What changed in this filing

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Item 9A. Controls and Procedures

2022-02-28 compared with 2021-02-26 · 442 added, 405 removed, 1256 unchanged (40% of the section changed)

6 unchanged sentences

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Our internal control over financial reporting is the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors;

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Our internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

2 unchanged sentences

In making this assessment, our management used the criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on the results of this assessment, management has concluded that, as of December 31, 2020, our internal control over financial reporting was effective based on the criteria in Internal Control — Integrated Framework (2013) issued by the COSO.

this assessment, our management has concluded that, as of December 31, 2021, our internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Remediation of Previously Reported Material Weakness

As previously disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2020, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2020, due to the inadequate design and maintenance of controls to evaluate and monitor the accounting for patent and technology licensing arrangements with unusual contract terms.

We have taken remediation steps to address the material weakness previously disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2020 to strengthen our internal control over financial reporting.

These include enhancement of our existing contract review control for patent and technology licensing arrangements, as well as implementation of a new control designed to evaluate and monitor, at inception and on a quarterly basis, the accounting assessment of patent and technology licensing arrangements with unusual terms.

Consequently, our management has concluded that the identified material weakness in internal control over financial reporting has been considered remediated as of December 31, 2021, as the related internal controls have been in operation for a sufficient period of time and our management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have not been any changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended December 31, 2021, that materially affected, or that we believe are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

13 unchanged sentences

The information responsive to this item is incorporated herein by reference to our Proxy Statement for our 2022 annual meeting of stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

Table of Content s

Exhibits and Financial Statement Schedules

1 unchanged sentence

The following consolidated financial statements of the Registrant and Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, are included herewith:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations for the years ended December 31, 2021 , 2020 and 2019

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020, 2019 and 2018

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 a nd 2019

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2021, 2020 and 2019

1 unchanged sentence

Notes to Consolidated Financial Statements

Consolidated Supplementary Financial Data (unaudited)

(a) (2) Financial Statement Schedule

8 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Changes in Accounting Principles

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019 and the manner in which it accounts for revenues from contracts with customers in 2018.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

13 unchanged sentences

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

2 unchanged sentences

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

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

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

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

Acquisition of AnalogX Inc.

and PLDA Group – Valuation of Existing Technology and In-process Research and Development (IPR&D) Intangible Assets

As described in Notes 2 and 21 to the consolidated financial statements, on July 2, 2021, the Company completed the acquisition of AnalogX Inc.

for total consideration of approximately $47.5 million, which resulted in recording $6.3 million of existing technology and $3.8 million of in-process research and development (IPR&D) intangible assets.

The fair value of the existing technology and IPR&D acquired from the AnalogX Inc.

acquisition were estimated using the estimated current replacement cost method under the cost approach.

Management applied significant judgment in estimating the fair value of the existing technology and IPR&D intangible assets from the AnalogX Inc.

acquisition, which involved the use of significant assumptions related to cost of labor to recreate the intangible assets.

On August 18, 2021, the Company completed the acquisition of PLDA Group for total consideration of approximately $85.6 million, which resulted in recording $20.4 million of existing technology and $7.4 million of IPR&D.

The fair value of the existing technology and IPR&D intangible assets acquired from the PLDA acquisition were estimated using the multiple-period excess earnings method under the income approach.

Management applied significant judgment in estimating the fair value of the existing technology and IPR&D intangible assets from the PLDA Group acquisition, which involved the use of significant assumptions related to revenue growth rates and discount rates.

The principal considerations for our determination that performing procedures relating to the valuation of existing technology and IPR&D intangible assets acquired from the AnalogX Inc.

and PLDA Group acquisitions is a critical audit matter are (i) the significant judgment by management in determining the fair value of the existing technology and IPR&D intangible assets, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to cost of labor to recreate existing technology and IPR&D intangible assets from the AnalogX Inc.

acquisition, and revenue growth rates and discount rates related to the existing technology and IPR&D intangible assets from the PLDA Group acquisition, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

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

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the existing technology and IPR&D intangible assets and controls over the development of significant assumptions related to cost of labor to recreate existing technology and IPR&D intangible assets from the AnalogX Inc.

acquisition, and revenue growth rates and discount rates related to the existing technology and IPR&D intangible assets from the PLDA Group acquisition.

These procedures also included, among others (i) reading the purchase agreements, (ii) testing management’s process for determining the fair value of the existing technology and IPR&D intangible assets from both acquisitions, (iii) evaluating the appropriateness of the estimated current replacement cost valuation methods and multi-period excess earnings valuation methods, (iv) testing the completeness and accuracy of the underlying data used in the valuation methods, and (v) evaluating the reasonableness of the significant assumptions used by management related to cost of labor to recreate the existing technology and IPR&D intangible assets from the AnalogX Inc.

acquisition, and revenue growth rates and discount rates related to the existing technology and IPR&D intangible assets from the PLDA Group acquisition.

Evaluating management’s assumptions related to the cost to recreate the intangible assets involved considering the current and historical compensation paid to engineers to recreate the technology.

Evaluating the reasonableness of the revenue growth rates involved considering (i) the current and past performance of PLDA Group, (ii) the consistency with external market and industry data, and (iii) whether these significant assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the (i) the appropriateness of the estimated current replacement cost valuation methods and multi-period excess earnings valuation methods and (ii) the reasonableness of the discount rate significant assumptions.

Revenue Recognition – License and Customization Services Revenue

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The key factor reviewed by management to estimate costs to complete each contract is the estimated man-months necessary to complete the project.

The principal considerations for our determination that performing procedures relating to revenue recognition for license and customization services revenue is a critical audit matter are the significant judgment by management in determining the estimated man-months necessary to contract completion for each contract, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s estimate of man-months necessary to complete each project.

The principal considerations for our determination that performing procedures relating to revenue recognition for license and customization services revenue is a critical audit matter are (i) the significant judgment by management in determining the estimated man-months necessary for contract completion for each contract, and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s estimate of man-months necessary to complete each project.

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

These procedures included testing the effectiveness of controls relating to the Company’s license and customization services revenue recognition process, including controls over management’s determination of the estimate of total man-months to complete each contract.

These procedures also included, among others, for a sample of contracts, testing management’s process for determining the estimate of total man-months.

Evaluating management’s assumption related to the estimate of man-months involved (i) performing a comparison of the estimated man-months to completed projects of similar size and (ii) evaluating the timely identification of circumstances which may warrant a modification to a previous cost estimate, including an assessment of total man-months.

These procedures also included, among others, for a sample of contracts, testing management’s process for determining the estimate of man-months.

Evaluating the reasonableness of management’s assumption related to the estimate of man-months involved (i) performing a comparison of the estimated man-months to completed projects of similar size and (ii) evaluating the timely identification of circumstances which may warrant a modification to a previous cost estimate, including an assessment of total man-months.

/s/ PricewaterhouseCoopers LLP

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Deferred tax assets 4,047 4,353

Unbilled receivables, long-term 232,056 343,703

Unbilled receivables 123,018 236,699

Other assets 4,240 4,535

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20,945 23,326

Convertible notes 163,687 —

Deferred revenue

24,755 10,198

Income taxes payable, short-term

20,064 19,142

Income taxes payable 20,607 20,064

Operating lease liabilities

3 unchanged sentences

267,267 85,864

Convertible notes, long-term 156,031 148,788

Convertible notes — 156,031

Long-term operating lease liabilities 29,099 34,305

27 unchanged sentences

(In thousands, except per share amounts)

Royalties $ 80,985 $ 90,785 $ 130,452

Product revenue $ 143,935 $ 113,996 $ 72,972

Royalties 136,706 84,560 94,361

Contract and other revenue 47,663 47,766 60,270

14 unchanged sentences

Total operating expenses 233,629 229,628 276,369

Operating loss ( 46,807 ) ( 104,539 ) ( 86,967 )

Operating income (loss) 24,281 ( 44,054 ) ( 100,141 )

Interest income and other income (expense), net 9,711 17,855 27,445

1 unchanged sentence

Interest and other income (expense), net ( 995 ) 7,515 17,593

Loss before income taxes ( 39,631 ) ( 87,016 ) ( 70,628 )

Income (loss) before income taxes 23,286 ( 36,539 ) ( 82,548 )

Provision for income taxes 4,952 3,932 3,416

Net loss $ ( 43,609 ) $ ( 90,419 ) $ ( 157,957 )

Net loss per share:

Net income (loss) $ 18,334 $ ( 40,471 ) $ ( 85,964 )

Net income (loss) per share:

Basic $ 0.17 $ ( 0.36 ) $ ( 0.77 )

8 unchanged sentences

(In thousands)

Net loss $ ( 43,609 ) $ ( 90,419 ) $ ( 157,957 )

Net income (loss) $ 18,334 $ ( 40,471 ) $ ( 85,964 )

Other comprehensive income (loss):

1 unchanged sentence

Unrealized gain (loss) on marketable securities, net of tax ( 1,005 ) ( 13 ) 54

Total comprehensive loss $ ( 43,598 ) $ ( 80,220 ) $ ( 163,151 )

Total comprehensive income (loss) $ 16,963 $ ( 40,460 ) $ ( 75,765 )

Refer to Notes to Consolidated Financial Statements

6 unchanged sentences

Foreign currency translation adjustment — — — — 10,145 10,145

Unrealized loss on marketable securities, net of tax — — — — ( 747 ) ( 747 )

Unrealized gain on marketable securities, net of tax — — — — 54 54

Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan 3,113 3 8,078 — — 8,081

Repurchase and retirement of common stock under repurchase plan ( 3,786 ) ( 4 ) ( 12,573 ) ( 37,456 ) — ( 50,033 )

Stock-based compensation — — 26,476 — — 26,476

Issuance of common stock in connection with the maturity of the 2018 Notes related to the settlement of the in-the-money conversion feature of the 2018 Notes 424 — — — — —

Cumulative effect adjustment from adoption of ASU 2016-01 — — — 1,058 — 1,058

Cumulative effect adjustment from the adoption of ASC 842 — — — 4,469 — 4,469

2 unchanged sentences

Foreign currency translation adjustment — — — — 24 24

Unrealized gain on marketable securities, net of tax — — — — 54 54

Unrealized loss on marketable securities, net of tax — — — — ( 13 ) ( 13 )

Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan 2,183 3 2,081 — — 2,084

Repurchase and retirement of common stock under repurchase plan ( 2,616 ) ( 3 ) ( 18,575 ) ( 31,491 ) — ( 50,069 )

Stock-based compensation — — 25,778 — — 25,778

Cumulative effect adjustment from the adoption of ASC 842 — — — 4,469 — 4,469

Balances at December 31, 2020 111,698 112 1,270,426 ( 357,751 ) ( 81 ) 912,706

Net loss — — — ( 43,609 ) — ( 43,609 )

Net income — — — 18,334 — 18,334

Foreign currency translation adjustment — — — — ( 366 ) ( 366 )

1 unchanged sentence

Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan 1,745 1 ( 1,657 ) — — ( 1,656 )

Issuance of common stock due to PLDA Group (“PLDA”) acquisition 300 — 6,978 — — 6,978

Repurchase and retirement of common stock under repurchase plan ( 4,451 ) ( 4 ) ( 4,267 ) ( 95,810 ) — ( 100,081 )

7 unchanged sentences

Cash flows from operating activities:

Net loss $ ( 43,609 ) $ ( 90,419 ) $ ( 157,957 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Net income (loss) $ 18,334 $ ( 40,471 ) $ ( 85,964 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Stock-based compensation 27,486 25,778 26,476

3 unchanged sentences

Deferred income taxes 1,522 624 ( 1,816 )

Non-cash restructuring — — 670

Loss on divestiture — — 7,439

Loss on equity investment 1,071 747 696

Gain from sale of marketable equity security — — ( 291 )

Gain from sale of assets held for sale — — ( 1,266 )

(Gain) loss from disposal of property, plant and equipment ( 77 ) 157 395

(Gain) loss on disposal of property, plant and equipment ( 82 ) ( 77 ) 157

Change in fair value of earn-out liability 5,300 ( 1,800 ) —

12 unchanged sentences

Purchases of property, plant and equipment ( 13,792 ) ( 29,728 ) ( 6,472 )

Acquisition of intangible assets — — ( 350 )

Purchases of marketable securities ( 567,947 ) ( 909,852 ) ( 657,433 )

2 unchanged sentences

Proceeds from divestiture, net of cash disposed — — 76,039

Proceeds from sale of assets held for sale — — 3,754

Proceeds from sale of property and property, plant and equipment — — 29

Settlement of working capital adjustment from disposal of business — ( 1,131 ) —

Proceeds from sale of equity security — — 1,350

Investment in privately-held companies — — ( 1,000 )

2 unchanged sentences

Cash flows from financing activities:

Repayment of 1.125% convertible notes — — ( 81,207 )

Proceeds received from issuance of common stock under employee stock plans 8,957 11,487 15,104

Payments under installment payment arrangement ( 13,201 ) ( 8,379 ) —

Principal payments against financing lease obligation — — ( 1,080 )

Repurchase and retirement of common stock, including prepayment under accelerated share repurchase program ( 50,069 ) — ( 50,033 )

Payments of taxes on restricted stock units ( 10,613 ) ( 9,403 ) ( 7,023 )

Payments under installment payment arrangements ( 12,472 ) ( 13,201 ) ( 8,379 )

Repurchase and retirement of common stock, including prepayment under accelerated share repurchase program ( 100,081 ) ( 50,069 ) —

Net cash used in financing activities ( 114,209 ) ( 61,186 ) ( 298 )

11 unchanged sentences

Non-cash investing and financing activities:

Property, plant and equipment received and accrued in accounts payable and other accrued liabilities $ 20,952 $ 29,844 $ 8,225

Property, plant and equipment received and accrued in accounts payable and other liabilities $ 12,935 $ 20,952 $ 29,844

As of December 31,

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(In thousands)

Reconciliation of the cash, cash equivalents and restricted cash balances as shown in the consolidated statement of cash flows:

Reconciliation of the cash, cash equivalents and restricted cash balances as shown on the consolidated statement of cash flows:

Cash and cash equivalents $ 107,891 $ 128,967 $ 102,176

4 unchanged sentences

Formation and Business of the Company

(the “Company” or “Rambus”) was incorporated in California in March 1990 and reincorporated in Delaware in March 1997.

(“Rambus” or the “Company”) was incorporated in California in March 1990 and reincorporated in Delaware in March 1997.

In addition to licensing, the Company is creating new business opportunities through offering products and services where its goal is to perpetuate strong company operating performance and long-term stockholder value.

2 unchanged sentences

The Company makes industry-leading chips and IP that enable critical performance improvements for data center and other growing markets.

The ongoing shift to the cloud, along with the widespread advancement of artificial intelligence (“AI”) across the data center, 5G, automotive and Internet of Things (“IoT”), has led to an exponential growth in data usage and tremendous demands on data infrastructure.

The ongoing shift to the cloud, along with the widespread advancement of artificial intelligence (“AI”) across the data center, edge and Internet of Things (“IoT”) end points, has led to exponential growth in data usage and tremendous demands on data infrastructure.

Creating fast and safe connections, both in and across systems, remains one of the most mission-critical design challenges limiting performance in advanced hardware for these markets.

2 unchanged sentences

The accompanying consolidated financial statements include the accounts of Rambus and its wholly owned subsidiaries.

All intercompany accounts and transactions have been eliminated in the accompanying consolidated financial statements.

All intercompany accounts and transactions have been eliminated on the accompanying consolidated financial statements.

Investments in entities with more than 20% ownership by Rambus and in which Rambus has the ability to significantly influence the operations of the investee (but not control) are accounted for using the equity method and are included in other assets.

2 unchanged sentences

Actual results could differ from those estimates.

Immaterial Correction of Prior-Period Error

Subsequent to the reissuance of the consolidated financial statements as of and for the year ended December 31, 2020, the Company determined that $ 7.2 million in corporate investments originally classified as cash equivalents should have been classified as marketable securities in the consolidated balance sheet as of December 31, 2020.

The Company assessed the effect of this correction based on an analysis of both quantitative and qualitative factors and determined that the correction was not material.

Accordingly, the Company corrected the error as of and for the year ended December 31, 2020 in the accompanying consolidated balance sheet, consolidated statement of cash flows and related footnotes.

The following adjustments were made:

• Cash and cash equivalents as of December 31, 2020 originally reported as $ 136.1 million was corrected to $129.0 million.

• Marketable securities as of December 31, 2020 originally reported as $ 366.5 million was corrected to $373.7 million.

• Correction of Note 8, “Marketable Securities” and Note 9, “Fair Value of Financial Instruments,” to reflect the above adjustments.

• Corrected its presentation of net cash used in investing activities for the year ended December 31, 2020, which was originally reported as $ 90.4 million, to reflect cash used in investing activities of $ 97.6 million, in the accompanying consolidated statement of cash flows.

The corrections did not affect the net cash provided by operating activities nor net cash used in financing activities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reclassifications

Certain prior-year balances were reclassified to conform to the current year’s presentation.

None of these reclassifications had an impact on reported net income or cash flows for any of the periods presented.

None of these reclassifications had an impact on reported net income (loss) or cash flows for any of the periods presented.

Revenue Recognition

4 unchanged sentences

all services offerings are priced within tightly controlled bands and all contracts that include support and maintenance state a renewal rate or price that is systematically enforced.

Rambus’ revenue consists of royalty, product and contract and other revenue.

The Company’s revenue consists of product, royalty and contract and other revenue.

Products primarily consist of memory interface chips sold directly and indirectly to module manufacturers and OEMs worldwide through multiple channels, including its direct sales force and distributors.

Royalty revenue consists of patent and technology license royalties.

Products primarily consist of memory interface chips sold directly and indirectly to module manufacturers and OEMs worldwide through multiple channels, including our direct sales force and distributors.

Contract and other revenue consists of software license fees, engineering fees associated with integration of Rambus’ technology solutions into its customers’ products and support and maintenance fees.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Contract and other revenue consists of software license fees, engineering fees associated with integration of the Company’s technology solutions into its customers’ products and support and maintenance fees.

Product Revenue

Product revenue is recognized upon shipment of product to customers, net of accruals for estimated sales returns and allowances, and to distributors, net of accruals for price protection and rights of return on products unsold by the distributors.

To date, none of these accruals have been significant.

The Company transacts with direct customers primarily pursuant to standard purchase orders for delivery of products and generally allows customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment date.

Royalty Revenue

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Patent and technology licensing arrangements result in fixed payments received over time, with guaranteed minimum payments on occasion, variable payments calculated based on the licensee’s sale or use of the IP, or a mix of fixed and variable payments.

• For fixed-fee arrangements (including arrangements that include minimum guaranteed amounts), the Company recognizes revenue upon control over the underlying IP use right transferring to the licensee, net of the effect of significant financing components calculated using customer-specific, risk-adjusted lending rates ranging between 3 % and 5 %, with the related interest income being recognized over time on an effective rate basis.

Where a licensee has the contractual right to terminate a fixed-fee arrangement for convenience without any substantive penalty payable upon such termination, the Company applies the guidance in ASU No.

2014-09, Revenue from Contracts with Customers in Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”) to the duration of the contract in which the parties have present enforceable rights and obligations and only recognizes revenue for amounts that are due and payable.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

• For variable arrangements, the Company recognizes revenue based on an estimate of the licensee’s sale or usage of the IP during the period of reference, typically quarterly, with a true-up recorded when the Company receives the actual royalty report from the licensee.

Product Revenue

To date, none of these accruals have been significant.

Contract and Other Revenue

Contract and other revenue consists of software license fees and engineering fees associated with integration of Rambus’ technology solutions into its customers’ related support and maintenance.

Contract and other revenue consists of software license fees and engineering fees associated with integration of the Company’s technology solutions into its customers’ related support and maintenance.

An initial software arrangement generally consists of a term-based or perpetual license, significant software customization services and support and maintenance services that include post-implementation customer support and the right to unspecified software updates and enhancements on a when and if available basis.

4 unchanged sentences

The Company recognizes license renewal revenue at the beginning of the renewal period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Significant Judgments

14 unchanged sentences

Additionally, the Company elected the practical expedient related to non-lease components and made the policy election for the short-term leases exemptions.

The Company used its incremental borrowing rate to measure the lease liabilities at the adoption date for its existing operating leases that commenced prior to January 1, 2019, which was based on the remaining lease term and remaining lease payments for such leases.

The Company used its incremental borrowing rate to measure the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

lease liabilities at the adoption date for its existing operating leases that commenced prior to January 1, 2019, which was based on the remaining lease term and remaining lease payments for such leases.

The Company leases office space, domestically and internationally, under operating leases.

The Company’s leases have remaining lease terms between one year and ten years .

Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, and long-term operating lease liabilities in the Company’s consolidated balance sheets.

The Company’s leases have remaining lease terms generally between one year and nine years .

Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, and long-term operating lease liabilities on the Company’s consolidated balance sheets.

The Company does not have any finance leases.

7 unchanged sentences

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination.

Goodwill is not subject to amortization, but is subject to at least an annual assessment

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

for impairment.

Goodwill is not subject to amortization, but is subject to at least an annual assessment for impairment.

The Company performs its impairment analysis of goodwill on an annual basis during the fourth quarter of the year unless conditions arise that warrant a more frequent evaluation.

25 unchanged sentences

Indefinite-lived intangible assets are subject to at least an annual assessment for impairment, applying a fair-value based test.

Under the income approach, the Company measures fair value of the indefinite-lived intangible assets based on a projected cash flow method using a discount rate determined by its management which is commensurate with the risk inherent in its current business model.

Under the income approach, the Company measures fair value of the indefinite-lived intangible assets based on a projected cash flow method

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

using a discount rate determined by its management which is commensurate with the risk inherent in its current business model.

The Company’s discounted cash flow projections are based on its annual financial forecasts developed internally by management for use in managing its business.

8 unchanged sentences

Property, Plant and Equipment

Property, plant and equipment include computer equipment, computer software, machinery, leasehold improvements, and furniture and fixtures.

Computer equipment, computer software, machinery, and furniture and fixtures are stated at cost and generally depreciated on a straight-line basis over an estimated useful life of three years , three years to five years , two years or

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

seven years , and three years , respectively.

Property, plant and equipment include computer software, computer equipment, leasehold improvements, machinery, and furniture and fixtures.

Computer software, computer equipment, machinery, and furniture and fixtures are stated at cost and generally depreciated on a straight-line basis over an estimated useful life of three years , three years , seven years , and three years , respectively.

Refer to Note 11, Balance Sheet Details,” for additional details.

11 unchanged sentences

During 2021, 2020 and 2019, the Company did not recognize any impairment of its definite-lived and indefinite-lived assets.

Income taxes are accounted for using an asset and liability approach, which requires the recognition of deferred tax assets and liabilities for expected future tax events that have been recognized differently in Rambus’ consolidated financial statements and tax returns.

Income taxes are accounted for using an asset and liability approach, which requires the recognition of deferred tax assets and liabilities for expected future tax events that have been recognized differently on the Company’s consolidated financial statements and tax returns.

The measurement of current and deferred tax assets and liabilities is based on provisions of the enacted tax law and the effects of future changes in tax laws or rates are not anticipated.

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The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock-Based Compensation and Equity Incentive Plans

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The Company generally recognizes compensation expense using a straight-line amortization method over the respective vesting period for awards that are ultimately expected to vest.

Stock-based compensation expense for 2020, 2019 and 2018 has been reduced for estimated forfeitures.

Stock-based compensation expense for the years ended December 31, 2021, 2020 and 2019 has been reduced for estimated forfeitures.

When estimating forfeitures, the Company considers voluntary termination behaviors, as well as trends of actual option forfeitures.

4 unchanged sentences

government sponsored obligations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Marketable Securities

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Research and Development

Costs incurred in research and development, which include engineering expenses, such as salaries and related benefits, stock-based compensation, depreciation, professional services and overhead expenses related to the general development of Rambus’ products, are expensed as incurred.

Software development costs are capitalized beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers.

Rambus has not capitalized any software development costs since the period between establishing technological feasibility and general customer release is relatively short and as such, these costs have not been material.

The Company has not capitalized any software development costs since the period between establishing technological feasibility and general customer release is relatively short and as such, these costs have not been material.

Computation of Earnings (Loss) Per Share

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Diluted earnings (loss) per share is calculated by dividing the earnings (loss) by the weighted-average number of common shares and potentially dilutive securities outstanding during the period.

Potentially dilutive common shares consist of incremental common shares issuable upon exercise of stock options, employee stock purchases, restricted stock and restricted stock units, and shares issuable upon the conversion of convertible notes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

dilutive common shares consist of incremental common shares issuable upon exercise of stock options, employee stock purchases, restricted stock and restricted stock units, and shares issuable upon the conversion of convertible notes.

The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method.

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Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments and unrealized gains and losses on marketable securities.

Other comprehensive income (loss), net of tax, is presented in the consolidated statements of comprehensive income (loss).

Other comprehensive income (loss), net of tax, is presented on the consolidated statements of comprehensive income (loss).

Credit Concentration

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The Company’s exposure to market risk for changes in interest rates relates primarily to its investment portfolio.

The Company places its investments with high credit issuers and, by

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

investment policy, attempts to limit the amount of credit exposure to any one issuer.

The Company places its investments with high credit issuers and, by investment policy, attempts to limit the amount of credit exposure to any one issuer.

As stated in the Company’s investment policy, it will ensure the safety and preservation of the Company’s invested funds by limiting default risk and market risk.

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Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period.

Gains and losses from these translations are recognized in foreign currency translation included in Accumulated Other Comprehensive Gain (Loss) in the consolidated statements of stockholders’ equity.

Gains and losses from these translations are recognized in foreign currency translation included in accumulated other comprehensive gain (loss) on the consolidated statements of stockholders’ equity.

The Company’s subsidiaries that use the U.S.

dollar as their functional currency re-measure monetary assets and liabilities at exchange rates in effect at the end of each period, and inventories, property and non-monetary assets and liabilities at historical rates.

Additionally, foreign currency transaction gains and losses are included in interest income and other (income) expense, net, in the consolidated statements of operations and were not material in the periods presented.

Subsequent to the divestiture of the Company’s Payments and Ticketing businesses in 2019, the U.S.

dollar is primarily the functional currency of the Company’s foreign subsidiaries.

Additionally, foreign currency transaction gains and losses are included in interest income and other (income) expense, net, on the consolidated statements of operations and were not material in the periods presented.

Business Combinations

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While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement.

As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations.

Upon the conclusion of the measurement period or final determination of the values of assets acquired or

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

liabilities assumed, whichever comes first, any subsequent adjustments are recorded on the consolidated statements of operations.

Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date including the Company’s estimates for intangible assets, contractual obligations assumed and pre-acquisition contingencies where applicable.

Although, the Company believes the assumptions and estimates made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.

Significant estimates and assumptions made by management in estimating the fair value of the existing technologies included revenue growth rates, operating expense margins, technology obsolescence rates and discount rates.

On July 2, 2021, the Company completed the acquisition of AnalogX, Inc.

and applied significant judgment in estimating the fair value of the existing technology and IPR&D intangible assets from the acquisition, which involved the use of significant assumptions related to cost of labor to recreate the intangible assets.

On August 18, 2021, the Company completed the acquisition of PLDA Group and applied significant judgment in estimating the fair value of the existing technology and IPR&D intangible assets from the acquisition, which involved the use of significant assumptions related to revenue growth rates and discount rates.

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

Rambus may be involved in certain legal proceedings.

Based upon consultation with outside counsel handling its defense in these matters and an analysis of potential results, if Rambus believes that a loss arising from such matters is probable and can be reasonably estimated, Rambus records the estimated liability in its consolidated financial statements.

If only a range of estimated losses can be determined, Rambus records an amount within the range that, in its judgment, reflects the most likely outcome;

if none of the estimates within that range is a better estimate than any other amount, Rambus records the low end of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company may be involved in certain legal proceedings.

Based upon consultation with outside counsel handling its defense in these matters and an analysis of potential results, if the Company believes that a loss arising from such matters is probable and can be reasonably estimated, the Company records the estimated liability on its consolidated financial statements.

If only a range of estimated losses can be determined, the Company records an amount within the range that, in its judgment, reflects the most likely outcome;

if none of the estimates within that range is a better estimate than any other amount, the Company records the low end of the range.

Any such accrual would be charged to expense in the appropriate period.

Rambus recognizes litigation expenses in the period in which the litigation services were provided.

The Company recognizes litigation expenses in the period in which the litigation services were provided.

Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.” The amendments in this ASU remove certain exceptions, clarifies and amends existing guidance.

This ASU is effective for interim and annual reporting periods beginning after December 15, 2020.

Early adoption is permitted.

Certain disclosures in ASU No.

2019-12 would need to be applied on a retrospective basis, modified retrospective basis, or prospective basis.

The Company elected to early adopt this ASU on January 1, 2020.

The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued ASU No.

2018-13, “Fair Value Measurement (Topic 820):

Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments in this ASU remove certain disclosures, modify certain disclosures and add additional disclosures.

In January 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815).” The amendments in this ASU clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815.

This ASU is effective for interim and annual reporting periods beginning after December 15, 2020.

Certain disclosures in ASU No.

2018-13 would need to be applied on a retrospective basis and others on a prospective basis.

The Company adopted this ASU on January 1, 2020.

The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU No.

The purpose of this ASU is to require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected.

Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses.

In April 2019, the FASB issued ASU No.

2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (ASU 2019-04),” which provided certain improvements to various ASUs, including ASU 2016-13.

In May 2019, the FASB issued ASU No.

2019-05, “Financial Instruments-Credit Losses (Topic 326),” which provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis.

In November 2019, the FASB issued ASU No.

2019-10, “Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)” which amends certain effective dates.

In November 2019, the FASB issued ASU No.

2019-11, “Financial Instruments-Credit Losses (Topic 326),” which provides additional clarifications.

In March 2020, the FASB issued ASU No.

2020-03, “Codification Improvements to Financial Instruments,” which provides additional clarifications and improvements.

These ASUs and the related amendments are effective for interim and annual reporting periods beginning after December 15, 2019.

The Company adopted this ASU on January 1, 2020.

The Company adopted this ASU on January 1, 2021 on a prospective basis.

The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In August 2020, the FASB issued ASU No.

2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40).” The amendments in this ASU amend the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity, including reducing the number of accounting models for convertible debt instruments and convertible preferred stock.

This ASU also amends the related earnings (loss) per share guidance for both subtopics, including the diluted earnings (loss) per share calculation for instruments that may be settled in cash or shares and for convertible instruments.

This ASU is effective for interim and annual reporting periods beginning after December 15, 2021.

Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020.

The amendments in this ASU may be applied on a modified retrospective basis or a fully retrospective basis.

The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

In January 2020, the FASB issued ASU No.

This ASU is effective for interim and annual reporting periods beginning after December 15, 2020.

Early adoption is permitted.

The amendments in this ASU should be applied on a prospective basis.

In October 2021, the FASB issued ASU No.

2021-08, “Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The amendments in this ASU improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistencies related to recognition of an acquired contract liability, and to payment terms and their effect on subsequent revenue recognized by the acquirer.

Among other changes, this ASU requires that an acquirer account for acquired revenue contracts in accordance with Topic 606 as if it had originated the contracts.

If the acquirer is unable to assess or rely on how the acquiree applied Topic 606, the acquirer should consider the terms of the acquired contracts as of the contract inception or contract modification date in applying Topic 606 to determine what should be recorded at the acquisition date.

The amendments also provide certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination.

The guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

In August 2020, the FASB issued ASU No.

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40).” The amendments in this ASU simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity.

Among other changes, the guidance removes the liability and equity separation models for convertible instruments.

Instead, entities will account for convertible debt instruments wholly as debt unless convertible instruments contain features that require bifurcation as a derivative or that result in substantial premiums accounted for as paid-in capital.

The guidance also requires the application of the if-converted method to calculate the impact of convertible

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

instruments on diluted earnings per share.

The guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020, and can be adopted on either a retrospective or modified retrospective basis.

The Company will adopt this guidance on January 1, 2022 on modified retrospective basis.

Although the Company continues to evaluate the impact of this guidance on its consolidated financial statements, upon adoption, the Company expects this guidance will result in a reclassification of the conversion feature balances from additional paid-in capital to debt and in a decrease of reported interest expense for its convertible notes.

Revenue Recognition

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Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted income (loss) per share (in thousands, except per share amounts):

The following table sets forth the computation of basic and diluted income (loss) per share:

For the Years Ended December 31,

2020 2019 2018

Net loss per share:

Net loss $ ( 43,609 ) $ ( 90,419 ) $ ( 157,957 )

(In thousands, except per share amounts) 2021 2020 2019

Net income (loss) per share:

Net income (loss) $ 18,334 $ ( 40,471 ) $ ( 85,964 )

Weighted-average common shares outstanding - basic

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114,865 113,254 110,948

Basic net loss per share $ ( 0.39 ) $ ( 0.81 ) $ ( 1.46 )

Diluted net loss per share $ ( 0.39 ) $ ( 0.81 ) $ ( 1.46 )

For the years ended December 31, 2020, 2019 and 2018, options to purchase approximately 0.3 million, 1.0 million and 1.6 million shares, respectively, were excluded from the calculation because they were anti-dilutive after considering proceeds from exercise, taxes and related unrecognized stock-based compensation expense.

For the years ended December 31, 2020, 2019 and 2018, an additional 2.3 million, 2.4 million and 2.4 million shares, respectively, have been excluded from the weighted-average dilutive shares because there was a net loss for the periods.

These shares do not include the Company’s 2023 Notes and the 1.125% convertible senior notes due 2018 (the “2018 Notes”).

The par amount of convertible notes is payable in cash equal to the principal amount of the notes plus any accrued and unpaid interest and then the “in-the-money” conversion benefit feature at the conversion price above $18.93 and $12.07, respectively, per share is payable in cash, shares of the Company’s common stock or a combination of both.

Basic net income (loss) per share $ 0.17 $ ( 0.36 ) $ ( 0.77 )

Diluted net income (loss) per share $ 0.16 $ ( 0.36 ) $ ( 0.77 )

For the years ended December 31, 2020 and 2019, options to purchase approximately 0.3 million and 1.0 million shares, respectively, were excluded from the calculation because they were anti-dilutive after considering proceeds from exercise, taxes and related unrecognized stock-based compensation expense.

For the year ended December 31, 2021, there were no options to purchase shares that were excluded from the calculation.

For the years ended December 31, 2020 and 2019, an additional 2.3 million and 2.4 million shares, respectively, were excluded from the weighted-average dilutive shares because there was a net loss for the periods.

These shares do not include the Company’s 2023 Notes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

per share is payable in cash, shares of the Company’s common stock or a combination of both.

The Company has the option to pay cash, issue shares of common stock or any combination thereof for the aggregate amount due upon conversion of the notes.

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As a result, upon conversion of the notes, only the amounts payable in excess of the principal amounts of the notes are considered in diluted earnings per share under the treasury stock method.

During the year ended December 31, 2021, the Company’s stock price exceeded the 2023 Notes' conversion price of $ 18.93 per share, due to which approximately 1.4 million shares for the year ended December 31, 2021 were included in the weighted-average dilutive shares.

Refer to Note 12, Convertible Notes,” for more details.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Intangible Assets and Goodwill

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(In thousands) December 31,

2019 Adjustment to Goodwill (1)

2020 Additions to Goodwill (1)

Total goodwill $ 183,222 $ 95,588 $ 278,810

______________________________________

(1) Working capital adjustments related to the acquisition of Northwest Logic, Inc.

(“Northwest Logic”).

(1) In July 2021, the Company acquired AnalogX and in August 2021, the Company acquired PLDA, which resulted in the Company recognizing additional goodwill.

Refer to Note 21, “Acquisitions,” for additional information.

As of December 31, 2021

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(In thousands) December 31,

2018 Additions to Goodwill (1)

Divestiture of Goodwill (2)

Effect of Exchange Rates (3)

2019 Adjustment to Goodwill (1)

Total goodwill $ 183,465 $ ( 243 ) $ 183,222

______________________________________

(1) In August 2019, the Company acquired Northwest Logic, and in December 2019, the Company acquired the Secure Silicon IP and Protocols business from Verimatrix (the “Secure Silicon IP and Protocols business”), which resulted in the Company recognizing additional goodwill.

Refer to Note 21, “Acquisitions,” for additional information.

(2) Refer to Note 17, “Divestiture,” for additional information.

(3) Effect of exchange rates relates to foreign currency translation adjustments for the period.

(1) Working capital adjustments related to the acquisition of Northwest Logic, Inc.

(“Northwest Logic”).

As of December 31, 2020

1 unchanged sentence

Total goodwill $ 204,992 $ ( 21,770 ) $ 183,222

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Intangible Assets

Intangible Assets, Net

The components of the Company’s intangible assets as of December 31, 2021 and December 31, 2020 were as follows:

As of December 31, 2021

(In thousands, except useful life) Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount

(In thousands, except useful life) Useful Life Gross Carrying Amount (1)

Accumulated Amortization (1)

Net Carrying Amount

Existing technology 3 to 10 years $ 292,058 $ ( 247,422 ) $ 44,636

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Total intangible assets $ 341,351 $ ( 282,931 ) $ 58,420

______________________________________

(1) In July 2021, the Company acquired AnalogX and in August 2021, the Company acquired PLDA, which resulted in the Company recognizing additional intangible assets.

Refer to Note 21, “Acquisitions,” for additional information.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2020

(In thousands, except useful life) Useful Life Gross Carrying Amount (1) (2)

Accumulated Amortization

Net Carrying Amount

(In thousands, except useful life) Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Existing technology 3 to 10 years $ 263,789 $ ( 230,950 ) $ 32,839

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Total intangible assets $ 301,982 $ ( 265,495 ) $ 36,487

_________________________________________

(1) In October 2019, the Company disposed of approximately $ 20.7 million of net intangible assets in connection with the sale of the legal entities comprising the Company’s Payments and Ticketing businesses.

Refer to Note 17, “Divestiture,” for additional information.

(2) In August 2019, the Company acquired Northwest Logic, and in December 2019, the Company acquired the Secure Silicon IP and Protocols business, which resulted in the Company recognizing additional intangible assets.

Refer to Note 21, “Acquisitions,” for additional information.

Amortization expense for intangible assets for the years ended December 31, 2021, 2020, and 2019 was $ 17.5 million, $ 18.4 million, and $ 17.1 million, respectively.

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The Company has determined its CODM to be the Chief Executive Officer (“CEO”).

The CEO reviews financial information presented on a consolidated basis for purposes of managing the business, allocating resources, making operating

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

decisions and assessing financial performance.

The CEO reviews financial information presented on a consolidated basis for purposes of managing the business, allocating resources, making operating decisions and assessing financial performance.

On this basis, the Company is organized and operates as a single segment within the semiconductor space.

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Customer 3 * 14 %

Customer 4 * 11 %

_________________________________________

* Customer accounted for less than 10% of total accounts receivable in the period.

Revenue from the Company’s major customers representing 10% or more of total revenue for the years ended December 31, 2020, 2019 and 2018 was as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Revenue from the Company’s major customers representing 10% or more of total revenue for the years ended December 31, 2021, 2020 and 2019, respectively, was as follows:

Years Ended December 31,

2020 2019 2018

Customer 2021 2020 2019

Customer A 21 % 12 % *

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Customer D * * 14 %

_________________________________________

* Customer accounted for less than 10% of total revenue in the period.

Revenue from customers in the geographic regions based on the location of contracting parties was as follows:

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USA $ 211,419 $ 137,614 $ 134,526

Singapore 39,798 28,034 21,751

Asia-Other 28,949 26,249 14,356

Taiwan 23,953 21,803 24,118

South Korea 3,664 3,583 13,421

Japan 14,894 20,437 15,453

South Korea 6,007 3,664 3,583

Europe 3,165 7,359 10,262

Canada 119 1,162 3,554

Singapore 28,034 21,751 19,140

Asia-Other 26,249 14,356 3,474

Total $ 328,304 $ 246,322 $ 227,603

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government-sponsored obligations, commercial paper, corporate notes and bonds, money market funds and municipal notes and bonds that mature within three years .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All cash equivalents and marketable securities are classified as available-for-sale.

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As of December 31, 2021

(Dollars in thousands) Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Weighted Rate of Return

(In thousands) Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Weighted Rate of Return

Money market funds $ 7,402 $ 7,402 $ — $ — 0.02 %

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$ 485,609 $ 486,672 $ 8 $ ( 1,071 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2020

(Dollars in thousands) Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Weighted Rate of Return

(In thousands) Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Weighted Rate of Return

Money market funds $ 18,162 $ 18,162 $ — $ — 0.01 %

6 unchanged sentences

$ 502,649 $ 502,707 $ 64 $ ( 122 )

Available-for-sale securities are reported at fair value on the balance sheets and classified as follows:

Available-for-sale securities are reported at fair value on the balance sheets and classified along with cash as follows:

As of December 31,

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$ 485,609 $ 502,649

The Company continues to invest in highly rated quality, highly liquid debt securities.

The Company continues to invest in highly rated and highly liquid debt securities.

The Company holds all of its marketable securities as available-for-sale, marks them to market, and regularly reviews its portfolio to ensure adherence to its investment policy and to monitor individual investments for risk analysis, proper valuation, and unrealized losses that may be other than temporary.

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Total cash equivalents and marketable securities in a continuous unrealized loss position $ 338,605 $ 251,897 $ ( 1,071 ) $ ( 122 )

The gross unrealized loss at December 31, 2020 and 2019 was not material in relation to the Company’s total available-for-sale portfolio.

The gross unrealized loss can be primarily attributed to a combination of market conditions as well as the demand for and duration of the U.S.

government-sponsored obligations and corporate notes and bonds.

The Company reasonably

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

believes that there is no need to sell these investments and that it can recover the amortized cost of these investments.

The gross unrealized losses at December 31, 2021 and 2020 were not material in relation to the Company’s total available-for-sale portfolio.

The gross unrealized losses can be primarily attributed to a combination of market conditions, as well as the demand for and duration of the U.S.

government-sponsored obligations and corporate notes, bonds and commercial paper.

The Company reasonably believes that there is no need to sell these investments and that it can recover the amortized cost of these investments.

The Company has found no evidence of impairment due to credit losses in its portfolio.

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However, the Company cannot provide any assurance that its portfolio of cash, cash equivalents and marketable securities will not be impacted by adverse conditions in the financial markets, which may require the Company in the future to record an impairment charge for credit losses which could adversely impact its financial results.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The contractual maturities of cash equivalents (excluding money market funds which have no maturity) and marketable securities are summarized as follows:

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The Company’s equity method investments are initially recognized at cost, and the carrying amount is increased or decreased to recognize the Company’s share of the profit or loss of the investee after the date of acquisition.

The Company’s share of the investee’s profit or loss is recognized in the Company’s consolidated statements of operations.

The Company’s share of the investee’s profit or loss is recognized on the Company’s consolidated statements of operations.

Distributions received from an investee reduce the carrying amount of the investment.

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Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The Company does not have any financial assets in Level 3 as of December 31, 2020 and 2019.

The Company does not have any financial assets or liabilities in Level 3 as of December 31, 2021 and 2020, except for the Company’s liability for the contingent earn-out consideration related to the PLDA acquisition.

The Company has classified this liability within Level 3 of the fair value hierarchy because the fair value is determined using significant unobservable inputs.

Refer to Note 21, “Acquisitions , ” for further details.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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Government bonds and notes 169,633 — 169,633 —

Corporate notes, bonds commercial paper 314,391 — 314,391 —

Corporate notes, bonds and commercial paper 253,391 — 253,391 —

Total available-for-sale securities

2 unchanged sentences

The Company monitors its investments for other-than-temporary losses by considering current factors, including the economic environment, market conditions, operational performance and other specific factors relating to the business underlying the investment, reductions in carrying values when necessary and the Company’s ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery in the market.

Any other-than-temporary loss is reported under “Interest and other income (expense), net” in the consolidated statement of operations.

Any other-than-temporary loss is reported under “Interest and other income (expense), net” on the consolidated statement of operations.

During the years ended December 31, 2021 and 2020, the Company recorded no other-than-temporary impairment charges on its investments.

1 unchanged sentence

This equity investment is accounted for under the equity method of accounting, and the Company accounts for its equity method share of the income (loss) on a quarterly basis.

As of December 31, 2020, the Company’s 25.0 % ownership percentage amounted to a $ 2.8 million equity interest in this equity investment.

As of December 31, 2019, the Company’s 25.0 % ownership percentage amounted to a $ 3.6 million equity interest in this equity investment.

The Company’s equity interest was included in other assets on the accompanying consolidated balance sheets.

The Company recorded immaterial amounts in its consolidated statements of operations representing its share of the investee’s loss for the years ended December 31, 2020 and 2019.

As of December 31, 2021 and December 31, 2020, the carrying value of the Company’s 25.0 % ownership percentage was $ 1.8 million and $ 2.8 million, respectively, which were included in other assets on the accompanying consolidated balance sheets.

The Company recorded immaterial amounts on its consolidated statements of operations representing its share of the investee’s loss for the years ended December 31, 2021, 2020 and 2019.

During the years ended December 31, 2021 and 2020, there were no transfers of financial instruments between different categories of fair value.

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The fair value of the convertible notes at each balance sheet date is determined based on recent quoted market prices for these notes which is a level 2 measurement.

As discussed in Note 12, “Convertible Notes,” as of December 31, 2020, the convertible notes are carried at their face value of $172.5 million, less any unamortized debt discount and unamortized debt

As discussed in Note 12, “Convertible Notes,” as of December 31, 2021, the convertible notes were carried at their face value of $172.5 million, less any unamortized debt discount and unamortized debt issuance costs.

The carrying value of other financial instruments, including accounts receivable, accounts payable and other liabilities, approximated fair value due to their short maturities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

issuance costs.

The carrying value of other financial instruments, including accounts receivable, accounts payable and other liabilities, approximates fair value due to their short maturities.

Information regarding the Company’s goodwill and long-lived assets balances are disclosed in Note 6, Intangible Assets and Goodwill.”

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The Amended Lease has a term of 128 months from the amended commencement date in April 2020.

The starting rent of the Amended Lease is approximately $ 3.26 per square foot on a triple net basis.

The starting rent of the Amended Lease was approximately $ 3.26 per square foot on a triple net basis.

The annual base rent increases each year to certain fixed amounts over the course of the term as set forth in the Amended Lease and will be $ 4.38 per square foot in the final year of the Amended Lease term.

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Pursuant to the terms of the Amended Lease, the landlord agreed to reimburse the Company up to $ 9.0 million related to a tenant improvement allowance.

The lease of the Company’s Sunnyvale, California, headquarters expired on June 30, 2020.

Refer to Note 13, “Commitments and Contingencies,” for additional information regarding the Company’s leases.

During the year ended December 31, 2021, the Company received approximately $ 9.0 million from the landlord in total reimbursements related to the tenant improvement allowance.

The table below reconciles the undiscounted cash flows for the first five years and total of the remaining years to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2021 (in thousands):

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As of December 31, 2021, the weighted-average remaining lease term for the Company’s operating leases was 7.9 years, and the weighted-average discount rate used to determine the present value of the Company’s operating leases was 4.5 %.

Operating lease costs included in research and development and selling, general and administrative costs on the statement of operations were $ 9.5 million and $ 9.6 million for the years ended December 31, 2020 and 2019, respectively.

Rent expense, recorded under accounting guidance in effect prior to January 1, 2019 when the New Leasing Standard became effective for the Company, was approximately $ 5.2 million for the year ended December 31, 2018.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 7.2 million for the year ended December 31, 2020.

Operating lease costs included in research and development and selling, general and administrative costs on the statements of operations were $ 7.4 million and $ 9.5 million for the years ended December 31, 2021 and 2020, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities were $ 7.8 million and $ 7.2 million for the years ended December 31, 2021 and 2020, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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Computer equipment 34,484 32,122

Furniture and fixtures 11,100 16,136

Leasehold improvements 34,120 9,658

Machinery 14,840 10,378

Furniture and fixtures 13,328 11,100

Construction in progress 1,813 27,250

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The 2023 Notes will mature on February 1, 2023, unless earlier repurchased by the Company or converted pursuant to their terms.

The Company incurred transaction costs of approximately $ 3.3 million related to the issuance of 2023 Notes.

The Company incurred transaction costs of approximately $ 3.3 million related to the issuance of the 2023 Notes.

In accounting for these costs, the Company allocated the costs to the liability and equity components in proportion to the allocation of proceeds from the issuance of the 2023 Notes to such components.

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The 2023 Notes are the Company’s senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the notes;

equal in right of payment with the Company’s existing and future liabilities that are not so subordinated, including its “2018 Notes”;

equal in right of payment with the Company’s existing and future liabilities that are not so subordinated;

effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness;

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Holders of the 2023 Notes and Convertible Note Hedge Transactions will not have any rights with respect to the Warrants.

The amounts paid and received for the Convertible Note Hedge Transactions and Warrants have been recorded in additional paid-in capital in the consolidated balance sheets.

The amounts paid and received for the Convertible Note Hedge Transactions and Warrants have been recorded in additional paid-in capital on the consolidated balance sheets.

The fair value of the Convertible Note Hedge Transactions and Warrants are not re-measured through earnings each reporting period.

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Impact to Earnings per Share.

The 2023 Notes will have no impact to diluted earnings per share until the average price of our Common Stock exceeds the conversion price of $18.93 per share because the principal amount of the 2023 Notes is required to be settled in cash upon conversion.

During the year ended December 31, 2021, the Company’s stock price exceeded the 2023 Notes' conversion price of $18.93 per share, due to which approximately 1.4 million shares for the year ended December 31, 2021 were included in the weighted-average dilutive shares.

Under the treasury stock method, in periods the Company reports net income, the Company is required to include the effect of additional shares that may be issued under the 2023 Notes when the price of the Company’s Common Stock exceeds the conversion price.

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However, upon conversion, the Convertible Note Hedge Transactions would neutralize the dilution from the 2023 Notes so that there would only be dilution from the warrants.

1.125% Convertible Senior Notes due 2018.

On August 16, 2013, the Company issued $ 138.0 million aggregate principal amount of 1.125% convertible senior notes pursuant to an indenture (the “2018 Indenture”) by and between the Company and U.S.

Bank National Association, as the trustee.

The 2018 Notes matured on August 15, 2018 (the “Maturity Date”), subject to earlier repurchase or conversion.

In accounting for the 2018 Notes at issuance, the Company separated the 2018 Notes into liability and equity components pursuant to the accounting standards for convertible debt instruments that may be fully or partially settled in cash upon conversion.

As of the date of issuance, the Company determined that the liability component of the 2018 Notes was $ 107.7 million and the equity component of the 2018 Notes was $ 30.3 million.

The fair value of the liability component was estimated using an interest rate for a similar instrument without a conversion feature.

The unamortized discount related to the 2018 Notes was amortized to interest expense using the effective interest method over five years through August 2018.

The Company paid cash interest at an annual rate of 1.125 % of the principal amount at issuance, semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2014.

The Company incurred transaction costs of approximately $ 3.6 million related to the issuance of 2018 Notes.

In accounting for these costs, the Company allocated the costs to the liability and equity components in proportion to the allocation of proceeds from the issuance of the 2018 Notes to such components.

Transaction costs allocated to the liability component of $ 2.8 million were recorded as deferred offering costs and were amortized to interest expense using the effective interest method over five years (the expected term of the debt).

The transaction costs allocated to the equity component of $ 0.8 million were recorded as additional paid-in capital.

The 2018 Notes were the Company’s general unsecured obligations, ranking equally in right of payment to all of Rambus’ existing and future senior unsecured indebtedness, including the 2023 Notes, and senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated to the 2018 Notes.

The 2018 Notes were convertible into shares of the Company’s common stock at an initial conversion rate of 82.8329 shares of common stock per $ 1,000 principal amount of 2018 Notes, subject to adjustment in certain events.

This is equivalent to an initial conversion price of approximately $ 12.07 per share of common stock.

Holders may have surrendered their 2018 Notes for conversion prior to the close of business day immediately preceding May 15, 2018 only under the following circumstances:

( 1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2013 (and only during such calendar quarter), if the closing sale price of the common stock for 20 or more trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 130 % of the conversion price per share of common stock on the last trading day of the preceding calendar quarter;

(2) during the five business day period after any five consecutive trading day period (the ‘‘measurement period’’) in which the trading price per $ 1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the closing sale price of the Company’s common stock and the conversion rate on each such trading day;

(3) upon the occurrence of specified distributions to holders of the Company’s common stock;

or (4) upon the occurrence of specified corporate events.

On or after May 15, 2018 until the close of business on the second scheduled trading day immediately preceding the Maturity Date, holders may have converted their notes at any time, regardless of the foregoing circumstances.

If a holder elected to convert its 2018 Notes in connection with certain fundamental changes, as that term is defined in the 2018 Indenture, that occurred prior to the Maturity Date, the Company would have, in certain circumstances, increased the conversion rate for 2018 Notes converted in connection with such fundamental changes by a specified number of shares of common stock.

Upon conversion of the 2018 Notes, the Company would have paid cash up to the aggregate principal amount of the notes to have been converted and paid or delivered, as the case may be, cash, shares of the Company’s common stock or a combination

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of cash and shares of the Company’s common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the notes converted, as specified in the Indenture.

During the third quarter of 2018, the Company paid upon maturity the remaining $ 81.2 million in aggregate principal amount of the 2018 Notes.

Additionally, the Company delivered 423,873 shares of the Company’s common stock as settlement related to the in-the-money conversion feature of the 2018 Notes at maturity.

The value of the shares delivered was approximately $ 5.0 million.

As of December 31, 2020, none of the conversion conditions were met related to the 2023 Notes.

Therefore, the classification of the entire equity component for the 2023 Notes in permanent equity is appropriate as of December 31, 2020.

In December 2021, the trigger for early conversion of the 2023 Notes was met as the last reported sale price of the Company’s common stock exceeded 130% of the conversion price of the 2023 Notes for more than 20 trading days during the 30 consecutive trading days ended December 31, 2021.

As a result, the 2023 Notes will be convertible at the option of the holders during the first quarter of 2022, and the net carrying amount of the 2023 Notes was reclassified to current liabilities on the consolidated balance sheet as of December 31, 2021.

Interest expense related to the notes for the years ended December 31, 2021, 2020 and 2019 was as follows:

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2023 Notes amortization of discount and debt issuance cost at an additional effective interest rate of 4.9% 7,656 7,243 6,854

2018 Notes coupon interest at a rate of 1.125% — — 377

2018 Notes amortization of discount and debt issuance cost at an additional effective interest rate of 5.5% — — 2,756

Total interest expense on convertible notes

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Commitments and Contingencies

On December 15, 2009, the Company entered into a lease agreement for approximately 125,000 square feet of office space located at 1050 Enterprise Way in Sunnyvale, California, which commenced on July 1, 2010 and expired on June 30, 2020.

The office space was used for the Company’s corporate headquarters, as well as engineering, sales, marketing and administrative operations and activities.

Refer to Note 10, “Leases,” for information regarding the Company’s lease agreement for a new corporate headquarters in San Jose, California.

On November 17, 2017, the Company entered into an Indenture with U.S.

Bank National Association, as trustee, relating to the issuance by the Company of $172.5 million aggregate principal amount of the 2023 Notes.

Refer to Note 12, “Convertible Notes,” for additional details.

As of December 31, 2020, the Company’s material contractual obligations were as follows (in thousands):

Total 2021 2022 2023 2024 2025

As of December 31, 2021, the Company’s material contractual obligations were as follows:

(In thousands) Total 2022 2023 2024 2025 2026

Contractual obligations (1) (2) (3)

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Convertible notes (6)

172,500 — 172,500 — — —

Interest payments related to convertible notes

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(3) The Company’s other contractual obligations as of December 31, 2021 were not material.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(4) The Company has commitments with various software vendors for agreements generally having terms longer than one year .

(5) In connection with the acquisitions of Northwest Logic in August 2019 and the Secure Silicon IP and Protocols business in December 2019, the Company is obligated to pay retention bonuses to certain employees subject to certain eligibility and acceleration provisions including the condition of employment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(5) In connection with the acquisitions of Northwest Logic in the third quarter of 2019 and the Secure Silicon IP and Protocols business in the fourth quarter of 2019, and the acquisitions of AnalogX and PLDA in the third quarter of 2021, the Company is obligated to pay retention bonuses to certain employees subject to certain eligibility and acceleration provisions including the condition of employment.

(6) On November 17, 2017, the Company entered into an Indenture with U.S.

Bank National Association, as trustee, relating to the issuance by the Company of $172.5 million aggregate principal amount of the 2023 Notes.

Refer to Note 12, Convertible Notes,” for additional details.

Indemnifications

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Indemnification covers customers for losses suffered or incurred by them as a result of any patent, copyright, or other IP infringement or any other claim by any third party arising as result of the applicable agreement with the Company.

The Company generally attempts to limit the maximum amount of indemnification that the Company could be required to make under these agreements to the amount of fees received by the Company, however, this is not always possible.

The fair value of the liability as of December 31, 2021 and 2020 was not material.

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Total shares available for grant as of December 31, 2020 12,412,320

Increase in shares approved for issuance (5)

Stock options granted

Stock options forfeited

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______________________________________

(1) For purposes of determining the number of shares available for grant under the 2015 Plan against the maximum number of shares authorized, each restricted stock granted reduces the number of shares available for grant by 1.5 shares and each restricted stock forfeited increases shares available for grant by 1.5 shares.

(2) Amount includes 0.5 million shares that had been reserved for potential future issuance related to certain performance unit awards discussed under the section titled “Nonvested Equity Stock and Stock Units” below.

(1) Shares were reserved under the 2019 Inducement Plan adopted in the third quarter of 2019.

(4) Amount includes 1.0 million shares that have been reserved for potential future issuance related to certain performance unit awards discussed under the section titled “Nonvested Equity Stock and Stock Units” below.

(2) For purposes of determining the number of shares available for grant under the 2015 Plan against the maximum number of shares authorized, each restricted stock granted reduces the number of shares available for grant by 1.5 shares and each restricted stock forfeited increases shares available for grant by 1.5 shares.

(3) Amount includes approximately 1.0 million shares that have been reserved for potential future issuance related to certain performance unit awards discussed under the section titled “Nonvested Equity Stock and Stock Units” below.

(4) On April 30, 2020, the Company’s stockholders approved an additional 7,800,000 shares for issuance under the 2015 Plan.

(6) Amount includes 0.5 million shares that have been reserved for potential future issuance related to certain performance unit awards discussed under the section titled “Nonvested Equity Stock and Stock Units” below.

(5) Amount includes approximately 0.5 million shares that have been reserved for potential future issuance related to certain performance unit awards discussed under the section titled “Nonvested Equity Stock and Stock Units” below.

(6) Amount includes approximately 0.4 million shares that have been reserved for potential future issuance related to certain performance unit awards granted in the first quarter of 2021 and discussed under the section titled “Nonvested Equity Stock and Stock Units” below .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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The following table summarizes stock option activity under the Company’s equity incentive plans for the years ended December 31, 2021, 2020 and 2019 and information regarding stock options outstanding, exercisable, and vested and expected to vest as of December 31, 2021:

Options Outstanding Weighted-Average Remaining Contractual Term

Options Outstanding Weighted-Average Remaining Contractual Term (years)

(In thousands, except per share amounts and years) Number of Shares Weighted-Average Exercise Price Per Share Aggregate Intrinsic Value

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Options granted

40,000 $ 15.59

Options exercised

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During the years ended December 31, 2021, 2020, and 2019, the Company had one employee stock purchase plan, the 2015 Employee Stock Purchase Plan (“2015 ESPP”).

Employees generally will be eligible to participate in the plan if they are employed by Rambus for more than 20 hours per week and more than five months in a fiscal year.

Employees generally will be eligible to participate in the plan if they are employed by the Company for more than 20 hours per week and more than five months in a fiscal year.

The 2015 ESPP provides for six-month offering periods, with a new offering period commencing on the first trading day on or after May 1 and November 1 of each year.

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Employees generally may not purchase more than the number of shares having a value greater than $25,000 in any calendar year, as measured at the purchase date.

The Company issued 467,065 shares at a weighted-average price of $ 10.51 per share during the year ended December 31, 2020.

The Company issued 629,438 shares at a weighted-average price of $ 8.53 per share during the year ended December 31, 2019.

The Company issued 541,395 shares at a weighted-average price of $ 9.99 per share during the year ended December 31, 2018.

The Company issued 384,087 shares at a price of $ 12.95 per share during the year ended December 31, 2021.

The Company issued 467,065 shares at a price of $ 10.51 per share during the year ended December 31, 2020.

The Company issued 629,438 shares at a price of $ 8.53 per share during the year ended December 31, 2019.

On April 30, 2020, the Company's stockholders approved an additional 2,000,000 shares to be reserved for issuance under the 2015 ESPP.

As of December 31, 2020, 3,198,375 shares under the ESPP remained available for issuance.

As of December 31, 2021, 2.8 million shares under the ESPP remained available for issuance.

Stock-Based Compensation

Stock Options

There were no stock options granted during the year ended December 31, 2021.

During the years ended December 31, 2020 and 2019, the number of stock options granted were not material.

During the year ended December 31, 2018, Rambus granted 711,479 stock options with an estimated total grant-date fair value of $ 3.0 million.

During the years ended December 31, 2020, 2019 and 2018, Rambus recorded stock-based compensation related to stock options of $ 0.6 million, $ 1.0 million and $ 1.7 million, respectively.

During the years ended December 31, 2021, 2020 and 2019, the Company recorded stock-based compensation related to stock options of $ 0.4 million, $ 0.6 million and $ 1.0 million, respectively.

As of December 31, 2021, there was $ 0.4 million of total unrecognized compensation cost, net of expected forfeitures, related to unvested stock-based compensation arrangements granted under the stock option plans.

This cost is expected to be recognized over a weighted-average period of 1.4 years .

The total fair value of options vested for the years ended December 31, 2020, 2019 and 2018 was $ 3.3 million, $ 6.7 million and $ 12.9 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Employee Stock Purchase Plans

During the years ended December 31, 2020, 2019 and 2018, Rambus recorded stock-based compensation related to the ESPP of $ 1.5 million, $ 1.5 million and $ 1.4 million, respectively.

The total fair value of options vested f or the years ended December 31, 2021, 2020 and 2019 was $ 2.0 million, $ 3.3 million and $ 6.7 million, respectively.

Employee Stock Purchase Plan

During the years ended December 31, 2021, 2020 and 2019, the Company recorded stock-based compensation related to the 2015 ESPP of $ 1.4 million, $ 1.5 million and $ 1.5 million, respectively.

As of December 31, 2021, there was $ 0.6 million of total unrecognized compensation cost related to stock-based compensation arrangements granted under the 2015 ESPP.

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Valuation Assumptions

Rambus estimates the fair value of stock awards using the BSM model.

The BSM model determines the fair value of stock-based compensation and is affected by Rambus’ stock price on the date of the grant as well as assumptions regarding a number of highly complex and subjective variables.

The Company estimates the fair value of stock awards using the BSM model.

The BSM model determines the fair value of stock-based compensation and is affected by the Company’s stock price on the date of the grant, as well as assumptions regarding a number of highly complex and subjective variables.

These variables include expected volatility, expected life of the award, expected dividend rate, and expected risk-free rate of return.

The assumptions for expected volatility and expected life are the two assumptions that significantly affect the grant-date fair value.

If actual results differ significantly from these estimates, stock-based compensation expense and Rambus’ results of operations could be materially impacted.

If actual results differ significantly from these estimates, stock-based compensation expense and the Company’s results of operations could be materially impacted.

The fair value of stock awards is estimated as of the grant date using the BSM option-pricing model assuming a dividend yield of 0% and the additional weighted-average assumptions as listed in the table below.

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Stock Option Plan for Years Ended December 31,

2020 2019 2018

Stock Option Plan

Expected stock price volatility

38 % 33%-36% 24%-32%

Risk free interest rate

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Expected term (in years)

5.5 5.1-5.2 5.8

Weighted-average fair value of stock options granted $ 5.46 $ 4.36

There were no stock options granted during the year ended December 31, 2021.

Employee Stock Purchase Plan for Years Ended December 31,

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Expected Stock Price Volatility:

Given the volume of market activity in its market traded options, Rambus determined that it would use the implied volatility of its nearest-to-the-money traded options.

Given the volume of market activity in its market traded options, the Company determined that it would use the implied volatility of its nearest-to-the-money traded options.

The Company believes that the use of implied volatility is more reflective of market conditions and a better indicator of expected volatility than historical volatility.

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Risk-free Interest Rate:

Rambus bases the risk-free interest rate used in the BSM valuation method on implied yield currently available on the U.S.

The Company bases the risk-free interest rate used in the BSM valuation method on implied yield currently available on the U.S.

Treasury zero-coupon issues with an equivalent term.

Where the expected terms of Rambus’ stock-based awards do not correspond with the terms for which interest rates are quoted, Rambus uses an approximation based on rates on the closest term currently available.

Where the expected terms of the Company’s stock-based awards do not correspond with the terms for which interest rates are quoted, the Company uses an approximation based on rates on the closest term currently available.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Expected Term:

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The expected term of ESPP grants is based upon the length of each respective purchase period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Nonvested Equity Stock and Stock Units

The Company grants nonvested equity stock units to officers, directors and employees.

The Company grants nonvested equity stock units to officers, employees and directors.

For the years ended December 31, 2021, 2020 and 2019, the Company granted nonvested equity stock units totaling 2.4 million, 2.0 million and 4.2 million shares, respectively.

These awards have a service condition, generally a service period of four years , except in the case of grants to directors, for which the service period is one year .

For the years ended December 31, 2020, 2019 and 2018, the fair value of nonvested equity stock units at the date of grant was approximately $ 31.0 million, $ 43.0 million and $ 38.1 million, respectively.

For the years ended December 31, 2021, 2020 and 2019, the nonvested equity stock units were valued at the date of grant, giving them a fair value of approximately $ 50.1 million, $ 31.0 million and $ 43.0 million, respectively.

During the years ended December 31, 2021, 2020 and 2019, the Company granted performance unit awards to certain Company executive officers with vesting subject to the achievement of certain performance and/or market conditions.

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The shares earned will vest on the third anniversary of the date of grant.

The Company’s shares available for grant has been reduced to reflect the shares that could be earned at the maximum target.

The Company’s shares available for grant have been reduced to reflect the shares that could be earned at the maximum target.

For the years ended December 31, 2021, 2020 and 2019, the Company recorded stock-based compensation expense of approximately $ 25.7 million, $ 23.7 million and $ 23.9 million, respectively, related to all outstanding nonvested equity stock grants.

Unrecognized stock-based compensation related to all nonvested equity stock grants, net of an estimate of forfeitures, was approximately $ 34.5 million at December 31, 2020.

This cost is expected to be recognized over a weighted-average period of 2.1 years.

The following table reflects the activity related to nonvested equity stock and stock units for the three years ended December 31, 2020:

Unrecognized compensation cost related to all nonvested equity stock grants, net of estimated forfeitures, was approximately $ 43.0 million at December 31, 2021.

This amount is expected to be recognized over a weighted-average period of 2.0 years.

The following table reflects the activity related to nonvested equity stock and stock units for the years ended December 31, 2021, 2020 and 2019:

Nonvested Equity Stock and Stock Units Shares Weighted-Average

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Stockholders’ Equity

On January 21, 2015, the Company’s Board approved a share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares (the “2015 Repurchase Program”).

Share repurchases under the 2015 Repurchase Program were made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules, and regulations.

During the years ended December 31, 2020 and 2019, the Company did not repurchase any shares of its common stock under the 2015 Repurchase Program.

On October 29, 2020, the Company’s Board approved a new share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares (the “2020 Repurchase Program”).

Share Repurchase Programs

On October 29, 2020, the Board approved a new share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares (the “2020 Repurchase Program”).

Share repurchases under the 2020 Repurchase Program may be made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules, and regulations.

There is no expiration date applicable to the 2020 Repurchase Program.

The 2020 Repurchase Program replaced the previous program approved by the Board in January 2015 and canceled the remaining shares outstanding as part of the previous authorization.

The 2020 Repurchase Program

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

replaced the previous program approved by the Board in January 2015 and canceled the remaining shares outstanding as part of the previous authorization.

During the years ended December 31, 2021 and 2020, the Company repurchased shares of its common stock under the 2020 Repurchase Program as discussed below.

On November 11, 2020, the Company entered into an accelerated share repurchase program with Deutsche Bank AG, London Branch as counterparty, through its agent Deutsche Bank Securities Inc.

(“Deutsche Bank”) (the “2020 ASR Program”).

The 2020 ASR Program was part of the broader share repurchase program previously authorized by the Company’s Board on October 29, 2020.

The 2020 ASR Program was part of the share repurchase program previously authorized by the Company’s Board on October 29, 2020.

Under the 2020 ASR Program, the Company pre-paid to Deutsche Bank the $ 50.0 million purchase price for its common stock and, in turn, the Company received an initial delivery of approximately 2.6 million shares of its common stock from Deutsche Bank in the fourth quarter of 2020, which were retired and recorded as a $ 40.0 million reduction to stockholders’ equity.

The remaining $ 10.0 million of the initial payment was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to the Company’s stock.

The number of shares to be ultimately purchased by the Company will be determined based on the volume-weighted-average price of the common stock during the terms of the transaction, minus an agreed upon discount between the parties.

The 2020 ASR Program is expected to be completed within six months from the beginning of the program.

There were no other repurchases of the Company’s common stock during 2020.

As of December 31, 2020, there remained an outstanding authorization to repurchase approximately 17.4 million shares of the Company’s outstanding common stock under the current share repurchase program.

The Company records share repurchases as a reduction to stockholders’ equity.

During the second quarter of 2021, the accelerated share repurchase program was completed and the Company received an additional 0.1 million shares of its common stock, which were retired, as the final settlement of the accelerated share repurchase program.

On June 15, 2021, the Company entered into an accelerated share repurchase program with Deutsche Bank (the “2021 ASR Program”).

The 2021 ASR Program was part of the share repurchase program previously authorized by the Board on October 29, 2020.

Under the 2021 ASR Program, the Company pre-paid to Deutsche Bank the $ 100.0 million purchase price for its common stock and, in turn, the Company received an initial delivery of approximately 3.9 million shares of its common stock from Deutsche Bank in the second quarter of 2021, which were retired and recorded as a $ 80.0 million reduction to stockholders’ equity.

The remaining $ 20.0 million of the initial payment was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to the Company’s stock.

During the fourth quarter of 2021, the accelerated share repurchase program was completed and the Company received an additional 0.4 million shares of its common stock, which were retired, as the final settlement of the accelerated share repurchase program.

During the year ended December 31, 2021, there were no other repurchases of the Company’s common stock under the 2020 Repurchase Program.

As of December 31, 2021, there remained an outstanding authorization to repurchase approximately 12.9 million shares of the Company’s outstanding common stock under the 2020 Repurchase Program.

The Company records stock repurchases as a reduction to stockholders’ equity.

The Company records a portion of the purchase price of the repurchased shares as an increase to accumulated deficit when the price of the shares repurchased exceeds the average original proceeds per share received from the issuance of common stock.

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Warrant Transactions

On November 14, 2017 and November 16, 2017, in connection with the 2023 Notes, the Company sold the Warrants to the Counterparties to acquire, collectively, subject to anti-dilution adjustments, approximately 9.1 million shares of the Common Stock at an initial strike price of approximately $23.30 per share, which represents a premium of 60% over the last reported sale price of the Common Stock of $14.56 on November 14, 2017.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock at an initial strike price of approximately $23.30 per share, which represents a premium of 60% over the last reported sale price of the Common Stock of $14.56 on November 14, 2017.

The Company received aggregate proceeds of approximately $23.2 million from the sale of the Warrants to the Counterparties.

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Benefit Plans

Rambus has a 401(k) Plan (the “401(k) Plan”) qualified under Section 401(k) of the Internal Revenue Code of 1986.

The Company has a 401(k) Plan (the “401(k) Plan”) qualified under Section 401(k) of the Internal Revenue Code of 1986.

Each eligible employee may elect to contribute up to 60 % of the employee’s annual compensation to the 401(k) Plan, up to the Internal Revenue Service limit.

Rambus, at the discretion of its Board of Directors, may match employee contributions to the 401(k) Plan.

The Company, at the discretion of its Board of Directors, may match employee contributions to the 401(k) Plan.

The Company matches 50 % of eligible employee’s contribution, up to the first 6 % of an eligible employee’s qualified earnings.

For the years ended December 31, 2020, 2019 and 2018, Rambus made matching contributions totaling approximately $ 1.8 million, $ 2.0 million and $ 2.1 million, respectively.

For the years ended December 31, 2021, 2020 and 2019, the Company made matching contributions totaling approximately $ 1.8 million, $ 1.8 million and $ 2.0 million, respectively.

During the second quarter of 2019, the Company entered into a share purchase agreement with Visa International Service Association (the “Purchaser”), pursuant to which the Purchaser agreed to acquire all of the outstanding shares of the Company’s subsidiary, Smart Card Software Limited, which comprises the Company’s Payments and Ticketing businesses, which was part of the Company’s former Rambus Security Division (“RSD”) segment.

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In connection with this restructuring program, the Company initiated a plan of termination resulting in a reduction of approximately 70 employees.

During the year ended December 31, 2020, the Company recorded charges of approximately $ 3.3 million related primarily to the reduction in workforce.

During the year ended December 31, 2020, the Company paid approximately $ 0.9 million of the total charges.

As of December 31, 2020, the Company’s accrued restructuring balance was approximately $ 2.4 million.

The 2020 Restructuring Plan is expected to be substantially completed in the first half of 2021.

During the years ended December 31, 2021 and 2020, the Company

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recorded charges of approximately $ 0.4 million and $ 3.3 million, respectively, related primarily to the reduction in workforce.

The 2020 Restructuring Plan was completed in the second quarter of 2021.

2019 Restructuring Plan

3 unchanged sentences

The 2019 Restructuring Plan was substantially completed in the second quarter of 2020.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2018 Restructuring Plan

On January 30, 2018, the Company announced its plans to close its lighting division and manufacturing operations in Brecksville, Ohio, (“the 2018 Restructuring Plan”).

The Company believed that such business was not core to its strategy and growth objectives.

In connection therewith, the Company terminated approximately 50 employees, and began the process to exit the facilities in Ohio and sell the related equipment.

The Company expected to record restructuring charges of approximately $ 2.0 million to $ 5.0 million related to employee terminations and severance costs and facility related costs.

During the year ended December 31, 2018, the Company recorded a net charge of $ 2.2 million, primarily related to the reduction in workforce, of which $ 2.0 million was related to the lighting division and $ 0.2 million was related to corporate support functions.

The 2018 Restructuring Plan was completed as of December 31, 2019.

The Company concluded that the closure of its lighting division did not meet the criteria for reporting as discontinued operations.

Consequently, the lighting division’s long-lived assets were reclassified as held for sale.

As of December 31, 2018, the Company sold all property, plant and equipment from its lighting division reclassified as held for sale on the consolidated balance sheets of approximately $ 3.5 million and recognized a gain on the disposal of the held for sale assets of approximately $ 1.2 million included in restructuring charges on the consolidated statements of operations.

Income (loss) before taxes consisted of the following:

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$ 23,286 $ ( 36,539 ) $ ( 82,548 )

The provision for (benefit from) income taxes was comprised of:

The provision for income taxes was comprised of:

Years Ended December 31,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The differences between Rambus’ effective tax rate and the U.S.

The differences between the Company’s effective tax rate and the U.S.

federal statutory regular tax rate were as follows:

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Divestiture — ( 20.4 ) 5.1

Acquisition 8.8 — —

Other ( 0.2 ) 0.8 ( 0.4 )

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Net operating loss carryovers 14,602 15,692

Capitalized research 22,301 —

Tax credits 130,348 168,978

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$ ( 19,938 ) $ ( 9,923 )

The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

negative, and the weight accorded to each, and concluded a full valuation allowance associated with U.S.

The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative.

During the third quarter of 2018, the Company assessed the changes in its underlying facts and circumstances and evaluated the realizability of its existing deferred tax assets based on all available evidence, both positive and negative, and the weight accorded to each, and concluded a full valuation allowance associated with U.S.

federal and California deferred tax assets was appropriate.

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85 and the temporary suspension of California net operating loss utilization for tax years 2020 through 2022, the Company released $ 0.7 million of the valuation allowance on its deferred tax asset for California research and development tax credits.

The Company continues to maintain a full valuation allowance on the remainder of its California and U.S.

In 2021, based on available evidence, the Company recorded a full valuation allowance on its California deferred tax assets.

The Company continues to maintain a full valuation allowance on its California and U.S.

federal deferred tax assets as it does not expect to be able to fully utilize them.

The following table presents the tax valuation allowance information for the years ended December 31, 2021, 2020 and 2019:

(In thousands) Balance at Beginning of Period Charged (Credited) to Operations Charged to Other Account* Valuation Allowance Release Valuation Allowance Set up Balance at End of Period

(In thousands) Balance at Beginning of Period Charged (Credited) to Operations Charged to Other Account* Valuation Allowance Release Balance at End of Period

Tax Valuation Allowance

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* Amounts not charged to operations are charged to other comprehensive income or retained earnings.

As of December 31, 2020, Rambus had California and other state net operating loss carryforwards of $ 202.2 million and $ 35.8 million, respectively.

As of December 31, 2020, Rambus had federal research and development tax credit carryforwards of $ 38.8 million and foreign tax credits of $ 123.5 million.

As of December 31, 2020, Rambus had California research and development tax credit carryforwards of $ 30.3 million and California alternative minimum tax credit carryforwards of $ 0.2 million.

As of December 31, 2021, the Company had California and other state net operating loss carryforwards of $ 202.0 million and $ 12.6 million, respectively.

As of December 31, 2021, the Company had federal research and development tax credit carryforwards of $ 41.7 million and foreign tax credits of $ 85.5 million.

As of December 31, 2021, the Company had California research and development tax credit carryforwards of $ 24.2 million and California alternative minimum tax credit carryforwards of $ 0.3 million.

The federal foreign tax credits and research and development credits begin to expire in 2022.

Approximately $ 9.9 million of federal foreign tax credits will expire in 2021.

Approximately $ 9.0 million of federal foreign tax credits would expire if not utilized in 2022.

The California net operating losses begin to expire in 2024.

The California research and development credits carry forward indefinitely.

In the event of a change in ownership, as defined under federal and state tax laws, Rambus’ net operating loss and tax credit carryforwards could be subject to annual limitations.

In the event of a change in ownership, as defined under federal and state tax laws, the Company’s net operating loss and tax credit carryforwards could be subject to annual limitations.

The annual limitations could result in the expiration of the net operating loss and tax credit carryforwards prior to utilization.

As of December 31, 2020, the Company had $134.0 million of unrecognized tax benefits including $ 23.6 million recorded as a reduction of long-term deferred tax assets, $ 109 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea (Korea), and $ 1.9 million recorded in long-term income taxes payable.

As a result of recent court rulings in Korea, the Company has determined that they may be entitled to refund claims for foreign taxes previously withheld from licensees in Korea.

The Company recognizes that there are numerous risks and uncertainties associated with the ultimate collection of this refund, and has therefore established an offsetting reserve for the entire amount of potentially refundable withholding taxes previously withheld in Korea.

If recognized, $ 110.9 million would be recorded as an income tax benefit in the consolidated statement of operations.

As of December 31, 2019, the Company had $115.7 million of unrecognized tax benefits including $ 22.8 million recorded as a reduction of long-term deferred tax assets, $ 91 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea (Korea), and $ 1.8 million recorded in long term income taxes payable.

As of December 31, 2021, the Company had $146.2 million of unrecognized tax benefits including $ 18.9 million recorded as a reduction of long-term deferred tax assets, $ 126.1 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea, and $ 1.3 million recorded to long-term income taxes payable.

As a result of recent court rulings in South Korea, the Company has determined that they may be entitled to refund claims for foreign taxes previously withheld from licensees in South Korea.

The Company recognizes that there are numerous risks and uncertainties associated with the ultimate collection of this refund and has therefore established an offsetting reserve for the entire amount of potentially refundable withholding taxes previously withheld in South Korea.

If recognized, $ 127.3 million would be recorded as an income tax benefit on the consolidated statement of operations.

As of December 31, 2020, the Company had $134.0 million of unrecognized tax benefits including $ 23.6 million recorded as a reduction of long-term deferred tax assets, $ 109.0 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea, and $ 1.9 million recorded to long term income taxes payable.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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( 1,586 ) ( 209 ) ( 472 )

( 5,606 ) — —

Balance at December 31

$ 146,215 $ 134,044 $ 115,653

Rambus recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision (benefit).

At December 31, 2020 and 2019, an immaterial amount of interest and penalties are included in long-term income taxes payable.

The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision (benefit).

At December 31, 2021 and 2020, an immaterial amount of interest and penalties is included in long-term income taxes payable.

Rambus files income tax returns for the U.S., California, India and various other state and foreign jurisdictions.

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In addition, any research and development credit carryforward or net operating loss carryforward generated in prior years and utilized in these or future years may also be subject to examination.

The India returns are subject to examination from fiscal year ending March 2012 and forward.

The Company is currently under examination by California for the 2010, 2011 and 2018 tax years.

The Company’s India subsidiary is under examination by the Indian tax administration for tax years beginning with 2011, except for 2014, which was assessed in the Company’s favor.

The Company settled its 2010, 2016 and 2018 audits with the California Franchise Tax Board in 2021, agreeing to the immaterial adjustments proposed.

The India returns are under examination by the Indian tax administration for tax years beginning with 2011, except for 2012 through 2014 which were assessed in the Company’s favor, and are subject to examination from 2015 and forward.

These examinations may result in proposed adjustments to the income taxes as filed during these periods.

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The Company records a contingent liability when it is probable that a loss has been incurred and the amount is reasonably estimable in accordance with accounting for contingencies.

2021 Acquisitions

On July 2, 2021 (the “AnalogX Closing Date”), the Company completed its acquisition of AnalogX, a premier interconnect IP company, by acquiring all of its outstanding shares.

The Company acquired AnalogX for total consideration of approximately $ 47.5 million, including certain adjustments for working capital, which consisted of $ 40.4 million in initial cash consideration at the AnalogX Closing Date and additional deferred payments totaling approximately $ 7.4 million, initially

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recorded at its present value of approximately $ 7.1 million, (the “Deferred Payments”).

The Deferred Payments will be paid in cash over three years following the AnalogX Closing Date, in three installments on each of the dates that are 12 months, 24 months and 36 months following the AnalogX Closing Date.

A portion of the purchase price, $ 5.9 million of the consideration, was deposited into an escrow account to fund indemnification obligations and other contractual provisions, to be released 12 months after the AnalogX Closing Date.

The addition of the technology and expertise from AnalogX augments the Company’s SerDes offerings and CXL memory interconnect initiative.

As part of the acquisition, the Company agreed to pay certain AnalogX employees $ 3.5 million in cash over three years following the AnalogX Closing Date (the “AnalogX Retention Bonus”), to be paid in three equal installments on each of the dates that are 12 months, 24 months and 36 months following the AnalogX Closing Date.

The AnalogX Retention Bonus payouts are subject to the condition of continued employment.

Therefore, the AnalogX Retention Bonus payouts will be treated as compensation and will be expensed ratably over the retention period.

As of December 31, 2021, the Company had incurred approximately $ 0.8 million in external acquisition costs in connection with the transaction, which were expensed as incurred.

The purchase price allocation and related accounting for this acquisition is preliminary.

The preliminary fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations and valuations and the Company’s estimates and assumptions for the acquisition are subject to change if the Company obtains additional information during the measurement period.

The fair value of the intangible assets acquired was determined by management primarily by using the estimated current replacement cost under the cost approach.

The fair values of the remaining assets acquired and liabilities assumed approximated their carrying values at the AnalogX Closing Date.

The Company performed a valuation of the net assets acquired as of the AnalogX Closing Date.

The total consideration from the acquisition was preliminarily allocated as follows:

(In thousands) Total

Cash and cash equivalents $ 2,763

Accounts receivable 280

Unbilled receivables 1,566

Prepaid expenses and other current assets 1,354

Identified intangible assets 6,800

Goodwill 38,326

Property, plant and equipment, net 118

Accounts payable ( 1,112 )

Deferred revenue ( 23 )

Income taxes payable ( 6,144 )

Other current liabilities ( 215 )

Total $ 47,513

The goodwill arising from the acquisition is primarily attributed to synergies related to the combination of new and complementary technologies of the Company and the assembled workforce of the acquired business.

Approximately $ 26.9 million of the goodwill is expected to be deductible for tax purposes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The identified intangible assets assumed in the acquisition of AnalogX were recognized as follows based upon their estimated fair values as of the acquisition date:

Total Estimated Weighted-Average Useful Life

(in thousands) (in years)

Existing technology $ 6,300 5 years

Customer contracts and contractual relationships 500 2 years

IPR&D 3,800 Not applicable

Total $ 10,600

IPR&D consists of multiple projects relating to the development of various high-speed SerDes technologies.

The projects are expected to be completed within the next three years.

The acquired IPR&D will not be amortized until completion of the related products, which is determined by when the underlying project reaches technological feasibility and commences commercial production.

Upon completion, the IPR&D projects will be amortized over their useful lives, which are expected to range between three years and five years .

On June 16, 2021, the Company announced that it had entered into an agreement to acquire PLDA, a provider of high-speed interconnect solutions.

On August 18, 2021 (the “PLDA Closing Date”), the Company completed its acquisition of PLDA by acquiring all of its outstanding shares.

Under the terms of the Share Purchase Agreement, the total consideration of approximately $ 85.6 million is comprised of $ 67.1 million in closing cash consideration, 0.3 million shares of the Company’s common stock (valued based on the Company’s closing stock price at the PLDA Closing Date, which amounted to approximately $ 6.9 million) and up to an additional $ 21.0 million to be paid in shares of common stock, currently valued at $ 16.9 million (the “fair value of the earn-out liability”), subject to certain revenue targets of the acquired business for the next three years.

The fair value of the earn-out liability will be remeasured each quarter, depending on the acquired business’s revenue performance relative to target over the applicable period.

The Company has classified its liability for the contingent earn-out consideration related to the PLDA acquisition within Level 3 of the fair value hierarchy because the fair value is determined using significant unobservable inputs.

A portion of the purchase price, $ 10.0 million of the consideration, was deposited into an escrow account to fund indemnification obligations and other contractual provisions, to be released 24 months after the PLDA Closing Date.

The addition of the technology and expertise from PLDA augments the Company’s digital controller IP and CXL memory interconnect initiative.

As part of the acquisition, the Company agreed to pay certain PLDA employees $ 3.0 million in cash over three years following the PLDA Closing Date (the “PLDA Retention Bonus”), to be paid in three equal installments on each of the dates that are 12 months, 24 months and 36 months following the PLDA Closing Date.

The PLDA Retention Bonus payouts are subject to the condition of continued employment.

Therefore, the PLDA Retention Bonus payouts will be treated as compensation and will be expensed ratably over the retention period.

As of December 31, 2021, the Company had incurred approximately $ 1.4 million in external acquisition costs in connection with the transaction, which were expensed as incurred.

The purchase price allocation and related accounting for this acquisition is preliminary.

The fair value of the intangible assets acquired was determined by management primarily by using the multi-period excess earnings method under the income approach.

This method reflects the present value of the projected cash flows that are expected to be generated by the existing technologies less charges representing the contribution of other assets to those cash

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair values of the remaining assets acquired and liabilities assumed approximated their carrying values at the PLDA Closing Date.

The Company performed a valuation of the net assets acquired as of the PLDA Closing Date.

The total consideration from the acquisition was preliminarily allocated as follows:

(In thousands) Total

Cash and cash equivalents $ 5,820

Accounts receivable 2,233

Inventories 125

Prepaid expenses and other current assets 836

Identified intangible assets 21,400

Goodwill 57,543

Property, plant and equipment, net 679

Operating lease right-of-use asset 864

Other assets 339

Accounts payable ( 1,046 )

Accrued salaries and benefits ( 814 )

Deferred revenue ( 514 )

Income taxes payable ( 118 )

Operating lease liability ( 852 )

Deferred tax liability ( 8,180 )

Other current liabilities ( 74 )

Total $ 85,641

This goodwill is not expected to be deductible for tax purposes.

The identified intangible assets assumed in the acquisition of PLDA were recognized as follows based upon their estimated fair values as of the acquisition date:

Total Estimated Weighted-Average Useful Life

(in thousands) (in years)

Existing technology $ 20,400 3 to 5 years

Customer contracts and contractual relationships 1,000 2 years

IPR&D 7,400 Not applicable

Total $ 28,800

IPR&D consists of multiple projects relating to the development of PLDA’s PCIe Gen 6 and CXL 3.0 technologies.

The projects are expected to be completed within the next 12 months.

The acquired IPR&D will not be amortized until completion of the related products which are determined by when the underlying project reaches technological feasibility and commences commercial production.

Upon completion, the IPR&D projects will be amortized over their respective useful life, which are expected to range between three years and five years .

Unaudited Pro Forma Combined Consolidated Financial Information

The following pro forma financial information presents the combined results of operations for the Company and AnalogX and PLDA as if the acquisitions had occurred on January 1, 2020.

The pro forma financial information has been prepared for comparative purposes only and does not purport to be indicative of the actual operating results that would have been recorded had the acquisitions actually taken place on January 1, 2020, and should not be taken as indicative of future consolidated

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

operating results.

Additionally, the pro forma financial results do not include any anticipated synergies or other expected benefits from the acquisitions (in thousands, except per share amounts):

For the Years Ended December 31,

Total revenue $ 338,961 $ 267,006

Net income (loss) $ 16,533 $ ( 33,871 )

The pro forma net income for 2021 was adjusted to exclude $ 2.2 million of acquisition-related costs incurred in 2021.

Consequently, the pro forma net loss for 2020 was adjusted to include these costs.

2019 Acquisitions

Northwest Logic, Inc.

2 unchanged sentences

Under the terms of the Merger Agreement, the Company paid approximately $ 21.9 million in cash, including certain bonus payments and adjustments for working capital.

Of the purchase price, $ 3.0 million of the consideration was deposited into an escrow account to fund indemnification

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

obligations and other contractual provisions, to be released 24 months after the Closing Date.

Of the purchase price, $ 3.0 million of the consideration was deposited into an escrow account to fund indemnification obligations and other contractual provisions, to be released 24 months after the Closing Date.

This acquisition allows the Company to further scale, bringing together high-speed design expertise with the physical and digital IP families from renowned market leaders to offer comprehensive memory and SerDes IP solutions for chip designers.

20 unchanged sentences

Total $ 21,939

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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On December 8, 2019 (the “Closing Date”), the Company completed its acquisition of the Secure Silicon IP and Protocols business.

Under the terms of the Asset

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Purchase Agreement, as amended, the Company paid approximately $ 45.0 million in cash at the Closing Date, and may have been required to pay up to an additional $ 20.0 million, at that time valued at $ 1.8 million (the “fair value of the earn-out liability”), subject to certain revenue targets of the transferred business for the calendar year 2020.

Since the specified targets were not met for calendar year 2020, the Company recorded a full reduction in the fair value of the earn-out liability, which resulted in a gain in the consolidated statements of operations.

Under the terms of the Asset Purchase Agreement, as amended, the Company paid approximately $ 45.0 million in cash at the Closing Date, and may have been required to pay up to an additional $ 20.0 million, at that time valued at $ 1.8 million (the “fair value of the earn-out liability”), subject to certain revenue targets of the transferred business for the calendar year 2020.

Since the specified targets were not met for calendar year 2020, the Company recorded a full reduction in the fair value of the earn-out liability, which resulted in a gain on the consolidated statements of operations.

The addition of the embedded security teams, products and expertise from the Secure Silicon IP and Protocols business augments the Company’s portfolio of mission-critical embedded security products and expands its offerings for data center, AI, networking and automotive.

10 unchanged sentences

The Company performed a valuation of the net assets acquired as of the Closing Date.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company performed a valuation of the net assets acquired as of the Closing Date.

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Approximately $ 15.0 million of the goodwill is deductible for tax purposes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The identified intangible assets assumed in the acquisition of the Secure Silicon IP and Protocols business were recognized as follows based upon their estimated fair values as of the acquisition date:

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During the year ended December 31, 2020, the amortization for the completed project was not material.

Unaudited Pro Forma Combined Consolidated Financial Information

The following unaudited pro forma financial information presents the combined results of operations for the Company and Northwest Logic as if the acquisition had occurred on January 1, 2018.

The unaudited pro forma financial information has been prepared for comparative purposes only and does not purport to be indicative of the actual operating results that would have been recorded had the acquisition actually taken place on January 1, 2018, and should not be taken as indicative of future consolidated operating results.

Additionally, the unaudited pro forma financial results do not include any anticipated synergies or other expected benefits from the acquisition (unaudited, in thousands, except per share amounts):

Years Ended December 31,

Revenue $ 231,492 $ 241,049

Net loss $ ( 90,688 ) $ ( 160,742 )

Net loss per share - diluted $ ( 0.82 ) $ ( 1.48 )

Pro forma loss for 2019 was adjusted to exclude $0.7 million of acquisition-related costs incurred in 2019.

Consequently, pro forma loss for 2018 was adjusted to include these costs.

Pro forma financial information on the combined results of operations for the Company and the Secure Silicon IP and Protocols business as if the acquisition had occurred on January 1, 2018 has not been presented as it was impracticable to prepare full financial statements for the Secure Silicon IP and Protocols business, given that the Secure Silicon IP and Protocols business had not been managed as a stand-alone business and thus stand-alone financial statements were not readily available.

Additionally, the revenue recognized from the Northwest Logic and Secure Silicon IP and Protocols business acquisitions was not material to the Company’s consolidated financial statements during the year ended December 31, 2019, either individually or in the aggregate.

Furthermore, the Company does not track operating results from these businesses separately.

Supplementary Financial Data

CONSOLIDATED SUPPLEMENTARY FINANCIAL DATA

Quarterly Statements of Operations

(In thousands, except for per share amounts) Dec.

31, 2020 Sept.

30, 2020 June 30, 2020 March 31, 2020 Dec.

31, 2019 Sept.

30, 2019 June 30, 2019 March 31, 2019

Total revenue $ 61,913 $ 56,915 $ 59,930 $ 63,989 $ 59,947 $ 57,399 $ 58,297 $ 48,384

Total cost of revenue $ 13,451 $ 15,264 $ 16,148 $ 15,885 $ 14,576 $ 12,574 $ 13,027 $ 11,198

Gross profit $ 48,462 $ 41,651 $ 43,782 $ 48,104 $ 45,371 $ 44,825 $ 45,270 $ 37,186

Total operating expenses $ 59,466 $ 54,151 $ 56,246 $ 58,943 $ 58,582 $ 67,698 $ 82,316 $ 68,595

Operating loss $ ( 11,004 ) $ ( 12,500 ) $ ( 12,464 ) $ ( 10,839 ) $ ( 13,211 ) $ ( 22,873 ) $ ( 37,046 ) $ ( 31,409 )

Net loss $ ( 12,066 ) $ ( 12,779 ) $ ( 10,781 ) $ ( 7,983 ) $ ( 9,532 ) $ ( 17,331 ) $ ( 36,980 ) $ ( 26,576 )

Net loss per share — basic $ ( 0.11 ) $ ( 0.11 ) $ ( 0.09 ) $ ( 0.07 ) $ ( 0.09 ) $ ( 0.16 ) ( 0.33 ) $ ( 0.24 )

Net loss per share — diluted $ ( 0.11 ) $ ( 0.11 ) $ ( 0.09 ) $ ( 0.07 ) $ ( 0.09 ) $ ( 0.16 ) ( 0.33 ) $ ( 0.24 )

Shares used in per share calculations — basic 112,706 113,828 113,572 112,907 111,883 111,315 110,875 109,692

Shares used in per share calculations — diluted 112,706 113,828 113,572 112,907 111,883 111,315 110,875 109,692

INDEX TO EXHIBITS

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10.4(6)* Forms of agreements under the 2006 Equity Incentive Plan, as amended.

10.5(8)* 2006 Employee Stock Purchase Plan, as amended.

10.5(7)* 2015 Equity Incentive Plan, as amended.

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10.8(7)* 2015 Employee Stock Purchase Plan, as amended.

10.10(11) Triple Net Space Lease, dated as of December 15, 2009, by and between Registrant and MT SPE, LLC.

10.9(9)+ Settlement Agreement, dated January 19, 2010, among Registrant, Samsung Electronics Co., Ltd, Samsung Electronics America, Inc., Samsung Semiconductor, Inc.

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10.23(3) Form of Warrant Confirmation.

10.26(19) Share Purchase Agreement by and between Rambus Inc.

and VISA International Service Association dated June 20, 2019.

10.24(18) Lease agreement between Rambus Inc.

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10.28(19) Form of Performance Based Restricted Stock Unit Agreement (2019 Inducement Equity Incentive Plan).

Exhibit Number Description of Document

10.29(20) First Amendment to Net Lease Agreement dated April 22, 2020 relating to the New San Jose Headquarters Location between Rambus Inc.

3 unchanged sentences

and Micron Technology, Inc.

Exhibit Number Description of Document

10.31(22) Master Confirmation between Deutsche Bank AG, London Branch as counterparty, through its agent Deutsche Bank Securities Inc.

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and Micron Technology, Inc.

10.33(24) Letter agreement dated as of March 12, 2021, among Rambus Inc.

and Barington Companies Equity Partners, L.P.

and certain other parties .

10.33(25) Master Confirmation between Deutsche Bank AG, London Branch, through its agent Deutsche Bank Securities Inc.

(“Dealer”) and Rambus Inc., dated June 15, 2021.

10.34(26) Employment Agreement for Vice President, Finance and Interim Chief Financial Officer between the C ompany and Keith Jones, dated as of October 12, 2021.

21.1 Subsidiaries of Registrant.

23.1 Consent of Independent Registered Public Accounting Firm.

24.1 Power of Attorney (included in signature page).

24.1^ Power of Attorney.

31.1 Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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______________________________________

Previously submitted.

* Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.

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Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

(1) Incorporated by reference to the Form 10-K filed on December 15, 1997.

(2) Incorporated by reference to the Form 10-Q filed on May 4, 2001.

(1) Incorporated by reference to the Form 8-K filed on April 30, 2013.

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(3) Incorporated by reference to the Form 8-K filed on November 17, 2017.

(6) Incorporated by reference to the Form S-1 (file no.

333-22885) filed on March 6, 1997.

(4) Incorporated by reference to the Form 10-Q filed on May 7, 2021.

(5) Incorporated by reference to the Form 8-K filed on March 9, 2015.

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(8) Incorporated by reference to the Form 10-Q filed on July 23, 2015.

(11) Incorporated by reference to the Form 10-K filed on February 26, 2010.

(12) Incorporated by reference to the Form 10-K filed on February 26, 2020.

(9) Incorporated by reference to the Form 10-Q filed on May 3, 2010.

(10) Incorporated by reference to the Form 10-K filed on February 24, 2012.

(11) Incorporated by reference to the Form 8-K filed on October 29, 2018.

(12) Incorporated by reference to the Form 10-Q/A filed on January 13, 2014.

(13) Incorporated by reference to the Form 10-Q filed on July 29, 2013.

(14) Incorporated by reference to the Form 10-K filed on February 21, 2014.

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(22) Incorporated by reference to the Form 8-K dated November 12, 2020.

(23) Incorporated by reference to the Form 10-K filed on February 26, 2021.

(24) Incorporated by reference to the Form 8-K filed on March 16, 2021.

(25) Incorporated by reference to the Form 8-K filed on June 16, 2021.

(26) Incorporated by reference to the Form 8-K filed on October 13, 2021.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

/s/ RAHUL MATHUR

Senior Vice President, Finance and Chief Financial Officer

/s/ Luc Seraphin

Chief Executive Officer and President

(Principal Executive Officer)

February 28, 2022

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Luc Seraphin and Rahul Mathur as his true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to (i) act on, sign, and file with the Securities and Exchange Commission any and all amendments to this Annual Report on Form 10-K, together with all schedules and exhibits thereto, (ii) act on, sign, and file such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, and (iii) take any and all actions that may be necessary or appropriate to be done, as fully for all intents and purposes as he might or could do in person, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Luc Seraphin, Keith Jones and John Shinn as his true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to (i) act on, sign, and file with the Securities and Exchange Commission any and all amendments to this Annual Report on Form 10-K, together with all schedules and exhibits thereto, (ii) act on, sign, and file such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, and (iii) take any and all actions that may be necessary or appropriate to be done, as fully for all intents and purposes as he might or could do in person, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

1 unchanged sentence

/s/ LUC SERAPHIN Chief Executive Officer, President and Director (Principal Executive Officer) February 28, 2022

/s/ RAHUL MATHUR Senior Vice President, Finance and Chief Financial Officer (Principal Financial Officer) February 26, 2021

/s/ KEITH JONES Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer) February 26, 2021

/s/ KEITH JONES Vice President, Finance and Interim Chief Financial Officer

(Principal Financial and Accounting Officer) February 28, 2022

/s/ CHARLES KISSNER Chairman of the Board of Directors February 28, 2022

2 unchanged sentences

Emiko Higashi

/s/ GREGORY LANG Director February 26, 2021

/s/ JAMES MITAROTONDA Director February 28, 2022

James Mitarotonda

/s/ MEERA RAO Director February 28, 2022

/s/ KAREN ROGGE Director February 28, 2022

/s/ SANJAY SARAF Director February 28, 2022

3 unchanged sentences

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