1. NATURE OF OPERATIONS Sierra Wireless, Inc., together with its subsidiaries (collectively, the  company, we, our ) was incorporated under the Canada Business Corporations Act on May 31, 1993. We are a global leader in the development of wireless technologies and solutions. We focus on wireless devices and applications, offering a comprehensive portfolio of products and services that reduce complexity for our customers. With sales, engineering, and research and development teams located in offices around the world, we provide leading edge wireless solutions for the machine-to-machine ( M2M ) and mobile computing markets. We develop and market a range of products that include wireless modems for mobile computers, embedded modules and software for original equipment manufacturers ( OEMs ), intelligent wireless gateway solutions for industrial, commercial and public safety applications, and an innovative platform for delivering device management and end-to-end application services. We also offer professional services to OEM customers during their product development and launch process, leveraging our expertise in wireless design, software, integration and certification to provide built-in wireless connectivity for mobile computing devices and M2M solutions. Our products, services and solutions connect people, their mobile computers and machines to wireless voice and data networks around the world. We implemented a new organizational structure during the fourth quarter of 2010 and we have two reportable segments effective January 1, 2011. Mobile Computing   includes AirCard mobile broadband devices and AirPrime wireless embedded modules for PC OEM customers Machine-to-Machine   includes AirPrime embedded wireless modules (excluding embedded module sales to PC OEMs), AirLink Intelligent Gateways, and AirVantage M2M Cloud. Effective August 1, 2012, also includes rugged terminals for railway applications (note 5) The primary markets for our products are North America, Europe and Asia Pacific. On January 28, 2013, we an