SQNS FY17 Form 20-F Selected excerpts from edgar/data
(ED: esp note Trade Receivables $20,926 so no BK this FY18)
sec.gov
Risks Related to Our Business and Industry
We have a history of losses and have experienced a significant decline in revenue from 2011, and we may not achieve or sustain profitability in the future, on a quarterly or annual basis.
We were established in 2003 and began operations in 2004, and have incurred losses on an annual basis since inception. We experienced net losses of $27.4 million, $24.8 million and $26.2 million in 2015, 2016 and 2017, respectively. At December 31, 2017, our accumulated deficit was $235.7 million...
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Competition...
Many of our competitors have longer operating histories, significantly greater resources and name recognition, and a larger base of existing customers than us. In addition, some of them may provide incentives to customers or offer bundled solutions with complementary products, which could be attractive to some customers, or adopt more aggressive pricing policies to offset what we believe are the performance and cost advantages of our solutions...
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Customers
We maintain relationships with 4G wireless carriers and with OEMs and ODMs who supply devices to those carriers and their end users. We do not typically sell directly to wireless carriers, except from time to time in the context of selling services to enable new technologies or markets being developed by the carrier. Our sales are conducted on a purchase order basis with OEMs, ODMs, contract manufacturers or system integrators, or to a lesser extent with distributors who provide certain customer communications, logistics and customer support functions.
Our top ten customers accounted for 92%, 86% and 78% of our total revenue in 2015, 2016 and 2017, respectively. Comtech, a distributor serving multiple end customers in China and Taiwan, accounted for 29% of our revenue in 2016 and 17% in 2017. ATM Electronic, a distributor serving multiple end customers in China and Taiwan, accounted for 16% of our revenue in 2017 and less than 10% in each of 2015 and 2016. Gemtek accounted for 14% in 2015, 15% in 2016 and less than 10% in 2017. Wistron accounted for 27% of our revenue in 2015 and less than 10% in 2016 and 2017. Asian Information Technology Inc., a distributor, accounted for 16% in 2015, but less than 10% in 2016 and 2017. The following is a list of our top ten customers, in alphabetical order, based on total revenue during 2017:
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We shipped 3.3 million semiconductor units during 2017, compared to 2.6 million units during 2016 and 1.8 million units during 2015. Our total revenue was $48.3 million in 2017, $45.6 million in 2016 and $32.5 million in 2015
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Research and Development Incentives
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In November 2014, December 2016 and September 2017, we received $3.9 million, $0.6 million and $1.1 million, respectively, in advances on grants and debt financing related to a large research project funded by the French government, called FELIN. The total value of the project funding for the Company is €7.0 million ($9.0 million) to be received over three years. Of the €7.0 million, €3.0 million is in the form of a grant and €4.0 million is in the form of interest-bearing debt to be repaid beginning in 2018 and through 2020...
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In 2016 and 2017, we recorded a provision for slow-moving LTE inventory totaling $0.1 million and $0.2 million, respectively. In 2017, all the WiMAX inventory, fully depreciated in previous years, was physically scrapped, resulting in a provision reversal of $2.8 million.
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In the year ended December 31, 2017, all the WiMAX inventory, fully depreciated in previous years, was physically scrapped, resulting in a provision reversal of $2,755,000. The Company also depreciated the value of inventory for one LTE product for which units on hand were in excess of the units needed to serve the expected demand for identified customers and projects. This resulted in a provision of $199,000. The Company further depreciated $265,000 in 2017 related to goods damaged during production over the course of the year, and is expected to be recovered from a manufacturing supplier and has been recorded in the Consolidated Statement of Financial Position as Prepaid Expenses and Other Receivables
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10. Trade receivables
Trade receivables are non-interest bearing and are generally on 30-90 day payment terms.
At December 31, 2015 2016 2017(in thousands)
Net trade receivables $16,497 $15,285 $20,926
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In 2014, the Company canceled a final shipment of components ordered from a supplier and was invoiced a contractual penalty of $507,000. The Company had recorded the full amount as a provision, which was recorded in G&A expense. In the year ended December 31, 2015, the supplier and the Company came to an agreement to reduce this penalty to $402,000 and the amount was paid during 2015
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Lead plaintiffs filed their Consolidated Amended Complaint (the “CAC”) on April 9, 2018, which did not significantly alter the allegations made in the earlier pleadings. Pursuant to a prior stipulation and order, the Company, Mr. Karam and Ms. Choate have until May 24, 2018 to answer, move or otherwise respond to the CAC. |
