Navitas Semiconductor Corp 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures 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: 84 TABLE OF CONTENTS A. 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; and, B. 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. 85 TABLE OF CONTENTS 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 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. Item 9B. Other Information. None . 86 TABLE OF CONTENTS Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. Part III Item 10. Directors, Executive Officers and Corporate Governance. 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. The full text of this code of business conduct and ethics is posted on the investor relations page of our website, at https://ir.navitassemi.com/corporate-governance/documents-charters. 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 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. Item 11. Executive Compensation. The information required by this item is incorporated by reference from our Proxy Statement. Item 12. 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. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this item is incorporated by reference from our Proxy Statement. Item 14. Principal Accountant Fees and Services. The information required by this item is incorporated by reference from our Proxy Statement. 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 under Part II, Item 8 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. 87 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”) 8-K 001-39755 2.1 5/7/2021 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 Corporatio n, as amended 4.1 Description of Registrant’s Securities 10-K 001-39755 4.1 3/6/2024 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 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 10.6† Form of Indemnification Agreement 8-K 001-39755 10.4 10/25/2021 10.7 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 10.8 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 10.9 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 10.10 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 12/8/2020 10.11 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 10.12† Employment Agreement of Gene Sheridan , dated as of May 6, 2021 S-4/A 333-256880 10.14 8/23/2021 10.13† Employment Agreement of Daniel Kinzer, dated as of May 6, 2021 S-4/A 333-256880 10.15 8/23/2021 10.14† Employment Agreement of Todd Glickman, dated as of May 6, 2021 8-K 001-39755 10.2 10/25/2021 10.15 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 88 TABLE OF CONTENTS Incorporated by Reference Exhibit Description Form File No. Exhibit Filing Date 10.16† Employment Offer Letter, dated May 17, 2022, between Ron Shelton and Navitas Semiconductor Corporation 10-Q 001-39755 10.1 8/15/2022 10.17† 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 10.18† 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 10.19† Navitas Semiconductor 2022 Employee Stock Purchase Plan 10-K 001-39755 10.23 3/6/2024 10.20† Navitas Semiconductor Executive Severance Plan 8-K 001-39755 10.1 1/3/2024 10.21† Employment Offer Letter, dated December 1, 2023, between Navitas Semiconductor USA, Inc. and Janet Chou 10-K 001-39755 10.25 3/6/2024 10.22† Letter Agreement, dated January 9, 2024, among Navitas Semiconductor USA, Inc., Navitas Semiconductor Corporation and Ron Shelton 10-K 001-39755 10.26 3/6/2024 10.23† Letter Agreement, dated July 31, 2024, among Navitas Semiconductor USA, Inc., Navitas Semiconductor Corporation and Ranbir Singh 10-Q 001-39755 10.1 8/5/2024 10.24†* L etter Agreement, effective November 2 6 , 2024, among Navitas Semiconductor USA, Inc., Navitas Semiconductor Corporation and Ranbir Singh 19.1 Insider Trading Policy 10-K 001-39755 19.1 3/6/2024 19.2 Equity Grant Policy and Procedures 10-K 001-39755 19.2 3/6/2024 21.1 List of Subsidiaries 10-K 001-39755 21.1 3/6/2024 23.1* Consent of Moss Adams LLP 24.1* Power of Attorney (included on signature page) 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 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document _____________________________________________ † Management contract or compensatory arrangement. * Filed herewith. ** Furnished herewith. 89 TABLE OF CONTENTS Item 16. Form 10–K Summary. None. 90 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 Gene Sheridan President and Chief Executive Officer Date: March 19, 2025 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. Signature Title Date /s/ Gene Sheridan Gene Sheridan President, Chief Executive Officer and Director (principal executive officer) March 19, 2025 /s/ Todd Glickman Todd Glickman Sr. V.P., Chief Financial Officer and Treasurer (principal financial and accounting officer) March 19, 2025 /s/ Daniel M. Kinzer Daniel M. Kinzer Chief Operating Officer, Chief Technology Officer and Director March 19, 2025 /s/ Richard J. Hendrix Richard J. Hendrix Director March 19, 2025 /s/ Brian Long Brian Long Director March 19, 2025 /s/ David Moxam David Moxam Director March 19, 2025 /s/ Dipender Saluja Dipender Saluja Director March 19, 2025 /s/ Ranbir Singh Ranbir Singh Director March 19, 2025 /s/ Gary K. Wunderlich, Jr. Gary K. Wunderlich, Jr. Director March 19, 2025 91