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Sequans Announces $50 Million Financing to Strengthen Balance Sheet

Use of proceeds to include repayment of convertible debt due April 14, 2021, if not converted; repayment of euro-based venture debt, and general corporate purposes

Sequans Communications S.A. (NYSE: SQNS), leading developer and provider of 5G and 4G solutions for broadband, critical, and massive IoT, announced today the signing of a $50 million private financing with Lynrock Lake Master Fund LP, a fund managed by Lynrock Lake LP (“Lynrock Lake”), an investment management firm with approximately $1.2 billion of assets under management. The financing consists of $10 million of American Depository Shares (ADS) and $40 million principal amount of convertible debt. The financing is scheduled to close April 9, 2021.

“A stronger balance sheet improves Sequans' standing as we accelerate our Massive IoT business and engage with potential strategic partners interested in our 5G technology. Increased cash on our balance sheet also provides the Company with additional working capital to manage the ongoing component and supply chain dynamics,” said Georges Karam, Sequans CEO. “We are delighted to secure this financing with Lynrock Lake, an existing shareholder of Sequans. Lynrock Lake’s long-term, value-oriented investment strategy and experience in the semiconductor industry aligns with our goals to maximize opportunities in 5G/4G Massive IoT and Broadband IoT and to improve long-term shareholder value."

“Sequans is pursuing an aggressive 5G product roadmap for Broadband and Critical IoT, partially funded by strategic partners and investment from the French government,” said Cynthia Paul, Chief Investment Officer of Lynrock Lake. “We are excited to partner with Sequans to strengthen their capital structure and improve their strategic positioning as they engage with new and existing partners and suppliers.”

The $50 million financing includes the sale of $10 million of ADS priced at $5.50 per ADS and $40 million of convertible debt that converts into the Company’s ADS at a conversion price of $7.66. The convertible debt matures in three years and pays interest annually at an interest rate of 5.0625% for cash payments or 6% for Payment in Kind (PIK) accruals.

Sequans retains an option to call the convertible debt under certain circumstances after 12 months, either in full or in part, subject to a 9.9% ownership limit for Lynrock Lake. Lynrock Lake has not requested a board seat.

The primary use of proceeds will be the repayment of $11.7 million in convertible debt and accrued interest due April 14, 2021, if not converted, and early repayment of €6 million ($7 million) in euro-based debt. The remaining proceeds will be used for general corporate purposes.

Forward Looking Statements

This press release contains forward-looking statements regarding the expecting timing of the closing of the Transaction and use of proceeds. All statements other than present and historical facts and conditions contained in this release, including any statements regarding business strategy and plans, expectations for Massive IoT sales, and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We undertake no obligation to update the information made in this release in the event facts or circumstances subsequently change after the date of this press release. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not rely on or place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements. In addition to the risk factors contained in our Form 20-F for the fiscal year ended December 31, 2020, some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: (i) the contraction or lack of growth of markets in which we compete and in which our products are sold, (ii) unexpected increases in our expenses, including manufacturing expenses, (iii) our inability to adjust spending quickly enough to offset any unexpected revenue shortfall, (iv) delays or cancellations in spending by our customers, (v) unexpected average selling price reductions, (vi) the significant fluctuation to which our quarterly revenue and operating results are subject due to cyclicality in the wireless communications industry and transitions to new process technologies, (vii) our inability to anticipate the future market demands and future needs of our customers, (viii) our inability to achieve new design wins or for design wins to result in shipments of our products at levels and in the timeframes we currently expect, (ix) our inability to enter into and execute on strategic alliances, (x) our ability to meet performance milestones under strategic license agreements, (xi) the impact of natural disasters on our sourcing operations and supply chain, (xii) our ability to remediate material weaknesses in our internal controls relating to controls over the accounting and presentation of complex, non-routine and certain other transactions, including certain revenue arrangements, (xiii) the impact of the coronavirus on the ability to operate our business and research, production of our products or demand for our products by customers whose supply chain is impacted or whose operations have been impacted by government shelter-in-place or similar orders, (xiv) the impact of the coronavirus on capital markets and our ability to raise debt and equity financing, and (xv) other factors detailed in documents we file from time to time with the Securities and Exchange Commission.

About Sequans

Sequans Communications S.A. (NYSE: SQNS) is a leading developer and provider of 5G and 4G chips and modules for massive, broadband, and critical IoT. For 5G/4G massive IoT applications, Sequans provides a comprehensive product portfolio based on its flagship Monarch LTE-M/NB-IoT and Calliope Cat 1 chip platforms, featuring industry-leading low power consumption, a large set of integrated functionalities, and global deployment capability. For 5G/4G broadband and critical IoT applications, Sequans offers a product portfolio based on its Cassiopeia Cat 4/Cat 6 4G and high-end Taurus 5G chip platforms, optimized for low-cost residential, enterprise, and industrial applications. Founded in 2003, Sequans is based in Paris, France with additional offices in the United States, United Kingdom, Finland, Israel, Hong Kong, Singapore, Taiwan, South Korea, and China. Visit Sequans online at .


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