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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From              to
Commission file number: 001-34666
MaxLinear Inc.
(Exact name of Registrant as specified in its charter)
Delaware14-1896129
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
5966 La Place Court, Suite 100,CarlsbadCalifornia92008
(Address of principal executive offices)(Zip Code)
(760) 692-0711
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stockMXLNew York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerEmerging growth company
Non-accelerated filerSmaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No   
As of July 21, 2021, the registrant had 76,469,545 shares of common stock, par value $0.0001, outstanding.


Table of Contents
MAXLINEAR, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page
Part I
Item 1.
Item 2.
Item 3.
Item 4.
Part II
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


2

Table of Contents
PART I — FINANCIAL INFORMATION

3

Table of Contents
ITEM 1.    FINANCIAL STATEMENTS

MAXLINEAR, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands, except par value amounts)
June 30,
2021
December 31,
2020
Assets
Current assets:
Cash and cash equivalents$130,312 $148,901 
Short-term restricted cash107 115 
Accounts receivable, net135,321 67,442 
Inventory98,502 97,839 
Prepaid expenses and other current assets13,866 47,421 
Total current assets378,108 361,718 
Long-term restricted cash1,015 1,018 
Property and equipment, net48,104 39,470 
Leased right-of-use assets22,847 21,886 
Intangible assets, net174,964 207,266 
Goodwill302,828 302,828 
Deferred tax assets91,526 86,065 
Other long-term assets7,235 2,191 
Total assets$1,026,627 $1,022,442 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$53,483 $32,751 
Accrued price protection liability54,717 47,766 
Accrued expenses and other current liabilities61,235 105,842 
Accrued compensation39,492 47,302 
Current portion of long-term debt2,862  
Total current liabilities211,789 233,661 
Long-term lease liabilities20,445 20,862 
Long-term debt343,022 363,592 
Other long-term liabilities17,704 13,210 
Total liabilities592,960 631,325 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; 25,000 shares authorized, no shares issued or outstanding
  
Common stock, $0.0001 par value; 550,000 shares authorized; 76,469 shares issued and outstanding at June 30, 2021 and 74,536 shares issued and outstanding December 31, 2020
8 7 
Additional paid-in capital640,710 602,064 
Accumulated other comprehensive income803 1,435 
Accumulated deficit(207,854)(212,389)
Total stockholders’ equity433,667 391,117 
Total liabilities and stockholders’ equity$1,026,627 $1,022,442 

See accompanying notes.
4

Table of Contents
MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share data)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net revenue$205,376 $65,220 $414,735 $127,247 
Cost of net revenue92,833 32,477 190,473 63,742 
Gross profit112,543 32,743 224,262 63,505 
Operating expenses:
Research and development74,416 27,984 137,582 53,673 
Selling, general and administrative35,885 27,470 72,354 52,102 
Impairment losses   86 
Restructuring charges38 64 2,204 553 
Total operating expenses110,339 55,518 212,140 106,414 
Income (loss) from operations2,204 (22,775)12,122 (42,909)
Interest income18 31 18 256 
Interest expense(3,741)(2,183)(7,947)(4,659)
Loss on extinguishment of debt(5,221) (5,221) 
Other income (expense), net(537)(81)(641)99 
Total other income (expense), net(9,481)(2,233)(13,791)(4,304)
Loss before income taxes(7,277)(25,008)(1,669)(47,213)
Income tax benefit(8,010)(3,201)(6,204)(9,937)
Net income (loss)$733 $(21,807)$4,535 $(37,276)
Net income (loss) per share:
Basic$0.01 $(0.30)$0.06 $(0.51)
Diluted$0.01 $(0.30)$0.06 $(0.51)
Shares used to compute net income (loss) per share:
Basic75,930 72,740 75,394 72,389 
Diluted79,026 72,740 78,657 72,389 

See accompanying notes.
5

Table of Contents
MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited; in thousands)

Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income (loss)$733 $(21,807)$4,535 $(37,276)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax expense of $607 and $231 for the three and six months ended June 30, 2021, respectively, and net of tax expense of $33 and $24 for the three and six months ended June 30, 2020, respectively
357 294 (632)(286)
Unrealized gain (loss) on interest rate swap, net of tax expense of $30 and tax benefit of $11 for the three and six months ended June 30, 2020, respectively
 116  (37)
Other comprehensive income (loss)357 410 (632)(323)
Total comprehensive income (loss)$1,090 $(21,397)$3,903 $(37,599)


See accompanying notes.
6

Table of Contents
MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FISCAL QUARTERS ENDED JUNE 30, 2021
(unaudited; in thousands)
    
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 202074,536 $7 $602,064 $1,435 $(212,389)$391,117 
Common stock issued pursuant to equity awards, net917 1 16,565 — — 16,566 
Repurchase of common stock(75)— (2,673)— — (2,673)
Stock-based compensation— — 12,955 — — 12,955 
Other comprehensive loss— — — (989)— (989)
Net income— — — — 3,802 3,802 
Balance at March 31, 202175,378 $8 $628,911 $446 $(208,587)$420,778 
Common stock issued pursuant to equity awards, net1,098 — (338)— — (338)
Repurchase of common stock(120)(4,464)(4,464)
Employee stock purchase plan113 — 2,635 — — 2,635 
Stock-based compensation— — 13,966 — — 13,966 
Other comprehensive income— — — 357 — 357 
Net income— — — — 733 733 
Balance at June 30, 202176,469 $8 $640,710 $803 $(207,854)$433,667 
See accompanying notes.

7

Table of Contents
MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FISCAL QUARTERS ENDED JUNE 30, 2020
(unaudited; in thousands)
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 201971,931 $7 $529,596 $(887)$(113,796)$414,920 
Common stock issued pursuant to equity awards, net414 — 2,612 — — 2,612 
Stock-based compensation— — 6,827 — — 6,827 
Other comprehensive loss— — — (733)— (733)
Net loss— — — — (15,469)(15,469)
Balance at March 31, 202072,345 $7 $539,035 $(1,620)$(129,265)$408,157 
Common stock issued pursuant to equity awards, net597 — 989 — — 989 
Employee stock purchase plan161 — 2,141 — — 2,141 
Stock-based compensation— — 12,085 — — 12,085 
Other comprehensive income— — — 410 — 410 
Net loss— — — — (21,807)(21,807)
Balance at June 30, 202073,103 7 554,250 (1,210)(151,072)401,975 
See accompanying notes.

8

Table of Contents
MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in thousands)
Six Months Ended June 30,
20212020
Operating Activities
Net income (loss)$4,535 $(37,276)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Amortization and depreciation44,322 33,265 
Impairment losses 86 
Amortization of debt issuance costs and accretion of discounts2,071 807 
Stock-based compensation26,921 18,912 
Deferred income taxes(5,461)(9,087)
Loss on disposal of property and equipment388  
Impairment of leasehold improvements226 163 
Impairment of leased right-of-use assets429 44 
Loss on extinguishment of debt5,221  
(Gain) loss on foreign currency408 (226)
Excess tax (benefits) deficiencies on stock-based awards(4,631)(378)
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable(67,879)8,977 
Inventory(596)(2,831)
Prepaid expenses and other assets33,448 774 
Leased right-of-use assets72 326 
Accounts payable, accrued expenses and other current liabilities6,311 5,235 
Accrued compensation15,233 7,757 
Accrued price protection liability6,955 (6,669)
Lease liabilities(4,347)(2,709)
Other long-term liabilities4,497 (1,262)
Net cash provided by operating activities68,123 15,908 
Investing Activities
Purchases of property and equipment(17,310)(4,936)
Purchases of intangible assets(1,112)(13)
Cash used in acquisitions, net of cash acquired(27,500) 
Purchases of long-term investments(5,000) 
Net cash used in investing activities(50,922)(4,949)
Financing Activities
Proceeds from the issuance of debt350,000  
Payment of debt issuance cost(4,127) 
Repayment of debt(369,813) 
Net proceeds from issuance of common stock6,094 4,642 
Minimum tax withholding paid on behalf of employees for restricted stock units(10,105)(1,499)
Repurchase of common stock(7,137) 
Net cash provided by (used in) financing activities(35,088)3,143 
Effect of exchange rate changes on cash and cash equivalents (713)210 
Increase (decrease) in cash, cash equivalents and restricted cash(18,600)14,312 
Cash, cash equivalents and restricted cash at beginning of period150,034 93,117 
Cash, cash equivalents and restricted cash at end of period$131,434 $107,429 
Supplemental disclosures of cash flow information:
Cash paid for interest$6,402 $3,999 
Cash paid for income taxes$1,671 $1,220 
Supplemental disclosures of non-cash activities:
Issuance of shares for payment of bonuses$22,874 $2,599 
See accompanying notes.
9

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Organization and Summary of Significant Accounting Policies
Description of Business
MaxLinear, Inc. was incorporated in Delaware in September 2003. MaxLinear, Inc., together with its wholly owned subsidiaries, collectively referred to as MaxLinear, or the Company, is a provider of communications systems-on-chip (SoC) solutions used in broadband, mobile and wireline infrastructure, data center, and industrial and multi-market applications. MaxLinear is a fabless integrated circuit design company whose products integrate all or substantial portions of a high-speed communication system, including radio frequency (RF), high-performance analog, mixed-signal, digital signal processing, security engines, data compression and networking layers, and power management. MaxLinear’s customers include electronics distributors, module makers, original equipment manufacturers, or OEMs, and original design manufacturers, or ODMs, who incorporate the Company’s products in a wide range of electronic devices, including cable Data Over Cable Service Interface Specifications (DOCSIS) fiber and DSL broadband modems and gateways; Wi-Fi and wireline routers for home networking; radio transceivers and modems for 4G/5G base-station and backhaul infrastructure; fiber-optic modules for data center, metro, and long-haul transport networks; as well as power management and interface products used in these and many other markets.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited consolidated financial statements include the accounts of MaxLinear, Inc. and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. All intercompany transactions and investments have been eliminated in consolidation.
In the opinion of management, the Company’s unaudited consolidated interim financial statements contain adjustments, including normal recurring accruals necessary to present fairly the Company’s consolidated financial position, results of operations, comprehensive income (loss), stockholders’ equity, and cash flows.

The consolidated balance sheet as of December 31, 2020 was derived from the Company’s audited consolidated financial statements at that date. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission, or the SEC, on February 11, 2021, or the Annual Report. Interim results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021.
Use of Estimates and Significant Risks and Uncertainties
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes.
Last year, the Company’s revenues were impacted by the novel coronavirus disease, or COVID-19, pandemic. In particular, the Company experienced some negative impact to its revenue and gross profits in the first half of 2020 due to several industry-wide dynamics related to COVID-19 including supply constraints as well as customer requests to temporarily delay shipments. Although the Company has benefited from increased demand for certain of our products from the work-from-home environment in the second half of 2020 and the first half of 2021, a sudden increase in demand for electronics containing semiconductor chips and stockpiling of chips by certain firms in China blacklisted by the U.S. has exacerbated bottlenecks in the supply chain, resulting in a global semiconductor chip shortage impacting the Company’s industry. Some chip manufacturers are estimating this supply shortage may continue into 2022. While these chip manufacturers are working to increase capacity in the future, and the Company is continuing to work closely with our suppliers and customers to minimize the potential adverse impacts of the supply shortage, such shortage may have a near-term impact on the Company’s ability to meet increased demand on certain products and have a negative impact on its operating results which may continue into 2022. Heightened volatility, global supply shortages, and uncertainty in customer demand and the worldwide economy in general has continued, and the Company may experience increased volatility in its sales and revenues in the near future. However, the magnitude of such volatility on the Company’s business and its duration is uncertain and cannot be reasonably estimated at this time.
10

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The Company also believes that its $131.4 million of cash and cash equivalents at June 30, 2021 will be sufficient to fund its projected operating requirements for at least the next twelve months. A material adverse impact from COVID-19 and the global semiconductor chip shortage could result in a need to raise additional capital or incur additional indebtedness to fund strategic initiatives or operating activities, particularly if the Company pursues additional acquisitions. The Company’s future capital requirements will depend on many factors, including the Company’s efforts to complete the integration of the acquired Wi-Fi and Broadband assets business and NanoSemi, Inc. (Note 3), changes in revenue, the expansion of engineering, sales and marketing activities, the timing and extent of expansion into new territories, the timing of introductions of new products and enhancements to existing products, the continuing market acceptance of the Company’s products and potential material investments in, or acquisitions of, complementary businesses, services or technologies. Additional funds may not be available on terms favorable to the Company or at all. If the Company is unable to raise additional funds when needed, it may not be able to sustain its operations or execute its strategic plans.

The Company is not aware of any specific event or circumstance that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of July 28, 2021, the issuance date of this Quarterly Report on Form 10-Q. Actual results could differ from those estimates, particularly if the Company experiences material impacts from COVID-19.
Summary of Significant Accounting Policies
Refer to the Company’s Annual Report for a summary of significant accounting policies. There have been no other significant changes to the Company’s significant accounting policies during the six months ended June 30, 2021.
Recently Adopted Accounting Pronouncements
In December 2019, the FASB issued ASU No. 2019-12 Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, to remove certain exceptions related to the approach for intraperiod tax allocation, recognition of deferred tax liabilities for outside basis differences and requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The amendments in this update are effective for the Company beginning with fiscal year 2021. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The adoption of the amendments in this update did not have a material impact on the Company’s consolidated financial position and results of operations as of and for the six months ended June 30, 2021, and is also not expected to have a material impact on the Company’s financial position and results of operations as of and for the year ending December 31, 2021.
In October 2020, the FASB issued ASU No. 2020-10 Codification Improvements, to make incremental improvements to GAAP and address stakeholder suggestions, including, among other things, clarifying that the requirement to provide comparative information in the financial statements extends to the corresponding disclosures section. The amendments in this update are effective for the Company beginning with fiscal year 2021. The amendments in this update should be applied retrospectively and at the beginning of the period that includes the adoption date. The adoption of the amendments in this update did not have a material impact on the Company’s financial disclosures as of and for the six months ended June 30, 2021, and is also not expected to have a material impact on the Company's financial disclosures for the year ending December 31, 2021.
2. Net Income (Loss) Per Share
Basic earnings per share, or EPS, is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted EPS is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period and the weighted-average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, common stock options, restricted stock units and restricted stock awards are considered to be common stock equivalents and are only included in the calculation of diluted EPS when their effect is dilutive. In periods in which the Company has a net loss, dilutive common stock equivalents are excluded from the calculation of diluted EPS.
11

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The table below presents the computation of basic and diluted EPS:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(in thousands, except per share amounts)
Numerator:
Net income (loss)$733 $(21,807)$4,535 $(37,276)
Denominator:
Weighted average common shares outstanding—basic75,930 72,740 75,394 72,389 
Dilutive common stock equivalents3,096  3,263  
Weighted average common shares outstanding—diluted79,026 72,740 78,657 72,389 
Net income (loss) per share:
Basic$0.01 $(0.30)$0.06 $(0.51)
Diluted$0.01 $(0.30)$0.06 $(0.51)
For the three and six months ended June 30, 2021 and 2020, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 0.04 million and 0.1 million for the 2021 periods, respectively, and 2.5 million and 2.9 million for the 2020 periods, respectively, from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.
3. Business Combinations
Acquisition of the Wi-Fi and Broadband assets business
On July 31, 2020, the Company and certain of its designated subsidiaries completed their acquisition of the Home Gateway Platform Division, which the Company refers to as the Wi-Fi and Broadband assets business, pursuant to an Asset Purchase Agreement with Intel Corporation, or Intel, dated April 5, 2020 (the “Asset Purchase Agreement”), and related agreements. The Company paid cash consideration of $150.0 million for the purchase of certain assets of the Wi-Fi and Broadband assets business, and assumed certain liabilities related to specified employment matters. The transaction was funded with a portion of the net proceeds from a secured incremental term loan with an aggregate principal amount of $175.0 million (Note 8).
The Wi-Fi and Broadband assets business develops a broad portfolio of connected home products, including Wi-Fi, Ethernet and Broadband Gateway Processor SoCs, which enables the Company to strengthen its existing connected home portfolio by bringing together a complete, scalable, and complementary platform of connectivity and access solutions to address its customers’ needs across target end-markets.
The acquired assets and assumed liabilities, together with the employees who joined the Company and its subsidiaries as a result of the transaction, represent a business as defined in ASC 805, Business Combinations. The Company is integrating the acquired assets and rehired employees into the Company’s existing business.
The Asset Purchase Agreement also contains customary representations, warranties and covenants, including indemnification provisions set forth therein. Pursuant to the Purchase Agreement, Intel has retained, and will be obligated to indemnify MaxLinear for, certain liabilities, including but not limited to those relating to the Home Gateway Platform Division for pre-closing taxes and specified employment matters, and MaxLinear has assumed, and will indemnify Intel for, certain liabilities, including but not limited to those relating to the Home Gateway Platform Division and the Transferred Assets for certain pre-closing and post-closing actions, events and periods (including certain product-related liabilities for products sold prior to the Closing for up to a $25.0 million cap), and specified employment matters.

12

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
In connection with the transaction, the Company and Intel have entered into as of the closing certain other ancillary agreements, including (i) an intellectual property matters agreement, pursuant to which Intel granted to the Company a license to certain intellectual property rights for use by the Company in connection with the acquired assets and the Company granted back to Intel a license to the intellectual property rights in the acquired assets, (ii) a supply agreement, pursuant to which Intel manufactures and fabricates certain products for the Company that are part of the acquired assets, (iii) an ethernet network controller services agreement, pursuant to which the Company provides Intel with certain development services with respect to certain Intel ethernet network controller products, (iv) a transition services agreement, pursuant to which Intel provided certain services on a transitional basis for up to a 12-month period after the closing, the scope of which included services relating to real estate and facilities, information technology, and supply chain, procurement, sales operations, and engineering support, and (v) a side letter regarding the delayed transfer of certain inventory. Pursuant to the delayed inventory side letter, the Company had control and economic benefits of the inventory, but transfer of the title and possession of the inventory was delayed until the last day that Intel provided services under the transition services agreement.
Acquisition Consideration

The following table summarizes the fair value of purchase price consideration to acquire the Wi-Fi and Broadband assets business (in thousands):
DescriptionAmount
Fair value of purchase consideration:
Cash$150,000 

Purchase Price Allocation

The following is an allocation of purchase price as of the July 31, 2020 acquisition closing date based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):
DescriptionAmount
Fair value of consideration transferred:
Cash$150,000 
Purchase price allocation:
Inventory$67,100 
Property and equipment17,641 
Identifiable intangible assets58,000 
Deferred tax assets457 
Accrued expenses(68)
Accrued price protection liability(413)
Accrued compensation(7,916)
Other long-term liabilities(8,197)
Identifiable net assets acquired126,604 
Goodwill23,396 
Total purchase price$150,000 

13

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets (in thousands):
CategoryEstimated Life in YearsFair Value
Finite-lived intangible assets:
Developed technology7$43,200 
Customer-related intangible56,800 
Product backlog0.58800 
50,800 
Indefinite-lived intangible assets:
IPR&DN/A7,200 
Total identifiable intangible assets acquired$58,000 
Acquisition of NanoSemi, Inc.
On September 9, 2020, the Company completed its acquisition of NanoSemi, Inc. or NanoSemi, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) with NanoSemi, dated September 9, 2020. The initial closing transaction consideration consisted of $10.0 million in cash and 804,163 shares of MaxLinear’s common stock. In addition, the NanoSemi stockholders will receive $35.0 million in deferred cash payments payable in 2021, and certain NanoSemi stockholders may also receive up to an additional $35.0 million in potential contingent consideration, subject to the acquired business’s satisfying certain financial objectives from July 1, 2020 through December 31, 2022. As of June 30, 2021, the Company has made $27.5 million of $35.0 million in deferred cash payments. The stock consideration was issued in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended. In connection with the acquisition, MaxLinear agreed to provide the NanoSemi stockholders with certain registration rights with respect to the shares of MaxLinear common stock they received in the acquisition.
NanoSemi is an industry-leading provider of intellectual property that utilizes patented machine learning techniques to improve signal integrity and power efficiency in systems-on-chip, or SoCs, application-specific integrated circuits, or ASICs, and field-programmable gate arrays, or FPGAs, used in next-generation communication and artificial intelligence systems. Its technology enables higher throughput connections for 5G, Wi-Fi, and WiGig smartphones and base stations while simultaneously reducing energy consumption.
Acquisition Consideration
The following table summarizes the fair value of purchase price consideration to acquire NanoSemi (in thousands):
DescriptionAmount
Fair value of purchase consideration:
Cash$10,000 
Common stock issued(1)
17,080 
Deferred payments(2)
34,100 
Contingent consideration(3)
 
Total purchase price$61,180 
_________________
(1) The fair value of common stock issued in the merger is based on 804,163 shares issued on the September 9, 2020 acquisition date at the closing price of the Company’s common stock of $21.24 per share.
(2) The fair value of the deferred payments was determined by discounting to present value payments totaling $35.0 million expected to be made to NanoSemi stockholders throughout 2021.
(3) The fair value of contingent consideration is zero as the applicable financial objectives from July 1, 2020 through December 31, 2022 are not expected to be met based on the Company’s forecast.

14

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Purchase Price Allocation
The following is an allocation of purchase price as of the September 9, 2020 acquisition closing date based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):
DescriptionAmount
Purchase price allocation:
Accounts receivable$175 
Prepaid expenses and other current assets879 
Property and equipment177 
Leased right-of-use assets1,805 
Identifiable intangible assets19,900 
Accounts payable(602)
Accrued expenses and other current liabilities(323)
Accrued compensation(223)
Long-term lease liabilities(1,546)
Other long-term liabilities(164)
Identifiable net assets acquired20,078 
Goodwill41,102 
Total purchase price$61,180 
The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets (in thousands):
CategoryEstimated Life in YearsFair Value
Finite-lived intangible assets:
Developed technology7$17,500 
Trademarks and tradenames71,000 
Customer-related intangible5900 
Product backlog5.33500 
Total identifiable intangible assets acquired$19,900 
Assumptions in the Allocations of Purchase Price

Management prepared the purchase price allocations for the Wi-Fi and Broadband assets business and NanoSemi, and in doing so considered or relied in part upon reports of a third party valuation expert to calculate the fair value of certain acquired assets, which primarily included identifiable intangible assets, inventory, and property and equipment, and the portions of the purchase consideration for NanoSemi expected to be paid to NanoSemi stockholders in the future, as described above. Certain NanoSemi stockholders that are employees are not required to remain employed in order to receive the deferred payments and contingent consideration; accordingly, the fair value of the deferred payments and contingent consideration have been accounted for as a portion of the purchase consideration.

Estimates of fair value require management to make significant estimates and assumptions. The goodwill recognized is attributable primarily to the acquired workforce, expected synergies, and other benefits that MaxLinear believes will result from integrating the operations of the Wi-Fi and Broadband assets business and NanoSemi with the operations of MaxLinear. Certain liabilities included in the purchase price allocations are based on management’s best estimates of the amounts to be paid or settled and based on information available at the time the purchase price allocations were prepared. There have been no adjustments between the preliminary purchase price allocations reflected as of December 31, 2020 and the purchase price allocation reflected as of June 30, 2021. Updates to the valuations of certain assets acquired and liabilities assumed and our evaluation of certain income tax positions may result in changes to the recorded amounts of assets and liabilities, with corresponding adjustments to goodwill amounts in subsequent periods. We expect to complete the purchase price allocations within 12 months of the respective acquisition dates.
15

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The fair value of the identified intangible assets acquired from the Wi-Fi and Broadband assets business and NanoSemi was estimated using an income approach. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. Indications of value are developed by discounting future net cash flows to their present value at market-based rates of return. More specifically, the fair value of the developed technology, IPR&D and backlog assets was determined using the multi-period excess earnings method, or MPEEM. MPEEM is an income approach to fair value measurement attributable to a specific intangible asset being valued from the asset grouping’s overall cash-flow stream. MPEEM isolates the expected future discounted cash-flow stream to its net present value. Significant factors considered in the calculation of the developed technology and IPR&D intangible assets were the risks inherent in the development process, including the likelihood of achieving technological success and market acceptance. Each project was analyzed to determine the unique technological innovations, the existence and reliance on core technology, the existence of any alternative future use or current technological feasibility and the complexity, cost, and time to complete the remaining development. Future cash flows for each project were estimated based on forecasted revenue and costs, taking into account the expected product life cycles, market penetration, and growth rates. Developed technology will begin amortization immediately and IPR&D will begin amortization upon the completion of each project. If any of the projects are abandoned, the Company will be required to impair the related IPR&D asset.

In connection with the acquisition of the Wi-Fi and Broadband assets business, the Company has assumed liabilities which primarily consist of accrued employee compensation and benefits in jurisdictions where such transfer is required either by law or by work council agreement. In connection with the acquisition of NanoSemi, the Company assumed certain operating liabilities. The liabilities assumed in these acquisitions are included in the respective purchase price allocations above.

Goodwill recorded in connection with the Wi-Fi and Broadband assets business and NanoSemi was $23.4 million and $41.1 million, respectively. The Company does not expect to deduct any of the acquired goodwill for tax purposes.
4. Restructuring Activity

From time to time, the Company approves and implements restructuring plans as a result of internal resource alignment and cost saving measures. Such restructuring plans include terminating employees, vacating certain leased facilities, and cancellation of contracts.

The following table presents the activity related to the restructuring plans, which is included in restructuring charges in the consolidated statements of operations:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(in thousands)
Employee separation expenses$20 $52 $1,273 $97 
Lease related charges  608 275 
Other18 12 323 181 
$38 $64 $2,204 $553 
Lease related charges for the six months ended June 30, 2021 included the impairment of leased right-of-use assets and leasehold improvements of $0.4 million and $0.2 million, respectively, related to exiting a redundant facility.
16

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The following table presents a roll-forward of the Company’s restructuring liability for the six months ended June 30, 2021. The restructuring liability is included in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheets.
Employee Separation ExpensesLease Related ChargesOtherTotal
(in thousands)
Liability as of December 31, 2020$3,274 $720 $3 $3,997 
Restructuring charges1,273 608 323 2,204 
Cash payments(1,856)(168)(25)(2,049)
Reimbursement from Intel(2,439)  (2,439)
Non-cash charges and adjustments (561)(301)(862)
Liability as of June 30, 2021252 599  851 
Less: current portion as of June 30, 2021(252)(372) (624)
Long-term portion as of June 30, 2021$ $227 $ $227 

As of June 30, 2021, the remaining lease related charges primarily consist of common area maintenance obligations. The Company does not expect to incur additional material costs related to current restructuring plans.
5. Goodwill and Intangible Assets

Goodwill

Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. The fair values of net tangible assets and intangible assets acquired are based upon preliminary valuations and the Company’s estimates and assumptions are subject to change within the measurement period (potentially up to one year from the acquisition date).

During the three and six months ended June 30, 2021, there were no changes in the carrying value of goodwill.

The Company performs an annual goodwill impairment assessment on October 31st each year, using a quantitative assessment comparing the fair value of each reporting unit, which the Company has determined to be the entity itself, with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recorded.
In addition to its annual review, the Company performs a test of impairment when indicators of impairment are present. During the three and six months ended June 30, 2021 and 2020, there were no indications of impairment of the Company’s goodwill balances.
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MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)