What changed in this filing

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Item 1A. Risk Factors

2021-07-28 compared with 2021-04-28 · 84 added, 128 removed, 673 unchanged (24% of the section changed)

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• Our actual financial and operating results could differ materially from any expectations or guidance provided by us concerning future results, including with respect to any cost savings and other potential synergies.

• Failure to integrate the acquired businesses successfully in the expected time-frame may adversely affect our results and financial condition.

• Our business relationships, including customer relationships, may be subject to disruption due to uncertainty associated with the acquisitions.

• We may have difficulty motivating and retaining key personnel in light of the acquisitions.

• We have incurred material secured term loan indebtedness which adversely affects our operating results and cash-flows and contains covenants that could adversely affect our operational freedom and ability to pursue strategic transactions.

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• Average selling prices of our products could decrease rapidly, which would have a material adverse effect on our revenue and gross margins.

• If we are unable to attract, train and retain qualified design and technical personnel, we may not be able to execute our business strategy effectively.

• If we fail to develop and introduce new or enhanced products on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

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• We may have difficulty accurately predicting our future revenue and appropriately budgeting our expenses particularly as we seek to enter new markets where we may not have prior experience.

• If we are unable to attract, train and retain qualified design and technical personnel, we may not be able to execute our business strategy effectively.

• Our business would be adversely affected by the departure of existing members of our senior management team.

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Our actual financial and operating results could differ materially from any expectations or guidance provided by us concerning future results, including (without limitation) expectations or guidance with respect to the financial impact of any cost savings and other potential synergies.

We currently expect to realize material synergies as a result of our acquisitions of the Home Gateway Platform Division of Intel Corporation, or Intel, which we refer to as the Wi-Fi and Broadband assets business, and NanoSemi, Inc., or NanoSemi, and as a result, we currently believe that the acquisitions will, in aggregate, be accretive to our free cash-flow and non-GAAP earnings per share, excluding upfront non-recurring charges, transaction related expenses, and amortization of purchased intangible assets.

The expectations and guidance we have provided with respect to the potential financial impact of the acquisitions are subject to numerous assumptions, however, including assumptions derived from our diligence efforts concerning the status of and prospects for the acquired businesses and assumptions relating to the near-term prospects for the semiconductor industry generally and the markets for the products of the acquired businesses in particular.

The integration of the acquired businesses may present substantial incremental challenges that could materially and adversely affect our ability to realize the currently anticipated financial, operational, and strategic benefits of the acquisitions.

Additional assumptions that could affect currently anticipated results relate to numerous matters, including (without limitation) the following:

Assumptions that could affect currently anticipated results relate to numerous matters, including (without limitation) the following:

• projections of the acquired businesses’ future revenues;

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• the amount of goodwill and intangibles that resulted from the acquisitions;

• certain other purchase accounting adjustments that we recorded in our financial statements in connection with the acquisitions;

• acquisition costs, including restructuring charges, acquisition transition and integration costs;

• our ability to maintain, develop, and deepen relationships with customers of the acquired businesses;

• other financial and strategic risks of the acquisitions, including the possible impact of reduced liquidity of MaxLinear resulting from deal-related cash outlays, the credit risk associated from the potential debt facility described below, and continued uncertainty arising from the COVID-19 pandemic.

We cannot provide any assurances with respect to the accuracy of our assumptions, including our assumptions with respect to future revenues or revenue growth rates, if any, of the acquired businesses, and we cannot provide assurances with respect to our ability to realize the cost savings that we currently anticipate.

Risks and uncertainties that could cause our actual results to differ materially from currently anticipated results include, but are not limited to, risks relating to our ability to successfully complete the integration of the acquired businesses;

currently unanticipated incremental costs that we may incur in connection with completing the integration of the acquired businesses into MaxLinear’s;

risks relating to our ability to realize incremental revenues from the acquisitions in the amounts that we currently anticipate;

risks relating to the willingness of the customers and other partners of the acquired businesses to continue to conduct business with MaxLinear;

• other financial and strategic risks of the acquisitions, including the possible impact of reduced liquidity of MaxLinear resulting from deal-related cash outlays, the credit risk associated from the debt facilities described below, and continued uncertainty arising from the COVID-19 pandemic.

respect to our ability to realize the cost savings that we currently anticipate.

Risks and uncertainties that could cause our actual results to differ materially from currently anticipated results include, but are not limited to, risks relating to our ability to realize incremental revenues from the acquisitions in the amounts that we currently anticipate;

and numerous risks and uncertainties that affect the semiconductor industry generally and the markets for our products and those of the acquired businesses specifically.

We believe the continuing pandemic enhances certain of these risks and presents additional uncertainty in our ability to achieve the financial and strategic objectives of the acquisitions.

Any failure to integrate the acquired businesses successfully and to realize the financial benefits we currently anticipate from the acquisitions would have a material adverse impact on our future operating results and financial condition and could materially and adversely affect the trading price or trading volume of our common stock.

Failure to integrate the acquired businesses with our business and operations successfully in the expected time-frame or otherwise may adversely affect MaxLinear’s operating results and financial condition.

The success of the acquisitions of the Wi-Fi and Broadband assets business and NanoSemi will depend, in substantial part, on our ability to integrate the acquired businesses with MaxLinear and to realize fully the anticipated benefits and potential synergies from the integration, including, among others, currently expected cost savings from duplicative functions;

potential operational efficiencies in our respective supply chains and in research and development investments;

and potential revenue growth resulting from the addition of the product portfolio of the acquired businesses.

Certain of the acquired products of the Wi-Fi and Broadband assets business are supplied to us on a turnkey basis under the terms of a supply agreement with Intel.

While we believe this supply agreement mitigates certain near-term integration risks, we also rely on Intel as a source of supply for these products.

Accordingly, this relationship presents similar supply risks as exist with respect to our other products as a fabless semiconductor company dependent on specific foundry relationships.

See the Risk Factor entitled “ We rely on a limited number of third parties to manufacture, assemble, and test our products, and the failure to manage our relationships with our third-party contractors successfully, or impacts from natural disasters, public health crises, or other labor stoppages in the regions where such contractors operate, could adversely affect our ability to market and sell our products.

” We expect that the completion of the integration of two acquired businesses will be complex and time consuming and will require substantial management time and attention, which may divert attention and resources from other important areas, including our existing businesses.

We may face significant challenges in consolidating our operations with the acquired businesses and addressing the different corporate cultures of MaxLinear and the acquired businesses.

Furthermore, the acquired businesses also operate in jurisdictions materially affected by the COVID-19 pandemic, which enhances integration risks, in particular risks relating to our ability to retain key employees at a time when engagement is difficult, as described in more detail under the Risk Factor entitled “ We may have difficulty motivating and retaining key personnel in light of the acquisitions.

” Additional unanticipated costs may be incurred in the course of integrating our respective businesses.

If the businesses are not successfully integrated, the anticipated benefits of the acquisitions may not be realized fully or at all or may take longer to realize than expected.

In such a case, we would expect our operating results and financial condition to be materially and adversely affected, which could also have a material and adverse effect on the trading price or trading volume of our common stock.

Our business relationships, including customer relationships, and those of the acquired businesses may be subject to disruption due to uncertainty associated with the acquisitions.

In response to the announcement of the acquisitions, customers, vendors, licensors, and other third parties with whom we or the acquired businesses do business or otherwise have relationships may experience uncertainty associated with the acquisitions, and this uncertainty could materially affect their decisions with respect to existing or future business relationships with MaxLinear.

As a result, we are in many instances unable to evaluate the impact of the acquisitions on certain assumed contract rights and obligations, including intellectual property rights.

These business relationships may be subject to disruption as customers and others may elect to delay or defer purchase or design-win decisions or switch to other suppliers due to the uncertainty about the direction of our offerings, any perceived unwillingness on our part to support existing products of the acquired businesses, or any general perceptions by customers or

other third parties that impute operational or business challenges to us arising from the acquisitions.

In addition, customers or other third parties may attempt to negotiate changes in existing business relationships, which may result in additional obligations imposed on us.

These disruptions could have a material adverse effect on our business, operating results, and financial condition.

Any loss of customers, customer products, design win opportunities, or other important strategic relationships could have a material adverse effect on our business, operating results, and financial condition and could have a material and adverse effect on the trading price or trading volume of our common stock.

We may have difficulty motivating and retaining key personnel in light of the acquisitions.

Uncertainty about the effect of the acquisitions on key employees may have an adverse effect on MaxLinear or the acquired businesses.

Employee retention may be particularly challenging as our employees may experience frustrations during the integration process and uncertainty about their future roles with us following completion of integration of the acquired businesses, which also operate in jurisdictions materially affected by the COVID-19 pandemic.

Attempting to complete the integration of these acquired businesses and new personnel around the world has been and will continue to be substantially complicated by continuing restrictions on travel and social distancing.

We are taking various steps to mitigate these risks, but we cannot predict whether or to what extent the pandemic may adversely affect our ability to retain employees and successfully integrate the acquired businesses.

If key employees depart, we may incur significant costs in identifying, hiring, and retaining replacements, which could substantially reduce or delay our ability to realize the anticipated benefits of the acquisitions, which could have a material adverse effect on our business, operating results, and financial condition.

We have incurred approximately $175.0 million of incremental secured term loan indebtedness, primarily to fund our $150.0 million acquisition of the Wi-Fi and Broadband assets business.

As of March 31, 2021, our aggregate indebtedness was $349.8 million.

Any failure to realize the financial benefits we currently anticipate from the acquisitions would have a material adverse impact on our future operating results and financial condition and could materially and adversely affect the trading price or trading volume of our common stock.

In June 2021, we incurred approximately $350.0 million of secured term loan indebtedness, the proceeds of which we used to repay the remaining outstanding principal on $175.0 million of incremental secured term loan indebtedness which we had used in part to fund our $150.0 million acquisition of the Wi-Fi and Broadband assets business in July 2020 and the remaining outstanding principal on $425.0 million of secured term loan indebtedness which we had used to fund a previous acquisition.

As of June 30, 2021, our aggregate indebtedness was $350.0 million.

Such indebtedness adversely affects our operating results and cash-flows as we satisfy our underlying interest and principal payment obligations and contains financial and operational covenants that could adversely affect our operational freedom or ability to pursue strategic transactions that we would otherwise consider to be in the best interests of stockholders, including obtaining additional indebtedness to finance such transactions.

MaxLinear financed the $150.0 million acquisition of the Wi-Fi and Broadband assets business in part with an incremental secured term loan facility in an aggregate principal amount of approximately $175.0 million, of which $137.8 million was outstanding as of March 31, 2021.

The incremental term loan has a three-year term expiring in July 2023 and bears interest, at our option, at either an Adjusted LIBOR plus a fixed applicable margin of 4.25% per annum or an Adjusted Base Rate plus a fixed applicable margin of 3.25% per annum.

The incremental term loan of $175.0 million amortizes in quarterly installments of principal equal to (i) 1.25% of the original aggregate principal amount of the incremental term loan on the last day of each of the first through fourth full fiscal quarters of the Company after July 31, 2020, (ii) 2.50% of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the fifth through eighth full fiscal quarters of the Company after July 31, 2020, and (iii) 3.75% of the original aggregate principal amount of the incremental term loan on the last day of each of the ninth through the eleventh full fiscal quarters of the Company after July 31, 2020.

The incremental term loan facility is secured by a first priority security interest in MaxLinear’s assets, subject to certain customary exceptions, as well as pledges of our equity interests in certain subsidiaries.

We had previously only carried long term debt on our balance sheet from one acquisition.

We have prepaid a substantial portion of the total principal of debt from the prior acquisition and have financed the remainder of our operations principally through working capital generated from operations as well as sales and issuances of our equity securities.

MaxLinear previously financed the acquisition of Exar in part with a secured initial term loan facility in an aggregate principal amount of approximately $425.0 million, of which $212.0 million remained outstanding as of March 31, 2021.

The outstanding principal on the initial term loan is due at maturity on May 12, 2024.

Our outstanding initial term loan debt is subject to an Adjusted LIBOR plus a 2.5% fixed applicable margin during the remainder of the term of the loan.

The existing term loan facility is secured by a first priority security interest in MaxLinear’s assets, subject to certain customary exceptions, as well as pledges of our equity interests in certain subsidiaries.

As of March 31, 2021, our aggregate indebtedness under the initial and incremental term loan facilities was $349.8 million.

As of June 30, 2021, our aggregate indebtedness was $350.0 million from an initial term loan under the June 23, 2021 Credit Agreement.

The June 23, 2021 Credit Agreement also provides for the Revolving Facility of up to $100.0 million, which remains undrawn as of June 30, 2021.

The credit agreement also permits the Company to request incremental loans in an aggregate principal amount not to exceed the sum of an amount equal to the greater of (x) $175.0 million and (y) 100% of consolidated EBITDA, plus the amount of certain voluntary prepayments, plus an unlimited amount that is subject to pro forma compliance with certain first lien net leverage ratio, secured net leverage ratio and total net leverage ratio tests.

The Initial Term Loan under the June 23, 2021 Credit Agreement has a seven-year term expiring in June 2028 and bears interest at either an Adjusted LIBOR plus a fixed applicable margin of 2.25% or an Adjusted Base Rate plus a fixed applicable margin of 1.25%, at our option.

Commencing on September 30, 2021, the Initial Term Loan under the June 23, 2021 Credit Agreement will amortize in equal quarterly installments equal to 0.25% of the original principal amount, with the balance payable on June 23, 2028.

The Company is subject to commitment fees ranging from 0.175% to 0.25% on the undrawn portion of the revolving facility, and any outstanding loans under the revolving facility will bear interest at either an Adjusted LIBOR plus a margin of 1.00% to 1.75% or an Adjusted Base Rate plus a margin of 0% to 0.75%.

The Company’s obligations under the June 23, 2021 Credit Agreement are required to be guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the credit agreement.

Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the subsidiary guarantors.

We had previously carried long term debt on our balance sheet from two acquisitions.

We have repaid all of the total principal of debt from the prior acquisitions and have financed the remainder of our operations principally through working capital generated from operations as well as sales and issuances of our equity securities.

MaxLinear previously financed the acquisition of the Wi-Fi and Broadband assets business in July 2020 with a portion of proceeds from a secured incremental term loan facility in an aggregate principal amount of approximately $175.0 million and the acquisition of Exar in part with a secured initial term loan facility in an aggregate principal amount of approximately $425.0 million.

Our material incremental indebtedness adversely affects our operating expenses through increased interest payment obligations and adversely affects our ability to use cash generated from operations as we repay interest and principal under the term loans.

In addition, the incremental term loan provisions include financial covenants such as an initial maximum total net leverage ratio of 3.5 to 1 which decreases to 3.0 to 1 beginning with the sixth full fiscal quarter after July 31, 2020, a requirement to maintain certain public corporate debt ratings, and operational covenants that may adversely affect our ability to engage in certain activities, including certain financing and acquisition transactions, stock repurchases, guarantees, and similar

transactions, without obtaining the consent of the lenders, which may or may not be forthcoming.

The initial secured term loan is only subject to operational covenants.

In addition, the revolving credit facility provisions under the June 23, 2021 Credit Agreement include financial covenants such as an initial maximum secured net leverage ratio of 3.5 to 1, which temporarily increases to 3.75 to 1 following the consummation of certain material permitted acquisitions, and operational covenants that may adversely affect our ability to engage in certain activities, including obtaining additional financing, granting liens, undergoing certain fundamental changes, or making investments or certain restricted payments, and selling assets, and similar transactions, without obtaining the consent of the lenders, which may or may not be forthcoming.

The initial secured term loan under the June 23, 2021 Credit Agreement is only subject to operational covenants.

Lastly, our borrowing costs can be affected by periodic credit ratings from independent rating agencies.

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Accordingly, outstanding indebtedness could adversely affect our operational freedom or ability to pursue strategic transactions that we would otherwise consider to be in the best interests of stockholders, including obtaining additional indebtedness to finance such transactions.

Specifically, our combined indebtedness has important consequences to investors in our common stock, including the following:

• we are subject to substantial variable interest rate risk because our interest rate under the incremental term loan varies based on a fixed margin of 4.25% per annum over an adjusted LIBOR rate or 3.25% per annum over an adjusted base rate and our interest rate under the initial term loan varies based on a fixed margin of 2.5% over an adjusted LIBOR rate.

If interest rates were to increase substantially, it would adversely affect our operating results and could affect our ability to service the term loan indebtedness;

Specifically, our indebtedness has important consequences to investors in our common stock, including the following:

• we are subject to substantial variable interest rate risk because our interest rate under Initial Term Loan under the June 23, 2021 Credit Agreement varies based on a fixed margin of 2.25% per annum over an adjusted LIBOR rate or 1.25% per annum over an adjusted base rate and our interest rate for any outstanding principal under the revolving credit facility varies based a margin of 0% to 0.75% over adjusted base rate or a margin of 1.00% to 1.75% over an adjusted LIBOR rate, and we are also subject to commitment fees ranging from 0.175% to 0.25% on the undrawn portion of the revolving facility.

If interest rates were to increase substantially, it would adversely affect our operating results and could affect our ability to service our indebtedness;

• a portion of our cash flows is dedicated to the payment of interest and when applicable, principal, on our indebtedness and other obligations and will not be available for use in our business;

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Subject to customary cure rights, any default would permit the holders of the indebtedness to accelerate repayment of this debt and could cause defaults under other indebtedness that we have, any of which could have a material adverse effect on the trading price of our common stock.

We expect to incur substantial expenses related to the integration of MaxLinear and the acquired businesses.

We expect to incur substantial expenses in connection with completion of the integration of the operations of MaxLinear and the acquired businesses.

We expect operational integration to require substantial management attention.

Numerous factors, many of which are beyond our control, could affect the total cost or the timing of expected integration expenses.

Moreover, many of the expenses that will be incurred are by their nature difficult to estimate accurately at the present time.

These expenses could, particularly in the near term, reduce the savings that we expect to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the businesses.

These integration expenses may result in MaxLinear’s taking significant charges against earnings.

We have recorded additional goodwill and other intangible assets in connection with the acquired businesses.

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We conduct our annual goodwill and indefinite-lived intangible asset impairment analysis on October 31 each year, or more frequently if we believe indicators of impairment exist.

In addition, there can be no guarantee that acquired

intangible assets, particularly in-process research and development, will generate revenues or profits that we include in our forecast that is the basis for their fair values as of the acquisition date.

In addition, there can be no guarantee that acquired intangible assets, particularly in-process research and development, will generate revenues or profits that we include in our forecast that is the basis for their fair values as of the acquisition date.

Any such impairment charges relating to goodwill or other intangible assets could have a material impact on our operating results in future periods, and the announcement of a material impairment could have an adverse effect on the trading price and trading volume of our common stock.

As of March 31, 2021, our balance sheet reflected goodwill of $302.8 million and other intangible assets of $191.5 million.

As of June 30, 2021, our balance sheet reflected goodwill of $302.8 million and other intangible assets of $175.0 million.

Consequently, we could recognize material impairment charges in the future.

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On March 11, 2020, the World Health Organization declared a global pandemic regarding COVID-19.

The COVID-19 pandemic has reached all of the countries and states in which we operate, including in California where our headquarters and central engineering team are located, as well as Spain, India, Singapore, Taiwan, Canada, Japan, South Korea, Hong Kong, Israel, Germany, and Austria, where additional engineering, sales, and administrative personnel are located.

COVID-19 pandemic has reached all of the countries and states in which we operate, including in California where our headquarters and central engineering team are located, as well as Spain, India, Singapore, Taiwan, Canada, Japan, South Korea, Hong Kong, Israel, Germany, and Austria, where additional engineering, sales, and administrative personnel are located.

In many of these jurisdictions, local authorities have instituted stay-at-home or shelter-in-place orders.

To protect the health and safety of our employees, we adopted social distancing policies including suspending employee travel and implementing remote work arrangements for substantially all of our workforce worldwide.

As of March 31, 2021, some of our workforce have returned to the office at reduced capacity adhering to local health authority guidelines and we are encouraging our employees to get COVID-19 vaccines as they become available.

As of June 30, 2021, some of our workforce have returned to the office at reduced capacity adhering to local health authority guidelines and we are encouraging our employees to get COVID-19 vaccines as they become available.

While we experienced some negative impact to our net revenue and gross profits in the first half of 2020 due to several industry-wide dynamics related to COVID-19, including supply constraints described above, as well as certain customer push-out requests, since then, we have been benefiting from the work-from-home environment that is driving an increase in demand for certain of our products.

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Some chip manufacturers are estimating this supply shortage may continue into 2022.

While these chip manufacturers are working to increase capacity in the future, and we are continuing to work closely with our suppliers and customers to minimize the potential adverse impacts of the supply shortage, such shortage may have a near-term impact on our ability to meet increased demand on certain products and have a negative impact on our operating results beginning in the second quarter of 2021, which may continue into 2022.

Further, global financial markets reacted negatively to the COVID-19 pandemic’s impacts causing significant declines in the stock price and market capitalization of many companies across all industries, although some have recovered.

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As our products are integrated into a variety of communications and industrial platforms, our competitors range from large, international merchant semiconductor companies offering a wide range of semiconductor products to smaller companies specializing in narrow markets, to internal or vertically integrated engineering groups within certain of our customers.

Our primary merchant semiconductor competitors include Silicon Laboratories, Inc., NXP Semiconductors N.V., MediaTek, Inc., Broadcom Ltd, Rafael Microelectronics, Inc., Inphi Corporation (which recently entered into a definitive agreement to be acquired by Marvell Technology Group Ltd.), M/A-COM Technology Solutions Holdings, Inc., Semtech Corporation, Qorvo Inc., Texas Instruments Incorporated, HiSilicon Technologies Co., Ltd., Analog Devices, Inc., Renesas Electronics Corporation, Maxim Integrated Products, Inc.

Our primary merchant semiconductor competitors include Silicon Laboratories, Inc., NXP Semiconductors N.V., MediaTek, Inc., Broadcom Ltd, Rafael Microelectronics, Inc., Marvell Technology Group Ltd., M/A-COM Technology Solutions Holdings, Inc., Semtech Corporation, Qorvo Inc., Texas Instruments Incorporated, HiSilicon Technologies Co., Ltd., Analog Devices, Inc., Renesas Electronics Corporation, Maxim Integrated Products, Inc.

(which entered into a definitive agreement to be acquired by Analog Devices), Monolithic Power Systems, Inc., Microchip Technology, Inc., Ambarella, Inc., and Infineon Technologies AG.

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Moreover, the competitive landscape is changing as a result of intense consolidation within our industry as some of our competitors have merged with or been acquired by other competitors, and other competitors have begun to collaborate with each other.

In addition, changes in government trade policies, including the imposition of tariffs and export restrictions, could limit our ability to sell our products to certain customers and adversely affect

our ability to compete successfully.

In addition, changes in government trade policies, including the imposition of tariffs and export restrictions, could limit our ability to sell our products to certain customers and adversely affect our ability to compete successfully.

These developments may materially and adversely affect our current and future target markets and our ability to compete successfully in those markets.

We depend on a limited number of customers, that have undergone or are undergoing consolidation and who themselves are dependent on a consolidating set of service provider customers, for a substantial portion of our revenue, and the loss of, or a significant reduction in orders from one or more of our major customers could have a material adverse effect on our revenue and operating results.

In the three months ended March 31, 2021, our top three customers accounted for 37% of our net revenue, and our ten largest customers collectively accounted for 72% of our net revenue, of which distributor customers accounted for 39% of our net revenue.

In the six months ended June 30, 2021, our top two customers accounted for 27% of our net revenue, and our ten largest customers collectively accounted for 70% of our net revenue, of which distributor customers accounted for 28% of our net revenue.

We expect that our operating results for the foreseeable future will continue to show a substantial percentage of sales dependent on a relatively small number of customers.

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A significant portion of our revenue is attributable to demand for our products in markets for broadband (previously connected home) solutions, and development delays and consolidation trends among cable and satellite Pay-TV and broadband operators could adversely affect our future revenues and operating results.

For the three months ended March 31, 2021 and 2020, revenue directly attributable to broadband (previously connected home) applications accounted for approximately 59% and 43% of our net revenue, respectively.

For the six months ended June 30, 2021 and 2020, revenue directly attributable to broadband (previously connected home) applications accounted for approximately 57% and 39% of our net revenue, respectively.

Delays in the development of, or unexpected developments in the broadband markets could have an adverse effect on order activity by original equipment manufacturers in these markets and, as a result, on our business, revenue, operating results and financial condition.

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Our product offerings also include broadband data access, power management and interface technologies which are ubiquitous functions in new and existing markets such as wireless and wireline communications infrastructure, broadband access, industrial, enterprise network, and automotive applications.

We have further expanded our product offerings to include Wi-Fi, ethernet and broadband gateway processor systems-on-chip, or SoCs, and intellectual property that utilizes patented machine learning techniques to improve signal integrity and power efficiency in SoCs, application-specific integrated circuits, or ASICs, and field-programmable gate arrays, or FPGAs, used in next-generation communication and artificial intelligence systems.

Our future revenue growth, if any, will depend in part on our ability to further penetrate into, and expand beyond, these markets with analog, digital and mixed-signal solutions targeting the markets for Wi-Fi and broadband, high-speed optical interconnects for data center, metro, and long-haul optical modules, telecommunications wireless infrastructure, and cable DOCSIS 3.1 network infrastructure products.

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Many of our products originated with our research and development efforts, which we believe have provided us with a significant competitive advantage.

For the three months ended March 31, 2021 and 2020, our research and development expense was $63.2 million and $25.7 million, respectively.

For the six months ended June 30, 2021 and 2020, our research and development expense was $137.6 million and $53.7 million, respectively.

We monitor such expenditures as part of our strategy of devoting focused research and development efforts on the development of innovative and sustainable product platforms.

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We are currently benefiting from an uptick in demand for certain products due to the work-from-home environment caused by the COVID-19 pandemic.

A significant variance in our operating results or rates of growth, if any, could lead to

substantial volatility in our stock price.

A significant variance in our operating results or rates of growth, if any, could lead to substantial volatility in our stock price.

We may not sustain our current growth rate, and we may not be able to manage future growth effectively.

Our net revenue increased from $62.0 million in the three months ended March 31, 2020 to $209.4 million in the three months ended March 31, 2021 due to market strength attributed to the work-from-home environment that is driving an increase in demand for certain of our products, particularly those from our acquisition of the Wi-Fi and Broadband assets business.

Our net revenue increased from $127.2 million in the six months ended June 30, 2020 to $414.7 million in the six months ended June 30, 2021 due to the results of the acquired businesses and market strength attributed to the work-from-home environment that is driving an increase in demand for certain of our products, particularly those from our acquisition of the Wi-Fi and Broadband assets business.

The COVID-19 pandemic could result in increased volatility in our sales and revenues.

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We may experience substantial period-to-period fluctuations in future operating results due to the erosion of our average selling prices.

From time to time, we have reduced the average unit price of our products due to competitive pricing pressures,

new product introductions by us or our competitors, and for other reasons, and we expect that we will have to do so again in the future.

From time to time, we have reduced the average unit price of our products due to competitive pricing pressures, new product introductions by us or our competitors, and for other reasons, and we expect that we will have to do so again in the future.

In particular, we believe that industry consolidation has provided a number of larger semiconductor companies with substantial market power, which has had an adverse impact on selling prices in some of our markets.

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In addition, under certain of our agreements with key distributors, we provide protection for reductions in selling prices of the distributors’ inventory, which could have a significant adverse effect on our operating results if the selling prices for those products fell dramatically.

If we are unable to attract, train and retain qualified personnel, especially our design and technical personnel, we may not be able to execute our business strategy effectively.

Our future success depends on our ability to retain, attract and motivate qualified personnel, including our management, sales and marketing and finance, and especially our design and technical personnel.

We do not know whether we will be able to attract and retain all of these personnel as we continue to pursue our business strategy.

Historically, we have encountered difficulties in hiring and retaining qualified engineers because there is a limited pool of engineers with the expertise required in our field.

Competition for these personnel is intense in the semiconductor industry.

As the source of our technological and product innovations, our design and technical personnel represent a significant asset.

The loss of the services of one or more of our key employees, especially our key design and technical personnel, or our inability to retain, attract and motivate qualified

design and technical personnel, could have a material adverse effect on our business, financial condition and results of operations.

If we fail to develop and introduce new or enhanced products on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

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Our operating history had previously focused on developing integrated circuits for specific terrestrial, cable and satellite television, and broadband voice and data applications, satellite set-top and gateway boxes and outdoor units and physical medium devices for the optical interconnect markets, and as part of our strategy, we seek to expand our addressable market into new product categories.

For example, we expanded into the markets for the wired whole-home broadband connectivity market and entered the markets for wireless telecommunications infrastructure and power management and interface technologies which are ubiquitous functions in wireless and wireline communications infrastructure, broadband access, industrial, enterprise network, and automotive applications.

which are ubiquitous functions in wireless and wireline communications infrastructure, broadband access, industrial, enterprise network, and automotive applications.

We have also expanded into the markets for Wi-Fi, Ethernet and Broadband Gateway Processor SoCs and intellectual property that utilizes patented machine learning techniques to improve signal integrity and power efficiency in systems-on-chip, or SoCs, application-specific integrated circuits, or ASICs, and field-programmable gate arrays, or FPGAs, used in next-generation communication and artificial intelligence systems.

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If our revenue does not increase as anticipated, we could incur significant losses due to our higher expense levels if we are not able to decrease our expenses in a timely manner to offset any shortfall in future revenue.

If we are unable to attract, train and retain qualified personnel, especially our design and technical personnel, we may not be able to execute our business strategy effectively.

We do not know whether we will be able to attract and retain all of these personnel as we continue to pursue our business strategy.

Historically, we have encountered difficulties in hiring and retaining qualified engineers because there is a limited pool of engineers with the expertise required in our field.

Competition for these personnel is intense in the semiconductor industry.

As the source of our technological and product innovations, our design and technical personnel represent a significant asset.

The loss of the services of one or more of our key employees, especially our key design and technical personnel, or our inability to retain, attract and motivate qualified design and technical personnel, could have a material adverse effect on our business, financial condition and results of operations.

Our business would be adversely affected by the departure of existing members of our senior management team.

13 unchanged sentences

Despite these uncertainties, we devote substantial resources, including design, engineering, sales, marketing and management efforts, to qualifying our products with customers in anticipation of sales.

are unsuccessful or delayed in qualifying any of our products with a customer, sales of this product to the customer may be precluded or delayed, which may result in a decrease in our revenue and cause our business to suffer.

If we are unsuccessful or delayed in qualifying any of our products with a customer, sales of this product to the customer may be precluded or delayed, which may result in a decrease in our revenue and cause our business to suffer.

Winning business is subject to lengthy competitive selection processes that require us to incur significant expenditures.

9 unchanged sentences

The typical time from early engagement by our sales force to actual product introduction runs from nine to twelve months for the consumer market, to as much as 18 to 24 months for the satellite markets, and 36 months or longer for industrial, wired and wireless infrastructure markets.

The delays inherent in these lengthy sales cycles increase the risk that a customer will decide to cancel, curtail, reduce or delay its product plans, causing us to lose anticipated sales.

The delays inherent in these lengthy sales cycles increase the risk that a customer will decide to cancel, curtail, reduce or delay its product plans,

causing us to lose anticipated sales.

In addition, any delay or cancellation of a customer’s plans could materially and adversely affect our financial results, as we may have incurred significant expense and generated no revenue.

39 unchanged sentences

We sell our products throughout the world.

Products shipped to Asia accounted for 82% of our net revenue in the three months ended March 31, 2021.

In addition, as of March 31, 2021, approximately 72% of our employees are located outside of the United States.

Products shipped to Asia accounted for 82% of our net revenue in the six months ended June 30, 2021.

In addition, as of June 30, 2021, approximately 72% of our employees are located outside of the United States.

The majority of our products are manufactured, assembled and tested in Asia, and all of our major distributors are located in Asia.

22 unchanged sentences

In recent years, diplomatic and trade relationships between the U.S.

government and China have been frayed.

government and China have

Events in Hong Kong have also prompted other governments such as that of the United Kingdom to reconsider its trade and business relationships with China and with certain Chinese companies.

8 unchanged sentences

Department of Commerce imposed a seven-year export ban on ZTE, which was subsequently lifted as of July 13, 2018.

Although we have not had significant sales to ZTE and certain other entities, we did have increasing sales to Huawei in the past year, and we believe the imposition of governmental prohibitions on selling our products to Huawei will adversely affect our revenues and operating results in the near term.

Although we have not had significant sales to ZTE and certain other entities, we did have increasing sales to Huawei in the prior year, and we believe the imposition of governmental prohibitions on selling our products to Huawei will adversely affect our revenues and operating results in the near term.

We cannot provide assurances that similar disruptions of distribution arrangements in the future or the imposition of governmental prohibitions on selling our products to particular customers will not also adversely affect our revenues and operating results.

23 unchanged sentences

We depend on companies that provide other components of the devices to support prevailing industry standards.

Many of these companies are significantly larger and more influential in driving industry standards than we are.

Many of these companies are significantly larger and more

influential in driving industry standards than we are.

Some industry standards may not be widely adopted or implemented uniformly, and competing standards may emerge that may be preferred by our customers or end users.

17 unchanged sentences

Claims of this sort also could harm our relationships with our customers or distributors and might deter future customers from doing business with us.

In order to maintain our relationships with existing customers and secure business from new customers, we have been required

from time to time to provide additional assurances beyond our standard terms.

In order to maintain our relationships with existing customers and secure business from new customers, we have been required from time to time to provide additional assurances beyond our standard terms.

If any future proceedings result in an adverse outcome, we could be required to:

26 unchanged sentences

Although we have taken steps to minimize the risk of this occurring, any such failure to identify unauthorized use and otherwise adequately protect our intellectual property would adversely affect our business.

Moreover, if we are required to commence litigation, whether as a plaintiff or defendant as has occurred in the

past, not only will this be time-consuming, but we will also be forced to incur significant costs and divert our attention and efforts of our employees, which could, in turn, result in lower revenue and higher expenses.

Moreover, if we are required to commence litigation, whether as a plaintiff or defendant as has occurred in the past, not only will this be time-consuming, but we will also be forced to incur significant costs and divert our attention and efforts of our employees, which could, in turn, result in lower revenue and higher expenses.

We also rely on customary contractual protections with our customers, suppliers, distributors, employees and consultants, and we implement security measures to protect our trade secrets.

9 unchanged sentences

The agreement does not affect our ability to use our registered trademark “MxL”, which we use on our products.

Due to our agreement not to register the “MAXLINEAR” mark, our ability to effectively prevent third parties from using the “MAXLINEAR” mark in connection with similar products or technology may be affected.

Due to our agreement not to register the “MAXLINEAR” mark, our ability to effectively prevent third parties from using the “MAXLINEAR” mark in

connection with similar products or technology may be affected.

If we are unable to protect our trademarks, we may experience difficulties in achieving and maintaining brand recognition and customer loyalty.

15 unchanged sentences

Open source software is typically freely accessible, usable and modifiable.

Certain open source software licenses

require a user who intends to distribute the open source software as a component of the user’s software to disclose publicly part or all of the source code to the user’s software.

Certain open source software licenses require a user who intends to distribute the open source software as a component of the user’s software to disclose publicly part or all of the source code to the user’s software.

In addition, certain open source software licenses require the user of such software to make any derivative works of the open source code available to others on unfavorable terms or at no cost.

24 unchanged sentences

In addition, if these third parties fail to deliver quality products and components on time and at reasonable prices, we could have difficulties fulfilling our customer orders, our net revenue could decline and our business, financial condition and results of operations would be adversely affected.

Additionally, our product shipment and manufacturing capacity may be similarly reduced or eliminated at one or more facilities due to the fact that the majority of our fabrication and assembly and test contractors are all located in the Pacific Rim

region, principally in China, Taiwan, and Singapore.

The risk of earthquakes in these geographies is significant due to the proximity of major earthquake fault lines, and Taiwan in particular is also subject to typhoons and other Pacific storms, and more recently, a drought impacting the water supply which chip manufacturers rely upon to fabricate chip products.

3 unchanged sentences

If such disruption were to recur over a prolonged period, it could have a material impact on our revenues and our business.

Any disruption resulting from similar events on a larger scale or over a prolonged period could cause significant delays in shipments of our products until we are able to resume such shipments, or shift our manufacturing, assembly, or test from the affected contractor to another third-party vendor, if needed.

Any disruption resulting from similar events on a larger scale or over a prolonged period could cause significant delays in shipments of our products until we are able to resume such shipments, or

shift our manufacturing, assembly, or test from the affected contractor to another third-party vendor, if needed.

There can be no assurance that alternative capacity could be obtained on favorable terms, if at all.

2 unchanged sentences

We currently sell a large portion of our products to customers through our distributors, who maintain their own inventories of our products.

Sales to distributors accounted for approximately 44 % and 61 % of our net revenue in the three months ended March 31, 2021 and 2020, respectively.

Sales to distributors accounted for approximately 45% and 63% of our net revenue in the six months ended June 30, 2021 and 2020, respectively.

Upon shipment of product to these distributors, title to the inventory transfers to the distributor and the distributor is invoiced, generally with 30 to 60 day terms.

26 unchanged sentences

Any failure of our corporate infrastructure could have a material adverse effect on our business, financial condition and results of operations.

Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.

Upon expiration or termination of any of our agreements with third-party

vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.

Additionally, we incorporate third-party technology into and with some of our products, and we may do so in future products.

41 unchanged sentences

• disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain intellectual property protection for our technologies;

• acquisitions may not be accretive and may cause dilution to our earnings per shares;

• acquisitions may not be accretive and may cause dilution to our earnings per share;

• announcement or expectation of additional financing efforts;

2 unchanged sentences

Furthermore, the stock markets recently have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.

These fluctuations often have been unrelated or

disproportionate to the operating performance of those companies.

These fluctuations often have been unrelated or disproportionate to the operating performance of those companies.

These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our common stock.

6 unchanged sentences

If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline.

If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

If one or more of these

analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

Future sales of our common stock in the public market could cause our share price to decline.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.

As of March 31, 2021, we had approximately 75.4 million shares of common stock outstanding.

As of June 30, 2021, we had approximately 76.5 million shares of common stock outstanding.

All shares of common stock are freely tradable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, unless held by our “affiliates,” as that term is defined under Rule 144 of the Securities Act.

25 unchanged sentences

Tariffs on our customers’ products may adversely affect our gross profit margins in the future due to the potential for increased pressure on our selling prices by customers seeking to offset the impact of tariffs on their own products.

In addition, tariffs could make our OEM and ODM customers’ products less attractive relative to products offered by their competitors, which may not be subject to similar tariffs.

tariffs could make our OEM and ODM customers’ products less attractive relative to products offered by their competitors, which may not be subject to similar tariffs.

Some OEM and ODMs in our industry have already implemented short-term price adjustments to offset such tariffs and transitioned their production and supply chain to locations outside of China.

24 unchanged sentences

To the extent we believe it is more likely than not that some portion of our deferred tax assets will not be realized, we record a valuation allowance against the deferred tax asset.

Realization of our deferred tax assets is dependent primarily upon future taxable

income in the applicable jurisdiction.

Based upon our review of all positive and negative evidence, we concluded that a full valuation allowance should continue to be recorded against our state and certain federal and foreign net deferred tax assets at March 31, 2021.

Realization of our deferred tax assets is dependent primarily upon future taxable income in the applicable jurisdiction.

On a periodic basis we evaluate our deferred tax assets for realizability.

4 unchanged sentences

If we fail to satisfy the conditions for receipt of these tax incentives, or to the extent U.S.

or other tax authorities challenge our operation under these favorable tax incentive programs or our intercompany transfer pricing agreements, our taxable income could be taxed at higher federal or foreign statutory rates and our income tax liability and expense could materially increase beyond our projections.

our income tax liability and expense could materially increase beyond our projections.

Each of our Singapore tax incentives is separate and distinct from the others, and may be granted, withheld, extended, modified, truncated, complied with or terminated independently without any effect on the other incentives.

9 unchanged sentences

We assumed an obligation associated with certain defined benefit retirement plans, including a pension plan, which cover certain employees of the Wi-Fi and Broadband assets business and generally provide benefits based on negotiated amounts for each year of service.

These plans were underfunded by $3.1 million as of March 31, 2021 based on current projections and plan assets.

These plans were underfunded by $3.2 million as of June 30, 2021 based on current projections and plan assets.

We have never managed defined benefit plans in our operating history.

9 unchanged sentences

Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud.

possible outcomes could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our consolidated financial statements and could result in investigations or sanctions by the SEC, the New York Stock Exchange, or NYSE, or other regulatory authorities or in stockholder litigation.

Any of these possible outcomes could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our consolidated financial statements and could result in investigations or sanctions by the SEC, the New York Stock Exchange, or NYSE, or other regulatory authorities or in stockholder litigation.

Any of these factors ultimately could harm our business and could negatively impact the market price of our securities.

3 unchanged sentences

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be

considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

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 1A. Risk Factors