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Item 9A. Controls and Procedures

2025-03-19 compared with 2024-03-06 · 79 added, 66 removed, 118 unchanged (55% of the section changed)

1 unchanged sentence

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, as amended (the “Exchange Act”)) as of December 31, 2023.

Based on that evaluation, our management, including our chief executive and chief financial officer, concluded that as of December 31, 2023, our disclosure controls and procedures were effective to provide a reasonable assurance that the information required to be disclosed by us in this Annual Report on Form 10-K was reported within the time periods specified by SEC rules and regulations, and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding the required disclosures.

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.

Based on this assessment, management concluded that our internal control over financial reporting is effective as of December 31,, 2023.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Moss Adams LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this Annual Report on Form 10-K and, as part of its audit, has issued an attestation report, included herein, on the effectiveness of our internal control over financial reporting.

Material Weaknesses

As disclosed in our annual report on Form 10-K for the year ended December 31, 2022, management concluded that a material weakness existed in our internal control over financial reporting.

Specifically we determined that due to a lack of sufficient number of trained professional with technical accounting expertise to identify, evaluate, value and account for complex and non-routine transactions, including revenue and stock-based compensation.

We also found we have insufficient accounting resources to maintain appropriate segregation of duties, including to ensure journal entries are reviewed by personnel independent of the preparer during our year ended December 31, 2022.

During the twelve months ended December 31, 2023, management has evaluated the design and operating effectiveness of internal controls over financial reporting and has taken the following steps to remediate the identified material weaknesses:

• Management has added a SEC reporting manager, a staff accountant and two accounts payable accountant.

• For complex transactions and to the extent there is a lack of knowledge within the current accounting team, management engaged external professional firms to assist with the applicable transactions as they arise.

• Management hired a consulting firm to act as the Company’s co-sourced internal audit department and assist with the Company’s SOX 404(b) requirements.

• As part of the Company’s SOX 404(b) requirements, management has identified and implemented additional internal controls to mitigate the material weaknesses identified from the prior year.

During the twelve months ended December 31, 2023, management tested the remediated controls related to the material weakness described above for a sufficient period of time, and management has concluded, through testing, that as of December 31, 2023, these controls were operating effectively.

Therefore, management has concluded that the material weaknesses previously identified in the Company’s internal control over financial reporting has been remediated at December 31, 2023.

Regardless of the previously identified and now remediated material weaknesses, management has concluded that the Company’s consolidated financial statements included in this annual report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows as of the date, and for the periods presented, in conformity with U.S.

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Exchange Act.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Based upon this evaluation, our chief executive officer and our chief financial officer concluded the disclosure controls and procedures were not effective as of December 31, 2024, the end of the period covered by this Annual Report on Form 10-K, due to material weaknesses in internal control over financial reporting described below.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Management of the Company has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 using the criteria described in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Because of the material weaknesses described below, management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2024.

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 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;

and (iii) ensuring control activities identified were performed in accordance with established policies, 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 lacked sufficient controls to accurately identify and present activity within its statements of operations and cash flows.

Specifically, the Company lacked controls in order to (1) accurately identify and present cash flows as either operating, investing or financing activities and (2) classify expenses within total operating expenses, and correctly classify activity associated with its equity method investment;

the Company's external reporting process is not appropriately designed to accurately identify, record, present and disclose transactions, including research and development assets, property and equipment and equity transactions.

These material weaknesses could result in misstatements of our consolidated financial statements that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

This annual report does not include an attestation report of our independent registered public accounting firm, Moss Adams LLP, as under the rules of the Securities and Exchange Commission the Company is a Small Reporting Company (SRC) with non-accelerated filer status.

Remediation Plan and Progress

Management has been executing and remains committed to implementing measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively.

In response to all unremediated material weaknesses, management has taken the following actions:

• engaging an external advisor to assist with evaluating and documenting the design and operating effectiveness of internal controls and to assist with the remediation of deficiencies, as necessary,

• actively hiring accounting, and finance personnel to support our remediation efforts, as well as third-party resources with relevant expertise to augment our internal resources,

• assessing the specific training needs for newly hired and existing personnel to support our internal controls.

In response to the material weakness “(A)” management has taken the following actions:

• designing and implementing control activities in order to ensure that the Company’s financial close and reporting activities specifically address appropriate consideration and presentation of transactions recorded within the statements of operations and cash flows.

In response to the material weakness “(B)” management has taken the following actions:

• designing and implementing control activities in order to ensure that transactions related to research and development assets, property and equipment and equity transactions are appropriately identified, recorded, presented and disclosed, including (1) implementing established policies related to review of significant contracts and transactions, and (2) ensuring that significant contracts and transactions have documented accounting considerations.

As we continue to evaluate and work to improve our internal control over financial reporting, we may decide to take additional measures to address the material weaknesses or modify the remediation plans described above.

We believe that these actions will remediate the material weaknesses, however the material weaknesses will not be considered remediated until we conclude all measures necessary to remediate the material weaknesses have been designed, implemented, and the applicable controls have operated for a sufficient period of time, and management has concluded, through testing, that these controls are designed and operating effectively.

While management believes that the aforementioned plans will remediate the material weaknesses, there is no assurance on the exact timing of the completion of the remediation.

Remediation of Previously Reported Material Weaknesses

We previously disclosed material weaknesses in our internal control over financial reporting related to the following:

• 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.

We completed the following activities as part of remediating these material weaknesses:

• designed and implemented controls to ensure that journal entries require independent review and authorization prior to processing,

• designed and implemented controls documenting the accounting treatment of the long-term incentive plan awards and earnout liability based on contractual terms,

• designed and implemented controls over the accounting for license and release agreement, including documenting the accounting treatment based on contractual terms and evaluating all key inputs and assumptions for completeness, accuracy and reasonableness,

• designed and implemented controls over the valuation of the earnout liability, including ensuring information utilized to classify awards as either equity or liability was complete and accuracy, and all key inputs were evaluated and reviewed for completeness, accuracy and reasonableness,

• designed and implemented controls to ensure reportable segments for purposes of segment reporting and reporting units for purposes of goodwill were supportable, including documenting information reviewed and evaluation of assumptions utilized.

We completed our testing of both the design and operating effectiveness of these controls and have determined that controls operated for a sufficient period of time for management to conclude that these material weaknesses have been remediated as of December 31, 2024.

Changes in Internal Control Over Financial Reporting

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Directors, Executive Officers and Corporate Governance.

The information required by this item is incorporated by reference to the proxy statement on Schedule 14A to be filed with the Securities and Exchange Commission in connection with our 2024 annual stockholders' meeting within 120 days of the fiscal year ended December 31, 2023 (our “Proxy Statement”).

The information required by this item is incorporated by reference from the definitive proxy statement on Schedule 14A for our 2025 annual stockholders’ meeting, to be filed with the Securities and Exchange Commission within 120 days after the fiscal year ended December 31, 2024 (our “Proxy Statement”).

Our board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including our President and Chief Executive Officer, Chief Financial Officer, and other executive and senior officers.

2 unchanged sentences

The reference to our website address in this filing does not include or incorporate by reference the information on that website into this filing.

We intend to disclose future amendments to certain provisions of this code of business conduct and ethics, or waivers of these provisions, on our website or in public filings to the extent required by the applicable rules.

We intend to disclose future amendments to certain provisions of our code of business conduct and ethics, or waivers of those provisions, on our website or in public filings to the extent required by the applicable rules.

Executive Compensation.

The information required by this item is incorporated by reference to our Proxy Statement.

Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters.

The information required by this item is incorporated by reference to our Proxy Statement.

Certain Relationships and Related Person Transactions.

The information required by this item is incorporated by reference to our Proxy Statement.

The information required by this item is incorporated by reference from our Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item is incorporated by reference from our Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is incorporated by reference from our Proxy Statement.

Principal Accountant Fees and Services.

The information required by this item is incorporated by reference to our Proxy Statement.

The information required by this item is incorporated by reference from our Proxy Statement.

Exhibits and Financial Statement Schedules.

2 unchanged sentences

(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.

Schedules not listed under Part II, Item 8 have been omitted because they are not required, not applicable, or the required information is otherwise included.

(3) Exhibits.

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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

2 unchanged sentences

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

Amended and Restated Bylaws of Navitas Semiconductor Corporatio n, as amended

Description of Registrant’s Securities

7 unchanged sentences

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

10.5 Registration Rights Agreement, dated December 2, 2020, among Live Oak Acquisition Corp.

12 unchanged sentences

8-K 001-39755 10.4 5/7/2021

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

Sponsor Letter Agreement, dated May 6, 2021, between Live Oak Acquisition Corp.

Sponsor Letter Agreement, dated December 2, 2020 , between Live Oak Acquisition Corp.

II and Live Oak Sponsor Partners II, LLC

8-K 001-39755 10.2

Incorporated by Reference

Exhibit Description Form File No.

Exhibit Filing Date

Amendment to Letter Agreement, dated May 6, 2021.

among Live Oak Acquisition Corp.

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

9 unchanged sentences

8-K 001-39755 10.3 10/7/2021

Stock Repurchase Agreement, dated March 4, 2022, between Todd Glickman and Navitas Semiconductor Corporation

10-Q 001-39755 10.5 5/16/2022

Incorporated by Reference

Exhibit Description Form File No.

Exhibit Filing Date

Employment Offer Letter, dated May 17, 2022, between Ron Shelton and Navitas Semiconductor Corporation

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Navitas Semiconductor 2022 Employee Stock Purchase Plan

N avitas Semiconductor Executive Severan ce Pla n

E mployment O ffer L e tter , dated December 1, 2023, between Navitas Semiconductor USA, I nc.

Navitas Semiconductor Executive Severance Plan

8-K 001-39755 10.1 1/3/2024

Employment Offer Letter, dated December 1, 2023, between Navitas Semiconductor USA, Inc.

and Janet Chou

L etter Agreement, dated January 9, 2 024, among Navitas Semicon ductor USA, In c., Navitas Semiconductor C orporatio n and Ro n Shelton

I nsider Trading Policy

10.25 3/6/2024

Letter Agreement, dated January 9, 2024, among Navitas Semiconductor USA, Inc., Navitas Semiconductor Corporation and Ron Shelton

Letter Agreement, dated July 31, 2024, among Navitas Semiconductor USA, Inc., Navitas Semiconductor Corporation and Ranbir Singh

L etter Agreement, effective November 2 6 , 2024, among Navitas Semiconductor USA, Inc., Navitas Semiconductor Corporation and Ranbir Singh

Insider Trading Policy

Equity Grant Policy and Procedures

List of Subsidiaries

C onsent of Moss Adams LLP

Consent of Deloitte & Touche LLP

Consent of Moss Adams LLP

24.1* Power of Attorney (included on signature page)

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101.LAB* XBRL Taxonomy Extension Label Linkbase Document

Incorporated by Reference

Exhibit Description Form File No.

Exhibit Filing Date

101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

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** Furnished herewith.

Form 10–K Summary.

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.

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March 19, 2025

Each person whose signature appears below constitutes and appoints Ron Shelton and Paul D.

Delva as his true and lawful attorney-in-fact and agent, with full power of substitution and, for him and in his name, place and stead, in any and all capacities to sign any and all amendments to this annual report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Todd Glickman and Paul D.

Delva, jointly and severally, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this annual report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

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.

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March 19, 2025

/s/ Ron Shelton

Chief Financial Officer and Treasurer

/s/ Todd Glickman

Todd Glickman

V.P., Chief Financial Officer and Treasurer

(principal financial and accounting officer)

March 19, 2025

/s/ Daniel Kinzer

Daniel Kinzer

/s/ Daniel M.

Chief Operating Officer, Chief Technology Officer and Director March 19, 2025

8 unchanged sentences

Director March 19, 2025

/s/ Ranbir Singh

Director March 19, 2025

Wunderlich, Jr.

2 unchanged sentences

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-K

Item 9A. Controls and Procedures