)\n\nSequans Communications S.A.\n\nConsolidated Statements of Cash Flow\n\n  Year ended December 31,\n\n Note20232024\n2025 (1)\n\n  (in thousands)\n\nOperating activities:\n\nProfit (loss) before income taxes$(38,316)$61,104 $(108,447)\n\nAdjustments to reconcile profit before tax to net cash flows :\n\nAmortization and impairment of property, plant and equipment9 4,594 3,353 2,757 \n\nAmortization and impairment of intangible assets10 7,348 60,690 2,962 \n\nImpairment of digital assets11 — — 67,375 \n\nShare-based payment expense6.3 7,104 4,090 3,011 \n\nIncrease (Decrease) in provisions(97)191 887 \n\nInterest expense, net11,233 22,878 11,097 \n\nChange in the fair value of embedded derivatives17.1 (3,200)(3)(45,000)\n\nLoss (gain) on debt extinguishment, net of non-cash transaction cots17.1 (247)(13,952)28,299 \n\nForeign exchange loss (gain)741 (29)(2,533)\n\nLoss (gain) on disposal of assets— (157,095)12 \n\nLoss on sale of digital assets— — 6,102 \n\nWorking capital adjustments:\n\nDecrease (Increase) in trade receivables and other receivables(41)3,637 8,193 \n\nDecrease (Increase) in inventories3,052 3,141 (1,275)\n\nIncrease in research tax credit receivable(3,204)(2,081)(1,991)\n\nIncrease (Decrease) in trade payables and other liabilities7,252 (13,076)4,200 \n\nIncrease (Decrease) in contract liabilities(199)5,978 (3,496)\n\nIncrease (Decrease) in government grant advances(1,080)2,416 2,108 \n\nIncome tax paid(2,201)(753)(679)\n\nNet cash flow used in operating activities$(7,261)$(19,511)$(26,418)\n\nInvesting activities:\n\nPurchase of intangible assets and property, plant and equipment9-10$(5,457)$(3,316)$(2,243)\n\nPurchase of digital assets11$— $— $(377,200)\n\nCapitalized development expenditures(24,115)(16,428)— \n\nSale (Purchase) of financial assets(41)(30)365 \n\nDecrease (Increase) of short-term deposit5,000 (53,000)53,000 \n\nInterest received176 850 1,401 \n\nInvestment in ACP Advanced Circuit Pursuit, net of cash acquired3— — (2,816)\n\nProceeds from sale of digital assets11— — 116,532 \n\nProceeds from sale of 4G intangible and tangible assets4— 165,611 — \n\nNet cash flow from (used in) investments activities$(24,437)$93,687 $(210,961)\n\nFinancing activities:\n\nPrivate equity offering proceeds, including pre-funded warrants, net of transaction costs paid15 $25,450 $— $152,140 \n\nProceeds from convertible debt, net of transaction costs paid15-17.1— — 174,395 \n\nProceeds from exercise of pre-funded and 2025 warrants15 — — 32,521 \n\nProceeds (repayment of) from interest-bearing receivables financing, net17.3 1,483 3,329 (3,742)\n\nProceeds from interest-bearing research project financing19.2 545 934 1,129 \n\nProceeds from related party loans17.2 9,000 14,000 — \n\nPurchase of treasury shares15— — (9,363)\n\nRepayment of loans17.2 — (23,000)(420)\n\nRepayment of government loans19.3 (1,126)(1,705)(1,402)\n\nRepayment of convertible debt17.2 — (54,935)(100,643)\n\nF-11\n\n[Table of Contents](#id7a36a459db940a6aa2751de859fa394_184)\n\nSequans Communications S.A.\n\nConsolidated Statements of Cash Flow\n\nRepayment of interest-bearing research project financing19.2 (939)(1,316)(461)\n\nPayment of lease liabilities(1,321)(1,508)(1,591)\n\nInterest paid(1,356)(6,587)(1,028)\n\nNet cash flows from (used in) financing activities$31,736 $(70,788)$241,535 \n\nNet increase in cash and cash equivalents38 3,388 4,156 \n\nNet foreign exchange difference(4)— 137 \n\nCash and cash equivalents at January 15,671 5,705 9,093 \n\nCash and cash equivalents at period end14 $5,705 $9,093 $13,386 \n\n1) The changes primarily relate to the timing and amount of revenue recognized, adjustments related to the accounting for the compound financial instruments issued in July 2025 and related embedded derivative, the classification of digital asset losses between impairment and losses on sale, the accounting for acquired licenses, property plant and equipment, and new leases, and other adjustments attributable to normal year-end closing procedures, audit adjustments, and the completion of management’s review.\n\nThe following notes form an integral part of the annual financial statements\n\nF-12\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements\n\n1. Corporate information\n\nSequans Communications S.A. (“Sequans”) is organized as a limited liability company (“société anonyme”) incorporated and domiciled in the Republic of France, with its principal place of business at 15-55 boulevard Charles de Gaulle, 92700 Colombes, France. Sequans, together with its subsidiaries (the “Company”), is a fabless semiconductor company specializing in wireless 4G and 5G cellular technologies for the Internet of Things (IoT). Sequans’ engineers design and develop innovative, secure, and energy‑efficient semiconductor solutions that enable the next generation of AI‑connected applications, including smart energy metering, industrial automation, smart mobility and logistics, secure payments, e‑health, and smart home solutions.\n\nThe Company offers a comprehensive portfolio of wireless connectivity solutions, including radio frequency (RF) transceivers, integrated circuits (ICs) for baseband processing, as well as modules, software, and protocol stacks. Its LTE‑M/NB‑IoT, 4G LTE Cat 1bis, and future 5G NR RedCap/eRedCap platforms are purpose‑built for IoT use cases, delivering industry‑leading performance in power efficiency, security, reliability, and scalability. In addition to semiconductor products, Sequans provides advanced design services and licenses its proprietary technologies to ecosystem partners worldwide.\n\nIn parallel with its core semiconductor business, Sequans maintains a Bitcoin treasury strategy.\n\n2. Summary of significant accounting and reporting policies\n\n2.1. Basis of preparation\n\nThe Consolidated Financial Statements are presented in U.S. dollars.\n\nThe Consolidated Financial Statements for the year ended December 31, 2025 have been prepared on the basis that the Company will continue as a going concern, which presumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.\n\nSequans has historically incurred net losses and significant cash outflows from operating activities. We experienced net losses of $41.0 million and $109.3 million in 2023 and 2025, respectively, and net profit of $57.6 million in 2024. At December 31, 2025, our accumulated deficit was $145.1 million and we had negative working capital of $69.5 million, including $13.4 million of cash and cash equivalents.\n\nThe Company has financed its operations through a combination of results from operations and proceeds from the issue of shares through private placements (2023, $25.5 million and 2025, $152.1 million), pre-funded warrants and 2025 warrants issued in 2025 ($32.5 million), convertible debt in 2025 ($174.4 million) and bridge loans ($9.0 million in 2023 and $14.0 million in 2024).\n\nAs of April 23, 2026, $43.7 million of convertible debt remained outstanding and the Company held 1,114 Bitcoin, of which 917 are held as security for the remaining outstanding convertible debt and 197 are held without any restriction. Management has prepared business and liquidity plans, including financial forecasts extending through at least the second quarter of 2027, which demonstrate the Company’s ability to meet its operational and financial obligations as they fall due. These plans incorporate a number of key assumptions regarding significant revenue growth by product and by customer, assumes a declining operating cost structure, proceeds from the sale of unpledged Bitcoin, and ongoing and new government funding of research programs. The Company expects to be able to obtain additional funding through one or more possible license agreements, business partnerships or other similar arrangements.\n\nWhile management believes the assumptions underlying the forecasts are reasonable and that the Company has a credible plan to execute its strategy and that the sale of Bitcoin will provide an adequate source of financing, there remains significant uncertainty in relation to the achievement of forecasted operating cashflows, in particular if the Company is unable to achieve its revenue growth plans, the future market price of Bitcoin and the Company’s ability to realize planned asset sales.\n\nAs a result, a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Notwithstanding these uncertainties, based on current forecasts and available resources, management has concluded that the going concern basis of accounting remains appropriate for the preparation of these consolidated financial statements. The financial statements do not include the adjustments that would result if the Company were unable to continue as a going concern. Management continues to monitor the situation closely and is actively exploring alternative sources of funding and cost reduction measures to mitigate the risk. However, the outcome of these actions cannot be guaranteed.\n\nF-13\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nStatement of compliance\n\nThe Consolidated Financial Statements of the Company have been prepared in accordance with IFRS accounting standards as issued by the International Accounting Standard Board (“IASB”) and whose application is mandatory for the year ended December 31, 2025. Comparative figures are presented for December 31, 2023 and 2024.\n\nThe accounting policies are consistent with those of the same period of the previous financial year, except for the changes disclosed in Note 2.2 to the Consolidated Financial Statements.\n\nThe Consolidated Financial Statements of the Company as of and for the years ended December 31, 2023, 2024 and 2025 have been authorized for issue in accordance with a resolution of the board of directors on April 28, 2026.\n\nBasis of consolidation\n\nThe Consolidated Financial Statements comprise the financial statements of Sequans Communications S.A., which is the ultimate parent of the group, and its subsidiaries as of and for the years ended December 31, 2025, 2024 and 2023:\n\nNameCountry of\nincorporationYear of\nincorporation%\nequity\ninterest\n\nSequans Communications Ltd.United Kingdom2005100 \n\nSequans Communications Inc.United States2008100 \n\nSequans Communications Ltd. Pte.Singapore2008100 \n\nSequans Communications Israel (2009) Ltd.Israel2009100 \n\nSequans Communications Finland OyFinland2020100 \n\nSequans Communications SASFrance2023100 \n\nBitquans Holdings LLCUnited States2025100 \n\nACP Advanced Circuit Pursuit AGSwitzerland2025100 \n\nThe financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions are eliminated in full. The subsidiaries have been fully consolidated from their date of incorporation.\n\n2.2. Changes in accounting policy and disclosures\n\nNew and amended standards and interpretations\n\nThe accounting policies used in 2025 are consistent with those of the previous financial year, except for the following new and amended IFRS and IFRIC interpretations effective as of January 1, 2025:\n\n•Effects of Changes in Foreign Exchange Rates – Amendments to IAS 21. In August 2023, the IASB issued amendments to IAS 21 to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity’s financial performance, financial position and cash flows. The amendments are effective for annual reporting periods beginning on or after 1 January 2025. When applying the amendments, an entity cannot restate comparative information. The amendments, which apply for the first time in 2025, did not have a material impact on the Company’s financial statements.\n\nStandards issued but not yet effective\n\nStandards and interpretations issued but not yet effective up to the date of issue of the Company’s Consolidated Financial Statements are listed below. The Company intends to adopt these standards when they become effective:\n\nF-14\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n•IFRS 18 Presentation and Disclosure in Financial Statements. In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financial statements (PFS) and the notes. In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from ‘profit or loss’ to ‘operating profit or loss’ and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards. IFRS 18, and the amendments to the other standards, is effective for reporting periods beginning on or after 1 January 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The Company is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.\n\nRussian invasion in Ukraine\n\nWhile the Company's key engineering competencies are performed in-house, primarily in France, the United Kingdom, Israel and the United States, the Company outsources some application software development and testing activities to an independent third-party provider of engineering services. The Company works with a dedicated team of 20 software engineers based in Kyiv, Ukraine. If the Russian invasion of Ukraine is protracted or if Ukraine experiences further political instability, these engineers may be unable to work for a sustained period of time, which could adversely impact the research and development operations. The Company has developed a contingency plan if the engineers in Kyiv are unable to continue working on their projects for us for a sustained period of time, but if the contingency plan is not effective or sanctions are imposed that prevent the Company from conducting business in Ukraine, the Company could suffer delays in product introduction or delays in resolution of customer software bugs, which could have a negative impact on its revenues. During 2023, 2024 and 2025, the Ukraine team was able to work effectively, and the Company did not identify any direct impact from the situation on its business. As of December 31, 2025, the Company has not identified any impact on its assets and liabilities.\n\n2.3. Material accounting policies\n\nFunctional currencies and translation of financial statements denominated in currencies other than the U.S. dollar\n\nThe Consolidated Financial Statements are presented in U.S. dollars, which is also the functional currency of Sequans Communications S.A. The Company uses the U.S. dollar as its functional currency due to the high percentage of revenues, cost of revenue, capital expenditures and operating costs, other than those related to headcount and overhead, which are denominated in U.S. dollars. Each subsidiary determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.\n\nAs at the reporting date, the assets and liabilities of each subsidiary are translated into the presentation currency of the Company (the U.S. dollar) at the rate of exchange in effect at the Statement of Financial Position date and their Statement of Operations is translated at the weighted average exchange rate for the reporting period. The exchange differences arising on the translation are taken directly to a separate component of equity (“Cumulative translation adjustments”).\n\nForeign currency transactions\n\nForeign currency transactions are initially recognized by Sequans Communications S.A. and each of its subsidiaries at their respective functional currency rates prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange in effect at the reporting date. All differences are taken to the Consolidated Statement of Operations within financial income or expense. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the initial transactions.\n\nThe table below sets forth, for the periods and dates indicated, the average and closing exchange rate for the U.S. dollar (USD) to the euro (EUR), the U.K. pound sterling (GBP), the Singapore dollar (SGD), the New Israeli shekel (NIS) and the Switzerland franc (CHF):\n\nF-15\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nUSD/EURUSD/GBPUSD/SGDUSD/NISUSD/CHF\n\nDecember 31, 2023\n\nAverage rate1.0816 1.2435 0.7447 0.2716 Not applicable\n\nClosing rate1.1050 1.2714 0.7573 0.2763 Not applicable\n\nDecember 31, 2024\n\nAverage rate1.0821 1.2794 0.7485 0.2703 Not applicable\n\nClosing rate1.0389 1.2529 0.7335 0.2742 Not applicable\n\nDecember 31, 2025\n\nAverage rate1.1293 1.3190 0.7652 0.2902 1.2053 \n\nClosing rate1.1750 1.3466 0.7779 0.3136 1.2615 \n\nEarnings (loss) per ordinary share and per ADS\n\nBasic earnings (loss) amounts per ordinary share and per ADS are computed using the weighted average number of shares outstanding during each period, excluding ordinary shares held in treasury as these shares are not considered outstanding for purposes of earnings per share calculations.\n\nDiluted earnings per ordinary share and per ADS include the effects of dilutive options and warrants as if they had been exercised, unless the effect would be anti-dilutive.\n\nRevenue recognition\n\nThe Company’s total revenue consists of product revenue and services and license revenue.\n\nRevenue from contracts with customers is recognized when control of the goods or services is transferred to the customer at an amount that reflects the fair value of the consideration to which the Company is entitled, excluding sales taxes or duties.\n\nThe Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when the performance obligation is satisfied.\n\nWhen a contract includes multiple promised goods and services, the Company evaluates each component to determine whether they represent separate performance obligations and determines the appropriate allocation of the contract consideration to each identified performance obligation based on estimated relative stand-alone selling prices.\n\nIf the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Specifically, milestone payments in development services contracts represent variable consideration, the receipt of which is dependent upon the achievement of technical milestones.\n\nThe Company sometimes receives advance payments from customers for the provision of development services. The Company determines if there is a significant financing component for these contracts considering the length of time between the customers’ payment and the transfer of control of the goods and services. When a significant financing component has been identified, the transaction price for these contracts is discounted, using the rate that would be reflected in a separate financing transaction at contract inception. The Company applies the practical expedient for short-term advances received from customers. That is, the promised amount of consideration is not adjusted for the effects of a significant financing component if the period between the transfer of the promised good or service and the payment is one year or less.\n\nProduct revenue\n\nSubstantially all of the Company’s product revenue is derived from the sale of semiconductor solutions for 4G wireless applications.\n\nRevenue from the sale of products is usually recognized at a point in time when the Company satisfies its performance obligation to the buyer, whether direct end customer, end customer's manufacturing partner or distributor. This occurs when\n\nF-16\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nthere is no continuing managerial involvement to the degree usually associated with ownership nor effective control over the sale of products is retained, which is based on the specified Incoterms, but usually occurs on shipment of the goods. Sale of products to some distributors is recognized when the products are sold to the end-customer but these contracts are not significant. In general, the Company is the principal in product sales. In limited cases, the Company resells as an agent. Products are not sold with a right of return but are covered by warranty. This is an assurance-type warranty. The Company does not accrue for a general warranty obligation as the Company has not historically incurred and does not expect material warranty costs. Although the products sold have embedded software, the Company believes that software is incidental to the products it sells.\n\nLicense and services revenue\n\nLicense and services revenue consists of revenues from the sale of licenses to use the Company’s technology solutions and any fees for the associated annual software maintenance and support services, as well as from the sale of technical support and development services. Development services include advanced technology development services for technology partners and software or product development and integration services for customers.\n\nRevenue from the sale of licenses is recognized at a point in time when the Company satisfies its performance obligation which occurs when the software has been delivered to the customer (assuming no other significant obligations exist), as licenses provide the right to use the software as it exists when made available to the customer.\n\nRevenue from the sale of software maintenance and support services is recognized over the period of the maintenance (generally one year). When the first year of maintenance is included in the software license price, an amount generally equal to the negotiated rate for one year of maintenance is deducted from the value of the license and recognized as revenue over the period of maintenance as described above. The difference between license and maintenance services invoiced and the amount recognized in revenue is recorded as deferred revenue.\n\nRevenue from technical support and development services is generally recognized over time using the percentage-of-completion method. For each service contract, the Company determines whether the pattern of transfer of control meets one of the criteria for revenue recognition over time: (a) the customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs (b) the Company's performance creates or enhances an asset (for example, work in progress) that the customer controls as the asset is created or enhanced or (c) the Company's performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. Generally, the support and development contracts meet one or more of these criteria, based on the facts and circumstances both within the contract and the nature of the services provided. Typically, the customers consume the services as they are provided through ongoing technical support or through an iterative development process. Certain contracts also include terms which allow the customer to have control over the asset as it is created or provide Sequans the right to payment for all work performed to date.\n\nDue to revenue recognition over time, contract assets are created for services that Sequans does not yet have the right to invoice. Contract liabilities are created when milestones are billed in advance of being earned.\n\nWhen a contract does not meet one of the criteria above, revenue is recognized at a point in time, when there is evidence of transfer of control, which typically occurs upon achievement of certain or all contract milestones. Percentage-of-completion is calculated based on the input method using estimated costs as a measure of performance completed.\n\nThe costs associated with these arrangements are recognized as incurred. Revenue from development contracts where no related direct costs were identified amounted to $214,000 in the year ended December 31, 2023. There was no revenue from development contracts without direct costs for the years ended December 31, 2025 and 2024.\n\nContract assets\n\nA contract asset is the right to consideration in exchange for goods or services transferred to the customer. As described above, when the Company performs by transferring goods or services before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration that is conditional. Where the Company has an unconditional right to payment, these are included in unbilled revenue until billing occurs and classified as trade receivables.\n\nWe have elected to use the practical expedient not to adjust the promised amount of consideration for the effects of a significant financing component when the period between when we transfer the promised good or service to our customers and when we expect the customers to pay for that good or service is one year or less.\n\nF-17\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nWe do not have any costs that meet the criteria for costs to obtain a contract or cost to fulfill a contract.\n\nAs of December 31, 2025, the transaction price allocated to the unsatisfied or partially unsatisfied performance obligations was $576,000 and to be recognized in 2026.\n\nAs of December 31, 2024, there was no transaction price allocated to the unsatisfied or partially unsatisfied performance obligations recognized in 2025.\n\nAs of December 31, 2023, the transaction price allocated to the unsatisfied or partially unsatisfied performance obligations was $88,000 and was recognized in 2024.\n\nContract liabilities\n\nContract liabilities represent amounts invoiced and/or cash received in advance related to services being performed. Contract liabilities include both upfront payments from license and development service agreements in excess of revenues recognized, as well as deferred revenue from advance payments for goods or maintenance services.\n\nRevenue recognized in the current period from amounts included in deferred revenue at the beginning of the year was $204,000, $300,000 and $190,000 for 2025, 2024 and 2023, respectively (See Note 22 Other non-current liabilities and Note 21 trade payables and other current liabilities).\n\nCost of revenue\n\nCost of product revenue includes all direct and indirect costs incurred with the sale of products, including shipping and handling. Cost of services revenue includes direct costs incurred to support the obligations covered by development services contracts (mainly employees and subcontractors costs). Research and development costs associated with product development (including normal customer support which generates product improvement) are recorded in research and development expenses.\n\nResearch and development costs\n\nResearch costs are expensed as incurred. Development costs are recognized as an intangible asset if the Company can demonstrate:\n\n•the technical feasibility of completing the intangible asset so that it will be available for use or sale;\n\n•its intention to complete the asset and use or sell it;\n\n•its ability to use or sell the asset;\n\n•how the asset will generate future economic benefits;\n\n•the availability of adequate resources to complete the development and to use or sell the asset; and\n\n•the ability to measure reliably the expenditure during development.\n\nBeginning in 2015, certain development costs incurred at the end of the product development cycle when the criteria for capitalization are met, became material as the Company began making its product available on more operator networks which require significant testing and qualification work in order to finalize the product for sale on that network. In 2023, and 2024, the Company capitalized costs for the development for LTE Category 1 and the development of the 5G broadband platform. In 2025, the Company developed a variant of 5G, eRedCap, but no costs were capitalized since the relevant accounting requirements were not met. The intangible assets are tested for impairment annually. (See Notes 6.4 and 10 to the Consolidated Financial Statements). Amortization of these intangible assets is recorded in research and development expense.\n\nResearch and development costs associated with product development (including normal customer support which generates product improvements) are recorded in operating expense. In some cases, the Company has negotiated agreements with customers and partners whereby the Company provides certain development services beyond its normal practices or planned product roadmap. Amounts received from these agreements are recorded in services revenue. Direct costs incurred by the Company as a result of the commitments in the agreements are recorded in cost of revenue. Other research and development costs related to the projects covered by the agreements, but which would have been incurred by the Company without the existence of such agreements are recorded in research and development expense.\n\nF-18\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nGovernment grants, loans and research tax credits\n\nThe Company operates in certain jurisdictions which offer government grants or other incentives based on the qualifying research expense incurred or to be incurred in that jurisdiction. These incentives are recognized as the qualifying research expense is incurred if there is reasonable assurance that all related conditions will be complied with and the grant will be received. When the grant relates to an expense item, it is recognized as a reduction of the related expense over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. Any cash received in advance of the expenses being incurred is recorded as a liability.\n\nSome long-term research projects are also financed through low-interest forgivable loans. The present value of forgivable loans is calculated based on expected future payments discounted using the interest rate applied for standard loans with the same maturity. The difference between present value and amount received is accounted for as a grant.\n\nWhere loans or similar assistance provided by governments or related institutions are interest-free, the present value is calculated based on expected future payments discounted using the interest rate applied for standard loans with the same maturity. The difference between present value and amount received is accounted for as a grant.\n\nThe Company also benefits from research incentives in the form of tax credits which are detailed in Note 6.4 to the Consolidated Financial Statements. When the incentive is available only as a reduction of taxes owed, such incentive is accounted for as a reduction of tax expense; otherwise, it is accounted for as a government grant with the benefit recorded as a reduction of research and development costs, whether capitalized or expensed.\n\nDigital assets: Impairment and disposals\n\nThe Company holds digital assets (which are comprised solely of Bitcoin) which are classified as intangible assets in accordance with IAS 38- Intangible assets. Digital assets are initially recognized at cost which includes the purchase price and any directly attributable transaction fees. The assets are considered to have an indefinite useful life and are not amortized, but are subject to impairment testing at each closing date. If the fair value of a digital asset decreases below its carrying value, an impairment loss is recognized in the Consolidated Statements of Operations. Gains are not recognized until realized upon sale. The cost basis used in calculating the gain or loss realized on sale of digital assets is determined using the first-in, first-out method. The Company determines the fair value of its digital assets based on quoted market prices on active exchanges as found on the Coinbase platform at the closing date, reduced by the amount of fees to be paid on sale.\n\nFinancial income and expense\n\nFinancial income and expense include:\n\n•interest expense related to accounts receivable financing, the debt component of convertible debt, bridge loans, government loans, lease contracts, upfront payments, financing components of customer contracts and a supplier payable with extended payment terms;\n\n•other expenses paid to financial institutions for financing operations;\n\n•foreign exchange gains and losses;\n\n•change in fair value of financial assets and liabilities; and\n\n•impact of debt extinguishment.\n\nThe Company reflects foreign exchange gains and losses related to hedges (through derivatives) of euro-based operating expenses in operating expenses.\n\nTaxation\n\nCurrent income tax\n\nCurrent income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date.\n\nCurrent income tax relating to items recognized directly in equity is recognized in equity.\n\nF-19\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nDeferred income tax\n\nDeferred income tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.\n\nDeferred income tax liabilities are recognized for all taxable temporary differences, except with respect to taxable temporary differences associated with investments in subsidiaries where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.\n\nDeferred income tax assets are recognized for all deductible temporary differences, carry forwards of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forwards of unused tax credits and unused tax losses can be utilized.\n\nThe carrying amount of deferred income tax assets is reviewed at the reporting date and adjusted to the extent that it is probable that sufficient future taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.\n\nDeferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the statement of financial position date.\n\nDeferred income tax relating to items recognized directly in equity is recognized in equity.\n\nDeferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right of offset exists.\n\nValue added tax\n\nRevenue, expenses and assets are recognized net of the amount of value added tax except:\n\n•where the value added tax incurred on a purchase of assets or services is not recoverable from the tax authorities, in which case the value added tax is recognized as part of the cost of acquisition of the asset or as part of the expense item as applicable; and\n\n•receivables and payables that are stated with the amount of value added tax included.\n\nValue added tax recoverable consists of value added tax paid by the Company to vendors and suppliers located in the European Union, in the United Kingdom and in Israel, and recoverable from the tax authorities. Value added tax recoverable is collected on a monthly or quarterly basis.\n\nInventories\n\nInventories consist primarily of the cost of semiconductors, including wafer fabrication, assembly, testing and packaging; components; and modules purchased from subcontractors. Inventories are valued at the lower of cost (determined using the weighted average cost method) or net realizable value (estimated market value less estimated cost of completion and the estimated costs necessary to make the sale).\n\nThe Company writes down the carrying value of its inventories for estimated amounts related to the lower of cost or net realizable value, obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated net realizable value. The estimated net realizable value of the inventory is based on historical usage and assumptions about future demand, future product purchase commitments, estimated manufacturing yield levels and market conditions on a product-by-product basis. When the circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed economic circumstances, the amount of the write-down is reversed (i.e. the reversal is limited to the amount of the original write-down) so that the new carrying amount is the lower of the cost and the revised net realizable value.\n\nFinancial assets\n\nFinancial assets are classified, at initial recognition, as (1) measured at amortized cost, (2) fair value through other comprehensive income (OCI), or (3) fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and Sequans’ business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value.\n\nF-20\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nReceivables\n\nTrade receivables are measured at amortized cost. Impairment losses on trade accounts receivable are estimated using the expected loss method, in order to take into account the risk of payment default throughout the lifetime of the receivables. Based on an analysis of historical credit losses, the Company has not applied any expected credit losses to its outstanding receivables as of the reporting date beyond specific provisions for doubtful accounts. The Company records an allowance for any specific account it considers as doubtful based on the particular circumstances of the account. The carrying amount of the receivable is thus reduced through the use of an allowance account, and the amount of the charge is recognized on the line “General and administrative expenses” in the Consolidated Statement of Operations. Subsequent recoveries, if any, of amounts previously provided for are credited against the same line in the Consolidated Statement of Operations. When a trade accounts receivable is uncollectible, it is written-off against the allowance account for trade accounts receivable.\n\nShort-term investments\n\nShort-term investments are financial instruments with an initial maturity of greater than 90 days, but less than one year, and are reported as current financial assets.\n\nDeposits\n\nDeposits are reported as non-current financial assets (loans and receivables) when their initial maturity is more than twelve months.\n\nCash and cash equivalents\n\nCash and cash equivalents in the Consolidated Statements of Financial Position includes cash at banks, and money market funds, which correspond to highly liquid investments readily convertible to known amounts of cash and subject to an insignificant risk of change in value. Cash equivalents may also include amounts held in the trading portfolio at the digital asset custodian; the Company may hold cash in this account for brief periods after the sale of digital assets before the funds are transferred to a commercial bank account.\n\nProperty, plant and equipment\n\nProperty, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment loss. Depreciation is computed using the straight-line method over the estimated useful lives of each component. The Company presents right-of-use of lease contracts in property, plant and equipment and right of use assets are depreciated on a straight-line basis over the lease term. The useful lives most commonly used are the following:\n\nMachinery and equipment  3 to 5 years\n\nBuilding and leasehold improvements  Lesser of 6 years or the life of the lease\n\nComputer equipment  3 years\n\nFurniture and office equipment  5 years\n\nImpairment tests are performed at the end of each reporting period when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If any indication exists, the Company estimates the asset’s recoverable amount, which is the higher of the fair value less cost to sell and the value in use. Where the carrying amount exceeds that recoverable amount, the asset is considered impaired and it is written down to its recoverable amount.\n\nDepreciation expense is recorded in cost of revenue or operating expenses, based on the function of the underlying assets.\n\nIntangible assets\n\nIntangible assets, which primarily consist of purchased licenses for development or production technology and tools, as well as standard-related patent licenses and development costs meeting the criteria for capitalization, are stated at cost less accumulated amortization and any accumulated impairment loss. Amortization is computed using the straight-line method over the estimated useful life of each component. Acquired licenses are amortized over their contractual life or five years in the case of perpetual licenses. Capitalized development costs are generally amortized over periods ranging from 3 to 5 years, representing the expected life of the related technology.\n\nF-21\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nUseful lives are reviewed on a regular basis and changes in estimates, when relevant, are accounted for on a prospective basis. The amortization expense is recorded in cost of revenue or operating expenses, based on the function of the underlying assets.\n\nImpairment tests are performed at the end of each reporting period when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If any indication exists, the Company estimates the asset’s recoverable amount, which is the higher of the fair value less cost to sell and the value in use. Where the carrying amount exceeds that recoverable amount, the asset is considered impaired and it is written down to its recoverable amount.\n\nGoodwill\n\nGoodwill represents the excess of the cost of an acquired business over the fair value of the identifiable net assets acquired at the date of acquisition. Goodwill is initially recognized as an asset and measured at cost. Goodwill is not amortized but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss.\n\nAfter initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash generating units (CGU) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.\n\nImpairment is determined for goodwill by assessing the recoverable amount of each of the Company’s cash generating units (CGU) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.\n\nCosts of equity transactions\n\nIncremental costs directly attributable to the equity transaction are recorded as a deduction from equity.\n\nTreasury Shares\n\nTreasury shares are recorded as a deduction from equity at acquisition cost. No gain or loss is recognized in the Consolidated Statement of Operations on the purchase, sale, issuance, or cancellation of treasury shares. When treasury shares are reissued or cancelled, the difference between the consideration received, if any, and the acquisition cost is recognized directly in equity.\n\nProvisions\n\nProvisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in operating income (loss) net of any reimbursement.\n\nProvisions include the provision for pensions and post-employment benefits. Pension funds in favor of employees are maintained in France, the United Kingdom, Singapore (through May 2025), the United States, Finland, Israel and Switzerland, and they comply with the respective legislation in each country and are financially independent of the Company. The pension funds are generally financed by employer and employee contributions and are accounted for as defined contribution plans with the employer contributions recognized as expense as incurred. There are no actuarial liabilities in connection with these plans.\n\nFrench law also requires payment of a lump sum retirement indemnity to employees based on years of service and annual compensation at retirement. Benefits do not vest prior to retirement. This defined benefit plan is self-funded by the Company. It is calculated as the present value of estimated future benefits to be paid, applying the projected unit credit method whereby each period of service is seen as giving rise to an additional unit of benefit entitlement, each unit being measured separately to build up the final obligation. Following the application of IAS 19 as revised, actuarial gains and losses are recognized in equity. The discount rate is based on iBoxx Corporates AA.\n\nIn Switzerland, pension funds are legally independent from employers and are typically structured as foundations. Both employees and employers contribute to these funds, with contribution rates set by plan regulations. When employees leave,\n\nF-22\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nvested benefits are transferred to their new pension plans, requiring asset and liability transfers between funds to ensure accurate future projections. The Company uses the projected unit credit method, which values each year of service separately and considers future salary and pension increases, as well as employee turnover, to determine the defined benefit obligation (DBO). The DBO for active employees includes the present value of all future benefits, while for retirees, it covers current and future pension payments. The total obligation is compared to the value of plan assets. Annual defined benefit costs include service cost, net interest, and remeasurements. Service cost and net interest are recorded in profit and loss, while remeasurements are shown in other comprehensive income. Annual pension costs often differ from actual contributions, as they are based on projections.\n\nShare-based payment transactions\n\nEmployees (including senior executives and members of the board of directors) and certain service providers of the Company receive remuneration in the form of share-based payment transactions, whereby they render services as consideration for equity instruments (“equity-settled transactions”).\n\nThe cost of equity-settled transactions is measured by reference to the fair value at the date on which they are granted. The exercise price is based on closing market price on the date of grant.\n\nThe cost of equity-settled transactions is recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the beneficiary becomes fully entitled to the award (the “vesting date”). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest which includes assumptions on the number of awards to be forfeited due to the employees’ failing to fulfill the service condition, and forfeitures following the non-completion of performance conditions. The Consolidated Statement of Operations charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.\n\nFinancial liabilities\n\nFinancial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.\n\nAll financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.\n\nNon derivative financial liabilities are subsequently measured at amortized cost whereas derivative liabilities not designated as hedging instruments are recognized at fair value through profit or loss.\n\nConvertible debt\n\nThe Company evaluates at initial recognition of a convertible debt the different components and features of the hybrid instruments and determines whether these elements are equity instruments or embedded derivatives which require bifurcation. In subsequent periods, the liability component is accounted for using the effective interest method, based on the expected maturity of the debt. The equity component is not remeasured, while embedded derivatives unless closely related to the host instruments, are recorded at fair value through the Consolidated Statement of Operations.\n\nAs described in Note 17.1 to the Consolidated Financial Statements, the Company issued debt with an option to convert into shares of the Company in August 2019. The convertible note were amended several times to extend term of the notes and reduce conversion rates.\n\nEffective March 20, 2020, the convertible note was amended to grant the Company two options to extend the term of the note. Each option gave the Company the right to extend the term of such note by one year and consequently reset the conversion price to a 20% premium above the 20-day volume weighted average price (VWAP) if it is lower than the existing conversion price. On the first option exercise, the PIK would be adjusted to 9.5%, and the holder granted warrants for 15% of the value of the note with a three year term, at an exercise price of 20% premium above 20-day VWAP. On the second option exercise, the PIK would be adjusted to 13.5%, and the holder granted an additional warrant for 20% of the value of the note with a three year term, at an exercise price of 20% premium above 20-day VWAP. In consideration for entering into the amendments, the warrants that Nokomis owned previously and that were scheduled to expire April 2021 were extended to April 2024 upon the signing of the note amendment; these warrants expired in April 2024.\n\nF-23\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nFrom an accounting perspective, the amendment of the convertible note resulted in the extinguishment of the existing note and issuance of a new note, accounted for as compound financial instruments with two components:\n\n•A liability component reflecting the Company’s contractual obligation to pay interest and redeem the notes in cash; and\n\n•An embedded derivative, which reflects the Company's call options to extend the term of each note, the conversion option of Nokomis and in certain cases a repricing to decrease the conversion price.\n\nThe fair value of the liability component on the amendment date represented the fair value of a similar liability that does not have an associated equity conversion feature, calculated as the net present value of contractually determined future cash flows, discounted at the rate of interest applied by the market at the time of issue to instruments of comparable credit status and providing substantially the same cash flows, on the same terms, but without the conversion option. The Company derived 26.3% as the market rate of interest inherent in the value the liability components after valuing the embedded derivative.\n\nThe embedded derivatives of the note was valued using the Geometric Brownian Motion framework relying on Monte-Carlo simulations. On March 20, 2020, the initial fair value of the embedded derivative of the note was recorded in Other Capital reserves in shareholders' equity. The change in fair value is remeasured and recorded in the Consolidated Statement of Operations as financial income or loss at each statement of financial position date.\n\nOn April 9, 2021, the Company issued a note with options to convert into shares of the Company. The Company retained an option to call the convertible debt under certain circumstances after 12 months, either in full or in part. If a change of control occurred at any time prior to the payment of the note in full, the noteholder would have the right, in its sole discretion, to require Sequans to convert or redeem all of the outstanding principal amount (including accrued interest and unpaid interest).\n\nAs described in Note 17.1, the note was accounted for as compound financial instruments with two components:\n\n•A liability component reflecting the Company’s contractual obligation to pay interest and redeem the bonds in cash; and\n\n•An embedded derivative, which reflects the value of the conversion option.\n\nThe initial fair value of the notes was split between these two components.\n\nThe fair value of the liability component on the issuance date represented the fair value of a similar liability that does not have an associated equity conversion feature, calculated as the net present value of contractually determined future cash flows, discounted at the rate of interest applied by the market at the time of issue to instruments of comparable credit status and providing substantially the same cash flows, on the same terms, but without the conversion option. The Company used 20.89% as the market rate of interest in order to value the liability components of the note on issuance. The embedded derivative of the note was valued using the Geometric Brownian Motion framework relying on Monte-Carlo simulations. The change in fair value is remeasured and recorded as financial income or loss at each statement of financial position date.\n\nOn August 15, 2022, the Company elected to exercise the first option of the amendment signed on March 20, 2020 to extend the maturity of the convertible note issued in August 2019 to August 16, 2023. On August 15, 2023, the Company elected to exercise the second option of the amendment to extend the maturity of the convertible note to April 16, 2024.\n\nIn early April 2024, both note holders agreed to stay repayment of the notes until April 26, 2024. In late April, the Company extended the standstill agreements until September 30, 2024. This resulted in the extinguishment of the existing note and issuance of a new note for accounting purposes. Therefore, the fair value of the debt just prior to amendment was estimated in order to record a gain on extinguishment in the Consolidated Statement of Operations in “Debt amendments\". The amended debt was accounted for as compound financial instruments with two components:\n\n•A liability component reflecting the Company’s contractual obligation to pay interest and redeem the notes in cash; and\n\n•An embedded derivative, which reflects the value of the conversion option.\n\nOn July 7, 2025, the Company issued secured convertible debentures comprising a contractual obligation to deliver cash in the form of interest and principal repayments, together with a conversion feature that permits settlement into the Company’s equity instruments (shares of the Company or pre-funded warrants).\n\nAs described in Note 17.1, the secured convertible debentures were accounted for as compound financial instruments with the following distinct components:\n\n•A liability component reflecting the Company’s contractual obligation to pay interest and redeem the secured convertible debentures in cash;\n\nF-24\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n•An embedded derivative, which reflects the value of the conversion option embedded in the secured convertible debentures; and.\n\n•Freestanding derivative instruments, consisting of the warrants issued in connection with the debenture private placement for no additional consideration (the “debenture warrants”).\n\nThe initial fair value of the secured convertible debentures was split between the first two components. The debenture warrants, which are separate contractual instruments issued for no additional consideration in connection with the debenture private placement, are legally detachable from the secured convertible debentures. As separate units of account, they are excluded from the \"fixed-for-fixed\" assessment of the conversion feature and are evaluated independently. They are classified as financial liabilities under IAS 32.\n\nThe embedded derivative of the note was valued using the Geometric Brownian Motion framework relying on Monte-Carlo simulations. The change in fair value is remeasured and recorded as financial income or loss at each statement of financial position date. The fair value of the liability component on the issuance date represented the fair value of a similar liability that does not have an associated equity conversion feature, calculated as the net present value of contractually determined future cash flows, discounted at the rate of interest applied by the market at the time of issue to instruments of comparable credit status and providing substantially the same cash flows, on the same terms, but without the conversion option. The Company derived 30.2% as the effective market rate of interest, based on the residual value attributed to the debt after the embedded derivative had been valued.\n\nShort-term debt secured by accounts receivables\n\nAs described in Note 17.3 to the Consolidated Financial Statements, the Company has a factoring agreement with a French financial institution. The Company transfers to the finance company all invoices issued to qualifying customers, and the customers are instructed to settle the invoices directly with the finance company. Because there is recourse to the Company for amounts that are overdue, the Company retains all receivables on its Consolidated Statement of Financial Position until they are paid and any amounts drawn on the line of credit are reflected in short-term debt. The Company pays a commission on the face value of the accounts receivable submitted, which is recorded in General and Administration expense, and pays interest on any draw-down of the resulting line of credit. In November 2024, the Company notified the financial institution of its intention to terminate the factoring agreement at its next maturity date, which occurred on March 2, 2025.\n\nIn March 2022, the Company entered into an agreement to finance the 2022 research tax credit as it was earned over the year. The Company transferred to the finance company research tax credit receivable on a quarterly basis. Because there is recourse to the Company for amount not paid by the French tax administration, the Company retains all receivables on its Consolidated Statement of Financial Position until the French tax administration reimburses the finance company. Amounts drawn on the line of credit are reflected in short-term debt and commissions in the Consolidated Statement of Operations as financial expense. In March 2023, the Company entered into another agreement to finance the 2023 research tax credit, and in February 2024, the Company agreed to finance the 2024 research tax credit. In January 2025, the company decided to terminate the agreement.\n\nLease contracts\n\nExcept for leases related to low-value assets and short-term lease, lease contracts, as defined under IFRS 16 \"Leases\", are recorded in the Statement of Consolidated Financial Position, through the recognition of:\n\n•an asset representing a right-of-use of the asset leased during the lease term of the contract; and\n\n•a liability related to the payment obligation.\n\nAt the commencement date of the lease, the Company recognizes a lease liability measured at the present value of the remaining lease payments to be made over the lease term, discounted using the Company’s incremental borrowing rate. After the commencement date, the liability increases to reflect the accretion of interest and reduced for the lease and decreases with the lease payments made.\n\nRight-of-use assets are depreciated on a straight-line basis over the lease term and tested for impairment when there is an indication that an asset may be impaired.\n\nDerivative financial instruments and hedge accounting\n\nThe Company uses financial instruments, including derivatives such as foreign currency forward contracts, to reduce the foreign exchange risk on cash flows from firm and highly probable commitments denominated in euros. The effective portion\n\nF-25\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nof the gain or loss on the hedging instrument is recognized directly as other comprehensive income (loss) in the cash flow hedge reserve, while any ineffective portion is immediately accounted for in financial results in the Consolidated Statement of Operations. Amounts recognized as other comprehensive income (loss) are transferred to the Consolidated Statement of Operations when the hedged transaction affects profit or loss. If the forecasted transaction is no longer expected to occur, the cumulative gain or loss previously recognized in equity is transferred to the Consolidated Statement of Operations.\n\nAll derivative financial instruments are recorded at fair value. Changes in fair value are recorded in current earnings or other comprehensive income (loss), depending on whether the derivative is designated as a hedge, its effectiveness as a hedge, and the type of hedge transaction. Any change in the fair value of the derivatives deemed ineffective as a hedge is immediately recognized in earnings.\n\nCommitments\n\nCommitments comprise primarily purchase commitments with third-party manufacturers for future deliveries of equipment and components, which are described in Note 24 to the Consolidated Financial Statements.\n\n2.4. Significant accounting judgments, estimates and assumptions\n\nIn the process of applying the Company’s accounting policies, management must make judgments and estimates involving assumptions. These judgments and estimates can have a significant effect on the amounts recognized in the financial statements and the Company reviews them on an ongoing basis taking into consideration past experience and other relevant factors. The evolution of the judgments and assumptions underlying estimates could cause a material adjustment to the carrying amounts of assets and liabilities as recognized in the financial statements. The most significant management judgments and assumptions in the preparation of these financial statements are:\n\nRevenue recognition\n\nThe Company’s policy for revenue recognition, in instances where multiple deliverables are sold contemporaneously to the same counterparty, is in accordance with IFRS 15 Revenue from contracts with customers. The application of IFRS 15 to contracts with customers requires management to make certain judgments, the most significant of which are outlined below. These judgments are based on an analysis of the facts and circumstances surrounding the transactions on a contract-by-contract basis.\n\nDetermination of performance obligations within a contract\n\nThe Company applies judgment in determining whether a promised good or service is a performance obligation under the terms of the contract and whether multiple promised goods or services should be accounted for separately or together as a bundle.\n\nAllocation of contract consideration to distinct performance obligations based on their relative stand-alone selling prices\n\nTypically, contracts state the value of individual promised goods and services directly. However, in instances where the fair value is not observable, management applies judgment in determining the relative stand-alone selling price for goods and services.\n\nEstimation of percentage-of-completion based on the input method\n\nFor service contracts, management makes a determination as to whether revenue should be recognized at a point in time or overtime. For service contracts that are recognized over time based on the percentage-of-completion, the Company sets up an initial budget at contract inception and tracks the progress to completion based on time and costs incurred by the employees directly working on each project. Management reviews the progress and performance of open contracts in order to determine the best estimate of estimated costs at completion on a quarterly basis and updates the revenue recognized as necessary.\n\nTrade receivables\n\nThe Company records an allowance for any specific account it considers as doubtful based on the particular circumstances of the account. Additional allowances could be required if the Company receives information that the financial condition of its customers has deteriorated, resulting in an impairment of their ability to make payments, or there are indicators that amounts receivable will become uncollectible.\n\nF-26\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nInventories\n\nAs disclosed in Note 2.3 to the Consolidated Financial Statements, the Company writes down the carrying value of its inventory to the lower of cost or net realizable value. The estimated net realizable value of the inventory is based on historical usage and assumptions about future demand, future product purchase commitments, estimated manufacturing yield levels and market conditions on a product-by-product basis. Actual demand may differ from the forecast established by the Company, which may materially impact recorded inventory values and cost of revenue.\n\nPurchase price allocation\n\nFollowing the acquisition of ACP Advanced Circuit Pursuit AG in January 2025 (see Note 3), management exercised judgment in the valuation of developed technology and customer relationships, which were recognized as separately identifiable intangible assets under IAS 38, and in determining the amount recognized as goodwill.\n\nThe fair values of technology were determined primarily by reference to the cost to acquire licenses to similar technology in the open market. The fair values of customer relationships were determined using income‑based valuation techniques and required judgment in estimating future cash flows, economic lives and discount rates. Residual consideration was allocated to goodwill, representing future economic benefits that do not qualify for separate recognition.\n\nGoodwill\n\nImpairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The Company identified a single cash-generating unit (the full Company) for use in the impairment tests, and estimates future cash flows, growth rates, and discount rates. Changes in these assumptions could result in material differences in the amount of impairment recognized in the Consolidated Statement of Operations.\n\nDigital assets\n\nBitcoin does not meet the definition of a financial asset under IAS 32, as it is not cash and does not give rise to a contractual right to receive cash or another financial asset. It also does not meet the definition of inventory under IAS 2, as the Company is not a broker‑trader of cryptocurrencies and Bitcoin is not held for sale in the ordinary course of business. Therefore, in management's judgement, Bitcoin is accounted for as an intangible asset in accordance with IAS 38.\n\nManagement further concluded that Bitcoin has an indefinite useful life, as there is no foreseeable limit to the period over which it is expected to generate economic benefits. Accordingly, Bitcoin is not amortized and is tested for impairment at each balance sheet date, and whenever indicators of impairment arise, in accordance with IAS 36.\n\nAlthough an active market exists for Bitcoin, management elected to apply the cost model under IAS 38. This policy choice reflects the Company's strategy to hold the investment rather than actively trade, and the view that the cost model provides more useful and consistent information given the significant price volatility observed in cryptocurrency markets. Bitcoin is measured at cost less accumulated impairment losses, with impairment losses recognized in profit or loss.\n\nShare-based compensation\n\nAs disclosed in Note 16 to the Consolidated Financial Statements, the Company has various share-based compensation plans for employees and non-employees that may be affected, as to the expense recorded in the Consolidated Statements of Operations, by changes in valuation assumptions. Fair value of stock options is estimated by using the binomial model on the date of grant based on certain assumptions, including, among others expected volatility, the expected option term, the risk-free interest rate and the expected dividend payout rate. The fair value of the Company’s shares underlying stock option grants equals the closing price on the New York Stock Exchange on the date of grant.\n\nFair value measurement of financial instruments\n\nFair value corresponds to the quoted price for listed financial assets and liabilities. The Company determined that the fair values of cash, trade receivables and trade payables approximate their carrying amounts largely due to the short-term maturities of these instruments.\n\nWhere no active market exists, the Company establishes fair value by using a valuation technique determined to be the most appropriate in the circumstances.\n\nF-27\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nRegarding compound debt instruments, the fair value of debt component was determined at the date of issuance using a valuation model that requires judgment, including estimating the cash flows over the life of the security, the appropriate discount rate. The assumptions used in calculating the value of the conversion option, the expected volatility of the Company’s underlying stock price which has experienced fluctuations, and the discount rate, represent the Company’s best estimates based on management’s judgment and subjective future expectations. The fair values of the conversion feature, warrants and the debt component, which is the residual after accounting for the other units, were supported by work performed by an independent valuation specialist engaged by the Company.\n\nResearch and Development Costs\n\nCosts incurred internally in research and development activities are charged to expense until technological feasibility has been established for the project. Once technological feasibility is established, development costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved. Generally, this occurs when the preliminary design review has been done.\n\nLeases\n\nThe application of IFRS 16 Leases requires the Company to make assumptions and estimates in order to determine the value of the right-of-use assets and lease liabilities, which mainly relates to the determination of the Company’s incremental borrowing rate.\n\n2.5 Other information\n\nIn the current Consolidated Financial Statements, the Company has presented the government loan balance as a separate line item on the face of the Consolidated Statements of Financial Position. Previously, this balance was disclosed together with other types of government financing under “Government research financing”. The Company believes that presenting the government loan separately provides more relevant and reliable information to users of the financial statements, given its nature, terms, and significance compared to other government financing arrangements. This change in presentation does not affect the recognition, measurement, or total amount of government financing disclosed in prior periods. Comparative figures have been reclassified to conform to the current period’s presentation.\n\n3. Acquisition of ACP Advanced Circuit Pursuit AG\n\nOn January 16, 2025, the Company closed its acquisition of 100% of the share capital and voting rights of ACP Advanced Circuit Pursuit AG (\"ACP\"), a Swiss corporation with wholly-owned subsidiaries in China, Hong Kong and France. The subsidiaries in China and Hong Kong were subsequently closed, incurring restructuring costs of approximately $350,000. The French subsidiary was merged into Sequans Communications S.A. in July 2025.\n\nThe purchase price is a combination of fixed and contingent consideration. Fixed consideration was $3,084,000, of which $2,709,000 was paid in cash directly to selling shareholders in the first half of 2025 and $375,000 paid to an escrow agent in July 2025, to be released absent any claims by the Company on July 16, 2026. Contingent consideration is an earn-out payment (calculated as gross margin achieved from sales to the customers that ACP had as of the acquisition date, recognized through December 31, 2026). The amount of the earn-out has been valuated at the acquisition date at $566,000 and recorded at December 31, 2025 as $984,000.\n\nThe fair values of the identifiable assets and liabilities of ACP as at the date of acquisition were as follows :\n\nF-28\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n (amounts in thousands)At January 16, 2025\n\n \n\nASSETS\n\nNon-current assets:\n\nProperty, plant and equipment$862 \n\nIntangible assets1,909 \n\nDeposits and other receivables34 \n\n   Total non-current assets2,805 \n\nCurrent assets: \n\nInventories92 \n\nPrepaid expenses129 \n\nOther receivables32 \n\nResearch tax credit receivable120 \n\nCash and cash equivalents268 \n\n   Total current assets641 \n\nTotal assets$3,446 \n\nLIABILITIES \n\nNon-current liabilities: \n\nGovernment research financing225 \n\nProvisions593 \n\n   Total non-current liabilities818 \n\nCurrent liabilities: \n\nTrade payables43 \n\nGovernment loan194 \n\nGovernment research financing60 \n\nContract liabilities2,047 \n\nOther current liabilities and provisions310 \n\n   Total current liabilities2,654 \n\nTotal Liabilities$3,472 \n\nTotal identifiable net assets at fair value$(26)\n\nGoodwill arising on acquisition3,676 \n\nPurchase consideration transferred$3,650 \n\nAnalysis of cash flows on acquisition:\n\nNet cash acquired268 \n\nCash paid to investors(2,709)\n\nProvision of earn-out(566)\n\nProvision for payment to escrow(375)\n\n$(3,382)\n\nTransaction costs, primarily legal fees, amounted to $325,000. These costs were recorded in general and administrative expenses as incurred in 2024 and 2025.\n\nFrom the acquisition date on January 16, 2025 to December 31, 2025, ACP contributed $6,952,000 to the Company's revenues and $3,132,000 to net profit.\n\nF-29\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n4 4G technology sale to Qualcomm and related agreements\n\nOn August 22, 2024, the Company and Qualcomm Technologies, Inc (\"Qualcomm\") signed an Asset Purchase Agreement (APA). The agreement had several closing conditions which were met by the end of September, resulting in a closing date of\n\nSeptember 30, 2024. At closing, a number of other agreements, which had already been negotiated and included in the appendix of the APA, were also signed.\n\nThe overall deal resulted in Qualcomm acquiring the intellectual property (\"IP\") for the Company's two main 4G products (Monarch2 and Calliope2) and certain physical assets, as well as receiving a license to the entire patent portfolio of the Company and a license to the Company's partially developed 5G broadband platform, in consideration for payment of $200 million in cash, assumption of up to $700,000 in employee accrued vacation liabilities by Qualcomm and the license back to the Company of the acquired Monarch2 and Calliope2 4G IP.\n\nThe license back of the Monarch2 and Calliope2 IP means that the Company will continue to have the right to manufacture and sell the products to serve its customers as usual. Therefore there was no sale or discontinuation of the Company's 4G business.\n\nWith respect to the $200 million cash consideration:\n\n•$15 million was paid in June 2024 in the form of a license payment for Monarch2 manufacturing rights which was terminated upon deal closing, although certain clauses related to product liability and indemnity survive the termination.\n\n•$3 million in bridge loan provided in September plus accrued interest ($12,000) was deducted from proceeds.\n\n•$10 million was paid directly into an escrow account, the release of which took place in October 2025, after the 12-month warranty period to the extent that there are no indemnification liabilities to be deducted. The escrow amount remained the property of purchaser until the escrow termination date. Escrow fees were shared by the two companies: Sequans’ half to set up the escrow was deducted from the proceeds.\n\nAs a result of the above, $172 million was received in cash on September 30, 2024. The proceeds from this sale were used to repay the Company's matured debts (convertible debts - see Note 17.1, unsecured related party loans - see Note 17.2 and related accrued interest) and cleared all overdue payables to suppliers.\n\nThe transaction resulted in a net gain of $153.1 million on the sale of the 4G assets, which is included in operating income for the year ended December 31, 2024. The assets sold had a net book value of $18.4 million at the time of the sale. In addition, the Company recognized license revenue from deliveries under the licenses of the 5G broadband platform and the Monarch2 manufacturing rights, and the licensing of the patent portfolio.\n\nThe accounting for this transaction required significant judgment in estimating the fair values of the various intangible assets sold or licensed to Qualcomm. The estimations of the fair value of the 5G broadband platform license to Qualcomm were made taking into consideration similar transactions made by the Company with other customers in recent years. The fair value of the license of the acquired IP back to the Company was estimated taking into consideration estimated future cash flows from the sale of Monarch2 and Calliope2. The remaining portion of the transaction value was then allocated to the sale of the 4G IP for Monarch2 and Calliope2.\n\nAt December 31, 2025, the Company has performed an impairment test to evaluate the carrying amount of the license of the acquired IP. No impairment has been recorded in the year ended December 31, 2025.\n\nUnder French tax regulations, the Company may opt to apply a special lower-tax regime to sales or licenses of qualifying intellectual property, commonly referred to as \"IP Box\". Taxable income from such qualifying transaction is taxed at a rate of 10% rather than 25% in France. The Company has opted to apply the IP Box regime to the taxable income arising from the sale of the Monarch2 intellectual property (see Note 7 to the Consolidated Financial Statements).\n\n5. Segment information and Disaggregated Revenue Disclosures\n\nThe Company has one operating segment, which is the design and marketing of semiconductor components for cellular and other wireless systems. All information required to be disclosed under IFRS 8 Operating Segments is shown in the Consolidated Financial Statements and these associated Notes.\n\nSales to external customers disclosed below are based on the geographical location of the customers to which the Company invoices. The following table sets forth the Company’s total revenue by region for the periods indicated.\n\nF-30\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nYear ended December 31,\n\n202320242025\n\n(in thousands)\n\nAsia :\n\n  China (including Hong Kong)$21,702 $11,458 $7,261 \n\n  Taiwan29 468 893 \n\n  Japan 49 696 1,960 \n\n  Rest of Asia43 47 436 \n\n     Total Asia21,823 12,669 10,550 \n\nGermany1,001 687 629 \n\nFrance1,285 1,405 2,957 \n\nUnited States of America8,666 20,368 9,248 \n\nRest of world (no single country representing more than 10%)841 1,702 2,941 \n\nTotal revenue$33,616 $36,831 $26,325 \n\nOf our total revenue, 88.8% is attributable to international sales for the year ended December 31, 2025 (96.2% for 2024 and 96.2% for 2023).\n\nThe Company categorizes its total revenue based on technology.\n\nYear ended December 31,\n\n202320242025\n\n(in thousands)\n\nCellular IoT systems$33,616 $36,831 $22,709 \n\nRadio transceivers for all wireless systems— — 3,616 \n\nTotal revenue$33,616 $36,831 $26,325 \n\nAdditionally, the Company categorizes its total revenue based on product, license and services revenue.\n\nYear ended December 31,\n\n202320242025\n\n(in thousands)\n\nProduct revenue, transferred at a point of time$8,060 $12,007 $15,489 \n\nLicense revenue, transferred at a point of time2,846 19,353 8,036 \n\nLicense revenue, transferred over time20,151 3,230 — \n\nDevelopment and other services transferred at a point of time23 — 1,164 \n\nDevelopment and other services transferred over time2,536 2,241 1,062 \n\nRoyalties— — 574 \n\nTotal revenue$33,616 $36,831 $26,325 \n\nLicense revenue includes partial deliveries of Intellectual Property under a 5G broadband license and under a Monarch2 manufacturing license to Qualcomm in the years ended December 31, 2024 and 2025, and in years ended December 31, 2023 and 2024, license fees from agreements signed with strategic partners (See Note 22 to these Consolidated Financial Statements).\n\nDevelopment and other services include revenues recognized under contracts for various software customization and other engineering services.\n\nThe substantial majority of the Company’s current and non-current assets are held by the parent company, Sequans Communications S.A. and located in France. See Note 23.3 to these Consolidated Financial Statements for information about major customers.\n\nF-31\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n6. Other income and expenses\n\n6.1. Financial income and expenses\n\nFinancial income:\n\n Year ended December 31,\n\n 202320242025\n\n (in thousands)\n\nIncome from short-term investments and term deposits and other finance revenue$177 $850 $1,401 \n\nGain on debt extinguishment (Note 17.1)247 13,952 — \n\nChange in fair value of derivative financial instruments (Note 17.1)3,200 3 45,000 \n\nForeign exchange gain1,166 3,037 4,161 \n\nTotal financial income$4,790 $17,842 $50,562 \n\nFinancial expenses:\n\n Year ended December 31,\n\n 202320242025\n\n (in thousands)\n\nInterest on loans$9,584 $22,465 $11,140 \n\nInterest on lease contracts (see Note 18)479 321 229 \n\nInterest on financing component of revenue contracts (see Notes 21 and 22)115 69 715 \n\nLoss on debt extinguishment (Note 17.1)— — 29,348 \n\nInterest on supplier payable with extended payment terms286 142 — \n\nOther bank fees and financial charges946 731 414 \n\nForeign exchange loss1,858 2,543 5,271 \n\nTotal financial expenses$13,268 $26,271 $47,117 \n\nFor the year ended December 31, 2025, interest on loans included $10,945,000 related to convertible debt instruments issued in 2025 and the French government debt financing received in 2020 (compared with $22,409,000 and $9,566,000 for the years ended December 31, 2024 and 2023, respectively, which also included convertible debt instruments issued in 2021 and 2019 and bridge loans received in 2024 and in late 2023) (See Note 17.1 to the Consolidated Financial Statements).\n\nThe net foreign exchange loss of $1,110,000 for the year ended December 31, 2025 (2024: net foreign exchange gain of $494,000; 2023: net foreign exchange loss $692,000) arises primarily from euro-based monetary liabilities.\n\nFor the year ended December 31, 2025, a gain of $45,000,000 (2024 : gain of $3,000; 2023: gain of $3,200,000) was recognized, related to the change in fair value of derivative financial instruments (See Note 17.1 to the Consolidated Financial Statements).\n\nFor the year ended December 31, 2025, loss of $29,348,000 (2024: gain of $13,952,000; 2023: gain of $247,000) was recognized related to the impact of the convertible debt extinguishment and loans (see Note 17.1 to the Consolidated Financial Statements).\n\n6.2. Cost of revenue and operating expenses\n\nThe tables below present the cost of revenue and operating expenses by nature of expense:\n\nF-32\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n  Year ended December 31,\n\n Note202320242025\n\n  (in thousands)\n\nIncluded in cost of revenue:\n\nCost of components$5,071 $5,846 $7,519 \n\nDepreciation and impairment9395 289 527 \n\nAmortization of intangible assets10118 164 170 \n\nWages and benefits2,059 1,341 1,224 \n\nShare-based payment expense16131 84 19 \n\nAssembly services, royalties and other1,702 1,368 2,754 \n\n$9,476 $9,092 $12,213 \n\nYear ended December 31,\n\n Note202320242025\n\n  (in thousands)\n\nIncluded in operating expenses (income) (between gross profit and operating result):\n\nGain on sale of 4G intangible and tangible assets, net4— (153,129)$— \n\nDepreciation and impairment9$4,082 $2,814 2,197 \n\nAmortization of intangible assets107,346 4,145 2,784 \n\nImpairment of 5G broadband platform intangible and tangible assets— 56,633 — \n\nDigital assets impairment losses11— — 67,375 \n\nDigital assets losses on sales, net11— — 6,102 \n\nWages and benefits36,014 39,637 29,642 \n\nShare-based payment expense166,973 4,006 2,992 \n\nForeign exchange (gains) losses related to hedges of euro(180)(47)144 \n\nRent, supplies, external services and other, net of capitalization of research and developments costs(257)4,147 14,768 \n\n$53,978 $(41,794)$126,004 \n\nThe impact of capitalization of research and development costs is shown as a reduction of \"Rent, supplies, external services and other, net\" (See Note 6.4. to the Consolidated Financial Statements). In the year ended December 31, 2025, net rent, supplies, external services and other expense increased because the impact of capitalization of research and development costs was only $120,000 ($15,485,000 in 2024 and $22,328,000 in 2023).\n\n6.3. Employee benefits expense\n\n  Year ended December 31,\n\n Note202320242025\n\n  (in thousands)\n\nWages and salaries$28,863 $31,458 $23,972 \n\nSocial security costs and other payroll taxes9,087 9,270 6,895 \n\nOther benefits159 171 112 \n\nPension costs(36)79 (113)\n\nShare-based payment expenses167,104 4,090 3,011 \n\nTotal employee benefits expense$45,177 $45,068 $33,877 \n\nThe amount recognized as an expense for mandatory social tax contributions amounts to $1,199,000 for the year ended December 31, 2025 ($1,465,000 and $1,483,000 for the years ended December 31, 2023 and 2024, respectively).\n\nF-33\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n6.4. Research and development expense and tax credit receivable\n\nThe research tax credit in France is deducted from corporate income taxes due; if taxes due are not sufficient to cover the full amount of the credit, the balance is received in cash three years later (one year later if the Company is below certain size criteria, which was the case for each of the years ended December 31, 2025, 2024 and 2023). The Company also has research tax credits available in the United Kingdom relating to 2025 and 2024.\n\nTotal research tax credit receivable as of December 31, 2025 is $6,295,000, ($1,437,000 relating to tax credits receivables for 2025, $4,343,000 relating to tax credits receivables for 2024, $133,000 for 2023, $118,000 for 2022, $146,000 for 2021 and $118,000 for 2020). Part of the amount was financed in 2024 and reimbursed in February 2025 as the company decided to terminate the financing agreement (see Note 17.3 to the Consolidated Financial Statements).\n\nIn the years ended December 31, 2023 and 2024, the Company capitalized costs related to the development of LTE Category 1 chipset and of the 5G broadband platform. In the year ended December 31, 2025, the Company developed a variant of 5G, eRedCap, but no costs were capitalized since the relevant accounting requirements were not met.\n\nThe impact of the reduction of research and development expense due to government grants, research tax credit and development costs capitalized was as follows:\n\n Year ended December 31,\n\n 202320242025\n\n (in thousands)\n\nResearch and development costs$53,018 $47,566 $37,018 \n\nResearch tax credit(5,374)(3,821)(1,714)\n\nGovernment and other grants(1,834)(1,939)(4,062)\n\nDevelopment costs capitalized (*)(22,328)(15,485)(120)\n\nAmortization of capitalized development costs2,642 2,206 61 \n\nTotal research and development expense$26,124 $28,527 $31,183 \n\n(*) Reflecting reduction for research tax credits of $1,371,000 and $2,145,000 for the years ended December 31, 2024 and 2023, respectively.\n\n7. Income tax\n\nThe major components of income tax expense are:\n\n Year ended December 31,\n\n 202320242025\n\n (in thousands)\n\nConsolidated Statement of Operations\n\nCurrent income tax expense (benefit)$2,683 $3,626 $888 \n\nDeferred income tax expense (benefit)(9)(89)(56)\n\nIncome tax expense (benefit)$2,674 $3,537 $832 \n\nIn the years ended December 31, 2025, 2024 and 2023, withholding taxes were retained from a license fee invoiced in China and from dividends received from the subsidiary in Israel in 2025 and 2023. This withholding was only recoverable in the year of the invoicing and of the receipt of the dividends. As the Company was in a tax loss position in 2023 and 2025, the amounts of $2,060,000 in 2023 and $235,000 in 2025 were not recoverable and were recorded in Income tax expense. In 2024, the Company was in tax income position, so the amount of $10,000 withheld in 2024 was recoverable and was deducted from the income tax expense.\n\nUnder French tax regulations, the Company may opt to apply a special lower-tax regime to sales or licenses of qualifying intellectual property, commonly referred to as \"IP Box\". Taxable income from such qualifying transaction is taxed at a rate of 10%. The Company has opted to apply the IP Box regime to the taxable income arising from the sale of the Monarch 2 qualifying intellectual property, which is the trademarkable software element. The allocation of the gain on the sale of 4G assets\n\nF-34\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nwas allocated between the assets sold and between the eligible versus ineligible intellectual property based on an analysis of the respective development costs. The gain associated with the sale of Monarch2 eligible software was reduced by the value of related capital development costs that were on the balance sheet at the transaction date, as well as related research and development costs expensed in 2024 through the transaction date. Our use of the IP Box regime for this transaction was submitted for review by the French tax administration and a ruling not objecting to our position was received in 2025; the actual calculation of tax liability remains subject to audit. At December 31, 2025, the amount of current tax liabilities was $3,124,000. In the event of an unfavorable ruling, all our French taxable income would be taxed at 25%, resulting in an increase of taxes due of $4,280,000.\n\nA reconciliation of income taxes computed at the French statutory rate 25.00% for the years ended December 31, 2025, 2024 and 2023 to the income tax expense (benefit) is as follows:\n\n Year ended December 31,\n\n 202320242025\n\n (in thousands)\n\nProfit (loss) before income taxes$(38,316)$61,104 $(108,447)\n\nAt France’s statutory income tax rate of 25% in 2023, 2024 and in 2025(9,579)15,276 (27,112)\n\nImpact of French income taxed under IP Box regime at 10%— (8,793)— \n\nNon-deductible share-based payment expense1,776 1,023 753 \n\nTax credits(1,344)(955)(429)\n\nPermanent differences and other212 (29)3,424 \n\nWithholding tax2,055 — 235 \n\nUse of tax loss carryforwards— (2,985)— \n\nUnrecognized benefit of tax losses carryforward9,554 — 23,961 \n\nIncome tax expense$2,674 $3,537 $832 \n\nIn the year ended December 31, 2025, permanent differences include the impact of financing costs that are accounted for as a reduction of the share premium but are deductible for tax purposes.\n\nSignificant components of the Company’s deferred tax assets and liabilities are as follows:\n\nConsolidated Statement of Financial PositionEquityConsolidated Statement of Operations\n\nDecember 31,December 31,Year ended December 31,\n\n202320242025202320242025202320242025\n\n(in thousands)(in thousands)(in thousands)\n\nGovernment loan(127)(117)(61)— — — (135)11 56 \n\nTangible assets— — (599)— — — — — (599)\n\nIntangible assets(120)(4)(28)— — — 13 116 (24)\n\nLease contracts— (105)8 — — — — (105)113 \n\nCash flow hedge2 1 — — — — 5 (1)(1)\n\nRemeasurement of non-monetary accounts(3)103 128 — — — 485 106 25 \n\nDeferred revenue— — 125 — — — — — 125 \n\nOther provisions and accruals (962)(928)(396)— — — (468)33 532 \n\nFrom subsidiaries264 173 129 — — — (9)(89)(56)\n\nDeferred tax asset not recognized on losses (Loss available for offsetting against future taxable income)\n1,210 1,050 823 — — — 100 (160)(227)\n\n        Total$264 $173 $129 — $— $— $(9)$(89)$(56)\n\nThe changes in deferred tax assets and liabilities were as follows:\n\nF-35\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n202320242025\n\n(in thousands)\n\nAt January 1st$258 $264 $173 \n\nTax expense (income) during the year recognized in Profit or Loss(9)(89)(56)\n\nTax expense (income) during the year recognized in equity— — — \n\nEffect of foreign exchange15 (2)12 \n\nAt December 31st$264 $173 $129 \n\nAs of December 31, 2025, the Company had accumulated tax losses which arose in France of $462,808,000 that are available for offset against future taxable profits of Sequans Communications S.A within a limit of one million euro per year, plus 50% of the profit exceeding this limit. Remaining unapplied losses would continue to be carried forward indefinitely.\n\nDeferred tax assets were recognized in 2023, 2024 and 2025 only to the extent that deferred tax liabilities existed relating to the same taxable entity, which are expected to reverse in the same period as the asset or into which a tax loss may be carried forward.\n\n8. Earnings (loss) per share\n\nBasic earnings (loss) per share and American Deposit Shares (ADS) amounts are calculated by dividing net income (loss) for the year attributable to all shareholders of the Company by the weighted average number of all shares or ADS outstanding, excluding treasury shares, during the year. Shares repurchased and held by the Company are not included in the calculation, as they do not participate in the distribution of earnings.\n\nDiluted earnings per share and ADS amounts are calculated by dividing the net earnings attributable to equity holders of the Company by the weighted average number of shares or ADS outstanding, excluding treasury shares, during the year plus the weighted average number of shares or ADS that would be issued on the exercise of all the dilutive stock options and warrants, and upon vesting of restricted stock awards as well as conversion of convertible debt. Dilution is defined as a reduction of earnings per share or ADS or an increase of loss per share or ADS. As the exercise of all outstanding stock options and warrants as well as vesting as restricted stock awards and conversion of convertible debt, would decrease loss per ordinary share or ADS, they are considered to be anti-dilutive and excluded from the calculation of loss per ordinary share or ADS.\n\nOn October 9, 2024, the Company modified the ratio of shares per ADS from four shares per ADS to ten shares per ADS. Basic and diluted earnings (loss) per ADS presented below were retrospectively adjusted to give effect to the ADS ratio change of October 9, 2024 following which each ADS represents 10 ordinary shares.\n\nOn September 17, 2025, the Company modified the ratio of shares per ADS from ten shares per ADS to one hundred shares per ADS. Basic and diluted earnings (loss) per ADS presented below were retrospectively adjusted to give effect to the ADS ratio change of September 17, 2025 following which each ADS represents 100 ordinary shares.\n\nThe following reflects the income and share data used in the basic and diluted earnings (loss) per ordinary share and ADS computations:\n\nF-36\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n Year ended December 31,\n\n 202320242025\n\n (in thousands, except share and per share data)\n\nProfit (Loss)$(40,990)$57,567 $(109,279)\n\nWeighted average number of shares outstanding for basic EPS225,183,996 248,290,190 867,366,665 \n\nNet effect of dilutive stock options— — — \n\nNet effect of dilutive warrants— 10,004,114 — \n\nNet effect of vesting of restricted stock— 25,726.711 — \n\nNet effect of conversion of convertible notes— — — \n\nWeighted average number of shares outstanding for diluted EPS225,183,996 284,021,015 867,366,665 \n\nBasic earnings (loss) per share$(0.18)$0.23 $(0.13)\n\nDiluted earnings (loss) per share$(0.18)$0.20 $(0.13)\n\nADS outstanding for basic earnings (loss) per ADS2,251,840 2,482,902 8,673,667 \n\nADS outstanding for diluted earnings (loss) per ADS2,251,840 2,840,210 8,673,667 \n\nBasic earnings (loss) per ADS$(18.20)$23.19 $(12.60)\n\nDiluted earnings (loss) per ADS$(18.20)$20.27 $(12.60)\n\nThe weighted average number of shares outstanding in the year ended December 31, 2025 excludes 9,815,679 weighted treasury shares held by the company. At December 31, 2025, the Company held 151,697,300 treasury shares.\n\nF-37\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n9. Property, plant and equipment\n\nProperty, plant and equipment include:\n\nLeasehold\nimprovementsPlant and\nequipmentIT and office\nequipmentRight of useTotal\n\n (in thousands)\n\nCost:\n\nAt January 1, 2023$1,417 $32,380 $4,387 7,079 $45,263 \n\nAdditions75 1,812 220 767 2,874 \n\nDisposals— (2)(3)(414)(419)\n\nExchange difference10 107 16 — 133 \n\nAt December 31, 20231,502 34,297 4,620 7,432 47,851 \n\nAdditions— 772 70 462 1,304 \n\nDisposals(77)(727)(275)(705)(1,784)\n\nExchange difference(4)(22)(19)— (45)\n\nAt December 31, 20241,421 34,320 4,396 7,189 47,326 \n\nAdditions20 304 162 1,255 1,741 \n\nAcquisition of ACP Advanced Circuit Pursuit AG— 951 — — 951 \n\nDisposals(38)(88)(459)(302)(887)\n\nExchange difference30 235 160 — 425 \n\nAt December 31, 2025$1,433 $35,722 $4,259 $8,142 $49,556 \n\nDepreciation and impairment:\n\nAt January 1, 20231,333 26,971 3,993 4,477 36,774 \n\nDepreciation charge for the year41 2,421 198 1,223 3,883 \n\nImpairment— 711 — — 711 \n\nDisposals— (2)— (414)(416)\n\nExchange difference7 69 8 — 84 \n\nAt December 31, 20231,381 30,170 4,199 5,286 41,036 \n\nDepreciation charge for the year21 1,656 225 1,201 3,103 \n\nImpairment— 251 — — 251 \n\nDisposals(23)(606)(224)(483)(1,336)\n\nExchange difference(4)(15)(17)— (36)\n\nAt December 31, 20241,375 31,456 4,183 6,004 43,018 \n\nDepreciation charge for the year14 1,571 192 980 2,757 \n\nDisposals(37)(88)(448)(304)(877)\n\nExchange difference208 262 (112)— 358 \n\nAt December 31, 2025$1,422 $33,111 $4,044 6,680 $45,257 \n\nNet book value:\n\nAt January 1, 2023$84 $5,409 $394 2,602 $8,489 \n\nAt December 31, 2023121 4,127 421 2,146 6,815 \n\nAt December 31, 202446 2,864 213 1,185 4,308 \n\nAt December 31, 2025$11 $2,611 $215 1,462 $4,299 \n\nRight-of-use assets as of December 31, 2025 relate to real-estate leases ($7,921,000, gross, $6,969,000, gross as of December 31, 2024 and $7,212,000, gross as of December 31, 2023) as well as IT and office equipment leases ($220,000, gross, $220,000, gross as of December 31, 2024 and 2023).\n\nF-38\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nIncreases related to the acquisition of ACP Advanced Circuit Pursuit AG represent the fair value of fixed assets acquired as part of the integration of this company into the Company’s scope of consolidation. Accumulated depreciation represents the depreciation recognized on these assets at the acquisition date.\n\nIn the year ended December 31, 2024, the Company recognized an impairment loss of $251,000 related to the decision to discontinue the development of the 5G broadband platform. In the year ended December 31, 2023, the Company recognized an impairment loss of $707,000 related to a production equipment with a carrying amount is not recoverable.\n\nFollowing the sale and license back of the Monarch 2 and Calliope 2 intellectual property as described in Note 4, the Company reassessed the remaining useful lives of equipment related to these two products, extending the useful lives until the end of 2029 to be consistent with the estimated useful life of the license back.\n\nF-39\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n10. Intangible assets\n\nIntangible assets include:\n\n Capitalized development costsLicenses and acquired technologyGoodwillOtherTotal\n\n (in thousands)\n\nCost:\n\nAt January 1, 2023$48,903 $33,434 $— $— $82,337 \n\nAdditions22,327 633 — — 22,960 \n\nDisposals— (2,121)— — (2,121)\n\nExchange difference— (7)— — (7)\n\nAt December 31, 202371,230 31,939 — — 103,169 \n\nAdditions15,484 4,702 — — 20,186 \n\nDisposals(25,851)(4,493)— — (30,344)\n\nExchange difference— (22)— — (22)\n\nAt December 31, 202460,863 32,126 — — 92,989 \n\nAdditions120 3,653 — — 3,773 \n\nAcquisition of ACP Advanced Circuit Pursuit AG— 1,114 3,676 795 5,585 \n\nDisposals— (126)— — (126)\n\nExchange difference— 283 — — 283 \n\nAt December 31, 2025$60,983 $37,050 $3,676 $795 $102,504 \n\nDepreciation and impairment:\n\nAt January 1, 2023$8,285 $25,347 $— $— $33,632 \n\nAmortization2,640 4,708 — — 7,348 \n\nDisposals— (2,121)— — (2,121)\n\nExchange difference— 10 — — 10 \n\nAt December 31, 202310,925 27,944 — — 38,869 \n\nAmortization2,206 2,103 — — 4,309 \n\nImpairment55,156 1,225 — — 56,381 \n\nDisposals(7,705)(4,493)— — (12,198)\n\nExchange difference— (13)— — (13)\n\nAt December 31, 202460,582 26,766 — — 87,348 \n\nAmortization61 2,816 — 85 2,962 \n\nDisposals— (126)— — (126)\n\nExchange difference— 122 — — 122 \n\nAt December 31, 2025$60,643 $29,578 $— $85 $90,306 \n\nNet book value:\n\nAt January 1, 2023$40,618 $8,087 $— $— $48,705 \n\nAt December 31, 202360,305 3,995 — — 64,300 \n\nAt December 31, 2024281 5,360 — — 5,641 \n\nAt December 31, 2025$340 $7,472 $3,676 $710 $12,198 \n\nCapitalized development costs included $11.3 million related to the 5G broadband platform capitalized in the year ended December 31, 2024 ($18.4 million in 2023). In the year ended December 31, 2025, the Company developed a variant of 5G, eRedCap, but no costs were capitalized since the relevant accounting requirements were not met.\n\nF-40\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nIn the year ended December 31, 2024, the Company decided to discontinue the development of the 5G broadband platform due to the estimated expense to complete the development. The Company judged that reactivation of the development was highly unlikely and therefore recovery of the amounts capitalized on the balance sheet was deemed unrecoverable. Consequently, the Company recognized impairment losses of $55.2 million for the total amount of development costs capitalized and $1.2 million for capitalized third-party licenses.\n\nIn September 2024, the Company sold to Qualcomm its IP for two main 4G IoT technologies (Monarch2 and Calliope2). The disposal of development costs capitalized of $18.1 million was included in the net gain on sale of 4G IP in the Consolidated Statement of Operations (See Note 3 to the Consolidated Financial Statements).\n\nIn addition, the transaction provided for a license back of the Monarch 2 and Calliope 2 intellectual property as described in Note 4. The fair value of the license back has been estimated to be $3.0 million and it is included in 2024 additions. During 2025, the Company reassessed the remaining useful lives of licenses related to these two products, extending the useful lives until the end of 2029 to be consistent with the estimated useful life of the license back. An impairment test was performed at year end with no impairment of value noted.\n\nGoodwill of $3,676,000 was recognized in the current year following the acquisition of ACP Advanced Circuit Pursuit AG. See Note 3 of the Consolidated Financial Statements. Goodwill was allocated to our single cash-generating unit (CGU) where it is monitored and reviewed for internal management purposes.\n\nThe impairment test was performed on December 31, 2025, and the recoverable amount of the CGU was determined using a value-in use methodology. The value-in use calculation is based on cash projections derived from a board-approved business plan covering the period from 2026 to 2030, with a terminal value thereafter modeled based on the cash flows achieved in the final forecast year. The cash flow projections reflect management's best estimate of future economic conditions and performance of 4G and radio transceiver products, including monetization of intellectual property through licensing and other arrangements.\n\nFuture cash flows are discounted using a pre-tax weighted average cost of capital (\"WACC\") which reflects current market assessment of the risks specific to the Company.\n\nThe impairment test indicated that the recoverable amount of the CGU exceeded its carrying amount. Sensitivity analyses were performed on the key assumptions used in the impairment test. Based on the level of headroom in the sensitivity analyses performed, management considers that no reasonably considered change in key assumptions would cause the carrying amount of the CGU to exceed its recoverable amount as at the reporting date.\n\n11 Digital assets\n\nAs of December 31, 2025, the Company holds digital assets consisting solely of 2,139 Bitcoin. These assets were acquired during the year as part of the Company’s treasury management strategy and are held for investment purposes. The Bitcoin holding at December 31, 2025 are held primarily in a segregated secure vault (2,114 Bitcoin) and the remainder (25 Bitcoin) held in a commingled trading wallet. The Company does not engage in mining activities or provide digital asset-related services to third parties.\n\nAt December 31,\n\nNumber of Bitcoin202320242025\n\n(in units)\n\nOpening balance— — — \n\nAdditions— — 3,234 \n\nDisposals— — (1,095)\n\nClosing balance— — 2,139 \n\nF-41\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nAt December 31,\n\nInvestment in Bitcoin202320242025\n\n(in thousands)\n\nOpening balance$— $— $— \n\nAdditions— — 377,200 \n\nDisposals— — (122,634)\n\nImpairment— — (67,375)\n\nClosing balance$— $— $187,191 \n\nDuring the year ended December 31, 2025, the Company recognized an impairment loss on its digital assets in the amount of $67.4 million, which was recorded in Digital assets impairment losses in the Consolidated Statement of Operations. The impairment loss reflects the decrease in fair value below the carrying amount of the digital assets as of December 31, 2025. The fair value is based on the Coinbase quoted price on December 31, 2025, timestamp 23.59.59, Paris.\n\nIn addition, during the year ended December 31, 2025, the Company sold a portion of its digital assets, resulting in a realized net loss of $6.1 million, which is presented in operating expenses in the Consolidated Statement of Operations.\n\nAt December 31, 2025, 1,617 of the Bitcoin were restricted from sale and pledged as collateral for the outstanding convertible debt. See Note 17.1 to the Consolidated Financial Statements. The value of these assets at December 31, 2025 was $141.5 million out of the total $187.2 million on the balance sheet.\n\nThe remaining 522 Bitcoin with a value of $45.7 million had no restriction on sale.\n\nA 10% decrease in the market price of Bitcoin as of the reporting date would result in an additional impairment loss of approximately $18.7 million.\n\n12. Inventories\n\n At December 31,\n\n 202320242025\n\n (in thousands)\n\nComponents$4,706 $2,445 $3,472 \n\nFinished goods4,559 3,679 4,019 \n\nTotal inventories at cost$9,265 $6,124 $7,491 \n\nProvision for slow-moving or damaged components$1,065 $1,468 $1,791 \n\nProvision for slow-moving or damaged finished goods1,865 1,782 1,767 \n\nTotal provision for slow-moving or damaged inventory$2,930 $3,250 $3,558 \n\nComponents, net$3,641 $977 $1,681 \n\nFinished goods, at the lower of cost and net realizable value2,694 1,897 2,252 \n\nTotal net inventories$6,335 $2,874 $3,933 \n\nThe provisions for slow-moving or damaged inventory are related to units either damaged or in excess of the units needed to serve the expected demand for identified customers and projects. The Company also recorded expenses related to certain components whose lead-times increased due to COVID-19 and other supply chain constraints. Some components ultimately were not used in production and expired, resulting in a provision. In the year ended December 31, 2023, the Company recorded an expense of $126,000 and some components were physically scrapped resulting in a provision reversal of $104,000. In the year ended December 31, 2024, some components were sold resulting in a provision reversal of $8,000. In the year ended December 31, 2025, the Company recorded an expense of $1,111,000 related to a provision for slow-moving inventory and some components and finished goods were physically scrapped resulting in a provision reversal of $803,000. At December 31, 2025, the amount of $3,558,000 in depreciation is related to finished goods and components in excess of the units needed to serve the expected demand for identified customers and projects.\n\nF-42\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n13. Trade receivables and contract assets\n\nTrade receivables and contract assets are non-interest bearing. Trade receivables generally have 30-90 day payment terms.\n\n At December 31,\n\n 202320242025\n\n (in thousands)\n\nTrade receivables$10,803 $7,211 $3,662 \n\nContract assets497 122 98 \n\nProvision for credit notes to be issued(164)(101)(334)\n\nProvisions on trade receivables(2,524)(2,301)(50)\n\nNet trade receivables$8,612 $4,931 $3,376 \n\nIn the years ended December 31, 2025, 2024 and 2023, the Company recorded credit notes primarily related to customer product returns and, in 2023, rebate programs. Such rebates are recorded as a reduction of revenue in the same period that the product is delivered.\n\nThe movements in the provision for impairment of receivables were as follows:\n\n December 31,\n\n 202320242025\n\n (in thousands)\n\nAt January 1,$2,524 $2,524 $2,301 \n\nCharge for the year— — — \n\nUtilized amounts— (223)(2,251)\n\nUnutilized amounts— — — \n\nAt year end$2,524 $2,301 $50 \n\nIn the years ended December 31, 2023, 2024 and 2025, no new trade receivables were impaired. Trade receivables impaired are related primarily to significantly aged receivables, which the Company no longer expects to collect although still subject to legal enforcement. After seven years, the Company writes off the receivable definitively and the related provision is reversed as utilized. The \"unutilized amounts\" refers to the portion of the estimated liability that was not required, if any, typically due to recovery from the customer.\n\nAs at year end, the aging analysis of trade receivables and contract assets that were not impaired is as follows:\n\n TotalNeither past\ndue nor\nImpairedPast due but not impaired\n\n   <30 days30-60 days60-120 days>120 days\n\n (in thousands)\n\nAt December 31, 2023$8,612 $6,532 $1,919 $101 $4 $56 \n\nAt December 31, 2024$4,931 $4,392 $501 $— $— $38 \n\nAt December 31, 2025$3,376 $2,715 $634 $— $— $27 \n\nDue to its historical experience, the Company does not assign credit risk rating grades to its trade receivables, but assesses credit risk at the customer level. Based on an analysis of historical credit losses, the Company has not applied any expected credit losses to its outstanding receivables as of the year end beyond specific provisions for doubtful accounts.\n\nF-43\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n14. Cash, cash equivalents and short-term deposits\n\n At December 31,\n\n 202320242025\n\n (in thousands)\n\nCash at banks$5,697 $9,085 $6,533 \n\nCash equivalents8 8 6,853 \n\nShort-term deposits— 53,000 — \n\nCash, cash equivalents and deposits$5,705 $62,093 $13,386 \n\nCash at banks earns no interest. Cash equivalents in money market funds and short-term deposits are invested for short-term periods depending on the immediate cash requirements of the Company, and earn interest at market rates for short-term investments. At December 31, 2025, cash equivalents included $6.9 million held in the trading portfolio at the custodian for digital assets. The Company may hold cash in this account for brief periods after the sale of digital assets before being transferred to a commercial bank account.\n\nThe fair value of cash, cash equivalents and short-term deposits is equal to book value. Most of the cash, cash equivalents and short-term deposits is held in U.S. dollar and euros as follows:\n\n At December 31,\n\n 202320242025\n\n (in thousands)\n\nU.S. dollar denominated accounts$5,250 $61,189 $12,758 \n\nEuro denominated accounts91 509 202 \n\nGBP denominated accounts319 130 154 \n\nSGP denominated accounts13 24 10 \n\nNIS denominated accounts1 214 182 \n\nCHF denominated accounts— — 44 \n\nRMB denominated accounts10 17 22 \n\nOther currencies denominated accounts21 10 14 \n\nCash, cash equivalents and short-term deposits$5,705 $62,093 $13,386 \n\n15. Issued capital and reserves\n\nThe share capital of Sequans Communications S.A. is denominated in euros, as required by law in France. Any distributions to shareholders are denominated in euros. Amounts of capital and reserves presented in the Consolidated Statements of Financial Position in U.S. dollars have been translated using historical exchange rates.\n\nOn June 27 2023, the Company reduced its accumulated deficits by $12,727,000, reducing the share premium for the same amount. There was no impact on the nominal value.\n\nAuthorized capital, in number of shares\n\nAuthorized capital includes all shares issued as well as all potential shares which may be issued upon exercise of stock options, warrants, restricted share awards and conversion of convertible debt, or which the shareholders have otherwise authorized for specific capital increases. There is no impact on shareholders from the capital reduction as no shares have been cancelled through December 31, 2025, however the ordinary shares represented by the ADSs held in treasury do not have voting or dividend rights. These shares were cancelled in March 2026. At December 31, 2025, taking into account resolutions for capital increases approved by the shareholders in June 2025, authorized capital was 6,659,905,825 ordinary shares with a nominal value of €0.01 each (421,418,563 and 398,622,649 ordinary shares at December 31, 2023 and 2024, respectively).\n\nThere is one category of authorized shares: ordinary shares. The ratio of ordinary shares per ADS is one hundred shares represented by one ADS.\n\nF-44\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nShares issued and fully paid\n\n At December 31,\n\n 202320242025\n\n SharesAmountSharesAmountSharesAmount\n\n (in thousands, except for share data)\n\nOrdinary shares246,262,004 €2,463 251,408,922 €2,514 1,599,589,702 €15,996 \n\nConverted to U.S. dollars at historical exchange rates$2,878 $2,934 $18,718 \n\nTreasury shares\n\nAs of December 31, 2025, the Company had repurchased a total of 1,513,973 of its own American Depositary Shares (“ADSs\"), representing 151,397,300 ordinary shares, as treasury shares at an average price of $6.17 per ADSs (no treasury shares repurchased at December 31, 2023 and 2024). The treasury shares were subsequently cancelled on March 11, 2026, following shareholders approval on February 19, 2026, reducing the total number of shares issued and outstanding.\n\nOther capital reserves\n\nOther capital reserves include the accumulated share-based payment expense as of period end, the counterpart of which is in retained earnings (accumulated deficit) as the expense is reflected in profit and loss, as well as the fair values of the conversion options of convertible debt, the values of embedded derivatives related to convertible debt at the date the conversion rate finally fixed, the value of warrants issued to debt holders, the deferred tax impact related to the equity component of the convertible debts and venture debt.\n\nDividend rights\n\nDividends may be distributed from the statutory retained earnings and additional paid-in capital, subject to the requirements of French law and the by-laws of Sequans Communications S.A. There were no distributable retained earnings at December 31, 2023, 2024 or 2025. Dividend distributions by the Company, if any, will be made in euros.\n\nCapital transactions\n\nOn July 7, 2025, the Company increased its capital in connection with a private offering by issuing 1,171,987,620 ordinary shares at $0.14 per ordinary share (or $14.0 per ADS) and 222,458,520 pre-funded warrants at $0.139 per pre-funded warrant. The total gross proceeds from the offering amounted to $195,000,001 Accordingly, issued capital in the Consolidated Statement of Financial Position was increased by $13,736,376 recorded in share capital and by $181,263,625 in share premium. Costs directly attributable to the equity transaction amounting to $14.0 million were deducted from the share premium.\n\nIn August and September 2025, 125,943,130 ordinary shares (1,259,431 ADSs at the current ratio) were issued following exercise of pre-funded warrants, resulting in a gross proceeds amounted to $76,300 recorded in share premium. As of December 31, 2025, pre-funded warrants to acquire 96,158,250 ordinary shares (961,582 ADSs at the current ratio) remain outstanding.\n\nIn October 2025, the Company carried out a capital increase following the waiver of a receivable by a creditor for an amount of $4,263,193 in exchange for the issuance of 30,451,300 ordinary shares (304,513 ADSs at the current ratio) of the Company, issued at a unit price of $0.14 per share. This transaction resulted in an increase in share capital of $354,167 and in share premium of $3,909,026, net of transaction costs. The new shares issued as part of this transaction carry the same rights as existing shares, including voting rights and the right to receive dividends. In February 2026, the Company repurchased 25,000,000 ordinary shares represented by 250,000 ADSs at a purchase price of $3.73 per ADS.\n\nOn September 26, 2023, the Company increased its capital in connection with a private offering with 272 Capital Master Fund Ltd by issuing 8,480,564 ordinary shares (in the form of 84,805 ADSs at the current ratio) at $0.7075 per ordinary share (or $70.75 per ADS at the current ratio). The total gross proceeds from the offering amounted to $5,999,999. Accordingly, issued capital in the Consolidated Statement of Financial Position was increased by $89,046 recorded in share capital and by $5,910,953 in share premium. Costs directly attributable to the equity transaction amounting to $0.6 million were deducted from the share premium.\n\nF-45\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nOn April 12, 2023, the Company increased its capital in connection with a private offering to 272 Capital Master Fund Ltd, Lynrock Lake Master Fund LP and several other institutional investors by issuing 38,834,952 ordinary shares at $0.515 per ordinary share (or $51.50 per ADS at the current ratio). The total gross proceeds from the offering amounted to $20,000,000. Accordingly, issued capital in the Consolidated Statement of Financial Position was increased by $423,301 recorded in share capital and by $19,576,699 in share premium. Costs directly attributable to the equity transaction amounting to $0.4 million were deducted from the share premium.\n\nIn the years ended December 31, 2023, 2024 and 2025, ordinary shares were issued upon exercise of options and warrants as described in Note 16 to the Consolidated Financial Statements.\n\nWarrants\n\nOn July 7, 2025, in connection with the private placement of equity and debt, the Company issued warrants to shareholders to purchase up to 2,091,668 ADSs (at the current ratio) and warrants to debt holders to purchase up to 2,024,999 ADSs (at the current ratio), at an exercise price of $14.00 per ADS (at the current ratio) exercisable within 90 days of the closing of the Offering. In July 2025, 10,875,000 ordinary shares (108,750 ADS at the current ratio) were issued following exercise of these warrants, resulting in a gross proceeds amounted to $1,522,500 ($126,118 recorded in share capital and $1,396,382 recorded in share premium). In October 2025, the exercise period was extended to December 31, 2025; all remaining warrants expired unexercised.\n\nOn August 15, 2022, the Nokomis Note issued in August 2019 arrived at maturity and the Company elected to exercise the first option of the amendment signed on March 20, 2020, to extend the maturity to August 16, 2023 in exchange for the issuance of 594,680 warrants (5,946 ADSs at the current ratio) to Nokomis at an exercise price of $1.03 per warrant ($103.00 per ADS at the current ratio). On August 15, 2023, the Nokomis Note issued in August 2019 arrived at its extended maturity and the Company elected to exercise the second option of the amendment signed on March 20, 2020, to extend the maturity to August 16, 2024 in exchange for the issuance of 1,244,820 warrants (12,448 ADSs at the current ratio) to Nokomis at an exercise price of $0.8092 per warrant ($80.92 per ADS at the current ratio) and to extend the term of the warrant issued in August 2022 by one year. The expiration date of both issues of warrants is August 15, 2026.\n\nOn February 18, 2019, the Company issued warrants to purchase 9,392,986 ordinary shares to a strategic investor for a total subscription price of $8,360,000. The warrants are exercisable upon 61 days' notice to the Company at an exercise price of €0.02 per share (€2.00 per ADS at the current ration of shares per ADS). The warrants expire February 18, 2034. Upon issuance of the warrants, $8,360,000 was recorded in share premium in the Consolidated Statement of Financial Position.\n\nOn October 26, 2018, the Company entered into a bond issuance agreement with Harbert European Specialty Lending Company II S.a.r.l (the “Harbert”). The Company issued to Harbert, for a total subscription price of $1.00, warrants to acquire 816,716 shares at an exercise price of $1.34 per share ($134.00 per ADS at the current ratio). Such warrants are exercisable at any time and expire October 26, 2028.\n\nOn April 14, 2015, the Company entered into a convertible note agreement with Nokomis for the issuance and sale of a convertible note. In September 2018, the convertible note was amended to extend the term to April 14, 2021, and to decrease the conversion price. In addition, the Company issued to Nokomis warrants to acquire 1,800,000 ordinary shares at an exercise price of $1.70 per ordinary share ($170.00 per ADS at the current ratio). Such warrants were exercisable at any time and had an expiration date of April 14, 2021. In consideration for entering into further amendments of the convertible debt in 2020, the warrants were extended to April 14, 2024, at which date these warrants expired unexercised.\n\nF-46\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n16. Share-based payment plans\n\nThe expense recognized for employee and other services received during the year ended December 31, 2025 and arising from equity-settled share-based payment transactions was $3,011,000 (2023: $7,104,000; 2024: $4,090,000). Of this total, $55,000 in 2025 (2023: $111,000; 2024: $66,000), related to warrants plans for consultants considered equivalent to employees.\n\nThe breakdown is as follows:\n\nYear ended December 31,\n\n 202320242025\n\n (in thousands)\n\nCost of revenue$131 $84 $20 \n\nResearch and development$2,019 $718 $761 \n\nSales and marketing$1,397 $946 $494 \n\nGeneral and administrative$3,557 $2,342 $1,736 \n\nTotal$7,104 $4,090 $3,011 \n\nRestricted share awards and warrants give the right to acquire ordinary shares. The exercise price for warrants is based on the closing market price on the effective date of grant. There is no exercise price for restricted share awards; the beneficiary receives title to the underlying ordinary shares with no cash payment at the end of the vesting period. In general, the contractual life of the warrants is ten years. There are no cash settlement alternatives, and the Company has not developed a practice of cash settlement.\n\nThere have been no cancellations or modifications to any of the plans during the years ended December 31, 2023, 2024 or 2025.\n\nGeneral employee stock option and restricted shares awards\n\nAll employees of the French parent company and its subsidiaries are eligible to receive a grant of stock options or restricted shares awards.\n\nRestricted share awards (RSA) granted beginning in July 2024 vest over three years, with either 33% vesting after 1-year anniversary of the grant and the remaining 67% of the grant vesting semi-annually over the remaining 2 years or with 66% vesting after the 2-year anniversary of the grant and the remaining 34% vesting semi-annually over the remaining year. Prior to July 2024 grants, RSA vested over four years, with either 25% vesting after the 1-year anniversary of the grant and the remaining 75% of the grant vesting quarterly over the remaining 3 years, or with 50% vesting after the 2-year anniversary of the grant and the remaining 50% vesting quarterly over the remaining 2 years. Vested restricted shares may be sold only beginning two years after the effective date of grant.\n\nIn general, vesting of the stock options occurs over four years, with 25% vesting after the first anniversary of grant and the remaining 75% vesting monthly over the remaining 36 months.\n\nFrom time to time, vesting of stock options and restricted shares may be linked to employee performance with different vesting periods.\n\nAll expenses related to these plans have been recorded in the Consolidated Statement of Operations in the same line items as the related employees’ cash-based compensation.\n\nWarrant plans for board members and consultants\n\nThe Company awards warrants to members of the board of directors following approval by the shareholders and to a limited number of consultants who have long-term relationships with the Company. Vesting may be over a one-year, two-year, three-year or four-year period, or may be immediate, depending on the nature of the service contract. All expenses related to these plans have been recorded in the Consolidated Statements of Operations in the same line items as the related service provider’s cash-based compensation.\n\nF-47\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nMovements in the periods presented\n\nThe following table illustrates the number of shares (ADS equivalents are not presented) and weighted average exercise prices (WAEP) of, and movements in, stock options and warrants during the period:\n\n December 31,\n\n 202320242025\n\n NumberWAEPNumberWAEPNumberWAEP\n\nOutstanding at January 1,5,868,521 $1.51 6,811,814 $1.27 9,422,814 $0.82 \n\nGranted during the year1,500,000 $0.54 3,520,912 $0.15 2,520,000 $0.15 \n\nForfeited during the year(111,887)$1.70 (228,634)$2.04 (85,580)$1.08 \n\nExercised during the year— $— — $— — $— \n\nExpired during the year(444,820)$1.89 (681,278)$1.49 (815,114)$1.71 \n\nOutstanding at period end6,811,814 $1.27 9,422,814 $0.82 11,042,120 $0.60 \n\nOf which, warrants for consultants equivalent to employees724,288 $1.05 1,707,200 $0.57 1,667,120 $0.55 \n\nExercisable at period end5,420,965 $1.44 6,142,512 $1.17 8,009,667 $0.77 \n\nOf which, warrants for consultants equivalent to employees438,739 $1.28 796,307 $0.92 1,154,967 $0.70 \n\nThe following table illustrates the number of, and movements in, restricted shares awards (RSA) based on the number of ordinary shares (ADS equivalents are not presented) during the period:\n\nDecember 31,\n\n202320242025\n\nOutstanding at January 1,16,752,551 13,105,349 25,726,711 \n\nGranted during the year2,640,460 21,432,152 3,580,000 \n\nForfeited during the year(686,092)(3,807,502)(1,388,638)\n\nVested during the year(5,601,570)(5,003,288)(8,919,980)\n\nOutstanding at period end13,105,349 25,726,711 18,998,093 \n\nExercise prices are denominated in U.S. dollars.\n\nThe weighted average remaining contractual life of stock options and warrants outstanding as December 31, 2025 was 4.8 years (2024: 3.1 years; 2023: 2.6 years).\n\nThe range of exercise prices per share for stock options and warrants outstanding at December 31, 2025 was $0.13 - $3.31, $0.13 - $3.31 at December 31, 2024 and $0.54—$3.31 at December 2023.\n\nThe weighted average fair value of stock options and warrants granted during the year ended December 31, 2025 was $0.07 (2024: $0.08; 2023: $0.27). The weighted average fair value of the restricted shares awards granted during the year ended December 31, 2025 was $0.13 (2024: $0.22; 2023: $0.66). The fair value is measured at the grant date. The following table lists the inputs to the models used for determining the value of the grants made for the years ended December 31, 2023, 2024 and 2025:\n\nF-48\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n December 31,\n\n 202320242025\n\nDividend yield (%)— — — \n\nExpected volatility (%)59 \n58 to 62\n63 \n\nRisk–free interest rate (%)2.5\n4.35 to 4.75\n3.97\n\nAssumed annual lapse rate of awards (%)20 for all except 2 for warrants and a limited group of beneficiaries20 for all except 2 for warrants and a limited group of beneficiaries15 for all except 2 for warrants and a limited group of beneficiaries\n\nSell price multiple (applied to exercise price)2 2 2 \n\nWeighted average share price ($)0.86 0.21 0.14 \n\nModel usedBinomialBinomialBinomial\n\nFor the years ended December 31, 2023, 2024 and 2025, the 6-year adjusted volatility of the Company has been used.\n\nStock options and warrants can be exercised during a period after the vesting date until the plan terminates. In the pricing model, the assumption was made that plan participants will exercise before the end of the exercise period if the share price reaches a certain multiple of the exercise price.\n\nIf a sell-price multiple of 3 instead of 2 had been used (no impact on the restricted shares) and if the weighted average share price used in the pricing model had been decreased by 10%, share-based payment total compensation for stock options, warrants and restricted shares awards granted through December 31, 2025 would have decreased by (3.61)% (2024: (9.14)%; 2023: (7.51)%).\n\nThe expected life of the stock options and warrants is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.\n\n17. Interest-bearing loans and borrowings\n\nAt December 31,\n\nNote202320242025\n\n(in thousands)\n\nCurrent\n\nConvertible debt17.1 52,278 — 56,422 \n\nConvertible debt embedded derivative17.1 3 — 10,800 \n\nUnsecured related party loan17.2 8,922 — — \n\nInterest-bearing receivables financing17.3 9,544 3,742 — \n\nTotal current portion$70,747 $3,742 $67,222 \n\nAs of December 31, 2025, the Company had no non-current debt and no drawn or undrawn committed borrowing or overdraft facilities in place.\n\n17.1. Convertible debt\n\nNokomis Capital L.LC\n\nOn August 16, 2019, the Company entered into a convertible note agreement with Nokomis Capital, L.L.C. in the principal amount of $5.0 million (the \"Nokomis Note\"). The convertible note matured in August 2022 and was convertible, at the holder’s option, into the Company’s shares at a conversion rate of $1.03 per ordinary share ($103.00 per ADS at the current ratio). The 2019 note was an unsecured obligation of the Company. The note was not redeemable prior to maturity. The note’s accreted principal could be converted at any time after issuance until maturity, with adjustments for events like dilutive\n\nF-49\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nissuances, dividends, or stock splits. Unconverted portions accrued 7% annual interest, paid in kind on each anniversary. Standard default events could make the principal and interest immediately due. In major transactions such as mergers or asset sales, holders could opt for cash repurchase or conversion of their notes. The note also included typical covenants, restricting the Company from pledging assets to third-party lenders except in limited cases while the notes were outstanding.\n\nEffective March 20, 2020, the Nokomis Note was amended to grant the Company two options to extend the term of the note. Each option would give the Company the right to extend the term of such note by one year and consequently reset the conversion price to a 20% premium above the 20-day volume weighted average price (VWAP) if it was lower than the existing conversion price. On the first option exercise, the PIK would be adjusted to 9.5%, and the holder would be granted warrants for 15% of the value of the note with a three year term, at an exercise price of 20% premium above 20-day VWAP. On the second option exercise, the PIK would be adjusted to 13.5%, and the holder would be granted an additional warrant for 20% of the value of the note with a three year term, at an exercise price of 20% premium above 20-day VWAP. In consideration for entering into the amendments, the warrants that Nokomis owns previously and that were scheduled to expire April 2021 were extended to April 2024 upon the signing of the note amendment and expired in April 2024.\n\nOn August 15, 2022, the Nokomis Note arrived at maturity and the Company elected to exercise the first option of the amendment, to extend the maturity to August 16, 2023 in exchange for the issuance of 594,680 warrants (5,946 ADSs at the current ratio) to Nokomis at an exercise price of $1.03 per warrant ($103.00 per ADS at the current ratio). The expiration date of these warrants was August 15, 2025. In accordance with Article II of the amendment, the interest rate on the note increased to 9.5% per annum effective August 15, 2022. Conversion price of the debt was unchanged. This resulted in the extinguishment of the existing note and issuance of a new note for accounting purposes. The amended debt was accounted for as compound financial instruments with a liability component reflecting the Company’s contractual obligation to pay interest and redeem the notes in cash; and an embedded derivative, reflecting the value of the conversion option.\n\nThe value of the liability component at the extension date was $6,125,000. The fair value of the new liability component represented the fair value of a similar liability that does not have an associated equity conversion feature, calculated as the net present value of contractually determined future cash flows, discounted at the rate of interest applied by the market at the time of issue to instruments of comparable credit status and providing substantially the same cash flows, on the same terms, but without the conversion option. The Company used 23.2% as the market rate of interest in order to value the liability components for an amount of $5,454,000. The change in the liability component before and after the extension and the fair value of the warrants granted was recorded for a gain of $476,000 in the Consolidated Statement of Operations in “Debt amendments\". The fair value of the embedded derivative of the note was calculated at the extinguishment date and the change in fair value of $343,000 was recorded as financial expenses in the Consolidated Statement of Operations.\n\nOn August 15, 2023, the Nokomis Note arrived at its extended maturity and the Company elected to exercise its second option to extend the maturity to August 16, 2024 in exchange for the issuance of 1,244,820 warrants (12,448 ADSs at the current ratio) to Nokomis at an exercise price of $0.8092 per warrant ($80.92 per ADS at the current ratio) and to extend the term of the warrant issued in August 2022 by one year. The expiration date of both issues of warrants is August 15, 2026. In accordance with Article II of the amendment, the interest rate on the note increased to 13.5% per annum effective August 15, 2023. Conversion price of the debt was unchanged. This resulted in the extinguishment of the existing note and issuance of a new note for accounting purposes. The amended debt was accounted for as compound financial instruments with a liability component reflecting the Company’s contractual obligation to pay interest and redeem the notes in cash; and an embedded derivative, reflecting the value of the conversion option.\n\nThe value of the liability component at the extension date was $6,707,000. The fair value of the new liability component represented the fair value of a similar liability that does not have an associated equity conversion feature, calculated as the net present value of contractually determined future cash flows, discounted at the rate of interest applied by the market at the time of issue to instruments of comparable credit status and providing substantially the same cash flows, on the same terms, but without the conversion option. The Company used 21.9% as the market rate of interest in order to value the liability components for an amount of $6,378,000. The change in the liability component before and after the extension and the fair value of the warrants granted was recorded for a gain of $247,000 in the Consolidated Statement of Operations in Debt amendments. The fair value of the embedded derivative of the note was calculated at the extinguishment date and the change in fair value of $421,000 was recorded as financial expenses in the Consolidated Statement of Operations.\n\nAt December 31, 2023, the recalculated fair value of the Nokomis embedded derivatives was $3,000 and the change of the fair value of $1,244,000 for the year ended December 31, 2023 was recorded in the Consolidated Statement of Operations.\n\nF-50\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nLynrock Lake Master Fund LP\n\nOn April 9, 2021, the Company entered into a convertible note agreement with Lynrock Lake Master Fund LP in the principal amount of $40.0 million (the \"Lynrock Lake Note\"). The Lynrock Lake Note matured in April 2024 and was convertible, at the holder’s option, into the Company’s shares at a conversion rate of $1.915 per ordinary share (representing $191.50 per ADS at the current ratio), subject to a 9.9% ownership limit for Lynrock Lake. The Lynrock Lake Note earned interest annually at an interest rate of 5.0625% for cash payments or 6% for payment in kind accruals. The Company retained an option to call the Lynrock Lake Note under certain circumstances after 12 months, either in full or in part. If a change of control occurred at any time prior to the payment of the note in full, Lynrock Lake Master Fund LP would have the right, in its sole discretion, to require the Company to convert or redeem all of the outstanding principal amount (including accrued interest and unpaid interest). In the event that the note was not converted and the Company did not repay the amount due on the maturity date, the interest rate automatically increased to 8% beginning April 10, 2024.\n\nThe Lynrock Lake Note was accounted for as compound financial instruments with a liability component reflecting the Company’s contractual obligation to pay interest and redeem the bonds in cash; and an embedded derivative, reflecting the value of the conversion option. The initial fair value of the notes was split between these two components.\n\nThe fair value of the liability component on the issuance date represented the fair value of a similar liability that does not have an associated equity conversion feature, calculated as the net present value of contractually determined future cash flows, discounted at the rate of interest applied by the market at the time of issue to instruments of comparable credit status and providing substantially the same cash flows, on the same terms, but without the conversion option. The Company used 20.89% as the market rate of interest in order to value the liability components of the note on issuance. The embedded derivative of the Lynrock Lake Note was valued using the Geometric Brownian Motion framework relying on Monte-Carlo simulations. On April 9, 2021, the initial fair value of the embedded derivative of the notes was calculated to be $12,713,000 The change in fair value was remeasured and recorded as financial income or loss at each Statement of Financial Position date.\n\nAt December 31, 2023, the recalculated fair value of the Lynrock Lake Note embedded derivatives was zero and the change of the fair value of $1,956,000 for the year ended December 31, 2023 was recorded in the Consolidated Statement of Operations.\n\nStandstill and redemption of Nokomis and Lynrock Lake Notes\n\nOn April 9, 2024, the Company secured standstill agreements from both convertible debt holders with respect to the convertible debt maturing in April 2024. The agreements granted an initial standstill period until April 26, 2024 that was extended until September 30, 2024.\n\nThis resulted in the extinguishment of the existing notes and issuance of a new notes for accounting purposes. The amended debts were accounted for as compound financial instruments with a liability component reflecting the Company’s contractual obligation to pay interest and redeem the notes in cash; and an embedded derivative, reflecting he value of the conversion option.\n\nThe value of the liability components at the extension date was $54,935,000 (Nokomis Note: $7,294,000 ; Lynrock Note:$47,641,000). The fair value of the new liability components represented the fair value of a similar liability that does not have an associated equity conversion feature, calculated as the net present value of contractually determined future cash flows, discounted at the rate of interest applied by the market at the time of issue to instruments of comparable credit status and providing substantially the same cash flows, on the same terms, but without the conversion option. The Company used market rate of interest in order to value the liability components for an amount of $41,315,000 (Nokomis Note: $5,618,000 at market rate of 78.3% ; Lynrock Note: $35,697,000 at market rate of 80.8%) The change in the liability component before and after the extension was recorded for a gain of $13,260,000 (Nokomis Note: $1,676,000 ; Lynrock Note: $11,944,000) in the Consolidated Statement of Operations in “Debt amendments. The fair value of the embedded derivative of the note was calculated at the extinguishment date and the change in fair value of $3,000 was recorded as financial income in the Consolidated Statement of Operations.\n\nOn October 1, 2024, the Company repaid the Lynrock note and accrued interest for an amount of $49,473,000. On October 8, 2024, the Company repaid the Nokomis note and accrued interest for an amount of $7,739,000.\n\nHudson Bay et al\n\nOn June 22, 2025, we entered into a secured convertible debenture purchase agreement with five institutional and accredited investors (the “Hudson Bay et al Notes”), pursuant to which we agreed to issue to secured convertible debentures (the “secured\n\nF-51\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nconvertible debentures”) in a principal amount of $189 million with warrants (the \"2025 warrants\") to purchase up to 2,024,999 ADS at $14.00 per ADS at the current ratio. The transaction was finalized on July 7, 2025. The secured convertible debentures are convertible into ordinary shares or pre-funded warrants at the option of a debenture purchaser at any time at a conversion price of $21.00 per ADS at the current ratio. From and after the first anniversary date of the date the secured convertible debentures are issued (\"issuance date\") until, but not including, the second anniversary date of the issuance date, interest shall accrue on the outstanding principal balance of the secured convertible debentures at an annual rate equal to 6.0%, and from and after the second anniversary date of the issuance date, interest shall accrue on the outstanding principal balance of the secured convertible debentures at an annual rate equal to 8.0%.\n\nThe Hudson Bay et al Notes were accounted for as compound financial instruments with a liability component reflecting the Company’s contractual obligation to pay interest and redeem the bonds in cash; and an embedded derivative, reflecting both the value of the conversion option and the 2025 warrants. The initial fair value of the notes was split between these three components.\n\nThe fair value of the liability component on the issuance date represented the fair value of a similar liability that does not have an associated equity conversion feature, calculated as the net present value of contractually determined future cash flows, discounted at the rate of interest applied by the market at the time of issue to instruments of comparable credit status and providing substantially the same cash flows, on the same terms, but without the conversion option. The embedded derivative of the Hudson Bay et al Notes was valued using the Geometric Brownian Motion framework relying on Monte-Carlo simulations. The significant inputs used in the valuation of the convertible debt components included:\n\n•the risk‑free interest rate of 3.8% based on government bond yields with a maturity consistent with the expected life of the instrument;\n\n•the credit spread applied to determine the discount rate for the debt host derived to be 23.1%;\n\n•the expected volatility of the underlying equity instrument of 106%;\n\n•the expected term of the convertible instrument, taking into account the investor put right on January 7, 2027 and the issuer redemption right if the market price is above 130% or below 40% of the conversion price;\n\n•cash flows from the interest payments based on coupons of 0% for the first year, 6% for year two, 8% thereafter until maturity;\n\n•the share price at the valuation date ($14.30 at the current ADS ratio); and\n\n•the $21.00 conversion price specified in the contractual arrangement, with potential adjustment of the conversion price to the higher of (i) $1.40 and (ii) 120% of the average VWAP over the five trading days immediately preceding the reset date of April 25, 2026.\n\nOn July 7, 2025, the initial fair value of the embedded derivative of the notes was calculated to be $67,000,000 and the embedded derivative related to the 2025 warrants issued was calculated to be $6,200,000. The change in fair value is remeasured and recorded as financial income or loss at each Statement of Financial Position date. After the value of the embedded derivative and attached 2025 warrants was established, the value the liability components of the note on issuance resulted in rate of interest of 26.9% (30.9% after taking into account transaction costs) as the effective market rate of interest.\n\nOn October 27, 2025, the secured convertible debenture purchase agreement was amended to allow the Company to repurchase 50% of the secured convertible debentures at their face value plus a 6.5% premium. The repurchase of the secured convertible debentures for $100.6 million was completed on November 10, 2025. The change in the liability component before and after the repurchase was recorded for a loss of $29,394,000 in the Consolidated Statement of Operations in \"Gain (loss) on debt extinguishment\" and the change in fair value of $36,000,000 was recorded as financial income in the Consolidated Statement of Operations. At December 31, 2025, the recalculated fair value of the remaining embedded derivative was a total of $10,800,000\n\nF-52\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nand the change in fair value of $6,600,000 was recorded as financial income in the Consolidated Statement of Operations. At December 31, 2025, the 2025 warrants had expired and the reduction in the value was recorded as a gain of $2,400,000.\n\nOn February 10, 2026, the secured convertible debenture purchase agreement was further amended to allow the Company to repurchase the remaining 50% of the secured convertible debenture at their face value by June 1, 2026. Consequently, the convertible debt and related embedded derivative have been classified as current liabilities on the balance sheet.\n\nFrom the February 10 to April 23, 2026, the Company redeemed in several increments a total of $50,798,000.The liability component will be recalculated before and after each repurchase date and the change will be recorded in the Consolidated Statement of Operations in \"Gain (loss) on debt extinguishment\", and the change in fair value of the embedded derivative will be remeasured at each repurchase date, and recorded as financial income in the Consolidated Statement of Operations.\n\n17.2. Unsecured related party loan\n\nIn 2023, Renesas Electronics Corporation (\"Renesas\") was a minority shareholder of the Company and had a representative on the Company's board of directors. On November 8, 2023, in connection with contemplated acquisition of the Company by Renesas that was in process at the time (subsequently terminated in February 2024), the Company entered into a Security Purchase Agreement with Renesas Electronics America (\"Renesas America\") whereby Renesas America agreed to the issuance of an unsecured subordinated note (the “Note”) in an aggregate principal amount of $6.0 million, at a stated rate of interest of 9.5% per annum. The principal amount and any accrued interest on the Note was due on the earliest to occur of (i) the written demand by the holder of the Note for repayment after the successful consummation of the offer by Renesas Electronics Europe GmbH, incorporated as a limited liability company under the laws of Germany and a direct wholly owned subsidiary of Renesas, to acquire all of the Company’s outstanding ordinary shares, nominal value €0.01 per share (“Ordinary Shares”), including Ordinary Shares represented by American Depositary Shares (“ADSs”) and Ordinary Shares issuable upon the exercise or conversion or exchange of any outstanding options, warrants, convertible securities, restricted share awards or rights to purchase, subscribe for, or be allocated Ordinary Shares of the Company, for $0.7575 per Ordinary Share and $75.75 per ADS at the current ratio (the “Tender Offer”), (ii) 90 days after the termination of the Tender Offer (other than by reason of successful completion thereof), (iii) 90 days after the termination of the Memorandum of Understanding (the \"MoU), dated as of August 4, 2023, by and between Renesas and the Company, and (iv) the date a Company Termination Fee (as defined in the MoU) was payable under the MoU.\n\nOn December 27, 2023, the Company entered into a second Security Purchase Agreement with Renesas America whereby Renesas America agreed to the issuance of a Note in an aggregate principal amount of $3.0 million, at a stated rate of interest of 9.5% per annum.\n\nOn February 12, 2024, the Company entered into a third Security Purchase Agreement with Renesas America whereby Renesas America agreed to the issuance of a Note in an aggregate principal amount of $9.0 million, at a stated rate of interest of 9.5% per annum.\n\nOn February 22, 2024, Renesas notified the Company that Renesas was terminating the MoU due its receipt of an adverse Japanese tax ruling on February 15, 2024 from the National Tax Agency of Japan.\n\nOn April 22, 2024, the Company issued an Unsecured Promissory Note with a principal amount of $5,000,000 to 272 Capital Master Fund, Ltd., an investment fund shareholder of the Company also managed by a member of the Company's board of directors. The transaction closed on April 24, 2024. The Note bore paid-in kind interest at a rate of 12.0% per annum, compounded annually, with a guaranteed return of 40.0%. The Note was to mature on the earlier of April 22, 2025, or one day prior to the earliest extended maturity date of the Company’s existing convertible debt held by Lynrock Lake and Nokomis and subordinated notes held by Renesas.\n\nIn April, 2024, the Company secured a standstill agreement from Renesas. The agreement granted an initial standstill period until April 26, 2024 which was then extended until September 30, 2024. The change in the liability before and after the extension was recorded for a gain of $294,000 in the Consolidated Statement of Operations in \"Debt amendments\".\n\nIn October 2024, the Company repaid the loans with accrued interest. $19,266,000 was repaid to Renesas ($18,000,000 in principal and $1,266,000 as accrued interest) and $7,000,000 ($5,000,000 in principal and $2,000,000 as accrued interest) to 272 Capital master Fund, Ltd. No repayments of principal occurred during the year ended December 31, 2023.\n\nInterest expense related to the Notes recorded during the year ended December 31, 2024 amounted to $3,791,000 ($127,000 in the year ended December 31, 2023).\n\nF-53\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n17.3. Interest-bearing financing of receivables\n\nIn June 2014, the Company entered into a factoring agreement with a French financial institution whereby a line of credit was made available equal to 90% of the face value of accounts receivable from product sales to qualifying customers, up to the amount covered by the Company's credit insurance per customer. In July 2017, the Company signed an amendment to the initial agreement to include limited financing of accounts receivable from service sales of $800,000. The Company transferred to the finance company all invoices issued to qualifying customers, and the customers are instructed to settle the invoices directly with the finance company. The Company paid a commission on the face value of the accounts receivable submitted and interest at SOFR 3 months USD +2%. In the event that the customer did not pay the invoice within 60 days of the due date, the receivable was excluded from the line of credit, and recovery became the Company’s responsibility. At December 31, 2024, $3,079,000 ($2,531,000 at December 31, 2023) had been drawn on the line of credit and recorded as a current borrowing. On November 27, 2024, the Company informed the French financial institution that it terminated the factoring agreement which was up for renewal on March 2, 2025. All remaining outstanding amounts due under the facility were paid in the first quarter of 2025.\n\nBetween 2022 and 2024, the Company financed its French research tax credits as they were earned. At December 31, 2023 and 2024, the amount financed was $3,369,000 and $663,000, respectively, recorded as current liabilities. In January 2025, the company decided to terminate the agreement to finance the 2024 research tax credit and the amount financed was reimbursed in February 2025. The effective interest rate of 19.80% in 2024 and 1.46% in 2023 included expenses related to the financing. No portion of the 2025 research tax credit was financed.\n\nAt each of December 31, 2025, 2024 and 2023, retention from the financings for the years from 2020 to 2023 was recorded in other receivables. An amount of $118,000 is expected to be recovered in 2026 and is recorded in current other receivables. An amount of $397,000 is expected to be recovered from 2027 to 2029 and is recorded in long-term receivables.\n\n18. Lease liabilities\n\nThe table below present the carrying amounts of lease liabilities and the movements during the period:\n\nLease liabilitiesCurrentNon-current\n\n(In thousands)\n\nAs at January 1, 2023$3,569 $1,291 $2,278 \n\nAdditions767 \n\nDisposals(414)\n\nInterests expense479 \n\nForeign exchange loss (gain)36 \n\nPayments(1,321)\n\nAs at December 31, 2023$3,116 $1,471 $1,645 \n\nAdditions462 \n\nDisposals(706)\n\nInterests expense321 \n\nForeign exchange loss (gain)87 \n\nPayments(1,508)\n\nAs at December 31, 2024$1,772 $1,439 $333 \n\nAdditions1,255 \n\nDisposals(302)\n\nInterests expense229 \n\nForeign exchange loss (gain)463 \n\nPayments(1,591)\n\nAs at December 31, 2025$1,826 $601 $1,225 \n\nIdentified lease contracts mainly relate to real-estate rental agreements. In 2025, the new lease liabilities were discounted at an incremental borrowing rate of 28.3%.\n\nF-54\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nThe rental charges relating to short-term and low value leases remained classified as operating expenses in the Consolidated Statements of Operations and amounted to $1,434,000 for the year ended December 31, 2025 ($1,737,000 and $1,559,000 for the years ended December 31, 2024 and 2023, respectively).\n\n19. Government grant advances and loans\n\n  December 31,\n\n Note202320242025\n\n  (in thousands)\n\nCurrent\n\nGovernment grant advances19.1$708 $631 $1,364 \n\nResearch project financing19.21,518 3,549 2,945 \n\nGovernment loans19.31,727 1,299 734 \n\nAccrued interest19.2653 385 244 \n\nTotal current portion$4,606 $5,864 $5,287 \n\nNon-current\n\nGovernment grant advances19.1$328 $676 $564 \n\nResearch project financing19.2259 4,417 2,627 \n\nGovernment loans19.3173 616 — \n\nAccrued interest19.22,496 576 106 \n\nTotal non-current portion$3,256 $6,285 $3,297 \n\nHistorically the Company has succeeded in obtaining partial financing of some its research and development projects in the form of government project funding. In most cases, the financing is partly in the form of a grant, which is recorded as a reduction of research and development expense as the project progresses, and partly in the form of an interest-free or low-interest advance to be repaid after commercial launch of the financed product or according to some other predefined multiyear repayment plan. When the Company is awarded a new project, the total amount of the financing is recorded as a receivable with a corresponding liability. The financing generally is paid partially upfront and then based on achievement of project milestones.\n\n19.1. Government grant advances\n\nIn 2025, the Company was named as a participant in one new collaborative project with grant funding of €465,000 ($528,000 using the exchange rate of the grant dates) which is expected to be released to the Consolidated Statement of Operations over the life of the project, estimated to be approximately three years. Prior the acquisition by the Company, ACP had been awarded three collaborative projects with grant funding of CHF2,573,000 ($2,818,000 using the exchange rate of the acquisition date).\n\nIn 2024, the Company was named as a participant in one new collaborative project with combined funding of €907,000 ($989,000 using the exchange rate of the grant date) which is expected to be released to the Consolidated Statement of Operations over the life of the project, estimated to be approximately three years.\n\nIn 2023, the Company was named as a participant in one new collaborative project with combined funding of €428,000 ($436,000 using the exchange rate of the grant date) which is expected to be released to the Consolidated Statement of Operations over the life of the project, estimated to be approximately three years.\n\n19.2. Research project financing\n\nIn October 2014, Bpifrance, one of the Company’s shareholders and the financial agency of the French government, provided funding to the Company in the context of a long-term research project, estimated to be completed over a 3-year period. In December 2016, Bpifrance and the Company signed an amendment to extend the period from three to four years. The total funding amounted to €6,967,000 ($8,988,000 using the exchange rate of the funding dates) with a portion in the form of a grant (€2,957,000 or $3,815,000) and a portion in the form of a forgivable loan (€4,010,000 or $5,173,000). The funding was paid in three installments, the last of which was received in 2019 for €992,000 ($1,126,000 using the exchange rate of the payment date). The grant was recognized as a reduction of research and development expense when corresponding expense was\n\nF-55\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nincurred. The forgivable loan advance will be repaid from March 31, 2019 to January 2, 2025 of which €679,000 ($712,000 using the exchange rate of the payment date) in principal and interests was paid in 2025 (€1,130,000, or $1,250,000 in 2024; €870,000, or $939,000, in 2023), and bears interests at a 1.53% fixed contractual rate. The difference between the amount of grant received and the present value amounted to a reduction of $115,000 in the debt carrying value, with such difference being amortized over the contract period. If the sales of the product developed under this program are in excess of €350 million ($411 million using the exchange rate as of December 31, 2025) during a period of three years, then the Company shall pay for three consecutive years after the date of the termination of the reimbursement, a bonus to Bpifrance of 1% of annual revenues generated by products issued from the project (up to a maximum of €350,000,000 or $411,250,000 over a period of ten years ending with the fiscal year 2026). The Company doesn’t expect to make any such bonus payment to BPI as the underlying product financed is a product now at the end of its life and has not generated the minimum level of revenues to trigger the bonus.\n\nIn 2022, the Company received funding for one project of €309,000 ($316,000 using the exchange rate of the funding date) as a grant and €473,000 ($507,000 using the exchange rate of the funding date) as a reimbursable loan. The payment was received in March 2023. The forgivable loan advance will be repaid from January 2024 to September 2027 of which €125,000 ($139,000 using the exchange rate of the payment dates) in principal and interests was paid in 2025 (€60,000, or $66,000 in 2024).\n\nIn 2023, Bpifrance provided funding to the Company for a new long-term research project of €428,000 ($503,000 using the exchange rate at the closing date) as a grant and €142,000 ($167,000 using the exchange rate at the closing date) as a forgivable loan. The funding is paid in four installments. The first installment was received in March 2023 and amounted to €36,000 ($38,000 using the exchange rate of the funding date), the second installment was received in November 2024 and amounted to €63,000 ($69,000 using the exchange rate of the funding date) and the third installment was received in April 2025 and amounted to €21,000 ($22,000 using the exchange rate of the funding date).\n\nIn March 2024, Bpifrance provided funding to the Company in the context of a long-term research project (5G eRedCap project) as part of the France 2030 initiative to support the development of technologies deemed to be strategically important to the national interest. The project is estimated to be completed over a 3-year period. The total funding amounted to €10,888,000 ($11,838,000 using the exchange rate of the grant date) with a portion in the form of a grant (€7,451,000 or $8,101,000) and a portion in the form of a forgivable loan (€3,437,000 or $3,737,000). The funding will be paid in four installments, the first of which was received in April 2024 for €1,863,000 ($2,025,000 using the exchange rate of the funding date) as grant and €859,000 ($934,000 using the exchange rate of the payment date) as forgivable loan. The second installment was received in June 2025 for €2,718,000 ($3,066,000 using the exchange rate of the funding date) as grant and €1,001,000 ($1,129,000 using the exchange rate of the payment date) as forgivable loan. The grant was recognized as a reduction of research and development expense when corresponding expense was incurred. The forgivable loan advance would be repaid initially from March 31, 2028 to January 31, 2031. In 2025, the Company reached an agreement with Bpifrance to reschedule repayments from September 30, 2028 to June 30, 2032. The change in the liability before and after the extension was recorded for a gain of $46,000 in the Consolidated Statement of Operations in \"Gain (loss) on debt extinguishment\". The forgivable loan bears interests at a 5.07% fixed contractual rate. The difference between the amount of forgivable loan received and the present value amounted to a reduction of $1,262,000 in the debt carrying value, with such difference being amortized over the contract period.\n\nThe accrued interest of $104,000 was recorded as of December 31, 2025 ($556,000 as of December 2024 and $712,000 as of December 31, 2023) at an estimated market rate in a range from 20.9% to 22.0%.\n\n19.3. Government loans\n\nOn April 30, 2020, the Company finalized €5 million of French government debt financing that was received in May 2020 as part of the French COVID-19 economic support plan. The French loan is unsecured. The original five year repayment schedule agreed to in May 2020 was extended in April 2021 with only interest payable from August 2021 to May 2022. The repayments of principal are scheduled to occur from August 2022 until May 2026. Following the introduction of the French Conciliation procedure, the Company reached an agreement with BPI to reschedule repayments on French loan until after the end of the French Conciliation procedure in September 30, 2024. The change in the liability before and after the extension was recorded for a gain of $38,000 in the Consolidated Statement of Operations in \"Gain (loss) on debt extinguishment\".\n\nAs of December 31, 2025, $979,000 has been classified as current.\n\nF-56\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n20. Provisions\n\nPost-\nemployment\nbenefitsOther provisionsTotalCurrentNon current\n\n (in thousands)\n\nAt January 1, 2023$705 $1,568 $2,273 $77 $2,196 \n\nArising (released) during the year107 257 364 — — \n\nReleased (used) during the year(48)(76)(124)— — \n\nReleased (unused) during the year— (291)(291)— — \n\nAt December 31, 2023764 1,458 2,222 — 2,222 \n\nArising (released) during the year132 927 1,059 — — \n\nReleased (used) during the year— — — — — \n\nReleased (unused) during the year(268)(850)(1,118)— — \n\nAt December 31, 2024628 1,535 2,163 763 1,400 \n\nArising (released) during the year477 1,434 1,911 — — \n\nACP retirement provision at acquisition date593 — 593 — — \n\nReleased (used) during the year— (333)(333)— — \n\nReleased (unused) during the year(417)(351)(768)— — \n\nAt December 31, 2025$1,281 $2,285 $3,566 $1,454 $2,112 \n\nPost-employment benefits\n\nThe provision for post-employment benefits is for the defined benefit retirement indemnity required to be paid to French and Swiss employees if they retire as a Company employee. Following the acquisition of ACP (see Note 3), the opening balance of the provision for post-employment benefits was recognized in accordance with the purchase accounting requirements, reflecting the estimated present value of ACP’s obligations as of the acquisition date. This balance was determined based on ACP’s historical actuarial assumptions.\n\nThe amount for the French plan (service and finance cost) in 2025 was an income of $19,000 (2024: expenses of $61,000 and 2023: income of $13,000). The comprehensive income (loss) for 2025 includes $30,000 of actuarial gain (actuarial losses of $39,000 in 2024 and $46,000 in 2023. One employee retired in 2023 and no employee retired in either 2025 or 2024.\n\nIn 2024, following the transfer of French employees to Qualcomm on October 1, 2024, the related provision for the retirement indemnity of $237,000 was released and has been recognized as part of the gain on sale of the assets.\n\nThe main assumptions used in the calculation of the French post-employment benefits are the following:\n\n202320242025\n\nDiscount rate3.20%3.35%3.50%\n\nSalary increaseBetween 1.5% and 3.5%Between 1.5% and 3.5%Between 1.5% and 3.5%\n\nRetirement age65-67years65-67 years65-67 years\n\nTurnover: depending on the seniorityDecrease by age from 2% for directors, Vice presidents and managers and from 20% for other employees. 0% for executive teamDecrease by age from 2% for directors, Vice presidents and managers and from 20% for other employees. 0% for executive teamDecrease by age from 2% for directors, Vice presidents and managers and from 20% for other employees. 0% for executive team\n\nIn Switzerland, employers are obliged to provide a minimum defined benefit pension plan for the employees. Funding is granted there by means of defined savings contributions on individual retirement assets implementing a guaranteed interest rate (1.00% for 2017-2023 and 1.25% for 2024-2026) and a fixed conversion rate for old age pensions of the retirement asset (6.8% at the age of 65 years). The plans are financed by contributions of both employees and employer. Contributions are defined by\n\nF-57\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nthe plan regulations and cannot be decreased without amending the plan regulations. In mandatory pension funds the employer has to pay at least as much as the employees, which is the case for the Company. Swiss second-pillar pension plans generally do not foresee reimbursement rights. Contributions are made to a separately administered fund that is not managed by the Company.\n\nVested benefit lump sums have to be paid to leaving employees in order to preserve their individual asset for retirement in another pension plan. Lump sums from previous pension plans must be brought into the pension fund whenever a new employee joins the pension plan. Therefore, asset and liability transfer among Swiss pension funds should be taken into account to guarantee a fair projection of future liabilities or assets.\n\nThe main assumptions used in the calculation of the Swiss post-employment benefits are the following:\n\n2025\n\nDiscount rate (DR)1.30%\n\nInterest rate (IR) for projecting savings capital1.75%\n\nLong-term expected rate of salary increase (SI)1.50%\n\nRate of pension increase (PI)0.00%\n\nLong-term expected inflation rate (social security increase rate)1.00%\n\nLong term rate of mortality improvement (LTR)1.25%\n\nCapital option upon retirement30.00%\n\nTechnical basesBVG/LPP 2020 Generation Tables\n\nProbability of disability85% BVG/LPP 2020\n\nModel for the mortality projectionCMI 2023\n\nPlan Assets at Fair Value for Switzerland are:\n\n2025\n\nCash and cash equivalents$100,361 CHF79,557 \n\nEquity instruments1,522,154 1,206,622 \n\nDebt Instruments (eg. Bonds)1,296,339 1,027,617 \n\nReal estate723,441 573,477 \n\nOthers539,444 427,621 \n\nTotal plan assets as at December 31$4,181,739 CHF3,314,894 \n\nReconciliation of defined benefit obligation\n\n2025\n\nDefined benefit obligation at Dec. 31$4,348,071 CHF3,939,184 \n\nInterest expense on defined benefit obligation46,230 38,355 \n\nCurrent service cost (employer)180,842 150,038 \n\nContributions by plan participants172,442 143,069 \n\nBenefits (paid) / deposited(603,125)(500,391)\n\nAdministration cost (excl. cost for managing plan assets)2,374 1,970 \n\nActuarial (gain) / loss on defined benefit obligation(131,148)(108,809)\n\nForeign exchange impact605,713 — \n\nDefined benefit liability at Dec. 31$4,621,399 CHF3,663,416 \n\nReconciliation of fair value of plan assets:\n\n2025\n\nFair value of plan assets at Jan. 1$3,750,460 CHF3,397,771 \n\nInterest income on the plan assets39,662 32,906 \n\nF-58\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nContribution by the employer172,442 143,069 \n\nContribution by plan participants172,442 143,069 \n\nBenefits (paid) / deposited(603,125)(500,391)\n\nReturn on plan assets excl. interest income118,687 98,470 \n\nForeign exchange impact531,171 — \n\nFair value of plan assets at Dec. 31$4,181,739 CHF3,314,894 \n\nSensitivity analysis (DBO = Defined benefit obligation, SC = Service cost employer):\n\nAssumption ChangeImpact on DBO in 2025\n\nDBO at 31.12. with DR -0.25%$5,180,090 CHF4,106,294 \n\nDBO at 31.12. with DR +0.25%$4,775,428 CHF3,785,516 \n\nDBO at 31.12. with IR -0.25%$4,880,901 CHF3,869,125 \n\nDBO at 31.12. with IR +0.25%$5,060,497 CHF4,011,492 \n\nDBO at 31.12. with SI -0.25%$4,941,068 CHF3,916,820 \n\nDBO at 31.12. with SI +0.25%$5,000,890 CHF3,964,241 \n\nDBO at 31.12. with life expectancy +1 year$5,038,947 CHF3,994,409 \n\nDBO at 31.12. with life expectancy -1 year$4,899,515 CHF3,883,880 \n\nDBO at 31.12. with PI -0.25%$4,876,804 CHF3,865,877 \n\nDBO at 31.12. with PI +0.25%$5,066,615 CHF4,016,342 \n\nSC of next year with DR +0.25% 138'072 127'117$174,178 CHF138,072 \n\nSC of next year with IR +0.25% 155'262 142'156$195,863 CHF155,262 \n\nThe expected amount of contributions to be made in 2026 is CHF115,985 or $148,229.\n\nOther provisions\n\nAt December 31, 2023, 2024 and 2025, “Other provisions” include primarily estimated royalty payments assessed on sales of modules to holders of patents which may be deemed as essential under the requirements of the LTE standard. The royalty provision is based on management’s judgment, taking into consideration the published royalty rates, various legal decisions, articles, reports and industry discussions on the subject which were available, and is recorded in the cost of product revenue. The Company’s modules are considered as final products incorporating the full LTE function, and therefore may have royalties assessed on their sale; no royalties are accrued on the sales of chips as the full LTE functionality is not included in the chip and it is not current industry practice to license standard-essential patents at the component level.\n\nAt December 31, 2025, \"Other provisions\" also included a provision of $620,000 related to potential adjustments to government funding following an audit completed in 2025.\n\nF-59\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n21. Trade payables, other current liabilities and current contract liabilities\n\n At December 31,\n\n 202320242025\n\n (in thousands)\n\nTrade payables$16,281 $6,106 $10,081 \n\nOther current liabilities:\n\nEmployees and social debts7,383 8,146 6,260 \n\nProvisions— 763 1,454 \n\nAdvance payments from customers311 141 483 \n\nOthers1,205 2,124 2,887 \n\nTotal other current liabilities$8,899 $11,174 $11,084 \n\nContract liabilities:\n\nLicense and services agreement (See Note 22)5,485 10,712 6,514 \n\nDeferred revenue367 309 710 \n\n$5,852 $11,021 $7,224 \n\nTerms and conditions of the above liabilities:\n\n•Trade payables are non-interest bearing and are generally settled on 30-day terms.\n\n•Other current liabilities, primarily accrued compensation and related social charges, are non-interest bearing.\n\n•Certain upfront payments received from strategic partners are deemed to include a financing component, and as such, bear interest.\n\nTrade payables\n\nTrade payables at December 31, 2023 included two significant non-recurring items:\n\n•In the year ended December 31, 2022, the Company contracted a long-term supplier payable related to the acquisition of certain intangible assets. As of December 31, 2023, $1,587,000 remained and was included in current trade payables.\n\n•In January 2020, the Company entered into an agreement with a technology company based in Israel to transfer a team of engineers to the Company for the purpose of accelerating 5G new product development; $1,430,000 was payable under this agreement and was paid in October 2024. This amount was discounted and as of December 31, 2023, $1,288,000 was included in current trade payables and the Company recorded interest expense associated with this amount each reporting period.\n\nContract liabilities and deferred revenue\n\nIn December 2020, the Company signed a 5G technology access and license agreement with a strategic partner for an amount of $4,500,000. The agreement provided for an upfront payment which was received in January 2021. In the year ended December 31, 2024, the Company recognized the final revenues under the agreement for an amount of $314,000 ($571,000 in 2023). At December 31, 2025 and 2024, no contract liability remained (December 31, 2023: $245,000 as current portion).\n\nIn August 2022, the Company signed a 5G license agreement with another strategic partner for an amount of up to $60,000,000, to be paid over three years, to manufacture and sell the 5G chipset in China as well as the right to create derivative products based on the licensed technology that may be sold in China if a minor derivative and worldwide if a major derivative. In the year ended December 31, 2024, the Company recognized license fee revenues for an amount of $2,500,000 ($18,750,000 in 2023). At December 31, 2023, the net remaining contract liability of $2,500,000 was presented on the Statement of Financial Position as current contract liabilities. On May 31, 2024, the Company and the strategic partner mutually agreed to terminate the agreement. They have acknowledged that all payments owing under the agreement have been paid in full and that no\n\nF-60\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nadditional payments, fees or other compensation are owing or payable by one party to the other party in connection with this termination.\n\nIn October 2023, the Company signed with the first strategic partner an additional amendment related to the purchase of product with advance payment of $3,150,000. In the year ended December 31, 2023, $420,000 product revenues were recognized as a result of product deliveries (no revenues recognized in 2024 or 2025). At December 31, 2025, 2024 and 2023, a $2,730,000 contract liability remained and was presented on the Statement of Financial Position as a current liability. The Company does not expect to settle this amount until the Company's claims against this strategic partner on another matter are resolved.\n\nOn September 30, 2024, the Company licensed to Qualcomm its 5G broadband platform, which was approximately 75% developed and is licensed “as is” with no obligation to make any improvements. The license gives Qualcomm the right to use the IP to design their own products, manufacture and sell. The license amounted to $20,000,000. License revenue is recognized upon delivery of the technology packages to Qualcomm. In the year ended December 31, 2024, the Company recognized license fee revenues for an amount $12,139,000 for the technology packages delivered in by December 31, 2024. At December 31, 2024, the net remaining contract liability of $7,861,000 was presented on the Statement of Financial Position as current contract liabilities and was recognized as revenue in 2025.\n\nAt December 31, 2025, contract liabilities includes $2,571,000 related to a manufacturing supply agreement for products to be delivered in 2026.\n\nThe balance of contract liabilities at December 31, 2024 and 2025 comes from a number of small services contracts with several different customers.\n\nDeferred revenue is primarily related to maintenance services and, at December 31, 2025, to a license fee invoiced but not yet recognized in revenue. At December 31, 2023, 2024 and 2025, deferred revenue totaled $367,000 (recognized in 2024), $309,000 (recognized in 2025) and $710,000 (expected to be recognized during 2026), respectively.\n\n22. Other non-current liabilities\n\n At December 31,\n\n 202320242025\n\n (in thousands)\n\nTrade payables$— $— $376 \n\nACP contingent purchase price payable— — 984 \n\nDeferred tax liabilities264 173 129 \n\nContract liabilities:\n\n  License and services agreement— 809 3,157 \n\n  Total contract liabilities — 809 3,157 \n\nAt December 31, 2025, trade payables included the non-current payable related to acquisition of certain intangible assets.\n\nACP contingent purchase price payable is the estimated earn-out due to former ACP shareholders based on the future financial performance of the acquired entity through December 31, 2026 and payable in 2027.\n\nAt December 31, 2025, the Company recognized a net deferred tax liability of $129,000 ($173,000 and $264,000 at December 31, 2024 and 2023, respectively) related to origination and reversal of timing differences of Sequans Communication Ltd.\n\nOn June 27, 2025, the Company signed a manufacturing services agreement with on customer based in China for a total amount of $3,000,000 which was received in November 2025, with which the Company acquired a production mask set. The Company determined that this agreement includes a financing component related to the upfront payment, which will result in the recognition of interest expense over a portion of the term of the agreement. In the year ended December 31, 2025, the Company recognized revenues for an amount of $43,000 as result of product manufactured delivered in the period and $604,000 as interest expenses on the upfront payment. At December 31, 2025, the net remaining contract liability of $3,561,000 was presented on the Statement of Financial Position as current contract liabilities for $1,104,000 and as non-current liabilities for $2,457,000. The mask set was recorded in prepaid expenses and will be amortized over estimated volume shipments. At December 31, 2025, $2,751,000 remained in prepaid expenses ($538,000 in current and $2,213,000 in non-current).\n\nOn September 30, 2024, The Company signed a license with Qualcomm covering all patents Sequans has ever filed, and any future patents Sequans files through 30 June 2026., for an amount of $960,000.The revenue is recognized over the remaining\n\nF-61\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nlife of each patent as Sequans has the contractual obligation to maintain the patents. In the year ended December 31, 2025, the Company recognized license fee revenues for an amount $232,000 (in 2024: $30,000). At December 31, 2025, the net remaining contract liability of $809,000 (at December 31, 2024: $930,000) was presented on the Statement of Financial Position as current contract liabilities for $108,000 and as non-current liabilities for $701,000.\n\n23. Information about financial instruments\n\nF-62\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n23.1. Financial assets and liabilities\n\n Carrying amountFair value\n\n December 31,December 31,\n\n 202320242025202320242025\n\n (in thousands)\n\nFinancial assets:\n\nTrade and other receivables\n\nTrade receivables and contract assets$8,612 $4,931 $3,376 $8,612 $4,931 $3,376 \n\nDeposits and other receivables\n\nDeposits431 383 434 431 383 434 \n\nOther financial assets\n\nLong-term investments360 353 409 360 353 409 \n\nFinancial instruments at fair value through other comprehensive income\n\nCash flow hedges74 — 16 74 — 16 \n\nCash, cash equivalents and short-term investments5,705 62,093 13,386 5,705 62,093 13,386 \n\nTotal financial assets$15,182 $67,760 $17,621 $15,182 $67,760 $17,621 \n\nTotal current$14,391 $67,024 $16,778 $14,391 $67,024 $16,778 \n\nTotal non-current$791 $736 $843 $791 $736 $843 \n\nFinancial liabilities:\n\nLease liability3,116 1,772 1,826 3,116 1,772 1,826 \n\nInterest-bearing loans and borrowings:\n\nInterest-bearing receivables financing9,544 3,742 — 9,544 3,742 — \n\nConvertible debt52,278 — 56,422 52,111 — 56,422 \n\nUnsecured related party loan8,922 — — 8,922 — — \n\nGovernment loans5,815 2,419 979 5,815 2,419 979 \n\nResearch project financing2,489 8,403 5,679 2,489 8,403 5,679 \n\nConvertible debt embedded derivative3 — 10,800 3 — 10,800 \n\nTrade and other payables (current and non current)16,281 6,106 10,457 16,281 6,106 10,457 \n\nContingent consideration liability— — 984 — — 984 \n\nFinancial instruments at fair value through other comprehensive income\n\nCash flow hedges— 106 — — 106 — \n\nTotal financial liabilities$98,448 $22,548 $87,147 $98,281 $22,548 $87,147 \n\nTotal current$92,484 $16,682 $81,828 $92,317 $16,682 $81,828 \n\nTotal non-current$4,486 $5,866 $5,319 $4,486 $5,866 $5,319 \n\nThe carrying values of current financial instruments (cash and cash equivalents, short-term investments, trade receivables and trade and other payables, and interest-bearing receivables financing) approximate their fair values, due to their short-term nature.\n\nLong-term investments are primarily related to a bank guarantee secured by pledges of investments in money market funds issued in favor of the owners of leased office space to secure annual lease payments by the Company for its office space in Colombes.\n\nGovernment loans received from the financial agency of the French government were recorded as financial instruments in compliance with IAS 20 Accounting for Government Grants and Disclosure of Government Assistance.\n\nF-63\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nThe use of different estimations, methodologies and assumptions could have a material effect on the estimated fair value amounts. The methodologies are as follows:\n\n•Cash, cash equivalents, short-term investments, accounts receivable, accounts payable, other receivable and accrued liabilities: due to the short-term nature of these balances, carrying amounts approximate fair value.\n\n•Long-term investments are composed of debt-based mutual funds with traded market prices. Their fair values amounted to $360,000, $353,000 and $409,000 at December 31, 2023, 2024 and 2025, respectively. The carrying amounts approximate fair value measured based on significant observable input (Level 2).\n\n•Foreign exchange forward and option contracts: the fair values of foreign exchange forward and option contracts were calculated using the market price that the Company would pay or receive to settle the related agreements, by reference to published exchange rates (Level 2).\n\n•At December 31, 2023, fair value of the debt components of convertibles notes was calculated using the effective interest rate of the unsecured related party loan issued in November 2023 and amounted to $52,111,111.\n\n•At December 31, 2025, the carrying amount of the debt component of the convertible note approximates fair value because the note was issued in July 2025 and there is not a material difference in the effective interest rate since issuance.\n\n•As described under Note 17.1, the fair value of the embedded derivative related to the convertible debt is recalculated at the end of each reporting period. The fair value measured is based on significant unobservable input (Level 3).\n\n•Interest-bearing receivable financing, government loans and research project financing: carrying amounts approximate fair value.\n\nFair Value Hierarchy\n\nThe Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:\n\n•Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.\n\n•Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.\n\n•Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.\n\nAs at December 31, 2023, the Company held the following financial instruments carried at fair value on the statement of financial position:\n\nAssets measured at fair value\n\nAt December 31,\n\n 2023Level 1Level 2Level 3\n\n (in thousands)\n\nLong-term investments$360 — $360 — \n\nFinancial instruments at fair value through other comprehensive income:\n\nCash flow hedge74 74 \n\nLiabilities measured at fair value\n\nAt December 31,\n\n 2023Level 1Level 2Level 3\n\n (in thousands)\n\nConvertible debt embedded derivative$3 — $3 — \n\nAs at December 31, 2024, the Company held the following financial instruments carried at fair value on the statement of financial position:\n\nF-64\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nAssets measured at fair value\n\nAt December 31,\n\n 2024Level 1Level 2Level 3\n\n (in thousands)\n\nLong-term investments$353 — $353 — \n\nLiabilities measured at fair value\n\nAt December 31,\n\n 2024Level 1Level 2Level 3\n\n (in thousands)\n\nCash flow hedge106 — 106 — \n\nAs of December 31, 2025, the Company held the following financial instruments carried at fair value on the statement of financial position:\n\nAssets measured at fair value\n\nAt December 31,\n\n 2025Level 1Level 2Level 3\n\n (in thousands)\n\nLong-term investments409 — 409 — \n\nFinancial instruments at fair value through other comprehensive income:\n\nCash flow hedge16 — 16 — \n\nLiabilities measured at fair value\n\nAt December 31,\n\n 2025Level 1Level 2Level 3\n\n (in thousands)\n\nConvertible debt embedded derivative10,800 — 10,800 \n\nThe fair value of the convertible debt embedded derivative is estimated using a model that relies heavily on the expected volatility of the underlying asset. Changes in volatility can significantly impact the fair value measurement.\n\nManagement conducted a sensitivity analysis showing that a 5% increase in the volatility rate used would increase the derivative’s fair value by about $500,000 (or 4.6%) and a 5% decrease in the volatility rate would decrease the derivative's fair value by about $800,000 (or 7.4%) assuming all other factors remain unchanged. The asymmetric impact of the changes reflects the deep out-of-the-money of the conversion option at December 31, 2025.  The volatility rate used of 140.6% is based on historical and implied data and is reviewed regularly to reflect market conditions.  \n\nBecause future volatility is uncertain, the fair value of the embedded derivative may vary considerably over time. Management monitors market trends and updates assumptions as needed.\n\n23.2. Financial instruments at fair value\n\nThe Company uses financial instruments, including derivatives such as foreign currency forward to reduce the foreign exchange risk on cash flows from firm and highly probable commitments denominated in euros.\n\nThe following tables present fair values of foreign currency derivative financial instruments at December 31, 2025, 2024 and 2023.\n\nF-65\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n At December 31, 2023\n\n Notional AmountFair value\n\n (in thousands)\n\nForward contracts (buy euros, sell U.S dollars)€2,000 $74 \n\nOptions (buy euros, sell U.S. dollars)— — \n\nTotal€2,000 $74 \n\n At December 31, 2024\n\n Notional AmountFair value\n\n (in thousands)\n\nForward contracts (buy euros, sell U.S. dollars)€3,000 $(106)\n\nOptions (buy euros, sell U.S. dollars)— — \n\nTotal€3,000 $(106)\n\nAt December 31, 2025\n\nNotional AmountFair value\n\n(in thousands)\n\nForward contracts (buy euros, sell U.S. dollars)€3,000 $16 \n\nOptions (buy euros, sell U.S. dollars)— — \n\nTotal€3,000 $16 \n\nThe fair value of foreign currency related derivatives is included in the Consolidated Statement of Financial Position in \"Other receivables\" at December 31, 2025 and 2023 and in 'Other current liabilities\" at December 31, 2024. The earnings impact of cash flow hedges relating to forecasted operating expense transactions is reported in operating expense. Realized and unrealized gains and losses on these instruments deemed effective for hedge accounting are deferred in accumulated other comprehensive income until the underlying transaction is recognized in earnings or the instruments are designated as hedges.\n\nDuring the year ended December 31, 2025, the Company recorded a gain of $113,000 (losses of $183,000 and $76,000 for the years ended December 31, 2024 and 2023, respectively) in other comprehensive income (loss) related to the effective portion of the change in fair value of its cash flow hedges. During the years ended December 31, 2024 and 2023, the amount reclassified from other comprehensive income to Consolidated Statement of Operations was gains of $44,000 and $139,000, respectively and a loss of $102,000 during the year ended December 31, 2025.\n\nThere was no ineffective portion of hedging instruments in the years ended December 31, 2023, 2024 and 2025.\n\nThe derivatives have maturity dates of less than 12 months. Management believes counterparty risk on financial instruments is minimal since the Company deals with major banks and financial institutions.\n\nAt December 31, 2025, the Company holds $628,000 in currencies other than the U.S. dollar compared with $904,000 at December 31, 2024 and $455,000 at December 31, 2023 (See Note 14). The amount received from research tax credit in 2023 and 2024 is denominated in euros. At December 31, 2025, the Company has loans denominated in euros for a principal amount of $3,004,000 ($4,292,000 and $12,957,000 at December 31, 2024 and 2023, respectively).\n\n23.3. Financial risk management objectives and policies\n\nThe Company’s principal financial liabilities comprise trade payables (current and non-current), lease liabilities, government loans, convertible debt, and in 2023 and 2024, interest-bearing receivables financing and unsecured related party loan. The Company has various financial assets such as trade receivables, deposits and cash and cash equivalents, which arise directly from its operations, as well as from capital increases.\n\nThe main risks arising from the Company’s financial instruments are foreign currency risk, credit risk, interest rate risk and cash flow liquidity risk. The Board of Directors reviews and agrees policies for managing each of these risks which are summarized below.\n\nF-66\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nForeign currency risk\n\nThe Company faces the following foreign currency exposures:\n\n•Operating activities, when revenues or expenses are denominated in different currencies from the functional currency of the entity carrying out these transactions.\n\n•Government loans are denominated in euros, and lease liabilities are denominated in different currencies while the functional currency of the entity carrying out these transactions is the U.S. dollar.\n\n•Non-derivative monetary financial instruments that are denominated and settled in a currency different from the functional currency of the entity which holds them.\n\nNearly 100% of total revenues and 93% of total cost of sales are denominated in U.S. dollars. However, as a result of significant headcount and related costs from operations in France, which are denominated and settled in euros (the “structural costs”), the Company has transactional currency exposures which can be affected significantly by movements in the US dollar/euro exchange rates. 41% of operating expense is denominated in euros. (See Note 23.2 regarding hedging arrangements). If there were a 10% increase or decrease in exchange rate of the U.S. dollar to the euro, as measured using the Company's 2025 weighted average exchange rate of one euro = $1.1190, the Company estimates the impact, in absolute terms, on operating expenses and on financial liabilities for the year ended December 31, 2025 would have been approximately $2.5 million.\n\nCredit risk\n\nIt is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures and as such are considered to have low credit risk at initial recognition. Receivable balances are monitored on an ongoing basis. There is a rebuttable presumption in IFRS 9 that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due. The Company considers that credit risk has not increased significantly on its outstanding not impaired trade receivables since initial recognition. The Company considers events of default based on the specific facts and circumstances relevant to the outstanding amount. In 2023 and 2024, the Company subscribed to a credit insurance policy which provided assistance in determining credit limits and collection, in addition to some coverage of uncollectible amounts; given that most customers are now larger and better known than in the past, the Company has ceased subscribing to credit insurance in 2025.\n\nThe following table summarizes customers representing a significant portion of the Company’s total revenue:\n\nCustomerCustomer Location% of total revenues for the year ended December 31,Trade receivables at December 31,\n\n  202520242023202520242023\n\nAAmerica33 %53 %— %— 345,093 — \n\nBChina13 %15 %Less than 10%909,340 1,351,560 1,345,910 \n\nCChinaLess than 10%12 %56 %— — 3,411,000 \n\nDJapan— %Less than 10%16 %— — 18,000 \n\nWith respect to credit risk arising from the other financial assets, which comprise cash and cash equivalents, the Company’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. Nearly all cash and cash equivalents are held in France at three large and international banks. At a point in time, significant amounts of cash may be held briefly at the Company's digital assets custodial. Typically such cash balances are transferred to one of the Company's French banks with days. At December 31, 2025, $6.8 million was held at the digital assets custodian; such funds were transferred to the French bank in early January.\n\nVendor concentration risk\n\nAccess to foundry capacity is critical to the Company’s operations as a fabless semiconductor company. The Company currently depends on a sole independent foundry in Taiwan to manufacture its semiconductor wafers. The Company works with three vendors for manufacturing and testing chipsets and three vendors for assembling modules, but typically works with one dedicated vendor per product.\n\nF-67\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nLiquidity risk\n\nThe Company monitors its risk of a shortage of funds using a cash flow planning tool. This tool considers the maturity of both its financial investments and financial assets (e.g. accounts receivables, other financial assets) and projected cash flows from operations.\n\nThe following table includes our contractual obligations, including interest, for existing financial liabilities as of the following dates:\n\nWithin 1\nyear1 to 2\nyears2 to 3\nyears3 to 4\nyears4 to 5\nyearsMore\nthan 5\nyearsTotal\n\n (in thousands)\n\nAt December 31, 2023\n\nResearch project financing$2,057 $113 $165 $207 $— $— $2,542 \n\nInterest-bearing receivables financing9,544 — — — — — 9,544 \n\nGovernment loans1,791 1,414 695 — — — 3,900 \n\nConvertible debt (1)\n52,278 — — — — — 52,278 \n\nUnsecured related party loan8,922 — — — — — 8,922 \n\nLease liabilities1,471 1,102 387 61 70 25 3,116 \n\nTrade payables16,281 — — — — — 16,281 \n\nOther current liabilities8,595 — — — — — 8,595 \n\n$100,939 $2,629 $1,247 $268 $70 $25 $105,178 \n\nAt December 31, 2024\n\nResearch project financing$3,938 $4,026 $77 $307 $55 $— $8,403 \n\nInterest-bearing receivables financing3,742 — — — — — 3,742 \n\nGovernment loans1,303 1,116 — — — — 2,419 \n\nConvertible debt — — — — — — — \n\nUnsecured related party loan— — — — — — — \n\nLease liabilities1,439 333 — — — — 1,772 \n\nTrade payables6,106 — — — — — 6,106 \n\nOther current liabilities10,438 — — — — — 10,438 \n\nIncome tax liabilities2,827 — — — — — 2,827 \n\n$29,793 $5,475 $77 $307 $55 $— $32,880 \n\nAt December 31, 2025\n\nResearch project financing$2,945 $1,617 $493 $480 $144 $— $5,679 \n\nGovernment loans979 — — — — — 979 \n\nConvertible debt56,422 — — — — — 56,422 \n\nLease liabilities601 (79)(110)205 540 669 1,826 \n\nTrade payables10,081 376 — — — — 10,457 \n\nACP contingent purchase price payable— 984 — — — — 984 \n\nOther current liabilities12,202 — — — — — 12,202 \n\nIncome tax liabilities3,124 — — — — — 3,124 \n\n$86,354 $2,898 $383 $685 $684 $669 $91,673 \n\n(1) Based on the existing contractual terms as of December 31, 2022 and assuming the Company's options to extend maturity dates are exercised.\n\nThe Company’s liquidity risk for the next 12 months is described in note 2.1. The term of agreements with strategic partners which gave rise the contract liability recorded in the amount of $3,943,000, $10,712,000 and $5,486,000 as of December 31, 2025, 2024 and 2023, respectively, are described under note 21.\n\nF-68\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nCapital management\n\nThe primary objective of the Company’s capital management is to continue to execute according to its business plans and budgets in order to achieve profitability and positive cash flow, and to maximize shareholder value.\n\n23.4. Changes in liabilities arising from financing activities, including government grants\n\n(in thousands)January 1, 2023Cash flowsForeign exchange movementAccrued interest\nNon-cash impact of amendment and conversion\nOther(1)\nDecember 31, 2023\n\nGovernment grant advances and loans$10,394 (466)182 225 — (2,473)$7,862 \n\nConvertible debt$43,455 9,152 (247)(82)$52,278 \n\nUnsecured related party loan— 9,000 — 127 — (205)8,922 \n\nLease liabilities$3,569 (1,321)113 479 — 276 $3,116 \n\nInterest-bearing financing of receivables$7,723 1,483 179 234 — (75)$9,544 \n\nTotal$65,141 8,696 474 10,217 (247)(2,559)$81,722 \n\n(in thousands)January 1, 2024Cash flows\nForeign exchange movementAccrued interestNon-cash impact of amendment and conversion\nOther(1)\n\nDecember 31, 2024\n\nGovernment grant advances and loans$7,862 5,267 (244)9 (745)$12,149 \n\nConvertible debt$52,278 (54,935)16,277 (13,620)$— \n\nUnsecured related party loan8,922 (9,000)— 502 (424)— \n\nLease liabilities$3,116 (1,508)(28)322 (130)$1,772 \n\nInterest-bearing financing of receivables$9,544 3,329 (38)106 (9,199)$3,742 \n\nTotal$81,722 (56,847)(310)17,216 — (24,118)$17,663 \n\n(in thousands)January 1, 2025Cash flowsForeign exchange movementAccrued interestNon-cash impact of debt extinguishment\nOther(1)\nDecember 31, 2025\n\nGovernment grant advances and loans$12,149 (678)1,614 (27)(4,474)$8,584 \n\nConvertible debt$— 73,752 11,174 46,794 (75,298)$56,422 \n\nLease liabilities$1,772 (1,591)(38)229 1,454 $1,826 \n\nInterest-bearing financing of receivables$3,742 (3,742)$— \n\nTotal$17,663 67,741 1,576 11,376 46,794 (78,318)$66,832 \n\n(1) In 2023, 2024 and 2025, Other includes additions in lease liabilities, which are non-cash. In 2024, Other includes the netting of the interest-bearing financing debt with the Research tax credit receivable, the fair value of the embedded option of the convertible debts repaid during the year. In 2025, Other includes the fair value of the embedded option of the convertible debt and the 2025 warrants .\n\nF-69\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\n24. Commitments and contingencies\n\nContingencies\n\nFrom time to time, the Company has been and may become involved in legal proceedings arising in the ordinary course of its business.\n\nIn 2022, the Company was sued in three lawsuits in the United States District Court for the district of Minnesota by a company called Bell Semiconductor, LLC (“Bell”), accusing the Company of infringing certain U.S. Patents by the Company's use of certain design tools. In Bell Semiconductor, LLC v. Sequans Communications, SA et al, Case No. 0-22-cv-02106 (DMN), filed August 26, 2022, Bell accused the Company of infringing U.S. Patent Nos. 7,149,989 and 7, 260,803. In Bell Semiconductor, LLC v. Sequans Communications, SA et al, Case No. 0-22-cv-02344 (DMN), filed September 23, 2022, Bell accused the Company of infringing U.S. Patent Nos. 6,436,807 and 7,007,259. In Bell Semiconductor, LLC v. Sequans Communications, SA et al, Case No. 0-22-cv-02660 (DMN), filed October 21, 2022, Bell accused the Company of infringing U.S. Patent Nos. 7,231,626 and 7,396,760. The Company filed motions to dismiss in each case. In August 2023, Bell entered into a settlement agreement with supplier of the design tools that Bell asserts infringe the Patents and the three lawsuits against the Company were dismissed. The supplier of the design tools indemnified the Company for all the costs to defend and/or settle the lawsuits. The lawsuits were dismissed in August 2023.\n\nManagement is not aware of any other legal proceedings that, if concluded unfavorably, would have a significant impact on the Company's financial position, operations or cash flows.\n\nBank guarantee\n\nA bank guarantee was issued in favor of the owners of leased office space in France, in order to secure six months of lease payments, for an amount of $370,000 as of December 31, 2025 ($327,000 and $348,000 as of December 31, 2024 and 2023, respectively). This guarantee was secured by the pledge of certificates of deposit and mutual funds for 100% of the amount of the guarantee. The total value of investments secured to cover this bank guarantee was $409,000 at December 31, 2025 ($353,000 and $360,000 at December 31, 2024 and 2023).\n\nPurchase commitments\n\nAs of December 31, 2025, the Company had $7.8 million of non-cancelable purchase commitments with its third-party manufacturer and suppliers for future deliveries of equipment, components and fixed assets, principally during 2026.\n\n25. Related party disclosures\n\nThere is no single investor who has the ability to control the Board of Directors or the vote on shareholder resolutions.\n\nAs of December 31, 2023 and 2024, B. Riley Asset Management LLC and Lynrock Lake owned 10% or more of the share capital of the Company. On April 12, 2023, 272 Capital Fund LP, an entity managed by B. Riley Asset Management LLC (“BRAM”) and affiliated with Wes Cummins, a director of the Company and the President of BRAM (which relationship terminated at the end of 2024), purchased 1,310,221 ADSs in the offering. Lynrock Lake also purchased 3,930,663 ADSs. On September 26, 2023, 272 Capital Fund LP purchased 2,120,141 ADSs.\n\nIn August 2019, the Company completed the sale of a $5.0 million convertible note, to an affiliate of Nokomis Capital, L.L.C., a beneficial owner of 9.9% of the share capital of the Company at that time. Wesley Cummins, a former (as of February 2020) representative of Nokomis Capital, L.L.C., became a board observer in November 2017, and on June 29, 2018, the shareholders approved Mr. Cummins' nomination to the board of directors. Since February 2020, Nokomis no longer has representation on the board of directors and as of December 31, 2022 has declared itself to be no longer an owner of any shares of the Company.\n\nEffective March 20, 2020, the convertible notes issued in August 2019 were amended to grant the Company two options to extend the term of the note (See Note 17.1.).\n\nIn August 2022, the Company elected to exercise the option to extend the maturity of the August 2019 note to August 2023, and in August 2023, the Company exercised the option to further extend the maturity to April 2024.\n\nOn April 9, 2021, the Company completed the sale of a $40.0 million convertible note with Lynrock Lake Master Fund LP. As of December 31, 2023, the principal amount and accrued interest of the convertible note amounts to $45.4 million. The note was fully repaid in October 2024.\n\nF-70\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nAt the annual shareholders meeting on June 24, 2022, the shareholders approved the nomination of Dr. Sailesh Chittipeddi, Executive Vice President and Head of IoT and Infrastructure business unit of Renesas Electronics Corporation (\"Renesas\") to the Board of Directors. As of December 31, 2024, Renesas owned 3.14% of the share capital of the Company (3.20% and 4.08% as of December 31, 2023 and 2022, respectively). On November 8, 2023, in connection with contemplated acquisition of the Company by Renesas that was in process at the time (subsequently terminated in February 2024), the Company entered into a Security Purchase Agreement with Renesas Electronics America (\"Renesas America\") whereby Renesas America agreed to the issuance of an unsecured subordinated note in an aggregate principal amount of $6.0 million. On December 27, 2023 and on February 12, 2024, Renesas America agreed to issue two new unsecured subordinated notes for a total amount of $12.0 million. In October 2024, the Company repaid the loans with accrued paid-in-kind interest for an amount of $19.3 million.\n\nOn August 4, 2023, the Company entered into a Memorandum of Understanding with Renesas providing that Renesas and the Company engaged in a series of transactions pursuant to which Renesas would seek to acquire (through an affiliate) all of the issued and outstanding ordinary shares of the Company. On February 22, 2024, Renesas notified the Company that Renesas was terminating the Memorandum of Understanding due its receipt of an adverse Japanese tax ruling on February 15, 2024 from the National Tax Agency of Japan. Obtaining a favorable Japanese tax ruling had been one of the closing conditions for the transaction.\n\nOn March 19, 2024, Dr. Sailesh Chittipeddi resigned from the Company's Board of Directors.\n\nAs of December 31, 2025, Mr. Daniel Asher is the beneficial owner of over 10% of the Company's capital via his voting and dispositive control over DBA Trading, LLC and AFO Blackberry, LLC, the managing member of AFOB FIP MS, LLC (\"AFOB\"). DBA Trading, LLC holds 138,781,100 ordinary shares represented by 1,387,811 ADSs. AFOB holds 51,344,400 ordinary shares represented by 513,444 ADSs.\n\nIn July 2025, AFOB participated in the private placement of equity and convertible debt issued by the Company. AFOB purchased 714,285 ADS at the current ratio, representing 71,428,500 ordinary shares, for $10 million. At the time, this represented 4.6% of the outstanding capital of the Company. AFOB also purchased $10.0 million of the convertible debt, with a conversion price of $21.00 per ADS at the current ratio. In October 2025, half of the outstanding amount of the debt was redeemed, followed by further redemptions in February, March and April 2026. As of April 23, 2026, $2.3 million of the debt remains outstanding.\n\nIn connection with the investments in equity and convertible debt, AFOB received 2025 warrants to purchase an additional 214,285 ADS at the current ratio, representing 21,428,500 ordinary shares, for $14.00 per ADS at the current ratio. All the 2025 warrants expired unexercised on December 31, 2025.\n\nNo other transactions have been entered into with these or any other related parties in 2023, 2024 and 2025, other than normal compensation (including share based payment arrangements) for and reimbursement of expenses incurred in their roles as Directors or employees of the Company.\n\nCompensation of key management personnel\n\n Year ended December 31,\n\n 202320242025\n\n (in thousands)\n\nFixed and variable wages, social charges and benefits expensed in the year$2,689 $5,105 $6,084 \n\nShare-based payment expense for the year4,144 2,763 2,161 \n\nBoard members fees to non-executive members199 214 177 \n\nTotal compensation expense for key management personnel$7,032 $8,082 $8,422 \n\nKey management personnel comprises the chief executive officer and all executive vice presidents reporting directly to him.\n\nThe employment agreement with the chief executive officer calls for the payment of a termination indemnity of an amount equal to eighteen months of his gross annual base remuneration and 150% of bonus in the event of his dismissal without cause by the Board of Directors of the Company, as well as vesting of the ordinary shares that would have been vested during the twelve months following the end of his term. In the event of a change of control, he would be entitled to all the unvested share awards at the date of the change of control.\n\nOn July 25, 2023, the board of directors approved a special transaction bonus to Dr. Karam in the amount of €1,000,000 conditional upon the closing the proposed acquisition of the Company by Renesas. The transaction bonus was never paid due to\n\nF-71\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nthe termination of the proposed transaction by Renesas in February 2024. In addition, on August 15, 2023, the board of directors approved the payment by the Company of legal fees incurred by Dr. Karam in the connection with the negotiation with Renesas of the conditions of his retention as Chief Executive Officer of the Company upon change of control. A total amount of $50,401 in such legal fees were paid during 2023. In October 2024, the board of directors approved a special transaction bonus to Dr. Karam in the amount of €2,000,000 conditional upon closing of the strategic transaction with Qualcomm described in Note 4.\n\nFor the year ended December 31, 2025, the Company estimates that approximately $12,000 of the amounts set aside or accrued to provide pension, retirement or similar benefits to our employees was attributable to our executive officers.\n\nDirectors’ interests in an employee share incentive plan\n\nThe Company granted warrants to certain members of the Board of Directors during the years ended December 31, 2023, 2024 and 2025:\n\n- On June 27, 2023, the shareholders authorized the Board of Directors to grant to Mrs Marced Martin and each of Messrs. de Pesquidoux, Maitre, Nottenburg, Pitteloud, Slonimsky and Cummins warrants to purchase 180,000 ordinary shares. On June 27, 2023, the Board used this authorization to make such grants with an exercise price of $0.54 per ordinary share.\n\n- On June 28, 2024, the shareholders authorized the Board of Directors to grant to Mrs Marced Martin and each of Messrs. de Pesquidoux, Maitre, Nottenburg, Pitteloud, Slonimsky and Cummins warrants to purchase 360,000 ordinary shares. On July 1, 2024, the Board used this authorization to make such grants with an exercise price of $0.13 per ordinary share.\n\n- On June 30, 2025, the shareholders authorized the Board of Directors to grant to Mrs Marced Martin and each of Messrs. Cohenour, Cummins, de Pesquidoux, Maitre, Nottenburg, and Slonimsky warrants to purchase 360,000 ordinary shares. On June 30, 2025, the Board used this authorization to make such grants with an exercise price of $0.15 per ordinary share.\n\nThe board members were required to subscribe to the warrants at a price of €0.00001 per warrant for the warrants granted in 2023, 2024 and 2025.\n\nShare-based payment expense incurred in connection with these transactions amounted to $135,000 in the year ended December 31, 2025 (2024: $238,000; 2023: $292,000).\n\n26. Events after the reporting date\n\nNew York Stock Exchange compliance\n\nOn January 14, 2026, the New York Stock Exchange (the “NYSE”) notified us that we had regained compliance with all continued listing standards. On June 5, 2025, the NYSE notified us that we had become noncompliant with the minimum market capitalization requirements of the NYSE Listed Company Manual because we had an average global market capitalization over a consecutive 30 trading-day period below $50,000,000 and, at the same time, stockholders’ equity was less than $50,000,000.\n\nAmendment to Convertible Debt and Sale of Bitcoin\n\nOn February 10, 2026, the Company entered into a second amendment of the Secured Convertible Debenture Purchase Agreement for the Company’s convertible debt issued on July 7, 2025 (the “Debentures”). Pursuant to the Amendment, the Company will redeem in full the remaining $94.5 million aggregate principal amount of outstanding Debentures at a cash price equal to one hundred percent of the principal amount being redeemed, plus any accrued and unpaid interest. Subject to certain restrictions set forth in the Debentures, the redemption will be funded by the sale of Bitcoin held in a securities account to secure the Debentures (the “Bitcoin Collateral Account”) in increments such that, on or before June 1, 2026, either the Debentures will be fully redeemed or all 1,617 Bitcoin in the Bitcoin Collateral Account will have been sold to fund the redemption of the applicable portion of the principal amount of outstanding Debentures. To the extent that any principal amount or any accrued and unpaid interest thereon remains outstanding (the “Outstanding Amount”) following the release of all 1,617 Bitcoin from the Bitcoin Collateral Account, such Outstanding Amount shall not be subject to repurchase by the Company at the option of any holder of the Debentures until January 7, 2027 at the earliest, except as otherwise set forth in the Debentures.\n\nF-72\n\nSequans Communications S.A.\n\nNotes to the Consolidated Financial Statements—(Continued)\n\nAs of April 23, 2026, the Company had released from collateral and sold 700 Bitcoin for a total of $50.8 million, all of which proceeds were used to fund the redemption of outstanding convertible debt. As of April 23, 2026, $43.7 million of convertible debt remains outstanding.\n\nAs of April 23, 2026, the Company holds 1,114 Bitcoin, of which 917 are held as security for the remaining outstanding convertible debt and 197 are held without any restriction. The total Bitcoin held are valued at $86.7 million as of April 23, 2026 based on the quoted value on Coinbase, timestamp 23.59.59 Paris. The Company continues to monitor market conditions and may adjust its digital assets holdings as part of its ongoing treasury management strategy.\n\nOn April 25, 2026, the conversion price of the convertible debt was reset from $21.00 per ADS to $14.00 per ADS in accordance with the terms of the debenture agreement.\n\nGrant of restricted shares\n\nAt the meeting of April 28, 2026, the Board of Directors granted to two officers 8,420,000 restricted share awards, representing 84,200 ADS with vesting over three years.\n\nF-73"}