What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-01-31 compared with 2023-02-01 · 300 added, 256 removed, 1210 unchanged (31% of the section changed)

21 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2022, and our report dated February 1, 2023 expressed an unqualified opinion on those financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2023, and our report dated January 31, 2024 expressed an unqualified opinion on those financial statements.

Basis for opinion

16 unchanged sentences

Newport Beach, California

February 1, 2023

January 31, 2024

OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During our last fiscal quarter, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

41 unchanged sentences

2.1 Asset Purchase Agreement, dated as of April 5, 2020, by and among MaxLinear, Inc., a Delaware corporation, Intel Corporation, a Delaware corporation, and MaxLinear Asia Singapore Private Limited, a wholly-owned subsidiary of MaxLinear (incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on April 6, 2020 (File No.

2.2 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).

3.1 Registrant’s Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on March 29, 2010 (incorporated by reference to Exhibit 3.5 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.

2 unchanged sentences

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.

3.4 Registrant’s Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q filed on July 27, 2023 (File No.

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

9 unchanged sentences

+10.6 Form of Change in Control Agreement for Executive Officers (incorporated herein by reference to Exhibit 10.13 of the Registrant's Annual Report on Form 10-K filed on February 17, 2016).

†10.7 Intellectual Property License Agreement, dated June 18, 2009, between the Registrant and Intel Corporation, (incorporated by reference to Exhibit 10.16 of the Registrant’s Registration Statement on Form S-1 and all amendments thereto (File No.

333-162947)).

*†10.7 Intellectual Property License Agreement, dated June 18, 2009, between the Registrant and Intel Corporation.

+10.8 Employment Offer Letter, dated November 9, 2012, between the Registrant and Will Torgerson (incorporated by reference to Exhibit 10.17 of the Registrant’s Annual Report on Form 10-K filed on February 6, 2013 (File No.

3 unchanged sentences

+10.12 Employment Promotion Letter, dated February 11, 2016, between the Registrant and Connie Kwong (incorporated herein by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 10-Q filed on May 9, 2016).

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.

Exhibit Number Exhibit Title

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.

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.

+10.13 Employment Offer Letter, dated June 7, 2018, between the Registrant and Steven Litchfield (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 10-Q filed on August 7, 2018 (File No.

+10.17 Employment Offer Letter, dated June 27, 2018, between the Registrant and Michael Bollesen (incorporated by reference to Exhibit 10.2 to the Registrants Current Report on Form 10-Q filed on August 7, 2018 (File No.

+10.14 Form of Change in Control Agreement for Chief Executive Officer and Chief Financial Officer, as amended (incorporated herein by reference to Exhibit 10.1 of the Registrant's Form 8-K filed on December 19, 2018 (File No.

1 unchanged sentence

+10.16 Executive Incentive Bonus Plan, as amended on December 13, 2018 (incorporated by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 8-K filed on December 19, 2018 (File No.

+10.21 Clawback Policy, as adopted on December 13, 2018 (incorporated by reference to Exhibit 10.5 of the Registrant’s Current Report on Form 8-K filed on December 19, 2018 (File No.

+†10.22 Form of Restricted Stock Unit Award Agreement for Performance-Based Awards under the 2010 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the Registrant ’ s Form 10-Q filed on July 25, 2019 (File No.

10.23 Debt Commitment Letter by and among MaxLinear, Inc., MUFG Union Bank, and Wells Fargo Bank, N.A.

dated as of April 5, 2020 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on April 6, 2020 (File No.

10.24 Incremental Amendment No.

1, dated as of July 31, 2020, by and among MaxLinear, the guarantors party thereto, the lenders party thereto, MUFG Bank, Ltd., as administrative agent, and MUFG as collateral agent.

10.25 Incremental Amendment No.

1, dated as of July 31, 2020, by and among MaxLinear, the guarantors party thereto, the lenders party thereto, MUFG Bank, Ltd., as administrative agent, and MUFG as collateral agent (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on June 7, 2021 )

+*†10.17 Form of Restricted Stock Unit Award Agreement for Performance-Based Awards under the 2010 Equity Incentive Plan .

10.18 Credit Agreement, dated as of June 23, 2021, by and among MaxLinear, Inc., the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 24, 2021 ).

2 unchanged sentences

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).

10.21 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.

10.22 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 Trust 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

10.23 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).

dated as of October 24, 2022 (incorporated by reference to Exhibit 10.32 to the Registrant's Annual Report on Form 10-K filed on February 1, 2023) .

10.24 Amendment No.

1 to Credit Agreement, date as of June 29, 2023, by and among MaxLinear, Inc., the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on July 27, 2023 (File No.

*21.1 Subsidiaries of the Registrant.

5 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

+*97.1 Compensation Recovery Policy, as adopted on August 9, 2023.

101.INS XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

12 unchanged sentences

Indicates a management contract or compensatory plan.

† Confidential treatment has been requested and received for certain portions of these exhibits.

† Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

The Registrant agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.

The exhibits filed as part of this report are listed in Item 15(a)(3) of this Form 10-K.

6 unchanged sentences

President and Chief Executive Officer

February 1, 2023 (Principal Executive Officer)

January 31, 2024 (Principal Executive Officer)

POWER OF ATTORNEY

4 unchanged sentences

/s/ KISHORE SEENDRIPU, Ph.D.

President, Chief Executive Officer, and Director February 1, 2023

President, Chief Executive Officer, and Director January 31, 2024

Kishore Seendripu, Ph.D.

1 unchanged sentence

/s/ STEVEN G.

LITCHFIELD Chief Financial Officer and Chief Corporate Strategy Officer February 1, 2023

LITCHFIELD Chief Financial Officer and Chief Corporate Strategy Officer January 31, 2024

Litchfield (Principal Financial Officer)

/s/ CONNIE KWONG Corporate Controller February 1, 2023

/s/ CONNIE KWONG Corporate Controller January 31, 2024

Connie Kwong (Principal Accounting Officer)

/s/ THOMAS E.

PARDUN Lead Director February 1, 2023

PARDUN Lead Director January 31, 2024

/s/ DANIEL A.

ARTUSI Director February 1, 2023

ARTUSI Director January 31, 2024

/s/ CAROLYN D.

BEAVER Director February 1, 2023

BEAVER Director January 31, 2024

/s/ GREGORY P.

DOUGHERTY Director February 1, 2023

DOUGHERTY Director January 31, 2024

/s/ TSU-JAE KING LIU, Ph.D.

Director February 1, 2023

Director January 31, 2024

Tsu-Jae King Liu, Ph.D.

/s/ ALBERT J.

MOYER Director February 1, 2023

MOYER Director January 31, 2024

/s/ THEODORE TEWKSBURY, Ph.D.

Director February 1, 2023

Director January 31, 2024

Theodore Tewksbury, Ph.D.

15 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 1, 2023 expressed an unqualified opinion.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated January 31, 2024 expressed an unqualified opinion.

Basis for opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

Critical audit matter

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:

10 unchanged sentences

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 Section 174, Global Intangible Low-Taxed Income and its expected impact on estimated future taxable income;

• 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;

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

7 unchanged sentences

Newport Beach, California

February 1, 2023

January 31, 2024

MAXLINEAR, INC.

37 unchanged sentences

Additional paid-in capital 808,575 722,778

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

Accumulated other comprehensive loss ( 3,791 ) ( 1,021 )

Accumulated deficit ( 118,527 ) ( 45,380 )

23 unchanged sentences

Income (loss) before income taxes ( 63,810 ) 174,198 47,870

Income tax provision (benefit) 49,158 5,901 ( 16,259 )

Income tax provision 9,337 49,158 5,901

Net income (loss) $ ( 73,147 ) $ 125,040 $ 41,969

15 unchanged sentences

121 ( 5,201 ) ( 242 )

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

Net actuarial gain (loss) on pension and other defined benefit plans, net of tax benefit of $ 85 in 2023, $ 0 in 2022 and $ 0 in 2021

( 206 ) 2,055 932

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 on interest rate swap, net of tax — — 140

Reclassification adjustments of unrealized gain (loss) on pension and other defined benefit plans, net of tax benefit of $ 1,107 in 2023, $ 0 in 2022 and $ 0 in 2021

( 2,685 ) — —

Other comprehensive income (loss) ( 2,770 ) ( 3,146 ) 690

13 unchanged sentences

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

1 unchanged sentence

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

3 unchanged sentences

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

1 unchanged sentence

Common stock issued pursuant to equity awards, net 2,841 — 26,237 — — 26,237

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

Employee stock purchase plan 232 — 4,379 — — 4,379

1 unchanged sentence

Other comprehensive loss — — — ( 2,770 ) — ( 2,770 )

Net income — — — — 125,040 125,040

Net loss — — — — ( 73,147 ) ( 73,147 )

Balance at December 31, 2023 81,818 $ 8 $ 808,575 $ ( 3,791 ) $ ( 118,527 ) $ 686,265

10 unchanged sentences

Impairment losses 2,438 2,811 —

Inventory fair value adjustments — — 32,945

Amortization of debt issuance costs and accretion of discounts 2,561 1,975 3,000

6 unchanged sentences

Impairment of leased right-of-use assets — 462 429

(Gain) loss on settlement of pension ( 1,008 ) — —

Loss on extinguishment of debt — — 5,221

2 unchanged sentences

Changes in operating assets and liabilities, net of effects of acquisitions:

Accounts receivable ( 50,875 ) ( 51,690 ) ( 16,856 )

Accounts receivable, net 1,406 ( 50,875 ) ( 51,690 )

Inventory 60,636 ( 28,841 ) ( 33,689 )

13 unchanged sentences

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

Sale of trading securities 17,198 — —

Net cash used in investing activities ( 15,935 ) ( 91,762 ) ( 91,757 )

6 unchanged sentences

Repurchase of common stock — ( 31,511 ) ( 23,548 )

Net cash provided by (used in) financing activities ( 240,401 ) ( 91,903 ) 159,649

Net cash used in financing activities ( 26,356 ) ( 240,401 ) ( 91,903 )

Effect of exchange rate changes on cash and cash equivalents ( 1,082 ) 56 ( 2,869 )

5 unchanged sentences

Cash paid for income taxes $ 28,645 $ 23,829 $ 3,839

Cash received for dividend income on investments $ 716 $ — $ —

Supplemental disclosures of non-cash activities:

Common stock issued in acquisitions, at fair value $ — $ — $ 17,080

Deferred payments of purchase price for acquisitions, at fair value $ — $ — $ 34,100

Issuance of shares for payment of bonuses $ 38,648 $ 38,826 $ 23,981

8 unchanged sentences

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;

Examples of such devices include broadband modems compliant with Data Over Cable Service Interface Specifications, or DOCSIS, Passive Optical Network, or PON, and DSL;

Wi-Fi and wireline routers for home networking;

radio transceivers and modems for 4G/5G base-station and backhaul infrastructure;

fiber-optic modules for data center, metro, and long-haul transport networks;

optical transceivers targeting hyperscale data centers;

as well as power management and interface products used in these and many other markets.

9 unchanged sentences

Use of Estimates and Significant Risks and Uncertainties

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes of the consolidated financial statements.

Actual results could differ from those estimates.

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 $ 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.

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 February 1, 2023, the issuance date of this Annual Report on Form 10-K.

Actual results could differ from those estimates.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Business Combinations

8 unchanged sentences

For a given acquisition, the Company may identify certain pre-acquisition contingencies as of the acquisition date and may extend its review, evaluation, and adjustment of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether the Company includes these contingencies as a part of the fair value estimates of assets acquired and liabilities assumed and, if so, to determine their estimated amounts.

A pre-acquisition contingency (non-income tax related) is only recognized as an asset or a liability if:

A pre-acquisition

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

contingency (non-income tax related) is only recognized as an asset or a liability if:

(i) it is probable that an asset existed or a liability had been incurred at the acquisition date and (ii) the amount of the asset or liability can be reasonably estimated.

16 unchanged sentences

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.

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.

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

8 unchanged sentences

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Intangible Assets

17 unchanged sentences

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.

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.

During the years 2023, 2022, and 2021, the Company recorded impairment of intangible assets of $ 2.4 million, $ 2.8 million and $ 0 , respectively.

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

8 unchanged sentences

A five-step approach is applied in the recognition of revenue:

(1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when the Company satisfies a performance obligation.

(1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

obligations in the contract, and (5) recognize revenue when the Company satisfies a performance obligation.

Customer purchase orders plus the underlying master sales agreements are considered to be contracts with the customer for purposes of applying the five-step approach.

12 unchanged sentences

Customer contract liabilities consist primarily of obligations to deliver rebates to customers in the form of units of products which are included in accrued expenses and other current liabilities in the consolidated balance sheets.

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.

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.

Other obligations to customers, which are included in accrued price protection liability in the consolidated balance sheets, consist of estimates of price protection rights offered to the Company’s end customer on products sold by the Company to the end customer’s contract manufacturer at a standard price that are later incorporated into the end customers’ product.

The Company’s price adjustments included in accrued expenses and other current liabilities are discounts and rebates expected to be claimed by the Company’s distributors upon sell-through of the products to their customers, which are initially sold by the Company to the distributors at a standard price.

Also included in accrued expenses and other current liabilities are amounts expected to be returned by distributors under stock rotation rights.

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.

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.

5 unchanged sentences

As of December 31, 2023 and 2022, the Company has warranty reserves of $ 0.3 million and $ 0.5 million, respectively, based on the Company’s estimates.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Segment Information

15 unchanged sentences

Costs incurred in connection with the development of the Company’s technology and future products are charged to research and development expense as incurred.

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.

The Company also obtains research and development funding grants from governments in certain jurisdictions in which it operates.

Both of these types of income are reflected as a credit to research and development expense when such income has been earned and any contingencies associated with retaining such income have been resolved.

During the years ended December 31, 2023, 2022, and 2021, the Company recognized income from jointly funded research and development projects of $ 0 , $ 23.3 million, and $ 0 , respectively.

While the Company retains ownership and rights to the underlying technology developed under the joint development projects, the Company may be required to repay all or a portion of the funds provided by the other parties under certain conditions, and defers such funds as liabilities until the repayment conditions have been resolved (Note 15).

The Company’s leases primarily consist of facility leases which are classified as operating leases.

2 unchanged sentences

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.

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 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.

1 unchanged sentence

Lease expense is recognized on a straight-line basis over the lease term.

Upon adoption of ASC 842, the Company elected certain practical expedients and accordingly has (1) carried forward its prior assessments of (a) whether existing contracts on the January 1, 2019 adoption date contain leases, (b) classification of leases as operating or financing and (c) initial direct costs for existing leases and (2) considered hindsight in determining the lease term and assessing impairment of the right-of-use-asset.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

lease term and assessing impairment of the right-of-use-asset.

In addition, the Company used a portfolio approach for its facility leases when making judgments and estimates, such as the discount rate.

26 unchanged sentences

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.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Income (Loss)

5 unchanged sentences

The Company continually evaluates uncertainties associated with litigation and records a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met:

(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 Issued Accounting Pronouncements

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 October 2021, the FASB issued ASU No.

2 unchanged sentences

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 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.

These amendments were effective for the Company in 2023.

The impact of the adoption of the amendments in this update was not material to the Company’s consolidated financial position and results of operations, since there were no customer contracts assumed in a business combination in 2023.

Recently Issued Not Yet Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures , to require enhanced income tax disclosures to provide information to assess how an entity’s operations and related tax risks, tax planning, and operational opportunities affect its tax rate and prospects for future cash flows.

The amendments in this update provide that a business entity disclose (1) a tabular income tax rate reconciliation, using both percentages and amounts, (2) separate disclosure of any individual reconciling items that are equal to or greater than 5% of the amount computed by multiplying the income (loss) from continuing operations before income taxes by the applicable statutory income tax rate, and disaggregation of certain items that are significant and (3) amount of income taxes paid (net of refunds received) disaggregated by federal, state and foreign jurisdictions, including separate disclosure of any individual jurisdictions greater than 5% of total income taxes paid.

These amendments are effective for the Company for annual periods in 2025, applied prospectively, with early adoption and retrospective application permitted.

The Company intends to adopt the amendments in this update prospectively in 2025.

The impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial position and results of operations, since the amendments require only enhancement of existing income tax disclosures in the footnotes to the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures , to require enhanced disclosures that include reportable segment expenses.

The amendments in this update provide that a business entity disclose significant segment expenses, segment profit or loss (after significant segment expenses), and allows reporting of additional measures of a segments profit or loss if used in assessing segment performance.

Such disclosures apply to entities with a single reportable segment.

These amendments are effective for the Company for annual periods in 2024 and interim periods in 2025, retrospectively to all prior periods using the significant segment expense categories identified and disclosed in the period of adoption.

The impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial position and results of operations, since the requirements impact only segment reporting disclosures in the footnotes to the Company’s consolidated financial statements.

Net Income (Loss) Per Share

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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:

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For each of the years ended December 31, 2023, 2022, and 2021, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 4.9 million for 2023, 1.8 million for 2022, and 0.07 million for 2021 from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Terminated 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 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.

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, 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.

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).

On July 26, 2023, MaxLinear terminated the Merger Agreement and notified Silicon Motion that MaxLinear was relieved of its obligations to close because, among other reasons, (i) certain conditions to closing set forth in the Merger Agreement were not satisfied and were incapable of being satisfied, (ii) Silicon Motion had suffered a Material Adverse Effect that was continuing, (iii) Silicon Motion was in material breach of representations, warranties, covenants, and agreements in the Merger Agreement that gave rise to the right of the Company to terminate, and (iv) in any event, the First Extended Outside Date had passed and was not automatically extended because certain conditions in Article 6 of the Merger Agreement were not satisfied or waived as of May 5, 2023.

For these same reasons, under the terms of the Merger Agreement, MaxLinear was not required to pay a break-up fee or other fee to Silicon Motion as a result of the termination of the Merger Agreement.

Undefined capitalized terms in this paragraph have the same meaning as in the Merger Agreement.

On August 16, 2023, Silicon Motion delivered to MaxLinear a notice, which Silicon Motion publicly disclosed, that it was purporting to terminate the Merger Agreement and that Silicon Motion would be commencing an arbitration to seek damages from MaxLinear arising from MaxLinear's alleged breaches of the Merger Agreement.

On October 5, 2023, Silicon Motion filed a Notice of Arbitration with the Singapore International Arbitration Centre alleging that MaxLinear breached the Merger Agreement.

See Note 15 for more information on legal matters related to the termination of the Merger Agreement.

The second amended and restated commitment letter dated October 24, 2022 with Wells Fargo Bank, N.A., or Wells Fargo Bank, and other lenders, and related financing commitments for the previously pending (now terminated) merger were also terminated upon termination of the Merger Agreement.

As a result of the termination of the financing, the Company was required to pay to Wells Fargo Bank a ticking fee of $ 18.3 million, which is included in other income (expense), net in the year ended December 31, 2023.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $ 9.8 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 Y (in thousands):

Description Amount

Fair value of purchase consideration:

Contingent consideration (1)

Total purchase price $ 12,424

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(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 $ 2.6 million in payments subject to the acquired 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.

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.

Purchase Price Allocation

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 $ 2.0 million in net operating liabilities, with $ 11.8 million in goodwill.

Assumptions in the Allocations of Purchase Price

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.

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.

Goodwill recorded in connection with Company Y was $ 11.8 million as of December 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.

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

During the year ended December 31, 2023, the Company entered into plans of restructuring to reduce its workforce.

MAXLINEAR, INC.

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$ 19,786 $ 2,265 $ 2,204

Restructuring charges for the year ended December 31, 2023 included $ 17.9 million in employee severance-related charges associated with reductions in the workforce and $ 1.8 million in other charges related to abandonment of contracts used by the terminated employees.

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 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, 2023 and 2022.

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

As of December 31, 2022, the remaining lease-related charges primarily consist of common area maintenance obligations.

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

Goodwill and Intangible Assets

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Ending balance $ 318,588 $ 306,739

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 31 st 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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Backlog 5.3 500 ( 500 ) — 500 ( 429 ) 71

Patents 7.0 4,780 ( 455 ) 4,325 — — —

6.1 $ 480,274 $ ( 406,644 ) $ 73,630 $ 477,125 $ ( 367,809 ) $ 109,316

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Beginning balance $ 109,316 $ 149,940

Acquisitions (Note 3)

Additions 6,355 11,184

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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 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, 2023 and 2022, the Company recognized impairment losses related to finite-lived intangible assets of $ 2.4 million and $ 2.8 million respectively, 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.

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

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Total $ 73,630

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:

Year Ended December 31,

(in thousands)

Beginning balance $ 2,600 $ 7,200

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

Ending balance $ — $ 2,600

The Company performs its annual assessment of indefinite-lived intangible assets on October 31st 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.

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

MAXLINEAR, INC.

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

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Contingent consideration (Note 3) $ 2,462 $ 2,941

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;

At December 31, 2023, the Company did not hold any marketable equity investments.

The Company sold its marketable investment positions in December 2023.

Prior to the sale, unrealized gains and losses on such investments representing stock

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

price fluctuations in the underlying securities held were recorded to other income (expense), net in the consolidated statement of operations.

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

Impairment was evaluated considering numerous factors, and their relative significance varied depending on the situation.

Factors considered include the length of time and extent to which fair value was 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;

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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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The contingent consideration liability as of December 31, 2023 is associated with the Company’s acquisition of 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 $ 3.0 million was paid during the year ended December 2023.

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 included an assumption of total payments up to $ 3.0 million to Company X and an assumption of total payments up to $ 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.

The following summarizes the level in the fair value hierarchy for each financial instrument:

Fair Value Measurements at December 31, 2023

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(in thousands)

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

Contingent consideration $ 2,462 $ — $ — $ 2,462

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements at December 31, 2022

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(in thousands)

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

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

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Beginning balance $ 2,941 $ 2,700

Acquisitions (1) (Note 3)

Payments ( 3,000 ) —

Accretion of discount (1)

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(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.

(1) These changes to the balance associated with the estimated fair value of contingent consideration for the year ended December 31, 2023 were due to the addition of contingent consideration associated with the acquisition of Company Y and accretion of discounts on contingent consideration.

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, 2023, 2022 and 2021.

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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

Given that fair values for 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.

MAXLINEAR, INC.

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

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$ 99,908 $ 160,544

Inventory decreased $ 60.6 million from $ 160.5 million as of December 31, 2022 to $ 99.9 million as of December 31, 2023, as the Company’s management lowered inventory levels due to reduced supply chain constraints and decreased customer demand for certain products.

Property and equipment, net consists of the following:

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Depreciation expense for the years ended December 31, 2023, 2022, and 2021 was $ 23.8 million, $ 20.3 million and $ 17.7 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.

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 as of December 31, 2023 and December 31, 2022, respectively.

In September 2023, the terms of this note receivable were renegotiated, and the first initial repayment of $ 1.5 million is now due by March 31, 2025, and annual repayments of $ 1.7 million per year are due annually thereafter by March 31, from 2026 through 2030, provided that certain production utilization targets for the prior year are met.

Previously, repayments of $ 2.0 million per year were due annually by March 31, in years 2024 through 2027.

MAXLINEAR, INC.

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Ending balance $ 71,684 $ 113,274

The reason for the significant decrease in price protection liability from approximately $ 113.3 million as of December 31, 2022 to approximately $ 71.7 million as of December 31, 2023, was due to a significant decrease in revenues from customers with such price protection rights from 2022 to 2023, which decreased the corresponding price protection accruals to such customers.

Accrued expenses and other current liabilities consist of the following:

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Accrued obligations to customers for stock rotation rights 349 605

Contingent consideration 2,941 —

Contingent consideration – current portion 2,462 2,941

Other 6,242 6,679

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Other comprehensive income (loss) before reclassifications, net of tax 121 ( 206 ) ( 85 )

Reclassification adjustments of unrealized gain (loss) on pension and other defined benefit plans, net of tax — ( 2,685 ) ( 2,685 )

Net current period other comprehensive income (loss) 121 ( 2,891 ) ( 2,770 )

Balance at December 31, 2023 $ ( 5,059 ) $ 1,268 $ ( 3,791 )

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt and Interest Rate Swap

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

2022 December 31,

December 31, 2023 December 31, 2022

(in thousands)

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As of December 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.

Under the terminated amended and restated commitment letter with Wells Fargo Bank and other lenders entered into in connection with the previously pending (now terminated) merger with Silicon Motion (Note 3), the Company had expected 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.

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

The June 23, 2021 Credit Agreement contains customary provisions specifying alternative interest rate calculations to be employed at such time as LIBOR ceases to be available as a benchmark for establishing the interest rate on floating interest rate borrowings.

The June 23, 2021 Credit Agreement was amended on June 29, 2023 to implement a benchmark replacement.

The Company is required to make mandatory prepayments of the outstanding principal amount of term loans under the June 23, 2021 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.

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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

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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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 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.

To date, there has been no repayment of compensation from executive officers pursuant to such clawback policy.

Awards granted under the 2010 Plan, as amended, are subject to a compensation recovery policy adopted by the Company on August 9, 2023, or the Policy, that applies to certain incentive-based compensation that is received on or after October 2, 2023.

The Policy requires the Company to recover certain excess incentive-based compensation from current and former executive officers if the Company is required to prepare an accounting restatement due to a material noncompliance of the Company with any financial reporting requirement under the securities laws or as otherwise described in the Policy and paid during the three completed fiscal years immediately preceding the trigger date, as defined in the Policy.

Recoverable compensation is defined in the Policy but generally includes any incentive-based compensation that was granted, earned or vested based wholly or in part upon attainment of any financial reporting measure, to the extent the amount actually received exceeds the amount that would have been received if the incentive-based compensation had been determined based on the restated financial statements.

To date, there has been no recovery or repayment of compensation from executive officers pursuant to the Policy, or any prior compensation recovery policy of the Company which it replaced, including the executive compensation clawback policy adopted by the Company on December 13, 2018, which applies to compensation that was received prior to October 2, 2023.

As of December 31, 2023, the number of shares of common stock available for future issuance under the 2010 Plan was 15,081,087 shares.

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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

As of December 31, 2023, the number of shares of common stock available for future issuance under the ESPP was 5,658,561 shares.

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.

Employee Incentive Bonus

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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 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.

In connection with the Company’s bonus programs, in February 2023 and February 2022, the Company issued 0.9 million and 0.5 million freely-tradable (subject to certain restrictions for affiliates) shares, respectively, of the Company’s common stock in settlement of bonus awards to employees, including executives, for the 2023 and 2022 performance periods.

At December 31, 2023, the Company has an accrual of $ 11.5 million for bonus awards for employees for achievement in the 2023 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.

8 unchanged sentences

Selling, general and administrative 10,224 40,335 28,374

Restructuring expense — — 596

$ 55,176 $ 81,704 $ 59,358

The total unrecognized compensation cost related to unvested restricted stock units as of December 31, 2023 was $ 135.7 million, and the weighted average period over which these equity awards are expected to vest is 2.34 years.

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 performance-based restricted stock units as of December 31, 2023 was $ 0 as a result of revised estimates of performance achievement levels as of that date, and the weighted average period over which these equity awards are expected to vest is 1.14 years.

Actual levels of future performance for the unvested periods may differ from current estimates.

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

9 unchanged sentences

Performance-Based Restricted Stock Units

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.

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.

MAXLINEAR, INC.

2 unchanged sentences

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 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.

As of December 31, 2023, achievement to date under the performance metrics specified in the respective award agreements are 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.

To the extent any prior achievement levels are no longer probable, any compensation expense recorded is adjusted to the revised achievement levels.

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

37 unchanged sentences

Exercised ( 15 ) 15.30

Canceled ( 3 ) ( 19.62 )

Outstanding at December 31, 2023 375 $ 17.29 1.52 $ 1,583

12 unchanged sentences

Income (loss) before income taxes $ ( 63,810 ) $ 174,198 $ 47,870

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

The income tax provision consists of the following:

Year Ended December 31,

10 unchanged sentences

Total deferred ( 4,451 ) 23,487 ( 2,311 )

Total income tax provision (benefit) $ 49,158 $ 5,901 $ ( 16,259 )

Total income tax provision $ 9,337 $ 49,158 $ 5,901

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Year Ended December 31,

15 unchanged sentences

Valuation allowance 7,772 ( 1,654 ) ( 3,397 )

Total income tax provision (benefit) $ 49,158 $ 5,901 $ ( 16,259 )

Total income tax provision $ 9,337 $ 49,158 $ 5,901

The components of the deferred income tax assets are as follows:

15 unchanged sentences

Leased right-of-use assets ( 2,839 ) ( 1,784 )

Intangible assets — ( 640 )

Pension liability ( 371 ) ( 1,569 )

Net deferred tax assets $ 69,374 $ 64,923

At December 31, 2022, the Company had federal, state and foreign tax net operating loss carryforwards of approximately $ 115.7 million, $ 72.5 million and $ 0 , respectively.

At December 31, 2023, the Company had federal, state and foreign tax net operating loss carryforwards of approximately $ 100.2 million, $ 77.8 million and $ 49.5 million, respectively.

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.

10 unchanged sentences

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 $ 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 Company recorded an income tax provision of $ 9.3 million in the year ended December 31, 2023, 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, 2023 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including tax credits and a tax on global intangible low-taxed income, 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% 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.

The difference between our effective tax rate and the 21.0% U.S.

federal statutory rate for the year ended December 31, 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.

The permanent tax item related to global intangible low-taxed income, or GILTI, 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 our effective tax rate and the 21.0% U.S.

federal statutory rate for the year ended year ended December 31, 2021 resulted primarily from a tax on 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.

2 unchanged sentences

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

During the year ended December 31, 2022, the Company’s unrecognized tax benefits increased by $ 1.4 million.

At December 31, 2023, the Company’s unrecognized tax benefits totaled $ 68.6 million, $ 58.5 million of which, if recognized at a time when the valuation allowance no longer exists, would affect the effective tax rate.

12 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 )

7 unchanged sentences

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 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.

The Company recorded a tax provision in the years ended December 31, 2023 and 2022 at the incentive rate.

Due to the valuation allowance release in 2021 and the Company’s use of loss carryforwards, 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, and also tracks sales to the ultimate end customer (Note 12).

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

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

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

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

Year Ended December 31,

3 unchanged sentences

Customer B 10 % 10 % 11 %

____________________________

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

December 31, December 31,

Percentage of gross accounts receivable

Customer B * 14 %

Customer C 33 % 12 %

1 unchanged sentence

Customer E * 11 %

Customer F 12 % *

____________________________

1 unchanged sentence

Significant Suppliers

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

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

Year Ended December 31,

3 unchanged sentences

Vendor C 10 % 12 % 12 %

Vendor D * * 11 %

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Geographic Information

4 unchanged sentences

Asia $ 521,433 75 % $ 915,024 82 % $ 736,808 83 %

Europe 124,556 18 % 142,494 13 % 106,428 12 %

United States 36,955 5 % 40,077 4 % 35,978 4 %

9 unchanged sentences

____________________________

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

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

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

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, or EMEA 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, Taiwan, and Vietnam, the Company

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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):

December 31, December 31,

Amount % of total Amount % of total

3 unchanged sentences

Total $ 489,913 100 % $ 523,588 100 %

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue from Contracts with Customers

14 unchanged sentences

Contract Liabilities

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.

As of December 31, 2023 and 2022, customer contract liabilities were approximately $ 1.6 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 years ended December 31, 2023, 2022, and 2021 that was included in the contract liability balance as of the beginning of each of those respective periods was immaterial.

4 unchanged sentences

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 December 31, 2023 were $ 54.8 million and $ 0.3 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 or decrease in revenue in the years ended December 31, 2022, 2021, and 2020 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.

The increase or decrease in revenue in the years ended December 31,

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2023, 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 December 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 $ 0.1 million and $ 0.2 million, respectively.

1 unchanged sentence

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Operating Leases

15 unchanged sentences

Short-term lease costs for each of the years ended December 31, 2023, 2022, and 2021, respectively, were not material.

There were $ 12.0 million, $ 13.2 million, and $ 15.9 million of right-of-use assets obtained in exchange for new lease liabilities for the years ended December 31, 2022, 2021, and 2020, respectively, including $ 0.05 million and $ 1.8 million from acquisitions in 2021 and 2020, respectively.

There were $ 12.3 million, $ 12.0 million, and $ 13.2 million of right-of-use assets obtained in exchange for new lease liabilities for the years ended December 31, 2023, 2022, and 2021, respectively.

Employee Retirement Plans

3 unchanged sentences

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pension and Other Defined Benefit Retirement Obligations

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

During the year ended December 31, 2023, the Company paid approximately $ 3.2 million to a third party life insurance and pension provider to fund and administer future benefit payments for substantially all of the employees in one of the Company’s defined benefit retirement plans and recorded a gain on partial settlement of such pension plan of approximately $ 1.0 million.

As of December 31, 2023 and December 31, 2022, the defined benefit obligation was $ 1.4 million and $ 1.7 million, respectively.

1 unchanged sentence

Net periodic benefit costs were $ 0.5 million, $ 0.3 million, and $ 0.5 million respectively for the years ended December 31, 2023, 2022, and 2021 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

7 unchanged sentences

Actuarial (gain) loss 284 ( 2,817 )

Benefits paid ( 124 ) ( 157 )

Benefits paid and settlements ( 6,060 ) ( 124 )

Currency exchange rate changes 106 ( 587 )

3 unchanged sentences

Actual return on plan assets ( 194 ) ( 24 )

Employer contributions 3,245 —

Plan settlements ( 8,162 ) —

Currency exchange rate changes 216 ( 279 )

36 unchanged sentences

Pension Plan Assets

The plan assets are currently all in liquid cash and cash equivalents and an investment strategy is being developed to ensure that sufficient assets are available to pay pension benefits as they come due.

The plan assets were $ 0 as of December 31, 2023, since all assets were transferred to the third party life insurance and pension provider that is funding and administering future benefit payments for substantially all of the employees in the plan.

Prior to the transfer, pension assets were held in liquid cash and cash equivalents.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Estimated Future Benefit Payments for Pension Benefit Plans

3 unchanged sentences

Thereafter 63

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Commitments and Contingencies

5 unchanged sentences

2026 — 18,567 18,567

2027 — 3,673 3,673

Total minimum payments $ 38,985 $ 84,208 $ 123,193

2 unchanged sentences

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.

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 $ 15.0 million received from the other parties as of December 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 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 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.

During the years ended December 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.

Dispute with Silicon Motion

As disclosed in Note 3, on July 26, 2023, MaxLinear terminated the Merger Agreement on multiple grounds.

On August 16, 2023, Silicon Motion delivered to MaxLinear a notice, which Silicon Motion publicly disclosed, that it was purporting to terminate the Merger Agreement and that Silicon Motion would be commencing an arbitration before the Singapore International Arbitration Centre to seek damages from MaxLinear arising from MaxLinear’s alleged breaches of the Merger Agreement.

Silicon Motion’s position is that MaxLinear’s Willful and Material Breaches (as such term is defined in the Merger Agreement) of the Merger Agreement prevented the Merger from being completed by August 7, 2023 and that MaxLinear is consequently liable for substantial monetary damages in excess of the termination fee as provided in the Merger Agreement.

On October 5, 2023, Silicon Motion filed a Notice of Arbitration with the Singapore International Arbitration Centre alleging that MaxLinear breached the Merger Agreement.

Silicon Motion seeks payment of the termination fee, additional damages, fees, and costs.

The arbitration will be confidential.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MaxLinear believes that it properly terminated the Merger Agreement.

MaxLinear remains confident in its decision and will vigorously defend its right to terminate the Silicon Motion transaction without penalty.

Class Action Complaint

On August 31, 2023, a Silicon Motion stockholder filed a putative class action complaint in the United States District Court for the Southern District of California captioned Water Island Event-Driven Fund v.

MaxLinear, Inc.

23-cv-01607 (S.D.

Cal.), against MaxLinear and certain of its current officers.

The complaint includes two claims:

(1) an alleged violation of Section 10(b) of the Securities Exchange Act of 1934, or the “Exchange Act”, and Rule 10b-5 promulgated thereunder;

and (2) an alleged violation of Section 20(a) of the Exchange Act.

The complaint alleges that the defendants made false and misleading statements and/or omitted material facts that MaxLinear had a duty to disclose, concerning the Company’s ability and intention to timely close the merger with Silicon Motion, including that:

(i) MaxLinear had allegedly decided it would not consummate the merger because the economic circumstances surrounding the merger had materially changed, including a material downturn in the semiconductor industry and rising interest rates;

(ii) MaxLinear had allegedly determined to unilaterally terminate the merger in the event the merger was approved by SAMR;

(iii) MaxLinear had allegedly intended to argue that certain conditions in Article 6 of the Merger Agreement had not been satisfied as required by May 5, 2023 as a basis to terminate the merger;

and (iv) as a result, MaxLinear had allegedly materially misrepresented the viability of the merger, the purported benefits of the merger, and the likelihood that the merger would be consummated.

The complaint seeks compensatory damages, including interest, costs and expenses and such other equitable or injunctive relief that the court deems appropriate.

MaxLinear will vigorously defend its position.

On December 20, 2023, the Court appointed the lead plaintiffs, who are expected to file an amended complaint by February 15, 2024.

Defendants expect to answer or move to dismiss by March 29, 2024.

Comcast Litigation

On December 1, 2023, MaxLinear filed claims against Comcast Management, LLC and Comcast Cable Communications, LLC, or together, Comcast, in the United States District Court for the Southern District of New York.

MaxLinear alleges that in 2020, MaxLinear shared its proprietary design and know-how for a full-duplex, or FDX, amplifier with Comcast in the hope of securing future business with Comcast.

MaxLinear shared its design and know-how on several occasions, all pursuant to a non-disclosure agreement between MaxLinear and Comcast, with the expectation that Comcast would keep the information confidential.

Comcast needed this technology in order to effectively compete with fiber-optic internet providers.

Instead of engaging MaxLinear to develop the FDX amplifier, Comcast shared MaxLinear’s proprietary designs with MaxLinear’s direct competitor.

Comcast then worked with MaxLinear’s competitor to develop the FDX-amplifier technology.

MaxLinear brought claims for trade secret misappropriation, unfair competition, and breach of the parties’ non-disclosure agreement, and it sought an unspecified amount of compensatory damages, punitive damages, pre-judgment and post-judgment interest, costs, expenses, and attorney fees as well as an injunction against Comcast’s use or disclosure of MaxLinear’s trade secrets.

Dish Litigation

On February 10, 2023, Entropic Communications, LLC, or Entropic, filed claims for patent infringement against Dish Network Corporation, Dish Network LLC, Dish Network Service, LLC, and Dish Network California Service Corporation, or together, Dish,.

At that time, MaxLinear was not a party to the action.

On September 21, 2023, Dish Network California Service Corporation, or Dish California, filed four counterclaims against MaxLinear in the United States District Court for the Central District of California.

The four claims are declaratory judgment, breach of contract, fraud and negligent misrepresentation, and civil conspiracy.

Dish California alleges that when MaxLinear assigned certain patents to Entropic, MaxLinear violated its obligations owed to the Multimedia over Coax Alliance, or MoCA, under MoCA’s Intellectual Property Rights, or IPR, Policy.

Dish California alleges that MaxLinear also allegedly violated the MoCA IPR Policy by failing to offer Dish California a fair, reasonable, and nondiscriminatory, or FRAND, license for these patents.

Dish California seeks an unspecified amount of compensatory damages, disgorgement, attorneys’ fees, experts’ fees, and costs.

Cox Litigations

On October 6, 2023, Cox Communications, Inc., CoxCom, LLC, and Cox Communications California, LLC, or together, Cox, filed claims in two separate actions against MaxLinear in the United States District Court for the Central District of California.

In the first action, in response to Entropic suing Cox for patent infringement, Cox filed counterclaims alleging that when MaxLinear assigned certain patents to Entropic, MaxLinear violated its obligations under MoCA’s IPR Policy by assigning these patents and by failing to offer Cox a FRAND license for these patents.

Cox amended its counterclaims on January 9, 2024 and is asserting claims of breach of contract, unjust enrichment, and declaratory judgment against MaxLinear.

Cox seeks an unspecified amount of compensatory damages, equitable relief, attorneys’ fees, expenses, and costs.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the second action, in response to Entropic suing Cox for patent infringement, Cox filed counterclaims against MaxLinear.

Cox alleges that MaxLinear granted CableLabs a non-exclusive, royalty-free license to all patents essential for compliance with DOCSIS specifications.

It further alleges that MaxLinear breached this agreement when MaxLinear assigned certain patents to Entropic.

Cox amended its counterclaims on January 9, 2024 and is asserting claims for breach of contract, unjust enrichment, and declaratory judgment.

Cox seeks an unspecified amount of compensatory damages, equitable relief, attorneys’ fees, expenses, and costs.

The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

As of December 31, 2023, no material loss contingencies have been accrued for litigation and other legal claims in the consolidated financial statements, since the Company’s management currently does not believe that the ultimate outcome of any of the matters described above is probable.

An unfavorable outcome of these matters may be reasonably possible in excess of recorded amounts;

however, a reasonable estimate of the amount or range of such loss cannot be made at this time.

Other Matters

Results of litigation and claims are inherently unpredictable.

Regardless of the outcome, litigation and claims can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

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.

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

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

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.

1 unchanged sentence

As of December 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.

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