the accompanying notes to the unaudited condensed combined pro forma financial information;

the separate audited consolidated financial statements of Marvell Technology Group, Ltd. as of and for the year ended January 30, 2021 and the related notes, included in Marvell’s Annual Report on Form 10-K for the fiscal year ended January 30, 2021;

the separate unaudited condensed consolidated financial statements of MTI as of and for the six months ended July 31, 2021 and the related notes, included in MTI’s Quarterly Report on Form 10-Q for the period ended July 31, 2021;

the separate audited consolidated financial statements of Inphi as of and for the year ended December 31, 2020 and the related notes, included in Inphi’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020;

the separate unaudited condensed consolidated financial statements of Inphi as of and for the three months ended March 31, 2021 and the related notes, included as an Exhibit to this Form 8-K

Net revenue

Cost of goods sold

Gross profit

Operating expenses:

Research and development

Selling, general and administrative

Sales and marketing

General and administrative

Legal settlement

Restructuring related charges

Total operating expenses

Operating loss

Other income (expense):

Interest income

Interest expense

Loss on early extinguishment of debt

Other income, net

Loss before income taxes

Provision (benefit) for income taxes

Net loss

Net loss per share:

Basic

Diluted

Weighted average shares:

Basic

Diluted

Net revenue

Cost of goods sold

Gross profit

Operating expenses:

Research and development

Selling, general and administrative

Sales and marketing

General and administrative

Restructuring related charges

Total operating expenses

Operating loss

Other income (expense):

Interest expense

Interest income

Other income, net

Loss before income taxes

Provision (benefit) for income taxes

Net loss

Net loss per share:

Basic

Diluted

Weighted average shares:

Basic

Diluted

Description of the Inphi acquisition

Description of the Debt Financing

Basis of Presentation

Reclassification Adjustments

Calculation of Merger Consideration and Purchase Price Allocation

Cash consideration to Inphi common stockholders

Common stock (128,100,446 shares of the Company’s common stock at $45.84 per share)

Cash consideration for director and employee accelerated equity awards

Stock consideration for director and employee accelerated equity awards

Stock consideration for replacement equity awards attributable to pre-combination service

Equity component of convertible debt

Total merger consideration

Cash and cash equivalents

Accounts receivable, net

Inventories

Prepaid expenses and other current assets

Property and equipment, net

Goodwill

Acquired intangible assets, net

Other non-current assets

Accounts payable and accrued liabilities

Convertible debt – short term

Convertible debt – long term

Other non-current liabilities

Estimated merger consideration

Developed technology

Customer relationships

Order backlog

Trade names

IPR&D

Debt Financing Adjustment

Reflects the estimated incremental interest expense and amortization of debt financing fees, original issuance discounts related to the debt financing arrangements. In addition the write-off of $11.4 million in capitalized debt issuance cost related to the termination of the bridge loan during the period from January 31, 2021 to July 31, 2021 has been removed from the pro forma condensed combined statement of operations for the six months ended July 31, 2021 and added to the pro forma condensed combined statement of operations for the twelve months ended January 30, 2021 to illustrate the costs that would have been incurred earlier had the acquisition occurred on February 2, 2020.

Reverse historical stated interest expense, amortization of debt issuance costs, and bridge loan expense

Record new stated interest expense and amortization of debt issuance costs

Net adjustment to interest expense

This adjustment reflects the income tax benefit effect of the financing related adjustments based on the applicable statutory tax rate. There was no tax impact in MTI’s historical condensed combined statement of operations related to the $35.6 million interest expense for the six months ended July 31, 2021 and the $5.8 million bridge loan expense for the twelve months ended January 30, 2021, due to the Company’s financing having been in its Bermuda entity which has a 0% statutory tax rate thus no historic tax benefit to reverse. Refer to Note 7(e) for additional details on income tax effects of adjustments.

Transaction Related Adjustments

Reflects the adjustments to eliminate historical depreciation expense, record new depreciation expense based on the fair value of the property and equipment acquired, eliminate historical amortization expense, record new amortization expense based on the fair value of the identifiable acquired intangible assets, eliminate historical stock based compensation expense, record new stock-based compensation expense due to the equity award replacement and resulting remeasurement of the fair value of stock based compensation as a result of the Inphi acquisition, eliminate the incremental cost of sales recorded by the Company following the acquisition based on the fair value of inventory acquired and record the entire inventory fair value adjustment in the twelve months ended January 30, 2021.

Elimination of Inphi’s depreciation on property and equipment

Depreciation after fair value adjustment (1)

Elimination of Inphi’s amortization on intangible assets

Amortization after fair value adjustment (2)

Elimination of historical stock-based compensation expense

Stock based compensation expense after equity award replacement and fair value remeasurement (3)

Incremental inventory adjustment (4)

Net adjustment to cost of goods sold

Depreciation of property and equipment is based on the estimated remaining useful lives of the assets and is calculated on a straight-line basis. Depreciation expense is allocated among cost of goods sold, research and development and selling, general and administrative expense based upon the nature of the activities associated with the property and equipment acquired.

The amortization of intangible assets is based on the periods over which the economic benefits of the intangible assets are expected to be realized. Amortization expense is allocated among cost of goods sold and selling, general and administrative expense based on the nature of the activities associated with the intangible assets acquired. Refer to Note 5 for additional information on the useful lives of the acquired intangible assets expected to be recognized.

Subject to the terms of the Merger Agreement, certain unvested Inphi equity awards were replaced and converted into unvested equity awards of MTI shares.

The pro forma adjustments reflects the elimination of the incremental cost of sales recorded by the Company following the acquisition during the six months ended July 31, 2021 and includes the entire fair value adjustment of $187.1 million during the twelve month period ended January 30, 2021 based on the estimated inventory turnover period of four months.

Reflects the adjustments to eliminate historical depreciation expense, record new depreciation expense based on the fair value of the property and equipment acquired, eliminate historical amortization expense, eliminate historical stock-based compensation expense and record new stock-based compensation expense due to the equity award replacement and resulting remeasurement of the fair value of stock-based compensation as a result of the Inphi acquisition.

Elimination of Inphi’s depreciation on property and equipment

Depreciation after fair value adjustment (1)

Elimination of Inphi’s amortization on intangible assets

Elimination of historical stock-based compensation expense

Stock based compensation expense after equity award replacement and fair value remeasurement (2)

Net adjustment to research and development

Depreciation of property and equipment is based on the estimated remaining useful lives of the assets and is calculated on a straight-line basis. Depreciation expense is allocated among cost of goods sold, research and development and selling, general and administrative expense based upon the nature of the activities associated with the property and equipment acquired.

Subject to the terms of the Merger Agreement, certain unvested Inphi equity awards were replaced and converted into unvested equity awards of MTI shares.

Reflects the adjustments to eliminate historical depreciation expense, record new depreciation expense based on the fair value of the property and equipment acquired, eliminate historical amortization expense, record new amortization expense based on the fair value of the identifiable acquired intangible assets, eliminate historical stock-based compensation expense and record new stock-based compensation expense due to the equity award replacement and resulting remeasurement of the fair value of stock-based compensation as a result of the Inphi acquisition, and adjusting the timing of transaction costs.

Elimination of Inphi’s depreciation on property and equipment

Depreciation after fair value adjustment (1)

Elimination of Inphi’s amortization of intangible assets

Amortization after fair value adjustment (2)

Elimination of historical stock based compensation expense

Stock based compensation expense after equity award replacement and fair value remeasurement (3)

Transaction costs—Marvell or MTI(4)

Transaction costs—Inphi (4)

Net adjustment to selling, general and administrative

Depreciation of property and equipment is based on the estimated remaining useful lives of the assets and is calculated on a straight-line basis. Depreciation expense is allocated among cost of goods sold, research and development and selling, general and administrative expense based upon the nature of the activities associated with the property and equipment acquired.

The amortization of intangible assets is based on the periods over which the economic benefits of the intangible assets are expected to be realized. Amortization expense is allocated among cost of goods sold, and selling, general and administrative expense based on the nature of the activities associated with the intangible assets acquired. Refer to Note 5 for additional information on the useful lives of the acquired intangible assets expected to be recognized.

Subject to the terms of the Merger Agreement, certain unvested Inphi equity awards were replaced and converted into unvested equity awards of MTI shares.

The transaction costs incurred during the period from January 31, 2021 to July 31, 2021 have been removed from the pro forma condensed combined statement of operations for the six months ended July 31, 2021 and added to the pro forma condensed combined statement of operations for the twelve months ended January 30, 2021 to illustrate the costs that would have been incurred earlier had the acquisition occurred on February 2, 2020. These transaction costs are a non-recurring item.

As discussed in Note 2, as part of the acquisition, the Company assumed the $521.7 million principal amount of Inphi’s Convertible Notes. As of July 31, 2021, substantially all of Inphi’s Convertible Notes were converted into a combination of cash and shares of MTI common stock. As a result, this adjustment reflects the elimination of $34.3 million and $12.5 million of interest expense related to the Convertible Notes for the twelve months ended January 30, 2021 and the six months ended July 31, 2021, respectively.

This adjustment reflects the income tax expense/benefit effects of the transaction related adjustments based on applicable statutory tax rates for the jurisdictions associated with the respective transaction related adjustments. Because the tax rates used for these pro forma financial statements are an estimate, the blended rate will likely vary from the actual effective rate in periods subsequent to completion of the Inphi acquisition. Further, the combined company’s ability to use net operating loss carryforwards to offset future taxable income for U.S. federal income tax purposes may be subject to limitations. In general, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses to offset future taxable income. In general, an ownership change occurs if the aggregate stock ownership of certain stockholders (generally 5% stockholders, applying certain look-through rules) increases by more than 50 percentage points over such stockholder’s lowest percentage ownership during the testing period (generally three years). In addition, some of the standards and requirements under ASC 740 (Accounting for Income Taxes) may limit the combined company’s ability to record deferred tax assets relating to originating temporary differences between book and tax basis of income and expense items. Further, these standards may require a valuation allowance to be established against certain existing deferred tax assets of each company as of the completion of the Inphi acquisition and the transactions contemplated by the Inphi merger agreement. In addition, a combination of two companies may also cause the ability for certain valuation allowances associated with one of the companies to no longer be necessary because on a combined basis, there may be new sources of future taxable income to support the reversal of pre-existing valuation allowances. Currently, no adjustment to the unaudited pro forma condensed combined financial information has been made as it relates to whether limitations the combined company might incur under Section 382 of the Code or ASC 740 nor for a preliminary adjustment to the recognition of the acquired deferred tax assets in the form of a decrease to the pre-existing valuation allowances to conform with the Marvell valuation allowance profiles. Furthermore, adjustments to established deferred tax assets and liabilities as well as the recognition of additional deferred tax assets and liabilities may occur in conjunction with the finalization of the purchase accounting and these items could be material. Finally, tax related adjustments included in the unaudited pro forma condensed combined financial information are based on the current tax law and do not consider or contemplate effects of proposed legislative changes.

Reflects the adjustments to weighted average Marvell (or MTI) shares and Inphi shares outstanding. Pro forma weighted average shares outstanding are calculated by adding all shares of MTI common stock issued to Inphi common stockholders (including shares for purchase consideration or acceleration or replacement of equity awards), and subtracting the weighted average shares of MTI common stock issued to Inphi common stockholders that were included in the Company’s calculation of its historical weighted average shares outstanding.

Pro forma basic weighted average shares:

Historical Marvell or MTI weighted average shares outstanding

Issuance of shares to Inphi common stockholders

Remove weighted average of shares issued to Inphi common shareholders included in MTI’s historical weighted average shares

Pro forma weighted average shares (basic)

Pro forma diluted weighted average shares (1):

Historical Marvell or MTI weighted average shares outstanding

Issuance of shares to Inphi common stockholders

Remove weighted average of shares issued to Inphi common shareholders included in MTI’s historical weighted average shares

Pro forma weighted average shares (diluted)

8,605 MTI replacement awards to Inphi equity award holders were excluded from the computation of pro forma diluted weighted average shares as their effect would be anti-dilutive.