Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

U.S. Dollars in thousands, except per share amounts

Three months ended

Year ended

December 31,

December 31,

2022

2021

2022

2021

Unaudited

Unaudited

Unaudited

Unaudited

GAAP net income (loss)

$  1,940

$  3,878

$  (23,183)

$  396

Equity-based compensation expense included in cost of revenues

385

309

1,461

818

Equity-based compensation expense included in research and development expenses

2,359

1,852

8,540

7,287

Equity-based compensation expense included in sales and marketing expenses

485

441

1,550

1,626

Equity-based compensation expense included in general and administrative expenses

893

946

2,954

3,324

Income tax benefit related to equity-based compensation expenses

—

(842)

—

(842)

Amortization, Impairment and Write-off of intangible assets, net of taxes, related to acquisition of Intrinsix and Hillcrest Labs business, investments in NB-IoT and Immervision technologies

869

1,388

10,229

3,959

Impairment cost associated with close of an office

318

—

318

—

Costs associated with the Intrinsix acquisition

326

342

1,303

1,730

Income (loss) associated with the remeasurement of marketable equity securities, net of taxes.

240

(1,528)

1,989

(1,528)

Income tax expense as a result of a write off of a deferred tax asset and withholding tax that can't be utilized

—

—

15,845

—

Retirement expenses of executives

1,271

—

1,271

—

Adjustment related to implementing of US tax reform rule 174

(3,484)

(3,484)

Income tax benefit and additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition

—

(1,481)

42

(1,481)

Non-GAAP net income

$  5,602

$  5,305

$  18,835

$  15,289

GAAP weighted-average number of Common Stock used in computation of diluted net loss and earning per share (in thousands)

23,406

23,359

23,172

23,251

Weighted-average number of shares related to outstanding stock-based awards (in thousands)

684

375

839

314

Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands)

24,090

23,734

24,011

23,565

GAAP diluted income (loss) per share

$  0.08

$  0.17

$  (1.00)

$  0.02

Equity-based compensation expense, net of taxes

$  0.18

$  0.10

$  0.62

$  0.51

Amortization, Impairment and Write-off of intangible assets, net of taxes, related to acquisition of Intrinsix and Hillcrest Labs business, investments in NB-IoT and Immervision technologies

$  0.04

$  0.06

$  0.43

$  0.17

Impairment cost associated with close of an office

$  0.01

$     —

$  0.01

$     —

Costs associated with the Intrinsix acquisition

$  0.01

$  0.01

$  0.06

$  0.07

Income (loss) associated with the remeasurement of marketable equity securities, net of taxes.

$  0.01

$  (0.06)

$  0.09

$  (0.06)

Income tax expense as a result of a write off of a deferred tax asset and withholding tax that can't be utilized

$     —

$     —

$  0.67

$      —

Retirement expenses of executives

$  0.05

$     —

$  0.05

$      —

Adjustment related to implementing of US tax reform rule 174

$ (0.15)

$ (0.15)

Income tax benefit and additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition

$  —

$  (0.06)

$  —

$  (0.06)

Non-GAAP diluted earnings per share

$  0.23

$  0.22

$  0.78

$  0.65

Three months ended

Year ended

December 31,

December 31,

2022

2021

2022

2021

Unaudited

Unaudited

Unaudited

Unaudited

GAAP Operating Income (loss)

$  (1,570)

$  1,556

$  (5,409)

$  3,508

Equity-based compensation expense included in cost of revenues

385

309

1,461

818

Equity-based compensation expense included in research and development expenses

2,359

1,852

8,540

7,287

Equity-based compensation expense included in sales and marketing expenses

485

441

1,550

1,626

Equity-based compensation expense included in general and administrative expenses

893

946

2,954

3,324

Amortization, Impairment and Write-off  of intangible assets related to acquisition of Intrinsix and Hillcrest Labs business, investments in NB-IoT and Immervision technologies

869

1,614

10,229

4,260

Impairment cost associated with close of an office

318

—

318

—

Costs associated with the Intrinsix acquisition

326

342

1,303

1,730

Retirement expenses of executives

1,271

—

1,271

—

Additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition

—

180

42

180

Total non-GAAP Operating Income

$  5,336

$  7,240

$  22,259

$  22,733

Three months ended

Year ended

December 31,

December 31,

2022

2021

2022

2021

Unaudited

Unaudited

Unaudited

Unaudited

GAAP Gross Profit

$  27,527

$  28,134

$  107,596

$  105,879

GAAP Gross Margin

82 %

83 %

80 %

86 %

Additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition

—

180

42

180

Equity-based compensation expense included in cost of revenues

385

309

1,461

818

Amortization and Impairment of intangible assets related to acquisition of Intrinsix and investments in NB-IoT and Immervision technologies

395

996

3,949

1,550

Total Non-GAAP Gross profit

28,307

29,619

113,048

108,427

Non-GAAP Gross Margin

85 %

87 %

84 %

88 %