Navitas Semiconductor Corp 10-K/A

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our management, including our chief executive officer and chief financial officer, have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of December 31, 2023. We first filed our annual report on Form 10-K for the year ended December 31, 2023, before the determination of the material weaknesses described below. (We refer to our initial Form 10-K filing on March 6, 2024, as the “Original Filing”.) In the Original Filing, our CEO and CFO concluded that, as of December 31, 2023, our disclosure controls and procedures were operating effectively. However, after the determination of the material weaknesses described below, our CEO and CFO concluded that our disclosure controls and procedures were not effective, as of December 31, 2023. Management’s Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act). Management assessed the effectiveness of its internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the Internal Control-Integrated Framework (2013), or the COSO Report. In Management’s Report on Internal Control Over Financial Reporting included in our Original Filing, our management concluded that we maintained effective internal control over financial reporting as of December 31, 2023. Following the Public Company Accounting Oversight Board's inspection of Moss Adams LLP’s audit of our December 31, 2023 financial statements and internal controls over financial reporting, management conducted a reassessment and subsequently concluded that the material weaknesses described below existed as of December 31, 2023, and also concluded that we did not maintain effective internal control over financial reporting as of December 31, 2023. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified: • The Company did not fully maintain components of the COSO framework, including elements of the control environment, risk assessment, control activities, and monitoring activities components, relating to: (i) sufficiency of processes related to identifying and analyzing risks to the achievement of objectives across the entity, (ii) sufficiency of competent personnel with appropriate levels of knowledge, experience, and training in accounting for complex and non-routine transactions, and internal control matters to perform assigned responsibilities and have appropriate accountability for the design and operation of internal control over financial reporting; (iii) performing control activities in accordance with established policies in a timely manner, and (iv) performing ongoing evaluation to ascertain whether the components of internal controls are present and functioning. The entity level material weaknesses contributed to other material weaknesses within the Company’s system of internal control over financial reporting as follows: • The Company did not design and implement effective controls, such that, personnel within the Company have incompatible duties which allow for the creation, review and processing of journal entries without independent review and authorization, which affects substantially all financial statement account balances and disclosures. • The Company did not design and implement effective controls over the accounting for share-based payments, including the long-term incentive plan awards and earnout liability. • The Company did not design and implement effective controls over the accounting for its license and release agreement. • The Company did not design and implement effective controls over the inputs and assumptions used in the valuation of the earnout liability and information utilized to classify awards as either equity or liability. • The Company did not maintain effective controls over its determination of reportable segments for purposes of segment reporting and reporting units for purposes of goodwill. 61 TABLE OF CONTENTS Our independent registered public accounting firm, Moss Adams LLP, has issued a revised attestation report on our internal control over financial reporting. This report appears on page F-4. Remediation Plan We have immediately commenced developing a plan to enhance the design and operating effectiveness of our internal controls over financial reporting, including maintaining sufficient contemporaneous documentation of management review controls over accounting for share-based payments, including the long-term incentive plan awards, earnout liability, as well as the accounting for the Company’s license and release agreement, which we believe will address the material weakness described above. At least on an annual basis or as warranted due to organizational changes, we will perform a segment/reporting unit analysis. We expect our remediation will be complete prior to the end of the fourth quarter of fiscal 2024. We have hired a Director of Information Technology at the end of 2023 to, among other responsibilities, segregate financial accounting systems access and system changes between IT and accounting department. The Company will continue to review and modify system access for accounting personnel to ensure proper segregation of duties around manual journal entries. Changes in Internal Control Over Financial Reporting There were no significant changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), except as discussed above, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting. Part IV Item 15. Exhibits and Financial Statement Schedules. (a) (1) Financial Statements . Financial statements included in this annual report are listed under Part II, Item 8. (2) Financial Statement Schedules . Schedules not listed above have been omitted because they are not required, not applicable, or the required information is otherwise included. (3) Exhibits. The exhibits listed below are filed or furnished, as applicable, as part of this annual report or are incorporated by reference as indicated. 62 TABLE OF CONTENTS EXHIBIT INDEX Incorporated by Reference Exhibit Description Form File No. Exhibit Filing Date 2.1 Business Combination Agreement and Plan of Reorganization, dated as of May 6, 2021, among Live Oak Acquisition Corp. II, Live Oak Merger Sub Inc. and Navitas Semiconductor Limited, including as domesticated in the State of Delaware as Navitas Semiconductor Ireland, LLC (“Legacy Navitas”) S-4 333-256880 2.1 6/8/2021 2.2 Agreement and Plan of Merger, dated as of August 15, 2022, by and among Navitas Semiconductor Corporation, Gemini Acquisition LLC, GeneSiC Semiconductor Inc., Ranbir Singh and The Ranbir Singh Irrevocable Trust dated February 4, 2022 10-Q 001-39755 2.1 11/14/2022 3.1 Second Amended and Restated Certificate of Incorporation of Navitas Semiconductor Corporation 8-K 001-39755 3.1 10/25/2021 3.2 Amended and Restated Bylaws of Navitas Semiconductor Corporation 8-K 001-39755 3.2 10/25/2021 4.1* Description of Registrant’s Securities 10.1† Navitas Semiconductor Corporation 2021 Equity Incentive Plan 8-K/A 001-39755 10.5 11/15/2021 10.2† Form of Restricted Stock Unit Agreement 8-K 001-39755 10.6 10/25/2021 10.3† Form of Stock Option Agreement 8-K 001-39755 10.7 10/25/2021 10.4† Amended and Restated Navitas Semiconductor Limited 2020 Equity Incentive Plan S-4/A 333-256880 10.16 8/23/2021 10.5 Warrant Agreement, dated December 2, 2020, between Live Oak Acquisition Corp. II and Continental Stock Transfer & Trust Company, as warrant agent 8-K 001-39755 4.1 12/8/2020 10.6 Private Placement Warrants Purchase Agreement, dated December 2, 2020, between Live Oak Acquisition Corp. II and Live Oak Sponsor Partners II, LLC 8-K 001-39755 10.4 12/8/2020 10.7 Registration Rights Agreement, dated December 2, 2020, among Live Oak Acquisition Corp. II, Live Oak Sponsor Partners II, LLC and certain other security holders named therein 8-K 001-39755 10.3 12/8/2020 10.8† Form of Indemnification Agreement 8-K 001-39755 10.4 10/25/2021 10.9 Lock-Up Agreement (Management) , dated as of May 6, 2021, among Live Oak Acquisition Corp. II, Legacy Navitas and certain equity holders of Legacy Navitas 8-K 001-39755 10.2 5/7/2021 10.10 Lock-Up Agreement (VPs) , dated as of May 6, 2021, among Live Oak Acquisition Corp. II, Legacy Navitas and certain equity holders of Legacy Navitas 8-K 001-39755 10.3 5/7/2021 10.11 Lock-Up Agreement (Non-Management) , dated as of May 6, 2021, among Live Oak Acquisition Corp. II, Legacy Navitas and certain equity holders of Legacy Navitas 8-K 001-39755 10.4 5/7/2021 10.12 Letter Agreement, dated December 2, 2020, among Live Oak Acquisition Corp. II, its officers and directors and Live Oak Sponsor Partners II, LLC 8-K 001-39755 10.1 12/8/2020 10.13 Sponsor Letter Agreement, dated May 6, 2021, between Live Oak Acquisition Corp. II and Live Oak Sponsor Partners II, LLC 8-K 001-39755 10.5 5/7/2021 63 TABLE OF CONTENTS Incorporated by Reference Exhibit Description Form File No. Exhibit Filing Date 10.14 Amendment to Letter Agreement, dated May 6, 2021. among Live Oak Acquisition Corp. II, its officers and directors and Live Oak Sponsor Partners II, LLC 8-K 001-39755 10.5 5/7/2021 10.15† Employment Agreement of Gene Sheridan , dated as of May 6, 2021 S-4/A 333-256880 10.14 8/23/2021 10.16† Employment Agreement of Daniel Kinzer , dated as of May 6, 2021 S-4/A 333-256880 10.15 8/23/2021 10.17† Employment Agreement of Todd Glickman, dated as of May 6, 2021 8-K 001-39755 10.2 10/25/2021 10.18 Sponsor Letter Agreement, dated October 6, 2021, among Live Oak Sponsor Partners II, LLC, Live Oak Acquisition Corp. II and Navitas Semiconductor Limited 8-K 001-39755 10.3 10/7/2021 10.19† Stock Repurchase Agreement, dated March 4, 2022, between Todd Glickman and Navitas Semiconductor Corporation 10-Q 001-39755 10.5 5/16/2022 10.20† Employment Offer Letter, dated May 17, 2022, between Ron Shelton and Navitas Semiconductor Corporation 10-Q 001-39755 10.1 8/15/2022 10.21† Registration Rights Agreement, dated August 15, 2022, among Navitas Semiconductor Corporation, Ranbir Singh and The Ranbir Singh Irrevocable Trust dated February 4, 2022 10-Q 001-39755 10.1 11/14/2022 10.22† Employment Offer Letter, dated August 15, 2022, among Navitas Semiconductor Corporation, Navitas Semiconductor USA, Inc. and Ranbir Singh 10-K/A 001-39755 10.31 4/14/2023 10.23†* Navitas Semiconductor 2022 Employee Stock Purchase Plan 10.24† Navitas Semiconductor Executive Severance Plan 8-K 001-39755 10.1 1/3/2024 10.25†* Employment Offer Letter, dated December 1, 2023, between Navitas Semiconductor USA, Inc. and Janet Chou 10.26†* Letter Agreement, dated January 9, 2024, among Navitas Semiconductor USA, Inc., Navitas Semiconductor Corporation and Ron Shelton 19.1* Insider Trading Policy 19.2* Equity Grant Policy and Procedures 21.1* List of Subsidiaries 23.1+ Consent of Moss Adams LLP 23.2+ Consent of Deloitte & Touche LLP 24.1* Power of Attorney 31.1+ Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act 31.2+ Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act 32.1++ Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. § 1350 97.1* Navitas Semiconductor Dodd-Frank Clawback Policy 101.SCH+ XBRL Taxonomy Extension Schema Document 101.CAL+ XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF+ XBRL Taxonomy Extension Definition Linkbase Document 101.LAB+ XBRL Taxonomy Extension Label Linkbase Document 64 TABLE OF CONTENTS Incorporated by Reference Exhibit Description Form File No. Exhibit Filing Date 101.PRE+ XBRL Taxonomy Extension Presentation Linkbase Document _____________________________________________ † Management contract or compensatory arrangement. * Included in the original filing of our annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 6, 2024. + Filed herewith. ++ Furnished herewith. 65 TABLE OF CONTENTS SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NAVITAS SEMICONDUCTOR CORPORATION By: /s/ Gene Sheridan Name: Gene Sheridan Title: President and Chief Executive Officer Date: July 23, 2024 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Gene Sheridan Gene Sheridan President, Chief Executive Officer and Director (principal executive officer) July 23, 2024 /s/ Janet Chou Janet Chou Chief Financial Officer and Treasurer (principal financial and accounting officer) July 23, 2024 * Daniel Kinzer Chief Operating Officer, Chief Technology Officer and Director July 23, 2024 * Richard J. Hendrix Director July 23, 2024 * Brian Long Director July 23, 2024 * David Moxam Director July 23, 2024 * Dipender Saluja Director July 23, 2024 * Gary K. Wunderlich, Jr. Director July 23, 2024 *By: /s/ Paul D. Delva Paul D. Delva, as attorney-in-fact 66