MAXLINEAR, INC

Previous wording

We are a provider of communications SoCs used in broadband, mobile and wireline infrastructure, data center, and industrial and multi-market applications. We are a fabless integrated circuit design company whose products integrate all or substantial portions of a high-speed communication system, including RF, high-performance analog, mixed-signal, digital signal processing, security engines, data compression and networking layers, and power management. In most cases, these products are designed on a single silicon-die, using standard digital CMOS manufacturing processes and conventional packaging technologies. Importantly, our ability to design analog and mixed-signal circuits in CMOS allows us to efficiently combine analog functionality and complex digital signal processing logic in the same integrated circuit. As a result, we believe our solutions have exceptional levels of functional integration and performance, low manufacturing cost, and reduced power consumption versus competition. These solutions also enable shorter design cycles, significant design flexibility and low system-level cost across a range of markets.

Current wording

We are a provider of communications SoCs used in broadband, mobile and wireline infrastructure, data center, and industrial and multi-market applications. We are a fabless integrated circuit design company whose products integrate all or substantial portions of a high-speed communication system, including RF, high-performance analog, mixed-signal, digital signal processing, security engines, data compression and networking layers, and power management. Importantly, our ability to design analog and mixed-signal circuits in CMOS allows us to efficiently combine analog functionality and complex digital signal processing logic in the same integrated circuit. As a result, we believe our solutions have exceptional levels of functional integration and performance, low manufacturing cost, and reduced power consumption versus competition. These solutions also enable shorter design cycles, significant design flexibility and low system-level cost across a range of markets.

Previous wording

In the year ended December 31, 2024, net revenue was $360.5 million, which was derived in part from sales of RF receivers and RF receiver SoC and connectivity solutions into broadband operator voice and data modems and gateways and connectivity adapters, global analog and digital RF receiver products, radio and modem solutions into wireless carrier access and backhaul infrastructure platforms, high-speed optical interconnect solutions sold into optical modules for data-center, metro and long-haul networks, and high-performance interface and power management solutions into a broad range of communications, industrial, automotive and multi-market applications, and from revenue from intellectual property sale agreements. We have experienced slower than expected recovery in sales across all of our end markets. This is primarily driven by excess inventory in the channels as well as slower demand in regions such as China. Geopolitical tensions and changing trade policies continue to influence the semiconductor industry. We continue to develop and innovate with new products for new solutions in advanced semiconductor process nodes such as 16nm and 5nm and beyond, while addressing opportunities capturing and processing high quality broadband communications and high-speed optical interconnect signals.

Current wording

In the year ended December 31, 2025, net revenue was $467.6 million, which was derived in part from sales of RF receivers and RF receiver SoC and connectivity solutions into broadband operator voice and data modems and gateways and connectivity adapters, global analog and digital RF receiver products, radio and modem solutions into wireless carrier access and backhaul infrastructure platforms, high-speed optical interconnect solutions sold into optical modules for data-center, metro and long-haul networks, and high-performance interface and power management solutions into a broad range of communications, industrial, automotive and multi-market applications. We are currently experiencing growth in sales demand across our broadband, connectivity and infrastructure end markets driven by new product wins and market growth along with a recovery from excess inventory in the channels. Geopolitical tensions and changing trade policies, including escalating tariffs between the United States and China, and other countries, continue to influence the semiconductor industry as well as the global economy. We continue to develop and innovate with new products for new solutions in advanced semiconductor process nodes such as 16nm and 5nm and beyond, while addressing opportunities capturing and processing high quality broadband communications and high-speed optical interconnect signals.

Previous wording

Products shipped to Asia accounted for 75%, 75% and 82% of net revenue during the years ended 2024, 2023 and 2022, respectively, including 41%, 37% and 43%, respectively, from products shipped to Hong Kong and less than 10%, 11% and 16%, respectively, from products shipped to mainland China. Although a large percentage of our products is shipped to Asia, we believe that a significant number of the systems designed by these customers and incorporating our semiconductor products are then sold outside Asia. For example, revenue generated from sales of our products during the years ended December 31, 2024, 2023 and 2022 related principally to sales to Asian ODMs and contract manufacturers delivering products into European and North American markets. To date, all of our sales have been denominated in United States dollars.

Current wording

Products shipped to Asia accounted for 82%, 75% and 75% of net revenue during the years ended 2025, 2024 and 2023, respectively, including 49%, 41% and 37%, respectively, from products shipped to Hong Kong, 12% from products shipped to Vietnam in 2025, and 11% from products shipped to mainland China in 2023. Although a large percentage of our products is shipped to Asia, we believe that a significant number of the systems designed by these customers and incorporating our semiconductor products are then sold outside Asia. For example, revenue generated from sales of our products during the years ended December 31, 2025, 2024 and 2023 related principally to sales to Asian ODMs and contract manufacturers delivering products into European and North American markets. To date, all of our sales have been denominated in United States dollars.

Previous wording

A significant portion of our net revenue has historically been generated by a limited number of customers through sales of our products, as well as consideration under intellectual property sale agreements. Sales of products to customers comprise both direct sales to customers and indirect sales through distributors. In the year ended December 31, 2024, one customer accounted for 12% of our net revenue, and our ten largest customers collectively accounted for 60% of our net revenue, of which distributor customers accounted for 30% of our net revenue. In the year ended December 31, 2023, one of our customers accounted for 10% of our net revenue, and our ten largest customers collectively accounted for 54% of our net revenue, of which distributor customers comprised 18% of our net revenue. In the year ended December 31, 2022, two of our direct customers accounted for 31% of our net revenue, and our ten largest customers collectively accounted for 65% of our net revenue, of which distributor customers comprised 27% of our net revenue. For certain customers, we sell multiple products into disparate end user applications such as PON ODUs, Wi-Fi routers, broadband gateways and cable modems.

Current wording

A significant portion of our net revenue has historically been generated by a limited number of customers through sales of our products. Sales of products to customers comprise both direct sales to customers and indirect sales through distributors. In the year ended December 31, 2025, two customers accounted for 28% of our net revenue, and our ten largest customers collectively accounted for 65% of our net revenue, of which distributor customers accounted for less than 10% of our net revenue. In the year ended December 31, 2024, one customer accounted for 12% of our net revenue, and our ten largest customers collectively accounted for 60% of our net revenue, of which distributor customers comprised 30% of our net revenue. In the year ended December 31, 2023, one customer accounted for 10% of our net revenue, and our ten largest customers collectively accounted for 54% of our net revenue, of which distributor customers comprised 18% of our net revenue. For certain customers, we sell multiple products into disparate end user applications such as PON ODUs, Wi-Fi routers, broadband gateways and cable modems.

Previous wording

Estimates in our revenue recognition that involve a significant level of estimation uncertainty include the estimates of price adjustments and returns under contractual stock rotation rights based on our analysis of expected value of actual price adjustment claims by distributors and product historical return rates. Any changes to such estimates, for example differences in actual sell-through activity versus our estimate of sell-through activity in our price adjustments, or actual vs. historical return rates, may impact our consolidated financial results in periods subsequent to recording those estimates, and such amounts are disclosed in our consolidated financial statements. Other than our estimates of sell-through activity and customer return rates, there are no assumptions inherent in our estimates in the valuation of price adjustments and returns that would result in sensitivity of reported amounts to such assumptions. During the years ended December 31, 2024, 2023 and 2022 we have not recorded any material adjustments to such estimates.

Current wording

Estimates in our revenue recognition that involve a significant level of estimation uncertainty include the estimates of price adjustments and returns under contractual stock rotation rights based on our analysis of expected value of actual price adjustment claims by distributors and product historical return rates. Any changes to such estimates, for example differences in actual sell-through activity versus our estimate of sell-through activity in our price adjustments, or actual vs. historical return rates, may impact our consolidated financial results in periods subsequent to recording those estimates, and such amounts are disclosed in our consolidated financial statements. Other than our estimates of sell-through activity and customer return rates, there are no assumptions inherent in our estimates in the valuation of price adjustments and returns that would result in sensitivity of reported amounts to such assumptions. Refer to Note 7 to our consolidated financial statements for adjustments to such estimates.

Previous wording

Estimates in the valuation of inventory that involve a significant level of estimation uncertainty include our estimates of excess and obsolete inventory based on forecasts of future demand for our products in inventory. Any changes to such estimates, for example differences in actual sales versus our estimates of demand, or conversely, the ultimate sell-through of fully reserved inventory for which we did not anticipate any future demand, impact our consolidated financial results in periods subsequent to recording those estimates. Other than our forecasts of future demand, there are no assumptions inherent in our estimates in the valuation of inventory that would result in sensitivity of reported amounts to such assumptions. During the years ended December 31, 2024, 2023 and 2022, we have not recorded any material net adjustments for such changes in estimates.

Current wording

Estimates in the valuation of inventory that involve a significant level of estimation uncertainty include our estimates of excess and obsolete inventory based on forecasts of future demand for our products in inventory. Any changes to such estimates, for example differences in actual sales versus our estimates of demand, or conversely, the ultimate sell-through of fully reserved inventory for which we did not anticipate any future demand, impact our consolidated financial results in periods subsequent to recording those estimates. Other than our forecasts of future demand, there are no assumptions inherent in our estimates in the valuation of inventory that would result in sensitivity of reported amounts to such assumptions.

Previous wording

Research and Development. Research and development expense includes personnel-related expenses, including benefits and stock-based compensation, new product engineering mask costs, prototype integrated circuit packaging and test costs, computer-aided design software license costs, intellectual property license costs, reference design development costs, development testing and evaluation costs, depreciation expense, and allocated occupancy costs, partially offset by income from joint R&D projects and/or governmental R&D grants, if any. Research and development activities include the design of new products, refinement of existing products and design of test methodologies to ensure compliance with required specifications. All research and development costs are expensed as incurred.

Current wording

Research and Development. Research and development expense includes personnel-related expenses, including salaries and benefits and stock-based compensation, new product engineering mask costs, prototype integrated circuit packaging and test costs, computer-aided design software license costs, intellectual property license costs, reference design development costs, development testing and evaluation costs, depreciation expense, and allocated occupancy costs, partially offset by income from joint R&D projects and/or governmental R&D grants, if any. Research and development activities include the design of new products, refinement of existing products and design of test methodologies to ensure compliance with required specifications. All research and development costs are expensed as incurred. Income from joint R&D projects and governmental R&D grants are reflected as a credit to research and development expense when such income has been earned and any contingencies associated with retaining such income have been resolved.

Previous wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net includes interest income, interest expense and other income (expense). Interest income consists of interest earned on our cash, cash equivalents and restricted cash balances. Interest expense consists of interest accrued on debt and amortization of discounts on debt and other liabilities. Other income (expense) generally consists of income (expense) generated from non-operating transactions, including a ticking fee paid to lenders following the termination of the Silicon Motion merger, net gains (losses) from sales or impairment of investments and/or income or losses from investments, if any, including unrealized holding gains (losses) from certain investments required to be marked to market value, if any, and a gain from partial curtailment of employee defined benefit obligations.

Current wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net includes interest income, interest expense and other income (expense). Interest income consists of interest earned on our cash, cash equivalents and restricted cash balances. Interest expense consists of interest accrued on debt and amortization of discounts on debt and other liabilities. Other income (expense) generally consists of income (expense) generated from non-operating transactions, and net gains (losses) from sales or impairment of investments and/or income or losses from investments, if any, including unrealized holding gains (losses) from certain investments required to be marked to market value, if any.

Previous wording

Income tax provision. We make certain estimates and judgments in determining income taxes for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expenses for tax and financial statement purposes and the realizability of assets in future years.

Current wording

Income tax provision (benefit). We make certain estimates and judgments in determining income taxes for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expenses for tax and financial statement purposes and the realizability of assets in future years.

Previous wording

Net revenue decreased $332.7 million to $360.5 million for the year ended December 31, 2024, as compared to $0.7 billion for the year ended December 31, 2023, as a result of macroeconomic conditions impacting customer demand, including excess inventory in the channel built up following the supply shortages in 2022. Broadband net revenue decreased by $86.7 million, driven by decreases in the volume of broadband SOC shipments in this category, partially offset by revenue from certain intellectual property sale agreements and increases from reversals of unclaimed rebates due to expiration of rebate pricing. Connectivity revenue decreased $82.5 million due to decreased volume of shipments of certain products associated with residential broadband market decline, partially offset by revenue from certain intellectual property sale agreements. The decrease in infrastructure revenues of $63.2 million was driven by decreases in the volume of wireless backhaul shipments, and high performance analog shipments, partially offset by improvement in shipments of from high-speed interconnect products, and revenues from certain intellectual property sale agreements. Industrial and multi-market revenue decreased $100.4 million driven by a decreased volume of shipments of component and high-performance analog products. Price changes did not have a material impact to revenues period over period.

Current wording

Net revenue increased $107.1 million to $467.6 million for the year ended December 31, 2025, as compared to $360.5 million for the year ended December 31, 2024, due to increased demand in our broadband, connectivity and infrastructure markets, while demand in the industrial and multi-market category decreased. Broadband net revenue increased by $87.6 million, driven by increases in the volume of broadband SoC and cable data shipments in this category. Connectivity revenue increased $22.2 million due to improvements in the volume of Wi-Fi, ethernet, and MoCA product shipments. The increase in infrastructure revenues of $34.3 million was driven by increases in the volume of shipments of high-performance analog products, wireless backhaul, access, and optical products, partially offset by decreases in intellectual property licensing revenue in this category. Industrial and multi-market revenue decreased $37.0 million driven by a decreased volume of shipments of high-performance analog and component products in this category. Price changes did not have a material impact to revenues period over period.

Previous wording

Cost of net revenue decreased $141.9 million to $165.7 million for the year ended December 31, 2024, as compared to $307.6 million for the year ended December 31, 2023. The decrease was driven by a decreased volume of shipments of our products as a result of macroeconomic conditions impacting customer demand for such products as described above under “Net Revenue”. Gross profit percentage declined for the year ended December 31, 2024, as compared to the year ended December 31, 2023, due to reduced absorption of intangible amortization and fixed costs.

Current wording

Cost of net revenue increased $36.1 million to $201.8 million for the year ended December 31, 2025, as compared to $165.7 million for the year ended December 31, 2024. The increase was driven by an increased volume of shipments of our products as described above under “Net Revenue”. Gross profit percentage improved for the year ended December 31, 2025, as compared to the year ended December 31, 2024, due to product mix and decreased intangible asset amortization.

Previous wording

Research and development, or R&D, expense decreased $44.3 million to $225.2 million for the year ended December 31, 2024 from $269.5 million in the year ended December 31, 2023. The decrease was driven by decreases in payroll and benefits expense of $24.2 million, CAD design tools and other software license expense of $8.6 million, stock based compensation of $5.4 million, prototype expense of $5.0 million, bonuses of $4.5 million, consulting expense of $4.1 million, depreciation expense of $1.5 million and occupancy expenses of $1.0 million. These decreases were partially offset by a decrease in income from joint R&D and governmental grants of $10.9 million offset against R&D expense. The decrease in payroll and benefits expense, stock-based compensation, and bonuses are attributable to the Workforce Reductions and cost reduction measures. The decreases in CAD design tool, consulting and prototype expenses are due to timing of project completion. The decrease in depreciation expense is from acquired assets becoming fully amortized as they reached the end of their useful lives. The decrease in income from joint R&D projects and governmental grants is due to timing of governmental R&D grants and termination of certain programs during the first and third quarters of 2024 as a result of the Workforce Reductions. The amount of income from research and development funded by others also varies from period to period depending on availability of such funding, including governmental grants.

Current wording

Research and development, or R&D, expense decreased $16.6 million to $208.6 million for the year ended December 31, 2025 from $225.2 million in the year ended December 31, 2024. The decrease was driven by decreases in payroll and benefits expense of $18.8 million, CAD design tools and other software license costs of $9.1 million, consulting and outside services expenses of $4.8 million, the impact of an increase to income from joint R&D projects and government grants of $2.9 million offset against R&D expense, occupancy expense of $1.3 million, various prototype expenses of $1.0 million, and supplies expenses of $0.8 million. The decrease in expenses are attributable to workforce reductions and cost reduction measures. The amount of income from research and development funded by others varies from period to period depending on availability of such funding, including governmental grants. These decreases were partially offset by increases in bonuses of $17.7 million, stock-based compensation of $2.7 million, and engineering mask expense of $1.9 million. The increase in bonuses is due to improved financial performance over the prior period. The increase in stock-based compensation is due to incremental grants made to employees for retention purposes. Engineering mask expense varies from period to period depending on timing of new products entering the production phase.

Previous wording

We are reducing our research and development spending, including via our Workforce Reductions, to meet evolving demand; however, we expect our research and development expenses to increase in future years as we develop products to drive future growth.

Current wording

We have reduced our research and development spending to align with current project demands and expect our research and development expenses to increase in future years as we develop products to drive future growth.

Previous wording

We are reducing our selling, general and administrative expenses, including via our Workforce Reductions; however, we expect selling, general and administrative expenses to increase in future years when we return to growing our sales and marketing organization to expand into existing and new markets.

Current wording

Our selling, general and administrative expenses have increased over the prior year due to the factors described above, while certain costs within such expenses have been reduced via our cost reduction measures. We expect selling, general and administrative expenses to increase in future years when we return to growing our sales and marketing organization to expand into existing and new markets.

Previous wording

Impairment losses in the year ended December 31, 2024 related to abandonment of certain intellectual property licenses. Impairment losses in the year ended December 31, 2023 also related to abandonment of certain intellectual property licenses.

Current wording

Impairment losses in the year ended December 31, 2024 related to abandonment of certain intellectual property licenses.

Previous wording

Restructuring charges for the year ended December 31, 2024 included $28.9 million in employee severance-related charges, $17.2 million in charges under contracts associated with cancelled projects and related impairment of assets, and $7.2 million in charges related to reduction of space leased for office facilities. A large portion of the employee severance-related charges are estimated statutory severance benefits payable in the jurisdictions in which the terminated employees were employed, with the remainder representing standard severance benefits.

Current wording

Restructuring charges in the year ended December 31, 2024 included $28.9 million in employee severance-related charges and $17.2 million in charges under contracts associated with cancelled projects and related impairment of assets, and $7.2 million in charges related to reduction of space leased for office facilities. A large portion of the employee severance-related charges are estimated statutory severance benefits payable in the jurisdictions in which the terminated employees were employed, with the remainder representing standard severance benefits.

Previous wording

The income tax provision for the year ended December 31, 2024 was $6.5 million compared to an income tax provision of $9.3 million for the year ended December 31, 2023.

Current wording

The income tax benefit for the year ended December 31, 2025 was $4.2 million compared to an income tax provision of $6.5 million for the year ended December 31, 2024.

Previous wording

The difference between our effective tax rate and the 21.0% U.S. federal statutory rate for the year ended December 31, 2023 resulted primarily from the mix of pre-tax income among jurisdictions, permanent tax items including tax credits and a tax on global intangible low-taxed income, stock based compensation, excess tax benefits related to stock-based compensation, and release of uncertain tax positions under ASC 740-10. The permanent tax item related to global intangible low-taxed income, or GILTI, also reflects the then recent legislative changes requiring the capitalization of research and experimentation costs, as well as limitations on the creditability of certain foreign income taxes.

Current wording

The difference between our effective tax rate and the 21.0% U.S. federal statutory rate for the year ended December 31, 2025 primarily related to the mix of pre-tax income among jurisdictions and impact of the valuation allowance on Singapore deferred tax assets, permanent tax items including tax credits, stock based compensation, tax deficiencies related to stock-based compensation, and the release of uncertain tax positions under ASC 740-10.

Previous wording

Our subsidiary in Singapore operates under certain tax incentives in Singapore, which are effective through March 2027. Under these incentives, qualifying income derived from certain sales of our integrated circuits is taxed at a concessionary rate over the incentive period. We also receive a reduced withholding tax rate on certain intercompany royalty payments made by our Singapore subsidiary during the incentive period. We recorded income taxes in the years ended December 31, 2024 and 2023 at the incentive rate. The incentives are conditional upon our meeting certain minimum employment and investment thresholds within Singapore over time, and we may be required to return certain tax benefits in the event we do not achieve compliance related to that incentive period. We currently believe that we will be able to satisfy these conditions without material risk.

Current wording

Our subsidiary in Singapore operates under certain tax incentives in Singapore, which are effective through March 2027. Under these incentives, qualifying income derived from certain sales of our integrated circuits is taxed at a concessionary rate over the incentive period. We also receive a reduced withholding tax rate on certain intercompany royalty payments made by our Singapore subsidiary during the incentive period. During the quarter ended December 31, 2024, we recorded a full valuation allowance against our Singapore deferred tax assets. Due to this Singapore valuation allowance position, no income tax provision was recorded in Singapore for the year ended December 31, 2024. We recorded an income tax benefit in Singapore in the year ended December 31, 2025 and 2024 at the incentive rate. The incentives are conditional upon our meeting certain minimum employment and investment thresholds within Singapore over time, and we may be required to return certain tax benefits in the event we do not achieve compliance related to that incentive period. We currently believe that we will be able to satisfy these conditions without material risk.

Previous wording

As of December 31, 2024, we had cash and cash equivalents of $118.6 million, restricted cash of $1.0 million and net accounts receivable of $85.5 million. Additionally, as of December 31, 2024, our working capital, which we define as current assets less current liabilities, was $141.2 million. Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. Collateral is generally not required for customer receivables. We limit our exposure to credit loss by placing our cash with high credit quality financial institutions. At times, such deposits may be in excess of insured limits. We have not experienced any losses on our deposits of cash and cash equivalents.

Current wording

As of December 31, 2025, we had cash and cash equivalents of $72.8 million, restricted cash of $28.6 million and net accounts receivable of $46.1 million. Additionally, as of December 31, 2025, our working capital, which we define as current assets less current liabilities, was $62.8 million. Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. Collateral is generally not required for customer receivables. We limit our exposure to credit loss by placing our cash with high credit quality financial institutions. At times, such deposits may be in excess of insured limits. We have not experienced any losses on our deposits of cash and cash equivalents.

Previous wording

Our primary uses of cash are to fund operating expenses and purchases of inventory, property and equipment, and from time to time, the acquisition of businesses. In May 2022, we entered into the Merger Agreement to acquire Silicon Motion. However, on July 26, 2023, we terminated the Merger Agreement and were relieved of our obligations to close.

Current wording

Our primary uses of cash are to fund operating expenses and purchases of inventory, property and equipment, and from time to time, the acquisition of businesses and repurchase of our common stock. In May 2022, we entered into the Merger Agreement to acquire Silicon Motion. However, on July 26, 2023, we terminated the Merger Agreement and were relieved of our obligations to close.

Previous wording

Our planned capital expenditures as of December 31, 2024 were not material. Our consolidated balance sheet at December 31, 2024 included in other long-term liabilities $4.4 million for uncertain tax positions, some of which may result in cash payment and $15.0 million received from other parties for jointly funded research and development projects which will be recognized into income when the contingencies associated with the repayment conditions have been resolved. The future payments related to uncertain tax positions recorded as other long-term liabilities have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.

Current wording

Our planned capital expenditures as of December 31, 2025 were not material. Our consolidated balance sheet at December 31, 2025 included $4.1 million in other long-term liabilities for uncertain tax positions, some of which may result in cash payment and $15.0 million received from other parties for jointly funded research and development projects which will be recognized into income when the contingencies associated with the repayment conditions have been resolved. The future payments related to uncertain tax positions recorded as other long-term liabilities have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.

Previous wording

We believe that our $118.6 million of cash and cash equivalents at December 31, 2024 will be sufficient to fund our projected operating requirements for at least the next twelve months. As of December 31, 2024, our indebtedness totaled $125.0 million, which consists of outstanding principal under the Initial Term Loan under the June 23, 2021 Credit Agreement. The June 23, 2021 Credit Agreement also provides the Company with the Revolving Facility in an aggregate principal amount of up to $100.0 million, which remained undrawn as of December 31, 2024. The Initial Term Loan under the June 23, 2021 Credit Agreement has a seven-year term expiring in June 2028 and bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one-month interest period plus 1.00%, in each case, plus an applicable margin of 1.25% or (ii) an adjusted LIBOR rate, subject to a floor of 0.50%, plus an applicable margin of 2.25%. Loans under the Revolving Facility initially bear interest, at a per annum rate equal to either (i) a base rate (as calculated above) plus an applicable margin of 0.00%, or (ii) an adjusted LIBOR rate (as calculated above) plus an applicable margin of 1.00%. Following delivery of financial statements for the Company’s fiscal quarter ending June 30, 2021, the applicable margin for loans under the Revolving Facility will range from 0.00% to 0.75% in the case of base rate loans and 1.00% to 1.75% in the case of LIBOR rate loans, in each case, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. The Company is required to pay commitment fees ranging from 0.175% to 0.25% per annum on the daily undrawn commitments under the Revolving Facility, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. Commencing on September 30, 2021, the Initial Term Loan under the June 23, 2021 Credit Agreement amortizes in equal quarterly installments equal to 0.25% of the original principal amount, with the balance payable at maturity on June 23, 2028. The June 23, 2021 Credit Agreement was amended on June 29, 2023 to implement a benchmark replacement for LIBOR.

Current wording

We believe that our $101.4 million of cash, cash equivalents, and restricted cash at December 31, 2025 will be sufficient to fund our projected operating requirements for at least the next twelve months. As of December 31, 2025, our indebtedness totaled $125.0 million, which consists of outstanding principal under the Initial Term Loan under the June 23, 2021 Credit Agreement. The June 23, 2021 Credit Agreement also provides the Company with the Revolving Facility in an aggregate principal amount of up to $100.0 million, which remained undrawn as of December 31, 2025. The June 23, 2021 Credit Agreement was amended on June 29, 2023 to implement a benchmark replacement for LIBOR. The Initial Term Loan under the June 23, 2021 Credit Agreement has a seven-year term expiring in June 2028 and subsequent to the benchmark replacement amendment bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) an adjusted SOFR rate determined on the basis of a one-month interest period plus 1.00%, in each case, plus an applicable margin of 1.25% or (ii) an adjusted SOFR rate, subject to a floor of 0.50%, plus an applicable margin of 2.25%. Loans under the Revolving Facility initially bear interest, at a per annum rate equal to either (i) a base rate (as calculated above) plus an applicable margin of 0.00%, or (ii) an adjusted SOFR rate (as calculated above) plus an applicable margin of 1.00%. Following delivery of financial statements for the Company’s fiscal quarter ending June 30, 2021, the applicable margin for loans under the Revolving Facility ranges from 0.00% to 0.75% in the case of base rate loans and 1.00% to 1.75% in the case of SOFR rate loans, in each case, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. The Company is required to pay commitment fees ranging from 0.175% to 0.25% per annum on the daily undrawn commitments under the Revolving Facility, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter.

Previous wording

In the year ended December 31, 2024, net cash used in operating activities was $45.3 million, compared to net cash provided by operating activities of $43.4 million for the year ended December 31, 2023. The decline in operating cash flows was driven by a decline in revenue from decreased volume of shipments of our products as a result of macroeconomic conditions impacting customer demand for our products (as discussed under the heading, “Results of Operations,” above). Operating cash flows were also impacted by changes in our working capital, which increased $68.4 million, in particular, in 2024, we collected accounts receivable of $177.6 million, which was partially offset by payments against our price protection liability of $44.6 million and severance and other payments from the Workforce Reductions of $34.5 million.

Current wording

In the year ended December 31, 2025, net cash provided by operating activities was $19.6 million, compared to net cash used in operating activities of $45.3 million for the year ended December 31, 2024. The increase in operating cash flows was driven by an increase in revenue from an increased shipment of our products as a result of customer demand for our products (as discussed under the heading, “Results of Operations,” above). Operating cash flows were also impacted by changes in our working capital, which decreased $23.0 million. In 2025, we collected accounts receivable previously outstanding as of December 31, 2024 of $71.1 million, which was partially offset by payments against our price protection liability of $18.1 million and severance and other payments from workforce reductions of $13.9 million.

Previous wording

Our use of cash in investing activities increased, as we increased investments in property equipment, including production masks. Net cash used in investing activities was $23.4 million for the year ended December 31, 2024 and consisted of purchases of property and equipment of $17.7 million and purchases of intangible assets of $5.8 million.

Current wording

Our use of cash in investing activities declined, as we moved to optimize investments in property and equipment, including production masks. Net cash used in investing activities was $19.8 million for the year ended December 31, 2025 and consisted of purchases of property and equipment of $12.6 million and purchases of intangible assets of $7.2 million.

Previous wording

Net cash used in investing activities was $15.9 million for the year ended December 31, 2023.

Current wording

Net cash used in investing activities was $23.4 million for the year ended December 31, 2024.

Previous wording

We continued cash conservation in 2024 following the general slowdown in the market environment. Net cash provided by financing activities was $1.3 million for the year ended December 31, 2024. Net cash provided by financing activities consisted of net proceeds from the issuance of common stock upon exercise of stock options of $4.1 million partially offset by cash outflows of repayments of minimum tax withholding paid on behalf of employees for restricted stock units of $2.8 million.

Current wording

Our use of cash in financing activities increased due to our repurchase of common stock in the fourth quarter of 2025. Net cash used in financing activities was $18.7 million for the year ended December 31, 2025. Net cash used in financing activities consisted of common stock repurchases of $20.0 million plus cash outflows of repayments of minimum tax withholding paid on behalf of employees for restricted stock units of $2.2 million, partially offset by net proceeds from the issuance of common stock of $3.6 million.