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Item 1. Financial Statements

2023-05-11 compared with 2022-12-07 · 272 added, 374 removed, 242 unchanged (73% of the section changed)

FINANCIAL STATEMENTS

MOBILEYE GROUP

CONDENSED COMBINED BALANCE SHEETS

MOBILEYE GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

dollars in millions

1 unchanged sentence

Cash and cash equivalents

Trade account receivables, net

Related party loan

Trade accounts receivable, net

Other current assets

10 unchanged sentences

Related party payable

Dividend Note with related party

Other current liabilities

6 unchanged sentences

TOTAL LIABILITIES

Parent net investment

Class A common stock:

$ 0.01 par value;

4,000,000,000 shares authorized;

shares issued and outstanding:

51,912,143 as of April 1, 2023 and 51,911,905 as of December 31, 2022

Class B common stock:

$ 0.01 par value;

1,500,000,000 shares authorized;

shares issued and outstanding:

750,000,000 as of April 1, 2023 and as of December 31, 2022

Additional paid-in capital

Accumulated other comprehensive income (loss)

Retained earnings (accumulated deficit)

TOTAL LIABILITIES AND EQUITY

The accompanying notes are an integral part of the unaudited condensed combined financial statements

MOBILEYE GROUP

CONDENSED COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

MOBILEYE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Three months ended

Nine months ended

September 25,

dollars in millions, except share and per share amounts

dollars in millions, except per share amounts

Cost of revenue

5 unchanged sentences

Interest income with related party

Interest expense with related party

Other income (expense), net

Other financial income (expense), net

Income (loss) before income taxes

1 unchanged sentence

Net income (loss)

Earnings (loss) per share:

Earnings (loss) per share attributed to Class A and Class B stockholders:

Basic and diluted

Weighted-average number of shares used in computation of earnings (loss) per share (in millions):

Weighted-average number of shares used in computation of earnings (loss) per share attributed to Class A and Class B stockholders (in millions):

Basic and diluted

2 unchanged sentences

TOTAL COMPREHENSIVE INCOME (LOSS)

The accompanying notes are an integral part of the unaudited condensed combined financial statements

MOBILEYE GROUP

CONDENSED COMBINED STATEMENTS OF CHANGES IN EQUITY

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

MOBILEYE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Accumulated Other

1 unchanged sentence

Shareholders’

dollars in millions

dollars in millions, except per share amounts

Income (Loss)

Three Months Ended

Balance as of July 2, 2022

Other comprehensive income (loss), net

Balance as of December 25, 2021

Net income (loss)

Tax sharing agreement with Parent

Net transfer from (to) Parent

Balance as of October 1, 2022

Balance as of June 26, 2021

Other comprehensive income (loss), net

Net income (loss)

Net transfer from (to) Parent

Balance as of September 25, 2021

Nine Months Ended

Balance as of April 2, 2022

Balance as of December 31, 2022

Other comprehensive income (loss), net

Net income (loss)

Equity transaction in connection with the legal purchase of Moovit entities

Dividend Note with related party

Dividend distribution

Tax sharing agreement with Parent

Net transfer from (to) Parent

Balance as of October 1, 2022

Balance as of December 26, 2020

Other comprehensive income (loss), net

Net income (loss)

Net transfer from (to) Parent

Balance as of September 25, 2021

The accompanying notes are an integral part of the unaudited condensed combined financial statements

MOBILEYE GROUP

CONDENSED COMBINED STATEMENTS OF CASH FLOWS

Nine months ended

September 25,

Tax sharing agreement with Parent

Share-based compensation expense

Recharge to Parent for Share-based compensation

Balance as of April 1, 2023

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

MOBILEYE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

dollars in millions

7 unchanged sentences

Deferred income taxes

Interest on Dividend Note

Interest with related party, net

Changes in operating assets and liabilities:

Decrease (increase) in trade accounts receivables

Decrease (increase) in trade accounts receivable

Decrease (increase) in other current assets

Decrease (increase) in inventories

Increase (decrease) in account payables and accrued expenses

Increase (decrease) in accounts payable, accrued expenses and related party payable

Increase (decrease) in employee-related accrued expenses and long term benefits

5 unchanged sentences

Purchase of property and equipment

Repayments of loan due from related party

Issuance of loan to related party

Repayment of loan due from related party

Net cash provided by (used in) investing activities

1 unchanged sentence

Net transfers from Parent

Dividend paid

Share-based compensation recharge

Deferred offering costs

Changes in withholding tax related to employee stock plans

Net cash provided by (used in) financing activities

6 unchanged sentences

Non-cash share based compensation recharge

Equity transaction in connection with the legal purchase of Moovit entities

Dividend Note with related party

Non cash deferred offering costs

Unpaid offering costs

Tax sharing agreement with Parent

Supplemental cash flow information:

Cash (paid) for income taxes, net of refunds

Interest received from related party

The accompanying notes are an integral part of the unaudited condensed combined financial statements

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Cash received (paid) for income taxes, net of refunds

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - GENERAL

Mobileye Group is a leader in the development and deployment of advanced driver assistance systems (“ADAS”) and autonomous driving technologies and solutions.

Mobileye Group combines the operations of Cyclops Holdings LLC (“Cyclops”), Mobileye B.V.

and its subsidiaries (“Mobileye”) GG Acquisition Ltd.

and the Moovit App Global Ltd.

and its subsidiaries (“Moovit”) and certain Intel employees mainly in research and development (the “Intel Aligned Groups”) (collectively, unless the context otherwise requires, the “Company”, “we”, and “our”).

Mobileye operates as a component of Intel, which acquired a majority stake in Mobileye in August 2017 (the “Mobileye Acquisition”).

The remaining issued and outstanding shares of Mobileye were acquired by Intel during 2018.

The Company is building a robust portfolio of end-to-end ADAS and autonomous driving solutions to provide the capabilities required for the future of autonomous driving, leveraging a comprehensive suite of purpose-built software and hardware technologies.

Moovit, a leading urban mobility app and mobility-as-a-service (“MaaS”) solutions provider also operates as a component of Intel upon acquisition of the issued and outstanding equity interests of Moovit in May 2020 (the “Moovit Acquisition”).

On May 31, 2022, we legally purchased from Intel 100 % of the issued and outstanding equity interests of the Moovit entities.

For further detail see Note 6.

In December 2021, Intel announced plans to pursue an initial public offering (“IPO”) of Mobileye Group.

In January 2022, Intel incorporated a new legal entity, Mobileye Global Inc., with the intent to contribute the Company to Mobileye Global Inc.

and be able to offer newly issued shares of common stock of Mobileye Global Inc.

In October 2022, the initial public offering of Mobileye (the “Mobileye IPO”) was completed.

The registration statement related to the Mobileye IPO was declared effective on October 25, 2022, and our Class A common stock began trading on the Nasdaq Global Select Market under the ticker symbol “MBLY” on October 26, 2022.

Prior to the completion of the Mobileye IPO, we were a wholly-owned business of Intel Corporation (“Intel” or the “Parent”).

Mobileye Global Inc.

(“Mobileye”, “the Company” or “we”) is a leader in the development and deployment of advanced driver assistance systems (“ADAS”) and autonomous driving technologies and solutions, aimed to provide the capabilities required for the future of autonomous driving, leveraging a comprehensive suite of purpose-built software and hardware technologies.

Mobileye combines the operations of its consolidated subsidiaries, which include the Mobileye Group, as defined below.

Mobileye operates as a subsidiary of Intel Corporation (“Intel” or the “Parent”), which acquired a majority stake in Mobileye in August 2017 (the “Mobileye Acquisition”).

The remaining issued and outstanding shares of Mobileye were acquired by Intel in 2018.

Before the completion of the Mobileye IPO and the Reorganization (both as defined below) in October 2022, the Company consisted of the “Mobileye Group”, which combined the operations of Cyclops Holdings LLC (“Cyclops”), Mobileye B.V.

and its subsidiaries, GG Acquisition Ltd.

and Moovit App Global Ltd.

and its subsidiaries (“Moovit”) and certain Intel employees mainly in research and development (the “Intel Aligned Groups”).

In December 2021, Intel announced plans to pursue an initial public offering of the Mobileye Group.

In January 2022, Intel incorporated a new legal entity, Mobileye Global Inc., with the intent to contribute the Mobileye Group to Mobileye Global Inc.

and to have Mobileye Global Inc.

offer newly issued shares of common stock of Mobileye Global Inc.

in an initial public offering.

On October 28, 2022, the initial public offering of Mobileye (the “Mobileye IPO”) was completed and we issued 41,000,000 shares of our Class A common stock, at $ 21 per share, before underwriting discounts and commissions.

Concurrently with the closing of the Mobileye IPO, the Company issued an additional 4,761,905 shares of its Class A common stock to General Atlantic (ME), L.P., a Delaware limited partnership, at $ 21 per share, pursuant to a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, for gross proceeds of $ 100 million (the “Concurrent Private Placement”).

On November 1, 2022, we closed the sale of an additional 6,150,000 Class A shares pursuant to the exercise of the underwriters’ over-allotment option.

The Mobileye IPO generated proceeds to the Company of approximately $ 1.0 billion, including the proceeds from the underwriters exercise of their option and the Concurrent Private Placement, net of underwriting discounts and commissions in the amount of $ 41 million and offering costs in the amount of $ 18 million.

Prior to the completion of the Mobileye IPO, we were a wholly-owned business of Intel Corporation.

Upon the closing of the Mobileye IPO (after giving effect to the exercise of the underwriters’ over-allotment option), Intel continues to directly or indirectly hold all of the Class B common stock of Mobileye, which represents approximately 99.3 % of the voting power of our common stock.

Upon completion of the IPO, we completed the legal entity reorganization of our operations comprising the Mobileye Group business so that they are all under the single parent entity, Mobileye Global Inc., and the filing and effectiveness of our amended and restated certificate of incorporation.

Refer to Note 9, Subsequent Events, for details relating to the Company’s IPO and related transactions.

Upon completion of the Mobileye IPO, we completed the legal entity reorganization (“Reorganization”) of the operations comprising the Mobileye Group business so that they are all under the single parent entity, Mobileye Global Inc., and the filing and effectiveness of our amended and restated certificate of incorporation.

The Reorganization was accomplished through a series of transactions and agreements with Intel, including the legal purchase of 100 % of the issued and outstanding equity interests of the Moovit entities from Intel.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These condensed combined financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S.

These condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S.

GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

These condensed combined financial statements have been prepared on the same basis as the Company’s annual audited combined financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The results of operations for the three and nine months ended October 1, 2022 shown in this report are not necessarily indicative of the results to be expected for the full year ending 2022.

The condensed combined financial statements should be read in conjunction with the audited combined financial statements for the fiscal year ended December 25, 2021.

The condensed combined financial statements and accompanying notes have been derived from the consolidated financial statements and accounting records of Intel and are presented as if the Company had been operating as a stand-alone company for all periods presented.

The assets, liabilities, revenue, and expenses directly attributable to the Company’s operations, including the acquired goodwill and intangible assets, have been reflected in these condensed combined financial statements on a historical cost basis, as included in the consolidated financial statements of Intel.

The Company utilized the Intel Aligned Groups mainly in research and development activities.

The associated costs of the Intel Aligned Groups are reflected on a specific attribution basis in the condensed combined statements of operations and comprehensive income (loss).

Intel Aligned Groups also participated in various Intel compensation and benefit plans.

Portions of those plans’ costs were based on actual headcount and included in these condensed combined financial statements.

These costs are not necessarily indicative of costs that would have been incurred had the Company operated on a stand-alone basis.

The condensed combined statements of operations and comprehensive income (loss) also include allocations of general corporate expenses from Intel.

These expenses have been allocated to the Company on the basis of direct usage when identifiable or allocated on the basis of headcount.

Management of the Company and Parent considered the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of the services provided to or the benefit received by the Company during the periods presented.

Mobileye largely continued to operate as a standalone operation and had not been fully integrated into Intel, with limited use of corporate overhead functions.

The allocated costs for the periods presented in the statement of operations and comprehensive income (loss) were not material.

The allocations may not be reflective of the expenses that would have incurred had the Company operated as a stand-alone company for the periods presented.

These costs also may not be indicative of the expenses that the Company will incur in the future or would have incurred if the Company had obtained these services from a third party.

Actual costs that may have been incurred if the Company had operated as a stand-alone company would depend on a number of factors, including the chosen organizational structure, the outsourcing of certain functions, and other strategic decisions.

As Mobileye Group was not historically held by a single legal entity, total parent net investment is shown in lieu of equity in the condensed combined financial statements and represents Intel’s total interest in the recorded net assets of Mobileye Group.

All intercompany transactions within the combined businesses of the Company have been eliminated.

Transactions between the Company and Intel, arising from arrangements with Intel and other similar related-party transactions, were considered to be effectively settled in the condensed combined financial statements at the time the transactions were recorded, unless otherwise noted.

The total net effect of the settlement of these transactions was reflected within parent net investment as a component of equity in the condensed combined balance sheets and within net transfers from Parent as a financing activity in the condensed combined statements of cash flows, unless otherwise noted.

There have been no material changes in our significant accounting policies as described in our combined financial statements for the fiscal year ended December 25, 2021, other than described below regarding deferred offering costs and income tax and regarding earnings per share as described in Note 4.

For further detail, see Note 2 in the audited combined financial statements for the fiscal year ended December 25, 2021.

Deferred Offering Costs

Deferred offering costs consisting of legal, accounting and other fees and costs incurred that are directly related to the IPO, are capitalized and recorded on the condensed combined balance sheet.

These deferred costs will be reclassified to shareholders’ equity upon the consummation of the IPO, which was completed in October 2022, and recorded against the proceeds received.

If the IPO would have been aborted, all the deferred offering costs would have been expensed.

The Company capitalized $ 15 million and $ 0 million of deferred offering costs within other long-term assets, in the condensed combined balance sheet as of October 1, 2022, and December 25, 2021, respectively.

Transaction costs which are not directly related to the IPO, are expensed as incurred within general and administrative expenses.

The Company recognized $ 1 million and $ 4 million of offering costs as an expense in the three and nine months ended October 1, 2022, respectively.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to such rules and regulations.

These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information.

We have a 52- or 53-week fiscal year that ends on the last Saturday in December.

Fiscal year 2022 was a 53-week fiscal year;

fiscal year 2023 is a 52-week fiscal year.

The additional week in fiscal year 2022 was added in the first quarter, which consisted of 14 weeks.

The results of operations for the three months ended April 1, 2023 shown in this report are not necessarily indicative of the results to be expected for the full year ending 2023.

The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2022.

The financial statements and accompanying notes that include periods ending or as of dates prior to the completion of the Mobileye IPO have been derived from the consolidated financial statements and accounting records of Intel and are presented as if the Company had been operating as a stand-alone company.

The assets, liabilities, revenue, and expenses directly attributable to the Company’s operations, including the acquired goodwill and intangible assets, have been reflected in these condensed consolidated financial statements on a historical cost basis, as included in the consolidated financial statements of Intel.

As Mobileye Group was not historically held by a single legal entity, total parent net investment is shown in lieu of equity in the periods prior to the completion of the Mobileye IPO and represents Intel’s total interest in the recorded net assets of Mobileye Group.

All intercompany transactions within the previously combined businesses of the Company have been eliminated.

Transactions between the Company and Intel, arising from arrangements with Intel and other similar related-party transactions, were considered to be effectively settled at the time the transactions were recorded, unless otherwise noted.

The total net effect of the settlement of these transactions was reflected within parent net investment as a component of equity and within net transfers from Parent as a financing activity in the periods prior to the completion of the Mobileye IPO, unless otherwise noted.

Following the completion of the Mobileye IPO, the condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

There have been no material changes in our significant accounting policies as described in our consolidated financial statements for the fiscal year ended December 31, 2022.

For further detail, see Note 2 in the audited consolidated financial statements for the fiscal year ended December 31, 2022.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions that affect the amounts and events reported and disclosed in the condensed consolidated financial statements and accompanying notes.

We base our estimates on historical experience and on various other assumptions and factors, including the current economic environment, that we believe to be reasonable under the circumstances.

Actual results could differ from those estimates.

On an on-going basis, management evaluates its estimates, judgments, and assumptions.

The most significant estimates and assumptions relate to useful lives of intangible assets, impairment assessment of goodwill and income taxes.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cash, cash equivalents and restricted cash

1 unchanged sentence

dollars in millions

October 1, 2022

April 1, 2023

December 31, 2022

Cash and cash equivalents

Restricted cash (within other long-term assets)

Short term deposits

Money market funds

Restricted cash (within other current and other long-term assets)

Cash, cash equivalents and restricted cash

Fair value measurement

The carrying amounts of the related party loan, trade accounts receivable, Dividend Note with related party, accounts payable and investments in short term deposits classified as cash equivalents, approximate their respective fair value because of their generally short maturities.

Short term deposits included in cash and cash equivalents were $ 770 million and $ 209 million as of October 1, 2022 and December 25, 2021, respectively.

The Company also has goodwill and acquisition-related in-process research and development assets that are required to be recorded at fair value only if an impairment is recognized in the current period.

The Company measures its investment in short term deposits classified as cash equivalents at fair value on a recurring basis.

The carrying value of short term deposits classified as cash equivalents approximates their fair value due to the short maturity of these items.

The Company’s investment in money market funds is measured at fair value and consists of financial assets for which quoted prices are available in an active market.

Interest income related to money market funds for the three months ended April 1, 2023, amounted to $ 8 million.

The carrying amounts of trade accounts receivable and accounts payable approximate fair value because of their generally short maturities.

Research and development, net

4 unchanged sentences

All intellectual property generated from these arrangements is exclusively owned by the Company.

Participation in expenses for research and development projects are recognized on the basis of the costs incurred and are netted against research and development expenses in the condensed combined statements of operations and comprehensive income (loss).

Research and development reimbursements of $ 15 million, and $ 17 million were offset against research and development costs in the three months ended October 1, 2022 and September 25, 2021, respectively;

and $ 40 million and $ 39 million were offset in the nine months ended October 1, 2022 and September 25, 2021, respectively.

Participation in expenses for research and development projects are recognized on the basis of the costs incurred and are netted against research and development expenses in the condensed consolidated statements of operations and comprehensive income (loss).

Research and development reimbursements of $ 17 million and $ 14 million were offset against research and development costs in the three months ended April 1, 2023 and April 2, 2022, respectively.

Derivatives and hedging

Beginning in 2021, as part of Intel’s corporate hedging program, Intel is hedging forecast cash flows denominated in Israel Shekels (“ILS”) related to the Company.

Beginning in 2021, as part of Intel’s corporate hedging program, Intel hedges forecasted cash flows denominated in Israeli Shekels (“ILS”) related to the Company.

ILS is the largest operating expense currency of the Company.

Intel combines all of its ILS exposures, and as part of Intel’s hedging program enters into hedging contracts to hedge Intel’s combined ILS exposure.

Derivative gains and losses attributed to these condensed combined financial statements are recorded under accumulated other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Derivative gains and losses attributed to these condensed consolidated financial statements are recorded under accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects the statement of operations.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the fourth quarter of 2022, the Company de-designated its remaining cash flow hedges for forecasted operating expenses denominated in ILS.

As the hedged transactions and cash flows related to the outstanding instruments were expected to occur as originally forecasted, the associated gains and losses deferred in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheet were reclassified into earnings in the same period or periods during which the originally hedged transactions affect earnings.

Any subsequent changes in the fair value of the outstanding derivative instruments after the de-designation and termination of hedge accounting were immediately reflected in operating expenses.

As of April 1, 2023, there are no outstanding hedging instruments and all of the related accumulated other comprehensive income (loss) was reclassified into the statement of operations and comprehensive income (loss).

The notional amount and fair value of derivatives outstanding at Intel on behalf of Mobileye were:

October 1, 2022

December 25, 2021

dollars in millions

April 1, 2023

December 31, 2022

Notional amount of derivatives

2 unchanged sentences

Three Months Ended

Nine Months Ended

October 1, 2022

dollars in millions

April 1, 2023

April 2, 2022

Other comprehensive income (loss) before reclassifications

5 unchanged sentences

The overall effective tax rate is influenced by valuation allowances on tax assets for which no benefit can be recognized due to the Company’s recent history of pretax losses sustained.

Tax jurisdictions with forecasted pretax losses for the year for which no benefit can be recognized are excluded from the calculation of the worldwide estimated annual effective tax rate, and any associated tax expense for those jurisdiction is recorded separately.

Certain legal entities of Mobileye file tax returns on a consolidated basis with our parent Intel Corporation.

We have entered into a tax sharing agreement with Intel Corporation that establishes the amount of cash we will pay to our parent for our share of the tax liability owed on these consolidated filings.

The income tax provision included in these combined financial statements has been calculated using the separate return method, as if the Company had filed its own tax returns.

This method can limit our ability to benefit losses that may have been used by Intel in the consolidated tax returns.

To the extent the tax sharing agreement and the separate return method differ, an adjustment to our net parent investment balance is recorded.

Use of estimates

The preparation of condensed combined financial statements in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions that affect the amounts and events reported and disclosed in the combined financial statements and accompanying notes.

We base our estimates on historical experience and on various other assumptions and factors, including the current economic environment, that we believe to be reasonable under the circumstances.

Actual results could differ from those estimates.

On an on-going basis, management evaluates its estimates, judgments, and assumptions.

The most significant estimates and assumptions relate to recognition and useful lives of intangible assets, impairment assessment of intangible assets and goodwill, and income taxes.

During the periods presented in the consolidated financial statements, certain components of the Company’s business operations were included in the consolidated U.S.

domestic income tax return filed by the Company’s Parent.

The Company also files various foreign income tax returns on a separate basis, distinct from its Parent.

The income tax provision included in the Company’s condensed consolidated financial statements has been calculated using the separate return method, as if the Company had filed its own tax returns.

The Company has entered into a Tax Sharing Agreement with its Parent that establishes the amount of cash payable for the Company’s share of the tax liability owed on consolidated tax return filings with its Parent.

Any differences between taxes payable to the Company’s Parent under the Tax Sharing Agreement and the current tax provision computed on a separate return basis, is reflected as adjustments to additional paid-in capital in the condensed consolidated statement of changes in equity and financing activities within the condensed consolidated statement of cash flows.

The Company reflects tax loss and tax credit carry-forward attributes under the separate return method approach.

Such tax attributes may not be benefited in the same period as the Company’s Parent on a consolidated tax return.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Loss contingencies

Management believes that there are no current matters that would have a material effect on the Company’s condensed combined balance sheets, statement of operations or cash flows.

Management believes that there are no current matters that would have a material effect on the Company’s condensed consolidated balance sheets, statements of operations or cash flows.

Legal fees are expensed as incurred.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Concentration of credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, which include short-term deposits, and trade accounts receivable.

The majority of the Company’s cash and cash equivalents are invested in banks domiciled in the U.S., as well as in Israel.

The majority of the Company’s cash and cash equivalents are invested in banks domiciled in the U.S.

and Europe, as well as in Israel.

Generally, these cash equivalents may be redeemed upon demand.

Short term bank deposits, included in cash and cash equivalents, are held in the aforementioned banks.

Accordingly, management believes that these bank deposits have minimal credit risk.

Short term bank deposits are held in the aforementioned banks.

The money market funds consist of institutional investors money market funds and are readily redeemable to cash.

Accordingly, management believes that these bank deposits and money market funds, have minimal credit risk.

The Company’s accounts receivables are derived primarily from sales to Tier 1 suppliers to the automotive manufacturing industry located mainly in the U.S., Europe, and China.

3 unchanged sentences

The Company performs ongoing credit evaluations of its customers and has not experienced any material losses in the periods presented.

The Company establishes credit losses accounts receivable by considering a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history from such customers, and the customers’ current ability to pay its obligation to the Company.

As of October 1, 2022 and December 25, 2021, the credit losses in respect of accounts receivable, which are determined with respect to specific debts that are doubtful of collection and netted against accounts receivable, were not material.

The Company establishes credit losses for accounts receivable by considering a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history from such customers, and the customers’ current ability to pay its obligation to the Company.

As of April 1, 2023 and December 31, 2022, the credit losses for accounts receivable were not material.

The Company writes off accounts receivable when they are deemed uncollectible.

For the three and nine months ended October 1, 2022 and September 25, 2021, the charge-offs and recoveries in relation to the credit losses accounts were not material.

For the three months ended April 1, 2023 and April 2, 2022, the charge-offs and recoveries in relation to the credit losses accounts were not material.

Customer concentration risk

4 unchanged sentences

The loss of one or more key customers, a reduction in sales to any key customer or the Company’s inability to attract new significant customers could negatively impact revenue and adversely affect the Company’s business, results of operations, and financial condition.

See Note 8 related to customers that accounted for more than 10% of the Company’s total revenue and accounts receivable for each of the periods presented in these condensed combined financial statements.

See Note 9 related to customers that accounted for more than 10% of the Company’s total revenue and more than 10% of the total accounts receivable balance for each of the periods presented in these condensed consolidated financial statements.

Dependence on a single supplier risk

1 unchanged sentence

Any issues that occur and persist in connection with the manufacture, delivery, quality, or cost of the assembly and testing of inventory could have a material adverse effect on the Company’s business, results of operations and financial condition.

See below regarding a shortage in EyeQ® SoC that the Company has been experiencing during 2021 and through the nine months ended October 1, 2022.

The COVID-19 pandemic has adversely affected significant portions of the Company’s business and could have a continued adverse effect on the Company’s business, results of operations, and financial condition.

There is a significant constraint in the global supply of semiconductors.

The COVID-19 pandemic led to an increase in the demand for consumer electronics and global semiconductor manufacturers allocated significant capacity to meet such demand.

As global automakers resumed production in 2020 following shutdowns resulting from the COVID-19 pandemic, semiconductor supply became further strained, and these factors, combined with the long lead times associated with the Company, have contributed to a shortage of semiconductors.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

During the fiscal year ended December 25, 2021, and through nine months ended October 1, 2022, the Company’s sole supplier was not able to meet demand of the Company for the EyeQ® SoC, causing a significant reduction in the Company’s inventory levels.

We expect to continue to experience a shortfall of EyeQ® SoC which has already caused certain delays and may continue to cause further delays in our ability to fulfil customers’ orders.

Since the EyeQ® SoC is the core of the ADAS and AV products, continued shortages in the supply of sufficient EyeQ® SoC to meet production needs may impair the Company’s ability to meet its customers’ requirements in a timely manner and may adversely affect the Company’s business, results of operations and financial condition.

See below regarding a shortage in EyeQ® SoC that the Company has been experiencing during 2022 and may experience during 2023, including in components of our other products.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Supply chain risk

During the fiscal year ended December 31, 2022, due to global supply chain constraints and shortage of semiconductors, the Company’s sole supplier was not able to meet demand of the Company for EyeQ® SoCs, causing a significant reduction in the Company’s inventory levels.

We may continue to experience a shortfall of EyeQ® SoCs and may experience a shortfall in components of our other products, which has already caused certain delays and may continue to cause further delays in our ability to fulfil customers’ orders.

Continued shortages and supply chain constraints in EyeQ® SoCs and in components of our other products, may impair the Company’s ability to meet its customers’ requirements in a timely manner and may adversely affect the Company’s business, results of operations and financial condition.

Moreover, to the extent that the global semiconductor shortage results in reduced production or production delays by automakers, those delays could result in reduced or delayed demand for the Company products.

2 unchanged sentences

Although we cannot fully predict the length and the severity of the impact these pressures will have on a long-term basis, we do not anticipate that our current supply chain constraints would materially adversely affect our results of operations, capital resources, sales, profits, and liquidity.

New Accounting pronouncements:

Recently Adopted Accounting Pronouncements

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual reporting periods.

The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s condensed combined financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies.

The new standard which can be applied prospectively or retrospectively, was adopted by the Company, and only impacts annual financial statement footnote disclosures.

The impact of adoption of this standard is immaterial.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides practical expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform.

2020-04 is effective and can be applied prospectively through December 31, 2022.

The Company has completed its evaluation of significant contracts.

The Company has adopted the ASU in these unaudited condensed combined financial statements.

There was no material impact on these unaudited condensed combined financial statements.

For further information, see Note 6 regarding related party transactions.

NOTE 3 - OTHER FINANCIAL STATEMENT DETAILS

dollars in millions

April 1, 2023

December 31, 2022

Raw materials

Work in process

Finished goods

Inventory write-downs and write-offs were not material for the periods presented in these condensed combined financial statements.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Inventory write-downs and write-offs were not material for the periods presented in these condensed consolidated financial statements.

Property and equipment, net:

dollars in millions

April 1, 2023

December 31, 2022

Computers, electronic equipment and software

1 unchanged sentence

Leasehold improvements

Construction on process

Total property, plant and equipment, gross

Construction in process

Total property and equipment, gross

accumulated depreciation

Total property, plant and equipment, net

Depreciation expenses totaled $ 7 million and $ 5 million for the three months ended October 1, 2022 and September 25, 2021, respectively;

and $ 17 million and $ 12 million for the nine months ended October 1, 2022 and September 25, 2021, respectively.

Total property and equipment, net

Depreciation expenses totaled $ 7 million and $ 5 million for the three months ended April 1, 2023 and April 2, 2022, respectively.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - EQUITY

Stock-based compensation plans

The Company’s equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees.

The Company’s employees participate in Intel’s equity incentive plan.

All references to share and per share data in the tables below refer to Intel’s common stock.

Outstanding and exercisable options for Intel’s common stock under Intel’s plan as of October 1, 2022 were as follows:

Share-based compensation plans

Mobileye Plan

Following the Mobileye IPO in October 2022, the Company’s employees are incentivized and rewarded through the grant of the Company’s equity awards under the Mobileye Global Inc.

2022 Equity Incentive Plan (“the 2022 Plan”), which are granted for Class A shares and vest upon the satisfaction of a service-based vesting condition, mostly over service periods of three years .

Restricted Stock Units

The RSUs activity for the three months ended April 1, 2023 for RSUs granted to Company’s employees under the 2022 Plan was as follows:

Weighted average grant

Number of RSUs

date fair value

Outstanding as of December 31, 2022

Outstanding as of April 1, 2023

* Less than 1000

As of April 1, 2023, the unrecognized compensation cost related to all unvested RSUs granted under the 2022 Plan, was $ 180 million, which is expected to be recognized as expense over a weighted-average period of 1.5 years.

Prior to the Mobileye IPO, since 2017, employees of the Company had been incentivized and rewarded through the grant of Intel equity awards under Intel’s equity incentive plan which contains only a service condition.

The equity awards granted generally vest over the course of three years from the grant date.

Outstanding and exercisable options for Intel’s common stock under Intel’s plan as of April 1, 2023 were as follows:

Weighted average

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$ 22.4 - 26.9

$ 22.41 - 26.89

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The option activity for the nine months ended October 1, 2022 for options granted to the Company’s employees for Intel’s common stock was as follows:

exercise price

intrinsic value(1)

dollars in millions

Options outstanding at December 25, 2021

Options outstanding at October 1, 2022

Options exercisable as of October 1, 2022

The option activity for the three months ended October 1, 2022 for options granted to the Company’s employees for Intel’s common stock was as follows:

exercise price

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The options activity for the three months ended April 1, 2023 for options granted to the Company’s employees for Intel’s common stock was as follows:

Weighted average

Number of options

contractual Life

intrinsic value(1)

dollars in millions

Options outstanding at July 2, 2022

Options outstanding at October 1, 2022

Options exercisable at October 1, 2022

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of the Intel’s ordinary share.

On October 1, 2022 and December 25, 2021, Intel’s ordinary share prices were $ 25.77 , and $ 51.31 , respectively.

Options outstanding as of December 31, 2022

Options outstanding as of April 1, 2023

Options exercisable as of April 1, 2023

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of Intel’s ordinary shares.

On April 1, 2023, the share price was $ 32.7 .

This represents the potential pre-tax amount receivable by the option holders had all option holders exercised their options as of such date.

(2) The remaining options expected to vest as of October 1, 2022 are 63 thousand options with an average weighted exercise price of $ 26.49 .

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The RSU activity for the nine months ended October 1, 2022 for RSUs granted to Company’s employees for Intel’s common stock was as follows:

Weighted average

grant fair value

Outstanding at December 25, 2021

Outstanding at October 1, 2022

The RSU activity for the three months ended October 1, 2022 for RSUs granted to Company’s employees for Intel’s common stock was as follows:

(2) The remaining options expected to vest as of April 1, 2023 are 10.5 thousand options with an average weighted exercise price of $ 21.6 .

The RSUs activity for the three months ended April 1, 2023 for RSUs granted to the Company’s employees for Intel’s common stock was as follows:

Weighted average

grant fair value

Outstanding at July 2, 2022

Outstanding at October 1, 2022

Share-based compensation expense summary

Share-based compensation expenses included in the condensed combined statements of operations and comprehensive income (loss) was as follows:

Number of RSUs

grant date fair value

Outstanding as of December 31, 2022

Outstanding as of April 1, 2023

Unrecognized expenses

As of April 1, 2023, the unrecognized compensation cost related to stock options and RSUs granted under the Intel 2006 Plan was $ 165 million, which will be recognized over a weighted average period of 0.9 years.

Share-based compensation expense summary (for both Mobileye and Intel Plans)

Share-based compensation expenses included in the condensed consolidated statements of operations and comprehensive income (loss) was as follows:

Three months ended

Nine Months Ended

October 1, 2022

September 25, 2021

October 1, 2022

September 25, 2021

dollars in millions

April 1, 2023

April 2, 2022

Cost of revenue

3 unchanged sentences

Total share-based compensation

On May 12, 2022, Mobileye Group declared and paid a dividend in an aggregate amount of $ 336 million to Intel, net of $ 14 million of cash paid to tax authorities to settle related tax obligations.

Earnings Per Share

Before the Mobileye IPO, Intel held directly or indirectly the 100 shares of common stock of Mobileye Global Inc.

with a par value of $ 0.01 per share, that were issued and outstanding .

Immediately prior to the IPO, those 100 shares of common stock held by Intel were reclassified into 100 shares of Class B common stock with a par value of $ 0.01 per share.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - EARNINGS (LOSS) PER SHARE

Before the Mobileye IPO, Intel held directly or indirectly the 100 shares of common stock of Mobileye, with a par value of $ 0.01 per share, that were issued and outstanding .

Immediately prior to the Mobileye IPO, those 100 shares of common stock held by Intel were reclassified into 100 shares of Class B common stock with a par value of $ 0.01 per share.

Concurrently, we issued to Intel an additional 749,999,900 shares of our Class B common stock pursuant to an agreement with Intel.

Accordingly, as of the completion of the IPO, we have 750,000,000 Class B shares, all held by Intel.

This share amount is being utilized for the calculation of basic and diluted earnings

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

per share for all periods presented.

Basic and diluted net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period.

In connection with the IPO, we issued 41,000,000 shares of our Class A common stock to the public at a public offering price of $ 21.00 per share and an additional 4,761,905 Class A shares at a private placement.

The IPO closed on October 28, 2022.

On November 1, 2022, we closed the sale of an additional 6,150,000 shares pursuant to the exercise of the underwriters’ option.

In accordance with ASC 260, the Class A shares issued in connection with the IPO will be included in earnings per share calculations for periods subsequent to the closing of the IPO and are not included in the earning per share calculations for periods prior to the closing of the IPO.

In October 2022, our board of directors approved the issuance of restricted stock units in connection with the IPO.

These restricted stock units were not included in the computation of diluted earnings per share for the three and nine months ended October 1, 2022.

The following table summarizes the calculation of basic net income (loss) per share for the periods presented:

Accordingly, as of the completion of the Mobileye IPO, we have 750,000,000 Class B shares, all held by Intel.

Per ASC 260-10-55-12, this share amount is being retroactively utilized for the calculation of basic and diluted earnings (loss) per share (“EPS”) for all periods presented.

In connection with the Mobileye IPO, we issued 41,000,000 shares of our Class A common stock to the public at a public offering price of $ 21 per share and an additional 4,761,905 Class A shares at a private placement.

The Mobileye IPO closed on October 28, 2022.

On November 1, 2022, we closed the sale of an additional 6,150,000 shares pursuant to the exercise of the underwriters’ over-allotment option.

In accordance with ASC 260, the Class A shares issued in connection with the Mobileye IPO are included in earnings (loss) per share calculations for periods subsequent to the closing of the Mobileye IPO and are not included in the earnings (loss) per share calculations for periods prior to the closing of the Mobileye IPO.

For the three months ended April 1, 2023, the computation of diluted earnings (loss) per share attributable to common stockholders does not include 7.1 million potential common shares, based on treasury stock method, related to restricted stock units granted under the 2022 Plan to the Company’s employees, as the effect of their inclusion would have been anti-dilutive.

The following table summarizes the calculation of basic earnings (loss) per share for the periods presented:

Three months ended

Nine Months Ended

September 25,

In millions, except per share amounts

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Weighted average common shares - basic and diluted

Net income (loss) per share:

Earnings (loss) per share:

Basic and diluted

NOTE 6 - INCOME TAXES

The Company’s quarterly benefit (provision) for income taxes and the estimates of its annual effective tax rate, are subject to fluctuation due to several factors, principally including variability in overall pre-tax income and the mix of paying for certain components to which such income relates.

The income tax provision included in these condensed combined financial statements has been calculated using the separate return method, as if the Company had filed its own tax returns.

This method can limit the Company’s ability to benefit from losses that may have been used by Intel in its consolidated tax returns.

The Company has entered into a tax sharing agreement with Intel, which establishes the amount of cash payable to Intel for our share of the tax liability owed on a consolidated tax filing basis with Intel.

To the extent the tax sharing agreement and the separate return method differ, and the liability to Intel is higher or lower than the amount that would have been payable if the Company had filed its own tax returns, an adjustment to the net parent investment balance is recorded within equity.

The adjustment to the net parent investment for the nine months ended October 1, 2022 was an aggregate decrease in net parent investment of $ 16 million because amounts payable under the tax sharing agreement in respect of the nine-month period exceeded amounts calculated under the separate return method.

The tax expense for the nine months ended October 1, 2022, was unfavorably impacted by an accrued withholding tax expense and valuation allowances for certain jurisdictions.

A withholding tax expense of $ 14 million related to a dividend distribution between entities within the Mobileye Group (see Note 4 regarding a dividend distribution to Intel) was recorded in the nine months ended October 1, 2022.

The Company’s quarterly benefit (provision) for income taxes and the estimates of its annual effective tax rate, are subject to fluctuation due to several factors, principally including variability in overall pre-tax income and the mix of tax paying components to which such income relates.

The income tax provision included in these condensed consolidated financial statements has been calculated using the separate return method, as if the Company had filed its own tax returns.

Net operating losses generated by the Company that have been utilized as part of the Parent’s consolidated income tax return filings but have not been utilized by the Company under the separate return method approach, have been reflected in these condensed consolidated financial statements because the Company will recognize a benefit for the separate return method net operating losses when determined to be realizable, whether as a deduction against current taxable income in future periods or upon recognition of associated deferred tax assets based on valuation allowance assessments.

Any differences between taxes currently payable to the Company’s Parent under the Tax Sharing Agreement and the current tax provision computed on a separate return basis, is reflected as adjustments to additional paid-in capital (see also Note 2).

The adjustment to additional paid-in capital for the three months ended April 1, 2023 was an aggregate decrease of $ 5 million because amounts payable under the Tax Sharing Agreement in respect of the three-month period exceeded amounts calculated under the separate return method.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The tax expense for the three months ended April 1, 2023 and April 2, 2022, was unfavorably impacted by a valuation allowance for certain jurisdictions.

A withholding tax expense of $ 14 million related to a dividend distribution between entities within the Mobileye Group was recorded in the three months ended April 2, 2022.

As the Company has jurisdictions that have sustained recent losses based on the separate return method, a valuation allowance is required for deferred tax assets for which no benefit can be currently realized.

The Company also estimates cash taxes for these jurisdictions this year due to unfavorable timing adjustments based upon tax law.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7 - RELATED PARTIES TRANSACTIONS

The Company has entered into a series of related party arrangements with Intel.

The arrangements were as follows:

Loan arrangements

The Company entered into a series of bilateral lending/borrowing arrangements with Intel.

The purposes of the facilities are to enable bilateral cash movements between the parties.

The arrangements are denominated in U.S dollars.

In 2017, Intel along with the Company, entered into a bilateral lending/borrowing arrangement (“Arrangement 1”) to make available to either party up to an aggregate principal amount of $ 1.5 billion.

Arrangement 1 has a mechanism of automatic renewal for additional periods of one year .

In 2021, Arrangement 1 was amended to increase the capacity from $ 1.5 billion to $ 1.8 billion, and was automatically renewed to December 2022.

In 2017, Intel along with the Company, entered into a bilateral lending/borrowing arrangement (“Arrangement 2”) to make cash available to either party up to an aggregate principal amount of $ 750 million.

Arrangement 2 has a mechanism for automatic renewal for additional periods of one year each.

In March 2022, Arrangement 2 was amended to increase the aggregate principal amount from $ 750 million to $ 1.0 billion and the maturity date was extended to March 2023.

In 2021, the Company and Intel entered into a bilateral lending/borrowing arrangement (“Arrangement 3” and together with Arrangement 1 and Arrangement 2, the “Bilateral Loan Arrangements”) to make cash available to either party up to an aggregate principal amount of $ 100 million.

Arrangement 3 has a maturity date of July 2022 with a mechanism of automatic renewal for additional periods of one year .

In March 2022, Arrangement 3 was amended to increase the aggregate principal amount available to draw from $ 100 million to $ 500 million.

The interest rate is based on an applicable margin of 0.0 % with an option for Intel to elect to increase or decrease the applicable margin on or after the first day of the 2022 fiscal year.

If the election to increase the applicable margin is applied, the spread adjustment would be reflective of the difference between three-month LIBOR and the term Secured Overnight Financing Rate (“SOFR”).

In March 2022, due to reference rate reform, Arrangement 1 and Arrangement 2 were amended to change the interest rate from LIBOR based to SOFR based.

The modification was accounted for as if it is not substantial in accordance with the expedient for ASC 470 and an updated effective interest rate was calculated to reflect the change in terms.

There was no gain or loss recognized for the nine months ended October 1, 2022.

The total outstanding balance under the Bilateral Loan Arrangements was approximately $ 901 million and $ 1.3 billion as of October 1, 2022 and December 25, 2021 respectively, and is reflected in current assets as a related party loan based on the maturity date as of each balance sheet period (accumulated interest is presented within other current assets).

Interest income recognized by the Company totaled $ 5 million, and $ 0.6 million for the three months ended October 1, 2022 and September 25, 2021, respectively;

and $ 9 million and $ 2 million for the nine months ended October 1, 2022 and September 25, 2021, respectively.

For further description of the arrangements refer to Note 9 of the notes to the consolidated financial statements for the year ended December 31, 2022.

Stock Compensation Recharge Agreement

The Company entered into a stock compensation recharge agreement with Intel, which requires the Company to reimburse Intel for certain amounts relating to the value of share-based compensation provided to the Company’s employees for RSUs or stock options exercisable in Intel stock.

The liability associated with the stock compensation recharge agreement that is reflected on the condensed combined balance sheets, under related party payable was approximately $ 14 million and $ 162 million as of October 1, 2022 and December 25, 2021, respectively.

As for the inclusion of the Company’s employees in Intel’s equity incentive plan, see Note 4.

Hedging services

Intel centrally hedges its exposure to changes in foreign exchange rates.

At the beginning of 2021, the Company entered into a hedging services agreement with Intel, pursuant to which the Company is entitled to a certain allocation of the gains and obligated to a

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

certain allocation of the losses arising from the execution of the hedging contracts.

For further information, see Note 2, Derivatives and hedging.

Development Services and Lease

Intel entered into agreements with the Company to provide certain development services, including research, technical work on technology, products and solutions, construction and ancillary administrative services and use of space in Intel’s building in Israel.

The Company paid for these services on a quarterly basis.

These costs are included in the condensed combined statements of operations and comprehensive income (loss) primarily on a specific and direct attribution basis.

The liability associated with the stock compensation recharge agreement that is reflected on the condensed consolidated balance sheets, under related party payable was approximately $ 1 million and $ 1 million as of April 1, 2023 and December 31, 2022, respectively.

The reimbursement amounts recorded as an adjustment to additional paid-in capital (and to parent net investment prior to the Mobileye IPO) in the condensed consolidated statement of changes in equity were $ 4 million and $ 29 million for the three months ended April 1, 2023 and April 2, 2022, respectively.

Lease agreements

Under lease agreements with Intel, the Company leases office space in Intel’s buildings.

The costs are included in the condensed consolidated statements of operations and comprehensive income (loss) primarily on a specific and direct attribution basis.

The leasing costs for the three months ended April 1, 2023 and April 2, 2022, were $ 1.3 million and $ 0.4 million, respectively.

Other services to a related party

The Company reimbursed its Chief Executive Officer for reasonable travel related expenses incurred while conducting business on behalf of the Company.

Travel expenses totaled $ 0.8 million and $ 0.6 million for nine months ended October 1, 2022 and September 25, 2021, respectively.

Dividend Note

On April 21, 2022, Intel and Mobileye Group signed a loan agreement whereby Mobileye Group agreed to issue a promissory note to Intel in an aggregate principal amount of $ 3.5 billion (the “Dividend Note”).

The Dividend Note is scheduled to mature on April 21, 2025 and accrues interest at a rate equal to 1.26 % per annum, such interest to accrue quarterly.

Prior to June 30, 2024, such interest will be paid by being automatically added to the outstanding principal amount of the loan and will thereafter be payable quarterly in cash in arrears and shall also be payable upon any prepayment, whether in whole or in part, to the extent accrued on the amount being prepaid and upon maturity.

Under the Dividend Note, Mobileye Group has the right, at its option, on any business day, to prepay the loan, including principal and any accrued interest thereon, in whole or in part without premium or penalty.

As of October 1, 2022, accrued interest expense was $ 20 million.

The aggregate principal amount plus related accrued interest is presented as Dividend Note with related party.

Refer to Note 9 for the settlement of the Dividend Note.

Equity transaction in connection with the legal purchase of Moovit entities

On May 31, 2022, we entered into an agreement with Intel pursuant to which we legally purchased from Intel 100 % of the issued and outstanding equity interests of the Moovit entities for an aggregate amount of $ 900 million that is payable in cash to Intel and presented within related party payable.

Moovit’s operations are already reflected as part of the Mobileye Group in these condensed combined financial statements as further detailed in Note 1 and therefore the transaction is treated within equity.

Travel related reimbursements totaled $ 0.7 million and zero for three months ended April 1, 2023 and April 2, 2022, respectively.

Administrative Services Agreement

Under the Administrative Services Agreement, effective as of the completion of the Mobileye IPO, Intel provides the Company with administrative, financial, legal, tax, and other services.

The Company pays fees to Intel for the services rendered based on pricing per service agreed between the Company and Intel.

The costs incurred under this agreement for the three months ended April 1, 2023 were $ 0.4 million.

Technology and Services Agreement

The Technology and Services Agreement, effective as of the completion of the Mobileye IPO, provides a framework for the collaboration on technology projects and services between the Company and Intel (“Technology Projects”), and sets out the licenses granted by each party to its respective technology for the conduct of the Technology Projects, provisions relating to the ownership of certain existing technology, the allocation of rights in any new technology created in the course of the Technology Projects, and certain provisions applicable to the development of a certain radar product of the Company.

The Technology and Services Agreement does not apply to projects for the development and manufacture of a Lidar sensor system for automobiles, for which the LiDAR Product Collaboration Agreement applies.

Pursuant to the Technology and Services Agreement, the Company and Intel will agree to statements of work with additional terms for Technology Projects.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The amount incurred under this agreement for the three months ended April 1, 2023 was $ 1 million.

LiDAR Product Collaboration Agreement

The LiDAR Product Collaboration Agreement, effective as of the completion of the Mobileye IPO, provides the terms that will apply to the Company’s collaboration with Intel for the development and manufacture of a Lidar sensor system for ADAS and AV in automobiles (“LiDAR Projects”).

On some of the LiDAR programs joint funding will apply between Intel and Mobileye until the end of 2027 whereby Mobileye will bear its own Lidar sensor system development costs up to the first $ 40 million per year and Intel will bear up to $ 20 million per year of Mobileye’s Lidar sensor system development costs that are greater than $ 40 million per year.

The LiDAR Product Collaboration Agreement further provides that Intel will manufacture certain components for the Company to market and sell as part of a FMCW (frequency-modulated continuous wave) Lidar sensor system solely for external environment sensing for ADAS and AV in automobiles.

The price for the components Intel will manufacture for the Company will be based on a cost-plus model.

In addition, the agreement also includes a profit-sharing model under which Mobileye will pay Intel a share of the gross profit for each LiDAR sensor system or components thereof, based on Intel technology, sold by Mobileye.

There were no amounts received or receivable from Intel under this agreement for the three months ended April 1, 2023.

Tax Sharing Agreement

The Tax Sharing Agreement establishes the respective rights, responsibilities and obligations of the Company and Intel after the completion of the Mobileye IPO with respect to tax matters, including the amount of cash the Company will pay to Intel for its share of the tax liability owed on the consolidated filings in which the Company or any of the Company’s subsidiaries are included, audit or other tax proceedings.

As of April 1, 2023 and December 31, 2022, the related party payable to Intel, pursuant to the Tax Sharing Agreement, was $ 39 million and $ 34 million, respectively.

NOTE 8 - IDENTIFIED INTANGIBLE ASSETS

October 1, 2022

December 25, 2021

dollars in millions

April 1, 2023

December 31, 2022

Developed technology

Customer relationships & brands

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents the amortization expenses recorded for these identified intangible assets and their weighted average useful lives:

Three months ended

Nine Months Ended

September 25,

dollars in millions

2 unchanged sentences

Total amortization expenses

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company expects future amortization expenses for the next five years and thereafter to be as follows:

dollars in millions

Remainder of 2023

Future amortization expenses

7 unchanged sentences

Mobileye is the Company’s only reportable operating segment and Moovit is presented within “Other” as per ASC 280, Segment Reporting.

Segment performance is the operating income reported excluding the amortization of acquisition-related intangible assets and IPO related expense.

Segment performance is the operating income reported excluding the amortization of acquisition-related intangible assets.

The measure of assets has not been disclosed for each segment as it is not regularly reviewed by the CODM.

The accounting policies of the individual segments are the same as those described in the summary of significant accounting policies in Note 2 to the audited combined financial statements for the fiscal year ended December 25, 2021.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The accounting policies of the individual segments are the same as those described in the summary of significant accounting policies in Note 2 to the audited consolidated financial statements for the fiscal year ended December 31, 2022.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following are segment results for each period as follows:

Three Months Ended October 1, 2022

dollars in millions

Cost of revenues

Research and development, net

Sales and Marketing

General and administrative

Segment performance

Interest (expense) with a related party

Loss before taxes on income

Share-based compensation

Depreciation of property and equipment

Three Months Ended September 25, 2021

dollars in millions

Cost of revenues

Research and development, net

Sales and Marketing

General and administrative

Segment performance

Interest income with a related party

Other expense

Loss before taxes on income

Share-based compensation

Depreciation of property and equipment

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Nine Months Ended October 1, 2022

Three months ended April 1, 2023

dollars in millions

4 unchanged sentences

Segment performance

Interest (expenses) with a related party

Other financial income (expense), net

Loss before taxes on income

1 unchanged sentence

Depreciation of property and equipment

Nine Months Ended September 25, 2021

Three months ended April 2, 2022

dollars in millions

4 unchanged sentences

Segment performance

Interest income with a related party

Other expense

Interest income (expense) with related party

Other financial income (expense), net

Loss before taxes on income

3 unchanged sentences

Three months ended

Nine Months Ended

September 25,

dollars in millions

United Kingdom

Czech Republic

Rest of World

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The Company generates the majority of its revenue from the sale of the EyeQ® SoCs to OEM customers through Tier 1 suppliers.

Revenue generated by other product types was deemed to be not material.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We generate the majority of our revenue from the sale of our EyeQ® SoCs to OEMs through sales to Tier 1 automotive suppliers.

EyeQ® SoC sales represented approximately 88 % and 92 % of our revenue for each of the three months ended April 1, 2023 and April 2, 2022, respectively.

Major Customers

1 unchanged sentence

Three months ended

Nine Months Ended

September 25,

dollars in millions

Percent of total revenues:

*Less than 10%

Accounts receivable balances of major customers that amount to 10% or more of total accounts receivable balance:

October 1, 2022

December 25, 2021

Percent of total accounts receivables balance:

*Less than 10%

NOTE 10 - SUBSEQUENT EVENTS

The condensed combined financial statements of the Company are derived from the consolidated financial statements of Intel, which were previously issued for the three and nine months ended October 1, 2022 on October 28, 2022.

Accordingly, the Company has evaluated transactions or other events for consideration as recognized subsequent events in these condensed combined financial statements through October 28, 2022.

Additionally, the Company has evaluated transactions and other events that occurred through December 7, 2022, the date these condensed combined financial statements were available to be issued, for purposes of disclosure of unrecognized subsequent events.

Initial Public Offering

On October 28, 2022, upon completion of Mobileye IPO, we issued 41,000,000 shares of our Class A common stock, at $ 21.00 per share, before underwriting discounts and commissions.

On November 1, 2022, the underwriters exercised their option to purchase an additional 6,150,000 shares.

The offer and sale was pursuant to the registration statement on Form S-1 (File No.

333-267685), as amended, which was declared effective by the SEC on October 25, 2022.

Mobileye’s Class A common stock began trading on the Nasdaq Global Select Market on October 26, 2022 under the ticker symbol “MBLY”.

Concurrently with the closing of the Mobileye IPO, we issued an additional 4,761,905 shares of our Class A common stock to General Atlantic (ME), L.P., a Delaware limited partnership, at $ 21.00 per share, pursuant to a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, for gross proceeds of $ 100 million (the “Concurrent Private Placement”).

In connection with the IPO, we have entered into certain agreements with Intel, including the Master Transaction Agreement, which provides that immediately after completion of the IPO, Intel agrees to ensure that we will have $ 1.0 billion in cash, cash equivalents, or marketable securities.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

In November 2022, we used approximately $ 0.9 billion out of the net proceeds to repay a portion of the indebtedness under the Dividend Note and Intel has contributed to Mobileye the remaining portion of the Dividend Note such that no amounts under the Dividend Note remain owed by us to Intel.

The portion of the net proceeds used to repay part of the Dividend note was such that we retain the $ 1.0 billion cash, cash equivalents, or marketable securities as stipulated by the Master Transaction Agreement.

Equity Incentive Plan

In October 2022, our board of directors approved issuance of restricted stock units to be issued under our equity incentive plan in an aggregate value of $ 264.5 million issuable upon the vesting of such restricted stock units.

In April 2023, the Company’s compensation committee approved the issuance of restricted stock units to be issued under our 2022 Equity Incentive Plan.

The total aggregate fair value of RSUs granted was $ 15.2 million, which consisted of 403 thousand RSUs, which will vest over a service period of three years.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements