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,

2021

2020

2021

2020

Unaudited

Unaudited

Unaudited

Unaudited

GAAP net income (loss)

$  3,878

$  635

$  396

$  (2,379)

Equity-based compensation expense included in cost of revenues

309

166

818

639

Equity-based compensation expense included in research and development expenses

1,852

1,759

7,287

6,874

Equity-based compensation expense included in sales and marketing expenses

441

542

1,626

2,038

Equity-based compensation expense included in general and administrative expenses

946

1,099

3,324

4,085

Income tax benefit related to equity-based compensation expenses

(842)

(196)

(842)

(256)

Amortization of intangible assets, net of taxes, related to acquisition of Intrinsix in 2021 and Hillcrest Labs business, investments in NB-IoT and Immervision technologies

1,388

685

3,959

2,746

Costs associated with the Intrinsix acquisition

342

-

1,730

-

Income associated with the reevaluation of investment in other company, net of taxes.

(1,528)

-

(1,528)

-

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

(1,481)

-

(1,481)

-

Non-GAAP net income

$  5,305

$  4,690

$  15,289

$  13,747

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

23,359

22,911

23,251

22,107

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

375

305

314

979

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

23,734

23,216

23,565

23,086

GAAP diluted earnings (loss) per share

$  0.17

$0.03

$    0.02

$ (0.11)

Equity-based compensation expense, net of taxes

$  0.10

$0.14

$    0.51

$   0.59

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

$  0.06

$0.03

$    0.17

$   0.12

Costs associated with the Intrinsix acquisition

$  0.01

-

$    0.07

-

Income associated with the reevaluation of investment in other company, net of taxes.

$(0.06)

-

$ (0.06)

-

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

$  0.22

$0.20

$    0.65

$  0.60

GAAP revenues - Licensing, NRE and related revenues

$21,327

$12,068

$72,827

$52,513

   Purchase price allocation (PPA) for the Intrinsix acquisition

180

180

   Non-GAAP Licensing, NRE and related revenues

21,507

12,068

73,007

52,513

   Royalties

12,730

16,077

49,879

47,813

Total non-GAAP revenues

$34,237

$28,145

$122,886

$100,326