ACHRONIX SEMICONDUCTOR CORPORATION

RECONCILIATION OF GAAP NET INCOME (LOSS)

TO NON-GAAP MEASURES

(Dollar in thousands, except shares and per share amounts)

(Unaudited)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

2021

2020

2021

2020

Non-GAAP gross margin

GAAP gross profit

$                28,314

$               11,177

$               51,540

$               15,216

GAAP gross margin

82%

80%

80%

79%

Stock-based compensation expense - cost of revenue

32

20

65

40

Non-GAAP gross profit

$                28,347

$               11,198

$               51,606

$               15,257

Non-GAAP gross margin

82%

80%

80%

79%

Non-GAAP Operating income (loss)

GAAP operating income (loss)

$                11,062

$                 1,199

$               20,735

$               (4,245)

Stock-based compensation expense

Cost of revenues 

32

20

65

40

Research and development

306

104

557

211

Sales and marketing

242

120

382

220

General and administrative

318

108

602

220

Total stock-based compensation expense

898

352

1,606

691

Non-GAAP operating income (loss)

$                 1,551

$               22,341

Non-GAAP net income

GAAP net income (loss)

$                12,176

$                  (298)

$               20,939

$               (5,645)

Stock-based compensation expense

898

352

1,606

691

Change in fair value of warrant liability 

(1,095)

222

(328)

(118)

Non-GAAP net income (loss)

$                11,979

$                    276

$               22,217

$               (5,072)

GAAP basic earnings per share

$                    0.66

$                 (0.05)

$                   2.23

$                 (0.91)

Effect of non-GAAP adjustments on basic earnings per share

0.09

0.14

0.09

Non-GAAP basic earnings per share

$                    0.65

$                   0.04

$                   2.37

$                 (0.81)

GAAP diluted earnings per share

$                    0.26

$                 (0.05)

$                   0.53

$                 (0.91)

Effect of non-GAAP adjustments on diluted earnings per share

(0.00)

0.09

0.03

0.09

Non-GAAP diluted earnings per share

$                    0.25

$                   0.04

$                   0.56

$                 (0.81)

Weighted - average shares used in computing net income (loss) per share: 

Basic

18,495

6,226

9,370

6,226

Diluted*

47,278

6,226

39,511

6,226

* Diluted  shares  include options  and warrants  on an  as -if-converted basis  and  exclude redeemable preferred  stocks

Three Months Ended

Six Months Ended

June 30, 

June 30, 

2021

2020

2021

2020

Adjusted EBIT

GAAP net income (loss)

$                12,176

$                  (298)

$               20,939

$               (5,645)

Stock-based compensation expense

898

352

1,606

691

Total other income (expense), net

(1,061)

1,476

(250)

1,356

Provision for income tax

(53)

21

46

44

Adjusted EBIT

$                11,960

$                 1,551

$               22,341

In addition to disclosing financial results calculated in accordance with U. S. generally accepted accounting principles (GAAP), the operating

results presented contain non-GAAP financial measures that exclude the income statement effects of stock-based compensation expense

and expenses related to the change in fair value of our redeemable preferred stock warrants.

Management believes it is useful to provide these non-GAAP financial measures and a reconciliation to comparable GAAP financial measures

as we believe non-GAAP measures provide useful supplemental information for investors to evaluate our operating results in the same manner 

as used by industry research analysts, all of whom present non-GAAP projections in their published reports.  As such, non-GAAP measures

provided by Achronix facilitate a more direct comparison of its performance with the financial reports published by the industry analysts.  

The items reconciling GAAP financial measures to non-GAAP financial measures and additional comments and the usefulness of each item are 

set forth below: 

(1)

Stock-based compensation is excluded by management when evaluating operating activities and for strategic decision making, forecasting 

future results and evaluating current performance. Management believes that utilizing non-GAAP financial measures that exclude this 

non-cash item is useful in providing an alternate measure that excludes the variability caused by different methodologies and subjective 

assumptions used in the valuation of equity awards across different companies.

(2)

Redeemable preferred stock warrant is excluded from the internal analysis of Achronix's operations and management does not view this

non-cash expense as reflective of the business' current performance. Management believes that utilizing non-GAAP financial measures

that exclude this non-cash item is useful in providing an alternate measure that excludes the variability caused by such item.

Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other

companies' financial information and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures 

calculated in accordance with GAAP.

ACHRONIX SEMICONDUCTOR CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar in thousands)

June 30,

December 31,

2021

2020

(unaudited)

(audited)

Assets

Current assets:

Cash and cash equivalents 

$                40,613

$               38,546

Restricted Cash

5,145

5,011

Accounts receivable, net

15,886

16,900

Inventories

14,174

2,116

Prepaid expenses and other current assets

1,944

2,251

Total current assets

77,762

64,824

Property and equipment, net

10,039

3,723

Operating lease assets, net

5,722

-

Intangible assets, net

21,477

16,432

Other current assets

600

1,247

Total assets

$              115,600

$               86,226

Liabilities, redeemable convertible preferred shares and stockholders' equity (deficit)

Current liabilities:

Accounts payable

$                  3,442

$                 5,938

Accrued liabilities

13,942

13,414

Operating lease liabilities

1,236

-

Deferred revenue

2,540

4,176

Total current liabilities

21,160

23,528

Preferred stock warrant liability 

3,983

4,311

Deferred revenue - noncurrent

4,942

2,800

Operating lease liabilities - noncurrent

2,317

-

Other noncurrent liabilities

9,619

6,125

Total liabilities

$                42,021

$               36,764

Redeemable convertible preferred stock

$              320,916

$             320,916

Stockholders' equity (deficit):

Common stock

18

9

Additional paid-in capital

9,151

5,983

Currency translation adjustment

(86)

(87)

Accumulated deficit

(256,420)

(277,359)

Total stockholders' equity (deficit)

(247,337)

(271,454)

Total liabilities, redeemable convertible preferred
shares and stockholders' equity (deficit)

$              115,600

$               86,226