Navitas Semiconductor Corp 10-Q

Item 1A. Risk Factors. Except as set forth below, there have been no material changes to the risk factors described under Item 1A of our annual report on Form 10-K for the fiscal year ended December 31, 2025. All of these risk factors should be carefully considered in conjunction with the other information included in this quarterly report on Form 10-Q. The risk factors we disclose, as well as other risks not currently known to us or that we currently view as immaterial, could materially and adversely affect our business, financial condition, results of operations, or the value of our securities. We update these disclosures as required to reflect significant developments and evolving business conditions facing the Company and its businesses. Intellectual property infringement or misappropriation assertions by third parties could result in significant costs and adversely affect our business, financial condition, operating results and reputation. If we infringe or misappropriate, or are accused of infringing or misappropriating, the intellectual property rights of third parties, we may incur substantial costs or be unable to commercialize new products. The semiconductor industry is characterized by frequent litigation regarding patent and other intellectual property rights, including by both competitors and so-called “non-practicing entities.” We have received communications, and we expect to receive additional communications from time to time, that allege or imply that our products or technologies infringe the patent or other intellectual property rights of third parties or that invite us to take a license to certain allegedly infringed patents. Lawsuits or other proceedings resulting from allegations of infringement could subject us to significant liability for damages, invalidate our proprietary rights, force us to make changes to our products, and adversely affect our business. In some cases, the allegation of patent infringement is made against our end-customer who may seek indemnification from us. In the event that any third-party succeeds in asserting a valid claim against us or any of our end customers, we could be forced to do one or more of the following: • Discontinue selling, importing or using certain technologies that contain the allegedly infringing intellectual property, which could cause us to stop manufacturing certain products; • Seek to develop non-infringing technologies, which may not be feasible; • Incur significant legal expenses, including defense costs under indemnification obligations; • Pay substantial monetary damages to the party whose intellectual property rights we may be found to be infringing; and/or • We or our end customers could be required to seek licenses to the infringed technology that may not be available on commercially reasonable terms, if at all. We may not prevail in such matters or be able to license any valid and infringed patents from third parties on commercially reasonable terms. This could result in the loss of our ability to make, import and sell our products or require us to pay costly royalties to third parties in connection with sales of our products. In addition, if a third-party causes us to discontinue the use of any patented technologies, we could be required to design around those technologies. This could be 31 TABLE OF CONTENTS costly and time consuming and could have an adverse effect on our financial results. Any significant impairments of intellectual property rights from any litigation we face could materially and adversely impact our business, financial condition, results of operations and our ability to compete. Even when we believe we do not infringe the intellectual property rights of a third party, we may decide to enter into a settlement agreement with the third party in order to avoid the risks and costs resulting from protracted litigation. Such settlement agreements may require us to make fixed or recurring payments to the third party, which could materially and adversely impact our business, financial condition and results of operations. In addition, we could be subject to claims that our employees, or we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of third parties. If we are unable to resolve claims that may be brought against us by third parties related to their intellectual property rights on terms acceptable to us, we may be precluded from offering some of our products or using some of our processes. Defending ourselves against third-party claims, including litigation in particular, may be costly and time consuming and may divert management’s attention from our business. For example, Wolfspeed has filed a lawsuit in the U.S. District Court for the District of Delaware, alleging that certain of our GaN and SiC products infringe certain of Wolfspeed's GaN and SiC patents. We will defend ourselves vigorously against this lawsuit, but patent litigation is costly and outcomes are uncertain. Wolfspeed is seeking monetary damages and injunctive relief, among other remedies. An adverse result could have a material adverse effect on our business and even if we prevail in the litigation, doing so may be costly and time consuming and may divert management’s attention from our business. In addition, on or about July 22, 2026, Renesas Electronics Corporation ("Renesas") filed a lawsuit against us and two of our employees who are former employees of Renesas, including our chief executive officer, alleging misappropriation of trade secrets, breach of contract and other claims. The litigation was filed in the United States District Court for the Northern District of California. We are evaluating this complaint and intend to vigorously defend ourselves against these allegations, but a negative result could have a material adverse impact on our business. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Mine Safety Disclosures. None.