What changed in this filing

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Item 1. Financial Statements

2024-05-15 compared with 2023-11-09 · 203 added, 377 removed, 388 unchanged (60% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares and par value) September 30, 2023 December 31, 2022

(In thousands, except shares and par value) March 31, 2024 December 31, 2023

CURRENT ASSETS:

15 unchanged sentences

Operating lease liabilities, current 1,857 1,892

Deferred revenue 13,759 486

Customer deposit 8,074 10,953

Total current liabilities 41,972 50,384

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STOCKHOLDERS’ EQUITY:

Common stock, $ 0.0001 par value, 750,000,000 shares authorized as of both September 30, 2023 and December 31, 2022, and 178,584,150 and 153,628,838 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

Common stock, $ 0.0001 par value, 750,000,000 shares authorized as of March 31, 2024 and December 31, 2023, and 182,996,785 and 179,196,418 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 701,771 680,790

1 unchanged sentence

Accumulated deficit ( 303,868 ) ( 300,187 )

Total stockholders’ equity of Navitas Semiconductor Corporation 403,350 381,132

Noncontrolling interest — 3,628

Total stockholders’ equity 397,917 380,617

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

September 30, Nine Months Ended

September 30,

Three Months Ended March 31,

(In thousands, except per share amounts) 2024 2023

8 unchanged sentences

OTHER INCOME (EXPENSE), net:

Interest income, net 1,695 638 3,405 666

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

Interest income 1,682 903

Gain (loss) from change in fair value of earnout liabilities 26,199 ( 27,752 )

Other income (expense) 20 ( 74 ) 50 ( 1,215 )

Other income 83 11

Total other income (expense), net 27,964 ( 26,838 )

INCOME (LOSS) BEFORE INCOME TAXES 7,542 ( 42,963 ) ( 113,386 ) 70,939

INCOME TAX (BENEFIT) PROVISION 23 ( 10,135 ) ( 13 ) ( 9,862 )

NET INCOME (LOSS) 7,519 ( 32,828 ) ( 113,373 ) 80,801

LOSS BEFORE INCOME TAXES ( 3,611 ) ( 62,304 )

INCOME TAX PROVISION 70 61

NET LOSS ( 3,681 ) ( 62,365 )

NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS — ( 518 )

NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTERESTS $ 7,519 $ ( 32,590 ) $ ( 112,855 ) $ 81,039

NET INCOME (LOSS) PER COMMON SHARE:

Basic net income (loss) per share attributable to common stockholders $ 0.04 $ ( 0.24 ) $ ( 0.68 ) $ 0.64

Diluted net income (loss) per share attributable to common stockholders $ 0.04 $ ( 0.24 ) $ ( 0.68 ) $ 0.58

WEIGHTED AVERAGE COMMON SHARES USED IN NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:

NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS $ ( 3,681 ) $ ( 61,847 )

NET LOSS PER COMMON SHARE:

Basic net loss per share attributable to common stockholders $ ( 0.02 ) $ ( 0.39 )

Diluted net loss per share attributable to common stockholders $ ( 0.02 ) $ ( 0.39 )

WEIGHTED AVERAGE COMMON SHARES USED IN NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:

Basic common shares 179,779 156,792

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NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, Nine Months Ended September 30,

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Three Months Ended March 31,

(In thousands) 2024 2023

NET INCOME (LOSS) $ 7,519 $ ( 32,828 ) $ ( 113,373 ) $ 80,801

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments, net of tax — 54 — ( 6 )

Total other comprehensive income (loss) — 54 — ( 6 )

COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST 7,519 ( 32,774 ) ( 113,373 ) 80,795

NET LOSS $ ( 3,681 ) $ ( 62,365 )

Other comprehensive income

COMPREHENSIVE LOSS ( 3,681 ) ( 62,365 )

COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST — ( 518 )

TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST $ 7,519 $ ( 32,536 ) $ ( 112,855 ) $ 81,033

TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO CONTROLLING INTEREST $ ( 3,681 ) $ ( 61,847 )

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

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Stockholder's Equity (Deficit)

NINE MONTHS ENDED SEPTEMBER 30, 2023 Common stock Additional

Stockholders' Equity

THREE MONTHS ENDED MARCH 31, 2024 Common stock Additional

capital Accumulated

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comprehensive

income (loss) Noncontrolling interest Total

loss Noncontrolling interest Total

Shares Amount

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Issuance of common stock under employee stock option and stock award plans 3,801 — 10,734 — — — 10,734

Shares issued in connection with buyout agreement (see Note 18) 4,232 — 7,509 — — ( 3,110 ) 4,399

Stock-based compensation expense related to employee and non-employee stock awards — — 10,247 — — — 10,247

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BALANCE AT MARCH 31, 2024 182,997 $ 21 $ 701,771 $ ( 303,868 ) $ ( 7 ) $ — $ 397,917

Issuance of common stock under employee stock option and stock award plans 1,207 — 633 — — — 633

Shares issued in May 2023 public offering, including underwriter's exercise of option to purchase shares, net of issuance costs 11,500 1 86,458 — — — 86,459

Stock-based compensation expense related to employee and non-employee stock awards — — 10,246 — — — 10,246

Net loss — — — ( 58,527 ) — — ( 58,527 )

BALANCE AT JUNE 30, 2023 173,650 $ 19 $ 658,530 $ ( 275,128 ) $ ( 7 ) $ — $ 383,414

Issuance of common stock under employee stock option and stock award plans 4,934 — 2,178 — — — 2,178

Stock-based compensation expense related to employee and non-employee stock awards — — 10,239 — — — 10,239

Net income — — — 7,519 — — 7,519

BALANCE AT SEPTEMBER 30, 2023 178,584 $ 19 $ 670,947 $ ( 267,609 ) $ ( 7 ) $ — $ 403,350

Stockholder's Equity (Deficit)

NINE MONTHS ENDED SEPTEMBER 30, 2022 Common stock Additional

Stockholders' Equity

THREE MONTHS ENDED MARCH 31, 2023 Common stock Additional

capital Accumulated

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comprehensive

income (loss) Noncontrolling interest Total

loss Noncontrolling interest Total

Shares Amount

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Issuance of common stock under employee stock option and stock award plans 3,083 — 2,925 — — — 2,925

Repurchase of common stock ( 67 ) — ( 550 ) — — — ( 550 )

Exercise of warrants 3,318 — 29,641 — — — 29,641

Stock-based compensation expense related to employee and non-employee stock awards — — 14,884 — — — 14,884

Foreign currency translation adjustment — — — — ( 60 ) — ( 60 )

Net income — — — 79,792 — — 79,792

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

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

Issuance of common stock under employee stock option and stock award plans 1,489 — 1,316 — — — 1,316

Shares issued for business acquisition 24,883 2 146,310 — — — 146,312

Shares issued for transaction fees 170 — 1,000 — — — 1,000

Stock-based compensation expense related to employee and non-employee stock awards — — 14,722 — — — 14,722

Change in noncontrolling interest — — — — — 4,655 4,655

Foreign currency translation adjustment — — — — 54 — 54

Shares issued in connection with buyout agreement 4,232 — 7,509 — — ( 3,110 ) 4,399

Net loss — — — ( 61,847 ) — ( 518 ) ( 62,365 )

BALANCE AT SEPTEMBER 30, 2022 152,015 $ 18 $ 525,311 $ ( 147,628 ) $ ( 8 ) $ 4,417 $ 382,110

BALANCE AT MARCH 31, 2023 160,944 $ 18 $ 561,193 $ ( 216,601 ) $ ( 7 ) $ — $ 344,603

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

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2024 2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ ( 113,373 ) $ 80,801

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Net loss $ ( 3,681 ) $ ( 62,365 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation 722 506

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Non-cash lease expense 601 512

Other 85 2,174

Stock-based compensation expense 13,548 17,160

Amortization of debt discount and issuance costs — 7

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

(Gain) loss from change in fair value of earnout liability ( 26,199 ) 27,752

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Accounts receivable 3,659 1,704

Inventory 3,157 ( 2,731 )

Inventories ( 10,010 ) 188

Prepaid expenses and other current assets 595 743

Other assets 138 ( 1,612 )

Accounts payable, accrued compensation and deferred revenue 20,761 2,778

Accounts payable, accrued compensation and other accrued expenses ( 532 ) 3,376

Operating lease liability ( 519 ) ( 511 )

Customer deposit ( 2,879 ) —

Net cash used in operating activities ( 19,783 ) ( 7,920 )

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Investment purchases ( 2,500 ) ( 1,000 )

Business acquisitions, net of cash acquired — ( 96,355 )

Investment in Joint Venture — ( 5,204 )

Investment in preferred stock — ( 1,500 )

Purchases of property and equipment ( 2,898 ) ( 815 )

Receipts on notes receivable — 97

Net cash used in investing activities ( 5,398 ) ( 1,815 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Redemption of warrants — ( 38 )

Repurchase of common stock — ( 550 )

Proceeds from issuance of common stock in connection stock option exercises 236 221

Proceeds from issuance of common stock in May 2023 public offering 86,941 —

Payment of May 2023 public offering costs ( 482 ) —

Payment of debt issuance costs — ( 2,400 )

Net cash provided by (used in) financing activities 88,213 ( 1,476 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 66,361 ( 143,460 )

Proceeds from employee stock purchase plan 1,788 —

Net cash provided by financing activities 2,024 221

NET DECREASE IN CASH AND CASH EQUIVALENTS ( 23,157 ) ( 9,514 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 152,839 110,337

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 129,682 $ 100,823

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Net assets acquired through change in control of joint venture $ — $ 6,444

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for income taxes $ 27 $ 10

Cash paid for interest $ — $ 205

Shares issued in connection with buyout agreement (see Note 18) $ 22,400 $ —

Shares issued for business acquisition $ — $ 147,380

Shares issued in connection with buyout agreement $ — $ 22,400

Capital expenditures in accounts payable $ 942 $ 228

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ORGANIZATION AND BASIS OF PRESENTATION

Navitas Semiconductor Corporation (“the Company”) designs, develops and markets next-generation power semiconductors including gallium nitride (“GaN”) power integrated circuits (“ICs”), silicon carbide (“SiC”) and associated high-speed silicon system controllers, and digital isolators used in power conversion and charging.

Navitas Semiconductor Corporation (“the Company”) designs, develops and markets next-generation power semiconductors including gallium nitride (“GaN”) power integrated circuits (“ICs”), silicon carbide (“SiC”) devices and associated high-speed silicon system controllers, and digital isolators used in power conversion and charging.

Power supplies incorporating the Company’s products may be used in a wide variety of applications including fast chargers for mobile phones and laptops, consumer electronics, data centers, solar products, electric vehicles and infrastructure, among numerous other applications.

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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, Ireland, Germany, Italy, Belgium, China, Taiwan, Thailand, Korea and the Philippines, with principal executive offices in Torrance, California.

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

Investment in Third Party

On January 3, 2024, the Company made an additional investment of $ 2.5 million in preferred interests in a third party .

The Company’s new ownership percentage increased to 15.48 %.

The investment is $ 5.0 million and $ 2.5 million as of March 31, 2024 and December 31, 2023, respectively.

Such investment is included in Other Assets in the Condensed Consolidated Balance Sheets and is accounted for as an equity investment under ASC 321 Investments - Equity Securities.

In accordance with ASC 321, the Company elected to use the measurement alternative to measure such investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any.

May 2023 Public Offering

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The Company intends to use the net proceeds for working capital and other general corporate purposes, including potential acquisitions or strategic manufacturing investments.

In June 2022, the Company acquired VDDTECH srl, a Belgian private company, for approximately $ 1.9 million in cash and stock , and in August 2022 the Company acquired GeneSiC for approximately $ 246.2 million in cash and stock.

S ee Note 17, Business Combinations, for more information.

In January 2023, the Company announced an agreement to acquire the remaining minority interest in its silicon control IC joint venture from Halo Microelectronics International Corporation for a purchase price of $ 22.4 million in Navitas stock.

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The information contained in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are in the opinion of management, necessary for a fair presentation of such condensed consolidated financial statements.

Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of results to be expected for the full year ending December 31, 2023.

Operating results for the three months ended March 31, 2024, are not necessarily indicative of results to be expected for the full year ending December 31, 2024.

Certain footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America have been condensed or omitted pursuant to SEC rules and regulations relating to interim financial statements.

The accompanying condensed consolidated financial statements should be read in conjunction with consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on April 3, 2023.

Except as further described below, there have been no significant changes in the Company’s accounting policies from those disclosed in its Form 10-K filed with the SEC on April 3, 2023.

Use of Estimates

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

31, 2023, filed with the SEC on March 6, 2024.

Except as further described below, there have been no significant changes in the Company’s accounting policies from those disclosed in its Form 10-K filed with the SEC on March 6, 2024.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Actual results could differ from those estimates.

SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

Business Combinations

We account for business combinations using the acquisition method of accounting, in accordance with Accounting Standards Codification (“ASC”) 805 , “ Business Combinations” .

The acquisition method requires identifiable assets acquired and liabilities assumed to be recognized and measured at fair value on the acquisition date, which is the date that the acquirer obtains control of the acquired business.

The amount by which the fair value of consideration transferred exceeds the net fair value of assets acquired and liabilities assumed is recorded as goodwill.

The determination of estimated fair value requires us to make significant estimates and assumptions.

These fair value determinations require judgment and involve the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, and asset lives, among other items.

As a result, we may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date) with the corresponding offset to goodwill.

Transaction costs associated with business combinations are expensed as they are incurred.

Valuation of Contingent Consideration Resulting from a Business Combination

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Actual results may differ from estimates.

Recently Adopted Accounting Standards

Credit Losses

In June 2016, the Financial Accounting Standards Board (“FASB”) amended guidance related to impairment of financial instruments as part of ASU 2016-13, Financial Instruments — Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , which replaced the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss.

This ASU requires entities to measure the impairment of certain financial instruments, including accounts receivable, based on expected losses rather than incurred losses.

For companies that qualify under the emerging growth company exemptions, this ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted, and is effective for the Company beginning in 2023.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures.

We pool financial assets based on their risk characteristics, which include class of customer, geographic location of the customer, contractual life of the financial asset, and age of the open receivable balance.

The allowance for credit losses pool is estimated based on historical credit loss rates adjusted for management’s reasonable and supportable expectations of future economic conditions, which consider macroeconomic, industry and market trends that could impact future credit loss rates.

Additions to the allowance are charged to general and administrative expenses in the consolidated statements of operations.

Accounts receivables are written off against the allowance when the probability of collection of an account balance is deemed remote.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Inventory consists of the following (in thousands):

September 30, 2023 December 31, 2022

Recently Issued Accounting Standards

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, titled Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

These amendments address investor requests for enhanced transparency regarding income tax information.

Specifically, they improve income tax disclosures related to rate reconciliation and income taxes paid.

ASU 2023-09 becomes effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

While we are currently assessing the impact of this standard, we anticipate it will result in disclosure changes only.

This Form 10-Q does not include any other newly implemented accounting standards or pronouncements beyond those detailed above.

Such exclusions were made because they either do not apply to our company or are not anticipated to materially impact the condensed consolidated financial statements.

Inventories consist of the following (in thousands):

March 31, 2024 December 31, 2023

Raw materials

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Work-in-process

23,000 10,863

Finished goods

$ 33,176 $ 23,166

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following (in thousands):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Furniture and fixtures $ 277 $ 244

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Construction in Progress 390 1,114

17,409 14,057

Accumulated depreciation ( 5,636 ) ( 4,903 )

Total $ 11,773 $ 9,154

For the three and nine months ended September 30, 2023, depreciation expense was $ 0.6 million and $ 1.6 million, respectively.

For the three and nine months ended September 30, 2022, depreciation e xpense w as $ 0.3 million and $ 0.6 million, respectively, and was determined using the straight-line method over the following estimated useful lives:

The depreciation expense was $ 0.7 million and $ 0.5 million f or the three months ended March 31, 2024 and 2023 , respectively, and was determined using the straight-line method over the following estimated useful lives:

Furniture and fixtures

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This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

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 $ 159.5 million and not material as of September 30, 2023 and December 31, 2022, respectively.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company’s fair value hierarchy for financial liabilities as of September 30, 2023 (in thousands) :

The short-term nature of the Company’s cash and cash equivalents, accounts receivable 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 $ 113.0 million as of March 31, 2024 and $ 139.0 million for December 31, 2023.

The following table presents the Company’s fair value hierarchy for financial liabilities as of March 31, 2024 (in thousands) :

Level 1 Level 2 Level 3 Total

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The following table presents the Company’s fair value hierarchy for financial liabilities as of December 31, 2023 (in thousands):

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Level 1 Level 2 Level 3 Total

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Fair value adjustment ( 26,199 )

Balance at September 30, 2023 $ 38,567

The Company did not transfer any investments between Level 1 and Level 2 of the fair value hierarchy during the three and nine months ended September 30, 2023.

Balance at March 31, 2024 $ 20,653

The Company did not transfer any investments between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2024.

GOODWILL AND INTANGIBLES

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Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the changes in the Company’s goodwill balance (in thousands):

Balance at December 31, 2022 $ 161,527

Purchase price adjustment 1,688

Balance at September 30, 2023 $ 163,215

Refer to Note 17, Business Combinations, for further details.

The following table presents the Company’s intangible asset balance by asset class as of September 30, 2023 (in thousands):

The following table presents the Company’s intangible asset balance by asset class as of March 31, 2024 (in thousands):

Intangible Asset Cost Accumulated Amortization Net Book Value Amortization Method Useful Life

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Total $ 117,335 $ ( 31,010 ) $ 86,325

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the changes in the Company’s intangible asset balance (in thousands):

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Amortization expense ( 4,774 )

Balance at September 30, 2023 $ 96,176

The amortization expense was $ 4.8 million and $ 14.0 million for the thre e and nine months ended September 30, 2023, respectively.

The amortization expense was $ 2.2 million and $ 2.4 million for the three and nine months ended September 30, 2022, respectively.

There were no impairment charges during the three months ended September 30, 2023 and 2022.

DEBT OBLIGATIONS

On April 29, 2020, the Company entered into a loan and security agreement with a new bank (the “Term Loan”), which provided for term advances up to $ 8.0 million.

As of September 30, 2023, this loan had been paid in full.

In connection with execution of the Term Loan, the Company issued warrants to the bank (see Note 10, Warrant Liability).

The fair value of the warrants at the date of issuance was not material and was recorded as debt discount, subject to amortization using the effective interest rate method over the term of the loan.

All warrants were no longer outstanding

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

by December 31, 2022, and amortization of debt discount and issuance costs was not significant any of the three or nine months ended September 30, 2023 or 2022.

Balance at March 31, 2024 $ 86,325

The amortization expense was $ 4.8 million and $ 4.5 million for the thre e months ended March 31, 2024 and 2023, respectively.

Total future amortization expense of intangible assets is estimated to be as follows (in thousands):

Fiscal Year Ending December 31, Total

2024 (remainder of fiscal 2024) $ 14,153

Thereafter 28,301

Total $ 85,167

There were no impairment charges during the three months ended March 31, 2024 and 2023.

The Compa ny has entered into operating leases primarily for commercial buildings.

These leases have terms which range from 0.1 to 5.2 years.

As of September 30, 2023 no operating lease agreements contain economic penalties for the Company to extend th e lease, and it is not reasonably certain the Company will exercise these extension options.

These leases have remaining terms which range from 0.2 to 5.6 years.

As of March 31, 2024, no operating lease agreements contain economic penalties for the Company to extend th e lease, and it is not reasonably certain the Company will exercise these extension options.

Additionally, these operating lease agreements do not contain material residual value guarantees or material restrictive covenants.

As of September 30, 2023 all leases recorded on the Company’s consolidated balance sheets were operating leases.

Upon adoption of ASC 842 on January 1, 2022, the Company recorded operating lease assets of $ 1.6 million and lease liabilities of $ 1.7 million in the Company’s consolidated balance sheets.

The adoption of this standard did not have a material impac t on retained earnings, the consolidated statements of operations, or cash flows.

As of March 31, 2024, all leases recorded on the Company’s consolidated balance sheets were operating leases.

The Company has made the accounting policy election to use certain ongoing practical expedients made available by ASC 842 to:

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For leases that do not have a readily determinable implicit rate, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments.

Rent expense, including short-term lease cost, was $ 0.5 million and $ 1.5 million for the three and nine months ended September 30, 2023, respectively.

Rent expense, including short term lease cost, was $ 0.7 million and $ 1.4 million for the three and nine months ended September 30, 2022, respectively.

Rent expense, including short-term lease cost, was $ 0.8 million and $ 0.5 million for the three months ended March 31, 2024 and 2023 , respectively.

In addition to rent payments, the Company’s leases include real estate taxes, common area maintenance, utilities, and management fees, which are not fixed.

The Company accounts for these costs as variable payments and does not include such costs as a lease component.

Total variable expense was not material for the three and nine months ended September 30, 2023 and 2022.

The Company accounts for these costs as

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

variable payments and does not include such costs as a lease component.

Total variable expense was $ 0.1 million for the three months ended March 31, 2024 and not material for the three months ended March 31, 2023 .

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

Nine Months Ended September 30,

Three Months Ended March 31,

Cash paid for operating lease liabilities $ 566 $ 454

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Non-cash right-of-use assets obtained in exchange for new operating lease obligations $ 28 $ 590

Weighted-average remaining lease term 4.64 years 2.26 years

Weighted-average remaining lease term 4.71 4.96

Weight-average discount rate 3.45 % - 9.25 %

4.25 % - 7.75 %

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Maturities of lease liabilities are as follows (in thousands):

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Shares of Common Stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021 will become authorized for issuance pursuant to awards under the 2021 Plan (as defined below).

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Navitas Semiconductor Corporation 2021 Equity Incentive Plan (the “2021 Plan”) was adopted by the Company’s board of directors on August 17, 2021 and adopted and approved by the Company’s stockholders on October 12, 2021.

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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) su ch amount, if any, as the board of directors may determine.

As of September 30, 2023 the Company has issued 9,750,000 non- statutory stock options under the 2021 Plan.

As of March 31, 2024 the Company has issued 9,750,000 non- statutory stock options under the 2021 Plan.

Stock-Based Compensation

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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

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 and nine months ended September 30, 2023 and 2022:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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, 2024 and 2023:

Three Months Ended March 31,

Research and development $ 7,370 $ 7,177

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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 stock option awards during the three or nine months ended September 30, 2023 or 2022.

A summary of stock options outstanding, excluding LTIP Options as of September 30, 2023, and activity during the nine months then ended, is presented below:

The Company did not grant any stock option awards during the three months ended March 31, 2024 or 2023.

A summary of stock options outstanding, excluding LTIP Options as of March 31, 2024, and activity during the three months then ended, is presented below:

Stock Options Shares

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Forfeited or expired ( 14 ) 1.06 0

Outstanding at September 30, 2023 2,831 $ 0.74 6.03

Vested and Exercisable at September 30, 2023 2,269 $ 0.66 5.77

During both the three and nine months ended September 30, 2023, the Company recogni zed $ 0.1 million and $ 0.4 million o f stock-based compensation expense for the vesting of outstanding stock optio ns, excluding $ 1.8 million and $ 6.1 million related to the LTIP Options described below.

During the three and nine months ended September 30, 2022, the Company recognized $ 0.1 million and $ 0.4 million of stock-based compensation expense for the vesting of outstanding stock options, excluding $ 1.4 million related to LTIP options described below.

At September 30, 2023, unrecognized compensation cost related to unvested awards totaled $ 0.2 million.

Outstanding at March 31, 2024 2,220 $ 0.76 5.6

Vested and Exercisable at March 31, 2024 2,050 $ 0.73 5.6

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During both the three months ended March 31, 2024 and 2023, the Company recogni ze d $ 0.1 million o f stock-based compensation expense for the vesting of outstanding stock optio ns, excluding $ 1.9 million and $ 2.5 million, respectively, related to the LTIP Options described below.

At March 31, 2024, unrecognized compensation cost related to unvested options totaled $ 0.1 million .

The weighted-average period over which this remaining compensation cost will be recognized is 0.5 years.

Long-term Incentive Plan Stock Options

The Company awarded a total of 6,500,000 LTIP Options to certain members of senior management on December 29, 2021 pursuant to the 2021 Plan.

The Company awarded a total of 6,500,000 LTIP Options (“2021 LTIP Options”) to certain members of senior management on December 29, 2021 pursuant to the 2021 Plan.

These non-statutory options are intended to be the only equity incentive awards for the recipients over the duration of the performance period.

The options vest in increments subject to achieving certain performance conditions, including ten share price hurdles ranging from $ 15 to $ 60 per share, coupled with revenue and EBITDA targets, measured over a seven-year performance period and expire on the tenth anniversary of the grant date.

The options vest in increments subject to achieving certain market and performance conditions, including ten share price hurdles ranging from $ 15 to $ 60 per share, coupled with revenue and EBITDA targets, measured over a seven-year performance period and expire on the tenth anniversary of the grant date.

The options have an exercise price of $ 15.51 per share and the average fair value on the grant date was $ 9.14 based on the Black-Scholes model and a Monte Carlo simulation incorporating 500,000 scenarios.

The weighted average contractual

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

period remaining is 8.3 years.

The weighted average contractual period remaining is 7.8 years.

The Company utilized the services of a professional valuation firm to finalize these assumptions during the fiscal year ended December 31, 2023.

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Weighted-average grant date fair value of options $ 9.14

In connection with LTIP Options granted in 2021, the Company recognized $ 1.6 million and $ 5.3 million of stock-based compensation expense for the three and nine months ended September 30, 2023, respectively.

The Company recognized $ 1.4 million and $ 4.2 million related to these LTIP Options during the three and nine months ended September 30, 2022, respectively.

The unrecognized compensation expense related to these LTIP Options is $ 48.5 million as of September 30, 2023, and compensation expense will be recognized over 2.7 years.

The Company awarded a total of 3,250,000 LTIP Options to a member of senior management on August 15, 2022 pursuant to the 2021 Plan.

In connection with the “2021 LTIP Options”, the Company recognized $ 1.6 million and $ 2.2 million of stock-based compensation expense for the three months ended March 31, 2024 and 2023, respectively.

The unrecognized compensation expense related to these LTIP Options is $ 4.7 million as of March 31, 2024, and compensation expense will be recognized over 0.8 years.

On a quarterly basis, after evaluating the 2021 LTIP Options based on the probability of achieving certain market and performance conditions, the Company may true up the 2021 LTIP Options expense as needed.

The Company awarded a total of 3,250,000 performance stock options (“2022 LTIP Options”) to a member of senior management on August 15, 2022 pursuant to the 2021 Plan.

The options vest in increments subject to achieving certain market and performance conditions, including ten share price hurdles ranging from $ 15 to $ 60 per share, coupled with revenue and EBITDA targets, measured over a seven year performance period and expire on the tenth anniversary of the grant date.

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The weighted average contractual period remaining is 8.3 years.

T he Black-Scholes model and a Monte Carlo simulation incorporated 100,000 scenarios.

Th e Black-Scholes model and a Monte Carlo simulation incorporated 100,000 scenarios.

The valuation model utilized the following assumptions:

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Weighted-average grant date fair value of options $ 2.89

In connection with LTIP Options granted in 2022, the Company recognized $ 0.3 million and $ 0.8 million of stock-based compensation expense for the three and nine months ended September 30, 2023, respectively.

The Company recognized $ 0.1 million related to these LTIP Options during the three and nine months ended September 30, 2022.

The unrecognized compensation expense related to the LTIP Options is $ 8.2 million as of September 30, 2023, and compensation expense will be recognized over 3.3 years.

In connection with the “2022 LTIP Options”, the Company recognized $ 0.3 million of stock-based compensation expense for both the three months ended March 31, 2024 and 2023, respectively.

The unrecognized compensation expense related to the LTIP Options is $ 1.5 million as of March 31, 2024, and compensation expense will be recognized over 1.7 years.

On a quarterly basis, after evaluating the 2022 LTIP Options based on the probability of achieving certain market and performance conditions, the Company may true up the 2022 LTIP Options expense as needed.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units

The Company regularly grants RSUs to employees as a component of their compensation.

A summary of RSUs outstanding as of September 30, 2023 , and activity during the nine months then ended, is presented below:

A summary of RSUs outstanding as of March 31, 2024 , and activity during the three months then ended, is presented below:

Restricted Stock Unit Awards

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

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Forfeited ( 27 ) 6.04

Outstanding at September 30, 2023 13,120 $ 6.73

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the three and nine months ended September 30, 2023, the Company recognized $ 8.1 million and $ 23.5 million of stock-based compensation expense for the vesting of RSUs, respectively.

During the three and nine months ended September 30, 2022, the Company recognized $ 8.7 million and $ 32.4 million of stock-based compensation expense for the vesting of RSUs, respectively.

As of September 30, 2023, unrecognized compensation cost related to unvested RSU awards totaled $ 77.4 million.

Outstanding at March 31, 2024 14,206 $ 6.43

During the three months ended March 31, 2024 and 2023, the Company recognized $ 8.2 million and $ 7.1 million of stock-based compensation expense for the vesting of RSUs, respectively.

As of March 31, 2024, unrecognized compensation cost related to unvested RSU awards totaled $ 79.2 million.

The weighted-average period over which this remaining compensation cost is expected be recognized is 2.5 years.

The Company implemented a yearly stock-based bonus plan in 2021 which settles by issuing a variable number of fully-vested restricted stock units to employees in the first quarter of the following fiscal year.

The $ 5.7 million accrued as of September 30, 2023 reflects eligible employees included the Company’s 2023 annual bonus plan and amounts expected to be settled during the first quarter of 2024.

The $ 2.8 million accrued as of December 31, 2022 was for the Company’s 2022 annual bonus plan and a balance of $ 0.1 million is accrued as of September 30, 2023.

The Company’s annual bonus plan of $ 2.5 million related to fiscal year 2024 (included in accrued compensation expense liability on the condensed consolidated balance sheets), will be issued with a variable number of fully-vested restricted stock units to its employees and is expected to be settled in the first quarter of 2025.

Based on the closing share price of the Company’s Class A Common Stock of $ 4.77 on March 28, 2024, approximately 518,942 shares would be issued, however the actual number of shares will be based on the share price at the date of settlement.

2022 Employee Stock Purchase Plan

In August 2022, the Company’s board of directors adopted the Company’s 2022 Employee Stock Purchase Plan (the “2022 ESPP”), subject to stockholder approval.

The 2022 ESPP was approved by stockholders at the Company’s annual stockholders’ meeting held November 10, 2022.

The Company authorized the issuance of 3,000,000 shares of common stock under the 2022 ESPP.

Under the 2022 ESPP, eligible employees are granted the right to purchase shares of common stock at the lower of 85 % of the fair value at the time of offering or 85 % of the fair value at the time of purchase, generally over a six-month period.

The first offering period under the 2022 ESPP commenced in February 2023 and the second offering in September 2023.

For the three months ended March 31, 2024, employees who elected to participate in the ESPP purchased 393,139 shares of common stock under the 2022 ESPP, resulting in cash proceeds to the Company of $ 1.8 million.

The purchase price was $ 4.55 , which was 15 % of the fair market value in March 2024.

As of March 31, 2024, the Company had 2,348,898 remaining authorized shares available for purchase.

As the plan was newly adopted in 2023, there were no shares issued or stock-based compensation expense for the 2022 ESPP as of March 31, 2023.

During the three months ended March 31, 2024, the Company recognized $ 0.8 million of stock-based compensation expense for the 2022 ESPP.

Other Share Awards

In connection with the acquisition of the remaining minority interest of a silicon control IC joint venture, as described in Note 15, the Company issued 841,729 fully vested shares to certain former employees of the joint venture with a grant date fair value totaling $ 4.5 million.

Such amount has been recognized as stock-based compensation expense during the nine months ended September 30, 2023.

Such amount has been recognized as stock-based compensation expense during the three months ended March 31, 2023.

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 $ 1.9 million in cash and stock.

Among shares issued in the transaction, the Company issued approximately 113,000 restricted shares that are subject to time based vesting and issued approximately 151,000 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 recognized $ 0.1 million and $ 0.7 million of stock-based compensation expense related to the vesting of these shares during the three and nine months ended September 30, 2023, respectively.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

recognized $ 0.1 million and $ 0.4 million of stock-based compensation expense related to the vesting of these shares during the three months ended March 31, 2024 and 2023, respectively.

Unvested Earnout Shares

A portion of the earnout shares related to the Business Combination (discussed in Note 11 below) may be issued to individuals with unvested equity awards.

A portion of the earnout shares (discussed in Note 9 below) may be issued to individuals with unvested equity awards.

While the payout of these shares requires achievement of share price targets based on the volume weighted average price of the Company’s common stock, the individuals are required to complete the remaining service period associated with these unvested equity awards to be eligible to receive the earnout shares.

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 and nine months ended September 30, 2023 the Company recognized $ 0.0 million and $ 0.3 million, respectively, of stock-based compensation expense for the vesting of earnout shares.

As of the beginning of the second quarter of fiscal year 2023, these earnout shares had fully vested.

At September 30, 2023, there was no remaining compensation cost related to unvested earnout shares.

During the three and nine months ended September 30, 2022, the Company recognized $ 4.3 million and $ 11.5 million, respectively, of stock-based compensation expense for the vesting of earnout shares.

At March 31, 2024, there was no remaining compensation cost related to unvested earnout shares.

During the three months ended March 31, 2023, the Company recognized $ 0.3 million of stock-based compensation expense for the vesting of earnout shares.

Refer to Note 9, Earnout Liability.

WARRANT LIABILITY

On February 4, 2022, the Company issued a notice of redemption that it would redeem, at 5:00 p.m.

New York City time on March 7, 2022 (the “ Redemption Date ”), all of the Company’s outstanding Public Warrants and Private Placement Warrants to purchase shares of the Company’s Class A Common Stock that were governed by the Warrant Agreement, dated as of December 2, 2020 (the “ Warrant Agreement ”), between the Company and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agent”), at a redemption price of $ 0.10 per Warrant (the “ Redemption Price ”).

On February 22, 2022, the Company issued a notice that the “Redemption Fair Market Value,” determined in accordance with the Warrant Agreement based on the volume weighted average price of the Common Stock for the 10 trading days immediately following the date on which notice of redemption was sent, was $ 10.33 and, accordingly, that holders exercising Warrants on a “cashless” basis before the Redemption Date would receive 0.261 shares of Common Stock per Warrant exercised.

The Warrants were exercisable by their holders until immediately before 5:00 p.m.

New York City time

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

on the Redemption Date, either (i) on a cash basis, at an exercise price of $ 11.50 per share of Common Stock, or (ii) on a “cashless” basis in which the exercising holder would receive 0.261 shares of Common Stock per Warrant exercised.

Between December 7, 2021 (the date the Warrants became exercisable) and the Redemption Date, an aggregate of 12,722,773 Warrants were exercised (including 17,785 on a cash basis and 12,704,988 on a “cashless” basis);

an aggregate of 3,333,650 shares of Common Stock were issued upon exercise of the Warrants (including 17,785 shares in respect of cash exercises and 3,315,865 shares in respect of “cashless” exercises).

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 $ 81.4 million which resulted in a gain of $ 51.8 million due to the decrease in the fair value of the warrant liability in the nine months ended September 30, 2022.

There were no outstanding warrants as of September 30, 2023.

See footnote 10, Warrant Liability to the Company’s consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on April 3, 2023 for further details.

EARNOUT LIABILITY

Certain of the Company’s stockholders are entitled to receive up to 10,000,000 aggregate “earnout shares” of the Company’s Class A Common Stock if earnout milestones are met.

Certain of the Company’s stockholders are entitled to receive up to an aggregate of 10,000,000 “earnout shares” of the Company’s Class A Common Stock if earnout milestones are met.

The earnout milestones represent three independent criteria, each of which entitles the eligible stockholders to 3,333,333 aggregate earn-out shares if the milestone is met.

See footnote 11, Earnout Liability to the Company’s consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on April 3, 2023 for further details.

The earnout liability is remeasured at the end of each reporting period.

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The valuation model utilized the following assumptions:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Risk-free interest rate

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80.00 % 70.00 %

As of September 30, 2023 and December 31, 2022, the earnout liability had a fair value of $ 38.6 million and $ 12.5 million, respectively which resulted in a gain in the fair value of the earnout liability of $ 34.5 million and a loss in the fair value of the earnout liability of $ 25.5 million for the three and nine months ended September 30, 2023, respectively, due to the fluctuations in the fair value of the earnout liability.

GeneSiC Earnout Liability

In connection with the acquisition of GeneSiC as discussed in Note 17, the Company will pay additional contingent consideration of up to $ 25.0 million, in the form of cash earnout payments to the Sellers and certain employees of GeneSiC, conditioned on the achievement of substantial revenue and gross profit margin targets for the GeneSiC business over the four fiscal quarters beginning on October 1, 2022 and ending on September 30, 2023.

The estimated fair value of the earnout liability was determined using a Monte Carlo analysis of 20,000 simulations assuming that GeneSiC’s revenue and gross profit margins follow a geometric Brownian motion over the earnout period.

The valuation model utilized an assumption on the risk-free interest rate of 3.1 % and equity volatility rate of 99.9 %.

As of September 30, 2023, the GeneSiC earnout was not achieved, and no liability was recorded in earnout liability in the Company’s Condensed Consolidated Balance Sheets.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2024 and December 31, 2023, the earnout liability had a fair value of $ 20.7 million and $ 46.9 million, respectively, which resulted in a gain in the fair value of the earnout liability of $ 26.2 million.

The loss in the earnout liability was $ 27.8 million for the three month period ended March 31, 2023.

SIGNIFICANT CUSTOMERS AND CREDIT CONCENTRATIONS

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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 three and nine months ended September 30, 2023 and 2022:

Three Months Ended September 30, Nine Months Ended September 30,

The following customers represented 10% or more of the Company’s net revenues for the three months ended March 31, 2024 and 2023:

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31,

Customer 2024 2023

3 unchanged sentences

Distributor D * 17 %

Distributor E * 15 * *

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

1 unchanged sentence

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 and nine months ended September 30, 2023 and 2022 were attributable to end customers in the following countries or regions:

Three Months Ended September 30, Nine Months Ended September 30,

Revenues for the three months ended March 31, 2024 and 2023 were attributable to end customers in the following countries or regions:

Three Months Ended March 31,

Country 2024 2023

2 unchanged sentences

United States 9 11

Rest of Asia 12 3 8 7

All others — 2 — 1

Asia excluding China 7 4

Total 100 % 100 %

6 unchanged sentences

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

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Customer September 30, 2023 December 31, 2022

Customer March 31, 2024 December 31, 2023

Distributor A 78 % 77 %

Distributor B * 25 %

Distributor C * 19 %

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

The Company has a customer deposit from a primary customer of $ 8.1 million and the Company intends to apply a portion of the customer deposit to outstanding accounts receivable from time-to-time.

Concentration of Supplier Risk

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Loss of the relationship with either of these suppliers could have a substantial negative effect on the Company.

Additionally, the Company relies on a limited number of third-party subcontractors and suppliers for testing, packaging and certain other tasks.

Additionally, the Company relies on a limited number of third-party subcontractors and suppliers

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

for testing, packaging and certain other tasks.

Disruption or termination of supply sources or subcontractors, including due to pandemics or natural disasters such as an earthquake or other causes, could delay shipments and could have a material adverse effect on the Company.

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A significant amount of the Company’s assembly and test operations are conducted by third-party contractors in Taiwan and the Philippines.

The Company entered into an agreement to purchase raw materials from a supplier from September 29, 2022 through December 31, 2025, and accordingly made a $ 2.0 million refundable deposit.

The Company is not obligated to purchase from this supplier, however, if the Company does not meet minimum purchase requirements during the term, the Company may forfeit all or a portion of its $ 2.0 million deposit.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NET INCOME (LOSS) PER SHARE:

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted-average shares of common stock outstanding during the period.

Diluted earnings per share are calculated by dividing net income (loss) by the weighted-average shares of common stock and dilutive common equivalent shares outstanding during the period.

NET LOSS PER SHARE:

Basic loss per share is calculated by dividing net loss by the weighted-average shares of common stock outstanding during the period.

Diluted loss per share is calculated by dividing net loss by the weighted-average shares of common stock and dilutive common equivalent shares outstanding during the period.

Dilutive common equivalent shares included in this calculation consist of dilutive shares issuable upon the assumed exercise of outstanding common stock options, the assumed vesting of outstanding restricted stock units and restricted stock awards, the assumed issuance of awards for contingently issuable performance-based awards, as computed using the treasury stock method.

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The Company has no plans to declare dividends.

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Weighted-average common shares - basic common stock 179,779 156,792

2 unchanged sentences

Shares excluded from diluted weighted-average shares:

Dilutive shares excluded ² 5,317 9,083

Earnout shares (potentially issuable common shares) 10,000 10,000

2 unchanged sentences

Shares excluded from diluted weighted average shares 25,167 29,209

(1) The Company’s potentially dilutive securities, which include unexercised stock options, unvested shares, and earnout 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 nine months ended September 30, 2023.

¹ The Company’s potentially dilutive securities, which include unexercised stock options, unvested shares, and earnout 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 both the three months ended March 31, 2024 and 2023.

² We exclude the impact of restricted stock from the calculation of diluted net loss per common share in periods where we have a net loss or when their inclusion would be antidilutive.

PROVISION FOR INCOME TAXES

The Company determined the income tax provision for interim periods using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising during the quarter.

The Company’s effective tax rate for the three and nine months ended September 30, 2023 was 0.3 % and 0.0 %, respectively.

The Company’s effective tax rate for the three and nine months ended September 30, 2022 was 23.6 % and ( 13.9 )%, respectively.

The effective tax rate for 2023 differs from the prior year primarily as a result of tax expense in foreign jurisdictions that are in a full valuation allowance as the effective tax rate as of September 30, 2022 is reflective of a full valuation allowance in all jurisdictions.

The Company's quarterly income tax provision and quarterly estimate of the annual effective tax rate are subject to volatility due to several factors, including our ability to accurately predict the proportion of our income (loss) before provision for income taxes in multiple jurisdictions, the tax effects of our stock-based compensation, and the effects of its foreign entities.

The Company had no unrecognized tax benefits for the nine months ended September 30, 2023 and 2022.

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

No such interest and penalties were recognized during the nine months ended September 30, 2023 and 2022.

The Company’s effective tax rate for the three months ended March 31, 2024 and 2023 was ( 1.93 )% and ( 0.03 )%, respectively.

The effective tax rate for 2024 differs from the prior year primarily due to tax expense in foreign as a result of tax expense in foreign jurisdictions not impacted by valuation allowance.

In each quarter, the Company updates its estimated annual effective tax rate, and if the estimated annual effective tax rate changes, a cumulative adjustment is recorded in that quarter.

The Company's quarterly income tax provision and quarterly estimate of the annual effective tax rate are subject to volatility due to several factors, including our ability to accurately predict the proportion of our loss before provision for income taxes in multiple jurisdictions, the tax effects of our stock-based compensation, and the effects of its foreign entities.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company had no unrecognized tax benefits for the three months ended March 31, 2024 and 2023.

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, 2024 and 2023.

COMMITMENTS and CONTINGENCIES

Purchase Obligations

At September 30, 2023, the Com pany had no non-cancelable contractual arrangements that were due beyond one year besides lease obligations.

Employment agreements

The Company has entered into agreements with certain employees to provide severance payments to the employees in the event of the termination of their employment for reasons other than cause, death or disability.

Aggregate payments that would be required to be made in the event of termination under the agreements are approximately $ 2.1 million.

At September 30, 2023, no terminations have occurred or are expected to occur pursuant to these arrangements and, accordingly, no termination benefits have been accrued.

At March 31, 2024, the Com pany had no non-cancelable contractual arrangements that were due beyond one year besides lease obligations.

Indemnification

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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 September 30, 2023.

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, 2024.

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.

Release and license agreement

In March 2023, the Company entered into a Release and License Agreement (the “Agreement”) with a university.

The Agreement stipulates the Company pay the university a total of $ 1.0 million over a period of three years , with the final payment by March 1, 2026.

The agreement licenses the Company to sell certain products covered by a patent owned by the university, subject to the Company paying a royalty fee on revenues for covered products sold during the term.

Based on an indemnity agreement entered into in connection with the Company’s acquisition of GeneSiC Semiconductor Inc.

in August 2022, the Company expects to be indemnified by the sellers in that transaction for the royalty amounts up to approximately $ 1.0 million.

Legal proceedings and contingencies

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RELATED PARTY TRANSACTIONS

Notes Receivable

The Company had outstanding interest-bearing notes receivable from a non-executive employee.

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

As of December 31, 2022, Note 1 was forgiven for a loss of $ 0.1 million and Note 2 was paid off in the amount of $ 0.1 million.

No interest income was recognized for the three and nine months ended September 30, 2023, and interest income recognized for the three and nine months ended September 30, 2022 was not material.

Joint Venture

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(“Halo”), a manufacturer of power management ICs, to develop products and technology relating to AC/DC converters.

Navitas’ initial contribution to the joint venture was the commitment to sell its GaN integrated circuit die at prices representing cost plus

Navitas’ initial

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

insignificant handling fees, in exchange for a minority interest, with the right to acquire the balance of the joint venture based on the future results of the venture (among other rights and obli gat ions).

contribution to the joint venture was the commitment to sell its GaN integrated circuit die at prices representing cost plus insignificant handling fees, in exchange for a minority interest, with the right to acquire the balance of the joint venture based on the future results of the venture (among other rights and obli gat ions).

On January 19, 2023, the Company announced an agreement to acquire the remaining minority interest in the joint venture as well as rights to certain intellectual property from Halo and its U.S.

affiliate for a total purchase price of $ 22.4 million in Navitas stock.

Total related party revenues recognized by the Company as a result of arrangements with its joint venture were $ 0.0 million f or both the three and nine months ended September 30, 2023 , and $ 0.0 million and $ 0.7 million for the three and nine months ended September 30, 2022, respectively, and are included in Net Revenues in the Condensed Consolidated Statements of Operations.

See Note 15, Noncontrolling Interest, for more information.

Related Party Investment

During the third quarter of 2022, Navitas ma de a $ 1.5 million inv estment in preferred interests of an entity under common control with the Company’s partner in the joint venture described a bove.

During the first quarter of 2023 the Company made an additional investment of $ 1.0 million in the entity.

Such investment is included in Other Assets in the Condensed Consolidated Balance Sheets as of September 30, 2023 and is accounted fo r as an equity investment under ASC 321 Investments - Equity Securities .

Related Party Advance

During the third quarter of 2022, Navitas made a $ 1.0 million advance to its partner in the joint venture described above in order to facilitate orders of raw materials.

The outstanding amount as of September 30, 2023 was $ 0.3 million.

Related Party Leases

The Company leases certain property from an entity that it is owned by an executive of the Company, which expires in September 2023.

During the three and nine months ended September 30, 2023, the Company paid an immaterial amount in rental payments in relation to this lease.

The Company leases certain property from an entity that it is owned by an executive of the Company, which expired in September 2023 and is now a month-to-month lease.

During the three months ended March 31, 2024 , the Company paid an immaterial amount in rental payments in relation to this lease.

These payments were made at standard market rates in the ordinary course of business.

The Company leases certain property from the family member of a senior executive of the Company, which expires in March 2024.

During the three and nine months ended September 30, 2023, the Co mpany paid an immaterial amount in rental payments in relation to this lease.

The Company leases certain property from the family member of a senior executive of the Company, which expired in March 2024, and is now a month-to-month lease.

During the three months ended March 31, 2024 , the Co mpany paid an immaterial amount in rental payments in relation to this lease.

These payments were made at standard market rates in the ordinary course of business.

The total rent obligation as of September 30, 2023 was $ 21 thousand through M arch 31, 2024.

BUSINESS COMBINATIONS

Acquisition of VDDTECH srl

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 Balance Sheets and Condensed Consolidated Statements of Operations.

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

The Company recorded an 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 $ 1.2 million was recorded as goodwill as of June 30, 2022.

Subsequent to June 30, 2022, a valuation of the intangible assets acquired was calculated at $ 1.2 million .

During the third quarter of fiscal year 2022, the Company reclassified the goodwill to an intangible asset.

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the in-process R&D was estimated using the multi-period excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows.

To reflect the fact that certain other assets contribute to the cash flows generated, the returns for these contributory assets were removed to arrive at estimated cash flows solely attributable to the acquired technology, which were discounted at a rate of 18 % to determine the fair value.

Acquisition of GeneSiC Semiconductor Inc.

On August 15, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire 100 % of the outstanding shares of GeneSiC Semiconductor Inc., a silicon carbide (“SiC”) pioneer with deep expertise in SiC power device design and process, based in Dulles, Virginia.

Total merger consideration was approximately $ 244.0 million and consisted of approximately $ 146.3 million of common stock, $ 97.1 million of cash consideration, and potential future cash earn-out payments of up to an aggregate of $ 25.0 million which were fair valued at $ 0.6 million.

The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations.

The Company has determined fair values of the assets acquired and liabilities assumed.

The following tables summarize the purchase consideration and the purchase price allocation to estimated fair values of the identifiable assets acquired and liabilities assumed (in thousands) at acquisition date:

Merger Consideration Fair Value

Cash consideration at closing $ 97,116

Equity consideration at closing 146,314

Contingent earn-out 600

Total $ 244,030

Estimate of purchase price allocation

Cash and cash equivalents $ 951

Accounts receivable 823

Inventory 1,539

Fixed assets 226

Other assets 5

Intangible assets 110,100

Goodwill 157,699

Total assets acquired $ 271,343

Liabilities assumed:

Interest bearing debt 16

Other current liabilities 2,749

Deferred tax liabilities 24,548

Total liabilities acquired 27,313

Estimated fair value of net assets acquired $ 244,030

Goodwill represents the excess of the merger price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed.

Goodwill is primarily attributable to assembled workforce, market and expansion capabilities, expected synergies from integration and streamlining operational activities and other factors.

Goodwill is not expected to be deductible for income tax purposes.

During the Company’s second quarter of 2023, the Company received information regarding products shipped by GeneSiC to a distributor prior to the Company’s acquisition of GeneSiC.

GeneSiC had the option, but not the obligation, to accept returns sold to the distributor.

The Company determined that a $ 1.7 million return liability should have been recorded as of the close of the acquisition on August 15, 2022.

The Company recorded the return liability as a purchase

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

price adjustment as of June 30, 2023, resulting in an increase to goodwill and accounts payable and other accrued expenses of $ 1.7 million.

The fair values of the identifiable intangible assets acquired at the date of Acquisition are as follows (in thousands):

Intangible Asset Fair Value Amortization Method Useful Life

Trade Names $ 900 Straight line 2 years

Developed Technology 49,100 Straight line 4 years

Patents 33,900 Straight line 15 years

Customer Relationships 24,300 Straight line 10 years

Non-Competition Agreements 1,900 Straight line 5 years

Total Intangibles $ 110,100

The valuations of intangible assets incorporate significant unobservable inputs and require significant judgment and estimates, including the amount and timing of future cash flows.

The Company recognized approximately $ 5.9 million of transaction costs in the fiscal year ended December 31, 2022.

These costs were recorded in “Selling, general and administrative expense” in the consolidated statements of operations.

The financial results of GeneSiC have been included in the Company's consolidated financial statements since the date of the acquisition.

The fair value of developed technology was estimated using the multi-period excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows.

The fair value of customer relationships was estimated using the distributor method, an income level approach (Level 3), which estimates the value of an asset based upon costs avoided through ownership of the asset.

Estimated costs on projected revenues were made using historical data pertaining to sales to new and existing customers.

The cash flow impact of projected cost savings, primarily avoidance of legal costs pertaining to new customers and lower commission rates applicable to existing customers than new customers, were discounted at a rate of 16 % to determine the fair value.

The fair value of the trade name and trademarks was estimated using the relief from royalty method, an income approach (Level 3), because of the licensing appeal of these assets, the Company estimated the benefit of the ownership as the relief from the royalty expense that would be incurred in the absence of ownership A royalty rate was applied to the projected revenues associated with the intangible asset to determine the amount of savings, which was at a rate of 1 % to determine the fair value.

The fair value of the patents was estimated using the relief from royalty method, an income approach (Level 3), because of the licensing appeal of these assets, the Company estimated the benefit of the ownership as the relief from the royalty expense that would be incurred in the absence of ownership.

A royalty rate was applied to the projected revenues associated with the intangible asset to determine the amount of savings, which was at a rate of 5 % to determine the fair value.

The value of the non-competition agreement was estimated using the lost income method (Level 3).

Because the non-competition agreement prohibits the covenantor from competing with the Company, the fair value of the non-competition agreement can be determined by estimating cash flows that would be lost if the covenantors were to compete.

Based on this method we estimated a discount rate of 16 % to determine the fair value.

Discount rates for each respective intangible asset were determined by accounting for the risk associated with each asset, including required technology development and customer acquisition required to support respective projections, the uncertainty of market success and the risk inherent with projected financial results.

The estimated useful lives were determined by evaluating the expected economic and useful lives of the assets and of similar intangible assets from comparable business combinations and adjusting accordingly after taking into account circumstances that may be unique to

NAVITAS SEMICONDUCTOR CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net tangible assets and intangibles assets assumed as well as goodwill recognized are presented as continuing operations in the consolidated balance sheets.

The following unaudited pro forma financial information presented in the table below is provided for illustrative purposes only and is based on the historical financial statements of the Company and presents the Company’s results as if the business combination had occurred as of January 1, 2022 (in thousands):

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

Revenue $ 11,070 $ 36,266

Net income (loss) $ ( 38,479 ) $ 77,877

Basic net income per share $ ( 0.24 ) $ 0.55

Diluted net income per share $ ( 0.25 ) $ 0.50

The unaudited pro forma financial information may not be indicative of the results of operations that the Company would have attained had the business combination occurred as of January 1, 2022, nor is the pro forma financial information indicative of the results of operations that may occur in the fut ure.

There was no rent obligation as of March 31, 2024 .

NAVITAS SEMICONDUCTOR CORPORATION

2 unchanged sentences

In July 2021, the Company formed a joint venture for the purpose of conducting research and development on technology in the area of AC/DC converters for chargers and adapters.

Refer to Note 16 above.

Refer to Note 14.

On August 19, 2022, the Company obtained control of the joint venture, and no consideration was paid pursuant to the Change of Control Agreement.

1 unchanged sentence

The fair value of the noncontrolling interest and net assets is based on estimates.

The Company’s net income (loss) excludes income (loss) attributable to the noncontrollling interests.

The Company’s net income (loss) excludes income (loss) attributable to the noncontrolling interests.

The fair value of the joint venture was determined based on a multiple of future annual revenues with a discount rate of 30 %.

9 unchanged sentences

SUBSEQUENT EVENTS

The Company evaluated material subsequent events from the consolidated balance sheet date of September 30, 2023, through November 9, 2023, the date the condensed consolidated financial statements were issued.

There were no material subsequent events as of November 9, 2023.

The Company evaluated material subsequent events from the consolidated balance sheet date of March 31, 2024, through May 15, 2024, the date the condensed consolidated financial statements were issued.

There were no material subsequent events as of May 15, 2024.

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