What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-04-26 compared with 2022-10-25 · 247 added, 315 removed, 592 unchanged (49% of the section changed)

3 unchanged sentences

(in thousands, except par value amounts)

September 30,

2023 December 31,

Assets (unaudited)

Current assets:

31 unchanged sentences

550,000 shares authorized;

78,565 shares issued and outstanding at September 30, 2022 and 76,778 shares issued and outstanding December 31, 2021

79,981 shares issued and outstanding at March 31, 2023 and 78,745 shares issued and outstanding December 31, 2022

Additional paid-in capital 771,164 722,778

Accumulated other comprehensive income (loss) ( 5,316 ) 2,125

Accumulated other comprehensive loss ( 1,213 ) ( 1,021 )

Accumulated deficit ( 35,847 ) ( 45,380 )

5 unchanged sentences

in thousands, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Net revenue $ 248,442 $ 263,927

4 unchanged sentences

Selling, general and administrative 38,653 40,577

Impairment losses 2,438 —

Restructuring charges 4,648 —

3 unchanged sentences

Interest expense ( 2,487 ) ( 2,349 )

Loss on extinguishment of debt — — — ( 5,221 )

Other income (expense), net ( 324 ) ( 770 )

13 unchanged sentences

in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Net income $ 9,533 $ 33,586

Other comprehensive loss, net of tax:

Foreign currency translation adjustments, net of tax benefits of $ 187 and $ 184 for the three and nine months ended September 30, 2022, respectively, and net of tax expense of $ 196 and $ 427 for the three and nine months ended September 30, 2021, respectively

Foreign currency translation adjustments, net of tax benefit of $ 71 for the three months ended March 31, 2023 and net of tax expense of $ 2 for the three months ended March 31, 2022, respectively

( 192 ) ( 1,075 )

3 unchanged sentences

MAXLINEAR, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FISCAL QUARTERS ENDED SEPTEMBER 30, 2022

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FISCAL QUARTER ENDED MARCH 31, 2023

in thousands)

8 unchanged sentences

Common stock issued pursuant to equity awards, net 1,236 — 31,926 — — 31,926

Repurchase of common stock ( 440 ) — ( 26,297 ) — — ( 26,297 )

Stock-based compensation — — 16,460 — — 16,460

2 unchanged sentences

Balance at March 31, 2023 79,981 $ 8 $ 771,164 $ ( 1,213 ) $ ( 35,847 ) $ 734,112

Common stock issued pursuant to equity awards, net 999 — 310 — — 310

Minimum tax withholding on common stock issued — — ( 3,698 ) — — ( 3,698 )

Repurchase of common stock ( 124 ) — ( 5,214 ) — — ( 5,214 )

Employee stock purchase plan 83 — 2,911 — — 2,911

Stock-based compensation — — 19,464 — — 19,464

Other comprehensive loss — — — ( 3,988 ) — ( 3,988 )

Net income — — — — 31,966 31,966

Balance at June 30, 2022 78,333 8 677,395 ( 2,938 ) ( 104,868 ) 569,597

Common stock issued pursuant to equity awards, net 232 — ( 56 ) — — ( 56 )

Stock-based compensation — — 20,310 — — 20,310

Other comprehensive loss — — — ( 2,378 ) — ( 2,378 )

Net income — — — — 28,408 28,408

Balance at September 30, 2022 78,565 $ 8 $ 697,649 $ ( 5,316 ) $ ( 76,460 ) $ 615,881

See accompanying notes.

MAXLINEAR, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FISCAL QUARTERS ENDED SEPTEMBER 30, 2021

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FISCAL QUARTER ENDED MARCH 31, 2022

in thousands)

2 unchanged sentences

Comprehensive

Income Accumulated

Income (Loss) Accumulated

Deficit Total

8 unchanged sentences

Balance at March 31, 2022 77,375 $ 8 $ 663,622 $ 1,050 $ ( 136,834 ) $ 527,846

Common stock issued pursuant to equity awards, net 1,098 — ( 338 ) — — ( 338 )

Repurchase of common stock ( 120 ) — ( 4,464 ) — — ( 4,464 )

Employee stock purchase plan 113 — 2,635 — — 2,635

Stock-based compensation — — 13,966 — — 13,966

Other comprehensive income — — — 357 — 357

Net income — — — — 733 733

Balance at June 30, 2021 76,469 8 640,710 803 ( 207,854 ) 433,667

Common stock issued pursuant to equity awards, net 290 — ( 104 ) — — ( 104 )

Repurchase of common stock ( 24 ) — ( 1,008 ) — — ( 1,008 )

Stock-based compensation — — 16,022 — — 16,022

Other comprehensive loss — — — ( 292 ) — ( 292 )

Net income — — — — 9,258 9,258

Balance at September 30, 2021 76,735 $ 8 $ 655,620 $ 511 $ ( 198,596 ) $ 457,543

See accompanying notes.

2 unchanged sentences

in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating Activities

2 unchanged sentences

Amortization and depreciation 19,202 23,880

Impairment losses 2,438 —

Amortization of debt issuance costs and accretion of discounts 548 486

2 unchanged sentences

Loss on disposal of property and equipment 40 159

Unrealized holding loss on investments 1,418 —

Impairment of leasehold improvements — 226

Impairment of leased right-of-use assets 462 429

Loss on extinguishment of debt — 5,221

Unrealized holding (gain) loss on investments ( 152 ) 954

(Gain) loss on foreign currency 362 ( 316 )

4 unchanged sentences

Prepaid expenses and other assets ( 4,338 ) 3,503

Leased right-of-use assets — 72

Accounts payable, accrued expenses and other current liabilities ( 886 ) 32,952

12 unchanged sentences

Financing Activities

Proceeds from the issuance of debt — 350,000

Payment of debt issuance cost — ( 4,144 )

Repayment of debt — ( 20,000 )

4 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 1 ( 230 )

Increase (decrease) in cash, cash equivalents and restricted cash 50,755 20,520

Increase in cash, cash equivalents and restricted cash 20,479 20,515

Cash, cash equivalents and restricted cash at beginning of period 188,357 131,738

27 unchanged sentences

The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission, or the SEC, on February 1, 2023, or the Annual Report.

Interim results for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022.

Interim results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023.

The functional currency of certain foreign subsidiaries is the local currency.

6 unchanged sentences

Actual results could differ from those estimates.

During the COVID-19 global pandemic, which is still ongoing, various restrictions were put in place causing a temporary decline in demand for certain items such as automobiles.

As restrictions began easing across the world, 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.

Consistent with the prior year, the Company continues to operate in a supply constrained environment and is working closely with its suppliers to mitigate the impact of such shortage.

Furthermore, the Company’s management believes this supply-constrained environment may continue into 2023.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Global supply shortages, inflation, and uncertainty in customer demand and the worldwide economy has continued as a result of the COVID-19 pandemic, and the Company may experience continued volatility in its sales and revenues in the near future.

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 $ 182.5 million of cash and cash equivalents at September 30, 2022 will be sufficient to fund its projected operating requirements for at least the next twelve months.

A material adverse impact from 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 as the Company pursues additional acquisitions (Note 3).

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 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.

If the Company is unable to raise additional funds when needed, it may not be able to sustain its operations or execute its strategic plans.

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 October 25, 2022, the issuance date of this Quarterly Report on Form 10-Q.

Actual results could differ from those estimates, particularly if the Company experiences material impacts from the global supply shortage.

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 April 26, 2023, the issuance date of this Quarterly Report on Form 10-Q.

Actual results could differ from those estimates.

Summary of Significant Accounting Policies

Refer to the Company’s Annual Report for a summary of significant accounting policies.

There have been no other significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2022.

There have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2023.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Pronouncements

5 unchanged sentences

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.

Net Income (Loss) Per Share

Basic earnings per share, or EPS, is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents.

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.

Net Income Per Share

Basic earnings per share, or EPS, is calculated by dividing net income by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents.

Diluted EPS is computed by dividing net income 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.

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below presents the computation of basic and diluted EPS:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

(in thousands, except per share amounts)

6 unchanged sentences

Diluted $ 0.12 $ 0.42

For the three months ended September 30, 2022 and 2021, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 2.5 million and 0.08 million, respectively, from the calculation of diluted net income per share due to their anti-dilutive nature.

For the nine months ended September 30, 2022 and 2021, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 1.5 million and 0.07 million, respectively, from the calculation of diluted net income per share due to their anti-dilutive nature.

For the three months ended March 31, 2023 and 2022, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 2.2 million and 0.9 million, respectively, from the calculation of diluted net income per share due to their anti-dilutive nature.

Business Combinations

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.

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 laws of the Cayman Islands, pursuant to which, among other things and subject to the terms and conditions thereof, MaxLinear agreed to acquire Silicon Motion pursuant to a statutory merger, under the laws of the Cayman Islands, 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.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the terms of the Merger Agreement, the transaction consideration will consist of $ 93.54 in cash and 0.388 shares of MaxLinear common stock for each Silicon Motion American Depositary Share, or ADS, (other than ADSs representing certain customary excluded shares) and $ 23.385 in cash and 0.097 shares of MaxLinear common stock for each Silicon Motion ordinary share not represented by an ADS (other than certain customary excluded shares), in each case, with cash in lieu of any fractional shares of MaxLinear common stock as set forth in the Merger Agreement.

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

1 unchanged sentence

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.

The merger is not subject to any financing conditions but is pending satisfaction of customary closing conditions, including antitrust 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;

however, if the merger is not consummated by June 27, 2023, the parties will need to re-file under the HSR Act.

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.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 (the “Term B Loan Facility”) (ii) a senior secured term A loan facility in an aggregate principal amount of up to $ 512.5 million (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.

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.

1 unchanged sentence

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, or the Purchase Agreement.

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 Wi-Fi solutions and service provider.

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 transaction consideration included $ 9.7 million in cash.

In addition, Company Y 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, 2024.

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

Acquisition Consideration

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

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

Description Amount

3 unchanged sentences

_________________

(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.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

business’s satisfying certain financial and personnel objectives by June 17, 2024 under the Purchase Agreement.

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

Purchase Price Allocation

An allocation of purchase price as of the December 8, 2021 acquisition closing date based upon an estimate of 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 $ 0.6 million in net operating liabilities, with $ 3.9 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

An allocation of purchase price as of the January 17, 2023 acquisition closing date based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition primarily includes $ 2.5 million in net operating liabilities, with $ 12.2 million in goodwill.

Assumptions in the Allocations of Purchase Price

Management prepared the purchase price allocations for 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 and contingent consideration.

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

Management prepared the purchase price allocations for Company Y 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 an acquired workforce and contingent consideration.

Certain stockholders that are employees of Company Y were not required to remain employed in order to receive the contingent consideration;

accordingly, the fair value of the contingent consideration was 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 Company X with the operations of MaxLinear.

The goodwill recognized is attributable primarily to the acquired workforce.

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 were minor adjustments to various assets and liabilities that resulted in a change in the purchase price allocation reflected as of September 30, 2022 compared to the preliminary purchase price allocation as of December 31, 2021 for Company X.

These adjustments resulted in a decrease of $ 0.07 million in net operating assets and corresponding increase in goodwill.

The fair value of the identified intangible assets acquired from 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 licensed technology 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.

Future cash flows were estimated based on forecasted revenue and costs, taking into account expected future contracts and remaining contract terms.

The licensed technology began amortization immediately upon the closing of the transaction.

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

In connection with the acquisition of Company Y, the Company assumed certain operating liabilities.

The liabilities assumed in this acquisition are included in the respective purchase price allocations above.

Goodwill recorded in connection with Company X was $ 3.9 million as of September 30, 2022.

Goodwill recorded in connection with Company Y was $ 12.2 million as of March 31, 2023.

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

Restructuring Activity

From time to time, the Company approves and implements restructuring plans as a result of internal resource alignment and cost saving measures.

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

MAXLINEAR, INC.

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 income:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

During the three months ended March 31, 2023, the Company entered into a plan of restructuring to reduce its workforce as a result of internal resource alignment and cost saving measures.

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

Three Months Ended March 31,

(in thousands)

1 unchanged sentence

Lease related charges 8 —

Other — — — 323

$ 631 $ — $ 1,093 $ 2,204

Lease related charges for the nine months ended September 30, 2022 included the impairment of leased right-of-use assets of approximately $ 0.5 million related to exiting a redundant facility.

Lease related charges for the nine months ended September 30, 2021 included the impairment of leased right-of-use assets and leasehold improvements of approximately $ 0.4 million and $ 0.2 million, respectively, related to exiting a redundant facility.

The following table presents a roll-forward of the Company’s restructuring liability for the nine months ended September 30, 2022.

We expect to incur additional costs throughout the remainder of 2023 related to the plan of restructuring, due to statutory requirements in the jurisdictions in which the terminated employees were employed.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents a roll-forward of the Company’s restructuring liability for the three months ended March 31, 2023.

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

5 unchanged sentences

Non-cash charges and adjustments — 21 — 21

Liability as of September 30, 2022 — 224 — 224

current portion as of September 30, 2022 — ( 224 ) — ( 224 )

Long-term portion as of September 30, 2022 $ — $ — $ — $ —

Liability as of March 31, 2023 3,097 71 8 3,176

current portion as of March 31, 2023 ( 3,097 ) ( 71 ) ( 8 ) ( 3,176 )

Long-term portion as of March 31, 2023 $ — $ — $ — $ —

Goodwill and Intangible Assets

1 unchanged sentence

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).

During the nine months ended September 30, 2022, there was an increase in the carrying value of goodwill of $ 0.07 million related to minor adjustments to assets and liabilities in the purchase price allocation for Company X.

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

Three Months Ended March 31,

(in thousands)

Beginning balance $ 306,739 $ 306,668

Acquisitions (Note 3)

Adjustments — 45

Ending balance $ 318,910 $ 306,713

During the three months ended March 31, 2023, there was an increase in the carrying value of goodwill of $ 12.2 million related to the acquisition of Company Y.

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.

1 unchanged sentence

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

During the three and nine months ended September 30, 2022 and 2021, there were no indications of impairment of the Company’s goodwill balances.

During the three months ended March 31, 2023 and 2022, there were no indications of impairment of the Company’s goodwill balances.

MAXLINEAR, INC.

3 unchanged sentences

The following table sets forth the Company’s finite-lived intangible assets resulting from business acquisitions and other purchases, which are amortized over their estimated useful lives:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(in Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Value Accumulated Amortization Net Carrying Amount

7 unchanged sentences

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

(in thousands) (in thousands)

Three Months Ended March 31,

(in thousands)

Cost of net revenue $ 9,458 $ 10,847

4 unchanged sentences

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

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

1 unchanged sentence

Additions 630 4,637

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

Other disposals ( 769 ) —

Amortization ( 10,387 ) ( 17,024 )

Impairment losses ( 2,438 ) —

Ending balance $ 96,352 $ 137,553

2 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 each of the three and nine months ended September 30, 2022 and 2021, no impairment losses related to finite-lived intangible assets were recognized.

During the three months ended March 31, 2023 and 2022, impairment losses related to finite-lived intangible assets of $ 2.4 million and $ 0 , respectively, were recognized.

The impairment loss was attributable to certain purchased licensed technology.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents future amortization of the Company’s finite-lived intangible assets at September 30, 2022:

The following table presents future amortization of the Company’s finite-lived intangible assets at March 31, 2023:

(in thousands)

2 unchanged sentences

Total $ 96,352

Indefinite-lived Intangible Assets

Indefinite-lived intangible assets consist entirely of acquired in-process research and development technology, or IPR&D.

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

Nine Months Ended September 30,

(in thousands)

Beginning balance $ 2,600 $ 7,200

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

Ending balance $ — $ 7,200

The Company performs its annual assessment of indefinite-lived intangible assets on October 31 each year or more frequently if events or changes in circumstances indicate that the asset might be impaired utilizing a qualitative test as a precursor to the quantitative test comparing the fair value of the assets with their carrying amount.

Based on the qualitative test, if it is more likely than not that indicators of impairment exists, the Company proceeds to perform a quantitative analysis.

During the three and nine months ended September 30, 2022 and 2021, no indicators of impairment were identified and, as a result, no IPR&D impairment losses were recorded.

Financial Instruments

The composition of financial instruments is as follows:

September 30, 2022

March 31, 2023

Net Unrealized

2 unchanged sentences

Marketable equity investments $ 20,005 $ — $ ( 1,324 ) $ 18,681

September 30, 2022

(in thousands)

Contingent consideration (Note 3) $ 2,882

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

Net Unrealized

Cost Gains Losses Fair Value

Assets (in thousands)

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

March 31, 2023 December 31, 2022

Fair Value Fair Value

(in thousands)

Contingent consideration (Note 3)

At September 30, 2022, the Company held marketable equity investments with an aggregate fair value of $ 18.6 million that were in an unrealized loss position for less than 12 months.

The net unrealized loss of $ 1.4 million as of September 30, 2022 represents stock price fluctuations in the underlying securities held, and was recorded to other income (expense), net in the consolidated statement of income.

$ 5,253 2,941

At March 31, 2023, the Company held marketable equity investments with an aggregate fair value of $ 18.7 million that were in an unrealized loss position.

The net unrealized loss of $ 1.3 million as of March 31, 2023 represents stock price fluctuations in the underlying securities held, and was recorded to other income (expense), net in the consolidated statement of income.

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

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The levels are described below:

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

1 unchanged sentence

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 investment held by the Company has been valued on the basis of quoted market prices and is 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.

The Company classifies its financial instruments that are categorized 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 is therefore classified as Level 1.

The contingent consideration liability as of March 31, 2023 is associated with the Company’s acquisitions of Company X in December 2021 and Company Y in January 2023 (Note 3) and the contingent consideration liability as of December 31, 2022 is associated with the Company’s acquisition of Company X.

The contingent consideration liability is classified as a Level 3 financial instrument.

The contingent consideration as it relates to Company X was subject to the acquired business’s satisfaction of certain financial and personnel objectives by March 31, 2023, while the contingent consideration as it relates to Company Y is subject to the acquired business’s satisfaction of certain personnel objectives by June 17, 2024.

The financial and personnel objectives of Company X were achieved by March 31, 2023 and contingent consideration for Company X of $ 2.7 million is expected to be paid by the end of April 2023 with the remaining $ 0.3 million to be paid in December 2023.

The fair value of 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, if applicable, 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 total payments up to $ 3.0 million to Company X and $ 2.6 million to Company Y.

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.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements at September 30, 2022

Balance at September 30, 2022 Quoted Prices

Fair Value Measurements at March 31, 2023

Balance at March 31, 2023 Quoted Prices

Identical Assets

10 unchanged sentences

(in thousands)

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

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following summarizes the activity in Level 3 financial instruments:

Nine Months Ended September 30,

Three Months Ended March 31,

Contingent Consideration

Beginning balance

$ 2,941 $ 2,700

Acquisitions (1)

Accretion of discount (1)

1 unchanged sentence

$ 5,253 $ 2,768

(1) Changes to the balance associated with the estimated fair value of contingent consideration for the nine months ended September 30, 2022 were primarily due to accretion of the related discount.

For the nine months ended September 30, 2022, there were no transfers between Level 1, Level 2, or Level 3 financial instruments.

_____________________

(1) Changes to the balance associated with the estimated fair value of contingent consideration for the three months ended March 31, 2023 were due to the addition of contingent consideration associated with the acquisition of Company Y and accretion of discounts on contingent consideration.

For the three months ended March 31, 2023, there were no transfers between Level 1, Level 2, or Level 3 financial instruments.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

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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).

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Included in other long-term assets are investments in privately held entities of $ 15.1 million and $ 5.0 million as of September 30, 2022 and December 31, 2021, respectively.

Included in other long-term assets are investments in privately held entities of $ 11.8 million and $ 11.8 million as of March 31, 2023 and December 31, 2022, 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.

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Cash, cash equivalents and restricted cash consist of the following:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(in thousands)

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Total cash, cash equivalents and restricted cash $ 208,836 $ 188,357

As of September 30, 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 September 30, 2022 and December 31, 2021, the Company had restricted cash of approximately $ 1.0 million and $ 1.2 million, respectively.

As of March 31, 2023 and December 31, 2022, cash and cash equivalents included money market funds of approximately $ 20.5 million and $ 0.4 million, respectively.

As of March 31, 2023 and December 31, 2022, the Company had restricted cash of approximately $ 1.0 million and $ 1.0 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:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(in thousands)

3 unchanged sentences

Property and equipment, net consists of the following:

(in Years) September 30, 2022 December 31, 2021

(in Years) March 31, 2023 December 31, 2022

(in thousands)

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$ 77,691 $ 79,018

Depreciation expense for the three months ended September 30, 2022 and 2021 was $ 5.1 million and $ 4.7 million, respectively.

Depreciation expense for the nine months ended September 30, 2022 and 2021 was $ 14.7 million and $ 12.0 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 on 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

Depreciation expense for the three months ended March 31, 2023 and 2022 was $ 6.4 million and $ 4.8 million, respectively.

In March 2022, the Company entered into a note receivable with a supplier for $ 10.0 million, of which $ 2.0 million and $ 8.0 million are included in prepaid expenses and other current assets and other long-term assets, respectively, on the consolidated balance sheet as of March 31, 2023, and $ 10.0 million is included in other long-term assets as of December 31, 2022.

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

Accrued price protection liability consists of the following activity:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

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Ending balance $ 103,797 $ 68,349

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accrued expenses and other current liabilities consist of the following:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(in thousands)

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Accrued obligations to customers for stock rotation rights 739 605

Contingent consideration 2,882 —

Contingent consideration - current portion 3,000 2,941

Other 6,717 6,679

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Other comprehensive loss before reclassifications, net of tax ( 192 ) — ( 192 )

Balance at September 30, 2022 $ ( 7,420 ) $ 2,104 $ ( 5,316 )

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Balance at March 31, 2023 $ ( 5,372 ) $ 4,159 $ ( 1,213 )

The carrying amount of the Company’s long-term debt consists of the following:

September 30,

2023 December 31,

1 unchanged sentence

Principal balance:

Initial term loan under June 23, 2021 credit agreement $ 175,000 $ 310,000

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

Total principal balance 125,000 125,000

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Long-term debt, non-current portion $ 121,910 $ 121,757

As of September 30, 2022 and December 31, 2021, the weighted average effective interest rate on debt was approximately 3.4 % and 3.2 %, respectively.

During the three months ended September 30, 2022 and 2021, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.2 million and $ 0.2 million, respectively, to interest expense.

During the nine months ended September 30, 2022 and 2021, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.4 million and $ 1.2 million, respectively, to interest expense.

The approximate aggregate fair value of the term loans outstanding as of September 30, 2022 and December 31, 2021 was $ 192.4 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.

As of September 30, 2022, the outstanding principal balance of $ 175.0 million is due in full on June 23, 2028, upon maturity of the loan.

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

As of March 31, 2023 and December 31, 2022, the weighted average effective interest rate on debt was approximately 6.9 % and 3.8 %, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2023 and 2022, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.2 million and $ 0.1 million, respectively, to interest expense.

The approximate aggregate fair value of the term loans outstanding as of March 31, 2023 and December 31, 2022 was $ 139.1 million and $ 137.4 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.

As of March 31, 2023, the outstanding principal balance of $ 125.0 million is due in full on June 23, 2028, upon maturity of the loan.

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

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.

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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 September 30, 2022, the Revolving Facility was undrawn.

As of March 31, 2023, 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.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

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The Company has the right to prepay its term loans under the June 23, 2021 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 following the closing date of the June 23, 2021 Credit Agreement.

The Initial Term Loan under the June 23, 2021 Credit Agreement will mature on June 23, 2028, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan under the June 23, 2021 Credit Agreement must be repaid.

The Initial Term Loan under the June 23, 2021 Credit Agreement will

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

mature on June 23, 2028, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan under the June 23, 2021 Credit Agreement must be repaid.

The Revolving Facility will mature on June 23, 2026, at which time all outstanding principal and accrued and unpaid interest under the Revolving Facility must be repaid.

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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.

As of September 30, 2022, the Company was in compliance with such covenants.

As of March 31, 2023, the Company was in compliance with such covenants.

The June 23, 2021 Credit Agreement also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other indebtedness, covenant defaults, change in control defaults, judgment defaults, and bankruptcy and insolvency defaults.

If an event of default exists, the lenders may require immediate payment of all obligations under the June 23, 2021 Credit Agreement and may exercise certain other rights and remedies provided for under the June 23, 2021 Credit Agreement , the other loan documents and applicable law.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The debt is carried at its principal amount, net of unamortized debt discount and issuance costs, and is not adjusted to fair value each period.

4 unchanged sentences

Employee Stock-Based Compensation Plans

At September 30, 2022, the Company had stock-based compensation awards outstanding under the following plans:

At March 31, 2023, the Company had stock-based compensation awards outstanding under the following plans:

the 2010 Equity Incentive Plan, as amended, or 2010 Plan, and the 2010 Employee Stock Purchase Plan, or ESPP.

Refer to the Company’s Annual Report for a summary of its stock-based compensation and equity plans as of December 31, 2022.

There have been no material changes to the terms of the Company’s equity incentive plans during the nine months ended September 30, 2022.

As of September 30, 2022, the number of shares of common stock available for future issuance under the 2010 Plan was 15,425,135 shares.

As of September 30, 2022, the number of shares of common stock available for future issuance under the ESPP was 4,977,968 shares.

There have been no material changes to the terms of the Company’s equity incentive plans during the three months ended March 31, 2023.

As of March 31, 2023, the number of shares of common stock available for future issuance under the 2010 Plan was 16,652,604 shares.

As of March 31, 2023, the number of shares of common stock available for future issuance under the ESPP was 5,890,355 shares.

Employee Incentive Bonus

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In connection with the Company’s bonus programs, in February 2023, the Company issued 0.9 million freely-tradable (subject to certain restrictions for affiliates) shares of the Company’s common stock in settlement of bonus awards to employees, including executives, for the 2022 performance period.

At September 30, 2022, the Company has an accrual of $ 30.0 million for bonus awards for employees for year-to-date achievement in the 2022 performance period.

At March 31, 2023, the Company has an accrual of $ 5.9 million for bonus awards for employees for

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

year-to-date achievement in the 2023 performance period.

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

1 unchanged sentence

The Company recognizes stock-based compensation in the consolidated statements of income, based on the department to which the related employee reports, as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

(in thousands) (in thousands)

Three Months Ended March 31,

(in thousands)

Cost of net revenue $ 210 $ 163

2 unchanged sentences

$ 16,448 $ 18,554

The total unrecognized compensation cost related to unvested restricted stock units as of September 30, 2022 was $ 147.1 million, and the weighted average period over which these equity awards are expected to vest is 2.74 years.

The total unrecognized compensation cost related to unvested performance-based restricted stock units as of September 30, 2022 was $ 27.8 million, and the weighted average period over which these equity awards are expected to vest is 1.07 years.

There was no unrecognized compensation cost related to unvested stock options as of September 30, 2022.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The total unrecognized compensation cost related to unvested restricted stock units as of March 31, 2023 was $ 175.9 million, and the weighted average period over which these equity awards are expected to vest is 2.70 years.

The total unrecognized compensation cost related to unvested performance-based restricted stock units as of March 31, 2023 was $ 28.2 million, and the weighted average period over which these equity awards are expected to vest is 1.87 years.

There was no unrecognized compensation cost related to unvested stock options as of March 31, 2023.

Restricted Stock Units

6 unchanged sentences

Canceled ( 235 ) 38.44

Outstanding at September 30, 2022 6,128 $ 34.97

Outstanding at March 31, 2023 7,531 $ 35.26

Performance-Based Restricted Stock Units

Performance-based restricted stock units are eligible to vest at the end of each performance year, as defined in the underlying agreement, 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 year-long performance period, as defined in the underlying agreement, 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.

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.

The maximum percentage for a particular metric is 250 % of the target number of units subject to the award related to that metric, however, vesting of the performance stock units is capped at 30 % and 100 %, respectively, of the target number of units subject to the award in years one and two, respectively, of the three-year performance period.

As of September 30, 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.

As of March 31, 2023, 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:

4 unchanged sentences

Canceled ( 3 ) 48.24

Outstanding at September 30, 2022 1,950 $ 34.07

Outstanding at March 31, 2023 2,753 $ 34.64

________________

2 unchanged sentences

Employee Stock Purchase Rights

During the nine months ended September 30, 2022 and 2021 there were 83,404 and 113,510 shares, respectively, of common stock purchased under the ESPP at a weighted average price of $ 34.92 and $ 23.21 , respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2023 and 2022, there were no shares of common stock purchased under the ESPP.

The fair values of employee stock purchase rights for the latest ESPP offering period were estimated using the Black-Scholes option pricing model at their respective grant date using the following assumptions:

Nine Months Ended September 30,

Three Months Ended March 31,

Weighted-average grant date fair value per share $ 11.97 $ 18.82

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Exercised ( 4 ) 12.14

Outstanding at September 30, 2022 393 $ 17.22 2.68 $ 6,060

Vested and expected to vest at September 30, 2022 393 $ 17.22 2.68 $ 6,060

Exercisable at September 30, 2022 393 $ 17.22 2.68 $ 6,060

No stock options were granted by the Company during the nine months ended September 30, 2022.

The intrinsic value of stock options exercised was $ 0.1 million and $ 0.2 million in the three months ended September 30, 2022 and 2021, respectively.

The intrinsic value of stock options exercised was $ 0.9 million and $ 9.2 million in the nine months ended September 30, 2022 and 2021, respectively.

Cash received from exercise of stock options was $ 0.1 million and $ 0.2 million during the three months ended September 30, 2022 and 2021, respectively.

Cash received from exercise of stock options was $ 0.3 million and $ 4.0 million during the nine months ended September 30, 2022 and 2021, respectively.

The tax benefit from stock options exercised was $ 0.2 million and $ 10.0 million during the three months ended September 30, 2022 and 2021, respectively.

The tax benefit from stock options exercised was $ 1.2 million and $ 23.4 million during the nine months ended September 30, 2022 and 2021, respectively.

Outstanding at March 31, 2023 389 $ 17.27 2.20 $ 6,972

Vested and expected to vest at March 31, 2023 389 $ 17.27 2.20 $ 6,972

Exercisable at March 31, 2023 389 $ 17.27 2.20 $ 6,972

No stock options were granted by the Company during the three months ended March 31, 2023.

The intrinsic value of stock options exercised was $ 0.1 million and $ 0.3 million in the three months ended March 31, 2023 and 2022, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash received from exercise of stock options was $ 4.0 thousand and $ 0.1 million during the three months ended March 31, 2023 and 2022, respectively.

The tax benefit from stock options exercised was $ 0.1 million and $ 0.4 million during the three months ended March 31, 2023 and 2022, respectively.

The provision for income taxes primarily relates to projected federal, state, and foreign income taxes.

3 unchanged sentences

The Company records a valuation allowance to reduce its deferred taxes to the amount it believes is more likely than not to be realized.

In making such determination, the Company considers all available positive and negative evidence quarterly, including scheduled reversals of

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance.

In making such determination, the Company considers all available positive and negative evidence quarterly, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance.

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

1 unchanged sentence

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 $ 16.2 million in the three months ended September 30, 2022 and an income tax provision of $ 11.8 million in the three months ended September 30, 2021.

The Company recorded an income tax provision of $ 39.5 million in the nine months ended September 30, 2022 and an income tax provision of $ 5.6 million in the nine months ended September 30, 2021.

The Company recorded an income tax provision of $ 15.6 million in the three months ended March 31, 2023 and an income tax provision of $ 11.5 million in the three months ended March 31, 2022.

The difference between the Company’s effective tax rate and the 21.0% U.S.

federal statutory rate for the nine months ended September 30, 2022 primarily related to the 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.

federal statutory rate for the three months ended March 31, 2023 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including a tax on global intangible low-taxed income, research and development credits, stock based compensation, excess tax benefits related to stock-based compensation, and release of uncertain tax positions under ASC 740-10.

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% U.S.

federal statutory rate for the nine months ended September 30, 2021 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including the tax on global intangible low-taxed income, stock based compensation, excess tax benefits related to stock-based compensation, and release of certain reserves for uncertain tax positions under ASC 740-10.

federal statutory rate for the three months ended March 31, 2022 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including the tax on global intangible low-taxed income, stock based compensation, excess tax benefits related to stock-based compensation, and release of certain reserves for uncertain tax positions under ASC 740-10, and release of the valuation allowance on certain federal R&D credits.

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

2 unchanged sentences

The Company records potential penalties and interest accrued related to unrecognized tax benefits within the consolidated statements of income as income tax expense.

During the nine months ended September 30, 2022, the Company’s unrecognized tax benefits increased by $ 0.4 million.

During the three months ended March 31, 2023, the Company’s unrecognized tax benefits increased by $ 1.5 million.

The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

Accrued interest and penalties associated with uncertain tax positions as of September 30, 2022 were approximately $ 0.4 million and $ 0.03 million, respectively.

Accrued interest and penalties associated with uncertain tax positions as of March 31, 2023 were approximately $ 0.4 million and $ 0.01 million, respectively.

The Company is subject to federal and state income tax in the United States and is also subject to income tax in certain other foreign tax jurisdictions.

At September 30, 2022, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed for the years before 2018, 2017, and 2016, respectively.

At March 31, 2023, 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 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.

The Company recorded a tax provision in the nine months ended September 30, 2022 at the incentive rate.

In the nine months ended September 30, 2021, due to the Company’s Singapore net operating losses and a full valuation allowance in Singapore, the incentives did not have a material impact on the Company’s income tax provision.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 its business along with guidance issued with respect to both Acts to determine whether any adjustments are needed to the Company’s consolidated tax provision in future periods.

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.

The Company recorded a tax provision in the three months ended March 31, 2023 and 2022 at the incentive rate.

Concentration of Credit Risk, Significant Customers and Geographic Information

9 unchanged sentences

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Percentage of total net revenue

1 unchanged sentence

Customer B 15 % 11 %

Customer E * 10 % * *

Customer C * 10 %

____________________________

* Represents less than 10% of net revenues for the period presented.

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

September 30, December 31,

March 31, December 31,

Percentage of gross accounts receivable

Customer B * 14 %

Customer C * 11 %

Customer D 20 % 12 %

Customer E 16 % 28 %

Customer F 11 % *

Customer G 11 % *

____________________________

4 unchanged sentences

Suppliers comprising greater than 10% of total inventory purchases are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Vendor A 23 % 27 %

1 unchanged sentence

Vendor C * 12 %

Vendor D 11 % *

Geographic Information

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Amount % of total net revenue Amount % of total net revenue Amount % of total net revenue Amount % of total net revenue

Three Months Ended March 31,

Amount % of total net revenue Amount % of total net revenue

Asia $ 192,502 77 % $ 211,665 80 %

3 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:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Percentage of total net revenue

6 unchanged sentences

No other individual country accounted for more than 10% of net revenue during these periods.

Although a large percentage of the Company’s products is shipped to Asia, and in particular, Hong Kong, China and Vietnam, the Company believes that a significant number of the systems designed by customers and incorporating the Company’s semiconductor products are subsequently sold outside Asia to Europe, Middle East, and Africa markets and North American markets.

Although a large percentage of the Company’s products is shipped to Asia, and in particular, Hong Kong, mainland China and Vietnam, the Company believes that a significant number of the systems designed by customers and incorporating the Company’s semiconductor products are subsequently sold outside Asia to Europe, Middle East, and Africa markets and North American markets.

Long-lived assets, which consists of property and equipment, net, leased right-of-use assets, intangible assets, net, and goodwill by geographic area are as follows (in thousands):

September 30, December 31,

March 31, December 31,

Amount % of total Amount % of total

8 unchanged sentences

The table below presents disaggregated net revenues by market (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Broadband $ 81,681 $ 134,556

7 unchanged sentences

Total net revenue $ 248,442 $ 263,927

Revenues from sales through the Company’s distributors accounted for 41 % and 47 % of net revenue for the three months ended September 30, 2022 and 2021, respectively.

Revenues from sales through the Company’s distributors accounted for 44 % and 46 % of net revenue for the nine months ended September 30, 2022 and 2021, respectively.

Revenues from sales through the Company’s distributors accounted for 43 % and 47 % of net revenue for the three months ended March 31, 2023 and 2022, respectively.

Contract Liabilities

As of September 30, 2022 and December 31, 2021, customer contract liabilities were approximately $ 1.0 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 three and nine months ended September 30, 2022 and 2021 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 nine months ended September 30, 2022 and 2021.

As of March 31, 2023 and December 31, 2022, customer contract liabilities were approximately $ 1.1 million and $ 1.1 million, respectively, and consisted primarily of advanced payments received for which performance obligations have not been completed.

Revenue recognized in each of the three months ended March 31, 2023 and 2022 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 three months ended March 31, 2023 and 2022.

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

As of September 30, 2022 and December 31, 2021, obligations to customers consisting of estimates of price protection rights offered to the Company’s end customers totaled $ 116.6 million and $ 40.5 million, respectively, and are included in accrued price protection liability in the consolidated balance sheets.

As of March 31, 2023 and December 31, 2022, obligations to customers consisting of estimates of price protection rights offered to the Company’s end customers totaled $ 103.8 million and $ 113.3 million, respectively, and are included in accrued price protection liability in the consolidated balance sheets.

For activity in this account, including amounts included in net revenue, refer to Note 7.

Other obligations to customers representing estimates of price adjustments to be claimed by distributors upon sell-through of their inventory to their end customer and estimates of stock rotation returns to be claimed by distributors on products sold as of September 30, 2022 were $ 46.0 million and $ 1.5 million, respectively, and as of December 31, 2021 were $ 6.7 million and $ 2.8 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7).

The increase in revenue in the three and nine months ended September 30, 2022 and 2021 from net changes in transaction prices for amounts included in obligations to customers for price adjustments as of the beginning of those respective periods was not material.

As of September 30, 2022 and December 31, 2021, right of return assets under customer contracts representing the estimates of product inventory the Company expects to receive from customers in stock rotation returns were approximately $ 0.5 million and $ 1.1 million, respectively.

Other obligations to customers representing estimates of price adjustments to be claimed by distributors upon sell-through of their inventory to their end customer and estimates of stock rotation returns to be claimed by distributors on products sold as of March 31, 2023 were $ 62.3 million and $ 0.7 million, respectively, and as of December 31, 2022 were $ 52.4 million and $ 0.6 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7).

The increase in revenue in each of the three months ended March 31, 2023 and 2022 from net changes in transaction prices for amounts included in obligations to customers for price adjustments as of the beginning of those respective periods was not material.

As of March 31, 2023 and December 31, 2022, right of return assets under customer contracts representing the estimates of product inventory the Company expects to receive from customers in stock rotation returns were approximately $ 0.3 million and $ 0.2 million, respectively.

Right of return assets are included in inventory in the consolidated balance sheets.

As of September 30, 2022 and December 31, 2021, there were no impairment losses recorded on customer accounts receivable.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2023 and December 31, 2022, there were no impairment losses recorded on customer accounts receivable.

Operating Leases

Operating lease arrangements primarily consist of office leases expiring in various years through 2028.

These leases have original terms of approximately 2 to 8 years and some contain options to extend the lease up to 5 years or terminate the lease, which are included in right-of-use assets and lease liabilities when the Company is reasonably certain it will renew the underlying leases.

These leases have original terms of approximately 2 to 8 years and some contain options to extend the lease up to 5 years or terminate the lease,

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

which are included in right-of-use assets and lease liabilities when the Company is reasonably certain it will renew the underlying leases.

Since the implicit rate of such leases is unknown and the Company is not reasonably certain to renew its leases, the Company has elected to apply a collateralized incremental borrowing rate to facility leases on the original lease term in calculating the present value of future lease payments.

As of September 30, 2022 and December 31, 2021, the weighted average discount rate for operating leases was 3.6 % and 3.6 %, respectively, and the weighted average remaining lease term for operating leases was 4.1 years and 4.6 years, respectively, as of the end of each of these periods.

The table below presents aggregate future minimum payments due under leases, reconciled to total lease liabilities included in the consolidated balance sheet as of September 30, 2022:

As of March 31, 2023 and December 31, 2022, the weighted average discount rate for operating leases was 3.4 % and 3.4 %, respectively, and the weighted average remaining lease term for operating leases was 3.8 years and 3.9 years, respectively, as of the end of each of these periods.

The table below presents aggregate future minimum payments due under leases, reconciled to total lease liabilities included in the consolidated balance sheet as of March 31, 2023:

Operating Leases

7 unchanged sentences

Long-term lease liabilities $ 21,239

Operating lease cost was $ 2.9 million and $ 2.3 million for the three months ended September 30, 2022 and 2021, respectively.

Operating lease cost was $ 7.7 million and $ 7.1 million for the nine months ended September 30, 2022 and 2021, respectively.

Short-term lease costs for the three and nine months ended September 30, 2022 and 2021 were not material.

There were $ 0.1 million and $ 2.7 million of right-of-use assets obtained in exchange for new lease liabilities for the three months ended September 30, 2022 and 2021, respectively.

There were $ 11.7 million and $ 8.0 million of right-of-use assets obtained in exchange for new lease liabilities for the nine months ended September 30, 2022 and 2021, respectively.

Employee Defined Benefit Retirement Plans

Operating lease cost was $ 2.9 million and $ 2.5 million for the three months ended March 31, 2023 and 2022, respectively.

Short-term lease costs for the three months ended March 31, 2023 and 2022 were not material.

There were $ 0.2 million and $ 8.0 million of right-of-use assets obtained in exchange for new lease liabilities for the three months ended March 31, 2023 and 2022, respectively.

Employee Retirement Plans

Defined Contribution Plan

The Company has a 401(k) defined contribution retirement plan (the 401(k) Plan) covering all eligible employees.

Participants may voluntarily contribute on a pre-tax basis an amount not to exceed a maximum contribution amount pursuant to Section 401(k) of the Internal Revenue Code.

The Company is not required to contribute, nor has it contributed, to the 401(k) Plan for any of the periods presented.

Pension and Other Defined Benefit Retirement Obligations

In connection with a 2020 acquisition, the Company assumed an obligation of $ 7.9 million associated with certain defined benefit retirement plans, including a pension plan.

As of September 30, 2022 and December 31, 2021, the defined benefit obligation was $ 4.0 million and $ 4.5 million, respectively.

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

As of March 31, 2023 and December 31, 2022, the defined benefit obligation was $ 1.8 million and $ 1.7 million, respectively.

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

Net periodic benefit costs were $ 0.1 million and $ 0.1 million for the three months ended September 30, 2022 and 2021 and were recorded to research and development expenses in the consolidated statements of income.

Net periodic benefit costs were $ 0.1 million and $ 0.1 million for the three months ended March 31, 2023 and 2022, respectively, and were recorded to research and development expenses in the consolidated statements of income.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net periodic benefit costs were $ 0.2 million and $ 0.3 million for the nine months ended September 30, 2022 and 2021 and were recorded to research and development expenses in the consolidated statements of income.

Commitments and Contingencies

Inventory Purchase and Other Contractual Obligations

As of September 30, 2022, future minimum payments under inventory purchase and other obligations are as follows:

As of March 31, 2023, future minimum payments under inventory purchase and other obligations are as follows:

Inventory Purchase Obligations Other Obligations Total

2 unchanged sentences

2025 — 1,968 1,968

2025 — 109 109

Total minimum payments $ 92,414 $ 33,346 $ 125,760

Other obligations consist of contractual payments due for software licenses.

Other obligations consist primarily of contractual payments due for software licenses.

Jointly Funded Research and Development

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, certain funds received from the other parties of $ 6.0 million have been deferred in other long-term liabilities.

As the Company may be required to repay all or a portion of the funds provided by the other parties under certain conditions, funds of $ 9.0 million received from the other parties as of March 31, 2023 have been deferred in other long-term liabilities.

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

During the three and nine months ended September 30, 2022, the Company recognized $ 0 and $ 3.8 million in previously deferred amounts from other parties due to resolution of such repayment conditions.

During the three months ended March 31, 2023 and 2022, the Company recognized $ 0 and $ 3.8 million, 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, or Bell Semiconductor, filed suit against MaxLinear in the Southern District of California alleging infringement of U.S.

6,436,807 and 7,007,259, and requested monetary damages and a permanent injunction as relief.

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

7,149,989 and 7,260,803, and requested monetary damages and a permanent injunction as relief.

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

7,396,760, and requested monetary damages and a permanent injunction as relief.

Specifically, on October 13, 2022, 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.

Bell Semiconductor requested as relief a limited exclusion order and cease and desist order.

On March 10, 2023, Bell Semiconductor and MaxLinear entered into a Settlement and Patent License Agreement, or the Settlement Agreement, in settlement and release of all claims above.

The amount of the settlement was not material.

The Settlement Agreement also grants MaxLinear and its affiliates, a license of certain listed patents with respected to certain licensed products for a term that continues until the expiration of the last surviving claim of such licensed patents.

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 is not currently a party to any pending legal proceedings that, if determined adversely to the Company’s interests, would, in management's opinion, 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.

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

From time to time, the Company is subject to threats of litigation or actual litigation in the ordinary course of business as described above and in “ Part II.

— Other Information, Item 1.

— 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 March 31, 2023, other than the matter described above, no material loss contingencies have been accrued for such matters in the Company’s financial statements.

MAXLINEAR, INC.

1 unchanged sentence

Stock Repurchases

On February 23, 2021, the Company’s board of directors authorized a plan to repurchase up to $ 100 million of the Company’s common stock over a period ending February 16, 2024.

On February 23, 2021, the Company’s board of directors authorized a plan to repurchase up to $ 100 million of the Company’s common stock over a period ending on February 16, 2024.

The amount and timing of repurchases are subject to a variety of factors including liquidity, share price, market conditions, and legal requirements.

1 unchanged sentence

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 three months ended September 30, 2022, the Company did no t repurchase any shares of its common stock under the repurchase program.

During the nine months ended September 30, 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 September 30, 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.

The share repurchase program has been temporarily suspended since July 2022 due to the Company’s pending merger with Silicon Motion (Note 3).

During the three months ended March 31, 2023, the Company did no t repurchase any shares of its common stock under the repurchase program.

At March 31, 2023, 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.

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

What changed 10-Q

Item 1. Financial Statements