What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 220 added, 154 removed, 482 unchanged (44% of the section changed)

3 unchanged sentences

(in thousands, except share and par value amounts)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

CURRENT ASSETS:

7 unchanged sentences

INTANGIBLE ASSETS, net 421 170

NOTES RECEIVABLE 200 206

GOODWILL 1,177 —

OTHER ASSETS 7,166 1,759

5 unchanged sentences

Current operating lease liabilities 1,165 —

Deferred revenue 17 29

Current portion of long-term debt 3,200 3,200

Other liabilities 4 29

Total current liabilities 15,579 10,728

7 unchanged sentences

STOCKHOLDERS’ EQUITY:

Common stock, $ 0.0001 par value, 740,000,000 shares authorized as of March 31, 2022 and December 31, 2021, and 123,461,312 and 117,750,608 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Common stock, $ 0.0001 par value, 740,000,000 shares authorized as of June 30, 2022 and December 31, 2021, and 125,473,437 and 117,750,608 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 361,963 294,190

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

NET REVENUES $ 8,611 $ 5,450 $ 15,351 $ 10,767

7 unchanged sentences

OTHER INCOME (EXPENSE), net:

Interest expense, net of interest income of $ 16 and $ 2

( 24 ) ( 61 )

Interest income (expense), net 52 ( 63 ) 28 ( 124 )

Gain from change in fair value of warrants — — 51,763 —

15 unchanged sentences

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

NET INCOME (LOSS) $ 33,837 $ ( 18,650 ) $ 113,629 $ ( 25,995 )

8 unchanged sentences

Redeemable Convertible Preferred Stock Stockholder's equity (deficit)

THREE MONTHS ENDED MARCH 31, 2022 Series A

THREE AND SIX MONTHS ENDED JUNE 30, 2022 Series A

preferred stock Series B

7 unchanged sentences

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

BALANCE AT DECEMBER 31, 2021 — — — — — — — — 117,751 $ 15 $ 294,190 $ ( 228,667 ) $ — $ ( 2 ) $ 65,536

BALANCE AT JANUARY 1, 2022 — $ — — $ — — $ — — $ — 117,751 $ 15 $ 294,190 $ ( 228,667 ) $ — $ ( 2 ) $ 65,536

Issuance of common stock under employee stock option and stock award plans — — — — — — — — 2,459 — 1,305 — — — 1,305

5 unchanged sentences

BALANCE AT MARCH 31, 2022 — $ — — $ — — $ — — — 123,461 $ 15 $ 348,658 $ ( 148,875 ) $ — $ ( 62 ) $ 199,736

THREE MONTHS ENDED MARCH 31, 2021

BALANCE AT DECEMBER 31, 2020 16,620 $ 14,970 14,213 $ 27,371 5,416 $ 14,786 18,199 $ 52,379 16,774 $ 2 $ 3,557 $ ( 75,982 ) $ — $ ( 1 ) $ ( 72,424 )

Issuance of common stock under employee stock option and stock award plans — — — — — — — — 1,862 1 2,514 — — — 2,515

Shares issued for business acquisition — — — — — — — — 150 — 1,068 — — — 1,068

Stock-based compensation expense related to employee and non-employee stock awards — — — — — — — — — — 9,723 — — — 9,723

Net income — — — — — — — — — — — 33,837 — — 33,837

BALANCE AT JUNE 30, 2022 — $ — — $ — — $ — — $ — 125,473 $ 16 $ 361,963 $ ( 115,038 ) $ — $ ( 62 ) $ 246,879

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

Redeemable Convertible Preferred Stock Stockholder's equity (deficit)

THREE AND SIX MONTHS ENDED JUNE 30, 2021 Series A

preferred stock Series B

preferred stock Series B-1

preferred stock Series B-2

preferred stock Common stock Additional

capital Accumulated

deficit Notes receivable - shareholder's Accumulated

comprehensive

income (loss) Total

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

BALANCE AT JANUARY 1, 2021 16,620 14,970 14,213 27,371 5,416 14,786 18,199 52,379 16,774 $ 2 $ 3,557 $ ( 75,982 ) $ — $ ( 1 ) $ ( 72,424 )

Issuance of common stock under employee stock option and stock award plans — — — — — — — — 5,843 1 1,405 — ( 1183 ) — 223

Stock-based compensation expense related to employee and non-employee stock awards — — — — — — — — — — 1,835 — — — 1,835

Foreign currency translation adjustment — — — — — — — — — — — — —

1 unchanged sentence

BALANCE AT MARCH 31, 2021 16,620 14,970 14,213 27,371 5,416 14,786 18,199 52,379 22,617 3 6,797 ( 83,327 ) ( 1,183 ) ( 1 ) ( 77,711 )

Issuance of common stock under employee stock option and stock award plans — — — — — — — 12,729 — — 12,729

Rescission of common stock — — — — — — — — ( 4,729 ) — ( 1,231 ) — 1,183 — ( 48 )

Foreign currency translation adjustment — — — — — — — — — — — — — ( 3 ) ( 3 )

Net loss — — — — — — — — — — — ( 18,650 ) — — ( 18,650 )

BALANCE AT JUNE 30, 2021 16,620 14,970 14,213 27,371 5,416 14,786 18,199 52,379 17,888 3 18,295 ( 101,977 ) — ( 4 ) ( 83,683 )

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

16 unchanged sentences

Other assets 418 ( 121 )

Accounts payable, accrued compensation and other expenses 817 619

Accounts payable, accrued compensation and other liabilities 1,883 4,562

Operating lease liability ( 581 ) —

2 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Business acquisition, net of cash acquired ( 645 ) —

Asset acquisition — ( 680 )

Investment in joint venture

( 5,204 ) ( 150 )

Purchases of property and equipment

7 unchanged sentences

Proceeds from issuance of common stock in connection stock option exercises 880 222

Proceeds from issuance of long-term debt — —

Principal payments on long-term debt ( 1,600 ) —

Net cash (used in) provided by financing activities

Net cash provided by financing activities

( 1,308 ) 222

Effect of exchange rate changes on cash

8 unchanged sentences

Cash paid for interest

Shares issued for business acquisition $ 1,068 $ —

Capital expenditures in accounts payable $ 873 $ 254

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

8 unchanged sentences

The Company presently operates as a product design house that contracts the manufacturing of its chips and packaging to partner suppliers.

Navitas maintains its operations around the world, including the United States, China, Taiwan and the Philippines, with principal executive offices in El Segundo, California.

Navitas maintains its operations around the world, including the United States, Ireland, Germany, Italy, Belgium, China, Taiwan and the Philippines, with principal executive offices in El Segundo, California.

Reorganization

13 unchanged sentences

Pursuant to the terms of the BCA, the Business Combination was consummated (the “Closing”) on October 19, 2021 (the “Closing Date”) by means of (i) a tender offer to acquire the entire issued share capital of Navitas Ireland (other than Navitas Ireland Restricted Shares (as defined below)) in exchange for the Tender Offer Consideration (as defined below) (the “Tender Offer”) and (ii) the merger of a wholly owned subsidiary of Live Oak (“Merger Sub”) with and into Navitas Delaware (the “Merger”), with Navitas Delaware surviving the Merger.

See the Company’s annual report on 10-K filed with the SEC on March 31, 2022 for further information.

See the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2022 for further information.

The Business Combination was accounted for as a reverse recapitalization, in accordance with GAAP.

4 unchanged sentences

For all periods presented, unless stated otherwise, references to Legacy Navitas common shares and options for common shares outstanding before the Closing and related per share amounts have been retroactively restated to give effect to the reverse recapitalization, specifically, the Exchange Ratio of 1.0944 shares to 1 at Closing.

References to share quantities for Legacy Navitas convertible preferred stock related to balances or activity before the Closing reflect the historical quantities and are not adjusted for the Exchange Ratio.

References to share

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

quantities for Legacy Navitas convertible preferred stock related to balances or activity before the Closing reflect the historical quantities and are not adjusted for the Exchange Ratio.

Acquisition of VDDTech

On June 10, 2022, the Company’s wholly owned subsidiary, Navitas Semiconductor Limited, acquired all of the stock of VDDTECH srl, a private Belgian company (“VDDTech”) for approximately $ 1,859 in cash and stock.

Based in Mont-saint-Guibert, Belgium, VDDTech creates advanced digital-isolators for next-generation power conversion.

VDDTech’s net assets and operating results since the acquisition date are inc luded in the Company’s Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2022, and were not material.

The Company issued 113 restricted shares that are subject to time based vesting and issued another 151 restricted shares that are subject to time and performance based vesting over the next four and three years , respectively.

These restricted shares are subject to certain individuals maintaining employment with the Company and, therefore, are accounted for under ASC 718.

The Company has recorded a preliminary allocation of the purchase price to tangible assets acquired and liabilities assumed based on their fair values as of the acquisition date.

The excess of the purchase price over the fair value of tangible assets and liabilities of $ 1,177 was recorded as goodwill.

Upon a final determination of the purchase price and the final valuation of the intangible assets acquired, primarily including developed technology, the Company will allocate the purchase price to tangible and intangible assets acquired and liabilities assumed, and adjust the excess purchase price allocated to goodwill as needed.

Basis of presentation

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The results of operations for the three months ended March 31, 2022 shown in this report are not necessarily indicative of results to be expected for the full year ending December 31, 2022.

The results of operations for the three and six months ended June 30, 2022 shown in this report are not necessarily indicative of results to be expected for the full year ending December 31, 2022.

In the opinion of the Company’s management, the information contained herein reflects all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the Company’s results of operations, financial position, cash flows and stockholders’ equity (deficit).

9 unchanged sentences

In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) (“ASU 2016-02”), and also issued subsequent amendments under ASU 2019-10 and ASU 2020-05 (collectively ASC 842).

On January 1, 2022, the Company adopted ASC 842 and the related amendments.

On January 1, 2022, the Company adopted

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

ASC 842 and the related amendments.

ASC 842 requires lessees to (i) recognize a right of use asset and a lease liability that is measured at the present value of the remaining lease payments, on the consolidated balance sheets, (ii) recognize a single lease cost, calculated over the lease term on a straight-line basis and (iii) classify lease related cash payments within operating and financing activities.

6 unchanged sentences

The Company is currently evaluating the impact of the new standard on the Company’s condensed consolidated financial statements and related disclosures.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

($ in thousands, except per share amounts and where noted)

PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Furniture and fixtures

5 unchanged sentences

$ 4,266 $ 2,302

For the three months ended March 31, 2022 and 2021, depreciation expense was $ 125 and $ 80 , respectively, and was determined using the straight-line method over the following estimated useful lives:

For the three and six months ended June 30, 2022, depreciation expense was $ 186 and $ 352 , respectively.

For the three and six months ended June 30, 2021, depreciation expense was $ 86 and $ 166 .

The depreciation method was determined using the straight-line method over the following estimated useful lives:

Furniture and fixtures

2 unchanged sentences

Inventory consists of the following:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Raw materials

2 unchanged sentences

$ 13,995 $ 11,978

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

7 unchanged sentences

The short-term nature of the Company’s cash and cash equivalents, accounts receivable, debt and current liabilities causes each of their carrying values to approximate fair value for all periods presented.

Cash equivalents classified as Level 1 instruments were $ 145.0 million and $ 159.6 million as of March 31, 2022 and December 31, 2021, respectively.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

($ in thousands, except per share amounts and where noted)

The following table presents the Company’s fair value hierarchy for financial liabilities as of March 31, 2022 :

Cash equivalents classified as Level 1 instruments were $ 131.5 million and $ 159.6 million as of June 30, 2022 and December 31, 2021, respectively.

The following table presents the Company’s fair value hierarchy for financial liabilities as of June 30, 2022 :

Level 1 Level 2 Level 3 Total

15 unchanged sentences

The Term Loan bears interest at a rate equal to the greater of (i) US Prime Rate plus 0.75 % or (ii) 5.5 % and is collateralized by all assets of the Company.

As of March 31, 2022 and 2021 , the interest rate was 4 %.

As of June 30, 2022, the interest rate was 5.5 %.

The loan is payable in monthly installments beginning September 1, 2021 with a final maturity date of January 1, 2024.

1 unchanged sentence

On August 1, 2021, the Company drew down $ 2,000 , the maximum available amount under the Second Term Advance and Third Term Advance.

In connection with execution of the Term Loan, the Company issued warrants to the bank (see Note 9).

The fair value of the warrants at the date of issuance was $ 16 and was recorded as debt discount, subject to amortization using the effective interest rate method over the term of the loan.

Amortization of debt discount and issuance costs for the three months ended March 31, 2022 and 2021 was $ 3 and $ 3 , respectively.

Amortization of debt discount and issuance costs includes the write-off of unamortized costs as of the date that the prior term loan was extinguished in 2020.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

The following is a summary of the carrying value of long-term debt as of March 31, 2022 and December 31, 2021:

March 31, 2022 December 31, 2021

In connection with execution of the Term Loan, the Company issued warrants to the bank (see Note 9).

The fair value of the warrants at the date of issuance was $ 16 and was recorded as debt discount, subject to amortization using the effective interest rate method over the term of the loan.

Amortization of debt discount and issuance costs for the three and six months ended June 30, 2022 was $ 2 and $ 6 , respectively.

Amortization of debt discount and issuance costs for the three and six months ended June 30, 2021 was $ 3 and $ 6 , respectively.

Amortization of debt discount and issuance costs includes the write-off of unamortized costs as of the date that the prior term loan was extinguished in 2020.

The following is a summary of the carrying value of long-term debt as of June 30, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

$ 5,333 $ 6,933

5 unchanged sentences

$ 2,122 $ 3,716

As of March 31, 2022, future scheduled principal payments of debt obligations were as follows:

2022 (less than one year) $ 2,401

As of June 30, 2022, future scheduled principal payments of debt obligations were as follows:

2022 (remaining) $ 1,600

Total $ 5,333

3 unchanged sentences

The operating leases do not contain material residual value guarantees or material restrictive covenants.

Rent expense, including short-term lease cost, was $ 352 and $ 267 for the three months ended March 31, 2022 and 2021, respectively.

Rent expense, including short-term lease cost, was $ 364 and $ 716 for the three and six months ended June 30, 2022, respectively.

Rent expense, including short-term lease cost, was $ 285 and $ 552 for the three and six months ended June 30, 2021, respectively.

Information related to the Company right-of-use assets and related operating lease liabilities were as follows:

March 31, 2022

Six Months Ended June 30, 2022

Cash paid for operating lease liabilities $ 527

3 unchanged sentences

Weight-average discount rate 4.25 % - 5.5 %

Maturities of lease liabilities due in 12-month period ending March 31,

Less imputed interest ( 48 )

Total lease liabilities $ 1,444

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

Maturities of lease liabilities due in 12-month period ending June 30,

Thereafter 1,724

Less imputed interest 1,206

Total lease liabilities $ 6,989

Supplemental information for comparative periods

15 unchanged sentences

Under the terms of the 2021 Plan, the Company is authorized to issue, pursuant to awards granted under the 2021 Plan, (a) up to 16,334,527 shares of Common Stock;

plus (b) up to 15,802,050 shares of Common Stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021;

plus (b) up to 15,802,050 shares of Common

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

Stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021;

plus (c) an annual increase, effective as of the first day of each fiscal year up to and including January 1, 2031, equal to the lesser of (i) 4 % of the number of shares of Common Stock outstanding as of the conclusion of the Company’s immediately preceding fiscal year, or (ii) such amount, if any, as the board of directors may determine.

3 unchanged sentences

The Company recognizes the fair value of stock-based compensation in its financial statements over the requisite service period of the individual grants, which generally equals a four-year vesting period.

The Company uses estimates of

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

($ in thousands, except per share amounts and where noted)

volatility, expected term, risk-free interest rate and dividend yield in determining the fair value of these awards and the amount of compensation expense to recognize.

The Company uses estimates of volatility, expected term, risk-free interest rate and dividend yield in determining the fair value of these awards and the amount of compensation expense to recognize.

The Company uses the straight-line method to amortize stock awards granted over the requisite service period of the award, which may be explicit or derived, unless market or performance conditions result in a graded attribution.

The following table summarizes the stock-based compensation expense recognized for the three months ended March 31, 2022 and 2021:

(In thousands) March 31, 2022 March 31, 2021

The following table summarizes the stock-based compensation expense recognized for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Net revenues $ — $ 50 $ — $ 163

6 unchanged sentences

Expense is recognized beginning in the period in which performance is considered probable.

The fair value of incentive stock options and non-statutory stock options issued was estimated using the Black-Scholes model with the following weighted-average assumptions used during the three months ended March 31, 2021.

The Company did not grant any awards during the three months ended March 31, 2022.

March 31, 2021

Risk-free interest rates

Expected volatility rates

Expected dividend yield

Expected term (in years)

Weighted-average grant date fair value of options

The fair value of incentive stock options and non-statutory stock options issued was estimated using the Black-Scholes model.

The Company did not grant any awards during the six months ended June 30, 2022.

A summary of stock options outstanding, excluding LTIP options as of June 30, 2022, and activity during the three months then ended, is presented below:

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

A summary of stock options outstanding, excluding LTIP options as of March 31, 2022, and activity during the three months then ended, is presented below:

Stock Options Shares

4 unchanged sentences

$ 0.51 6.80 $ 3.34

( 1,721 ) $ .08 - $ 1.06

Granted — — — — —

Exercised ( 3,165 ) $ .08 - $ 1.06

Forfeited or expired ( 34 ) $ 1.06 0.76 — 3.10

( 2 ) $ 1.06 1.06 — 9.22

( 1 ) $ 1.06 1.06 — 9.22

Outstanding at March 31, 2022 9,529 $ .08 - $ 1.06

Cancelled ( 1 ) $ 1.06 1.06 — 2.80

Outstanding at June 30, 2022 8,053 $ .08 - $ 1.06

$ 0.60 6.88 $ 3.26

Vested and Exercisable at March 31, 2022 7,064 $ .08 - $ 1.06

Vested and Exercisable at June 30, 2022 5,945 $ .08 - $ 1.06

$ 0.45 6.40 $ 3.41

During the three months ended March 31, 2022 and 2021, the Company recognized $ 124 and $ 139 , respectively, of stock-based compensation expense for the vesting of outstanding stock options, excluding $ 1.4 million related to the LTIP Options described below.

At March 31, 2022, unrecognized compensation cost related to unvested awards totaled $ 1.3 million.

During the three and six months ended June 30, 2022, the Company recognized $ 120 and $ 245 respectively, of stock-based compensation expense for the vesting of outstanding stock options, excluding $ 1.4 million related to the LTIP Options described below.

During the three and six months ended June 30, 2021, the Company recognized $ 208 and $ 347 , respectively, of stock-based compensation expense for the vesting of outstanding stock options.

At June 30, 2022, unrecognized compensation cost related to unvested awards totaled $ 0.9 million.

The weighted-average period over which this remaining compensation cost will be recognized is 1.9 years.

12 unchanged sentences

Weighted-average grant date fair value of options

The Company recognized $ 1.4 million of stock-based compensation expense for the three months ended March 31, 2022.

The Company recognized $ 1.4 million and $ 2.8 million of stock-based compensation expense for the three month and six months ended June 30, 2022, respectively.

The unrecognized compensations expense related to the LTIP Options is $ 50.1 million.

Restricted Stock Units

On August 25, 2021, the Company granted an aggregate of 4,135,000 Legacy Navitas RSU’s under the 2020 Plan to certain members of senior management pursuant to restricted stock unit agreements (collectively, the “RSU Agreements”).

On August 25, 2021, Legacy Navitas granted an aggregate of 4,135,000 Legacy Navitas RSUs under the 2020 Plan to certain members of senior management pursuant to restricted stock unit agreements (collectively, the “RSU Agreements”).

At the Closing of the Business Combination, these Legacy Navitas RSUs were assumed by the Company and converted at the Exchange Ratio into RSUs to acquire an aggregate of 4,525,344 shares of common stock.

Each RSU represents the right to receive one share of common stock of the Company, subject to the vesting and other terms and conditions set forth in the RSU Agreements and the 2020 Plan.

Up to 3,500,000 of these RSU awards vest in three equal installments over a three-year period subject to the occurrence of an IPO (which includes the Business Combination)

3,830,400 of these RSU awards are subject to vesting in

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

and certain valuation targets, subject to an accelerated vesting schedule based on the satisfaction of certain stock price targets.

Up to 500,000 RSUs vest on the six-month anniversary of the grant date, subject to the occurrence of an IPO and certain valuation targets.

Up to 52,500 RSUs vest upon the occurrence of an IPO, while the remaining 82,500 RSUs vest as specified by an RSU Agreement over a period of approximately three years .

As of October 19, 2021, the IPO performance condition had been met due to the Business Combination.

A summary of RSUs outstanding as of March 31, 2022, and activity during the three months then ended, is presented below:

Restricted Stock Unit Awards Shares

(In thousands) Weighted-Average

Grant Date Fair

Value Per Share

three equal installments over a three-year period, subject to the occurrence of an IPO (which includes the Business Combination) and certain valuation targets, and subject to accelerated vesting based on the satisfaction of certain stock price targets.

547,200 of these RSUs were subject to vesting on the six-month anniversary of the grant date, subject to the occurrence of an IPO (which included the Business Combination) and certain valuation targets.

57,456 of these RSUs were subject to vesting upon the occurrence of an IPO (which included the Business Combination), while the remaining 90,288 RSUs are subject to vesting as specified by an RSU Agreement over a period of approximately three years .

As of October 19, 2021, the IPO performance condition had been met as a result of the completion of the Business Combination.

A summary of RSUs outstanding as of June 30, 2022, and activity during the six months then ended, is presented below:

Restricted Common Stock Awards Shares

(In thousands) Weighted-Average Grant Date Fair Value Per Share

Outstanding at December 31, 2021 4,468 $ 9.62

2 unchanged sentences

Forfeited ( 119 ) 10.83

Outstanding at March 31, 2022 7,246 $ 10.15

During the three months ended March 31, 2022 and March 31, 2021, the Company recognized $ 16.2 million and $ 1.4 million of stock-based compensation expense for the vesting of RSAs and RSUs.

At March 31, 2022, unrecognized compensation cost related to unvested RSU awards totaled $ 14.7 million.

Outstanding at June 30, 2022 7,198 $ 9.91

During the three and six months ended June 30, 2022, the Company recognized $ 7.4 million and $ 23.3 million of stock-based compensation expense for the vesting of RSAs and RSUs.

During the three and six months ended June 30, 2021, the Company recognized $ 12,330 and $ 13,772 of stock-based compensation expense for the vesting of RSAs and RSUs.

As of June 30, 2022, unrecognized compensation cost related to unvested RSU awards totaled $ 31.3 million.

The weighted-average period over which this remaining compensation cost is expected be recognized is 2.03 years.

The Company accrued $ 2.5 million and $ 2.0 million as of March, 2022 and December 31, 2021, respectively, related to a stock-based bonus plan that the Company plans to settle by issuing a variable number of fully-vested restricted stock units to employees.

Based on the closing share price of the Company’s Class A Common Stock of $ 10.28 on March 31, 2022, approximately 241,287 shares would have been issued, however, the actual number of shares will be based on the share price at the date of settlement .

The Company accrued $ 3.5 million and $ 2.0 million as of June 30, 2022 and December 31, 2021, respectively, related to a stock-based bonus plan that the Company plans to settle by issuing a variable number of fully-vested restricted stock units to employees.

Based on the closing share price of the Company’s Class A Common Stock of $ 3.86 on June 30, 2022, approximately 907,954 shares would have been issued, however, the actual number of shares will be based on the share price at the date of settlement .

Unvested Earnout Shares

2 unchanged sentences

As a result, these unvested earn-out shares are equity-classified awards and have an aggregated grant date fair value of $ 19.1 million (or $ 11.52 per share).

During the three months ended March 31, 2022, the Company recognized $ 6.3 million of stock-based compensation expense for the vesting of earnout shares.

At March 31, 2021, unrecognized compensation cost related to unvested earnout shares totaled $ 7.4 million.

During the six months ended June 30, 2022, the Company recognized $ 0.8 million of stock-based compensation expense for the vesting of earnout shares.

At June 30, 2022, unrecognized compensation cost related to unvested earnout shares totaled $ 6.1 million.

The weighted-average period over which this remaining compensation cost is expected be recognized is 0.4 years.

Refer to Note 10 in this quarterly report.

Refer to Note 10.

WARRANT LIABILITY

2 unchanged sentences

On February 4, 2022, the Company gave notice that it would redeem all of the Warrants, as further described below.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

Closing of the Business Combination) or, in the event of redemption, the corresponding redemption date.

The Warrants were exercisable only during the period commencing December 7, 2021 ( 12 months after the consummation of Live Oak’s initial public offering) and ending on the earlier of October 19, 2026 ( five years after the Closing of the Business Combination) or, in the event of redemption, the corresponding redemption date.

The Company had the right to redeem not less than all of the outstanding Public Warrants on 30 days’ notice, at a redemption price of $ 0.01 per Warrant, if the reported closing price of the Common Stock was at least $ 18.00 per share for any 20 of 30 trading days ending three business days before the notice of redemption, subject to certain other conditions.

10 unchanged sentences

A total of 377,187 Warrants remained outstanding and unexercised at the Redemption Date and were redeemed for an aggregate Redemption Price of $ 38 .

Prior to the redemption date, the warrants had an aggregate fair value of $ 81,388 which resulted in a gain of $ 51,763 due to the decrease in the fair value of the warrant liability in the quarter ended March 31, 2022.

There were no outstanding warrants as of March 31, 2022.

Prior to the redemption date, the warrants had an aggregate fair value of $ 81,388 which resulted in a gain of $ 0 and $ 51,763 due to the decrease in the fair value of the warrant liability in the three and six months ended June 30, 2022.

There were no outstanding warrants as of June 30, 2022.

EARNOUT LIABILITY

8 unchanged sentences

These earnout shares have been categorized into two components:

(i) the “Vested Shares” - those associated with stockholders with vested equity at the closing of the Business Combination that will be earned upon achievement of the Earnout Milestones and (ii) the “Unvested Shares” - those associated with stockholders with unvested equity at the closing of the Business Combination that will be earned over the remaining service period with the Company on their unvested

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

equity shares and upon achievement of the Earnout Milestones.

of the Business Combination that will be earned over the remaining service period with the Company on their unvested equity shares and upon achievement of the Earnout Milestones.

The Vested Shares are classified as liabilities in the consolidated balance sheet and the Unvested Shares are equity-classified share-based compensation to be recognized over time (see Note 8 - Share-based Compensation).

4 unchanged sentences

The valuation model utilized the following assumptions:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Risk-free interest rate

3 unchanged sentences

At the closing of the Business Combination on October 19, 2021, the earnout liability had an initial fair value of $ 96,069 , which was recorded as a long-term liability and a reduction to additional paid in capital in the consolidated balance sheet.

As of March 31, 2022 and December 31, 2021, the earnout liability had a fair value of $ 70,767 and $ 134,173 , respectively which resulted in a gain due to the decrease in the fair value of the earnout liability of $ 63,406 .

As of June 30, 2022 and December 31, 2021, the earnout liability had a fair value of $ 15,913 and $ 134,173 , respectively which resulted in a gain due to the decrease in the fair value of the earnout liability of $ 54,854 and $ 118,260 for the three and six month ended June 30, 2022, respectively.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

SIGNIFICANT CUSTOMERS AND CREDIT CONCENTRATIONS

Customer Concentration

Nearly all of the Company’s revenues are attributable to sales of the Company’s products to distributors of electronic components.

Majority of the Company’s revenues are attributable to sales of the Company’s products to distributors of electronic components.

These distributors sell the Company’s products to a range of end users, including OEMs and merchant power supply manufacturers.

The following customers represented 10% or more of the Company’s net revenues for the respective three months ended March 31, 2022 and 2021, respectively:

Customer March 31, 2022 March 31, 2021

The following customers represented 10% or more of the Company’s net revenues for the respective three and six months ended June 30, 2022 and 2021, respectively:

Three Months Ended June 30, Six Months Ended June 30,

Customer 2022 2021 2022 2021

Distributor A 16 % * * *

1 unchanged sentence

Distributor C 21 % 23 % 29 % 19 %

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

($ in thousands, except per share amounts and where noted)

Distributor D 16 % 32 % 23 % 21 %

Distributor E * 42 % * 38 %

Distributor F * * * 20 %

*Total customer net revenues was less than 10% of total net revenues.

Revenues by Geographic Area

The Company considers the domicile of its end customers, rather than the distributors it sells to directly, to be the basis for attributing revenues from external customers to individual countries.

Revenues for the three months ending March 31, 2022 and 2021, were attributable to end customers in the following countries:

Country March 31, 2022 March 31, 2021

Revenues for the three and six months ended June 30, 2022 and 2021, were attributable to end customers in the following countries:

Three Months Ended June 30, Six Months Ended June 30,

Country 2022 2021 2022 2021

Europe* 38 % — 21 % —

United States

Rest of Asia 12 9 10 9

100 % 100 % 100 % 100 %

*Impractical to disclose the revenue percentages by individual countries within Europe and therefore Europe is presented in total.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

Concentration of Credit Risk

4 unchanged sentences

The Company does not have any off-balance-sheet credit exposure related to its customers.

The following customers represented 10% or more of accounts receivable:

Customer March 31, 2022 December 31, 2021

The following customers represented 10% or more of the Company’s accounts receivable.

Customer June 30, 2022 December 31, 2021

Distributor A * 44 %

3 unchanged sentences

Distributor E 30 % *

Distributor F 21 % *

* Total customer accounts receivable was less than 10% of net accounts receivables.

*Total customer accounts receivable was less than 10% of net account receivables.

Concentration of Supplier Risk

8 unchanged sentences

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

7 unchanged sentences

The Company has no plans to declare dividends.

A summary of the net income (loss) per share calculation is as follows for the three months ended March 31,:

(In thousands, except per share amounts) March 31, 2022 March 31, 2021

A summary of the net income (loss) per share calculation is as follows for the three and six months ended June 30:

Three Months Ended June 30, Six Months Ended June 30,

Numerator - basic and diluted:

2022 2021 2022 2021

Net income (loss) $ 33,837 $ ( 18,650 ) $ 113,629 $ ( 25,995 )

14 unchanged sentences

Shares excluded from diluted weighted average shares 23,358 67,485 22,756 67,485

(1) The Company’s potentially dilutive securities, which include unexercised stock options, unvested shares, preferred shares and warrants for common and preferred shares, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share for the three months ended March 31, 2021.

Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common shareholders is the same.

(2) Balances as of March 31, 2021 r etroactively restated to give effect to the October 19, 2021 reverse recapitalization.

(1) The Company’s potentially dilutive securities, which include unexercised stock options, unvested shares, preferred shares, earnout shares, and warrants for common and preferred shares, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share for the three and six months ended June 30, 2021.

For the three and six months ended June 30, 2022, potentially dilutive securities have been excluded as these securities contain performance metric(s) which have not be satisfied as of June 30, 2022.

Therefore, the

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common shareholders is the same.

(2) Balances as of June 30, 2022 r etroactively restated to give effect to the October 19, 2021 reverse recapitalization.

PROVISION FOR INCOME TAXES:

4 unchanged sentences

Realization of the NOL carryforwards is dependent on the Company generating sufficient taxable income prior to expiration of the NOL carryforwards and is also potentially subject to usage limitations due to changes in the Company’s ownership.

As of March 31, 2022, the Company continues to maintain a valuation allowance as the Company believes that it is not more likely than not that the deferred tax assets will be fully realized.

The Company had no unrecognized tax benefits for the three months ended March 31,2022 and 2021.

As of June 30, 2022, the Company continues to maintain a valuation allowance as the Company believes that it is not more likely than not that the deferred tax assets will be fully realized.

The Company had no unrecognized tax benefits for the three and six months ended June 30,2022 and 2021.

The Company recognizes interest and penalties related to unrecognized tax benefits in operating expenses.

No such interest and penalties were recognized during the three months ended March 31, 2022 and 2021.

No such interest and penalties were recognized during the three and six months ended June 30, 2022 and 2021.

COMMITMENTS and CONTINGENCIES

Purchase Obligations

At March 31, 2022, the Company had no non-cancelable purchase obligations that were due beyond one year.

At June 30, 2022, the Company had no non-cancelable purchase obligations that were due beyond one year.

Employment agreements

1 unchanged sentence

Aggregate payments that would be required to be made in the event of termination under the agreements are approximately $ 1,443 .

A March 31, 2022 no terminations have occurred or are expected to occur pursuant to these arrangements and, accordingly, no termination benefits have been accrued.

At June 30, 2022, no terminations have occurred or are expected to occur pursuant to these arrangements and, accordingly, no termination benefits have been accrued.

Indemnifications

3 unchanged sentences

The Company also, from time to time, has granted a specific indemnification right to individual customers.

The Company believes its internal development processes and other policies and practices limit its exposure related to such indemnifications.

In addition, the Company requires its employees to sign a proprietary information and inventions agreement, which assigns the rights to its employees’ development work to the Company.

To date, the Company has not had to reimburse any of its distributors or end customers for any losses related to these indemnifications and no material claims were outstanding as of March 31, 2022.

For several reasons, including the lack of prior indemnification claims and

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and March 31, 2021

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

the lack of a monetary liability limit for certain infringement cases, the Company cannot determine the maximum amount of potential future payments, if any, related to such indemnifications.

The Company believes its internal development processes and other policies and practices limit its exposure related to such indemnifications.

In addition, the Company requires its employees to sign a proprietary information and inventions agreement, which assigns the rights to its employees’ development work to the Company.

To date, the Company has not had to reimburse any of its distributors or end customers for any losses related to these indemnifications and no material claims were outstanding as of June 30, 2022.

For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases, the Company cannot determine the maximum amount of potential future payments, if any, related to such indemnifications.

Legal proceedings and contingencies

6 unchanged sentences

The notes have various maturity dates through May 1, 2023 and bear interest at rates ranging from 1 % to 2.76 %.

The Company recognized $ 4 and $ 4 of interest income from the notes for the three months ended March 31, 2022 and 2021, respectively.

March 31, 2022 December 31, 2021

As of June 30, 2022, Note 1 was forgiven for a loss of $ 109 and Note 2 was paid off in the amount of $ 88 .

The Company recognized $ 0.3 and $ 0.9 of interest income from the notes for the three and six months ended June 30, 2022, respectively.

The Company recognized $ 0.8 and $ 1.7 of interest income from the notes for the three and six months ended June 30, 2021.

June 30, 2022 December 31, 2021

Notes receivable

3 unchanged sentences

The Company accounts for the investment in the joint venture as an equity-method investment.

Total related party revenues recognized by the Company as a result of arrangements with its joint venture were $ 613 and $ 113 for the quarter ended March 31, 2022 and 2021, respectively, and are included in Net Revenues in the Condensed Consolidated Statements of Operations.

As of March 31, 2022, the investment balance of $ 2.9 million was included in other assets on the consolidated balance sheet.

Purchase of Shares from Executive Officer

On March 11, 2022, we purchased 66,829 shares of our common stock from Todd Glickman, Senior Vice President, Interim Chief Financial Officer and Treasurer, for $ 8.23 per share or an aggregate purchase price of $ 550,003 .

The transaction was undertaken solely for the purpose of satisfying certain tax obligations of Mr.

Glickman, including tax obligations arising in connection with his exercise of options to purchase shares of Legacy Navitas prior to the Business Combination, as contemplated by the Lock-Up Agreement with Mr.

Glickman described above under “Lock-Up Agreements.” The sale was executed pursuant to an agreement entered into between Navitas and Mr.

Glickman on March 4, 2022, which provided that (i) the sale was subject to the approval of our board of directors, (ii) the execution date of the sale would be the fifth trading day after the transaction was duly authorized by the board of directors and (iii) the purchase price would be equal to the closing price on the Nasdaq Stock Market on the trading day immediately preceding the execution date.

Our board of directors authorized the transaction on March 6, 2022, hence the execution date was March 11, 2022 and the purchase price was equal to the closing price of our common stock on March 10, 2022.

Following the sale Mr.

Glickman held 763,067 shares of our common stock.

The foregoing summary of the purchase agreement is qualified in its entirety by reference to the complete agreement, which is filed as Exhibit 10.5 to this quarterly report on Form 10-Q.

Total related party revenues recognized by the Company as a result of arrangements with its joint venture were $ 45 and $ 658 for the three and six months ended June 30, 2022, respectively, and are included in Net Revenues in the Condensed Consolidated Statements of Operations.

As of June 30, 2022, the investment balance of $ 4.7 million was included in other assets on the consolidated balance sheet.

For its unconsolidated joint venture investments, the Company measures and records impairment losses, and reduces the carrying value of the equity investment when indicators of impairment are present and the expected discounted cash flows related to the investment is less than the carrying value.

For the six months ended June 30, 2022, the Company did not record any impairment charges.

Related Party License Revenue

As of June 30, 2022, Navitas entered into a Patent License Agreement with an entity under common control with the Company’s partner in the joint venture described above.

In consideration of the license rights granted, the Company recorded license fee revenue of $ 850 during the three months ended June 30, 2022.

Such amounts are included in Net Revenues in the Condensed Consolidated Statement of Operations.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022 and 2021

($ in thousands, except per share amounts and where noted)

SUBSEQUENT EVENTS

The Company evaluated material subsequent events from the consolidated balance sheet date of March 31, 2022, through May 16, 2022, the date the condensed consolidated financial statements were issued.

There were no material subsequent events as of May 16, 2022.

The Company evaluated material subsequent events from the consolidated balance sheet date of June 30, 2022, through August 15, 2022, the date the condensed consolidated financial statements were issued.

There were no material subsequent events as of August 15, 2022, except as noted below.

Acquisition of GeneSiC Semiconductor

On August 15, 2022, the Company acquired GeneSiC Semiconductor Inc., a private Delaware corporation (“GeneSiC”), in exchange for consideration consisting of $ 100,000 in cash and 24,883,161 shares of Navitas common stock.

The acquisition was consummated pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Gemini Acquisition LLC, a Delaware limited liability company and a wholly owned direct subsidiary of the Company (“Merger Sub”), GeneSiC, and the stockholders of GeneSiC.

Pursuant to the Merger Agreement and immediately after its execution and delivery, GeneSiC merged with and into Merger Sub (the “Merger”), with Merger Sub as the surviving entity and continuing to operate the GeneSiC business after the Merger as a wholly owned subsidiary of the Company.

The Merger Agreement also includes possible earn-out payments of up to $ 25,000 , conditioned on revenue targets for the GeneSiC business over the four fiscal quarters ending September 30, 2023.

Due to the limited time since the acquisition date, and the size and complexity of the GeneSiC acquisition, the accounting for the business combination is not yet complete.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements