RAMBUS INC 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities and Exchange Act of 1934 as amended (“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2021, our disclosure controls and procedures were effective. Management’s Report on Internal Control over Financial Reporting 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 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: 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; and 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2021. 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 49 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 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. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 50 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance 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. The information under the heading “Our Executive Officers” in Part I, Item 1 of this Annual Report on Form 10-K is also incorporated herein by reference. We have a Code of Business Conduct and Ethics for all of our directors, officers and employees. Our Code of Business Conduct and Ethics is available on our website at https://investor.rambus.com/corporate-governance/committee-composition/code-of-business-conduct-and-ethics/default.aspx. To date, there have been no waivers under our Code of Business Conduct and Ethics. We will post any amendments or waivers, if and when granted, of our Code of Business Conduct and Ethics on our website. Item 11. Executive Compensation 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. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 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. Item 13. Certain Relationships and Related Transactions, and Director Independence 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. Item 14. Principal Accountant Fees and Services 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. 51 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) (1) Financial Statements The following consolidated financial statements of the Registrant and Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, are included herewith: Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 238 ) 53 Consolidated Balance Sheets as of December 31, 2021 and 2020 56 Consolidated Statements of Operations for the years ended December 31, 2021 , 2020 and 2019 57 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 a nd 2019 58 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2021, 2020 and 2019 59 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 60 Notes to Consolidated Financial Statements 61 (a) (2) Financial Statement Schedule All schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or the notes thereto. 52 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Rambus Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Rambus Inc. and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. 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. 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 The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting 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 53 Table of Contents company; 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters 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. 54 Table of Contents Revenue Recognition – License and Customization Services Revenue As described in Note 2 to the consolidated financial statements, the Company recognizes license and customization services revenue based on an over time model, measured using the input method. License and customization services revenue is reported as part of contract and other revenue, which was $7.5 million for the year ended December 31, 2021. Due to the nature of the work performed in these arrangements, the estimation of the over time model is complex and involves significant judgment. 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 (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 man-months necessary to complete each contract. 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 San Jose, California February 28, 2022 We have served as the Company’s auditor since 1991. 55 Table of Contents RAMBUS INC. CONSOLIDATED BALANCE SHEETS December 31, 2021 2020 (In thousands, except shares and per share amounts) ASSETS Current assets: Cash and cash equivalents $ 107,891 $ 128,967 Marketable securities 377,718 373,682 Accounts receivable 44,065 27,903 Unbilled receivables 135,608 138,813 Inventories 8,482 14,466 Prepaids and other current assets 10,600 15,881 Total current assets 684,364 699,712 Intangible assets, net 58,420 36,487 Goodwill 278,810 183,222 Property, plant and equipment, net 56,035 57,693 Operating lease right-of-use assets 23,712 28,708 Deferred tax assets 4,047 4,353 Unbilled receivables 123,018 236,699 Other assets 4,240 4,535 Total assets $ 1,232,646 $ 1,251,409 LIABILITIES & STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 11,279 $ 8,993 Accrued salaries and benefits 20,945 23,326 Convertible notes 163,687 — Deferred revenue 24,755 10,198 Income taxes payable 20,607 20,064 Operating lease liabilities 5,992 4,724 Other current liabilities 20,002 18,559 Total current liabilities 267,267 85,864 Convertible notes — 156,031 Long-term operating lease liabilities 29,099 34,305 Long-term income taxes payable 21,424 41,333 Deferred tax liabilities 23,985 14,276 Other long-term liabilities 28,475 6,894 Total liabilities 370,250 338,703 Commitments and contingencies (Notes 10, 13 and 20) Stockholders’ equity: Convertible preferred stock, $.001 par value: Authorized: 5,000,000 shares; Issued and outstanding: no shares at December 31, 2021 and December 31, 2020 — — Common stock, $.001 par value: Authorized: 500,000,000 shares; Issued and outstanding: 109,292,235 shares at December 31, 2021 and 111,697,994 shares at December 31, 2020 109 112 Additional paid in capital 1,298,966 1,270,426 Accumulated deficit ( 435,227 ) ( 357,751 ) Accumulated other comprehensive loss ( 1,452 ) ( 81 ) Total stockholders’ equity 862,396 912,706 Total liabilities and stockholders’ equity $ 1,232,646 $ 1,251,409 Refer to Notes to Consolidated Financial Statements 56 Table of Contents RAMBUS INC. CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, 2021 2020 2019 (In thousands, except per share amounts) Revenue: 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 Total revenue 328,304 246,322 227,603 Cost of revenue: Cost of product revenue 49,397 37,749 27,156 Cost of contract and other revenue 4,756 5,647 9,905 Amortization of acquired intangible assets 16,241 17,352 14,314 Total cost of revenue 70,394 60,748 51,375 Gross profit 257,910 185,574 176,228 Operating expenses: Research and development 135,678 139,837 156,815 Sales, general and administrative 91,057 86,441 100,551 Amortization of acquired intangible assets 1,226 1,061 2,743 Restructuring and other charges 368 4,089 8,821 Loss on divestiture — — 7,439 Change in fair value of earn-out liability 5,300 ( 1,800 ) — Total operating expenses 233,629 229,628 276,369 Operating income (loss) 24,281 ( 44,054 ) ( 100,141 ) Interest income and other income (expense), net 9,711 17,855 27,445 Interest expense ( 10,706 ) ( 10,340 ) ( 9,852 ) Interest and other income (expense), net ( 995 ) 7,515 17,593 Income (loss) before income taxes 23,286 ( 36,539 ) ( 82,548 ) Provision for income taxes 4,952 3,932 3,416 Net income (loss) $ 18,334 $ ( 40,471 ) $ ( 85,964 ) Net income (loss) per share: Basic $ 0.17 $ ( 0.36 ) $ ( 0.77 ) Diluted $ 0.16 $ ( 0.36 ) $ ( 0.77 ) Weighted-average shares used in per share calculations: Basic 110,538 113,254 110,948 Diluted 114,865 113,254 110,948 Refer to Notes to Consolidated Financial Statements 57 Table of Contents RAMBUS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Years Ended December 31, 2021 2020 2019 (In thousands) Net income (loss) $ 18,334 $ ( 40,471 ) $ ( 85,964 ) Other comprehensive income (loss): Foreign currency translation adjustment ( 366 ) 24 10,145 Unrealized gain (loss) on marketable securities, net of tax ( 1,005 ) ( 13 ) 54 Total comprehensive income (loss) $ 16,963 $ ( 40,460 ) $ ( 75,765 ) Refer to Notes to Consolidated Financial Statements 58 Table of Contents RAMBUS INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Gain (Loss) Common Stock Shares Amount Total (In thousands) Balances at December 31, 2018 109,018 $ 109 $ 1,226,588 $ ( 204,294 ) $ ( 10,291 ) $ 1,012,112 Net loss — — — ( 85,964 ) — ( 85,964 ) Foreign currency translation adjustment — — — — 10,145 10,145 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 Stock-based compensation — — 26,476 — — 26,476 Cumulative effect adjustment from the adoption of ASC 842 — — — 4,469 — 4,469 Balances at December 31, 2019 112,131 112 1,261,142 ( 285,789 ) ( 92 ) 975,373 Net loss — — — ( 40,471 ) — ( 40,471 ) Foreign currency translation adjustment — — — — 24 24 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 Balances at December 31, 2020 111,698 112 1,270,426 ( 357,751 ) ( 81 ) 912,706 Net income — — — 18,334 — 18,334 Foreign currency translation adjustment — — — — ( 366 ) ( 366 ) Unrealized loss on marketable securities, net of tax — — — — ( 1,005 ) ( 1,005 ) 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 ) Stock-based compensation — — 27,486 — — 27,486 Balances at December 31, 2021 109,292 $ 109 $ 1,298,966 $ ( 435,227 ) $ ( 1,452 ) $ 862,396 Refer to Notes to Consolidated Financial Statements 59 Table of Contents RAMBUS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2021 2020 2019 (In thousands) Cash flows from 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 Depreciation 26,810 29,773 23,644 Amortization of intangible assets 17,467 18,413 17,058 Non-cash interest expense and amortization of convertible debt issuance costs 7,656 7,243 6,854 Deferred income taxes 1,522 624 ( 1,816 ) Loss on divestiture — — 7,439 Loss on equity investment 1,071 747 696 (Gain) loss on disposal of property, plant and equipment ( 82 ) ( 77 ) 157 Change in fair value of earn-out liability 5,300 ( 1,800 ) — Change in operating assets and liabilities, net of effects of acquisitions and divestiture: Accounts receivable ( 13,521 ) 16,136 4,994 Unbilled receivables 118,452 156,202 147,868 Prepaid expenses and other assets 6,663 2,057 4,076 Inventories 6,109 ( 4,380 ) ( 3,353 ) Accounts payable 2,195 ( 2,176 ) 2,934 Accrued salaries and benefits and other liabilities ( 1,642 ) 3,353 6,176 Income taxes payable ( 25,309 ) ( 17,852 ) ( 15,925 ) Deferred revenue 15,496 ( 1,486 ) ( 3,497 ) Operating lease liabilities ( 4,790 ) ( 6,625 ) ( 9,282 ) Net cash provided by operating activities 209,217 185,459 128,535 Cash flows from investing activities: Purchases of property, plant and equipment ( 13,792 ) ( 29,728 ) ( 6,472 ) Purchases of marketable securities ( 567,947 ) ( 909,852 ) ( 657,433 ) Maturities of marketable securities 336,154 817,834 507,385 Proceeds from sale of marketable securities 227,045 25,304 6,758 Proceeds from divestiture, net of cash disposed — — 76,039 Proceeds from sale of property and property, plant and equipment — — 29 Settlement of working capital adjustment from disposal of business — ( 1,131 ) — Investment in privately-held companies — — ( 1,000 ) Acquisition of businesses, net of cash acquired ( 97,115 ) — ( 66,780 ) Net cash used in investing activities ( 115,655 ) ( 97,573 ) ( 141,474 ) Cash flows from financing activities: Proceeds received from issuance of common stock under employee stock plans 8,957 11,487 15,104 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 ) Effect of exchange rate changes on cash and cash equivalents ( 413 ) 106 ( 497 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 21,060 ) 26,806 ( 13,734 ) Cash, cash equivalents and restricted cash at beginning of year 129,324 102,518 116,252 Cash, cash equivalents and restricted cash at end of year $ 108,264 $ 129,324 $ 102,518 Years Ended December 31, 2021 2020 2019 (In thousands) Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 2,372 $ 2,372 $ 2,372 Income taxes, net of refunds $ 22,839 $ 21,312 $ 17,835 Non-cash investing and financing activities: Property, plant and equipment received and accrued in accounts payable and other liabilities $ 12,935 $ 20,952 $ 29,844 As of December 31, 2021 2020 2019 (In thousands) 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 Restricted cash 373 357 342 Cash, cash equivalents and restricted cash $ 108,264 $ 129,324 $ 102,518 Refer to Notes to Consolidated Financial Statements 60 Table of Contents RAMBUS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Formation and Business of the Company Rambus Inc. (“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. The Company generates revenue by licensing its inventions and solutions, selling its semiconductor products and providing services to market-leading companies. Rambus produces products and innovations that address the fundamental challenges of accelerating data. 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, 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. Summary of Significant Accounting Policies Financial Statement Presentation The accompanying consolidated financial statements include the accounts of Rambus and its wholly owned subsidiaries. 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. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. 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. 61 Table of Contents 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 (loss) or cash flows for any of the periods presented. Revenue Recognition The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to receive in exchange for those goods and services. Substantially all of the goods and services are distinct and are accounted for as separate performance obligations. Where an arrangement includes multiple performance obligations, the transaction price is allocated to these on a relative standalone selling price basis. The Company has established standalone selling prices for all of its offerings - specifically, the same pricing methodology is consistently applied to all licensing arrangements; 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. 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. 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 Rambus’ patent and technology licensing arrangements generally range between one year and ten years in duration and generally grant the licensee the right to use the Company’s entire intellectual property (“IP”) portfolio as it evolves over time. These arrangements do not typically grant the licensee the right to terminate for convenience and where such rights exist, termination is prospective, with no refund of fees already paid by the licensee. There is no interdependency or interrelation between the IP included in the portfolio licensed upon contract inception and any IP subsequently made available to the licensee, and the Company would be able to fulfill its promises by transferring the portfolio and the additional IP use rights independently. However, the numbers of additions to, and removals from the portfolio (for example when a patent expires and renewal is not granted to the Company) in any given period have historically been relatively consistent; as such, the Company does not allocate the transaction price between the rights granted at contract inception and those subsequently granted over time as a function of these additions. 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 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 Accounting Standards Update (“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. 62 Table of Contents 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. Contract and Other Revenue 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. The Company recognizes license and customization services revenue based on an over time model, measured using the input method. License and customization services revenue is reported as part of contract and other revenue which was approximately $ 7.5 million for the year ended December 31, 2021. Due to the nature of the work performed in these arrangements, the estimation of the over time model is complex and involves significant judgment. The key factor reviewed by management to estimate costs to complete each contract is the estimated man-months necessary to complete the project. The Company recognizes license renewal revenue at the beginning of the renewal period. Significant Judgments Historically and with the exception noted below, no significant judgment has generally been required in determining the amount and timing of revenue from the Company’s contracts with customers. • The Company has adequate tools and controls in place, and substantial experience and expertise in timely and accurately tracking man-months incurred in completing customization and other professional services, and quantifying changes in estimates. Key estimates used in recognizing revenue predominantly consist of the following: • For fixed-fee arrangements in which cash is being received over a period exceeding a year, the Company calculates a customer-specific lending rate using a Daily Treasury Yield Curve Rate that changes depending on the date on which the licensing arrangement was entered into and the term (in years) of the arrangement, and takes into consideration a licensee-specific risk profile determined based on a review of the licensee’s “Full Company View” Dun & Bradstreet report obtained on the date the licensing arrangement was signed by the parties, with a risk premium being added to the Daily Treasury Yield Curve Rate considering the overall business risk, financing strength and risk indicators, as listed. • The Company recognizes revenue on variable fee licensing arrangements on the basis of estimates. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to the Company’s customers. The Company records contract assets when revenue is recognized prior to invoicing, and a contract liability when revenue is recognized subsequent to invoicing. The contract assets are transferred to receivables when the billing occurs. Cost of Revenue Cost of revenue includes cost of professional services, materials, including cost of wafers processed by third-party foundries, cost associated with packaging and assembly, test and shipping, cost of personnel, including stock-based compensation, and equipment associated with manufacturing support, logistics and quality assurance, warranty cost, amortization of existing technology, write-down of inventories, amortization of production mask costs, overhead and an allocated portion of occupancy costs. Leases The Company adopted the New Leasing Standard as of January 1, 2019 using the alternative transition method provided by ASU No. 2018-11 and did not recast comparative periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. 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 63 Table of Contents 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 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. The Company determines if an arrangement is a lease, or contains a lease, at inception. The Company assesses all relevant facts and circumstances in making the determination of the existence of a lease. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments, and uses the implicit rate when readily determinable. Many of the Company’s leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the Company does not separate non-lease components from lease components. Operating lease costs are included in research and development and selling, general and administrative costs on the statement of operations. Goodwill 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 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. When goodwill is assessed for impairment, the Company has the option to perform an assessment of qualitative factors of impairment (optional assessment) prior to necessitating a quantitative impairment test. Should the optional assessment be used for any given year, qualitative factors to consider for a reporting unit include: cost factors; financial performance; legal, regulatory, contractual, political, business, or other factors; entity specific factors; industry and market considerations; macroeconomic conditions; and other relevant events and factors affecting the reporting unit. If the Company determines in the qualitative assessment that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. For a reporting unit tested using a quantitative approach, the Company compares the fair value of the reporting unit with the carrying amount of the reporting unit, including goodwill. The fair value of the reporting unit is estimated using an income approach. Under the income approach, the Company measures fair value of the reporting unit 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. The Company’s discounted cash flow projections are based on its annual financial forecasts developed internally by management for use in managing its business. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, then the amount of goodwill impairment will be the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company performed its annual goodwill impairment analysis as of December 31, 2021 and determined that there was no impairment of its goodwill. For the years ended December 31, 2020 and 2019, the Company did not recognize any goodwill impairment charges. Intangible Assets Intangible assets are comprised of existing technology, customer contracts and contractual relationships, and other definite-lived and indefinite-lived intangible assets. Identifiable intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. Identifiable definite-lived intangible assets are being amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from six months to ten years. Acquired indefinite-lived intangible assets related to the Company’s in-process research and development (“IPR&D”) are capitalized and subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, the Company makes a separate determination of the useful life of the acquired indefinite-lived intangible assets and the related amortization is recorded as an expense over the estimated useful life of the specific projects. 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 64 Table of Contents 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. If the fair value of the indefinite-lived intangible assets exceeds its carrying value, the indefinite-lived intangible assets are not impaired and no further testing is required. If the implied fair value of the indefinite-lived intangible assets is less than the carrying value, the difference is recorded as an impairment loss. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Inventories are reduced for write-downs based on periodic reviews for evidence of slow-moving or obsolete parts. The write-down is based on comparison between inventory on hand and estimated future sales for each specific product. Once written down, inventory write-downs are not reversed until the inventory is sold or scrapped. Inventory write-downs are also established when conditions indicate that the net realizable value is less than cost due to physical deterioration, obsolescence, changes in price level or other causes. Property, Plant and Equipment 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. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the initial terms of the leases. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the related gain or loss is included in the results from operations. Definite-Lived and Indefinite-Lived Asset Impairment The Company evaluates definite-lived and indefinite-lived assets (including property, plant and equipment and intangible assets) for impairment whenever events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. The carrying value is not recoverable if it exceeds the undiscounted cash flows resulting from the use of the asset group and its eventual disposition. The Company’s estimates of future cash flows attributable to its asset groups require significant judgment based on its historical and anticipated results and are subject to many factors. Factors that the Company considers important which could trigger an impairment review include significant negative industry or economic trends, significant loss of clients, and significant changes in the manner of its use of the acquired assets or the strategy for its overall business. When the Company determines that the carrying value of the asset groups may not be recoverable based upon the existence of one or more of the above indicators of impairment, the Company measures the potential impairment based on a projected discounted cash flow method using a discount rate determined by the Company to be commensurate with the risk inherent in the Company’s current business model. An impairment loss is recognized only if the carrying amount of the asset group is not recoverable and exceeds its fair value. The impairment charge is recorded to reduce the pre-impairment carrying amount of the assets based on the relative carrying amount of those assets, though not to reduce the carrying amount of an asset below its fair value. Different assumptions and judgments could materially affect the calculation of the fair value of the assets. During 2021, 2020 and 2019, the Company did not recognize any impairment of its definite-lived and indefinite-lived assets. Income Taxes 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. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized based on available evidence. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. As a result, the Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in its tax return. 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. 65 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Stock-Based Compensation and Equity Incentive Plans The Company maintained stock plans covering a broad range of equity grants including stock options, nonvested equity stock and equity stock units and performance-based instruments. In addition, the Company sponsors an Employee Stock Purchase Plan (“ESPP”), whereby eligible employees are entitled to purchase common stock semi-annually, by means of limited payroll deductions, at a 15 % discount from the fair market value of the common stock as of specific dates. The Company determines compensation expense associated with restricted stock units based on the fair value of its common stock on the date of grant. The Company determines compensation expense associated with stock options based on the estimated grant-date fair value method using the Black-Scholes Merton (“BSM”) valuation model. 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 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. Cash and Cash Equivalents Cash equivalents are highly liquid investments with original maturity of three months or less at the date of purchase. The Company maintains its cash balances with high quality financial institutions. Cash equivalents are invested in highly-rated and highly-liquid money market securities and certain U.S. government sponsored obligations. Marketable Securities Available-for-sale securities are carried at fair value, based on quoted market prices, with the unrealized gains or losses reported, net of tax, in stockholders’ equity as part of accumulated other comprehensive income (loss). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, both of which are included in interest and other income, net. Realized gains and losses are recorded on the specific identification method and are included in interest and other income, net. The Company reviews its investments in marketable securities for possible other than temporary impairments on a regular basis. If any loss on investment is believed to be a credit loss, a charge will be recognized in operations. In evaluating whether a credit loss on a debt security has occurred, the Company considers the following factors: 1) the Company’s intent to sell the security, 2) if the Company intends to hold the security, whether or not it is more likely than not that the Company will be required to sell the security before recovery of the security’s amortized cost basis and 3) even if the Company intends to hold the security, whether or not the Company expects the security to recover the entire amortized cost basis. Due to the high credit quality and short-term nature of the Company’s investments, there have been no material credit losses recorded to date. The classification of funds between short-term and long-term is based on whether the securities are available for use in operations or other purposes. Fair Value of Financial Instruments The carrying value of cash equivalents, accounts receivable and accounts payable approximate their fair values due to their relatively short maturities as of December 31, 2021 and 2020. Marketable securities are comprised of available-for-sale securities that are reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of stockholders’ equity, net of tax. Fair value of the marketable securities is determined based on quoted market prices. The fair value of the Company’s convertible notes fluctuates with interest rates and with the market price of the common stock, but does not affect the carrying value of the debt on the balance sheet. 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 the Company’s 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. 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 Basic earnings (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. 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 66 Table of Contents 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. This method includes consideration of the amounts to be paid by the employees, the amount of excess tax benefits that would be recognized in equity if the instrument was exercised and the amount of unrecognized stock-based compensation related to future services. No potential dilutive common shares are included in the computation of any diluted per share amount when a net loss is reported. Comprehensive Income (Loss) 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 on the consolidated statements of comprehensive income (loss). Credit Concentration As of December 31, 2021 and 2020, the Company’s cash, cash equivalents and marketable securities were invested with various financial institutions in the form of corporate notes, bonds and commercial paper, money market funds, U.S. Treasuries, U.S. Government Agencies, and municipal bonds and notes. 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 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. The Company has no investments denominated in foreign country currencies and therefore is not subject to foreign exchange risk from these assets. The Company mitigates default risk by investing in high credit quality securities and by positioning its portfolio to respond appropriately to a significant reduction in a credit rating of any investment issuer or guarantor. The portfolio includes only marketable securities with active secondary or resale markets to enable portfolio liquidity. The Company’s note hedge transactions, entered into in connection with the 1.375% convertible senior notes due 2023 (the “2023 Notes”), expose the Company to credit risk to the extent that its counterparties may be unable to meet the terms of the transactions. The Company mitigates this risk by limiting its counterparties to major financial institutions. Refer to Note 12, Convertible Notes,” for further details. The Company’s accounts receivable are derived from revenue earned from customers located in the U.S. and internationally. Refer to Note 7, Segments and Major Customers,” for further details. The Company’s unbilled receivables are collected from customers located in the U.S. and internationally. Refer to Note 4, Revenue Recognition,” for further details. Foreign Currency Translation and Re-Measurement The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. 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) 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, on the consolidated statements of operations and were not material in the periods presented. Business Combinations The Company accounts for acquisitions of businesses using the purchase method of accounting, which requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. 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. Upon the conclusion of the measurement period or final determination of the values of assets acquired or 67 Table of Contents 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. 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. Litigation 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. The Company recognizes litigation expenses in the period in which the litigation services were provided. 3. Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted 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. 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 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 68 Table of Contents 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. 4. Revenue Recognition Contract Balances The contract assets are primarily related to the Company’s fixed fee IP licensing arrangements and rights to consideration for performance obligations delivered but not billed as of December 31, 2021. The Company’s contract balances were as follows: As of December 31, (In thousands) 2021 2020 Unbilled receivables $ 258,626 $ 375,512 Deferred revenue 26,198 10,461 During the years ended December 31, 2021 and December 31, 2020, the Company recognized $ 10.2 million and $ 10.3 million, respectively, of revenue that was included in the contract balances as of December 31, 2020 and December 31, 2019, respectively. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted but unsatisfied performance obligations were approximately $ 29.6 million as of December 31, 2021, which the Company primarily expects to recognize over the next 2 years. 5. Earnings (Loss) Per Share The following table sets forth the computation of basic and diluted income (loss) per share: For the Years Ended December 31, (In thousands, except per share amounts) 2021 2020 2019 Net income (loss) per share: Numerator: Net income (loss) $ 18,334 $ ( 40,471 ) $ ( 85,964 ) Denominator: Weighted-average common shares outstanding - basic 110,538 113,254 110,948 Effect of potential dilutive common shares 4,327 — — Weighted-average common shares outstanding - diluted 114,865 113,254 110,948 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. 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 69 Table of Contents 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. The Company’s intent is to settle the principal amount of the notes in cash upon conversion. 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. 6. Intangible Assets and Goodwill Goodwill The following tables present goodwill information for the years ended December 31, 2021 and December 31, 2020: (In thousands) December 31, 2020 Additions to Goodwill (1) December 31, 2021 Total goodwill $ 183,222 $ 95,588 $ 278,810 ______________________________________ (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 (In thousands) Gross Carrying Amount Accumulated Impairment Losses Net Carrying Amount Total goodwill $ 300,580 $ ( 21,770 ) $ 278,810 (In thousands) December 31, 2019 Adjustment to Goodwill (1) December 31, 2020 Total goodwill $ 183,465 $ ( 243 ) $ 183,222 ______________________________________ (1) Working capital adjustments related to the acquisition of Northwest Logic, Inc. (“Northwest Logic”). As of December 31, 2020 (In thousands) Gross Carrying Amount Accumulated Impairment Losses Net Carrying Amount Total goodwill $ 204,992 $ ( 21,770 ) $ 183,222 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 (1) Accumulated Amortization (1) Net Carrying Amount Existing technology 3 to 10 years $ 292,058 $ ( 247,422 ) $ 44,636 Customer contracts and contractual relationships 0.5 to 10 years 37,793 ( 35,209 ) 2,584 Non-compete agreements and trademarks 3 years 300 ( 300 ) — IPR&D Not applicable 11,200 — 11,200 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. 70 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) As of December 31, 2020 (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 Customer contracts and contractual relationships 0.5 to 10 years 36,293 ( 34,245 ) 2,048 Non-compete agreements and trademarks 3 years 300 ( 300 ) — IPR&D Not applicable 1,600 — 1,600 Total intangible assets $ 301,982 $ ( 265,495 ) $ 36,487 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. The estimated future amortization expense of intangible assets as of December 31, 2021 was as follows (in thousands): Years Ending December 31: Amount 2022 $ 14,507 2023 13,491 2024 11,180 2025 5,180 2026 2,862 Thereafter — Total amortizable purchased intangible assets 47,220 IPR&D 11,200 Total intangible assets $ 58,420 7. Segments and Major Customers Operating segments are based upon Rambus’ internal organization structure, the manner in which its operations are managed, the criteria used by its Chief Operating Decision Maker (“CODM”) to evaluate segment performance and availability of separate financial information regularly reviewed for resource allocation and performance assessment. 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 decisions and assessing financial performance. On this basis, the Company is organized and operates as a single segment within the semiconductor space. As of December 31, 2021, the Company has a single operating and reportable segment. Accordingly, no additional disclosure of segment measures of profit or loss or total assets is applicable for all periods presented. Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable at December 31, 2021 and 2020, respectively, was as follows: As of December 31, Customer 2021 2020 Customer 1 19 % 13 % Customer 2 17 % * Customer 3 * 14 % Customer 4 * 11 % _________________________________________ * Customer accounted for less than 10% of total accounts receivable in the period. 71 Table of Contents 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, Customer 2021 2020 2019 Customer A 21 % 12 % * Customer B 13 % * * Customer C 11 % 15 % 10 % 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: Years Ended December 31, (In thousands) 2021 2020 2019 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 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 Total $ 328,304 $ 246,322 $ 227,603 At December 31, 2021, of the $ 56.0 million of total property, plant and equipment, approximately $ 49.8 million were located in the United States, $ 3.2 million were located in India and $ 3.0 million were located in other foreign locations. At December 31, 2020, of the $ 57.7 million of total property, plant and equipment, approximately $ 53.2 million were located in the United States, $ 3.3 million were located in India and $ 1.2 million were located in other foreign locations. 8. Marketable Securities Rambus invests its excess cash and cash equivalents primarily in U.S. government-sponsored obligations, commercial paper, corporate notes and bonds, money market funds and municipal notes and bonds that mature within three years . All cash equivalents and marketable securities are classified as available-for-sale. Total cash, cash equivalents and marketable securities are summarized as follows: As of December 31, 2021 (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 % U.S. Government bonds and notes 102,812 103,113 — ( 301 ) 0.29 % Corporate notes, bonds and commercial paper 287,905 288,667 8 ( 770 ) 0.22 % Total cash equivalents and marketable securities 398,119 399,182 8 ( 1,071 ) Cash 87,490 87,490 — — Total cash, cash equivalents and marketable securities $ 485,609 $ 486,672 $ 8 $ ( 1,071 ) 72 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) As of December 31, 2020 (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 % U.S. Government bonds and notes 169,633 169,670 3 ( 40 ) 0.12 % Corporate notes, bonds and commercial paper 253,391 253,412 61 ( 82 ) 0.20 % Total cash equivalents and marketable securities 441,186 441,244 64 ( 122 ) Cash 61,463 61,463 — — Total cash, cash equivalents and marketable securities $ 502,649 $ 502,707 $ 64 $ ( 122 ) Available-for-sale securities are reported at fair value on the balance sheets and classified along with cash as follows: As of December 31, (In thousands) 2021 2020 Cash equivalents $ 20,401 $ 67,504 Short-term marketable securities 377,718 373,682 Total cash equivalents and marketable securities 398,119 441,186 Cash 87,490 61,463 Total cash, cash equivalents and marketable securities $ 485,609 $ 502,649 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. The estimated fair value and gross unrealized losses of cash equivalents and marketable securities classified by the length of time that the securities have been in a continuous unrealized loss position at December 31, 2021 and 2020 are as follows: Fair Value Gross Unrealized Loss (In thousands) December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Less than 12 months U.S. Government bonds and notes $ 82,822 $ 70,548 $ ( 301 ) $ ( 40 ) Corporate notes, bonds and commercial paper 255,783 181,349 ( 770 ) ( 82 ) Total cash equivalents and marketable securities in a continuous unrealized loss position $ 338,605 $ 251,897 $ ( 1,071 ) $ ( 122 ) 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. Therefore, these unrealized losses were recorded in other comprehensive income (loss). 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. 73 Table of Contents 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: (In thousands) December 31, 2021 Due less than one year $ 222,641 Due from one year through three years 168,076 Total $ 390,717 Refer to Note 9, Fair Value of Financial Instruments,” for discussion regarding the fair value of the Company’s cash equivalents and marketable securities. 9. Fair Value of Financial Instruments The fair value measurement statement defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and the Company considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance. The Company’s financial instruments are measured and recorded at fair value, except for equity method investments and convertible notes. The Company’s non-financial assets, such as goodwill, intangible assets, and property, plant and equipment, are measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized. 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 on the Company’s consolidated statements of operations. Distributions received from an investee reduce the carrying amount of the investment. Fair Value Hierarchy The fair value measurement statement requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires that fair value measurement be classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company uses unadjusted quotes to determine fair value. The financial assets in Level 1 include money market funds. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. The Company uses observable pricing inputs including benchmark yields, reported trades, and broker/dealer quotes. The financial assets in Level 2 include U.S. government bonds and notes, corporate notes, commercial paper and municipal bonds and notes. Level 3: 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 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. 74 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company reviews the pricing inputs by obtaining prices from a different source for the same security on a sample of its portfolio. The Company has not adjusted the pricing inputs it has obtained. The following table presents the financial instruments that are carried at fair value and summarizes the valuation of its cash equivalents and marketable securities by the above pricing levels as of December 31, 2021 and 2020: As of December 31, 2021 (In thousands) Total Quoted Market Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Money market funds $ 7,402 $ 7,402 $ — $ — U.S. Government bonds and notes 102,812 — 102,812 — Corporate notes, bonds and commercial paper 287,905 — 287,905 — Total available-for-sale securities $ 398,119 $ 7,402 $ 390,717 $ — As of December 31, 2020 (In thousands) Total Quoted Market Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Money market funds $ 18,162 $ 18,162 $ — $ — U.S. Government bonds and notes 169,633 — 169,633 — Corporate notes, bonds and commercial paper 253,391 — 253,391 — Total available-for-sale securities $ 441,186 $ 18,162 $ 423,024 $ — The Company monitors its investments for other-than-temporary impairment and records appropriate reductions in carrying value when necessary. 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” 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. During the second half of 2018, the Company made an investment in a non-marketable equity security of a private company. 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, 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. The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure as of December 31, 2021 and 2020: As of December 31, 2021 As of December 31, 2020 (In thousands) Face Value Carrying Value Fair Value Face Value Carrying Value Fair Value 1.375% Convertible Senior Notes due 2023 (the “2023 Notes”) $ 172,500 $ 163,687 $ 254,103 $ 172,500 $ 156,031 $ 194,709 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, 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. 75 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Information regarding the Company’s goodwill and long-lived assets balances are disclosed in Note 6, Intangible Assets and Goodwill.” 10. Leases On July 8, 2019, the Company entered into a definitive triple net space lease agreement with 237 North First Street Holdings, LLC (the “Landlord”), whereby the Company leases office space located at 4453 North First Street in San Jose, California, (the “Lease”). In April 2020, the lease was amended for certain terms (the “Amended Lease”). The Amended Lease includes approximately 90,000 square feet of office space, which serves as the Company’s corporate headquarters and includes engineering, sales, marketing and administrative functions. The Amended Lease has a term of 128 months from the amended commencement date in April 2020. 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. In addition to the base rent, the Company will also pay operating expenses, insurance expenses, real estate taxes, and a management fee under the Amended Lease. The Amended Lease also allows for an option to expand, wherein the Company has the right of first refusal to rent additional space in the building. The Company has a one-time option to extend the Amended Lease for a period of 60 months and may elect to terminate the Amended Lease, via written notice to the Landlord, in the event the office space is damaged or destroyed. Total required payments under the Amended Lease are approximately $ 41 million. 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. 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): Years ending December 31, Amount 2022 $ 7,505 2023 4,705 2024 4,060 2025 4,178 2026 4,299 Thereafter 17,429 Total minimum lease payments 42,176 Less: amount of lease payments representing interest ( 7,085 ) Present value of future minimum lease payments 35,091 Less: current obligations under leases (5,992) Long-term lease obligations $ 29,099 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 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. 76 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 11. Balance Sheet Details Inventories Inventories consisted of the following: As of December 31, (In thousands) 2021 2020 Raw materials $ 3,879 $ 7,945 Work in process 1,536 650 Finished goods 3,067 5,871 Total $ 8,482 $ 14,466 Property, Plant and Equipment, net Property, plant and equipment, net is comprised of the following: As of December 31, (In thousands) 2021 2020 Computer software $ 51,922 $ 49,862 Computer equipment 34,484 32,122 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 Property, plant and equipment, gross 150,507 140,370 Less accumulated depreciation and amortization ( 94,472 ) ( 82,677 ) Property, plant and equipment, net $ 56,035 $ 57,693 Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $ 21.0 million, $ 22.1 million and $ 15.3 million, respectively. Accumulated Other Comprehensive Gain (Loss) Accumulated other comprehensive gain (loss) is comprised of the following: As of December 31, (In thousands) 2021 2020 Foreign currency translation adjustments $ ( 237 ) $ 129 Unrealized loss on available-for-sale securities, net of tax ( 1,215 ) ( 210 ) Total $ ( 1,452 ) $ ( 81 ) 12. Convertible Notes The Company’s convertible notes are shown in the following table: As of December 31, (In thousands) 2021 2020 2023 Notes $ 172,500 $ 172,500 Unamortized discount — 2023 Notes ( 8,266 ) ( 15,420 ) Unamortized debt issuance costs — 2023 Notes ( 547 ) ( 1,049 ) Total convertible notes 163,687 156,031 Less current portion 163,687 — Total long-term convertible notes $ — $ 156,031 77 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1.375% Convertible Senior Notes due 2023. On November 17, 2017, the Company issued $ 172.5 million aggregate principal amount of 1.375% convertible senior notes pursuant to an indenture (the “2023 Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”). In accounting for the 2023 Notes at issuance, the Company separated the 2023 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 2023 Notes was $ 137.3 million and the equity component of the 2023 Notes was $ 35.2 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 2023 Notes is being amortized to interest expense using the effective interest method over approximately five years . The 2023 Notes bear interest at a rate of 1.375 % per year, payable semi-annually on February 1 and August 1 of each year, beginning on August 1, 2018. 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 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. Transaction costs allocated to the liability component of $ 2.6 million are netted against the carrying amount of the liability in the consolidated balance sheet and are amortized to interest expense using the effective interest method over the term of the 2023 Notes. The transaction costs allocated to the equity component of $ 0.7 million were recorded as additional paid-in capital. The initial conversion rate of the 2023 Notes is 52.8318 shares of the Company’s common stock per $ 1,000 principal amount of 2023 Notes (which is equivalent to an initial conversion price of approximately $ 18.93 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the 2023 Indenture), the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2023 Notes in connection with such make-whole fundamental change. Prior to the close of business on the business day immediately preceding November 1, 2022, the 2023 Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after March 31, 2018, and only during such calendar quarter, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) in 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 on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which, for each trading day of that period, the trading price per $ 1,000 principal amount of 2023 Notes for such trading day was less than 98 % of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; (3) upon the occurrence of specified distributions to holders of our common stock; or (4) upon the occurrence of specified corporate transactions. On or after November 1, 2022, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the 2023 Notes may convert all or a portion of their 2023 Notes regardless of the foregoing conditions. Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2023 Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the 2023 Notes being converted. The Company may not redeem the 2023 Notes prior to the maturity date and no sinking fund is provided for the 2023 Notes. Upon the occurrence of a fundamental change (as defined in the 2023 Indenture) prior to the maturity date, holders may require the Company to repurchase all or a portion of the 2023 Notes for cash at a price equal to 100 % of the principal amount of the 2023 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. 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; 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; and structurally junior to any existing and future indebtedness and other liabilities (including trade payables, but excluding intercompany obligations and liabilities) and any preferred stock of subsidiaries of the Company. The following events are considered “events of default” with respect to the 2023 Notes, which may result in the acceleration of the maturity of the 2023 Notes: 78 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (1) the Company defaults on the payment when due of any principal of any of the 2023 Notes at maturity or upon exercise of a repurchase right or otherwise; (2) the Company defaults on the payment of any interest, including additional interest, if any, on any of the 2023 Notes, when the interest becomes due and payable, and continuance of such default for a period of 30 days; (3) failure by the Company to comply with its obligation to convert the 2023 Notes in accordance with the 2023 Indenture upon exercise of a holder’s conversion right; (4) failure by the Company to give a fundamental change notice or notice of a specified corporate transaction when due with respect to the Notes; (5) failure by the Company to comply with any of its other agreements contained in the 2023 Notes or the 2023 Indenture for a period of 60 days after written notice from the Trustee or the holders of at least 25 % in aggregate principal amount of the Notes then outstanding has been received; (6) failure by the Company to pay when due the principal of, or acceleration of, any indebtedness for money borrowed by the Company or any of its Material Subsidiaries (as defined in the 2023 Indenture) in excess of $ 40.0 million principal amount, if such indebtedness is not discharged, or such acceleration is not annulled, for a period of 30 days after written notice to the Company by the Trustee or to the Company and the Trustee by holders of 25 % or more in aggregate principal amount of the 2023 Notes then outstanding in accordance with the 2023 Indenture; and (7) certain events of bankruptcy, insolvency or reorganization of the Company or any of its Material Subsidiaries (as defined in the Indenture). If such an event of default, other than an event of default described in clause (7) above with respect to the Company, occurs and is continuing, the Trustee by written notice to the Company, or the holders of at least 25 % in aggregate principal amount of the outstanding Notes by notice to the Company and the Trustee, may, and the Trustee at the request of such holders shall, declare 100 % of the principal of and accrued and unpaid interest, if any, on all the Notes then outstanding to be due and payable. If an event of default described in clause (7) above occurs, 100% of the principal of and accrued and unpaid interest on the Notes then outstanding will automatically become due and payable. Note Hedges and Warrants. On November 14, 2017 and November 16, 2017, in connection with the 2023 Notes, the Company entered into privately negotiated convertible note hedge transactions (the “Convertible Note Hedge Transactions”) with respect to the Company’s common stock, par value $0.001 per share (the “Common Stock”), with certain bank counterparties (the “Counterparties”). The Company paid an aggregate amount of approximately $ 33.5 million to the Counterparties for the Convertible Note Hedge Transactions. The Convertible Note Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those in the 2023 Notes, approximately 9.1 million shares of Common Stock, the same number of shares underlying the 2023 Notes, at a strike price that corresponds to the initial conversion price of the 2023 Notes, and are exercisable upon conversion of the 2023 Notes. The Convertible Note Hedge Transactions will expire upon the maturity of the 2023 Notes. The Convertible Note Hedge Transactions are intended to reduce the potential economic dilution upon conversion of the 2023 Notes. The Convertible Note Hedge Transactions are separate transactions and are not part of the terms of the 2023 Notes. Holders of the 2023 Notes will not have any rights with respect to the Convertible Note Hedge Transactions. In addition, concurrently with entering into the Convertible Note Hedge Transactions, the Company separately entered into privately negotiated warrant transactions, whereby the Company sold to the Counterparties warrants (the “Warrants”) 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. The Company received aggregate proceeds of approximately $ 23.2 million from the sale of the Warrants to the Counterparties. The Warrants are separate transactions and are not part of the 2023 Notes or Convertible Note Hedge Transactions. 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 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. The amounts paid for the Convertible Note Hedge Transactions are tax deductible expenses, while the proceeds received from the Warrants are not taxable. 79 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Impact to Earnings per Share. 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. Under this method, the cumulative dilutive effect of the 2023 Notes would be approximately 9.1 million shares if the average price of the Company’s Common Stock is $18.93. However, upon conversion, there will be no economic dilution from the 2023 Notes, as exercise of the Convertible Note Hedge Transactions eliminates any dilution from the 2023 Notes that would have otherwise occurred when the price of the Company’s Common Stock exceeds the conversion price. The Convertible Note Hedge Transactions are required to be excluded from the calculation of diluted earnings per share, as they would be anti-dilutive under the treasury stock method. The warrants will have a dilutive effect when the average share price exceeds the warrant’s strike price of $23.30 per share. 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. 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: Years Ended December 31, (In thousands) 2021 2020 2019 2023 Notes coupon interest at a rate of 1.375% $ 2,372 $ 2,372 $ 2,372 2023 Notes amortization of discount and debt issuance cost at an additional effective interest rate of 4.9% 7,656 7,243 6,854 Total interest expense on convertible notes $ 10,028 $ 9,615 $ 9,226 13. Commitments and Contingencies 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) Software licenses (4) $ 16,348 $ 11,597 $ 3,274 $ 1,477 $ — $ — Acquisition retention bonuses (5) 9,528 5,194 2,167 2,167 — — Convertible notes (6) 172,500 — 172,500 — — — Interest payments related to convertible notes 3,564 2,372 1,192 — — — Total $ 201,940 $ 19,163 $ 179,133 $ 3,644 $ — $ — ______________________________________ (1) The above table does not reflect possible payments in connection with unrecognized tax benefits of approximately $ 20.2 million including $18.9 million recorded as a reduction of long-term deferred tax assets and $1.3 million in long-term income taxes payable, as of December 31, 2021. As noted below in Note 19, Income Taxes,” although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the outcome at this time. (2) For the Company’s lease commitments as of December 31, 2021, refer to Note 10, Leases.” (3) The Company’s other contractual obligations as of December 31, 2021 were not material. (4) The Company has commitments with various software vendors for agreements generally having terms longer than one year . 80 Table of Contents 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 From time to time, the Company indemnifies certain customers as a necessary means of doing business. 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 may not always be possible. The fair value of the liability as of December 31, 2021 and 2020 was not material. 14. Equity Incentive Plans and Stock-Based Compensation Equity Incentive Plans The Company has three equity incentive plans under which grants are currently outstanding: the 2006 Equity Incentive Plan (the “2006 Plan”), the 2015 Equity Incentive Plan (the “2015 Plan”) and the 2019 Inducement Equity Incentive Plan (the “2019 Inducement Plan”). On April 23, 2015, the Company’s stockholders approved the 2015 Plan, which replaced the 2006 Plan. Additionally, in the third quarter of 2019, the Company adopted the 2019 Inducement Plan and, subject to the adjustment provisions of the 2019 Inducement Plan, reserved 400,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the 2019 Inducement Plan. The 2015 Plan and 2019 Inducement Plan were the Company’s only plans for providing stock-based incentive awards to eligible employees, executive officers, non-employee directors and consultants as of December 31, 2021. Grants under all plans typically have a requisite service period of 60 months or 48 months, have straight-line vesting schedules and expire not more than 10 years from date of grant. No further awards will be made under the 2006 Plan, but the 2006 Plan will continue to govern awards previously granted under it. In addition, any shares subject to stock options or other awards granted under the 2006 Plan that on or after the effective date of the 2015 Plan are forfeited, cancelled, exchanged or surrendered or terminate under the 2006 Plan will become available for grant under the 2015 Plan. The Board will periodically review actual share consumption under the 2015 Plan and may make a request for additional shares as needed. The 2019 Inducement Plan provides for the grant of equity-based awards, including nonstatutory stock options, restricted stock units, restricted stock, stock appreciation rights, performance shares and performance units, and its terms are substantially similar to the Company’s 2015 Plan. However, awards under the 2019 Inducement Plan may only be granted to individuals who previously have not been employees or non-employee directors of the Company (or who will become employed following a bona fide period of non-employment or service with the Company), as an inducement material to the individuals’ entry into employment with the Company, or, to the extent permitted by Rule 5635(c)(3) of the Nasdaq Listing Rules, in connection with a merger or acquisition. 81 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A summary of shares available for grant under the Company’s plans is as follows: Shares Available for Grant Total shares available for grant as of December 31, 2018 10,074,046 Increase in shares approved for issuance (1) 400,000 Stock options granted ( 80,000 ) Stock options forfeited 426,960 Nonvested equity stock and stock units granted (2) (3) ( 7,261,845 ) Nonvested equity stock and stock units forfeited (2) 3,267,702 Total shares available for grant as of December 31, 2019 6,826,863 Increase in shares approved for issuance (4) 7,800,000 Stock options granted ( 40,000 ) Stock options forfeited 101,816 Nonvested equity stock and stock units granted (2) (5) ( 3,528,401 ) Nonvested equity stock and stock units forfeited (2) 1,252,042 Total shares available for grant as of December 31, 2020 12,412,320 Stock options forfeited 54,327 Nonvested equity stock and stock units granted (2) (6) ( 3,918,251 ) Nonvested equity stock and stock units forfeited (2) 1,943,782 Total shares available for grant as of December 31, 2021 10,492,178 ______________________________________ (1) Shares were reserved under the 2019 Inducement Plan adopted in the third quarter of 2019. (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. (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 . 82 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) General Stock Option Information 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 (years) (In thousands, except per share amounts and years) Number of Shares Weighted-Average Exercise Price Per Share Aggregate Intrinsic Value Outstanding as of December 31, 2018 3,235,891 $ 10.25 Options granted 80,000 $ 13.25 Options exercised ( 1,249,785 ) $ 7.79 Options forfeited ( 426,960 ) $ 13.71 Outstanding as of December 31, 2019 1,639,146 $ 11.37 Options granted 40,000 $ 15.59 Options exercised ( 613,119 ) $ 10.74 Options forfeited ( 101,816 ) $ 19.41 Outstanding as of December 31, 2020 964,211 $ 11.08 Options granted — $ — Options exercised ( 360,303 ) $ 11.06 Options forfeited ( 54,327 ) $ 14.98 Outstanding as of December 31, 2021 549,581 $ 10.71 4.3 $ 10,265 Vested or expected to vest at December 31, 2021 549,397 $ 10.71 4.3 $ 10,262 Options exercisable at December 31, 2021 500,826 $ 10.48 4.0 $ 9,472 Employee Stock Purchase Plan 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 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. Under the plans, employees may purchase stock at the lower of 85% of the beginning of the offering period (the enrollment date), or the end of each offering period (the purchase date). 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 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, 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 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 . 83 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. That cost is expected to be recognized over four months . Valuation Assumptions 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 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. The following table presents the weighted-average assumptions used to estimate the fair value of stock options granted that contain only service conditions in the periods presented: Stock Option Plan for Years Ended December 31, 2020 2019 Stock Option Plan Expected stock price volatility 38 % 33%-36% Risk free interest rate 0.2 % 1.4%-1.6% Expected term (in years) 5.5 5.1-5.2 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, 2021 2020 2019 Employee Stock Purchase Plan Expected stock price volatility 32%-33% 37%-46% 32 % Risk free interest rate 0.04%-0.05% 0.1 % 1.6%-2.4% Expected term (in years) 0.5 0.5 0.5 Weighted-average fair value of purchase rights granted under the purchase plan $ 5.17 $ 3.46 $ 3.13 Expected Stock Price Volatility: 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. If there is not sufficient volume in its market traded options, the Company will use an equally weighted blend of historical and implied volatility. Risk-free Interest Rate: 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 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. 84 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Expected Term: The expected term of options granted represents the period of time that options granted are expected to be outstanding. The expected term was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The expected term of ESPP grants is based upon the length of each respective purchase period. Nonvested Equity Stock and Stock Units 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, 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. The ultimate number of performance units that can be earned can range from 0 % to 200 % of target depending on performance relative to target over the applicable period. The shares earned will vest on the third anniversary of the date of grant. 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 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 Grant-Date Fair Value Nonvested at December 31, 2018 4,859,135 $ 12.71 Granted 4,233,701 $ 10.17 Vested ( 1,896,283 ) $ 12.40 Forfeited ( 1,907,070 ) $ 11.33 Nonvested at December 31, 2019 5,289,483 $ 11.27 Granted 1,986,117 $ 15.60 Vested ( 1,693,659 ) $ 11.70 Forfeited ( 730,676 ) $ 11.83 Nonvested at December 31, 2020 4,851,265 $ 12.82 Granted 2,363,885 $ 21.18 Vested ( 1,524,950 ) $ 12.41 Forfeited ( 971,815 ) $ 15.30 Nonvested at December 31, 2021 4,718,385 $ 16.62 15. Stockholders’ Equity 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 85 Table of Contents 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 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. 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. During the year ended December 31, 2021, the cumulative price of $95.8 million was recorded as an increase to accumulated deficit. Convertible Note Hedge Transactions On November 14, 2017 and November 16, 2017, in connection with the 2023 Notes, the Company entered into the Convertible Note Hedge Transactions with respect to the Common Stock, with the Counterparties. The Company paid an aggregate amount of approximately $33.5 million to the Counterparties for the Convertible Note Hedge Transactions. The Convertible Note Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those in the 2023 Notes, approximately 9.1 million shares of Common Stock, the same number of shares underlying the 2023 Notes, at a strike price that corresponds to the initial conversion price of the 2023 Notes, and are exercisable upon conversion of the 2023 Notes. The Convertible Note Hedge Transactions will expire upon the maturity of the 2023 Notes. The Convertible Note Hedge Transactions are expected generally to reduce the potential dilution to the Common Stock upon conversion of the 2023 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2023 Notes, as the case may be, in the event that the market price per share of the Common Stock, as measured under the terms of the Convertible Note Hedge Transactions, is greater than the strike price of the Convertible Note Hedge Transactions. The Convertible Note Hedge Transactions are separate transactions, entered into by the Company with the Counterparties, and are not part of the terms of the 2023 Notes. Holders of the 2023 Notes will not have any rights with respect to the Convertible Note Hedge Transactions. Refer to Note 12, Convertible Notes,” for additional details. 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 86 Table of Contents 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. The Warrants were sold in private placements to the Counterparties pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act. If the market price per share of the Common Stock, as measured under the terms of the Warrants, exceeds the strike price of the Warrants, the Warrants could have a dilutive effect, unless the Company elects, subject to certain conditions, to settle the Warrants in cash. The Warrants are separate transactions, entered into by the Company with the Counterparties, and are not part of the terms of the 2023 Notes. Holders of the 2023 Notes will not have any rights with respect to the Warrants. Refer to Note 12, Convertible Notes,” for additional details. 16. Benefit Plans 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. 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, 2021, 2020 and 2019, the Company made matching contributions totaling approximately $ 1.8 million, $ 1.8 million and $ 2.0 million, respectively. 17. Divestiture 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. The decision to sell these businesses reflected the Company’s ongoing review of its business to focus on products and offerings that are core to its semiconductor business. The sale of the legal entities comprising the Company’s Payments and Ticketing businesses was completed in October 2019. The final gross proceeds from the sale amounted to $ 82.5 million, which included the selling price of $ 75.0 million and approximately $ 7.5 million in net working capital adjustments finalized in October 2019. The $7.5 million in net working capital adjustments is net of a final working capital adjustment due to the buyer of approximately $ 1.1 million, which the Company paid in cash to the buyer during the first quarter of 2020. The final gross proceeds were offset by approximately $ 3.8 million in transaction costs for the year ended December 31, 2019. The Company measured these businesses at the lower of their carrying value or fair value less any costs to sell, and recognized a cumulative impairment of approximately $7.4 million during the year ended December 31, 2019. In the second quarter of 2019, in order to determine the impairment loss, the Company performed a relative fair value measurement to allocate goodwill to the business units between the disposed Payments and Ticketing businesses and the retained business, which includes Cryptography Research Inc., which was part of the former RSD segment. The fair value of the retained business was estimated by management using a discounted cash flow model. The Company’s cash flow projections for the retained business included significant judgments and assumptions relating to revenue growth rates, projected operating income and the discount rate. The operating results of these businesses did not qualify for reporting as discontinued operations. The reported results and financial position of the businesses did not necessarily reflect the total value of the businesses that the Company realized upon their sale. 18. Restructuring and Other Charges 2020 Restructuring Plan In November 2020, the Company initiated a restructuring program to reduce overall expenses which is expected to improve future profitability by reducing spending on research and development efforts and sales, general and administrative programs (the “2020 Restructuring Plan”). In connection with this restructuring program, the Company initiated a plan of termination resulting in a reduction of approximately 70 employees. During the years ended December 31, 2021 and 2020, the Company 87 Table of Contents 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 In June 2019, the Company initiated a restructuring program to reduce overall expenses which is expected to improve future profitability by reducing spending on research and development efforts and sales, general and administrative programs (the “2019 Restructuring Plan”). In connection with this restructuring program, the Company initiated a plan of termination resulting in a reduction of approximately 80 employees. During the years ended December 31, 2020 and 2019, the Company recorded charges of approximately $ 0.8 million and $ 8.8 million, respectively, related to the reduction in workforce. The 2019 Restructuring Plan was substantially completed in the second quarter of 2020. 19. Income Taxes Income (loss) before taxes consisted of the following: Years Ended December 31, (In thousands) 2021 2020 2019 Domestic $ 19,244 $ ( 39,937 ) $ ( 76,848 ) Foreign 4,042 3,398 ( 5,700 ) $ 23,286 $ ( 36,539 ) $ ( 82,548 ) The provision for income taxes was comprised of: Years Ended December 31, (In thousands) 2021 2020 2019 Federal: Current $ ( 112 ) $ ( 446 ) $ 2,932 Deferred 2,042 2,018 2,016 State: Current 214 657 670 Deferred 324 ( 1,589 ) ( 1,198 ) Foreign: Current 3,328 3,097 1,708 Deferred ( 844 ) 195 ( 2,712 ) $ 4,952 $ 3,932 $ 3,416 88 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The differences between the Company’s effective tax rate and the U.S. federal statutory regular tax rate were as follows: Years Ended December 31, 2021 2020 2019 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % State income tax (expense)/benefit 2.2 ( 2.5 ) 1.0 Withholding tax 4.4 ( 4.1 ) ( 3.7 ) Foreign rate differential 3.3 ( 4.8 ) ( 1.1 ) Research and development credit ( 7.1 ) ( 4.8 ) 1.2 Executive compensation 6.6 ( 1.8 ) ( 1.2 ) Stock-based compensation ( 7.7 ) 0.6 ( 2.4 ) Foreign tax credit ( 84.0 ) ( 89.5 ) 3.6 Foreign-derived intangible income deduction ( 55.8 ) 13.7 5.0 Divestiture — ( 20.4 ) 5.1 Acquisition 8.8 — — Other ( 0.2 ) 0.8 ( 0.4 ) Valuation allowance 129.8 81.0 ( 32.2 ) 21.3 % ( 10.8 ) % ( 4.1 ) % The components of the net deferred tax assets (liabilities) were as follows: As of December 31, (In thousands) 2021 2020 Deferred tax assets: Depreciation and amortization $ 6,578 $ 13,199 Lease liabilities 7,873 8,716 Other timing differences, accruals and reserves 5,828 5,347 Deferred equity compensation 5,077 4,631 Net operating loss carryovers 14,602 15,692 Capitalized research 22,301 — Tax credits 130,348 168,978 Total gross deferred tax assets 192,607 216,563 Deferred tax liabilities: Lease right-of-use assets ( 5,323 ) ( 6,392 ) Convertible debt ( 81 ) ( 130 ) Deferred revenue ( 267 ) ( 45,845 ) Total gross deferred tax liabilities ( 5,671 ) ( 52,367 ) Total net deferred tax assets 186,936 164,196 Valuation allowance ( 206,874 ) ( 174,119 ) Net deferred tax liabilities $ ( 19,938 ) $ ( 9,923 ) As of December 31, (In thousands) 2021 2020 Reported as: Non-current deferred tax assets $ 4,047 $ 4,353 Non-current deferred tax liabilities (23,985) (14,276) Net deferred tax liabilities $ ( 19,938 ) $ ( 9,923 ) 89 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. During 2020, as a result of the enactment of California A.B. 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. 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 Balance at End of Period Tax Valuation Allowance Year ended December 31, 2019 $ 173,878 22,220 — — $ 196,098 Year ended December 31, 2020 $ 196,098 ( 21,294 ) 3 ( 688 ) $ 174,119 Year ended December 31, 2021 $ 174,119 32,544 211 — $ 206,874 ______________________________________ * Amounts not charged to operations are charged to other comprehensive income or retained earnings. 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 $ 9.0 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, 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, 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. 90 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A reconciliation of the beginning and ending amounts of unrecognized income tax benefits for the years ended December 31, 2021, 2020 and 2019 was as follows: Years Ended December 31, (In thousands) 2021 2020 2019 Balance at January 1 $ 134,044 $ 115,653 $ 23,482 Tax positions related to current year: Additions 18,748 18,600 16,485 Tax positions related to prior years: Additions 615 — 76,158 Reductions ( 1,586 ) ( 209 ) ( 472 ) Settlements ( 5,606 ) — — Balance at December 31 $ 146,215 $ 134,044 $ 115,653 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. The U.S. federal returns are subject to examination from 2016 and forward. The California returns are subject to examination from 2017 and forward. 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 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. Management regularly assesses the likelihood of outcomes resulting from income tax examinations to determine the adequacy of their provision for income taxes and believes their provision for unrecognized tax benefits is adequate. The estimated potential reduction in the Company’s unrecognized tax benefits in the next 12 months would not be material. At December 31, 2021, no other income taxes (state or foreign) have been provided on undistributed earnings of approximately $ 25.4 million from the Company’s international subsidiaries since these earnings have been, and under current plans will continue to be, indefinitely reinvested outside the United States. However, if such earnings were distributed, the Company would incur approximately $ 2.2 million of foreign withholding taxes and an immaterial amount of U.S. taxes. 20. Litigation and Asserted Claims Rambus is not currently a party to any material pending legal proceeding; however, from time to time, Rambus may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on our business, operating results, financial position or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management attention and resources and other factors. 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. 21. Acquisitions 2021 Acquisitions AnalogX Inc. 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 91 Table of Contents 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 IPR&D 3,800 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. 92 Table of Contents 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 . PLDA Group 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 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 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 93 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) flows. 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 IPR&D 7,400 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 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. 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 94 Table of Contents 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, 2021 2020 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. On July 26, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Northwest Logic, a leading supplier of memory, PCIe, and MIPI digital controllers. On August 23, 2019 (the “Closing Date”), the Company completed its acquisition of Northwest Logic by acquiring all issued and outstanding shares of Northwest Logic through the merger of a wholly-owned Rambus subsidiary with Northwest Logic. 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 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. The Company integrated Northwest Logic’s offerings and design team into its IP cores technology solutions. As part of the acquisition, the Company agreed to pay $ 9.0 million to certain Northwest Logic employees in cash over three years following August 23, 2019 (the “Retention Bonus”), to be paid in three installments of $ 3.0 million on each of the dates that are 12 months, 24 months and 36 months following the Closing Date. The Retention Bonus payouts are subject to the condition of continued employment, and therefore treated as compensation and expensed as incurred. As of December 31, 2019, the Company had incurred approximately $ 0.7 million in external acquisition costs in connection with the transaction, which were expensed as incurred. The fair value of the 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 flows. The Company performed a valuation of the net assets acquired as of the Closing Date. The total consideration from the business combination was allocated as of the Closing Date, and reflects adjustments made through the measurement period to finalize the purchase price accounting, as follows: (In thousands) Total Cash and cash equivalents $ 159 Accounts receivable 1,679 Prepaid expenses and other current assets 65 Identified intangible assets 8,800 Goodwill 13,477 Operating lease right-of-use asset 178 Other asset 9 Accounts payable ( 9 ) Operating lease liability ( 178 ) Other current liabilities ( 108 ) Deferred tax liability, net ( 2,133 ) Total $ 21,939 95 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 Northwest Logic. This goodwill is not deductible for tax purposes. The identified intangible assets assumed in the acquisition of Northwest Logic 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 $ 8,100 5 Customer contracts and contractual relationships 400 2 Customer backlog 300 0.5 Total $ 8,800 Secure Silicon IP and Protocols Business from Verimatrix On September 11, 2019, the Company announced it had signed an asset purchase agreement to acquire the Secure Silicon IP and Protocols business from Verimatrix, formerly Inside Secure, for $ 65.0 million in cash. 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 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. The total adjusted purchase consideration for the acquisition of the Secure Silicon IP and Protocols business was $ 46.8 million, which consisted of the following: (In thousands) Total Cash consideration transferred at the Closing Date $ 45,000 Fair value of earn-out liability 1,800 Total adjusted purchase price $ 46,800 As part of the acquisition, the Company agreed to pay $ 1.0 million to certain employees in cash over two years effective January 1, 2020 (the “Retention Bonus”), to be paid in arrears in the fourth quarter of 2020 and 2021, respectively. The Retention Bonus payouts are subject to the condition of continued employment, and therefore treated as compensation and expensed as incurred. As of December 31, 2019, the Company had incurred approximately $ 3.1 million in external acquisition costs in connection with the transaction, which were expensed as incurred. The fair value of the 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 flows. The Company performed a valuation of the net assets acquired as of the Closing Date. 96 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company performed a valuation of the net assets acquired as of the Closing Date. The total consideration from the acquisition was allocated as follows: (In thousands) Total Prepaid expenses and other current assets $ 267 Unbilled receivables 6,765 Operating lease right-of-use assets 852 Identified intangible assets 23,500 Goodwill 16,845 Deferred revenue ( 310 ) Operating lease liabilities ( 852 ) Other current liabilities ( 267 ) Total $ 46,800 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 Secure Silicon IP and Protocols business. Approximately $ 15.0 million of the goodwill is deductible for tax purposes. 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: Total Estimated Weighted-Average Useful Life (in thousands) (in years) Existing technology $ 21,600 3 to 5 years Customer contracts and contractual relationships 900 5 years IPR&D 1,000 Not applicable Total $ 23,500 IPR&D consisted of one project, primarily relating to the development of Media Access Control Security frame engines, which was part of the Silicon IP solutions. During the year ended December 31, 2020, the project was completed and the asset is being amortized over its useful life of five years . During the year ended December 31, 2020, the amortization for the completed project was not material. 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. 97 INDEX TO EXHIBITS Exhibit Number Description of Document 3.1 Amended and Restated Certificate of Incorporation of Registrant filed May 29, 1997. 3.2 Certificate of Amendment of Amended and Restated Certificate of Incorporation of Registrant filed June 14, 2000. 3.3(1) Amended and Restated Bylaws of Registrant dated April 25, 2013. 4.1(2) Form of Registrant’s Common Stock Certificate. 4.2(3) Indenture, dated November 17, 2017, between Rambus Inc and U.S. Bank National Association (including form of 1.375% Convertible Senior Note due 2023). 4.3 Description of Securities. 10.1(4) Form of Indemnification Agreement entered into by Registrant with each of its directors and executive officers. 10.2(5)* Form of Change of Control Severance Agreement, Agreement entered into by Registrant with each of its named executive officers other than its chief executive officer. 10.3(6)* 2006 Equity Incentive Plan, as amended. 10.4(6)* Forms of agreements under the 2006 Equity Incentive Plan, as amended. 10.5(7)* 2015 Equity Incentive Plan, as amended. 10.6(8)* Form of Restricted Stock Unit Agreement (2015 Equity Incentive Plan). 10.7(8)* Form of Stock Option Agreement (2015 Equity Incentive Plan). 10.8(7)* 2015 Employee Stock Purchase Plan, as amended. 10.9(9)+ Settlement Agreement, dated January 19, 2010, among Registrant, Samsung Electronics Co., Ltd, Samsung Electronics America, Inc., Samsung Semiconductor, Inc. and Samsung Austin Semiconductor, L.P. 10.10(9)+ Semiconductor Patent License Agreement, dated January 19, 2010, between Registrant and Samsung Electronics Co., Ltd. 10.11(10) First Amendment of Lease, dated November 4, 2011, by and between Registrant and MT SPE, LLC. 10.12(11) Employment Agreement between the Company and Luc Seraphin, dated as of October 25, 2018. 10.13(11) Amended and Restated Change of Control Severance Agreement between the Company and Luc Seraphin, dated as of October 25, 2018. 10.14(12)+ Settlement Agreement, dated June 11, 2013, among Registrant, SK hynix and certain SK hynix affiliates. 10.15(13)+ Semiconductor Patent License Agreement, dated June 11, 2013, between Registrant and SK hynix. 10.16(14)+ Settlement Agreement, dated December 9, 2013, between Rambus Inc., Micron Technology, Inc., and certain Micron affiliates. 10.17(14)+ Semiconductor Patent License Agreement, dated December 9, 2013, between Rambus, Inc. and Micron Technology, Inc. 10.18(14)** Amendment to Semiconductor Patent License Agreement, dated December 30, 2013, by and between Rambus Inc. and Samsung Electronics Co., Ltd. 10.19(15)** Amendment 1 to Semiconductor Patent License Agreement, dated June 17, 2015, by and between Rambus Inc. and SK hynix Inc. 10.20(16) Asset Purchase Agreement, dated June 29, 2016, by and between Rambus Inc., Bell ID Singapore Ptd Ltd, Inphi Corporation and Inphi International Pte. Ltd. 10.21(17) Offer Letter, dated September 9, 2016, by and between Rambus Inc. and Rahul Mathur. 10.22(3) Form of Convertible Note Hedge Confirmation. 10.23(3) Form of Warrant Confirmation. 10.24(18) Lease agreement between Rambus Inc. and 237 North First Street Holdings, LLC dated July 8, 2019. 10.25(19) Offer Letter, dated August 9, 2019, by and between Rambus Inc. and Sean Fan. 10.26(19) 2019 Inducement Equity Incentive Plan. 10.27(19) Form of Restricted Stock Unit Agreement (2019 Inducement Equity Incentive Plan). 10.28(19) Form of Performance Based Restricted Stock Unit Agreement (2019 Inducement Equity Incentive Plan). 10.29(20) First Amendment to Net Lease Agreement dated April 22, 2020 relating to the New San Jose Headquarters Location between Rambus Inc. and 237 North First Street Holdings, LLC. 10.30(21)+ Amendment No. 1 to Semiconductor Patent License Agreement, dated September 2, 2020, between Rambus, Inc. and Micron Technology, Inc. 98 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. (“Deutsche Bank”) and Rambus Inc., dated November 11, 2020. 10.32(23)+ Amendment No. 2 dated December 15, 2020, to the Semiconductor Patent License Agreement between Rambus Inc. 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. 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. 31.2 Certification of Principal Financial 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. 32.1† Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2† Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) ______________________________________ ^ Previously submitted. * Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate. ** Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission. + Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10). † The certifications furnished in Exhibit 32.1 and 32.2 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. 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 8-K filed on April 30, 2013. (2) Incorporated by reference to the Form S-1/A (file no. 333-22885) filed on April 24, 1997. (3) Incorporated by reference to the Form 8-K filed on November 17, 2017. (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. (6) Incorporated by reference to the Form 8-K filed on April 30, 2014. (7) Incorporated by reference to the Form 8-K filed on May 6, 2020. (8) Incorporated by reference to the Form 10-Q filed on July 23, 2015. 99 (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. (15) Incorporated by reference to the Form 10-Q filed on July 23, 2015. (16) Incorporated by reference to the Form 10-Q filed on July 22, 2016. (17) Incorporated by reference to the Form 8-K filed on September 21, 2016. (18) Incorporated by reference to the Form 10-Q filed on August 2, 2019. (19) Incorporated by reference to the Form 8-K filed on August 28, 2019. (20) Incorporated by reference to the Form 10-Q filed on August 7, 2020. (21) Incorporated by reference to the Form 10-Q filed on November 6, 2020. (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. 100 SIGNATURES 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. RAMBUS INC. By: /s/ Luc Seraphin Luc Seraphin Chief Executive Officer and President (Principal Executive Officer) Date: 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, 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. 101 Signature Title Date /s/ LUC SERAPHIN Chief Executive Officer, President and Director (Principal Executive Officer) February 28, 2022 Luc Seraphin /s/ KEITH JONES Vice President, Finance and Interim Chief Financial Officer (Principal Financial and Accounting Officer) February 28, 2022 Keith Jones /s/ CHARLES KISSNER Chairman of the Board of Directors February 28, 2022 Charles Kissner /s/ EMIKO HIGASHI Director February 28, 2022 Emiko Higashi /s/ JAMES MITAROTONDA Director February 28, 2022 James Mitarotonda /s/ MEERA RAO Director February 28, 2022 Meera Rao /s/ KAREN ROGGE Director February 28, 2022 Karen Rogge /s/ SANJAY SARAF Director February 28, 2022 Sanjay Saraf /s/ NECIP SAYINER Director February 28, 2022 Necip Sayiner /s/ ERIC STANG Director February 28, 2022 Eric Stang 102