*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures" in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP  FINANCIAL  INFORMATION *
(In thousands)
(Unaudited)

Three Months Ended

March 31,

December 31,

March 31,

2022

2021

2021

Reconciliation of GAAP net loss attributable to Pixelworks Inc. and adjusted EBITDA

GAAP net loss attributable to Pixelworks Inc.

$              (4,592)

$              (3,291)

$              (8,075)

Stock-based compensation

1,049

1,589

1,432

Amortization of acquired intangible assets

90

271

305

Tax effect of non-GAAP adjustments

(3)

9

(20)

Impact of non-GAAP adjustments to redeemable non-controlling interest

-

(17)

-

Non-GAAP net loss attributable to Pixelworks Inc.

$              (3,456)

$              (1,439)

$              (6,358)

EBITDA adjustments:

Depreciation and amortization

$               1,040

$                  964

$               1,016

Non-GAAP interest income and other, net

(162)

(165)

(56)

Non-GAAP provision (benefit) for income taxes

406

(457)

237

Adjusted EBITDA

$              (2,172)

$              (1,097)

$              (5,161)

*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures" in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

PIXELWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

March 31,
2022

December 31,
2021

ASSETS

Current assets:

Cash and cash equivalents

$                55,162

$                     61,587

Accounts receivable, net

8,564

8,708

Inventories

1,794

1,469

Prepaid expenses and other current assets

3,158

2,732

Total current assets

68,678

74,496

Property and equipment, net

5,375

5,656

Operating lease right of use assets

4,177

4,789

Other assets, net

3,715

3,162

Acquired intangible assets, net

-

90

Goodwill

18,407

18,407

Total assets

$              100,352

$                   106,600

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$                  3,702

$                       2,747

Accrued liabilities and current portion of long-term liabilities

9,771

13,563

Current portion of income taxes payable

190

128

Total current liabilities

13,663

16,438

Long-term liabilities, net of current portion

366

519

Deposit liability

12,902

12,716

Operating lease liabilities, net of current portion

2,335

2,853

Income taxes payable, net of current portion

2,816

2,948

Total liabilities

32,082

35,474

Redeemable non-controlling interest

31,527

30,905

Shareholders' equity

36,743

40,221

Total liabilities, redeemable non-controlling interest and shareholders' equity

$              100,352

$                   106,600