Navitas Semiconductor Corp 10-Q

Item 1. Financial Statements. NAVITAS SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except shares and par value) June 30, 2025 December 31, 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 161,189 $ 86,737 Accounts receivable, net of allowance of $ 885 and $ 135 , respectively 12,476 13,982 Inventories 15,124 15,477 Prepaid expenses and other current assets 4,076 4,070 Total current assets 192,865 120,266 RESTRICTED CASH 152 1,503 PROPERTY AND EQUIPMENT, net 14,521 15,421 OPERATING LEASE RIGHT OF USE ASSETS 6,012 6,900 FINANCE LEASE RIGHT OF USE ASSETS 930 — INTANGIBLE ASSETS, net 62,727 72,195 GOODWILL 163,215 163,215 OTHER ASSETS 9,019 10,478 Total assets $ 449,441 $ 389,978 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable and other accrued expenses $ 16,927 $ 10,754 Accrued compensation expenses 4,398 8,623 Operating lease liabilities, current 1,789 1,767 Finance lease liabilities, current 315 — Total current liabilities 23,429 21,144 OPERATING LEASE LIABILITIES NONCURRENT 4,714 5,553 FINANCE LEASE LIABILITIES NONCURRENT 619 — EARNOUT LIABILITY 30,059 10,208 DEFERRED TAX LIABILITIES 406 441 NONCURRENT LIABILITIES 1,337 4,619 Total liabilities 60,564 41,965 COMMITMENTS AND CONTINGENCIES (Note 15) STOCKHOLDERS’ EQUITY: Class A common stock, $ 0.0001 par value, 740,000,000 shares authorized as of June 30, 2025 and December 31, 2024, and 213,084,356 and 188,114,202 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 24 22 Class B common stock, $ 0.0001 par value, 10,000,000 shares authorized as of June 30, 2025 and December 31, 2024, and 0 shares issued and outstanding at both June 30, 2025 and December 31, 2024 — — Additional paid-in capital 839,550 732,784 Accumulated other comprehensive loss ( 7 ) ( 7 ) Accumulated deficit ( 450,690 ) ( 384,786 ) Total stockholders’ equity 388,877 348,013 Total liabilities and stockholders’ equity $ 449,441 $ 389,978 The accompanying condensed notes are an integral part of these condensed consolidated financial statements. 4 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2025 2024 2025 2024 NET REVENUES $ 14,490 $ 20,468 $ 28,508 $ 43,643 COST OF REVENUES (exclusive of amortization of intangible assets included below) 12,162 12,478 20,873 26,138 OPERATING EXPENSES: Research and development 11,496 18,971 24,164 39,200 Selling, general and administrative 7,751 15,382 19,491 31,469 Amortization of intangible assets 4,734 4,774 9,468 9,548 Restructuring expense — — 1,469 — Total operating expenses 23,981 39,127 54,592 80,217 LOSS FROM OPERATIONS ( 21,653 ) ( 31,137 ) ( 46,957 ) ( 62,712 ) OTHER INCOME (EXPENSE), net: Interest income (expense), net 131 ( 72 ) 93 ( 70 ) Dividend income 647 1,361 1,391 3,041 (Loss) Gain from change in fair value of earnout liabilities ( 27,964 ) 7,550 ( 19,851 ) 33,749 Other income 37 31 55 114 Total other income (expense), net ( 27,149 ) 8,870 ( 18,312 ) 36,834 LOSS BEFORE INCOME TAXES ( 48,802 ) ( 22,267 ) ( 65,269 ) ( 25,878 ) INCOME TAX PROVISION 48 61 130 131 Equity method investment loss ( 225 ) — ( 505 ) — NET LOSS $ ( 49,075 ) $ ( 22,328 ) $ ( 65,904 ) $ ( 26,009 ) NET LOSS PER COMMON SHARE: Basic net loss per share attributable to common stockholders $ ( 0.25 ) $ ( 0.12 ) $ ( 0.34 ) $ ( 0.14 ) Diluted net loss per share attributable to common stockholders $ ( 0.25 ) $ ( 0.12 ) $ ( 0.34 ) $ ( 0.14 ) WEIGHTED AVERAGE COMMON SHARES USED IN NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS: Basic common shares 198,956 183,127 193,462 181,493 Diluted common shares 198,956 183,127 193,462 181,493 The accompanying condensed notes are an integral part of these condensed consolidated financial statements. 5 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited) Stockholders' Equity SIX MONTHS ENDED JUNE 30, 2025 Class A common stock Additional paid in capital Accumulated deficit Accumulated comprehensive loss Total Shares Amount BALANCE AT DECEMBER 31, 2024 188,114 $ 22 $ 732,784 $ ( 384,786 ) $ ( 7 ) $ 348,013 Issuance of common stock under employee stock option and stock award plans 3,649 — 3,979 — — 3,979 Costs for the issuance of common stock/At-the-market offering (ATM One and ATM Two) — — ( 346 ) — — ( 346 ) Stock-based compensation expense related to employee and non-employee stock awards — — 7,003 — — 7,003 Net loss — — — ( 16,829 ) — ( 16,829 ) BALANCE AT MARCH 31, 2025 191,763 $ 22 $ 743,420 $ ( 401,615 ) $ ( 7 ) $ 341,820 Issuance of common stock under employee stock option and stock award plans 1,540 — 889 — — 889 Shares issued in connection with At-the-market offerings (ATM One and ATM Two) 19,781 2 99,998 — — 100,000 Costs for the issuance of common stock/At-the-market offering (ATM One and ATM Two) — — ( 2,904 ) — — ( 2,904 ) Stock-based compensation expense related to employee and non-employee stock awards — — ( 1,853 ) — — ( 1,853 ) Net loss — — — ( 49,075 ) — ( 49,075 ) BALANCE AT JUNE 30, 2025 213,084 $ 24 $ 839,550 $ ( 450,690 ) $ ( 7 ) $ 388,877 Stockholders' Equity SIX MONTHS ENDED JUNE 30, 2024 Class A common stock Additional paid in capital Accumulated deficit Accumulated comprehensive loss Total Shares Amount BALANCE AT DECEMBER 31, 2023 179,196 $ 21 $ 680,790 $ ( 300,187 ) $ ( 7 ) $ 380,617 Issuance of common stock under employee stock option and stock award plans 3,801 — 10,734 — — 10,734 Stock-based compensation expense related to employee and non-employee stock awards — — 10,247 — — 10,247 Net loss — — — ( 3,681 ) — ( 3,681 ) 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 505 — 1,123 — — 1,123 Stock-based compensation expense related to employee and non-employee stock awards — — 11,388 — — 11,388 Net loss — — — ( 22,328 ) — ( 22,328 ) BALANCE AT JUNE 30, 2024 183,502 $ 21 $ 714,282 $ ( 326,196 ) $ ( 7 ) $ 388,100 The accompanying condensed notes are an integral part of these condensed consolidated financial statements. 6 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited) Six Months Ended June 30, (In thousands) 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 65,904 ) $ ( 26,009 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,677 1,449 Amortization of intangible assets 9,468 9,548 Non-cash lease expense 896 1,178 Stock-based compensation expense 6,059 26,639 Allowance for expected credit losses 750 — Loss from equity method investment 505 — Loss on disposition of capital assets 8 — Loss (Gain) from change in fair value of earnout liability 19,851 ( 33,749 ) Deferred income taxes ( 35 ) — Change in operating assets and liabilities: Accounts receivable 756 3,179 Inventories 353 ( 2,925 ) Prepaid expenses and other current assets ( 6 ) 1,431 Other assets 954 576 Accounts payable, accrued compensation and other accrued expenses 728 ( 10,373 ) Operating lease liability ( 825 ) ( 1,103 ) Customer deposit and deferred revenue — ( 4,749 ) Net cash used in operating activities ( 24,765 ) ( 34,908 ) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposition of capital assets 46 — Investment purchases — ( 2,500 ) Purchases of property and equipment ( 720 ) ( 5,639 ) Net cash used in investing activities ( 674 ) ( 8,139 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from the issuance of the At-the-market offerings (ATM One and ATM Two) 100,000 — Costs for the issuance of common stock/At-the-market offering (ATM One and ATM Two) ( 3,250 ) — Proceeds from issuance of common stock in connection stock option exercises 1,023 415 Proceeds from employee stock purchase plan 818 1,788 Payments on finance lease obligations ( 51 ) — Net cash provided by financing activities 98,540 2,203 NET INCREASE (DECREASE) IN CASH 73,101 ( 40,844 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD 88,240 152,839 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD $ 161,341 $ 111,995 RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH Cash and cash equivalents $ 161,189 $ 111,687 Restricted cash 152 308 TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH $ 161,341 $ 111,995 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for income taxes $ 187 $ 116 Cash paid for interest $ 8 $ — Capital expenditures in accounts payable $ 267 $ 414 Shares issued in connection with annual bonus $ 2,988 $ 7,707 Noncash finance lease acquisition $ 985 $ — The accompanying condensed notes are an integral part of these condensed consolidated financial statements. 7 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. 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”) 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. The Company’s products provide superior efficiency, performance, size, cost and sustainability relative to existing silicon technology. 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, South Korea and the Philippines , with principal executive offices in Torrance, California. The Company has two authorized classes of common stock: Class A and Class B. Both classes have identical voting, dividend, and liquidation rights. There were no outstanding Class B shares as of June 30, 2025 and December 31, 2024. The Company also has 1.0 million shares of preferred stock authorized, with no shares outstanding as of June 30, 2025 and December 31, 2024. The preferred stock may be issued with voting rights, if any, and such other designations, powers, preferences and rights as may be determined by the board of directors at the time of issuance. Execution of At-The-Market Agreement On March 19, 2025, the Company entered into an Open Market Sale Agreement SM (the “Sale Agreement”) with Jefferies LLC (“Jefferies”) as sales agent, pursuant to which the Company may sell shares of its Class A common stock, par value $ 0.0001 per share, from time to time in “at the market” (“ATM”) offerings through Jefferies as sales agent. The Company subsequently completed two ATM offerings (“ATM One” and “ATM Two”). Under each of ATM One and ATM Two, the Company may, from time to time, offer and sell shares having an aggregate offering price of up to $ 50,000,000 . As of June 30, 2025, the Company completed sales of 11.1 million shares of Class A common stock under ATM One and 8.7 million shares under ATM Two, resulting in gross proceeds of approximately $100.0 million and offering-related costs of $3.3 million in total. The shares were offered and sold pursuant to the Company’s registration statement on Form S-3 (File No. 333-269752), the prospectus included therein, and prospectus supplements filed with the SEC effective March 20, 2025 and May 27, 2025 with respect to ATM One and ATM Two, respectively. Basis of Presentation The unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information contained in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such condensed consolidated financial statements. Operating results for the three and six months ended June 30, 2025, are not necessarily indicative of results to be expected for the full year ending December 31, 2025. 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 filed for the fiscal year ended December 31, 2024, filed with the SEC on March 19, 2025. 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 19, 2025. 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. 8 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 2. SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Accounting Standards In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, which mandates enhanced disclosure of specific costs and expenses within the notes to the financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is evaluating the impact that this ASU will have on the presentation of its consolidated financial statements. In December 2023, 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. This updated standard will be effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. The new disclosure requirements are applicable beginning with the Company’s annual reporting for the year ending December 31, 2025. The Company is still assessing this standard and expects it to result in changes to disclosures only. Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) introduced Accounting Standard Update ASU 2023-07, titled Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update mandates that all public entities, including those with a single reportable segment, disclose one or more measures of segment profit or loss that the chief operating decision maker (CODM) uses to allocate resources and assess performance during interim and annual reporting periods. Furthermore, the standard requires the disclosure of significant segment expenses, other relevant segment items, and additional qualitative information. The Company adopted ASC 2023-07 and all related subsequent amendments during the year ended December 31, 2024, as disclosed in Note 14 - “Segment Information” of this Form 10-Q. 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 the Company or are not anticipated to materially impact the condensed consolidated financial statements. 3. ACCOUNTS RECEIVABLE Accounts receivable trade, net consist of the following (in thousands): June 30, 2025 December 31, 2024 Accounts receivable, gross $ 12,443 $ 12,578 Unbilled receivables 918 1,539 Allowance for credit losses ( 885 ) ( 135 ) Accounts receivable, net $ 12,476 $ 13,982 9 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Allowance for credit losses activity (in thousands): Allowance for Credit Losses Balance at December 31, 2023 $ — Provision for credit losses ( 7,619 ) Accounts written-off 7,484 Balance at December 31, 2024 $ ( 135 ) Provision for credit losses ( 750 ) Accounts written-off — Balance at June 30, 2025 $ ( 885 ) 4. INVENTORIES Inventories consist of the following (in thousands): June 30, 2025 December 31, 2024 Raw materials $ 1,966 $ 2,422 Work-in-process 11,142 10,465 Finished goods 2,016 2,590 Total $ 15,124 $ 15,477 5. PROPERTY AND EQUIPMENT, NET Property and equipment, net consist of the following (in thousands): June 30, 2025 December 31, 2024 Furniture and fixtures $ 332 $ 330 Computers and other equipment 13,317 11,714 Leasehold improvements 4,321 4,302 Construction in Progress 5,942 6,887 23,912 23,233 Accumulated depreciation ( 9,391 ) ( 7,812 ) Total $ 14,521 $ 15,421 The depreciation expense wa s $ 0.9 million and $1.7 million fo r the three and six months ended June 30, 2025 and $0.7 million and $1.4 million for the three and six months ended June 30, 2024, respectively, and was determined using the straight-line method over the following estimated useful lives: Furniture and fixtures 3 — 7 years Computers and other equipment 2 — 5 years Leasehold improvements 2 — 6 years 10 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 6. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES The accounting guidance on fair value measurements clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices for identical assets in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. 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 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 $ 92.9 million as of June 30, 2025 and $ 66.5 million for December 31, 2024. The following table presents the Company’s fair value hierarchy for financial liabilities as of June 30, 2025 (in thousands) : Level 1 Level 2 Level 3 Total Liabilities: Earnout liability $ — $ — $ 30,059 $ 30,059 Total $ — $ — $ 30,059 $ 30,059 The following table presents the Company’s fair value hierarchy for financial liabilities as of December 31, 2024 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Earnout liability $ — $ — $ 10,208 $ 10,208 Total $ — $ — $ 10,208 $ 10,208 The following table provides a reconciliation between the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands): Fair Value Measurements Using Significant Unobservable Inputs Balance at December 31, 2024 $ 10,208 Fair value adjustment 19,851 Balance at June 30, 2025 $ 30,059 The Company did not transfer any investments between Level 1 and Level 2 of the fair value hierarchy during the three and six months ended June 30, 2025 . 11 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 7. GOODWILL AND INTANGIBLES Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination. Intangible assets are measured at their respective fair values as of the acquisition date and may be subject to adjustment within the measurement period, which may be up to one year from the acquisition date. 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. As of the annual measurement date of September 30, 2024, the fair market value of the Company’s stock price remains above carrying value, and no indicators of impairment are present as of June 30, 2025. In the first quarter of 2025, the Company transferred $1.2 million from in-process research and development to developed technology as the project was completed and placed into service. There were no changes to goodwill during the three and six months ended June 30, 2025. The following table presents the Company’s intangible asset balance by asset class as of June 30, 2025 (in thousands): Intangible Asset Cost Accumulated Amortization Net Book Value Amortization Method Useful Life Trade Names $ 900 $ ( 900 ) $ — Straight line 2 years Developed Technology 54,677 ( 37,907 ) 16,770 Straight line 4 - 10 years Patents 34,900 ( 7,064 ) 27,836 Straight line 5 - 15 years Customer Relationships 24,300 ( 6,986 ) 17,314 Straight line 10 years Non-Competition Agreements 1,900 ( 1,093 ) 807 Straight line 5 years Other 658 ( 658 ) — Straight line 5 years Total $ 117,335 $ ( 54,608 ) $ 62,727 The following table presents the Company’s intangible asset balance by asset class for the fiscal year ended December 31, 2024 (in thousands): Intangible Asset Cost Accumulated Amortization Net Book Value Amortization Method Useful Life Trade Names $ 900 $ ( 900 ) $ — Straight line 2 years Developed Technology 53,500 ( 31,074 ) 22,426 Straight line 4 -10 years In-process R&D 1,177 — 1,177 Indefinite N/A Patents 34,900 ( 5,834 ) 29,066 Straight line 5 - 15 years Customer Relationships 24,300 ( 5,771 ) 18,529 Straight line 10 years Non-Competition Agreements 1,900 ( 903 ) 997 Straight line 5 years Other 658 ( 658 ) — Straight line 5 years Total $ 117,335 $ ( 45,140 ) $ 72,195 12 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) The following table presents the changes in the Company’s intangible asset balance (in thousands): Intangible Assets, net Balance at December 31, 2024 $ 72,195 Amortization expense ( 9,468 ) Balance at June 30, 2025 $ 62,727 The amortization expense was $ 4.7 million and $9.5 million for the three and six months ended June 30, 2025 and $4.8 million and $9.5 million for the three and six months ended June 30, 2024 , respectively. Total future amortization expense of intangible assets is estimated to be as follows (in thousands): Fiscal Year Ending December 31, Total 2025 (remainder of fiscal 2025) $ 9,442 2026 14,347 2027 5,641 2028 4,996 2029 4,690 Thereafter 23,611 Total $ 62,727 There were no impairment charges during the three and six months ended June 30, 2025 or during the year ended December 31, 2024 . The goodwill balance was $ 163.2 million as of both June 30, 2025 and December 31, 2024, with no accumulated impairment losses recorded as of either date. 8. LEASES: The Compa ny has entered into operating leases primarily for commercial buildings and a finance lease for equipment. As of June 30, 2025, no operating or finance 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, lease agreements do not contain material residual value guarantees or material restrictive covenants. The Company has made the accounting policy election to use certain ongoing practical expedients made available by ASC 842 to: (i) not separate lease components from non-lea se components for real estate; and (ii) exclude leases with an initial term of 12 months or less (“short-term” leases) from the condensed consolidated balance sheets and will recognize related lease payments in the consolidated statements of operations on a straight-line basis over the lease term. 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 for operating leases, including short-term lease cost, was $ 0.6 million and $ 1.2 million for the three and six months ended June 30, 2025 and $ 0.6 million and $ 1.4 million for the three and six months ended June 30, 2024, 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 expenses were $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2025 and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2024 , respectively. 13 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Information related to the Company right-of-use assets and related operating and finance lease liabilities were as follows (in thousands): Six Months Ended June 30, Operating Leases 2025 2024 Cash paid for operating lease liabilities $ 1,074 $ 1,122 Right-of-use assets obtained in exchange for new operating lease liabilities $ 137 $ 530 Six Months Ended June 30, Finance Lease 2025 2024 Cash paid for principal portion of finance lease $ 51 $ — Right-of-use assets obtained in exchange for new finance lease liabilities $ 985 $ — Operating Leases Finance Lease Weighted-average remaining lease term in years 3.57 2.83 Weight-average discount rate 4.9 % 5.0 % Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Operating lease expense $ 516 $ 577 $ 1,062 $ 1,178 Finance lease amortization $ 55 $ — $ 55 $ — Finance lease interest expense $ 8 $ — $ 8 $ — Maturities of operating and finance lease liabilities were as follows (in thousands): Fiscal Year Ending December 31, Operating Leases Finance Lease 2025 (remainder of fiscal 2025) $ 1,051 $ 176 2026 2,034 353 2027 1,846 353 2028 1,698 118 2029 448 — Thereafter — — 7,077 1,000 Less imputed interest ( 574 ) ( 66 ) Total lease liabilities $ 6,503 $ 934 9. STOCK-BASED COMPENSATION: Equity Incentive Plans The Navitas Semiconductor Limited 2020 Equity Incentive Plan, initially adopted by the Company’s board of directors on August 5, 2020 as an amendment and restatement of the 2013 Equity Incentive Plan (“2013 Plan”), was amended and restated as the Amended and Restated Navitas Semiconductor Limited 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit (“RSU”) awards, stock appreciation rights, and other stock awards to employees, directors and 14 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) consultants. Pursuant to the 2020 Plan, the exercise price for incentive stock options and non-statutory stock options is generally at least 100% of the fair market value of the underlying shares on the date of grant. Options generally vest over 48 months measured from the date of grant. Options generally expire no later than ten years after the date of grant, subject to earlier termination upon an optionee’s cessation of employment or service. Under the terms of the 2020 Plan, the Company is authorized to issue 18,899,285 shares of Class A common stock pursuant to awards under the 2020 Plan. As of October 19, 2021, the Company had issued an aggregate of 11,276,706 stock options and non-statutory options to its employees and consultants and 4,525,344 RSUs to employees, directors and consultants under the 2020 Plan. No awards have or will be issued under the 2020 Plan after October 19, 2021. 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). 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. Under the terms of the 2021 Plan, the Company is authorized to issue, pursuant to awards granted under the 2021 Plan, (a) up to 16,334,527 shares of Common Stock; plus (b) up to 15,802,050 shares of Common Stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021; plus (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 June 30, 2025 the Company has issued 3,250,000 non- statutory stock options under the 2021 Plan. Stock-Based Compensation The Company recognizes the fair value of stock-based compensation in its financial statements over the requisite service period of the individual grants, which generally equals a four-year vesting period, except for Long-Term Incentive Plan Stock Options discussed below. The Company uses estimates of volatility, expected term, risk-free interest rate and dividend yield in determining the fair value of these awards and the amount of compensation expense to recognize. The Company uses the straight-line method to amortize stock awards granted over the requisite service period of the award, which may be explicit or derived, unless market or performance conditions result in a graded attribution. The following table summarizes the stock-based compensation expense recognized for the three and six months ended June 30, 2025 and 2024: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cost of goods sold $ 71 $ 249 $ 107 $ 249 Research and development ( 364 ) 6,438 3,474 13,808 Selling, general and administrative ( 620 ) 6,404 2,478 12,582 Total stock-based compensation expense $ ( 913 ) $ 13,091 $ 6,059 $ 26,639 15 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Stock Options Generally, stock options granted under the Plans have terms of ten years and vest 1/4th on the anniversary of the vesting commencement date and 1/36th monthly thereafter. Stock options with performance vesting conditions begin to vest upon achievement of the performance condition. Expense is recognized beginning in the period in which performance is considered probable. The fair value of incentive stock options and non-statutory stock options issued was estimated using the Black-Scholes model. A summary of stock options outstanding, excluding LTIP Options as of June 30, 2025, and activity during the three and six months then ended, is presented below: Stock Options Shares (In thousands) Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (In years) Outstanding at December 31, 2024 1,499 $ 0.74 4.7 Exercised ( 236 ) 0.55 — Outstanding at March 31, 2025 1,263 $ 0.77 4.1 Exercised ( 1,155 ) 0.77 — Outstanding at June 30, 2025 108 $ 0.74 4.1 Vested and Exercisable at June 30, 2025 108 $ 0.74 4.1 During the three months ended June 30, 2025, the Company recorded no stock-based compensation expense and for the six months ended June 30, 2025, the Company recorded an immaterial amount o f stock-based compensation expense for the vesting of outstanding stock optio ns, excluding credits of $( 8.3 ) million and $(8.0) million, respectively, related to the LTIP Options described below. During the three and six months ended June 30, 2024, the Company recogni ze d $0.0 million and $0.1 million o f stock-based compensation expense for the vesting of outstanding stock optio ns, excluding $1.0 million and $2.9 million, respectively, related to the LTIP Options. Long-term Incentive Plan Stock Options 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 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 period remaining is 6.6 years. The Company utilized the services of a professional valuation firm to finalize these assumptions during the fiscal year ended December 31, 2023. The valuation model utilized the following assumptions: Risk-free interest rates 1.47 % Expected volatility rates 67.33 % Expected dividend yield — Cost of equity (for derived service period) 11.77 % Weighted-average grant date fair value of options $ 9.14 On a quarterly basis, management reviews the probable achievement for each of the tranches in the 2021 LTIP Options in regards to revenue and EBITDA, which includes assumptions for forecasted revenue and EBITDA. In 16 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) connection with the “2021 LTIP Options”, the Company recognized a credit of $( 8.3 ) million and $(8.0) million of stock-based compensation expense for the three and six months ended June 30, 2025, respectively. During the three months ended June 30, 2025, one member of senior management who was a recipient of the 2021 LTIP Options resigned. As a result, the Company recognized a reversal of previously recognized stock-based compensation expense totaling $8.4 million related to the forfeited award of which $4.2 million was recorded in Research and development expenses and $4.2 million in Selling, general and administrative expenses. The remaining unrecognized compensation expense related to probable tranches in the 2021 LTIP Options is $ 0.9 million as of June 30, 2025, and compensation expense will be recognized over 3.2 years. If the Company achieves all revenue and EBITDA performance metrics, the total incremental recognized expense would be $ 21.3 million. The Company recognized $0.8 million and $2.4 million of stock-based compensation expense for the three and six months ended June 30, 2024, respectively. 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. The options have an exercise price of $ 10.00 per share and the average fair value on the grant date was $ 2.89 . The weighted average contractual period remaining is 7.3 years. The Company utilized the services of a professional valuation firm to finalize these assumptions during the fiscal year ended December 31, 2023 . The valuation m odel utilized the following assumptions: Risk-free interest rates 2.82 % Expected volatility rates 68.48 % Expected dividend yield — Cost of equity (for derived service period) 14.64 % Weighted-average grant date fair value of options $ 2.89 On a quarterly basis, management reviews the probable achievement for each of the tranches in the 2022 LTIP Options in regards to revenue and EBITDA, which includes assumptions for forecasted revenue and EBITDA. In relation to the 2022 LTIP Options, a member of senior management departed the Company prior to December 31, 2024, failing to meet the service requirement for the options. As a result, their options were forfeited and no expense was recognized for the three and six months ended June 30, 2025. The Company recognized $ 0.2 million and $0.5 million of stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Restricted Stock Units The Company regularly grants RSUs to employees as a component of their compensation. A summary of RSUs outstanding as of June 30, 2025 , and activity during the six months then ended, is presented below: 17 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Restricted Stock Unit Awards Shares (In thousands) Weighted-Average Grant Date Fair Value Per Share Outstanding at December 31, 2024 9,552 $ 6.63 Granted 1,634 2.67 Vested ( 2,990 ) 5.36 Forfeited ( 859 ) 6.73 Outstanding at March 31, 2025 7,337 $ 6.25 Granted 3,438 4.25 Vested (402) 5.75 Forfeited (830) 6.78 Outstanding at June 30, 2025 9,543 $ 5.51 During the three and six months ended June 30, 2025, the Company recognized $ 5.9 million and 12.4 million of stock-based compensation expense for the vesting of RSUs, respectively. During the three and six months ended June 30, 2024, the Company recognized $9.7 million and $17.9 million of stock-based compensation expense for the vesting of RSUs, respectively. As of June 30, 2025, unrecognized compensation cost related to unvested RSU awards expected to be recognized totaled $ 37.9 million. The weighted-average period over which this remaining compensation cost is expected be recognized is 1.7 years. The Company implemented a yearly stock-based bonus plan in 2021 and plans to settle accrued bonus liabilities related to fiscal year 2025 (included in “Accrued compensation expenses” on the Condensed Consolidated Balance Sheets), by issuing a variable number of fully-vested restricted stock units to its employees in 2025. As of June 30, 2025, the Company accrued $1.5 million for its 2025 annual bonus, which is expected to be settled in the first quarter of 2026 through the issuance of approximately 234,131 shares based on the Company's closing stock price as of June 30, 2025. 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. For the three and six months ended June 30, 2025, employees who elected to participate in the ESPP purchased 400,431 shares of common stock under the 2022 ESPP, resulting in cash proceeds to the Company of $ 0.8 million. The purchase price was $ 2.07 , which was 15 % of the fair market value in March 2025. As of June 30, 2025, the Company had 1,540,141 remaining authorized shares available for purchase. For the three and six months ended June 30, 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. During the three and six months ended June 30, 2025, the Company recognized $ 0.2 million and $0.5 million of stock-based compensation expense for the 2022 ESPP, respectively. During the three and six months ended June 30, 2024, the Company recognized $0.3 million and $1.1 million of stock-based compensation expense for the 2022 ESPP, respectively. Other Share Awards 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 18 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 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. During the three and six months ended June 30, 2025, the Company recorded $ 0.2 million to stock-based compensation expense related to 150,622 shares that vested upon employee separation. No additional compensation cost will be recognized beyond the second quarter of 2025. The Company recognized $0.2 million and $0.3 million of stock-based compensation expense related to the vesting of these shares during three and six months ended June 30, 2024, respectively. Unvested Earnout Shares A portion of the earnout shares 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. The Company recognized $ 0.1 million of stock-based compensation expense related to forfeitures during three and six months ended June 30, 2025 and none during the six months ended June 30, 2024. The Company recognized $0.1 million and $0.1 million of stock-based compensation expense related to the vesting of these shares during three and six months ended June 30, 2024, respectively. As of June 30, 2025, there was no remaining compensation cost related to unvested earnout shares, except for forfeitures. Refer to Note 10 - “Earnout Liability”. 10. EARNOUT LIABILITY 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. The earnout liability is remeasured at the end of each reporting period. The change in fair value of the earnout liability is recorded as part of other income (expense), net in the condensed consolidated statements of operations. The estimated fair value of the earnout liability was determined using a Monte Carlo analysis of 20,000 simulations of the future path of the Company’s stock price over the earnout period. The assumptions utilized in the calculation are based on the achievement of certain stock price milestones including projected stock price, volatility, and risk-free rate. The valuation model utilized the following assumptions: June 30, 2025 December 31, 2024 Risk-free interest rate 3.89 % 4.23 % Equity volatility rate 100 % 90 % As of June 30, 2025 and December 31, 2024, the earnout liability had a fair value of $ 30.1 million and $ 10.2 million, respectively, which resulted in a loss in the fair value of the earnout liability of $( 28.0 ) million and $(19.9) million for the three and six months ended June 30, 2025. As of June 30, 2024, the earnout liability had a fair value of $13.1 million, which resulted in a gain in the fair value of the earnout liability of $7.6 million and $33.7 million for the three and six months ended June 30, 2024, respectively. 19 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 11. SIGNIFICANT CUSTOMERS AND CREDIT CONCENTRATIONS Customer Concentration A majority of the Company’s revenues are attributable to sales of the Company’s products to distributors of electronic components. These distributors sell the Company’s products to a range of end users, including OEMs and merchant power supply manufacturers. The following customers represented 10% or more of the Company’s net revenues for the three and six months ended June 30, 2025 and 2024: Three Months Ended June 30, Six Months Ended June 30, Customer 2025 2024 2025 2024 Distributor A 54 % * 53 % * Distributor B * 55 % * 63 % Revenues by Geographic Area Revenues for the three and six months ended June 30, 2025 and 2024 were attributable to the following regions: Three Months Ended June 30, Six Months Ended June 30, Region 2025 2024 2025 2024 Hong Kong 60 % 70 % 60 % 74 % Rest of Asia 16 12 20 12 China 12 4 9 4 United States 11 10 10 8 Europe* 1 4 1 2 Total 100 % 100 % 100 % 100 % *Impractical to disclose the revenue percentages by individual countries within Europe and therefore Europe is presented in total. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consisted principally of cash, cash equivalents and trade receivables. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At times, such amounts may exceed federally insured limits. The Company has not experienced any losses on cash or cash equivalents held at financial institutions. The Company does not have any off-balance-sheet credit exposure related to its customers. The following customers represented 10% or more of the Company’s accounts receivable. Customer June 30, 2025 December 31, 2024 Distributor A 44 % * Distributor B * 44 % *Customer accounts receivable represented less than 10% of total accounts receivable. 20 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Concentration of Supplier Risk The Company currently relies on a single foundry to produce wafers for GaN ICs and a separate single foundry to produce wafers for SiC MOSFETs. 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. 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. Although there are generally alternate sources for these materials and services, qualification of the alternate sources could cause delays sufficient to have a material adverse effect on the Company. A significant amount of the Company’s third-party subcontractors and suppliers, including the third-party foundry that supplies wafers for GaN ICs, are located in Taiwan. A significant amount of the Company’s assembly and test operations are conducted by third-party contractors in Taiwan and the Philippines. On July 1, 2025, the Company announced that its sole supplier of GaN wafers, Taiwan Semiconductor Manufacturing Company Limited (“TSMC”), plans to cease GaN production in July 2027. To mitigate this risk, the Company is expanding its collaboration with Powerchip Semiconductor Manufacturing Corporation (“Powerchip”), with initial device qualification expected in the fourth quarter of 2025 and mass production targeted for the first half of 2026. The Company is also evaluating additional suppliers to enhance supply chain resilience. The Company previously entered into an agreement to purchase raw materials from a supplier from September 29, 2022, through December 31, 2025, and made a $ 2.0 million deposit to be received as invoice credits toward future purchases. Although the Company was not obligated to purchase from this supplier, failure to meet the minimum purchase requirements could result in forfeiture of all or a portion of the deposit. As of December 31, 2024, the Company determined that it would not meet the minimum purchase requirements and, accordingly, wrote off the $ 2.0 million deposit as a research and development expense for the year ended December 31, 2024. 21 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 12. NET 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 using the two-class method because the Company’s sponsor earnout shares are a participating security since these shares contain a non-forfeitable right to receive dividends. Under the two-class method, earnings are allocated to each class of common stock and participating security as if all of the earnings for the period had been distributed. As the Company incurred net losses during three and six months ended June 30, 2025 and 2024 and these securities are not contractually required to fund the Company’s losses, there is no allocation to the participating securities in the years presented. 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. 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, and the assumed issuance of awards for contingently issuable performance-based awards, as computed using the treasury stock method. Performance-based restricted stock units and restricted stock awards are included in the number of shares used to calculate diluted earnings per share after evaluating the applicable performance criteria as of period end and under the assumption the end of the reporting period was the end of the contingency period, and the effect is dilutive. The Company has no plans to declare dividends. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Weighted-average common shares - basic common stock 198,956 183,127 193,462 181,493 Stock options and other dilutive awards — — — — Weighted-average common shares - diluted common stock 198,956 183,127 193,462 181,493 Shares excluded from diluted weighted-average shares: Dilutive shares excluded ¹ 1,694 4,334 1,551 5,162 ¹ The Company’s potentially dilutive securities, which include unexercised stock options, unvested restricted stock units, ESPP shares have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share for the three and six months ended June 30, 2025 and 2024. As of June 30, 2025 and 2024, the Company excluded an immaterial amount of restricted stock awards from the diluted weighted average share count as their performance conditions have not been achieved. As of June 30, 2025 and 2024, the Company exclude d 10.0 million Earnout shares from the diluted weighted average share count as their performance and/or market conditions have not been achieved. As of June 30, 2025 and 2024, 3.3 million and 8.8 million LTIP options have been excluded from the diluted weighted average share count, respectively, as their performance and/or market conditions have not been achieved. As of June 30, 2025, the Company exclu ded 1.3 million of o utstanding Class A common stock from basic and diluted weighted average share count as shares are subject to forfeiture based on market conditions that have not been achieved. These shares relate to certain shares of Class A common stock held by the Company’s SPAC sponsor that as part of the business combination were placed under market conditions requirements that if not met, would result in forfeiture. These requirements are consistent with the Earnout Milestones noted in Note 10 - “Earnout Liability” with each milestone tied to 421,000 shares. Each Earnout Milestone is considered met if at any time between March 18, 2022 (150 days following the Business Combination) and October 19, 2026, the volume-weighted average price of the Company’s Class A common stock is greater than or equal to $ 12.50 , $ 17.00 or $ 20.00 for any twenty trading days within any thirty trading day period, respectively. These shares are participating securities with the same voting and dividend rights as the Company’s other Class A common stock. 22 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 13. 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 six months ended June 30, 2025 was (0.1)% and (0.2)%, respectively. The Company’s effective tax rate for the three and six months ended June 30, 2024 was (0.3)% and (0.5)%, respectively. The effective tax rate for 2025 differs from the prior year primarily as a result of tax expenses in foreign jurisdictions, which were not impacted by the 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 the Company’s ability to accurately predict the proportion of the Company’s loss before provision for income taxes in multiple jurisdictions, the tax effects of the Company’s stock-based compensation, and the effects of its foreign entities. The Company had no unrecognized tax benefits for the three and six months ended June 30, 2025 and 2024. The Company recognizes interest and penalties related to unrecognized tax benefits in operating expenses. No such interest and penalties were recognized during the three and six months ended June 30, 2025 and 2024. 14. SEGMENT INFORMATION Navitas operates as a single operating segment under ASC 280 - Segment Reporting, which establishes requirements for public entities to disclose financial information about operating segments. Under ASC 280, an operating segment is defined as a component of a company that generates revenue and expenses, has discrete financial data available, and is regularly reviewed by the Chief Operating Decision Maker (CODM) to assess performance and allocate resources. The Company's CEO, Gene Sheridan, serves as the CODM, overseeing financial performance and making resource allocation decisions at a consolidated level. The CODM primarily evaluates consolidated net income (loss) as the measure of segment profit or loss. While product-level data is available internally, it is not used for performance evaluation or resource allocation. Additionally, the CODM reviews detailed breakdowns of significant expenses, such as selling, general, and administrative (SG&A) expenses and research and development (R&D) costs, which are already disclosed in the income statement. The CODM also utilizes the Company’s consolidated budget, consolidated forecast models as a key input to resource allocation and assess performance of the business, and monitors budget versus actual results on a consolidated basis. The CODM does not review any measures of financial results beyond what is presented in the accompanying statement of operations. 15. COMMITMENTS and CONTINGENCIES Purchase Obligations At June 30, 2025, the Company had non-cancellable contractual agreements that were due beyond one year related to the Company’s lease obligations, see Note 8 - “Leases”. In December 2024, the Company entered into an agreement with a vendor for the purchase of equipment wherein the Company will make quarterly installment payments of $ 0.8 million during 2026. The $ 1.4 million present value of these payments is included within 'Noncurrent liabilities' in the Condensed Consolidated Balance Sheets, while the first two payments of $1.6 million , due within one year, are recorded within accounts payable and other accrued expenses as of June 30, 2025. The $ 2.8 million present value of payments is reflected within noncurrent liabilities at December 31, 2024 in the Condensed Consolidated Balance Sheets. 23 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Indemnification The Company sells products to its distributors under contracts, collectively referred to as Distributor Sales Agreements (“DSAs”). Each DSA contains the relevant terms of the contractual arrangement with the distributor, and generally includes certain provisions for indemnifying the distributor against losses, expenses, and liabilities from damages that may be awarded against the distributor in the event the Company’s products are found to infringe upon a patent, copyright, trademark, or other proprietary right of a third party (Customer Indemnification). The DSA generally limits the scope of and remedies for the Customer Indemnification obligations in a variety of industry-standard respects, including, but not limited to, limitations based on time and geography, and a right to replace an infringing product. The Company also, from time to time, has granted a specific indemnification right to individual customers. The Company believes its internal development processes and other policies and practices limit its exposure related to such indemnifications. In addition, the Company requires its employees to sign a proprietary information and inventions agreement, which assigns the rights to its employees’ development work to the Company. To date, the Company has not had to reimburse any of its distributors or end customers for any losses related to these indemnifications and no material claims were outstanding as of June 30, 2025. 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 from 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. The total amount of accrued royalty was $ 2.0 million included in “Accounts payable and other accrued expenses” and $ 1.8 million and is included in “Accounts payable and other accrued expenses” and “Noncurrent liabilities” as of June 30, 2025 and December 31, 2024, respectively. Legal proceedings and contingencies From time to time in the ordinary course of business, the Company may become involved in lawsuits, or end customers, distributors, suppliers or other third parties may make claims against the Company. The Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company is not currently subject to any pending actions or regulatory proceedings that either individually or in the aggregate are expected to have a material impact on its condensed consolidated financial statements. 24 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 16. RELATED PARTY TRANSACTIONS 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 a joint venture. During the first quarter of 2023 the Company made an additional investment of $1.0 million in the entity. The investment was accounted fo r 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. In October 2024, the Company began accounting for this investment under the equity method in accordance with ASC 323. The Company revalued its investment to its fair value of $5.55 per share during the fourth quarter of 2024. The Company recorded its share of losses for the three and six months ended June 30, 2025 , resulting in a net loss of $ 0.2 million and $0.5 million, respectively, which was recorded in “Equity method investment loss” on the Statements of Operations. The investment was $ 8.4 million and $ 8.9 million as of June 30, 2025 an d December 31, 2024, resp ectively, and is included in Other Assets in the Condensed Consolidated Balance Sheets. Related Party Leases The Company leases certain property from the family member of a senior executive of the Company, which expired in March 2024, and was a month-to-month lease through December 2024, and then was terminated. During the three and six months ended June 30, 2024, the Co mpany paid an immaterial amount in rental payments. These payments were made at standard market rates in the ordinary course of business. There was no rent obligation as of June 30, 2025 . The Company leases certain property from an entity that is owned by an executive of the Company, which expired in September 2023, and was on a month-to-month lease through May 2024, and then was terminated. During the three and six months ended June 30, 2024, the Company paid an immaterial a mount in rental payments in relation to this lease. These payments were made at standard market rates in the ordinary course of business. There was no rent obligation as of June 30, 2025 . 17. RESTRUCTURING On October 15, 2024, the Company announced a cost-reduction plan (“2024 Restructuring Plan”) to streamline the organization with increased focus on artificial intelligence data centers, new energy sectors, which include EV, renewables, and energy storage and mobile applications, accelerating the Company’s path to profitability. The 2024 Restructuring Plan includes a reduction in headcount with the majority of the costs consisting of employee severance and benefits. The Company incurred $ 1.2 million in the fourth quarter of 2024 related to this plan. An immaterial amount of restructuring-related liabilities under the 2024 Restructuring Plan remain and is reported under Accounts payable and other accrued expenses on the Company’s Condensed Consolidated Balance Sheets. On January 20, 2025, the Company announced an additional cost-reduction plan (“2025 Restructuring Plan”) aimed at further streamlining operations and enhancing its focus on artificial intelligence data centers, EV, and mobile applications. The plan included a 19% reduction in workforce, with most associated costs related to severance and stock-based compensation. The Company incurred no restructuring costs related to this plan for the three months ended June 30, 2025 and $ 1.5 million for the six months ended June, 30, 2025. As of June 30, 2025, restructuring-related liabilities under the 2025 Restructuring Plan remain immaterial and are reported under Accounts payable and other accrued expenses on the Company’s Condensed Consolidated Balance Sheets. A summary of the balance sheet activity related to the combined 2024 and 2025 Restructuring Plans is as follows (in thousands): 25 TABLE OF CONTENTS NAVITAS SEMICONDUCTOR CORPORATION CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Amounts accrued as of December 31, 2024 Costs Incurred Cash Payments Adjustment Amounts accrued as of June 30, 2025 Employee Severance and Benefits $ 511 $ 1,469 $ ( 1,865 ) $ (93) $ 22 Other 6 — ( 6 ) — — $ 517 $ 1,469 $ ( 1,871 ) $ (93) $ 22 18. SUBSEQUENT EVENTS The Company evaluated material subsequent events from the condensed consolidated balance sheet date of June 30, 2025, through August 4, 2025, the date the condensed consolidated financial statements were issued. There were no material subsequent events as of August 4, 2025, except as discussed below. On July 1, 2025, the Company announced that its sole supplier of gallium nitride (“GaN”) wafers, Taiwan Semiconductor Manufacturing Company Limited (“TSMC”), will cease GaN production in July 2027. To mitigate this risk, the Company has expanded its collaboration with Powerchip Semiconductor Manufacturing Corporation (“Powerchip”), with qualification of initial devices expected in the fourth quarter of 2025 and mass production beginning in the first half of 2026. The Company is evaluating additional suppliers to diversify its supply chain and the impact to the Company’s financial statements, as an estimate cannot be made at this time. 26 TABLE OF CONTENTS