What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-02-01 compared with 2022-02-02 · 291 added, 353 removed, 1175 unchanged (35% of the section changed)

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An evaluation was performed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, to determine whether any change in our internal control over financial reporting occurred during the fiscal quarter ended December 31, 2022 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 of the Exchange Act, as amended, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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The information required by Item 10 with respect to our directors and executive officers will be either (i) included in an amendment to this Annual Report on Form 10-K or (ii) incorporated by reference to our Definitive Proxy Statement to be filed in connection with our 2023 Annual Meeting of Stockholders, or the 2023 Proxy Statement.

Such amendment in the 2022 Proxy Statement will be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2021.

Such amendment in the 2023 Proxy Statement will be filed with the SEC no later than 120 days after December 31, 2022.

Item 405 of Regulation S-K calls for disclosure of any known late filing or failure by an insider to file a report required by Section 16(a) of the Exchange Act.

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We have adopted a code of ethics and employee conduct that applies to our board of directors and all of our employees, including our chief executive officer and principal financial officer.

Our code of conduct is available at our website by visiting www.maxlinear.com and clicking through “Investors,” “Corporate Governance,” “Governance,” “Governance Documents,” and “Code of Conduct.” When required by the rules of the NASDAQ Stock Market LLC, or NASDAQ, or the Securities and Exchange Commission, or SEC, we will disclose any future amendment to, or waiver of, any provision of the code of conduct for our chief executive officer and principal financial officer or any member or members of our board of directors on our website within four business days following the date of such amendment or waiver.

Our code of conduct is available at our website by visiting www.maxlinear.com and clicking through “Investors,” “Corporate Governance,” “Governance,” “Governance Documents,” and “Code of Conduct.” When required by the rules of the Nasdaq Stock Market LLC, or Nasdaq, or the SEC, we will disclose any future amendment to, or waiver of, any provision of the code of conduct for our chief executive officer and principal financial officer or any member or members of our board of directors on our website within four business days following the date of such amendment or waiver.

The information required by Item 10 with respect to our audit committee is incorporated by reference from the information set forth under the caption “Corporate Governance and Board of Directors — Board Committees” in either an amendment to this Annual Report on Form 10-K or the 2023 Proxy Statement.

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The information required by Item 13 is incorporated by reference from the information set forth under the captions “Corporate Governance and Board of Directors — Director Independence” and “Related Person Transactions and Section 16(a) Beneficial Ownership Reporting Compliance” in either an amendment to this Annual Report on Form 10-K or our 2023 Proxy Statement.

PRINCIPAL ACCOUNTING FEES AND SERVICES

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 is incorporated by reference from the information set forth under the caption “Proposal Number 3 — Ratification of Appointment of Independent Registered Public Accounting Firm” in either an amendment to this Annual Report on Form 10-K or our 2023 Proxy Statement.

PART IV — FINANCIAL INFORMATION

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

a) Documents filed as part of the report

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333-162947)).

3.2 Registrant’s Amended and Restated Bylaws, as amended to date (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on April 14, 2021 (File No.

3.2 Registrant’s Certificate of Retirement (incorporated by reference to Exhibit 3.1 of Registrant’s Form 8-A/A filed on July 30, 2017).

3.3 Registrant’s Amended and Restated Bylaws, as amended to date (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 17, 2022 (File No.

4.1 Specimen common stock certificate of Registrant (incorporated by reference to Exhibit 4.1 of the Registrant’s Amendment No.

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10.13 Debt Commitment Letter by and among MaxLinear, Inc., JPMorgan Chase Bank, N.A., Deutsche Bank AG New York Branch, and Deutsche Bank Securities Inc., dated as of March 28, 2017 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K/A filed on March 31, 2017 (File No.

10.14 Credit Agreement, dated as of May 12, 2017, by and among MaxLinear, Inc., the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (incorporated by references to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on May 12, 2017 (File No.

Exhibit Number Exhibit Title

10.15 Security Agreement, dated as of May 12, 2017, by and among MaxLinear, Inc., the subsidiary guarantors from time to time party thereto, and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by references to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on May 12, 2017 (File No.

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10.27 Security Agreement, dated as of June 23, 2021, by and among MaxLinear, Inc., the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on June 24, 2021)

10.28+ Employment Offer Letter, dated April 26, 2022, between the Registrant and Michelle M.

Sayer (incorporated by reference to Exhibit 10.3 to the Registrant ’ s Current Report on Form 10-Q filed on July 27, 2022).

10.29 Agreement and Plan of Merger, dated as of May 5, 2022, by and among MaxLinear, Inc., Silicon Motion Technology Corporation and Shark Merger Sub (incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on May 5, 2022).

10.30 Commitment Letter, dated as of May 5, 2022, by and among MaxLinear, Inc., Wells Fargo Bank, N.A., and Wells Fargo Securities, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 5, 2022) .

10.31 Amended and Restated Commitment Letter, dated as of June 17, 2022, by and among MaxLinear, Inc., Wells Fargo Bank, N.A., Wells Fargo Securities, LLC, Bank of Montreal, BMO Capital Markets Corp., Citizens Bank, N.A., Truist Bank and Tru st Securities, Inc.

(incorporated by reference to Exhibit 10.1 to the Registrant ’ s Current Report on Form 8-K filed on June 21, 2022)

Exhibit Number Exhibit Title

10.32 Second Amended and Restated Commitment Letter by and among MaxLinear, Inc., Wells Fargo Bank, N.A., Wells Fargo Securities, LLC, Bank of Montreal, BMO Capital Markets Corp., Citizens Bank, N.A., Truist Bank, and Truist Securities, Inc.

dated as of October 24, 2022.

*11.1 Statement re computation of income (loss) per share (included in Part IV, Item 14 of this Form 10-K).

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101.LAB XBRL Taxonomy Extension Label Linkbase Document

Exhibit Number Exhibit Title

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

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MOYER Director February 1, 2023

/s/ DONALD E.

SCHROCK Director February 2, 2022

/s/ THEODORE TEWKSBURY, Ph.D.

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Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Inventory valuation

As discussed in Note 1 to the financial statements, the Company assesses the recoverability of its inventory based on judgments and assumptions about future demand and market conditions.

Future demand is determined based on historical sales and expected future sales.

The Company reduces its inventory to its lower of cost or net realizable value on a part-by-part basis to account for its obsolescence or lack of marketability.

Reductions are calculated as the difference between the cost of inventory and its net realizable value based upon the assumptions about future demand, market conditions, and costs.

We identified inventory valuation as a critical audit matter.

The principal consideration for our determination that inventory valuation is a critical audit matter is that management’s estimates of future demand and market conditions are subject to a high level of estimation uncertainty.

Therefore, subjective and complex auditor judgment is necessary to evaluate the reasonableness of management’s judgments and assumptions since historical results may not be indicative of the future due to uncertainties arising from technological advances, complexities in developing new products, industry consolidation and economic factors.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others:

• Evaluating management’s assumptions with regard to future demand by considering whether:

◦ Current and past results indicated management’s ability to reliably forecast future demand.

We compared prior year forecasts of future demand to actual results in the current year;

◦ Changes contemplated in forecasted future demand compared with the current year actual results are reasonable;

◦ The information was consistent with evidence obtained in other areas of the audit;

• Evaluating the propriety of significant adjustments to the inventory valuation calculations, by making inquiries of management and reviewing judgments, assumptions and documentation supporting such adjustments;

• Testing the completeness, accuracy, and relevance of underlying data used in the estimate of net realizable value of its inventories;

• Testing the design and operating effectiveness of internal controls over the inventory valuation adjustments, including management’s review of the demand forecast and significant adjustments to the inventory valuation calculation.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Realizability of deferred tax assets

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We identified the realizability of deferred tax assets as a critical audit matter.

The principal consideration for our determination that the realizability of deferred tax assets is a critical audit matter is that the forecast of future taxable income is an accounting estimate subject to a high level of estimation.

The principal consideration for our determination that the realizability of deferred tax assets as a critical audit matter is that the forecast of future taxable income is an accounting estimate subject to a high level of estimation.

There is inherent uncertainty and subjectivity related to management’s judgments and assumptions regarding the Company’s international tax structure and transfer pricing agreements, determination of the taxable income by jurisdiction and the impacts of the Tax Act on future taxable income, which are complex in nature and require significant auditor judgment.

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With the assistance of engagement team members possessing specialized skill in income tax matters, our audit procedures related to the realizability of deferred tax assets included the following, among others:

• Reviewing management’s application of the rules under the Tax Act with a focus on Global Intangible Low-Taxed Income and the ordering rules and its expected impact on estimated future taxable income;

• Reviewing management’s application of the rules under the Tax Act with a focus on Section 174, Global Intangible Low-Taxed Income and its expected impact on estimated future taxable income;

• Comparing the scheduled reversals of deferred tax liabilities to the underlying financial and tax accounting records;

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Short-term restricted cash 982 105

Short-term investments 18,529 —

Accounts receivable, net 170,971 119,724

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Additional paid-in capital 722,778 657,485

Accumulated other comprehensive income 2,125 1,435

Accumulated other comprehensive income (loss) ( 1,021 ) 2,125

Accumulated deficit ( 45,380 ) ( 170,420 )

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(in thousands)

Years Ended December 31,

Year Ended December 31,

2022 2021 2020

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Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments, net of tax expense of $ 93 in 2021, expense of $ 216 in 2020 and expense of $ 136 in 2019

Foreign currency translation adjustments, net of tax benefit of $ 455 in 2022, expense of $ 93 in 2021 and expense of $ 216 in 2020

( 5,201 ) ( 242 ) 1,010

Net actuarial gain on pension and other defined benefit plans, net of tax expense of $ 792 in 2021 and $ 0 in 2020

Unrealized gain (loss) on interest rate swap, net of tax expense of $ 0 in 2021, tax expense of $ 8 in 2020, and tax benefit of $ 341 in 2019

Net actuarial gain on pension and other defined benefit plans, net of tax expense of $ 782 in 2022, $ 792 in 2021 and $ 0 in 2020

2,055 932 1,172

Unrealized gain on interest rate swap, net of tax expense of $ 8 in 2020

Reclassification adjustments of unrealized gain on interest rate swap, net of tax of $ 0 in 2020

Unrealized gain (loss) on interest rate swap, net of tax — 140 ( 1,319 )

Unrealized gain on interest rate swap, net of tax — — 140

Other comprehensive income (loss) ( 3,146 ) 690 2,322

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Common stock issued pursuant to equity awards, net 1,515 — 3,997 — — 3,997

Common stock issued for merger, net 804 — 17,080 — — 17,080

Employee stock purchase plan 286 — 3,794 — — 3,794

Stock-based compensation — — 47,597 — — 47,597

Cumulative effect of adoption of new accounting principles — — — — ( 268 ) ( 268 )

Other comprehensive loss — — — ( 1,159 ) — ( 1,159 )

Other comprehensive income — — — 2,322 — 2,322

Net loss — — — — ( 98,593 ) ( 98,593 )

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Common stock issued pursuant to equity awards, net 2,501 1 14,613 — — 14,614

Common stock issued for merger, net 804 — 17,080 — — 17,080

Repurchase of common stock ( 455 ) — ( 23,548 ) — — ( 23,548 )

Employee stock purchase plan 196 — 4,998 — — 4,998

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Other comprehensive income — — — 690 — 690

Net loss — — — — ( 98,593 ) ( 98,593 )

Net income — — — — 41,969 41,969

Balance at December 31, 2021 76,778 8 657,485 2,125 ( 170,420 ) 489,198

Repurchase of common stock ( 455 ) — ( 23,548 ) — — ( 23,548 )

Common stock issued pursuant to equity awards, net 2,391 — 10,252 — — 10,252

Repurchase of common stock ( 564 ) — ( 31,511 ) — — ( 31,511 )

Employee stock purchase plan 140 — 4,684 — — 4,684

Stock-based compensation — — 81,868 — — 81,868

Other comprehensive income — — — 690 — 690

Other comprehensive loss — — — ( 3,146 ) — ( 3,146 )

Net income — — — — 125,040 125,040

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Loss on disposal of property and equipment 170 533 —

Gain on sale of investments ( 3,375 ) — —

Unrealized holding loss on investments 1,476 — —

Impairment of leasehold improvements — 226 319

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Loss on extinguishment of debt — 5,221 —

Gain on extinguishment of lease liabilities — — ( 10,437 )

Loss on foreign currency 634 1,289 760

(Gain) loss on foreign currency ( 1,829 ) 634 1,289

Excess tax benefits on stock-based awards ( 9,921 ) ( 7,415 ) ( 677 )

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Cash used in acquisitions, net of cash acquired — ( 40,000 ) ( 160,000 )

Proceeds loaned under notes receivable ( 10,000 ) — —

Purchases of long-term investments ( 29,325 ) ( 5,000 ) —

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was incorporated in Delaware in September 2003.

MaxLinear, Inc., together with its wholly owned subsidiaries, collectively referred to as MaxLinear, or the Company, is a provider of communications systems-on-chip (SoC) solutions used in broadband, mobile and wireline infrastructure, data center, and industrial and multi-market applications.

MaxLinear is a fabless integrated circuit design company whose products integrate all or substantial portions of a high-speed communication system, including radio frequency (RF), high-performance analog, mixed-signal, digital signal processing, security engines, data compression and networking layers, and power management.

MaxLinear’s customers include electronics distributors, module makers, original equipment manufacturers, or OEMs, and original design manufacturers, or ODMs, who incorporate the Company’s products in a wide range of electronic devices, including cable Data Over Cable Service Interface Specifications (DOCSIS), fiber and DSL broadband modems and gateways;

MaxLinear, Inc., together with its directly and indirectly wholly-owned subsidiaries, collectively referred to as MaxLinear, or the Company, is a provider of communications systems-on-chip, or SoC, solutions used in broadband, mobile and wireline infrastructure, data center, and industrial and multi-market applications.

MaxLinear is a fabless integrated circuit design company whose products integrate all or substantial portions of a high-speed communication system, including radio frequency, or RF, high-performance analog, mixed-signal, digital signal processing, security engines, data compression and networking layers, and power management.

MaxLinear’s customers include electronics distributors, module makers, original equipment manufacturers, or OEMs, and original design manufacturers, or ODMs, who incorporate the Company’s products in a wide range of electronic devices, including cable Data Over Cable Service Interface Specifications, or DOCSIS, fiber and DSL broadband modems and gateways;

Wi-Fi and wireline routers for home networking;

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The consolidated financial statements include the accounts of MaxLinear, Inc.

and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.

and its directly and indirectly wholly- owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.

All intercompany transactions and investments have been eliminated in consolidation.

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Actual results could differ from those estimates.

In the year ended December 31, 2020, the Company’s revenues were impacted by the novel coronavirus disease, or COVID-19, pandemic.

In particular, the Company experienced some negative impact to its revenue and gross profits in the first half of 2020 due to several industry-wide dynamics related to COVID-19 including supply constraints as well as customer requests to temporarily delay shipments.

Although the Company has benefited from increased demand for certain of its products from the work-from-home environment in the second half of 2020 and in fiscal year 2021, a sudden increase in demand for electronics containing semiconductor chips and stockpiling of chips by certain firms in China blacklisted by the U.S.

has exacerbated bottlenecks in the supply chain, resulting in a global semiconductor supply shortage impacting the Company’s industry.

Some chip manufacturers are estimating this supply shortage may continue into 2023.

While these chip manufacturers are working to increase capacity in the future, and the Company is continuing to work closely with its suppliers and customers to minimize the potential adverse impacts of the supply shortage, such shortage may have a near-term impact on the Company’s ability to meet increased demand on certain products and have a negative impact on its operating results which may continue into 2023.

Heightened volatility, global supply shortages, and uncertainty in customer demand and the worldwide economy in general has continued, and the Company may experience increased volatility in its sales and revenues in the near future.

Inflation, and uncertainty in customer demand and the worldwide economy has continued, and the Company may experience continued volatility in its sales and revenues in the near future.

The Company’s management believes an economic downturn and inventory oversupply due to changes in customer demand will add to volatility in managing the business.

However, the magnitude of such volatility on the Company’s business and its duration is uncertain and cannot be reasonably estimated at this time.

The Company also believes that its $ 131.7 million of cash and cash equivalents at December 31, 2021 will be sufficient to fund its projected operating requirements for at least the next twelve months.

A material adverse impact from COVID-19 and the global semiconductor supply shortage could result in a need to raise additional capital or incur additional indebtedness to fund strategic initiatives or operating activities, particularly if the Company pursues additional acquisitions.

The Company’s future capital requirements will depend on many factors, including changes in revenue, the expansion of engineering, sales and marketing activities, the timing and extent of expansion into new territories, the timing of introductions of new products and

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

enhancements to existing products, the continuing market acceptance of the Company’s products and potential material investments in, or acquisitions of, complementary businesses, services or technologies.

The Company also believes that its $ 188.4 million of cash and cash equivalents at December 31, 2022 will be sufficient to fund its projected operating requirements for at least the next twelve months, excluding its pending acquisition of Silicon Motion which it intends to fund with proceeds from additional debt (Note 3).

The Company’s future capital requirements will depend on many factors, including the timing of the closing of the pending transaction to acquire Silicon Motion, changes in revenue, the expansion of engineering, sales and marketing activities, the timing and extent of expansion into new territories, the timing of introductions of new products and enhancements to existing products, the continuing market acceptance of the Company’s products and potential material investments in, or acquisitions of, complementary businesses, services or technologies.

Additional funds may not be available on terms favorable to the Company or at all.

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The Company is not aware of any specific event or circumstance that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of February 1, 2023, the issuance date of this Annual Report on Form 10-K.

Actual results could differ from those estimates, particularly if the Company experiences material impacts from COVID-19.

Actual results could differ from those estimates.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Business Combinations

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The Company monitors collections and payments from its customers and maintains an allowance for doubtful accounts, which is based upon applying an expected credit loss rate to receivables based on the historical loss rate from similar high risk customers adjusted for current conditions, including any specific customer collection issues identified, and forecasts of economic conditions.

Delinquent account balances are written off after management has determined that the likelihood of collection is

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Delinquent account balances are written off after management has determined that the likelihood of collection is remote.

The allowance for credit losses as of December 31, 2022 and 2021 and the activity in this account, including the current-period provision for expected credit losses for the years ended December 31, 2022, 2021, and 2020, were not material.

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Cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis and net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

The Company reduces its inventory to its lower of cost or net realizable value on a part-by-part basis to account for its obsolescence or lack of marketability.

Reductions are calculated as the difference between the cost of inventory and its net realizable value based upon assumptions about future demand, market conditions and costs.

The Company reduces its inventory to the lower of its cost or net realizable value on a part-by-part basis to account for obsolescence or lack of marketability.

Reductions are calculated as the difference between the cost of

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

inventory and its net realizable value based upon assumptions about future demand, market conditions and costs.

Once established, these adjustments are considered permanent and are not revised until the related inventory is sold or disposed of.

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The carrying amount of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and compensation are considered to be representative of their respective fair values because of the short-term nature of these accounts.

The interest rate swap was carried at fair value prior to its expiration in 2020.

Property and Equipment

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Production Masks

Production masks with alternative future uses or discernible future benefits are capitalized and amortized over their estimated useful life of two to five years .

To determine if the production mask has alternative future uses or benefits, the Company evaluates risks associated with developing new technologies and capabilities, and the related risks associated with entering new markets.

Production masks with alternative future uses or discernible future benefits are capitalized and amortized over their estimated useful lives of two to five years .

To determine if a production mask has alternative future uses or benefits, the Company evaluates risks associated with developing new technologies and capabilities, and the related risks associated with entering new markets.

Production masks that do not meet the criteria for capitalization are expensed as research and development costs.

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The Company reviews indefinite-lived intangible assets for impairment using a qualitative assessment, followed by a quantitative assessment, as needed, each year as of October 31, the date of its annual goodwill impairment review, or whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Recoverability of indefinite-lived intangible assets is measured by comparing the

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

carrying amount of the asset to its fair value.

Recoverability of indefinite-lived intangible assets is measured by comparing the carrying amount of the asset to its fair value.

In certain cases, the Company utilizes the relief-from-royalty method when appropriate, and a fair value will be obtained based on analysis over the costs saved by owning the right instead of leasing it.

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Should impairment exist, the impairment loss would be measured based on the excess of the carrying amount of the asset over the asset’s fair value.

During the years 2021, 2020, and 2019, the Company recorded impairment of intangible assets of $ 0 , $ 0.1 million and $ 0 , respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the years 2022, 2021, and 2020, the Company recorded impairment of intangible assets of $ 2.8 million, $ 0 and $ 0.1 million, respectively.

Refer to Goodwill and Intangible Assets, Note 5 for more information.

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Although customers may place orders for products to be delivered on multiple dates that may be in different quarterly reporting periods, all of the orders are scheduled within one year from the order date.

The Company has opted to not disclose the portion of revenues allocated to partially unsatisfied

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

performance obligations, which represent products to be shipped within 12 months under open customer purchase orders, at the end of the current reporting period.

The Company has opted to not disclose the portion of revenues allocated to partially unsatisfied performance obligations, which represent products to be shipped within 12 months under open customer purchase orders, at the end of the current reporting period.

The Company has also elected to record sales commissions when incurred, as the period over which the sales commission asset that would have been recognized is less than one year .

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Other obligations to customers consist of estimates of price protection rights offered to the Company’s end customers, which are included in accrued price protection liability in the consolidated balance sheets, as well as price adjustments expected to be claimed by the distributor upon sell-through of the products to their customers, and amounts expected to be returned by distributors under stock rotation rights, which are included in accrued expenses and other current liabilities in the consolidated balance sheets.

The Company also records a right of return asset, consisting of amounts representing the products the Company expects to receive from customers in returns, which is included in inventory in the consolidated balance sheets, and is typically settled within six months of transfer of control to the customer, or the period over which stock rotation rights are based.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

settled within six months of transfer of control to the customer, or the period over which stock rotation rights are based.

Upon lapse of the time period for stock rotations, or the contractual end to price protection and rebate programs, which is approximately one to two years , and when the Company believes unclaimed amounts are no longer subject to payment and will not be paid, any remaining asset or liability is derecognized by an offsetting entry to cost of net revenue and net revenue.

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The Company makes estimates of product return rates and expected costs to replace the products under warranty at the time revenue is recognized based on historical warranty experience and any known product warranty issues.

If actual return rates and/or replacement costs differ significantly from these estimates, adjustments to recognize additional cost of net revenue may be required in future periods.

If actual return rates and/or replacement costs differ significantly from these estimates, adjustments to recognize additional warranty expenses in cost of net revenue may be required in future periods.

As of December 31, 2022 and 2021, the Company has warranty reserves of $ 0.5 million and $ 0.8 million, respectively, based on the Company’s estimates.

Segment Information

The Company operates in one segment as it has developed, marketed and sold primarily only one class of similar products, radio-frequency, high-performance analog and mixed-signal communications system-on-chip solutions for the connected home, wired and wireless infrastructure markets and industrial and multi-market applications.

The Company operates under one segment as it has developed, marketed and sold primarily only one class of similar products, radio-frequency, high-performance analog and mixed-signal communications system-on-chip solutions for the connected home, wired and wireless infrastructure markets and industrial and multi-market applications.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

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The Company has one business activity and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the consolidated unit level.

Accordingly, the Company reports as a single operating segment.

Accordingly, the Company reports under a single operating segment.

Stock-based Compensation

The Company measures the cost of employee services received in exchange for equity incentive awards, including restricted stock units and restricted stock awards, employee stock purchase rights and stock options based on the grant date fair value of the award.

The Company measures the cost of employee services received in exchange for equity incentive awards, including restricted stock units, employee stock purchase rights and stock options based on the grant date fair value of the award.

The Company calculates the fair value of restricted stock units and performance-based restricted stock units based on the fair market value of the Company’s common stock on the grant date.

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The Company recognizes compensation expense over the vesting period using the straight-line method and classifies these amounts in the consolidated statements of operations based on the department to which the related employee reports.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Research and Development

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The Company recognizes a lease liability to make contractual payments under all leases with terms greater than twelve months and a corresponding right-of-use asset, representing its right to use the underlying asset for the lease term.

The lease liability is initially measured at the present value of the lease payments over the lease term using the collateralized incremental borrowing rate since the implicit rate is unknown.

Options to extend or terminate a lease are included in the lease term when it is reasonably certain that the Company will exercise such an option.

The lease liability is initially measured at the present value of the lease payments over the lease term using the collateralized incremental borrowing rate when the implicit rate is unknown.

Options to extend or terminate

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

a lease are included in the lease term when it is reasonably certain that the Company will exercise such an option.

The right-of-use asset is initially measured as the contractual lease liability plus any initial direct costs and prepaid lease payments made, less any lease incentives.

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The Company monitors its long-lived assets for indicators of impairment.

As the Company’s leased right-of-use assets primarily relate to facility leases, early abandonment of all or part of facility as part of a restructuring plan is typically an indicator of impairment.

As the Company’s leased right-of-use assets primarily relate to facility leases, early abandonment of all or part of a facility as part of a restructuring plan is typically an indicator of impairment.

If impairment indicators are present, the Company tests whether the carrying amount of the leased right-of-use asset is recoverable including consideration of sublease income, and if not recoverable, measures impairment loss for the right-of-use asset or asset group.

Derivatives and Hedging Activities

The Company records derivatives in the consolidated balance sheets at fair value.

Hedge accounting is applied to derivatives designated in a hedging relationship.

A derivative designated as a hedge of a forecasted transaction is carried at fair value with the effective portion of a derivative’s gain or loss recorded in other comprehensive income (i.e., a separate component of stockholders’ equity) and subsequently recognized in earnings in the same period or periods the hedged forecasted transaction affects earnings.

The ineffective portion of a derivative’s gain or loss is recorded in earnings as it occurs.

Changes in certain terms of the hedged transactions, including the selection of interest rate from one-month LIBOR to another rate could cause ineffectiveness in the derivatives and result in reclassification of amounts in accumulated other comprehensive income (loss) into earnings.

Pension and Other Defined Benefit Retirement Obligations

9 unchanged sentences

Valuation allowances are recorded to reduce deferred tax assets when a judgment is made that is considered more likely than not that a tax benefit will not be realized.

A decision to record a

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

valuation allowance results in an increase in income tax expense or a decrease in income tax benefit.

A decision to record a valuation allowance results in an increase in income tax expense or a decrease in income tax benefit.

If the valuation allowance is released in a future period, income tax expense will be reduced accordingly.

6 unchanged sentences

The Company continually assesses the need for a valuation allowance on the deferred tax asset by evaluating both positive and negative evidence that may exist.

Any adjustment to the net deferred tax asset valuation allowance would be recorded in the income statement for the period that the adjustment is determined to be required.

Any adjustment to the net deferred tax asset valuation allowance would be recorded in the consolidated statement of operations for the period that the adjustment is determined to be required.

On December 22, 2017, the Tax Cuts and Jobs Act, or the Tax Act, was enacted into U.S.

In 2018, the Company made an accounting policy election to treat Global Intangible Low Taxed Income in accordance with the Tax Act as a period cost.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity (net assets) of a business entity during a period from transactions and other events and circumstances from non-owner sources.

Other comprehensive income (loss) includes certain changes in equity that are excluded from net income (loss), net of tax, such as foreign currency translation gains and losses and change in fair value of projected benefit obligation for defined benefit plans.

Other comprehensive income (loss) includes certain changes in equity that are excluded from net income (loss), net of tax, such as foreign currency translation gains and losses and changes in fair value of projected benefit obligations for defined benefit plans.

Litigation and Settlement Costs

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(i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the loss or range of loss can be reasonably estimated.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No.

2019-12 Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes , to remove certain exceptions related to the approach for intraperiod tax allocation, recognition of deferred tax liabilities for outside basis differences and requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date.

The amendments in this update are effective for the Company beginning with fiscal year 2021.

Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.

The adoption of the amendments in this update did not have a material impact on the Company’s consolidated financial position and results of operations as of and for the year ended December 31, 2021.

In October 2020, the FASB issued ASU No.

2020-10 Codification Improvements , to make incremental improvements to GAAP and address stakeholder suggestions, including, among other things, clarifying that the requirement to provide comparative information in the financial statements extends to the corresponding disclosures section.

The amendments in this update are effective for the Company beginning with fiscal year 2021.

The amendments in this update should be applied retrospectively and at the beginning of the period that includes the adoption date.

The adoption of the amendments in this update did not have a material impact on the Company’s financial disclosures as of and for the year ended December 31, 2021.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Pronouncements

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The amendments in this update provide that the acquirer should consider the terms of the acquired contracts, such as timing of payment, identify each performance obligation in the contracts, and allocate the total transaction price to each identified performance obligation on a relative standalone selling price basis as of contract inception (that is, the date the acquiree entered into the contracts) or contract modification to determine what should be recorded at the acquisition date.

These amendments are effective for the Company beginning with fiscal year 2023.

These amendments are effective for the Company in 2023.

The impact of the adoption of the amendments in this update will depend on the magnitude of any customer contracts assumed in a business combination in 2023 and beyond.

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Diluted EPS is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period and the weighted-average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method.

For purposes of this calculation, common stock options, restricted stock units and restricted stock awards are considered to be common stock equivalents and are only included in the calculation of diluted EPS when their effect is dilutive.

For purposes of this calculation, common stock options and restricted stock units are considered to be common stock equivalents and are only included in the calculation of diluted EPS when their effect is dilutive.

In periods in which the Company has a net loss, dilutive common stock equivalents are excluded from the calculation of diluted EPS.

10 unchanged sentences

Diluted $ 1.55 $ 0.53 $ ( 1.35 )

For each of the years ended December 31, 2021, 2020, and 2019, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 0.07 million for 2021, 3.2 million for 2020 periods, and 2.5 million for 2019 from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.

For each of the years ended December 31, 2022, 2021, and 2020, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 1.8 million for 2022, 0.07 million for 2021, and 3.2 million for 2020 from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.

MAXLINEAR, INC.

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Business Combinations

Acquisition of the Wi-Fi and Broadband assets business

On July 31, 2020, the Company and certain of its designated subsidiaries completed their acquisition of the Home Gateway Platform Division, which the Company refers to as the Wi-Fi and Broadband assets business, pursuant to an Asset Purchase Agreement with Intel Corporation, or Intel, dated April 5, 2020 (the “Asset Purchase Agreement”), and related agreements.

The Company paid cash consideration of $ 150.0 million for the purchase of certain assets of the Wi-Fi and Broadband assets business, and assumed certain liabilities related to specified employment matters.

The transaction was funded with a portion of the net proceeds from a secured incremental term loan with an aggregate principal amount of $ 175.0 million (Note 8).

The acquired assets and assumed liabilities, together with the employees who joined the Company and its subsidiaries as a result of the transaction, represent a business as defined in ASC 805, Business Combinations .

The Company has integrated the acquired assets and rehired employees into the Company’s existing business and has completed its purchase price allocation accounting associated with this acquisition.

Acquisition of NanoSemi, Inc.

On September 9, 2020, the Company completed its acquisition of NanoSemi, Inc.

or NanoSemi, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) with NanoSemi, dated September 9, 2020.

The initial closing transaction consideration consisted of $ 10.0 million in cash and 804,163 shares of MaxLinear’s common stock.

In addition, in the year ended December 31, 2021, the NanoSemi stockholders received $ 35.0 million in cash payments that were deferred as of the acquisition date, and certain NanoSemi stockholders may also receive up to an additional $ 35.0 million in potential contingent consideration, subject to the acquired business’s satisfying certain financial objectives from July 1, 2020 through December 31, 2022.

The stock consideration was issued in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended.

In connection with the acquisition, MaxLinear agreed to provide the NanoSemi stockholders with certain registration rights with respect to the shares of MaxLinear common stock they received in the acquisition.

The Company has integrated NanoSemi into the Company's existing business and has completed its purchase price allocation accounting associated with this acquisition.

Silicon Motion Merger

On May 5, 2022, MaxLinear entered into an agreement and plan of merger, or the Merger Agreement, with Silicon Motion Technology Corporation, or Silicon Motion, an exempted company with limited liability incorporated under the Law of the Cayman Islands, pursuant to which, subject to the terms and conditions thereof, MaxLinear agreed to acquire Silicon Motion pursuant to a statutory merger of Shark Merger Sub, a wholly-owned subsidiary of MaxLinear, with and into Silicon Motion, with Silicon Motion surviving the merger as a wholly-owned subsidiary of MaxLinear.

Silicon Motion is a provider of NAND flash controllers for solid state drives, or SSDs, and other solid state storage devices.

Under the terms of the Merger Agreement, the transaction consideration will consist of $ 93.54 in cash and 0.388 shares of MaxLinear stock for each Silicon Motion American Depositary Share, or ADS, and $ 23.385 in cash and 0.097 shares of MaxLinear common stock for each Silicon Motion ordinary share not represented by an ADS.

Upon closing of the transaction, the current MaxLinear stockholders will own approximately 86 % of the combined company and former Silicon Motion securityholders will own approximately 14 % of the combined company.

Based on the closing price of MaxLinear shares on May 4, 2022, the implied value of the total transaction consideration for Silicon Motion is approximately $ 4.3 billion.

MaxLinear may fund up to $ 3.5 billion of cash consideration with cash on hand and fully committed debt financing from Wells Fargo Bank, N.A., or Wells Fargo Bank, and other lenders as described below.

MaxLinear will also assume Silicon Motion’s vested and unvested employee stock-based compensation awards.

The merger is not subject to any financing conditions but is pending satisfaction of customary closing conditions, including regulatory approval in the People’s Republic of China, or China.

On June 27, 2022, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or HSR, waiting period expired with respect to the pending merger.

On July 13, 2022, the registration statement on Form S-4 was declared effective by the SEC.

On August 31, 2022, the Silicon Motion securityholders approved the merger at the extraordinary general meeting.

On June 17, 2022, MaxLinear entered into an amended and restated commitment letter with Wells Fargo Bank and other lenders pursuant to which, subject to the terms and conditions set forth therein, the lenders have committed to provide (i) a senior secured term B loan facility in an aggregate principal amount of up to $ 2.7375 billion, or the Term B Loan Facility, (ii) a senior secured term A loan facility in an aggregate principal amount of up to $ 512.5 million, or the Term A Loan Facility, and (iii) a senior secured revolving credit facility in an aggregate principal amount of up to $ 250.0 million, which we collectively refer to as the Senior Secured Credit Facilities.

The funding of the Senior Secured Credit Facilities is contingent on the satisfaction of customary conditions, including (i) the execution and delivery of definitive documentation with respect to credit facilities in accordance with the terms in the amended and restated commitment letter, and (ii) the consummation of the acquisition by MaxLinear of Silicon Motion in accordance with the Merger Agreement.

A portion of the proceeds from the Senior Secured Credit Facilities will be used to repay existing debt (Note 8) in full.

On October 24, 2022, MaxLinear entered into a second amended and restated commitment letter with Wells Fargo Bank and other lenders, which allows for additional commitments in respect of the Term A Loan Facility to be effected by way of the joinder of additional commitment parties to the second amended and restated commitment letter, and allows for an increase in the Term Loan A Loan Facility on a dollar-for-dollar basis by a corresponding decrease in the amount of the Term Loan B facility.

Acquisition of Company X

On December 8, 2021, the Company completed its acquisition of a business, or Company X, pursuant to a Purchase and Sale Agreement (the “Purchase Agreement”).

On December 8, 2021, the Company completed its acquisition of a business, or Company X, pursuant to a Purchase and Sale Agreement, or the Purchase Agreement to acquire Company X.

The initial closing transaction consideration consisted of $ 5.0 million in cash.

In addition, their stockholders may receive up to an additional $ 3.0 million in potential contingent consideration, subject to the acquired business satisfying certain financial and personnel objectives by March 31, 2023.

Company X is headquartered in Chennai, India and operates as a WiFi solutions and service provider.

Acquisition Consideration

The following table summarizes the fair value of purchase price consideration to acquire Company X (in thousands):

Description Amount

Fair value of purchase consideration:

Contingent consideration (1)

Total purchase price 7,700

_________________

(1) The fair value of contingent consideration is based on applying the Monte Carlo simulation method to forecast achievement under various contingent consideration events which may result in up to $ 3.0 million in payments subject to the acquired business’s satisfying certain financial and personnel objectives by March 31, 2023 under the Purchase Agreement.

Key inputs in the valuation include forecasted revenue, revenue volatility and discount rate.

Underlying forecast mathematics were based on Geometric Brownian Motion in a risk-neutral framework and discounted back to the applicable period in which the accumulative thresholds were achieved at discount rates commensurate with the risk and expected payout term of the contingent consideration.

Preliminary Purchase Price Allocation

A preliminary allocation of purchase price as of the December 8, 2021 acquisition closing date based upon an estimate of

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition primarily includes $ 4.4 million in identifiable intangible assets, and $ 0.5 million in net operating liabilities, with $ 3.8 million in goodwill:

The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets (in thousands):

Category Estimated Life in Years Fair Value

Finite-lived intangible assets:

Licensed technology 3 $ 4,400

Total identifiable intangible assets acquired $ 4,400

Assumptions in the Allocations of Purchase Price

Management prepared the purchase price allocations for the Wi-Fi and Broadband assets business, NanoSemi, and Company X, and in doing so considered or relied in part upon reports of a third party valuation expert to calculate the fair value of certain acquired assets, which primarily included identifiable intangible assets, inventory, and property and equipment for the Wi-Fi and Broadband assets business and NanoSemi, and identifiable intangible assets for Company X, the portions of the purchase consideration for NanoSemi that were initially deferred and were subsequently paid to NanoSemi stockholders in the year ended December 31, 2021, as described above, and contingent consideration for NanoSemi and Company X.

Certain stockholders that are employees of NanoSemi and Company X were not required to remain employed in order to receive the deferred payments and contingent consideration;

accordingly, the fair value of the deferred payments and contingent consideration were accounted for as a portion of the purchase consideration.

Estimates of fair value require management to make significant estimates and assumptions.

The goodwill recognized is attributable primarily to the acquired workforce, expected synergies, and other benefits that MaxLinear believes will result from integrating the operations of the Wi-Fi and Broadband assets business, NanoSemi, and Company X with the operations of MaxLinear.

Certain liabilities included in the purchase price allocations are based on management’s best estimates of the amounts to be paid or settled and based on information available at the time the purchase price allocations were prepared.

There have been no adjustments between the preliminary purchase price allocations reflected as of December 31, 2020 for the Wi-Fi and Broadband assets business and NanoSemi, and the final purchase price allocations reflected as of December 31, 2021.

The fair value of the identified intangible assets acquired from the Wi-Fi and Broadband assets business, NanoSemi and Company X was estimated using an income approach.

Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset.

Indications of value are developed by discounting future net cash flows to their present value at market-based rates of return.

More specifically, the fair value of the developed and licensed technology, IPR&D and backlog assets was determined using the multi-period excess earnings method, or MPEEM.

MPEEM is an income approach to fair value measurement attributable to a specific intangible asset being valued from the asset grouping’s overall cash-flow stream.

MPEEM isolates the expected future discounted cash-flow stream to its net present value.

Significant factors considered in the calculation of the developed technology and IPR&D intangible assets were the risks inherent in the development process, including the likelihood of achieving technological success and market acceptance.

Each project was analyzed to determine the unique technological innovations, the existence and reliance on core technology, the existence of any alternative future use or current technological feasibility and the complexity, cost, and time to complete the remaining development.

Future cash flows for each project were estimated based on forecasted revenue and costs, taking into account the expected product life cycles, market penetration, and growth rates.

Developed technology began amortization immediately upon the closing of the transaction and IPR&D will begin amortization upon the completion of each project.

If any of the projects are abandoned, the Company will be required to impair the related IPR&D asset.

In connection with the acquisition of the Wi-Fi and Broadband assets business, the Company has assumed liabilities which primarily consist of accrued employee compensation and benefits in jurisdictions where such transfer is required either by law or by work council agreement.

In connection with the acquisition of NanoSemi and Company X, the Company assumed certain operating liabilities.

The liabilities assumed in these acquisitions are included in the respective purchase price allocations above.

Goodwill recorded in connection with the Wi-Fi and Broadband assets business, NanoSemi and Company X was $ 23.4 million, $ 41.1 million, and $ 3.8 million respectively.

The Company does not expect to deduct any of the acquired goodwill for tax purposes.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company has integrated Company X into the Company’s existing business and has completed its purchase price allocation accounting associated with this acquisition, with an immaterial decrease to net operating assets and a corresponding increase in goodwill recorded in 2022 (Note 5).

Restructuring Activity

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Such restructuring plans include terminating employees, vacating certain leased facilities, and cancellation of contracts.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the activity related to the restructuring plans, which is included in restructuring charges in the consolidated statements of operations:

6 unchanged sentences

$ 2,265 $ 2,204 $ 3,833

Lease related charges for the year ended December 31, 2022 included the impairment of leased right-of-use assets of $ 0.5 million related to exiting a redundant facility.

Lease related charges for the year ended December 31, 2021 included the impairment of leased right-of-use assets and leasehold improvements of $ 0.4 million and $ 0.2 million, respectively.

Lease related charges for the year ended December 31, 2020 included the impairment of leased right-of-use assets of $ 1.5 million related to a reduction in expected cash inflows from subleases.

Lease related and other charges for the year ended December 31, 2019 primarily related to exiting certain redundant facilities.

The following table presents a roll-forward of the Company’s restructuring liability for the year ended December 31, 2021 and 2020.

Lease related and other charges for the year ended December 31, 2020 included the impairment of leased right-of-use assets of $ 1.5 million related to a reduction in expected cash inflows from subleases.

The following table presents a roll-forward of the Company’s restructuring liability for the years ended December 31, 2022 and 2021.

The restructuring liability is included in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheets.

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Cash payments ( 1,833 ) ( 329 ) ( 25 ) ( 2,187 )

Reimbursement due from Intel (Note 6) 4,415 — — 4,415

Reimbursement from Intel ( 2,711 ) — — ( 2,711 )

Non-cash charges and adjustments ( 3 ) ( 555 ) ( 301 ) ( 859 )

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Cash payments ( 824 ) ( 273 ) — ( 1,097 )

Reimbursement from Intel ( 2,711 ) ( 2,711 )

Non-cash charges and adjustments — ( 530 ) — ( 530 )

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The Company does not expect to incur additional material costs related to current restructuring plans.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Intangible Assets

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The fair values of net tangible assets and intangible assets acquired are based upon preliminary valuations and the Company’s estimates and assumptions are subject to change within the measurement period (potentially up to one year from the acquisition date).

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the changes in the carrying amount of goodwill for the periods indicated:

Years Ended December 31,

Year Ended December 31,

(in thousands)

2 unchanged sentences

Ending balance $ 306,739 $ 306,668

During the year ended December 31, 2022, the increase in the carrying value of goodwill related to minor adjustments to the assets and liabilities in the purchase price allocation for Company X (Note 3).

The Company performs an annual goodwill impairment assessment on October 31st each year, using a quantitative assessment comparing the fair value of each reporting unit, which the Company has determined to be the entity itself, with its carrying amount, including goodwill.

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Customer relationships 5.0 128,800 ( 124,807 ) 3,993 128,800 ( 116,847 ) 11,953

Non-compete covenants — — — — 1,100 ( 1,100 ) —

Backlog 5.3 500 ( 429 ) 71 1,300 ( 941 ) 359

6.1 $ 477,125 $ ( 367,809 ) $ 109,316 $ 470,411 $ ( 320,471 ) $ 149,940

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth amortization expense associated with finite-lived intangible assets, which is included in the consolidated statements of operations as follows:

Years Ended December 31,

Year Ended December 31,

2022 2021 2020

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Amortization of finite-lived intangible assets in cost of net revenue in the consolidated statements of operations results primarily from acquired developed technology.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth the activity related to finite-lived intangible assets:

4 unchanged sentences

Additions 11,184 7,581

Transfers to developed technology from IPR&D 2,600 4,600

Amortization ( 51,597 ) ( 66,707 )

4 unchanged sentences

Should impairment exist, the impairment loss is measured based on the excess of the carrying amount of the asset over the asset’s fair value.

During the years ended December 31, 2021 and 2019, no impairment losses related to finite-lived intangible assets were recognized.

During the year ended December 31, 2022, the Company recognized impairment losses related to finite-lived intangible assets of $ 2.8 million, which was attributable to certain acquired licensed technology.

During the year ended December 31, 2021, no impairment losses related to finite-lived intangible assets were recognized.

During the year ended December 31, 2020, the Company recognized impairment losses related to finite-lived intangible assets of $ 0.1 million, which was attributable to certain purchased licensed technology.

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Total $ 109,316

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Indefinite-lived Intangible Assets

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The following table sets forth the Company’s activities related to indefinite-lived intangible assets:

Years Ended December 31,

Year Ended December 31,

(in thousands)

Beginning balance $ 2,600 $ 7,200

Acquisitions (Note 3) — 7,200

Transfers to developed technology from IPR&D ( 2,600 ) ( 4,600 )

3 unchanged sentences

Based on the Company’s assessment as of October 31, 2022, no indicators of impairment were identified.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition to its annual review, the Company performs a test of impairment when indicators of impairment are present.

During the years ended December 31, 2022, 2021, and 2020, no indicators of impairment were identified and, as a result, no IPR&D impairment losses were recorded.

Financial Instruments

The composition of financial instruments were as follows:

The composition of financial instruments is as follows:

December 31, 2022

Net Unrealized

Cost Gains Losses Fair Value

(in thousands)

Marketable equity investments $ 20,005 $ — $ ( 1,476 ) $ 18,529

December 31, 2022 December 31, 2021

1 unchanged sentence

Contingent consideration (Note 3) $ 2,941 $ 2,700

The fair values of the Company’s financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants and is recorded using a hierarchical disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities.

At December 31, 2022, the Company held marketable equity investments with an aggregate fair value of $ 18.5 million that were in an unrealized loss position for less than 12 months.

The net unrealized loss of $ 1.5 million as of December 31, 2022 represents stock price fluctuations in the underlying securities held, and was recorded to other income (expense), net in the consolidated statement of operations.

The Company evaluates securities for other-than-temporary impairment on a quarterly basis.

Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation.

Factors considered include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the issuer;

including changes in the financial condition of any underlying collateral of the security;

any downgrades of the security by analysts or rating agencies;

nonpayment of any scheduled interest, or the reduction or elimination of dividends;

as well as our intent and ability to hold the security in order to allow for an anticipated recovery in fair value.

The fair value of the Company’s financial instruments is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants and is recorded using a hierarchical disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities.

The levels are described below:

2 unchanged sentences

Unobservable inputs are used when little or no market data is available.

The Company classifies its financial instruments within Level 1 or Level 2 of the fair value hierarchy on the basis of valuations using quoted market prices or alternate pricing sources and models utilizing market observable inputs, respectively.

The marketable equity investments held by the Company have been valued on the basis of quoted market prices and are therefore classified as Level 1.

The contingent consideration liability is associated with the Company’s acquisition of Company X (Note 3) and is classified as a Level 3 financial instrument that is subject to the acquired business’s satisfaction of certain financial and personnel objectives by March 31, 2023, under the Purchase Agreement.

The fair value of the contingent consideration is based on (1) applying the Monte Carlo simulation method, with underlying forecast mathematics based on Geometric Brownian motion in a risk-neutral framework, to forecast achievement of the acquired business’ financial objectives under various possible contingent consideration events and (2) a probability based methodology using management’s inputs and assumptions to forecast achievement of the acquired business’ personnel objectives which combined may result in up to $ 3.0 million in total payments to the acquired business.

Key inputs in the valuation include forecasted revenue, revenue volatility, discount rate and discount term as it relates to the financial objectives and probability of achievement, discount term and discount rate as it relates to the personnel objectives.

The following are the financial instruments that are measured on a recurring basis.

The contingent consideration liability, a Level 3 financial instrument, was $ 2.7 million as of December 31, 2021.

Key inputs in the valuation include forecasted revenue, revenue volatility, discount rate and

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes activity for the contingent consideration:

Fair Value at December 31,

discount term as it relates to the financial objectives and probability of achievement, discount term and discount rate as it relates to the personnel objectives.

Fair Value Measurements at December 31, 2022

Balance at December 31, 2022 Quoted Prices

Identical Assets

(Level 1) Significant

(Level 2) Significant

(in thousands)

Marketable equity securities $ 18,529 $ 18,529 $ — $ —

Contingent consideration $ 2,941 $ — $ — $ 2,941

Beginning balance $ — $ —

Acquisitions (Note 3) 2,700 —

Gain (loss) recognized in earnings — —

Ending balance $ 2,700 $ —

Net loss for the period included in earnings attributable to contingent consideration held at the end of the period $ — $ —

Interest rate swap

Fair Value Measurements at December 31, 2021

Balance at December 31, 2021 Quoted Prices

Identical Assets

(Level 1) Significant

(Level 2) Significant

(in thousands)

Contingent consideration $ 2,700 $ — $ — $ 2,700

The following summarizes the activity in Level 3 financial instruments:

Year Ended December 31,

(in thousands)

Contingent consideration

Beginning balance $ 2,700 $ 2,700

Unrealized gain (loss) recognized in other comprehensive income (loss) — 122

Gain recognized in earnings — ( 85 )

Accretion of discount (1)

Ending balance $ 2,941 $ 2,700

____________________

(1) Changes to the balance associated with the estimated fair value of contingent consideration for the year ended December 31, 2022 were primarily due to accretion of the related discount.

There were no transfers between Level 1, Level 2 or Level 3 fair value hierarchy categories of financial instruments in the years ended December 31, 2022, 2021 and 2020.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

Some of the Company’s financial instruments are recorded at amounts that approximate fair value due to their liquid or short-term nature or by election on investments in privately-held entities (Note 7).

Such financial assets and financial liabilities include:

cash and cash equivalents, restricted cash, net receivables, investments in privately-held entities, certain other assets, accounts payable, accrued price protection liability, accrued expenses, accrued compensation costs, and other current liabilities.

Such financial assets and financial liabilities include cash and cash equivalents, restricted cash, net receivables, investments in privately-held entities, certain other assets, accounts payable, accrued price protection liability, accrued expenses, accrued compensation costs, and other current liabilities.

The Company’s long-term debt is not recorded at fair value on a recurring basis, but is measured at fair value for disclosure purposes (Note 8).

Included in other long-term assets are investments in privately held entities of $ 11.8 million and $ 5.0 million as of December 31, 2022 and December 31, 2021, respectively.

The Company does not have the ability to exercise significant influence or control over such entity and has accounted for the investments as financial instruments.

Given that fair values for

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

such investments are not readily determinable, the Company is electing to measure these investments at cost, less any impairment, and adjust the carrying value to fair value if any observable price changes for similar investments in the same entity are identified.

Balance Sheet Details

6 unchanged sentences

Total cash, cash equivalents and restricted cash $ 188,357 $ 131,738

As of December 31, 2021 and December 31, 2020, cash and cash equivalents included money market funds of approximately $ 20.4 million.

As of December 31, 2021 and December 31, 2020, the Company has restricted cash of approximately $ 1.2 million and $ 1.1 million, respectively.

As of December 31, 2022 and December 31, 2021, cash and cash equivalents included money market funds of approximately $ 0.4 million and $ 20.4 million, respectively.

As of December 31, 2022 and December 31, 2021, the Company had restricted cash of approximately $ 1.0 million and $ 1.2 million, respectively.

The cash is restricted in connection with guarantees for certain import duties and office leases.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Inventory consists of the following:

4 unchanged sentences

$ 160,544 $ 131,703

Prepaid and other current assets consist of the following:

December 31, 2021 December 31, 2020

(in thousands)

Prepaid expenses $ 12,194 $ 7,674

Other receivables — 32,762

Other current assets 9,806 6,985

$ 22,000 $ 47,421

As of December 31, 2020, other receivables of $ 32.8 million consisted of amounts due from Intel of $ 28.4 million for amounts collected on the Company’s behalf from customers on sales of the Company’s products under the transition services agreement and of $ 4.4 million for reimbursement of certain severance-related costs pursuant to the Asset Purchase Agreement (Note 3).

Property and equipment, net consists of the following:

14 unchanged sentences

Depreciation expense for the years ended December 31, 2022, 2021, and 2020 was $ 20.3 million, $ 17.7 million and $ 11.3 million, respectively.

In March 2022, the Company entered into a note receivable with a supplier for $ 10.0 million, which is included in other long-term assets in the consolidated balance sheet.

Repayments of $ 2.0 million per year are due annually by March 31, in years 2024 through 2027, provided that certain production utilization targets for the prior year are met.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Included in other long-term assets is an investment in a privately held entity of $ 5.0 million as of December 31, 2021.

The Company does not have the ability to exercise significant influence or control over such entity and has accounted for the investment as a financial instrument.

Given that there is not a readily determinable fair value, the Company is electing to measure such investment at cost, less any impairment, and adjust the carrying value to fair value if any observable price changes for similar investments in the same entity are identified.

Accrued price protection liability consists of the following activity:

3 unchanged sentences

Charged as a reduction of revenue 180,538 81,116

Reversal of unclaimed rebates — ( 159 )

Payments ( 107,773 ) ( 88,373 )

3 unchanged sentences

(in thousands)

Deferred purchase price payments $ — $ 34,484

Payables under transition services agreement — 17,420

Accrued technology license payments $ 7,402 $ 7,337

9 unchanged sentences

Accrued obligations to customers for stock rotation rights 605 2,847

Contingent consideration 2,941 —

Other 6,679 9,205

$ 100,155 $ 57,268

As of December 31, 2020, payables under transition services agreement of $ 17.4 million consisted of amounts due to Intel of approximately $ 9.1 million for purchases of inventory and $ 8.3 million for other operating expenses incurred under the transition services agreement.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the change in balances of accumulated other comprehensive income (loss) by component:

Cumulative Translation Adjustments Interest Rate Hedge Pension and Other Defined Benefit Plan Obligation Total

Cumulative Translation Adjustments Pension and Other Defined Benefit Plan Obligation Total

(in thousands)

1 unchanged sentence

Other comprehensive income (loss) before reclassifications, net of tax ( 242 ) 932 690

Amounts reclassified, net of tax — ( 85 ) — ( 85 )

Net current period other comprehensive income (loss) 1,010 140 1,172 2,322

Balance at December 31, 2021 21 2,104 2,125

1 unchanged sentence

Balance at December 31, 2022 $ ( 5,180 ) $ 4,159 $ ( 1,021 )

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt and Interest Rate Swap

4 unchanged sentences

Initial term loan under June 23, 2021 credit agreement $ 125,000 $ 310,000

Initial term loan under May 12, 2017 credit agreement — 212,000

Incremental term loan under May 12, 2017 credit agreement, as amended — 157,812

Total principal balance 125,000 310,000

6 unchanged sentences

During the years ended December 31, 2022, 2021 and 2020, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.6 million, $ 1.3 million, and $ 1.5 million, respectively, to interest expense.

The approximate aggregate fair value of the term loans outstanding as of December 31, 2021 and December 31, 2020 was $ 311.0 million and $ 376.1 million, respectively, which was estimated on the basis of inputs that are observable in the market and which is considered a Level 2 measurement method in the fair value hierarchy.

The approximate aggregate fair value of the term loans outstanding as of December 31, 2022 and December 31, 2021 was $ 137.4 million and $ 311.0 million, respectively, which was estimated on the basis of inputs that are observable in the market and which is considered a Level 2 measurement method in the fair value hierarchy (Note 6).

As of December 31, 2022, the outstanding principal balance of $ 125.0 million is due in full on June 23, 2028 upon maturity of the loan.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Initial Term Loan and Revolving Facility under June 23, 2021 Credit Agreement

On June 23, 2021, the Company entered into a Credit Agreement (the “June 23, 2021 Credit Agreement”), by and among the Company, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent and collateral agent, that provides for a senior secured term B loan facility, or the “Initial Term Loan under the June 23, 2021 Credit Agreement,” in an aggregate principal amount of $ 350.0 million and a senior secured revolving credit facility, or the “Revolving Facility,” in an aggregate principal amount of up to $ 100.0 million.

On June 23, 2021, the Company entered into a Credit Agreement, or the June 23, 2021 Credit Agreement, by and among the Company, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent and collateral agent, that provides for a senior secured term B loan facility, or the Initial Term Loan under the June 23, 2021 Credit Agreement, in an aggregate principal amount of $ 350.0 million and a senior secured revolving credit facility, or the Revolving Facility, in an aggregate principal amount of up to $ 100.0 million.

The proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement were used (i) to repay in full all outstanding indebtedness under that certain Credit Agreement dated May 12, 2017, by and among the Company, MUFG Bank Ltd., as administrative agent and MUFG Union Bank, N.A., as collateral agent and the lenders from time to time party thereto (as amended by Amendment No.

1, dated July 31, 2020 and as further amended, amended and restated, waived, supplemented or otherwise modified from time to time, the “May 12, 2017 Credit Agreement”) and (ii) to pay fees and expenses incurred in connection therewith.

1, dated July 31, 2020) and (ii) to pay fees and expenses incurred in connection therewith.

The remaining proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement are available for general corporate purposes and the proceeds of the Revolving Facility may be used to finance the working capital needs and other general corporate purposes of the Company and its subsidiaries.

As of December 31, 2022, the Revolving Facility was undrawn.

Under the amended and restated commitment letter with Wells Fargo Bank and other lenders entered into in connection with the pending merger with Silicon Motion (Note 3), the Company expects to repay the remaining outstanding term loans under this agreement upon closing of the merger.

The June 23, 2021 Credit Agreement 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.

Incremental loans are subject to certain additional conditions, including obtaining additional commitments from the lenders then party to the June 23, 2021 Credit Agreement or new lenders.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the June 23, 2021 Credit Agreement, the Initial Term Loan bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50 %, (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one-month interest period plus 1.00 %, in each case, plus an applicable margin of 1.25 % or (ii) an adjusted LIBOR rate, subject to a floor of 0.50 %, plus an applicable margin of 2.25 %.

11 unchanged sentences

Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the subsidiary guarantors pursuant to a Security Agreement, dated as of June 23, 2021, by and among the Company, the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

fundamental changes, make investments, make certain restricted payments, and sell assets, in each case, subject to limitations and exceptions set forth in the June 23, 2021 Credit Agreement.

The June 23, 2021 Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its restricted subsidiaries to, among other things, incur debt, grant liens, undergo certain fundamental changes, make investments, make certain restricted payments, and sell assets, in each case, subject to limitations and exceptions set forth in the June 23, 2021 Credit Agreement.

The Revolving Facility also prohibits the Company from having a secured net leverage ratio in excess of 3.50 :1.00 (subject to a temporary increase to 3.75 :1.00 following the consummation of certain material permitted acquisitions) as of the last day of any fiscal quarter of the Company (commencing with the fiscal quarter ending September 30, 2021) if the aggregate borrowings under the Revolving Facility exceed 1 % of the aggregate commitments thereunder (subject to certain exceptions set forth in the June 23, 2021 Credit Agreement) as of such date.

4 unchanged sentences

The issuance date fair value of the liability component of the debt in the amount of $ 350.2 million was determined using a discounted cash flow analysis, in which the projected interest and principal payments were discounted back to the issuance date of the term loan at a market interest rate for nonconvertible debt of 3.4 %, which represents a Level 2 fair value measurement.

The debt discount of $ 0.9 million and debt issuance costs of $ 2.9 million associated with the Initial Term Loan under the June 23, 2021 Credit Agreement are being amortized to interest expense using the effective interest method over its seven-year term.

Debt issuance costs of $ 0.4 million associated with the Revolving Facility are being amortized to interest expense over its five-year term.

Initial Term Loan under May 12, 2017 Credit Agreement

On May 12, 2017, the Company entered into the May 12, 2017 Credit Agreement in connection with the acquisition of Exar Corporation.

The May 12, 2017 Credit Agreement provided for an initial secured term B loan facility, or the “Initial Term Loan under the May 12, 2017 Credit Agreement,” in an aggregate principal amount of $ 425.0 million.

The May 12, 2017 Credit Agreement permitted the Company to request incremental loans in an aggregate principal amount not to exceed the sum of an amount equal to $ 160.0 million, plus the amount of certain voluntary prepayments, plus an unlimited amount that is subject to pro forma compliance with certain secured leverage ratio and total leverage ratio tests.

Incremental loans were subject to certain additional conditions, including obtaining additional commitments from the lenders then party to the credit agreement or new lenders.

Loans under the May 12, 2017 Credit Agreement bore interest, at the Company’s option, at a rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50 %, (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one - three - or six-month interest period, plus 1.0 % or (ii) an adjusted LIBOR rate, subject to a floor of 0.75 %, in each case, plus an applicable margin of 2.50 % in the case of LIBOR rate loans and 1.50 % in the case of base rate loans.

Commencing on September 30, 2017, the Initial Term Loan under the May 12, 2017 Credit Agreement amortized in equal quarterly installments equal to 0.25 % of the original principal amount of the Initial Term Loan under the May 12, 2017 Credit Agreement, with the balance payable on the maturity date.

The Initial Term Loan under the May 12, 2017 Credit Agreement had a term of seven years and was scheduled to mature on May 12, 2024, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan under the May 12, 2017 Credit Agreement was due.

The Company was required to make mandatory prepayments of the outstanding principal amount of term loans under the May 12, 2017 Credit Agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness.

The Company had the right to prepay its term loans under the May 12, 2017 Credit Agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0 % soft call premium applicable during the first six months of the loan term.

On June 23, 2021, the Company exercised its right to prepay the Initial Term Loan under the May 12, 2017 Credit Agreement and repaid the outstanding principal amount of the Initial Term Loan under the May 12, 2017 Credit Agreement, plus accrued and unpaid interest in full with the proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement.

Incremental Term Loan under May 12, 2017 Credit Agreement, As Amended

In connection with the acquisition of the Wi-Fi and Broadband assets business, on July 31, 2020, the Company entered into an incremental term loan agreement with certain lenders that amended the May 12, 2017 Credit Agreement and provided for a secured incremental term loan facility in an aggregate principal amount of $ 350.0 million (the “Incremental Term Loan”).

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Incremental Term Loan bore interest, at the Company’s option, at 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.

Commencing on July 31, 2020, the Incremental Term Loan amortized 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 had a term of three years and was scheduled to mature on July 31, 2023, at which time all outstanding principal and accrued and unpaid interest on the Incremental Term Loan was due.

On June 23, 2021, the Company exercised its right to prepay the Incremental Term Loan and repaid the outstanding principal amount of the Incremental Term Loan, plus accrued and unpaid interest in full with the proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement.

In connection with the settlement of the indebtedness under the May 12, 2017 Credit Agreement, in the year ended December 31, 2021, the Company recognized an aggregate loss on debt extinguishment of $ 5.2 million consisting of unamortized debt issuance costs and discounts.

Interest Rate Swap

In November 2017, the Company entered into a fixed-for-floating interest rate swap with an amortizing notional amount to swap a substantial portion of variable rate LIBOR interest payments under its initial term loan for fixed interest payments bearing an interest rate of 1.74685 % through the expiration of the swap in October 2020.

The Company’s then outstanding initial term loan was still subject to a 2.5 % fixed applicable margin during the term of the loan.

The interest rate swap was designated as a cash flow hedge of a portion of floating rate interest payments on the initial term loan and effectively fixed the interest rate on a substantial portion of the Company’s then outstanding long-term debt at approximately 4.25 % until the expiration of the swap in October 2020.

Accordingly, the Company applied cash flow hedge accounting to the interest rate swap and it was recorded at fair value as an asset or liability and the effective portion of changes in the fair value of the interest rate swap, as measured quarterly, were reported in other comprehensive income (loss) until expiration of the swap.

The change in fair value related to the interest rate swap asset included in other comprehensive income (loss) for the years ended December 31, 2021, 2020 and 2019 was a $ 0.0 million increase, a $ 0.1 million increase, and a $ 1.7 million decrease in fair value, respectively.

Upon expiration of the interest rate swap, a total $ 0.1 million of unrealized gain was recorded in interest income and included in gain/loss on foreign currency and other in the statement of cash flows at December 31, 2020.

its seven-year term.

Debt issuance costs of $ 0.4 million associated with the Revolving Facility are being amortized to interest expense over its five-year term.

Stock-Based Compensation

10 unchanged sentences

Options granted will generally vest over a period of four years and the term can be from seven to ten years .

The plan expires in August 2026, unless terminated earlier by action of the board of directors.

The 2010 plan, as amended, contains a clawback policy, which requires the Company’s executive officers to repay to MaxLinear certain incentive compensation if (i) the Company restates its financial statements as a result of a material error or due to material non-compliance with reporting requirements under applicable law;

(ii) no more than three (3) years have

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

elapsed since the original filing date of the financial statements;

(ii) no more than three (3) years have elapsed since the original filing date of the financial statements;

and (iii) an independent committee of the board’s compensation committee determines, in its sole discretion, that the misreporting event occurred due to fraud or intentional misconduct within MaxLinear and, following consideration of such factors as the committee may deem reasonable and appropriate, including the extent to which an executive officer knew or should have known of the factors resulting in the misreporting, that the executive officer should repay any “recoverable compensation.” Recoverable compensation is defined in the clawback policy but generally includes any cash or equity compensation paid to executive officers under the Company’s Executive Incentive Bonus Plan or 2010 Equity Incentive Plan, as amended, to the extent the amount actually paid by MaxLinear exceeds the amount that would have been paid if the financial misreporting event had not occurred.

12 unchanged sentences

Generally, all eligible employees, including executive officers, employed by the Company may participate in the ESPP and may contribute up to 15 % of their earnings for the purchase of the Company’s common stock under the ESPP.

Unless otherwise determined by the Company’s board of directors, common stock will be purchased for accounts of employees participating in the ESPP at a price per share equal to the lower of (a) 85 % of the fair market value of a share of the Company’s common stock on the first date of an offering or (b) 85 % of the fair market value of a share of the Company’s common stock on the date of purchase.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

common stock on the date of purchase.

As of December 31, 2022, the number of shares of common stock available for future issuance under the ESPP was 4,921,614 shares.

3 unchanged sentences

When bonus awards are settled in common stock issued under the 2010 Equity Incentive Plan, the number of shares issuable to plan participants is determined based on the closing price of the Company’s common stock as determined in trading on the applicable stock exchange on a date approved by the Board of Directors.

In connection with the Company’s bonus programs, in February 2021 and March 2020, the Company issued 0.5 million and 0.2 million freely-tradable shares, respectively, of the Company’s common stock in settlement of bonus awards to employees, including executives, for the 2020 and 2019 performance periods.

At December 31, 2021, the Company has an accrual of $ 41.5 million for bonus awards for employees for year-to-date achievement in the 2021 performance period, which the Company intends to settle primarily in shares of its common stock, unless otherwise required to be settled in cash due to local laws or agreements.

In connection with the Company’s bonus programs, in February 2022 and February 2021, the Company issued 0.5 million and 0.5 million freely-tradable shares, respectively, of the Company’s common stock in settlement of bonus awards to employees, including executives, for the 2021 and 2020 performance periods.

At December 31, 2022, the Company has an accrual of $ 42.6 million for bonus awards for employees for achievement in the 2022 performance period, which the Company intends to settle primarily in shares of its common stock, unless otherwise required to be settled in cash due to local laws or agreements.

The Company’s compensation committee retains discretion to effect payment in cash, stock, or a combination of cash and stock.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation

10 unchanged sentences

The total unrecognized compensation cost related to unvested performance-based restricted stock units as of December 31, 2022 was $ 23.1 million, and the weighted average period over which these equity awards are expected to vest is 0.82 years.

The total unrecognized compensation cost related to unvested stock options as of December 31, 2021 was $ 0.3 million, and the weighted average period over which these equity awards are expected to vest is 0.51 years.

There was no unrecognized compensation cost related to unvested stock options as of December 31, 2022.

Restricted Stock Units

8 unchanged sentences

Performance-Based Restricted Stock Units

Performance-based restricted stock units are eligible to vest at the end of each fiscal year in a three-year performance period based on the Company’s annual growth rate in net sales and non-GAAP diluted earnings per share (subject to certain adjustments) over baseline results relative to the growth rates for a peer group of companies for the same metrics and periods.

Performance-based restricted stock units are eligible to vest at the end of each period in a three-year performance period based on the Company’s annual growth rate in net sales and non-GAAP diluted earnings per share (subject to certain adjustments) over baseline results relative to the growth rates for a peer group of companies for the same metrics and periods.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the performance-based restricted stock units granted to date, 60 % of each performance-based award is subject to the net sales metric for the performance period and 40 % is subject to the non-GAAP diluted earnings per share metric for the performance period.

1 unchanged sentence

As of December 31, 2022, the Company believes that it is probable that it will achieve certain performance metrics specified in the respective award agreements based on its expected revenue and non-GAAP diluted EPS results over the performance periods and calculated growth rates relative to its peers’ expected results based on data available, as defined in the respective award agreements.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the Company’s performance-based restricted stock unit activity is as follows:

29 unchanged sentences

In addition, the estimated volatility incorporates the historical volatility over the expected term based on the Company’s daily closing stock prices.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

9 unchanged sentences

The intrinsic value of stock options exercised during 2022, 2021, and 2020 was $ 0.9 million, $ 9.8 million, and $ 4.9 million, respectively.

Cash received from exercise of stock options was $ 4.2 million, $ 4.4 million and $ 4.5 million during the

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

years ended December 31, 2021, 2020, and 2019, respectively.

Cash received from exercise of stock options was $ 0.3 million, $ 4.2 million and $ 4.4 million during the years ended December 31, 2022, 2021, and 2020, respectively.

The tax benefit from stock options exercised was $ 1.20 million, $ 14.4 million and $ 5.2 million during the years ended December 31, 2022, 2021, and 2020, respectively.

The domestic and international components of income (loss) before income taxes are presented as follows:

Years Ended December 31,

Year Ended December 31,

2022 2021 2020

4 unchanged sentences

The income tax provision (benefit) consists of the following:

Years Ended December 31,

Year Ended December 31,

2022 2021 2020

13 unchanged sentences

The actual income tax provision (benefit) differs from the amount computed using the federal statutory rate as follows:

Years Ended December 31,

Year Ended December 31,

2022 2021 2020

11 unchanged sentences

Transaction costs 5 45 883

Foreign tax credits 2,224 — —

Attribute expirations 34 — 11,937

11 unchanged sentences

Stock-based compensation 9,976 8,014

Intangible assets 5,582 —

138,899 159,395

9 unchanged sentences

The federal and state tax loss carryforwards will begin to expire in 2025 and 2030, and foreign tax loss will not expire, unless previously utilized.

At December 31, 2021, the Company had federal, state and foreign tax credit carryforwards of approximately $ 56.7 million, $ 95.6 million and $ 1.8 million, respectively.

The federal and foreign tax credit carryforwards will begin to expire in

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2022 and 2026, respectively, unless previously utilized.

The state tax credit carryforwards do not expire.

At December 31, 2022, the Company had federal, state and foreign tax credit carryforwards of approximately $ 30.6 million, $ 100.7 million and $ 1.5 million, respectively.

The federal, state and foreign tax credit carryforwards will begin to expire in 2023, 2030 and 2029, respectively, unless previously utilized.

The Company also has foreign incentive deductions of approximately $ 7.4 million that do not expire.

3 unchanged sentences

Forming a conclusion that a valuation allowance is not required is difficult when there is negative evidence such as cumulative losses in recent years.

The Company believes it is more likely than not to realize certain federal and foreign deferred assets.

The Company continues to maintain a valuation allowance on its state deferred taxes, certain of its federal deferred tax assets, and certain foreign deferred tax assets in jurisdictions where the Company has cumulative losses or otherwise is not expected to utilize certain tax attributes.

Based upon the Company’s review of all positive and negative evidence, the Company continues to have a valuation allowance on its state deferred tax assets, certain of its federal deferred tax assets, and certain foreign deferred tax assets in jurisdictions where the Company has cumulative losses or otherwise is not expected to utilize certain tax attributes.

The Company does not incur expense or benefit in certain tax-free jurisdictions in which it operates.

The Company recorded an income tax provision of $ 5.9 million in the year ended December 31, 2021 and an income tax benefit of $ 16.3 million in the year ended December 31, 2020.

The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the year ended December 31, 2021 resulted primarily from a tax on global intangible low-taxed income (“GILTI”) and non-deductible foreign stock-based compensation, offset by a benefit related to research and development tax credits, foreign earnings taxed at rates other than the federal statutory rate and the effect of a release of valuation allowance against certain Singapore deferred tax assets pertaining to usage of net operating losses.

The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the year ended December 31, 2020 resulted primarily from foreign earnings taxed at rates other than the federal statutory rate, a benefit related to release of uncertain tax positions under ASC 740-10, and excess tax benefits related to stock-based compensation.

The Company recorded an income tax provision of $ 49.2 million in the year ended December 31, 2022 and an income tax provision of $ 5.9 million in the year ended December 31, 2021.

The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the year ended December 31, 2022 resulted primarily from a mix of pre-tax income among jurisdictions, permanent tax items including a tax on global intangible low-taxed income, stock based compensation, excess tax benefits related to stock-based compensation, release of uncertain tax positions under ASC 740-10, and release of the valuation allowance on certain federal research and development credits.

The permanent tax item related to global intangible low-taxed income also reflects recent legislative changes requiring the capitalization of research and experimentation costs, as well as limitations on the creditability of certain foreign income taxes.

The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the year ended December 31, 2022 resulted primarily from a tax on global intangible low-taxed income, or GILTI, and non-deductible foreign stock-based compensation, offset by a benefit related to research and development tax credits, foreign earnings taxed at rates other than the federal statutory rate and the effect of a release of valuation allowance against certain Singapore deferred tax assets pertaining to usage of net operating losses.

Income tax positions must meet a more-likely-than-not threshold to be recognized.

13 unchanged sentences

Additions based on tax positions related to the current year 1,506

Additions related to acquisitions 1,154

Decreases based on tax positions of prior year ( 922 )

5 unchanged sentences

Additions based on tax positions related to the current year 3,431

Additions related to acquisitions 241

Decreases based on tax positions of prior year ( 1,981 )

2 unchanged sentences

At December 31, 2022, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed for the years before 2019, 2018, and 2017, respectively.

The Company’s subsidiary in Singapore operates under certain tax incentives in Singapore, which are generally effective through March 2022 and may be extended through March 2027, and are conditional upon meeting certain employment and investment thresholds in Singapore.

The Company’s subsidiary in Singapore operates under certain tax incentives in Singapore, which are generally effective through March 2027, and are conditional upon meeting certain employment and investment thresholds in Singapore.

Under the incentives, qualifying income derived from certain sales of the Company’s integrated circuits is taxed at a concessionary rate over the incentive period, and there are reduced Singapore withholding taxes on certain intercompany royalties during the incentive period.

Due to the valuation allowance in Singapore in 2020 and prior, the incentive did not have a material impact on the Company's income tax provision in 2020 and 2019.

Due to the valuation allowance release in 2021 and the Company's use of loss carry forwards, the Company recorded a tax benefit in the current year at the incentive rate, net of any expected tax payable.

The Company recorded a tax provision in the year ended December 31, 2022 at the incentive rate.

Due to the valuation allowance release in 2021 and the Company’s use of loss carry forwards, the Company recorded a tax benefit in the year ended December 31, 2021 at the incentive rate, net of any expected tax payable.

Without the incentive rate, deferred taxes and the valuation allowance release would have provided an overall tax benefit, net of any current period payable.

On August 9, 2022, the CHIPS and Science Act of 2022, or the CHIPS Act, was enacted in the United States.

The CHIPS Act will provide financial incentives to the semiconductor industry which are primarily directed at manufacturing activities within the United States for qualifying property placed in service after December 31, 2022.

As the Company currently outsources its manufacturing, the CHIPS Act is not expected to have a material impact to the Company’s consolidated tax provision for the year ending December 31, 2023.

The Inflation Reduction Act of 2022, or IRA, was signed into law on August 16, 2022.

The bill was meant to address the high inflation rate in the United States through various climate, energy, healthcare, and other incentives.

These incentives are meant to be paid for by the tax provisions included in the IRA, such as a new 15 percent corporate minimum tax, a 1 percent new excise tax on stock buybacks, additional IRS funding to improve taxpayer compliance, and others.

The IRA provisions are effective for tax years beginning after December 31, 2022.

At this time, none of the IRA tax provisions are expected to have a material impact to the Company’s consolidated tax provision for the year ending December 31, 2023.

The Company will continue to monitor updates to our business along with guidance issued with respect to both Acts to determine whether any adjustments are needed to its consolidated tax provision in future periods.

Concentration of Credit Risk, Significant Customers and Geographic Information

5 unchanged sentences

The Company has not experienced any losses on its deposits of cash and cash equivalents.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant Customers

The Company markets its products and services to manufacturers of a wide range of electronic devices (Note 1).

The Company sells its products both directly to customers and through third-party distributors, both of which are referred to as the Company’s customers (Note 12).

The Company sells its products both directly to customers and through third-party distributors, and also tracks sales to the ultimate end customer (Note 12).

The Company makes periodic evaluations of the credit worthiness of its customers.

Customers comprising greater than 10% of net revenues for each of the periods presented are as follows:

End customers comprising greater than 10% of net revenues for each of the periods presented are as follows:

Year Ended December 31,

1 unchanged sentence

Percentage of total net revenue

Customer A (direct) 15 % 15 % 14 %

Customer B (direct) 11 % 13 % *

____________________________

* Represents less than 10% of total net revenue for the respective period.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Customer A 21 % 15 % 15 %

Customer B 10 % 11 % 13 %

The following table presents balances that are 10% or greater of accounts receivable, based on the Company’s billings to its customers.

1 unchanged sentence

Percentage of gross accounts receivable

Customer B (direct) 14 % 17 %

Customer C (direct) 17 % *

Customer D (distributor) * 13 %

Customer B * 14 %

Customer C 11 % *

Customer D * 17 %

Customer E 28 % *

Customer F 12 % *

____________________________

8 unchanged sentences

Vendor D * * 11 %

Vendor E * * 15 %

* Represents less than 10% of the inventory purchases for the respective period.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Geographic Information

The Company’s consolidated net revenues by geographic area based on ship-to location are as follows (in thousands):

Years Ended December 31,

Year Ended December 31,

2022 2021 2020

5 unchanged sentences

The products shipped to individual countries or territories representing greater than 10% of net revenue for each of the periods presented are as follows:

Years Ended December 31,

Year Ended December 31,

2022 2021 2020

5 unchanged sentences

* Represents less than 10% of total revenue for the respective period.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The determination of which country a particular sale is allocated to is based on the destination of the product shipment.

8 unchanged sentences

Total $ 523,588 100 % $ 547,401 100 %

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue from Contracts with Customers

14 unchanged sentences

Contract Liabilities

As of December 31, 2021, customer contract liabilities consisted primarily of advanced payments received for which performance obligations have not been completed of approximately $ 1.0 million.

As of December 31, 2020, customer contract liabilities consisted of estimates of obligations to deliver rebates to customers in the form of units of products and were approximately $ 0.03 million.

As of December 31, 2022, customer contract liabilities were approximately $ 1.1 million and $ 1.0 million, respectively, and consisted primarily of advanced payments received for which performance obligations have not been completed.

Revenue recognized in each of the years ended December 31, 2022, 2021, and 2020 that was included in the contract liability balance as of the beginning of each of those respective periods was immaterial.

There were no material changes in the contract liabilities balance during the years ended December 31, 2022, 2021, and 2020, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Obligations to Customers for Price Adjustments and Returns and Assets for Right-of-Returns

6 unchanged sentences

As of December 31, 2022 and December 31, 2021, there were no impairment losses recorded on customer accounts receivable.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Operating Leases

6 unchanged sentences

(in thousands)

2023 $ 11,445

Thereafter 577

1 unchanged sentence

imputed interest ( 2,336 )

unrealized translation loss —

Total lease liabilities 33,842

2 unchanged sentences

Operating lease cost was $ 10.4 million, $ 9.4 million, and $ 5.2 million for the years ended December 31, 2022, 2021, and 2020, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Short-term lease costs for each of the years ended December 31, 2022, 2021, and 2020, respectively, were not material.

6 unchanged sentences

Pension and Other Defined Benefit Retirement Obligations

In connection with the July 31, 2020 acquisition of the Wi-Fi and Broadband assets business (Note 3), the Company assumed an obligation of $ 7.9 million of the Wi-Fi and Broadband assets business associated with certain defined benefit retirement plans, including a pension plan.

The Company maintains certain defined benefit retirement plans, including a pension plan, in foreign jurisdictions.

As of December 31, 2022 and December 31, 2021, the defined benefit obligation was $ 1.7 million and $ 4.5 million, respectively.

The benefit is based on a formula applied to eligible employee earnings.

Net periodic benefit costs were $ 0.5 million and $ 0.2 million, respectively for the years ended December 31, 2021 and 2020, respectively, and were recorded to research and development expenses in the consolidated statements of operations.

Benefit Obligation and Plan Assets for Pension Benefit Plans

The vested benefit obligation for a defined-benefit pension or other retirement plan is the actuarial present value of the vested benefits to which the employee is currently entitled based on the employee's expected date of separation or retirement.

Net periodic benefit costs were $ 0.3 million, $ 0.5 million, and $ 0.2 million respectively for the years ended December 31, 2022, 2021, and 2020 respectively, and were recorded to research and development expenses in the consolidated statements of operations.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Benefit Obligation and Plan Assets for Pension Benefit Plans

December 31, 2022 December 31, 2021

2 unchanged sentences

Projected benefit obligation, beginning of period $ 9,733 $ 12,022

Projected benefit obligation assumed in acquisition — 13,274

Service cost 289 442

6 unchanged sentences

Fair value of plan assets, beginning of period 5,198 5,634

Plan assets transferred from acquisition — 5,417

Actual return on plan assets ( 24 ) 2

Employer contributions — —

Currency exchange rate changes ( 279 ) ( 439 )

Plan settlements — —

Fair value of plan assets, end of period 4,895 5,198

6 unchanged sentences

Under this approach, net actuarial gains or losses in excess of 10% of the larger of the projected benefit obligation or the fair value of plan assets are amortized on a straight-line basis.

As of December 31, 2021 and 2020, all plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets.

As of December 31, 2021 and 2020, the accumulated benefit obligations were $ 9.2 million and $ 11.1 million for the pension plans.

As of December 31, 2022 and December 31, 2021, all plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets.

As of December 31, 2022 and December 31, 2021, the accumulated benefit obligations were $ 6.3 million and $ 9.2 million for the pension plans.

MAXLINEAR, INC.

40 unchanged sentences

2025 — 179 179

2025 — 111 111

Total minimum payments $ 132,772 $ 29,920 $ 162,692

Other obligations consist of contractual payments due for software licenses.

Our inventory purchase obligations and other obligations increased by $ 64.7 million to $ 186.4 million as of December 31, 2021, from $ 121.7 million as of December 31, 2020 primarily as a result of increased orders of inventory placed with our vendors during the period, partially offset by a decrease in software license obligations.

Jointly Funded Research and Development

In 2021, the Company entered into contracts for jointly funded research and development projects to develop technology that may be commercialized into a product in the future.

As the Company may be required to repay all or a portion of the funds provided by the other parties under certain conditions, total funds received to date from the other parties of $ 5.8 million have been recorded in other long-term liabilities.

From time to time, the Company enters into contracts for jointly funded research and development projects to develop technology that may be commercialized into a product in the future.

As the Company may be required to repay all or a portion of the funds provided by the other parties under certain conditions, total funds received to date from the other parties of $ 8.0 million have been recorded in other long-term liabilities as of December 31, 2022.

Additional amounts under the contracts are tied to certain milestones and will also be recorded as a long-term liability as payment due under such milestones are received.

The Company currently expects to de-recognize the liabilities when the contingencies associated with the repayment conditions have been resolved.

The Company de-recognizes the liabilities when the contingencies associated with the repayment conditions have been resolved.

During the years ended December 31, 2022 and 2021, the Company recognized $ 3.8 million and $ 0 , respectively, in previously deferred amounts from other parties due to resolution of such repayment conditions.

Bell Semiconductor Litigation

On August 11, 2022, Bell Semiconductor LLC filed suit against MaxLinear in the Southern District of California alleging infringement of U.S.

6,436,807 and 7,007,259.

MaxLinear answered the complaint on January 26, 2023 and the case is presently early in the fact discovery phase.

The case is tentatively scheduled for trial in February 2024.

On August 26, 2022, Bell Semiconductor LLC filed suit against MaxLinear in the Southern District of California alleging infringement of U.S.

7,149,989 and 7,260,803.

MaxLinear answered the complaint on January 26, 2023 and the case is presently early in the fact discovery phase.

The case is tentatively scheduled for trial in February 2024.

On October 7, 2022 Bell Semiconductor LLC filed suit against MaxLinear in the Southern District of California alleging infringement of U.S.

This action has been stayed pending a parallel ITC investigation involving the same patent.

Specifically, on October 13, 2023, Bell Semiconductor also filed suit against MaxLinear before the U.S.

International Trade Commission alleging infringement of U.S.

This was instituted by the Commission as Investigation No.

337-TA-1342 on November 23, 2022.

A schedule was set by the administrative law judge and key deadlines include a close of fact discovery on May 1, 2023, a close of expert discovery June 5, 2023, and an evidentiary hearing beginning on August 7, 2023.

An initial determination is expected from the judge on November 21, 2023, with a final determination from the Commission by March 21, 2024.

Other Matters

From time to time, the Company is subject to threats of litigation or actual litigation in the ordinary course of business, some of which may be material.

The Company believes that there are no currently pending litigation matters that, if determined adversely to the Company’s interests, would have a material effect on the Company’s financial position, results of operations, or cash flows or that would not be covered by the Company’s existing liability insurance.

From time to time, the Company is subject to threats of litigation or actual litigation in the ordinary course of business as described in “ Item 3 — Legal Proceedings ,” some of which may be material.

The results of any litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have a material adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

However, as of December 31, 2022, no loss contingencies have been accrued for these matters in the Company’s financial statements.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Repurchases

3 unchanged sentences

The share repurchase program does not obligate the Company to make any repurchases and may be modified, suspended, or terminated by the Company at any time without prior notice.

The share repurchase program has been temporarily suspended since July 2022 due to the Company’s pending merger with Silicon Motion.

During the year ended December 31, 2022, the Company repurchased 564,449 shares of its common stock at a weighted average price of $ 55.7972 per share at an aggregate value of approximately $ 31.5 million under the repurchase program.

At December 31, 2021, the aggregate value of common stock repurchased under the program was approximately $ 23.5 million and approximately $ 76.5 million remained available for repurchase under the program.

During the year ended December 31, 2021, the Company repurchased 454,372 shares of its common stock at a weighted average price of $ 51.7998 per share at an aggregate value of approximately $ 23.5 million under the repurchase program.

As of December 31, 2022, the aggregate value of common stock repurchased under the program was approximately $ 55.0 million and approximately $ 45.0 million remained available for repurchase under the program.

Subsequent Event

Acquisition of Company Y

On January 17, 2023, the Company completed its acquisition of a business, or Company Y, pursuant to a Purchase and Sale Agreement, or the Purchase Agreement.

The initial closing transaction consideration consisted of $ 9.9 million in cash.

In addition, their stockholders may receive up to an additional $ 2.6 million in potential contingent consideration, subject to the acquired business satisfying certain personnel objectives by June 17, 2023.

Company Y is headquartered in Bangalore, India and operates as a provider of engineering design services.

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-K

Item 9A. Controls and Procedures