FILING OF ITS PROSPECTUS (“DOCUMENT DE BASE”) WITH THE AMF
Grenoble, May 17, 2018 - Kalray, a pioneer in processors for new intelligent systems, has announced the filing of its prospectus (“Document de Base”) by the French Financial Markets Authority (AMF) under number I.18-042 on May 16, 2018. The registration of the prospectus is the first step toward the initial public offering of Kalray on the Euronext Growth market in Paris, subject to market conditions and the approval (Visa) of the AMF on the prospectus relating to this operation.
The decision to proceed with an IPO is consistent with the company's strategy to acquire the means necessary to implement its development strategy. The IPO will also strengthen Kalray's credibility with its clients, among which major industrial groups, in terms of its ability to supply large volumes of its products to global markets whose growth should be sustained in the future.
THE PIONEER OF INTELLIGENT PROCESSORS
Founded in 2008, as a spin-off of the leading French national lab CEA (“Commissariat à l'Énergie Atomique”, the French Alternative Energies and Atomic Energy Commission) and the outcome of nearly 10 years of R&D and significant investment in the order of €60M, Kalray designs and markets a new generation of “intelligent” processors. “Intelligent” processors, firmly protected by 23 patent families, have the capability to analyze on the fly, and in an intelligent manner, a very large flow of information, and to react and make decisions in real time. These intelligent processors are being extensively deployed in fast-growing sectors such as next-generation computer networks, autonomous vehicles, healthcare equipment, as well as drones and robots.
Based on its “MPPA®” (Massively Parallel Processor Array) architecture, which is unique and patented, and which allows for the miniaturization of a supercomputer on a single chip, the Kalray intelligent processors offer a set of performance criteria that address the challenges raised by the new generation of intelligent systems, namely:
- considerable computing power, equivalent to 2,000 mainstream computers
- very low energy consumption hence energy efficiency and integration into confined embedded systems, such as autonomous vehicles
- data analysis on the fly and in a deterministic manner
- the capacity to process a large number of critical functions simultaneously
- upstream integration of security in the design process thanks to technical partnerships with a number of leaders in the aerospace and defense sectors
- an open and easily programmable system
DISRUPTIVE TECHNOLOGY KEY FOR INTELLIGENT DATA CENTERS AND INTELLIGENT CARS
The company's evolution has unfolded in two stages. The first stage was the development and refining of the technology, which was carried out until 2014. In a second stage, from 2015 onwards, the company has been focusing on two high-potential growing markets, intelligent data centers and intelligent cars, in order to build a competitive offering for each one.
These two high-growth markets (forecast to grow over 50% per year for the next five years) open up business opportunities in the very short term (as early as 2019 for data centers) and in the medium term (starting in 2021/2022 for intelligent vehicles). For the latter, major technological choices will be made by both manufacturers and component suppliers over the next 18 months.
An indicator that these goals are achievable is the fact that the intelligent Kalray processor has already been integrated into the Symbioz® concept car, released by Renault at the end of 2017 and designed to process several critical algorithms related to autonomous driving.
PRODUCTS ENDORSED AND SUPPORTED BY LEADING MANUFACTURERS
Kalray has already made significant headway in these two target markets, each with a potential of over €1b by 2022.
For data centers, the Kalray solution has been certified by an independent industry body in April 2018 and three server manufacturers are currently in the qualification phase of products that will integrate the Kalray solution for a launch in early 2019. The Kalray solution is also being evaluated by other very large storage server and data center manufacturers and global leaders, which may design in Kalray's technology over the next few months for very high-volume production from 2010 onwards.
For the market of intelligent cars, the Kalray processor is currently in the evaluation phase with five major car manufacturers out of the top 10 worldwide. It is also integrated into a project aimed at defining a new electronic architecture for all vehicles of one the top-3 global automobile manufacturers.
This momentum is reflected in the strong financial and strategic backing of industry leaders. The leading venture capital funds who have committed to supporting Kalray (ACE Management, CEA Investissement, EUREKAP! and Inocap Gestion) were joined in 2017 by the Safran investment fund, MBDA (the joint-venture between Airbus, BAE Systems and Leonardo), the Asian investment fund Pengpai and, more recently, the Renault-Nissan-Mitsubishi Alliance Ventures and the Definvest fund managed by Bpifrance on behalf of the French Ministry of the Armed Forces. These endorsements not only firmly validate the Kalray technology; they also vouch for its strategic interest for these key players.
THE STOCK EXCHANGE MARKET WITH A €100M REVENUE TARGET FOR 2022
The company has begun to market its processors so that its customers and prospects may validate the Kalray technology and later design it into their own products. It is now ready to enter a new development phase: the commercial ramp-up, on a large scale, of products fitted with Kalray processors. The company target for 2022 is revenue in excess of €100M.
In particular, Kalray relies on an agile organization and the ability to easily switch to large-scale production thanks to a fabless business model, allowing the outsourcing of its production, namely to world-leader TSMC.
The proposed IPO is consistent with the company's ambition of acquiring the means necessary to implement its development strategy, and to reach a breakeven operating income by 2020. It will also strengthen Kalray's credibility with its potential customers, among which major industrial groups, in terms of to its ability to supply large volumes to global markets whose growth should be sustained in the future.
AVAILABILITY OF THE PROSPECTUS
The Kalray prospectus is available on the Kalray (www.kalray-bourse.com) and AMF (www.amf-france.org) websites, and is also available free of charge, and on request, from the company headquarters, 180, avenue de l'Europe, 38330 Montbonnot-Saint-Martin, France. The company draws the attention of the public to Chapter 4 (“Risk Factors”), especially those related to dependent patents (section 4.5.1) as described in the prospectus registered by the AMF.
Find out more on www.kalray-bourse.com
Kalray is the pioneer of processors for new intelligent systems. A disruptive technology, “intelligent” processors have the capability to analyze on the fly, and in an intelligent manner, a very large flow of information, and to react and make decisions in real time. These intelligent processors are being extensively deployed in fast-growing sectors such as new-generation computer networks, autonomous vehicles, healthcare equipment, as well as drones and robots. The Kalray offering encompasses processors as well as complete solutions (electronic boards and software). Created in 2008, as a spin-off of the CEA, Kalray addresses a broad spectrum of clients, among which server manufacturers, intelligent system integrators and consumer product manufacturers, such as car manufacturers.
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No communication and no information in respect of Kalray's issuance of shares (the « Shares») may be distributed to the public in any jurisdiction where a registration or approval is required. No action has been or will be taken outside of France, in any country in which such action would be required. The offering or subscription of Shares may be subject to specific legal or regulatory restrictions in certain jurisdictions. Kalray takes no responsibility for any violation of any such restrictions by any person.
This press release is not a prospectus in the sense of EC Directive 2003/71 of the European Parliament and of the Council of November 4, 2003, as amended, in particular by Directive 2010/73/UE of the European Parliament and of the Council of November 24, 2010, as amended, as transposed into the law of each member state of the European Economic Area (the "Prospectus Directive").
The offer will be made to the public in France only after the granting of the "visa" by the AMF on the prospectus.
With respect to the member States of the European Economic Area other than France (the “Members states”), which have implemented the Prospectus Directive, no action has been or will be undertaken to make an offer to the public of the Bonds requiring a publication of a prospectus in any relevant member State. The Shares can, therefore, be offered only in Member states: (a) to legal persons deemed qualified investors in the Directive Prospectus; or (b) in other cases that do not require the publication by Kalray of a prospectus pursuant to Article 3(2) of the Prospectus Directive.
For the purpose of the present paragraph, the notion of a "public offer of Shares" is defined, in each of the Member States, as any communication sent to persons, in any form whatsoever and by any means whatsoever, which presents sufficient information on the terms of the offer and the Shares to be offered, that might enable an investor to decide to purchase or subscribe to these Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive.
This selling restriction is in addition to any other selling restriction applicable in those Relevant Member States.
The distribution of this press release is neither performed nor approved by an "authorized person" within the meaning of section 21 of the Financial Services and Markets Act 2000. Consequently, this press release is intended solely for (i) persons outside the United Kingdom (ii) investment professionals in the sense of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, (iii) individuals to whom it may be communicated lawfully under Article 49(2)(a) to (d) companies with significant shareholders' equity, non-registered associations, etc. of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, (iv) any other person to whom this press release may be lawfully addressed (persons cited in paragraphs (i), (ii), (iii) et (iv) and designated as "Eligible Persons"). The securities are available only to the Eligible Persons, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such shares may not be proposed or concluded other than with Eligible Persons. Any person who is not an Eligible Person must not act or rely on this press release or any of its contents. This press release is not a prospectus approved by Financial Services Authority or any other United Kingdom regulatory authority for the purposes of Section 85 of the Financial Services and Markets Act 2000.
This press release is not an offer of transferable securities, neither an invitation to purchase or subscribe securities nor any invitation to sell securities in the United States. The securities mentioned in this press release have not been and will not be registered in the sense of the U.S. Securities Act of 1933, as amended (the "US Securities Act"), and cannot be offered or sold in the United States except pursuant to an effective registration statement under the US Securities Act. Kalray does not intend to register any portion of the shares in the proposed offering in the United States or to conduct a public offering of securities in the United States.
The distribution of this press release in certain jurisdictions may constitute a breach of applicable law. The information in this press release does not constitute an offer of securities for sale in the United States, Canada, Australia or Japan.
This press release should not be published, transmitted or distributed, directly or indirectly, into the United States, Canada, Australia or Japan.
The Shares have not been and will not be qualified for sale to the public under applicable Canadian securities laws and, accordingly, any offer and sale of Shares in Canada will be made on a basis which is exempt from the prospectus and dealer registration requirements of such securities laws. The Shares are subject to transfer and sales restrictions in some countries, including Canada.
 Kalray has begun to market its processors so that its customers and prospects may validate the technology and design their own products.
 Including 2 families with an exclusive global patent granted by the CEA until December 31, 2026, bearing in mind that if the list of licensed components remains compliant, and short of substantial modifications to the business plan, the parties are committed to maintaining the application of the financial conditions as they exist on the date of expiry. When the cumulative amount of royalties paid by the company reaches €1.5M, KALRAY will have an option to purchase all, or part of the specific patents granted, exercisable at any time. The Parties shall meet as early as possible to agree on a cost price that cannot be superior to the amount of royalties that would have been paid out to the CEA had no purchase been carried out in the years following the exercise of the purchase option until the expiry of the current license, for the relevant patents, based on a realistic business plan, and having deducted the maintaining costs in effect which the CEA should have covered for the period in question.
 Experimental car produced in limited numbers to demonstrate a technology, elements of design or usage
 €7.4M of operating revenue in 2017, including €0.8M in board and development platform sales
 Operating income + Tax Research Credit (CIR)
 -€4.7M in 2017