* 

During February 2015 we have made a one-time early payment of $9.6 million to the Israeli Office of Chief Scientist, representing the full balance of the contingent liability related to the NP-5 grants received. Upon making this payment, we have eliminated all future royalty obligations related to our anticipated NP-5 revenues and saved the associated future interest payments related to such obligations. This amount was excluded from the non-GAAP statements of operations as it represents future royalty obligations.

**

In calculating diluted non-GAAP net income per share, the diluted weighted average number of shares outstanding excludes the effects of stock-based compensation expenses in accordance with FASB ASC 718.

EZchip Semiconductor Ltd.

Condensed Consolidated Balance Sheet

(U.S. Dollars in thousands)

June 30,

December 31,

2015

2014

(Unaudited)

(Audited)

ASSETS

CURRENT ASSETS:

Cash, cash equivalents, marketable securities and deposits

$      188,980

$      185,757

Trade receivables, net

8,454

10,865

Other receivables

6,073

4,735

Inventories

7,220

6,459

Total current assets

210,727

207,816

NON CURRENT ASSETS:

Severance pay fund

7,488

7,091

Long term investment and others

420

348

Total non current assets

7,908

7,439

PROPERTY AND EQUIPMENT, NET

3,017

3,601

INTANGIBLE ASSETS, NET

17,064

17,312

GOODWILL

127,706

127,355

TOTAL ASSETS

$      366,422

$      363,523

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Trade payables

$          3,359

$          2,664

Other payables and accrued expenses

11,772

13,726

Total current liabilities

15,131

16,390

ACCRUED SEVERANCE PAY

8,249

7,815

SHAREHOLDERS' EQUITY:

Share capital

170

169

Additional paid-in capital

349,916

349,050

Treasury shares at cost

4,748

--

Accumulated other comprehensive income (loss)

225

(731)

Accumulated deficit

(12,017)

(9,170)

Total shareholders' equity

343,042

339,318

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$        366,422

$        363,523