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Item 1A. Risk Factors

2026-02-27 compared with 2025-03-19 · 352 added, 316 removed, 262 unchanged (72% of the section changed)

Risk Factors.

Product Design and Selection Risks

SUMMARY OF RISK FACTORS

The below summary of risk factors provides an overview of many of the risks we are exposed to in the normal course of our business activities.

As a result, the below summary risks do not contain all of the information that may be important to you, and you should read the summary risks together with the more detailed and complete discussion of risks set forth under the heading “Risk Factors” in Part I, Item 1A of this annual report, as well as elsewhere in this annual report.

Additional risks, beyond those summarized below or discussed elsewhere in this annual report, may apply to our activities or operations as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate.

Consistent with the foregoing, we are exposed to a variety of risks, including risks associated with the following:

Risks Related to Our Business and Customers

• Our increased focus on AI data centers, energy and grid infrastructure, performance computing and industrial electrification, and our reduced emphasis on mobile and consumer products, may not achieve the anticipated results.

• Our success and future revenue depend on our ability to achieve design wins and to convince our current and prospective end customers to design our products into their product offerings.

• Even if we are awarded a design win, expected revenues typically do not result for one year or more, if ever.

Further, revenues from design wins may not materialize if our customer changes, cancels or delays the selection or if our customer’s products are not successful.

• If we fail in a timely and cost-effective manner to develop new product features or new products that address end customer preferences and achieve market acceptance, our operating results could be adversely affected.

• If we fail to accurately anticipate and respond to rapid technological change in the industries in which we operate or adopt to emerging industry standards, our ability to attract and retain end customers could be impaired and our competitive position could be harmed.

• Our ability to accurately predict future revenues and profits is inherently subject to significant uncertainties, particularly as our products are designed to disrupt existing markets and create new or emerging markets.

• We maintain a backlog of customer orders that is subject to cancellation, reduction or delay in delivery schedules, which may result in lower than expected revenues.

• We depend on a few key distributors and the loss of one or more of these distributors could have a material adverse effect on our business, financial condition and results of operations.

• Our business is subject to volatile demand and seasonal fluctuations, which could materially impact our revenue, profitability, and results of operations.

In addition, we rely on a limited number of customers for a significant portion of our revenue and key customer cancellations or deferrals could adversely affect our results.

Supply Chain and Quality Risks

• We rely on single sources of supply for certain front-end manufacturing services, and on a limited number of suppliers of other materials, leaving us vulnerable to supply chain disruption.

Our new emphasis on high power markets may require us to transition to new suppliers.

In addition, we do not have long-term contractual supply

commitments from our suppliers of wafer fabrication services.

As a result, we are at risk if any of our suppliers is unable or unwilling to perform or if we are unable to successfully transition to a new supplier.

• If our foundry vendors and other suppliers do not achieve satisfactory yields or quality, our reputation and end customer relationships could be harmed, and we could be exposed to additional expenses and liability.

• We rely on the timely supply of materials and new technologies from third-parties and could suffer if suppliers fail to meet their delivery obligations or raise prices.

Certain new technologies and materials needed in our manufacturing operations are only available from a limited number of suppliers, over whom we have limited influence.

Increased costs of wafers and materials, or shortages in wafers and materials, or quality issues at these suppliers could increase our costs of operations and our business could be harmed.

• Raw material price fluctuations can increase the cost of our products, impact our ability to meet end customer commitments, and may adversely affect our results of operations, including our gross margin.

• Product quality issues and recalls may impact our business, reputation and competitive position and we may face product warranty or product liability claims that are disproportionately higher than the value of the products involved.

• We face increasing regulatory requirements and stakeholder expectations to ensure our supply chain complies with environmental, social and governance standards, including responsible sourcing, labor practices and climate related risks.

Our failure to meet these requirements or expectations could harm our business reputation and customer relationships.

Geopolitical and Regulatory Risks

• We are subject to risks and uncertainties associated with international operations, which may harm our business.

• Investments in or by us may be subject to foreign investment regulation and review in the United States and elsewhere, which may result in material restrictions, conditions, prohibitions or penalties on us or our investors related to any such investments.

Semiconductor technologies generally, and GaN and SiC semiconductors specifically, may be subject to heightened regulatory scrutiny.

• We are subject to export restrictions and laws affecting trade and investments that could materially and adversely affect our business and results of operations.

• Our business is affected by new U.S.

government regulations restricting outbound investments in China.

Financial and Accounting Risks

• Our working capital needs are difficult to predict.

We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.

• Maintaining effective internal controls is an ongoing process, and if material weaknesses were to be identified in the future and not timely remediated, or if we were unable to continue to establish and maintain effective internal controls, we could be unable to produce timely and accurate financial statements or conclude that our internal

control over financial reporting is effective.

Any such outcome could adversely impact investor confidence and our stock price.

Cybersecurity Risks

• We face significant and evolving cybersecurity risks that could adversely affect our operations, financial condition, and reputation.

• We could be subject to domestic or international changes in tax laws, tax rates or the adoption of new tax legislation, or we could otherwise have exposure to additional tax liabilities, which could adversely affect our business, results of operations, financial condition or future profitability.

• Legacy Navitas is a tax resident of, and is subject to tax in, both the United States and Ireland.

While we have pursued relief from double taxation under the double tax treaty between the United States and Ireland, there can be no assurance that such efforts will be successful in the future.

Accordingly, the status of Legacy Navitas as a tax resident in the U.S.

and Ireland may result in an increase in our future cash tax obligations and effective tax rate, which increase may be material.

• As a consequence of Legacy Navitas being treated as an inverted domestic corporation under the Homeland Security Act, the U.S.

federal government and certain state and local governments may refrain from entering into contracts with it in the future, which could substantially decrease the value of our business and, accordingly, the value of our Class A common stock, par value of $0.0001 per share (our “Class A common stock”).

• As a result of the plans to expand our business operations, including to jurisdictions in which tax laws may not be favorable, our obligations may change or fluctuate, become significantly more complex or become subject to greater risk of examination by taxing authorities, any of which could adversely affect our after-tax profitability and financial results.

• Our ability to use net operating loss carryforwards and other tax attributes may be limited in connection with the Business Combination or other ownership changes.

Risks Related to Intellectual Property

• We may not be able to adequately protect our intellectual property rights.

If we fail to adequately enforce or defend our intellectual property rights, our business may be harmed.

• If we infringe or misappropriate, or are accused of infringing or misappropriating, the intellectual property rights of third parties, we may incur substantial costs or be unable to commercialize new products.

• Our ability to design and introduce new products in a timely manner is dependent upon third-party intellectual property, including third party and “open source” software.

Risks Related to Owning Our Common Stock

• Our business and operations could be impacted by stockholder activism, which could negatively affect our business and cause disruptions.

• Concentration of ownership among existing executive officers, directors and their affiliates, including the investment funds they represent, may prevent new investors from influencing significant corporate decisions.

• The issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans or otherwise by us could dilute the ownership and voting power of our stockholders.

• Provisions in our certificate of incorporation and our bylaws and under the Delaware General Corporation Law (“DGCL”) contain antitakeover provisions that could prevent or discourage a takeover.

• We may issue a substantial number of additional shares under an employee incentive plan which may dilute the equity interests of our investors.

• The market price of our Class A common stock may be affected by announcements regarding the selection of our products or technologies by key customers or industry participants, even though these events may not reflect binding commitments or future revenues.

This may be particularly true following the Company’s announcement of a pivot towards high-power markets.

Investors should not place undue reliance on such announcements as an indicator of our business prospects, future performance or otherwise when evaluating the value of our Class A common stock.

Risks Related to Our Business and Customers

Our increased focus on AI data centers, energy and grid infrastructure, performance computing and industrial electrification, and our reduced emphasis on mobile and consumer products, may not achieve the anticipated results.

We recently announced the restructuring of our business under Navitas 2.0 to enhance our focus on AI data centers, energy and grid infrastructure, performance computing and industrial electrification, and de-emphasize mobile and consumer products.

We may not successfully execute our strategic transition to these new markets and customer applications, which could adversely affect our business, results of operations, and financial condition.

This strategic realignment entails significant operational, technical, and market risks.

Our success in these markets depends on factors including our ability to (i) develop and scale semiconductor solutions that meet demanding power, efficiency, and performance requirements of our customers;

(ii) compete against established incumbents with substantial R&D and manufacturing resources;

(iii) anticipate rapidly evolving customer needs and technological standards in these high-power and high-performance segments;

and (iv) secure design wins and long-term supply agreements in new and unfamiliar market segments.

This transition may also require additional capital to execute upon our strategy, which may not be available to us when we need it or on terms acceptable to us.

If we are unable to secure the capital needed to execute upon our strategic initiatives, our business operations could be materially affected.

Products for AI data centers, energy and grid infrastructure, performance computing and industrial electrification generally require larger, more complex die sizes, advanced process nodes, and longer qualification cycles than consumer products, leading to greater up-front R&D investments and longer payback periods.

In addition, our existing manufacturing and supply-chain relationships, optimized for high-volume consumer devices, will need to be adjusted for these new products and customers.

Any adverse outcomes in product qualification, manufacturing or performance could materially harm our margin and cash flows.

Furthermore, as we reduce our focus on the mobile and consumer markets, we may lose existing customer relationships and brand visibility in those sectors.

Mobile and consumer revenue may decline faster than we can establish revenue growth in high power markets.

The markets for AI data centers, energy and grid infrastructure, performance computing and industrial electrification are also subject to cycles of over-investment, component oversupply, and technological disruption, which can lead to sharp fluctuations in demand and variability in results.

If our transition does not yield expected revenue growth or margin improvement, or if emerging competitors capture key design opportunities, our business, financial performance, and long-term growth prospects could be materially and adversely affected.

Our success and future revenue depends on our ability to achieve design wins and to convince our current and prospective end customers to design our products into their product offerings.

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Even if we are awarded a design win, expected revenues typically do not result for one year or more, if ever.

Further, revenues from design wins may not materialize if our customer changes, cancels or delays the selection or if our customer’s products are not successful.

Because of our extended sales cycle, our revenue in future years is highly dependent on design wins we are awarded in prior years.

After incurring significant design and development expenditures and dedicating engineering resources to achieve an initial design win for a product, a substantial period of time generally elapses before we may generate meaningful net sales relating to such product, if at all.

The reasons for this delay include, among other things, the following:

• changing end customer requirements, resulting in an extended development cycle for the product;

• delay in the ramp-up of volume production of the customer’s products into which our solutions are designed;

• delay or cancellation of the customer’s product development plans;

• competitive pressures to reduce our selling price for the product;

• the discovery of design flaws, defects, errors or bugs in the products;

• lower-than-expected end customer acceptance of the solutions designed for the customer’s products;

• lower-than-expected acceptance of our end customers’ products;

• higher manufacturing costs than anticipated.

we cannot guarantee that this will result in any sales of our products, as the end customer may ultimately change or cancel our product plans, or our end customers’ efforts to market and sell our product may not be successful.

Even if an end customer selects our products, revenues from design wins may not materialize if our customer later decides to change or cancel the selection, if our customer decides to change suppliers, if our customer decides to delay production, or if our customer’s product is not successful.

This may be especially true as we reprioritize our business towards high-power markets and deprioritize our emphasis on mobile and consumer products markets.

This time period may be beyond our control, as the end customer may ultimately delay, change or cancel our product plans, change suppliers, or our end customers’ efforts to market and sell our product may not be successful.

The loss of a design win, a reduction in sales to any key customer or the loss of the customer altogether, a significant delay or negative development in our end customers’ product development plans, or our inability to attract new significant end customers or secure new key design wins could seriously impact our revenue and materially and adversely affect our business, financial condition, and results of operations.

We may not be able to maintain sales to our key end customers or continue to secure key design wins for a variety of reasons, and our end customers can stop incorporating our products into their product offerings with limited notice to us and suffer little or no penalty.

Product and Technology Development Risks

The success of our products is heavily dependent on the timely introduction, quality, and market acceptance of our end customers’ products incorporating our solutions, which are impacted by factors beyond our control.

Our end customers’ products are often very complex and subject to design complexities that may result in design flaws, as well as potential delays, defects, errors, and bugs.

This is especially true as we prioritize high-power markets and applications.

If our end customers discover design flaws, defects, errors, or bugs in their products, or if they experience changing market requirements, failed evaluations or field trials, increased competition or incompatible deliverables from other vendors, they may delay, change, or cancel a project, and we may not be able to recoup our costs, which in turn would adversely affect our business, financial condition, and results of operations.

If we fail in a timely and cost-effective manner to develop new product features or new products that address end customer preferences and achieve market acceptance, our operating results could be adversely affected.

Our products are based on novel design technology and our future success depends on the successful development of high-voltage power switching components and systems based on design technology.

There can be no assurance that any

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development problems we experience in the future related to our products will not cause significant delays or unanticipated costs, or that such development problems can be solved.

In addition, we compete in a dynamic environment characterized by rapid technology and product evolution.

Our end customers are constantly seeking new products with more features and functionality at lower cost, and our success relies heavily on our ability to continue to develop and market to our end customers new and innovative products and improvements of existing products.

In order to respond to new and evolving end customer demands, achieve strong market share and keep pace with new technological, processing and other developments, we must constantly introduce new and innovative products into the market.

Our failure to timely develop new technologies or to react quickly to changes in existing technologies could materially delay our development of new products, which could result in product obsolescence, decreased revenue, and/or a loss of market share to competitors.

As we develop new product lines, we must adapt to market conditions that are unfamiliar to us, such as competitors and distribution channels that are different from those we have known in the past.

Some of our new product lines require us to re-equip our labs to test parameters we have not tested in the past.

If we are unable to adapt rapidly to these new and additional conditions, we may not be able to successfully penetrate new markets, although we strive to respond to end customer preferences and industry expectations in the development of our products.

Further, if initial sales volumes for new or enhanced products do not reach anticipated levels within the time periods we expect, we may be required to engage in additional marketing efforts to promote such products and the costs of developing and commercializing such products may be higher than we predict.

Moreover, new and enhanced products may not perform as expected.

We may also encounter lower manufacturing yields and longer delivery schedules in commencing volume production of new products that we introduce, which could increase our costs and disrupt our supply of such products.

In addition, as we prioritize high-power markets and applications, the importance of reliability and safety will add complexity to our product development process.

There can be no assurance that any development problems we experience in the future related to our products will not cause significant delays or unanticipated costs, or that such development problems can be solved.

In addition, we compete in a dynamic environment characterized by rapid technology and product evolution and robust competition.

Our end customers are constantly seeking new products with more features and functionality at lower cost and with greater reliability, and our success relies heavily on our ability to continue to develop and market to our end customers new and

innovative products and improvements of existing products.

Our failure to timely develop new technologies or to react quickly to changes in new or existing technologies could materially delay our development of new products, which could result in product obsolescence, decreased revenue, and/or a loss of market share to competitors.

As we develop new product lines, particularly in emerging high-power markets, we must adapt to market conditions that are unfamiliar to us, such as testing and qualification requirements, new competitors and distribution channels that are different from those we have known or used in the past.

If we are unable to adapt rapidly to these new and additional conditions, we may not be able to successfully penetrate new markets or may incur additional marketing or engineering costs to do so.

Moreover, our products may not perform as expected.

The success of a new product depends on accurate forecasts of long-term market demand and future technological developments, as well as on a variety of specific implementation factors, including:

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To the extent that we fail to timely introduce new products or to quickly penetrate new markets, our business, financial condition and results of operations could be materially and adversely affected.

Furthermore, we face the risk that end customers may not value or be willing to bear the cost of incorporating newer solutions we develop into our product offerings, particularly if they believe their end customers are satisfied with prior offerings.

Regardless of the improved features or superior performance of the newer solutions, end customers may be unwilling to adopt our new solutions due to design or pricing constraints.

Because of the extensive time and resources that we invest in developing new solutions, if we are unable to sell new generations of our solutions, our revenue could decline and our business, financial condition, and results of operations would be negatively affected.

A fundamental shift in technologies, the regulatory climate or demand patterns and preferences in our existing product markets or the product markets of our end customers or end-users could make our current products obsolete, prevent or delay the introduction of new products or enhancements to our existing products or render our products irrelevant to our end customers’ needs.

If our new product development efforts fail to align with the needs of our end customers, including due to circumstances outside of our control like a fundamental shift in the product markets of our end customers and end users or regulatory changes, our business, financial condition and results of operations could be materially and adversely affected.

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Our margins are dependent on us achieving continued yield improvement through continued technology development.

We rely on obtaining yield improvements and corresponding cost reductions in the manufacture of existing products and on introducing new products that incorporate advanced features and other price/performance factors that enable us to increase revenues while maintaining acceptable margins.

Each of these depends on us continuing to successfully develop our technologies.

There can be no assurance that development problems we experience in the future related will not cause significant delays in expected cost reductions and corresponding margin improvements.

To the extent such cost reductions and new product introductions do not occur in a timely manner, or that our products do not achieve market acceptance, or market acceptance at acceptable pricing, our forecasts of future revenue, financial condition, and operating results could be harmed.

If we fail to accurately anticipate and respond to rapid technological change in the industries in which we operate, our ability to attract and retain end customers could be impaired and our competitive position could be harmed.

If we fail to anticipate or respond to technological shifts or market demands, or to timely develop new or enhanced products or technologies in response to the same, it could result in decreased revenue and the loss of our design wins to our competitors.

Furthermore, there is no guarantee that customers will adopt or be willing to pay for new or enhanced products we develop, regardless of the improved features or superior performance of these products.

Because of the extensive time and resources that we invest in developing new solutions, if we are unable to sell new generations of our products, our revenue could decline and our business, financial condition, and results of operations would be negatively affected.

If we fail to accurately anticipate and respond to rapid technological change in the industries in which we operate or adapt to emerging industry standards, our ability to attract and retain end customers could be impaired and our competitive position could be harmed.

As we prioritize high-power markets and applications, it becomes crucial that we accurately anticipate and respond to technological shifts and market demands, and to timely develop new or enhanced products or technologies in response to the same.

Our failure to do so could result in decreased revenue and the loss of our design wins to our competitors.

Due to the interdependence of various components in the systems within which our products and the products of our competitors operate, end customers are unlikely to change to another design, once adopted, until the next generation of a technology.

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We operate in industries characterized by rapidly changing technologies as well as technological obsolescence.

This is especially true as we prioritize high-power markets.

The introduction of new products by our competitors, the delay or cancellation of any of our end customers’ product offerings for which our solutions are designed, the market acceptance of products based on new or alternative technologies, or the emergence of new industry standards could render our existing or future products uncompetitive, obsolete, and otherwise unmarketable.

Our failure to anticipate or timely develop new or enhanced products or technologies in response to changing market demand, whether due to technological shifts or otherwise, could result in the loss of end customers and decreased revenue and have an adverse effect on our business, financial condition, and results of operations.

The success of some of our products are dependent on our end customers’ ability to develop products that achieve market acceptance.

The success of some of our products are heavily dependent on the timely introduction, quality, and market acceptance of our end customers’ products incorporating our solutions, which are impacted by factors beyond our control.

Our end customers’ products are often very complex and subject to design complexities that may result in design flaws, as well as potential defects, errors, and bugs.

As the company offers more products to new and existing customers, potentially expands its supply relationships, and enters new markets, the company may encounter yield, bugs and reliability issues with specific products, and any such issues could cause customer problems or adversely affect financial results.

No assurance can be given that future reliability issues will not have a material effect on financial results in any given period.

If our end customers discover design flaws, defects, errors, or bugs in their products, or if they experience changing market requirements, failed evaluations or field trials, or incompatible deliverables from other vendors, they may delay, change, or cancel a project, and we may have incurred significant additional development costs and may not be able to recoup our costs, which in turn would adversely affect our business, financial condition, and results of operations.

Furthermore, developing industry trends, including end customers’ use of outsourcing and new and revised supply chain models, may affect our revenue, costs and working capital requirements.

If our products do not conform to, or are not compatible with, existing or emerging industry standards, demand for our products may decrease, which in turn would harm our business and operating results.

Our failure to anticipate or timely develop new or enhanced products or technologies in response to changing or emerging market demand, whether due to technological shifts or otherwise, could result in the loss of end customers and decreased revenue and have an adverse effect on our business, financial condition, and results of operations.

We design certain of our products to conform to current industry standards.

Some industry standards may not be widely adopted or implemented uniformly and competing standards may emerge that may be preferred by our distributors or our end customers.

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Our ability to compete in the future will depend on our ability to identify and ensure compliance with evolving industry standards in our target markets.

The emergence of new industry standards could render our products incompatible with products developed by third-party suppliers or make it difficult for our products to meet the requirements of certain original equipment manufacturers.

If our end customers or our third-party suppliers adopt new or competing industry standards with which our solutions are not compatible, or if industry groups fail to adopt standards with which our solutions are compatible, our products would become less desirable to our current or prospective end customers.

As a result, our sales would suffer, and we could be required to make significant expenditures to develop new products.

Although we believe our products are compliant with applicable industry standards, proprietary enhancements may not in the future result in conformance with existing industry standards under all circumstances.

We may not realize the growth and other opportunities that are anticipated from the GeneSiC acquisition.

The benefits that we expect to achieve as a result of the GeneSiC acquisition will depend, in part, on our ability to realize anticipated growth and profitability opportunities.

The integration of GeneSiC with our other operations may not result in the realization of the full benefits of the growth and profitability opportunities we currently expect within the anticipated time frame or at all.

For example, we may incur substantial expenses in connection with the integration of the GeneSiC business, which are difficult to estimate accurately, and may exceed current estimates.

We may need to invest in additional business processes and systems to support the GeneSiC business within Navitas, which may be more complex or costly than the processes and systems needed to operate GeneSiC before the acquisition.

Such additional costs would offset the financial benefits realized from the acquisition.

Geographic and Geopolitical Risks

We are subject to risks and uncertainties associated with international operations, which may harm our business.

We maintain our operations around the world, including in the U nited States, China, Taiwan, Ireland, Germany, Italy, Belgium, Thailand, South Korea, and the Philippines .

For the years ended December 31, 2024 and December 31, 2023, approximately 75% and 70%, respectively, of our net sales were to end customers in Asia.

We allocate revenue among individual countries based on the location to which the products are initially billed even if our end customers’ revenue is attributable to end customers that are based in a different location.

As of December 31, 2024, approximately 67% of our workforce was located outside of the United States.

In addition, a substantial majority of our products are manufactured, assembled, tested and packaged by third parties located outside of the United States.

The principal assembly and test facilities operated by our back-end manufacturing service providers are located in Taiwan and the Philippines.

We also rely on several other wafer fabrication and manufacturing service providers located throughout Asia.

Any conflict or uncertainty in this region, including those posing risks to public health or safety, such as natural disasters, could have a material adverse effect on our business, financial condition and results of operations.

Moreover, the global nature of our business subjects us to a number of additional risks and uncertainties, which could harm our business, financial condition and results of operations, including:

• international economic and political conditions and other political tensions between countries in which we do business;

• actual or threatened military conflicts in countries or regions where we do not do business or have manufacturing partners, such as the military conflict between Russia and Ukraine, may increase the likelihood of supply interruptions or disruptions in countries or regions where we do business or in which our manufacturing partners have facilities.

Such interruptions or disruptions may make it harder for us to find favorable pricing and reliable sources for materials and services we need to make our products, putting upward pressure on our costs;

• unexpected changes in, or impositions of, legislative or regulatory requirements, including changes in tax laws;

• restrictions on cross-border investment, including enhanced oversight by the Committee on Foreign Investment in the United States (“CFIUS”) and substantial restrictions on investment from China as well as recently introduced restrictions on investments by U.S.

persons in China;

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• differing legal standards with respect to protection of intellectual property and employment practices;

• local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the U.S.

Foreign Corrupt Practices Act of 1977 (“FCPA”) and other anticorruption laws and regulations;

• exporting or importing issues related to export or import restrictions, including deemed export restrictions, tariffs, quotas and other trade barriers and restrictions;

• disruptions of capital and trading markets and currency fluctuations;

• increased costs and supply chain adjustments for semiconductor companies due to recent U.S.

tariffs on Chinese imports.

Since we have significant operations and revenues in China, our business development plans, results of operations and financial condition may be materially and adversely affected by significant political, social and economic developments in China.

A slowdown in economic growth in China could adversely impact our end customers, prospective end customers, suppliers, distributors and partners in China, which could have a material adverse effect on our results of operations and financial condition.

There is no guarantee that economic downturns, whether actual or perceived, any further decrease in economic growth rates or an otherwise uncertain economic outlook in China will not occur or persist in the future, that they will not be protracted, or that governments will respond adequately to control and reverse such conditions, any of which could materially and adversely affect our business, financial condition and results of operations.

A significant portion of our net sales is generated through end customers in China which subjects us to risks associated with changes of Chinese end customer interest and governmental or regulatory changes.

We generate a significant portion of our net sales through end customers in China.

In the fiscal years ended December 31, 2024 and December 31, 2023, 60% and 62%, respectively, of our net revenues were from sales to end customers in China.

We expect that our end customers in China will continue to account for a high percentage of our revenue for the foreseeable future.

Thus, our business success depends on our ability to maintain strong relationships with our end customers in China.

Any loss of our key end customers for any reason, including because of changes of end customer interest in our products, or a change in the relationship with them, including a significant delay or reduction in their purchases, may cause a significant decrease in our revenue, which we may not be able to recapture, and our business could be harmed.

Additionally, China’s government has implemented policies from time to time to regulate economic expansion in China.

It exercises significant control over China’s economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.

Any additional new regulations or the amendment or modification of previously implemented regulations could require us and our manufacturing partners to change our business plans, increase our costs, or limit our ability to sell products and conduct activities in China, which could adversely affect our business and operating results.

The Chinese government also has broad discretion and authority to regulate the technology industry in China.

The Chinese government and provincial and local governments also have provided, and continue to provide, various incentives to encourage the development of the semiconductor industry in China.

Such incentives include tax rebates, reduced tax rates, favorable lending policies and other measures, some or all of which may be available to our manufacturing partners in China.

Any of these incentives could be reduced or eliminated by governmental authorities at any time.

Any such reduction or elimination of incentives currently provided to our manufacturing partners could adversely affect our business and operating results.

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Commercial Risks

Our ability to accurately predict future revenues and profits is inherently subject to significant uncertainties, particularly as our products are designed to disrupt existing markets and create new or emerging markets.

Unlike established markets, such as those for legacy silicon solutions, where historical trends offer some predictive value, new and emerging markets present unique challenges.

For example, the success of our strategic focus on products intended for high-power markets, including AI data centers, energy and grid infrastructure, performance computing and industrial electrification depends on our assumptions about end-customer acceptance of both our products in those applications, and our assumptions about customers’ acceptance of advanced system architectures for servers used in high-power markets, which may turn out to be inaccurate.

Other areas where new and emerging market disruption could cause inaccurate forecasts and predictions include:

• Market Acceptance and Addressable Market Uncertainty :

The demand for our products, and our customers’ products, in new or emerging markets is difficult to forecast, as customer preferences may not be fully known and can evolve rapidly.

Further, demand for our products depends on the acceptance of underlying new and developing system architectures.

For example, our predictions for the use of GaN- and SiC-based products in 800V AI data center power applications depend on assumptions regarding the acceptance and growth of 800V systems themselves.

• Lack of Historical Data :

In established markets, revenue projections can be supported by trends from prior periods.

In contrast, there is little or no precedent for products aimed at new use cases, rendering traditional forecasting methods less reliable.

• Unpredictable Competitive Dynamics :

To the extent new and emerging products and technologies reshape or create new market landscapes, the competitive environment may evolve in unexpected ways.

For example, new competitors may emerge, or traditional competitors with established R&D and manufacturing resources, and long-standing customer relationships, may choose to offer competitive GaN or high-voltage SiC solutions.

• Cyclical and Volatile Industry Conditions :

The semiconductor sector is known for cyclical volatility.

This inherent unpredictability is amplified in new and emerging markets, where demand can swing sharply due to macroeconomic events, supply chain shocks, regulatory changes, or technology cycles.

Because our growth strategy depends on the successful creation and expansion of markets that did not previously exist—or were substantially different prior to our entry—we may experience periods of inconsistent or lower-than-expected revenue growth and profitability.

These factors may materially impact our operating results and financial condition.

Investors should not rely on past performance or management projections as an indication of future results in these dynamic markets.

We maintain a backlog of customer orders that is subject to cancellation, reduction or delay in delivery schedules, which may result in lower than expected revenues.

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We depend on a few key distributors and the loss of one or more of these distributors could have a material adverse effect on our business, financial condition and results of operations.

The use of distributors is an important part of our business model and we rely on a few key distributors to manage key customers and markets.

This is especially true following our announcement that we will prioritize high-power markets.

As a result of this change in our business, we reduced the overall number of distributors that we work with and placed additional reliance on a few key distribution partners.

We cannot assure that any of our current or future distributors will not cease purchasing products from us in favor of products of other suppliers, significantly reduce orders or seek price reductions in the future, and any such event could have a material adverse effect on our revenue, profitability, and results of operations.

A downturn in the industry or lower sales could materially adversely affect our business and results of operations.

Our business is subject to seasonal fluctuations, which could materially impact our revenue, profitability, and results of operations.

Certain end markets, including Mobile, Solar, EV, and Industrial, experience typical seasonal trends that affect demand, particularly in the first quarter.

Additionally, broader market weaknesses and inventory corrections in these sectors may further exacerbate seasonal declines.

We cannot assure that these seasonal trends will not intensify or that additional market factors will not further impact our financial performance.

Any prolonged or greater-than-expected seasonal downturns could have a material adverse effect on our business and operating results.

Product Quality and Reliability Risks

We may face product warranty or product liability claims that are disproportionately higher than the value of the products involved.

Our products are typically sold at prices that are significantly lower than the cost of the equipment or other goods into which they are incorporated.

For example, our products that are incorporated into a customer’s product may be sold for several dollars, whereas the customer product might be sold for several hundred dollars.

Although we maintain quality control systems, in the ordinary course of our business we receive warranty claims for some products that are defective, or are alleged to be defective, or that do not perform, or are alleged not to perform, to published specifications.

Additionally, while we attempt to contractually limit our customers’ use of our products, we cannot be certain that our distributors will not sell our products to customers who intend to use them in applications for which we did not intend them to be used.

Since a defect or failure in one of our products could give rise to failures in the goods that incorporate them (and consequential claims for damages against our customers from their customers), we may face claims for damages that are disproportionate to the revenues and profits we receive from the products involved.

Furthermore, even though we attempt, through our standard terms and conditions of sale and other customer contracts, to contractually limit our liability to replace the defective goods or refund the purchase price, we cannot be certain that these claims will not expose us to potential product liability, warranty liability, personal injury or property damage claims relating to the use of those products.

In the past, we have received claims for charges, such as for labor and other costs of replacing defective parts or repairing the products into which the defective products are incorporated, lost profits and other damages.

In addition, our ability to reduce such liabilities, whether by contracts or otherwise, may be limited by the laws or the customary business practices of the countries where we do business.

And, even in cases where we do not believe we have legal liability for such claims, we may choose to pay for them to retain a customer’s business or goodwill or to settle claims to avoid protracted litigation.

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Our results of operations and business could be adversely affected as a result of a significant quality or performance issue in our products, if we are required or choose to pay for the damages that result.

Our competitive position could be adversely affected if we are unable to meet end customers’ or device manufacturers’ quality requirements.

Semiconductor device suppliers must meet increasingly stringent quality standards of end customers.

While our quality performance to date has generally met these requirements, we may experience problems in achieving acceptable quality results in the manufacture of our products, particularly in connection with the production of new products or adoption of a new manufacturing process.

This risk is greater for products used in applications with higher quality and reliability standards, such as applications in the automotive industry, an important market in which we expect to introduce new products and increase our revenues in response to expected growing demand for electric vehicles.

The quality standards we will be expected to achieve in new markets we hope to penetrate, and which are critical to our future growth plans, Our failure to achieve acceptable quality levels for products intended for such applications, or generally, could adversely affect our business results.

Warranty claims, product liability claims and product recalls could harm our business, results of operations and financial condition.

We face an inherent business risk of exposure to warranty and product liability claims if products fail to perform as expected or are alleged to result in bodily injury, death, and/or property damage.

In addition, if any of our designed products are alleged to be defective, we may be required to participate in their recall.

We carry various commercial liability policies, including umbrella/excess policies which provide limited protection against product liability exposure.

However, we do not maintain separate insurance against product liability risks.

As a result, a successful warranty or product liability claim against us, or a requirement that we participate in a product recall, could have adverse effects on our business results.

Additionally, in the event that our products fail to perform as expected or such failure of our products results in a recall, our reputation may be damaged, which could make it more difficult for us to sell our products to existing and prospective end customers and could materially and adversely affect our business, results of operations and financial condition.

Furthermore, end customers may recall their end products if they prove to be defective or they may make compensatory payments in accordance with industry or business practice or in order to maintain good end customer relationships.

If such a recall or payment is caused by a defect in one of our products, end customers may seek to recover all or a portion of their losses from us.

If any of these risks materialize, our reputation would be harmed and there could be a material adverse effect on our business, financial condition and results of operations.

Reliability is especially critical in the power semiconductor industry, and any adverse reliability result by us with any of our end customers could negatively affect our business, financial condition, and results of operations .

Our end customers generally establish demanding specifications for quality, performance, and reliability that our products must meet.

ICs as complex as ours often encounter development delays and may contain undetected defects or failures when first introduced or after commencement of commercial shipments, which might require product replacement or recall.

Further, our third-party manufacturing processes or changes thereof, or raw material used in the manufacturing processes may cause our products to fail.

We have from time to time in the past experienced product quality, performance or reliability problems.

Our standard warranty period is generally one to two years.

In 2023, we announced a warranty period of 20 years for our GaN IC products.

Although we believe this warranty represents a differentiating feature of our GaN IC products and is justified by the reliability our products have demonstrated, our product warranties expose us to significant risks of claims for defects and failures.

If defects and failures occur in our products, we could experience lost revenue, increased costs, including warranty expense and costs associated with end customer support, cancellations or rescheduling of orders or shipments, and product returns or discounts, any of which would harm our operating results.

Furthermore, we may incur costs to investigate customer warranty claims even when those claims prove to be unfounded, such as when a claimed defect results from a customer’s improper system design.

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Further, the manufacture of our products, including the fabrication of semiconductor wafers, and the assembly and testing of products, involve highly complex processes.

For example, minute levels of contaminants in the manufacturing environment, difficulties in the wafer fabrication process or other factors can cause a substantial portion of the components on a wafer to be nonfunctional.

These problems may be difficult to detect at an early stage of the manufacturing process and often are time-consuming and expensive to correct.

From time to time, we have experienced problems achieving acceptable yields at our third-party wafer fabrication partner, resulting in delays in the availability of components.

Moreover, an increase in the rejection rate of products during the quality control process before, during or after manufacture and/or shipping of such products, results in lower yields and margins.

In addition, changes in manufacturing processes required as a result of changes in product specifications, changing end customer needs and the introduction of new product lines have historically significantly reduced manufacturing yields, resulting in low or negative margins on those products.

Poor manufacturing yields over a prolonged period of time could adversely affect our ability to deliver products on a timely basis and harm relationships with our end customers, which could materially and adversely affect our business, financial condition and results of operations.

The complexity of our products could result in unforeseen delays or expenses from undetected defects, errors or bugs in hardware or software which could reduce the market adoption of our products, damage our reputation with current or prospective end customers and adversely affect our operating costs.

Our products may contain defects, errors or bugs when they are first introduced or as new versions are released.

We have in the past and may in the future experience these defects, errors and bugs.

If any of our solutions have reliability, quality or compatibility problems, we may not be able to successfully correct these problems in a timely manner or at all.

In addition, if any of our proprietary features contain defects, errors or bugs when first introduced or as new versions of our solutions are released, we may be unable to timely correct these problems.

Consequently, our reputation may be damaged and end customers may be reluctant to buy our products, which could harm our ability to retain existing end customers and attract new end customers, and could adversely affect our financial results.

In addition, these defects, errors or bugs could interrupt or delay sales to our end customers.

If any of these problems are not found until after we have commenced commercial production of a new product, we may incur significant additional development costs and product recall, repair or replacement costs.

These problems may also result in claims against us by our end customers or others.

We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs.

We aim to use the most advanced manufacturing process technology appropriate for our products that is available from our third-party foundry.

As a result, we periodically evaluate the benefits of migrating our solutions to smaller geometry process technologies in order to improve performance and reduce costs.

We believe this strategy will help us to remain competitive.

These ongoing efforts require us from time to time to modify the manufacturing processes for our products and to redesign some products, which in turn may result in delays in product deliveries.

We may face difficulties, delays and increased expense as we transition our products to new processes and potentially to new foundries.

We cannot assure you that our current third-party foundry will be able to effectively manage such transitions or that we will be able to maintain our relationship with our current third-party foundries or develop relationships with new foundries.

If we or our foundry experience significant delays in transitioning to smaller geometries or fail to efficiently implement transitions, we could experience reduced manufacturing yields, delays in product deliveries and increased costs, all of which could harm our relationships with our end customers and our operating results.

As new processes become more prevalent, we expect to continue to integrate greater levels of functionality, as well as more end customer and third-party intellectual property, into our solutions.

We may not be able to achieve higher levels of design integration or deliver new integrated solutions on a timely basis.

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Supplier Risks

We rely on single sources of supply for front-end manufacturing (wafer fabrication) of our products, and on a limited number of suppliers of other materials.

We rely on a single third-party manufacturer (wafer foundry) to fabricate our gallium nitride (GaN) products, and on a separate, single wafer foundry to fabricate our silicon carbide (SiC) products.

Any reduction in our business with these key distributors, any downturn in the industry general or lower sales through distribution channels could materially adversely affect our business and results of operations.

In addition, the use of distributors means that we are subject to channel inventory fluctuations and reduced demand transparency in the distribution channel, which may increase forecasting and inventory risk.

Our business is subject to volatile demand and seasonal fluctuations, which could materially impact our revenue, profitability, and results of operations.

In addition, we rely on a limited number of customers for a significant portion of our revenue and key customer cancellations or deferrals could adversely affect our results.

Our end markets tend to be cyclical and subject to rapid changes in customer purchasing behavior, inventory levels, and macroeconomic conditions.

In addition, certain end markets may experience seasonal trends that affect demand, particularly in the first quarter.

Additionally, broader market weaknesses and inventory corrections in these sectors may further exacerbate cyclical or seasonal declines.

We cannot assure that these trends will not intensify or that additional market factors will not further impact our financial performance.

Any prolonged or greater-than-expected downturns could have a material adverse effect on our business and operating results.

In addition, a limited number of customers account for a significant portion of our current and anticipated revenue.

The cancellation, reduction or delay of orders from a major customer could materially and adversely affect our financial results.

Supply Chain and Quality Risks

We rely on single sources of supply for certain front-end manufacturing services, and on a limited number of suppliers of other materials, leaving us vulnerable to supply chain disruption.

Our new emphasis on high power markets may require us to transition to new suppliers.

In addition, we do not have long-term contractual supply commitments from our suppliers of wafer fabrication services.

As a result, we are at risk if any of our suppliers is unable or unwilling to perform or if we are unable to successfully transition to a new supplier.

We have historically relied on a single third-party manufacturer (wafer foundry) to fabricate our GaN products, and on a separate, single wafer foundry to fabricate our SiC products.

We also purchase a number of key materials and components used in the manufacture of our products from single or limited sources.

As a result, any disruption in the supply to or from these third parties (including ceasing or suspending operations entirely), may require us to transfer manufacturing processes to a new location or facility.

Our success is dependent upon our ability to successfully partner with our suppliers and our ability to produce wafers with competitive performance attributes and prices, including smaller process geometries.

We do not have long-term contractual supply commitments from our suppliers of wafer fabrication services.

In addition, terms with respect to the volume and timing of wafer production and the pricing of wafers produced by the semiconductor foundries are determined through periodic negotiations with wafer foundries, which usually result in short-term agreements that do not provide for long-term supply or allocation commitments for end customers, including us.

We cannot guarantee that the foundry that supplies our wafers will offer us competitive pricing terms or other commercial terms important to our business.

We also cannot guarantee that our suppliers will not experience manufacturing problems, including delays in the realization of advanced manufacturing process technologies or difficulties due to limitations of new and existing process technologies.

For example, we may experience supply shortages due to the difficulties our supplier and other foundries may encounter if they must rapidly increase their production capacities from low utilization levels to high utilization levels because of an unexpected increase in demand.

Furthermore, we cannot guarantee that the supplier will be able to manufacture sufficient quantities of our products or that they will continue to manufacture a given product for the full life of the product.

We could also experience supply shortages due to very strong demand for our products, or a surge in demand for semiconductors in general, which may lead to tightening of foundry capacity across the industry.

As we attract new customers in high power markets, those customers’ quality and capacity requirements may force us to work with new or additional suppliers and there is no guarantee that we will successfully transition or onboard such new suppliers without excess delay, cost or disruption.

Qualifying alternative manufacturing partners or relocating production involves significant time, cost, and technical risk and may not be feasible in the short term.

Similarly, many of our suppliers serve multiple customers and in the event of a supply constraint, those other customers may receive preferential priority or allocation.

Capacity constraints, yield issues, financial distress, labor disruptions and force majeure events, equipment failures or other disruptions at any of these suppliers could adversely affect our ability to deliver products on a timely basis.

For example, historically, we have relied on TSMC as our sole supplier of GaN wafers, a key component in our product offerings.

On July 1, 2025, TSMC announced its intention to cease GaN production in July 2027.

We have taken proactive steps to mitigate this risk, including committing to purchase buffer inventory from TSMC, expanding our collaboration

with Powerchip Semiconductor Manufacturing Corporation and in November 2025, we announced a long-term strategic partnership with GlobalFoundries to develop and deliver advanced GaN solutions for critical applications in high power markets, including AI datacenters, energy and grid infrastructure, performance computing and industrial electrification.

Despite these mitigation steps, there is no assurance that we will be able to successfully source sufficient quality or volume of GaN wafers at a cost or on a timeline that meets our requirements.

We may not be able to purchase a sufficient quantity of buffer inventory from TSMC, or we may incur substantial costs in doing so and end with excess inventory that must be scrapped.

Any delays or disruptions in qualifying or ramping production with Powerchip or GlobalFoundries, or other alternative suppliers, could negatively impact our ability to fulfill customer orders, lead to increased costs, or cause a loss of revenue and market share.

In addition, the transition may require us to modify our designs or manufacturing processes or to undertake extensive re-qualification efforts, any of which could result in increased engineering costs and potential delays in product availability.

If our United States-based suppliers are unable to meet our requirements, we may be forced to seek alternative suppliers overseas which could impact the competitiveness of our products for critical domestic industries.

We are continuing to evaluate the impact of this transition on our financial statements, and there can be no assurance that our mitigation efforts will fully address the risks associated with TSMC’s exit from GaN production.

Our failure to secure a stable and diversified supply of GaN wafers could materially adversely affect our business, financial condition, and results of operations.

In addition, terms with respect to the volume and timing of wafer production and the pricing of wafers produced by the semiconductor foundries, as well as the terms for other outsourced services, are determined through periodic negotiations with our third-party suppliers, which may result in short-term agreements that do not provide for long-term supply or allocation commitments for end customers, including us.

We cannot guarantee that the foundries that supply our wafers or other critical third-party suppliers will offer us competitive pricing terms or other commercial terms important to our business.

Because we do not have long-term contracts with some of our suppliers and third-party manufacturers, those suppliers or third-party manufacturers can discontinue supplying components or materials to us at any time without penalty.

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As a result, we may not be able to meet our end customers’ needs during such a transition, which would negatively impact our net sales, potentially damage our end customer relationships and our reputation and may have a material adverse effect on our business, financial condition and results of operations.

If our foundry vendor does not achieve satisfactory yields or quality, our reputation and end customer relationships could be harmed.

If our foundry vendors and other suppliers do not achieve satisfactory yields or quality, our reputation and end customer relationships could be harmed, and we could be exposed to additional expenses and liability.

The fabrication of our products is complex and technically demanding.

Minor deviations in the manufacturing process can cause substantial decreases in yields, and in some cases, cause production to be suspended.

This risk is especially relevant as we transition to new or additional suppliers or introduce new high-power products and technologies.

Our foundry vendors, from time to time, experience manufacturing defects and reduced manufacturing yields.

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Many of these problems are difficult to detect at an early stage of the manufacturing process and may be time consuming and expensive to correct.

Poor yields from our foundry vendor, or defects, integration issues or other performance problems in our solutions, could cause us significant

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end customer relations and business reputation problems, harm our financial results and give rise to financial or other damages to our end customers.

Poor yields from our foundry vendor, or defects, integration issues or other performance problems in our solutions, could cause us significant harm with our end customers and business reputation problems, harm our financial results and give rise to financial or other damages to our end customers.

We aim to use the most advanced manufacturing process technology appropriate for our products that is available from our third-party foundry.

As a result, we periodically evaluate the benefits of migrating our solutions to new process technologies in order to improve performance, power, yield, quality and reduce costs.

We believe this strategy will help us to remain competitive.

These ongoing efforts require us from time to time to modify the manufacturing processes for our products and to redesign some products, which in turn may result in delays in product deliveries.

We may face difficulties, delays and increased expense as we transition our products to new processes and potentially to new foundries.

We cannot guarantee that our suppliers will not experience manufacturing problems, including delays in the realization of advanced manufacturing process technologies or difficulties due to limitations of new and existing process technologies.

For example, we may experience supply shortages due to the difficulties our foundries and other suppliers may encounter if they must rapidly increase their production capacities from low utilization levels to high utilization levels because of an unexpected increase in demand.

Furthermore, we cannot guarantee that suppliers will be able to manufacture sufficient quantities of our products or that they will continue to manufacture a given product for the full life of the product.

If any of our suppliers suffer yield, quality or capacity problems, it may affect our ability to perform for our end customers.

Our end customers might consequently seek damages from us for their losses.

A product liability claim brought against us, even if unsuccessful, would likely be time consuming and costly to defend.

See “Product Quality and Reliability Risks”, above.

We rely on the timely supply of materials and new technologies and could suffer if suppliers fail to meet their delivery obligations or raise prices.

Certain new technologies and materials needed in our manufacturing operations are only available from a limited number of suppliers.

Even if the loss was the fault of the supplier, we may not have any legal or contractual remedies against the supplier and may be forced to incur the loss ourselves.

We rely on the timely supply of materials and new technologies from third-parties and could suffer if suppliers fail to meet their delivery obligations or raise prices.

Certain new technologies and materials needed in our manufacturing operations are only available from a limited number of suppliers, over whom we have limited influence.

Increased costs of wafers and materials, or shortages in wafers and materials, or quality issues at these suppliers could increase our costs of operations and our business could be harmed.

Our manufacturing operations depend on deliveries of materials in a timely manner and, in some cases, on a just-in-time basis.

From time to time, suppliers may extend lead times, limit the amounts supplied or increase prices due to capacity constraints or other factors.

The production of our own products involves lead time, and we may make binding capacity reservations or purchase commitments well in advance of customer orders.

Inaccurate forecasts may result in shortages, excess inventory, write-downs, or other expenses, which could adversely affect our financial results.

Our reliance on third parties reduces our direct control over manufacturing processes, quality assurance, environmental compliance, labor practices, and information security, which could expose us to operational, legal, or reputational risks.

Supply disruptions may also occur due to shortages in critical materials or components.

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Our business, financial condition and results of operations could be harmed if we are unable to obtain adequate supplies of materials in a timely manner or if there are significant increases in the costs of materials.

Increased costs of wafers and materials, or shortages in wafers and materials, could increase our costs of operations and our business could be harmed.

Worldwide manufacturing capacity for wafers is relatively inelastic.

For example, worldwide manufacturing capacity for wafers is relatively inelastic.

If the demand for wafers or assembly material exceeds market supply, our supply of wafers or assembly material could quickly become limited or prohibitively expensive.

A shortage in manufacturing capacity could also hinder our ability to meet product demand and therefore reduce our revenue.

If greater demand for wafers is not offset by an increase in foundry capacity, market demand for wafers or production and assembly materials increases, or if a supplier of our wafers or other materials ceases or suspends operations, for example due to shutdown measures implemented in response to the Covid-19 outbreak, our supply of wafers and other materials could become limited.

Such shortages raise the likelihood of potential wafer price increases, wafer shortages or shortages in materials at production and test facilities, resulting in potential inability to address our end customer product demands and our backlog in a timely manner and reduce our revenue and gross margins.

A shortage in manufacturing capacity could also hinder our ability to meet product demand and therefore reduce

If greater demand for wafers is not offset by an increase in foundry capacity, market demand for wafers or production and assembly materials increases, or if a supplier of our wafers or other materials ceases or suspends operations, our supply of wafers and other materials could become limited.

If we are unable to purchase wafers at favorable prices or at all, or we face supply shortages, our financial condition and results of operations will be harmed.

Raw material price fluctuations can increase the cost of our products, impact our ability to meet end customer commitments, and may adversely affect our results of operations.

Raw material price fluctuations can increase the cost of our products, impact our ability to meet end customer commitments, and may adversely affect our results of operations, including our gross margin.

The cost of raw materials is a key element in the cost of our products.

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Our inability to fill our supply needs would jeopardize our ability to fulfill obligations under our contracts, which could, in turn, result in reduced sales and profits, contract penalties or terminations, and damage to our end customer relationships.

Furthermore, increases in the price of wafers, testing costs, and commodities, which may result in increased production costs, mainly assembly and packaging costs, may result in a decrease in our gross margins.

Moreover, our suppliers may pass the increase in raw materials and commodity costs onto us which would further reduce the gross margin of our products.

In addition, as we are a fabless company, global market trends such as a shortage of capacity to fulfill our fabrication needs also may increase our raw material costs and thus decrease our gross margin.

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Regulatory Risks

Our business is affected by new U.S.

government regulations restricting outbound investments in China.

government has implemented new regulations, effective January 2, 2025, that establish an Outbound Investment Security Program which prohibits or requires notification of certain investments by U.S.

companies in entities involved in specific technologies, including semiconductor design, development, fabrication and assembly in China, Hong Kong and Macau.

The scope of the new regulations includes investments in existing wholly owned Chinese subsidiaries as well as investments in unaffiliated third parties and joint ventures.

These regulations affect our company and may adversely affect our business, financial condition and results of operations in the following ways:

• Investment Restrictions :

The regulations prohibit investments in entities engaged in activities related to advanced semiconductors, including the fabrication of integrated circuits from gallium-based compound semiconductors such as gallium nitride (GaN).

Although we do not believe this materially limits our ability to enter into or continue customary commercial relationships with Chinese suppliers and customers, this restriction does limit our ability to pursue strategic investments or partnerships in the area of GaN device fabrication, potentially affecting our growth and competitive positioning.

• Notification Requirement s:

Even when investments are not prohibited by the new regulations, we may be required to notify the U.S.

government of certain transactions, including investment transactions involving semiconductor device design, development, fabrication (from materials other than GaN) and packaging, in each case which our Chinese subsidiary was not engaged in before the new regulations became effective.

This could result in delays, increased compliance costs, and potential scrutiny of our investment activities.

• Competitive Disadvantage:

These regulations apply specifically to U.S.

companies and entities they control.

This may place us at a competitive disadvantage compared to non-U.S.

companies not subject to these restrictions.

• Penalties for Non-Compliance :

Violations of these regulations can result in substantial civil penalties, and willful violations may lead to criminal penalties.

The potential for such penalties could increase our compliance costs and increases our legal and financial risks associated with international investments.

The implementation of these regulations may contribute to increased geopolitical tensions, potentially affecting our broader business relationships and operations in China and other affected regions.

We are closely monitoring the implementation of these regulations and developing compliance strategies.

However, the full impact of this new regulatory regime on our business remains uncertain and could be material.

Moreover, our suppliers may pass the increase in raw materials and commodity costs onto us which would further reduce the gross margin of our products if we are unable to pass the corresponding cost increase on to our customers.

Product quality issues and recalls may impact our business, reputation and competitive position and we may face product warranty or product liability claims that are disproportionately higher than the value of the products involved.

Semiconductor device suppliers must meet increasingly stringent quality standards of end customers.

This risk is greater for products used in applications with higher quality and reliability standards, such as the high power markets we are prioritizing.

Our failure to achieve acceptable quality levels for products intended for such applications, or generally, could adversely affect our business results.

The manufacturing of our products, including the fabrication of semiconductor wafers, and the assembly and testing of products, involves highly complex processes.

These problems may be difficult to detect at an early stage of the manufacturing process and often are time-consuming and expensive to correct.

We face an inherent business risk of exposure to warranty and product liability claims if our products fail to perform as expected or are alleged to result in bodily injury, death, and/or property damage.

This is particularly true where our products are components in large high-power systems.

Failures of these systems can cause extensive property damage or personal injury and death, and the cost of replacing or repairing these systems can be substantial.

In addition, our ability to

reduce such liabilities, whether by contracts or otherwise, may be limited by the laws or the customary business practices of the countries where we do business.

Further, if any of our designed products are alleged to be defective, we may be required to participate in their recall.

In the event that our products fail to perform as expected or such failure of our products results in a recall, our reputation may be damaged, which could make it more difficult for us to sell our products to existing and prospective end customers.

Any of the foregoing outcomes could materially and adversely affect our business, results of operations and financial condition.

We have from time to time in the past experienced product quality, performance or reliability problems.

Our standard warranty period is generally one to two years.

In 2023, we announced a warranty period of 20 years for our GaN IC products.

Although we believe this warranty represents a differentiating feature of our GaN power IC products and is justified by the reliability our products have demonstrated, our product warranties expose us to significant risks of claims for defects and failures.

We carry various commercial liability policies, including umbrella/excess policies which provide limited protection against product liability exposure.

However, we do not maintain separate insurance against product liability risks.

As a result, a successful warranty or product liability claim against us, or a requirement that we participate in a product recall, could have adverse effects on our business results.

We face increasing regulatory requirements and stakeholder expectations to ensure our supply chain complies with environmental, social and governance standards, including responsible sourcing, labor practices and climate related risks.

Our failure to meet these requirements or expectations could harm our business reputation and customer relationships

Our procurement and supply chain practices are subject to certain regulatory requirements, including regulations related to sourcing conflict minerals and use of forced or underage labor, which often requires us to audit our direct and indirect suppliers to the mining of raw materials.

Violations of these regulations could result in regulatory penalties, liability and reputational damages.

In addition, our customers, particularly in the European Union and the United States, increasingly require suppliers to demonstrate responsible sourcing practices, environmental practices and ethical labor practices.

Although we support responsible sourcing practices, the processes required to demonstrate compliance with regulations and our customer expectations can be costly and depends on our ability to audit our direct and indirect supply chain, which includes entities with whom we have no contractual relationship.

As a result, there is a risk that we may obtain incomplete or inaccurate information.

We may incur significant costs to audit suppliers, implement traceability systems, change sourcing practices or find alternative suppliers that meet evolving and sometimes inconsistent responsible sourcing standards.

In addition, these requirements may impose additional costs on our suppliers who may pass those increased costs on to us.

Our failure to meet these requirements or expectations could harm our business reputation and customer relationships

Geopolitical and Regulatory Risks

We are subject to risks and uncertainties associated with international operations, which may harm our business.

We maintain our operations around the world, including in the U nited States, Ireland, China, Taiwan, Germany, South Korea, and the Philippines .

For the years ended December 31, 2025 and December 31, 2024, approximately 58% and 75%, respectively, of our net sales were to end customers in Asia.

Although we expect this percentage to decline significantly as we deprioritize mobile and consumer markets, a significant portion of our revenue will either involve supply chain partners or end customers located in Asia.

As of December 31, 2025, approximately 66% of our workforce was located outside of the United States.

In addition, a substantial majority of our products are manufactured, assembled, tested and packaged by third parties located outside of the United States.

The principal assembly and test facilities operated by our back-end manufacturing service providers are

located in Taiwan and the Philippines.

We also rely on several other wafer fabrication and manufacturing service providers located throughout Asia.

Accordingly, any conflict or uncertainty in this region, including political or regulatory changes, geopolitical factors or risks to public health or safety, such as natural disasters, could have a material adverse effect on our business, financial condition and results of operations.

Moreover, the global nature of our business subjects us to a number of additional risks and uncertainties, which could harm our business, financial condition and results of operations, including:

• international economic and political conditions and other political tensions between countries in which we do business;

• government restrictions on the export of certain semiconductor products, technologies, or manufacturing processes due to national security concerns, or the imposition of sanctions or licensing requirements on the sale of our semiconductor products to customers located abroad;

• actual or threatened military conflicts in countries or regions where we do not do business or have manufacturing partners, such as the military conflict between Russia and Ukraine, unrest in the Middle East and recent events in Venezuela, may increase the likelihood of supply interruptions or disruptions in countries or regions where we do business or in which our manufacturing partners have facilities.

• unexpected changes in, or impositions of, legislative or regulatory requirements, including changes in tax laws;

• restrictions on cross-border investment, including enhanced oversight by the Committee on Foreign Investment in the United States (“CFIUS”) or the foreign equivalent thereof, and substantial restrictions on investment from China as well as recently introduced restrictions on investments by U.S.

persons in China;

• differing legal standards with respect to protection of intellectual property and employment practices;

• local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the U.S.

Foreign Corrupt Practices Act of 1977 and other anti-corruption laws and regulations;

• exporting or importing issues related to export or import restrictions, including deemed export restrictions, tariffs, quotas and other trade barriers and restrictions;

• differing definitions of “country of origin” resulting in stacked or inconsistent treatment under multi-jurisdiction tariff or import regimes or increased costs and supply chain adjustments for semiconductor companies due to recent U.S.

tariffs on Chinese imports;

• disruptions of capital and trading markets and currency fluctuations;

• global pandemics, natural disasters, political instability, labor disruptions and other geopolitical and macroeconomic factors that can disrupt global supply chains or impact global economic activity..

Investments in or by us may be subject to foreign investment regulation and review in the United States and elsewhere, which may result in material restrictions, conditions, prohibitions or penalties on us or our investors related to any such investments.

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Any review and approval of an investment or transaction by an FDI regulator may have disproportionate impacts on transaction certainty, timing, feasibility, and cost, among other effects.

FDI regulatory policies and practices are rapidly evolving, and in the event that an FDI regulator reviews one or more proposed or existing investments, there can be no assurance that we will be able to maintain, or proceed with, such investments on terms acceptable to us.

FDI regulatory policies and practices are rapidly evolving, and in the event that an FDI regulator reviews one or more proposed or existing investments, there can be no assurance that we will

be able to maintain, or proceed with, such investments on terms acceptable to us.

We may be unable to complete commercially desirable acquisitions in such jurisdictions or be subject to material costs or restrictions in connection with such acquisitions.

While we strive to comply with all applicable laws and regulations, the application of FDI regulations could also in some circumstances result in financial or other penalties or require divestments, any of which could have a material impact on us.

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In the United States, certain investments that involve the acquisition of, or investment in, a U.S.

business by an investor subject to foreign control (a “foreign person”) may be subject to review and approval by the Committee on Foreign Investment in the United States (“CFIUS”).

business by an investor subject to foreign control (a “foreign person”) may be subject to review and approval by CFIUS.

Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends on, among other factors, the nature and structure of the transaction, including the level of beneficial ownership interest and the nature of any information or governance rights involved, and the nature of the technology possessed by the U.S.

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regulatory initiatives over the past several years have classified certain semiconductor technologies as “critical to national security,” including compound semiconductors and wide bandgap semiconductors.

Both gallium nitride (GaN) and silicon carbide (SiC) are compound semiconductors and wide-bandgap semiconductors.

Both GaN and SiC are compound semiconductors and wide bandgap semiconductors.

As a result, our company’s focus on GaN- and SiC-based products, together with our global presence in rapidly growing markets, including China, may subject our company to additional regulatory restrictions or scrutiny, including by CFIUS, in connection with past or future transactions that involve investments in us or by us.

Although we believe all of our GaN and SiC products are generally not subject to export controls under the U.S.

Export Administration Regulations (EAR), CFIUS could choose to review proposed or past investments in us by foreign persons whether or not our business is deemed to involve “critical technologies.” In the case of such review, CFIUS could prohibit or impose conditions on the relevant investment.

Export Administration Regulations, CFIUS could choose to review proposed or past investments in us by foreign persons whether or not our business is deemed to involve “critical technologies.” In the case of such review, CFIUS could prohibit or impose conditions on the relevant investment.

Such conditions might include limitations or obligations on our operations that could result in material costs or disruptions of our current or future operations.

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The institution of trade tariffs both globally and between the U.S.

and China specifically carries the risk of negatively affecting China’s overall economic condition, which could have negative repercussions on our business.

Furthermore, the imposition of tariffs could cause a decrease in the sales of products to end customers located in China or other end customers selling to Chinese end users, which could materially and adversely affect our business, financial condition and results of operations.

and China specifically could materially and adversely affect our business, financial condition and results of operations.

We are subject to U.S.

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Compliance with these laws and regulations could materially limit operations or sales, which would materially and adversely affect our business and results of operations.

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In addition, U.S.

laws and regulations and sanctions, or threat of sanctions, that could limit and restrict the export of some of our products and services to end customers, may also encourage end customers to develop their own solutions to replace our products, or seek to obtain a greater supply of similar or substitute products from competitors that are not subject to these restrictions, which could materially and adversely affect our business, financial condition and results of operations.

Further, our sales may be adversely affected by the current and future political environment in China and the policies of the China Central Government.

China’s government has exercised and continues to exercise substantial control over nearly all sectors of the Chinese economy through regulation and state ownership.

Our ability to ship products to China may be adversely affected by changes in Chinese laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, property and other matters.

Under its current leadership, China’s government has been pursuing economic reform policies that encourage private economic activity and greater economic decentralization.

There is no assurance, however, that China’s government will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice.

The United States government has called for substantial changes to foreign trade policy with China and has raised (as well as has proposed to further raise in the future), tariffs on several Chinese goods.

China has retaliated with increased tariffs on United States goods.

our products, or seek to obtain a greater supply of similar or substitute products from competitors that are not subject to these restrictions, which could materially and adversely affect our business, financial condition and results of operations.

Any further changes in United States trade policy could trigger retaliatory actions by affected countries, including China, resulting in trade wars.

Any changes in United States and China relations, including through changes in policies by the Chinese government could adversely affect our financial condition and results of operations, including:

changes in laws, regulations or the interpretation thereof, confiscatory taxation, governmental royalties, restrictions on currency conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprises.

In addition, there may be circumstances where we may have to incur premium freight charges to expedite the delivery of our products to end customers or as a result of being required to ship to alternative ports due to local Chinese government regulations or delays at the ports that we typically utilize.

If we incur a significant amount of freight charges, our gross profit will be negatively affected if we are unable to pass on those charges to end customers.

A trade war, particularly one involving semiconductor products and technologies, could adversely affect our financial condition and results of operations.

Our business is affected by new U.S.

government regulations restricting outbound investments in China.

government has implemented new regulations, effective January 2, 2025, that establish an Outbound Investment Security Program which prohibits or requires notification of certain investments by U.S.

companies in entities involved in specific technologies, including semiconductor design, development, fabrication and assembly in China, Hong Kong and Macau.

The scope of the new regulations includes investments in existing wholly owned Chinese subsidiaries as well as investments in unaffiliated third parties and joint ventures.

These regulations affect our company and may adversely affect our business, financial condition and results of operations in the following ways:

• Investment Restrictions :

• Notification Requirement s:

Even when investments are not prohibited by the new regulations, we may be required to notify the U.S.

This could result in delays, increased compliance costs, and potential scrutiny of our investment activities.

• Competitive Disadvantage:

These regulations apply specifically to U.S.

companies and entities they control.

This may place us at a competitive disadvantage compared to non-U.S.

companies not subject to these restrictions.

• Penalties for Non-Compliance :

Violations of these regulations can result in substantial civil penalties, and willful violations may lead to criminal penalties.

The potential for such penalties could increase our compliance costs and increases our legal and financial risks associated with international investments.

The implementation of these regulations may contribute to increased geopolitical tensions, potentially affecting our broader business relationships and operations in China and other affected regions.

We are closely monitoring the implementation of these regulations and developing compliance strategies.

However, the full impact of this new regulatory regime on our business remains uncertain and could be material.

Financial and Accounting Risks

Our working capital needs are difficult to predict.

We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.

Our working capital needs are difficult to predict and may fluctuate.

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The volatility of our end customers’ businesses and the time required to manufacture products also make it difficult to manage inventory levels.

We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and may require additional capital to respond to business opportunities and challenges, including the need to develop new features and products or enhance existing services, improve operating infrastructure or acquire complementary businesses and technologies.

Accordingly, we may need to engage in debt or equity financings to secure additional funds.

Any such financing secured in the future would increase expenses and could involve restrictive covenants relating to capital raising activities or create significant shareholder dilution, which may make it more difficult to obtain additional capital and to pursue business opportunities.

Any such financing secured in the future would increase expenses and could involve restrictive covenants relating to capital raising activities or create significant

shareholder dilution, which may make it more difficult to obtain additional capital and to pursue business opportunities.

We may not be able to obtain additional financing on favorable terms, if at all.

If we are unable to obtain adequate financing or financing on satisfactory terms when required, our ability to continue to support business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

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We have in the past identified material weaknesses in our internal control over financial reporting.

If we identify such material weaknesses in the future and are unable to remedy these material weaknesses, or if we fail to establish and maintain effective internal controls, we may be unable to produce timely and accurate financial statements, and we may conclude that our internal control over financial reporting is not effective, which could adversely impact our investors’ confidence and our stock price.

As disclosed in this annual report for the year ended December 31, 2024, and as previously disclosed in our amended annual report on Form 10-K/A for the year ended December 31, 2023, in connection with the audit of our consolidated financial statements for the years then ended, we identified material weaknesses in our internal control over financial reporting (see Part II, Item 9A (Controls and Procedures) of this annual report on Form 10-K for the year ended December 31, 2024, and our amended annual report on Form 10-K/A for the year ended December 31, 2023, filed with the SEC on July 23, 2024).

We have begun implementing and continue to implement measures to improve our internal control over financial reporting and remediate these material weaknesses.

These efforts include engaging an external advisor to evaluate and document the design and effectiveness of our internal controls, as well as to assist with remediation as needed.

Additionally, we are hiring accounting and finance personnel to support our remediation efforts, leveraging third-party resources with relevant expertise to supplement our internal team, and assessing training needs for both new and existing personnel to strengthen our internal controls.

As a result of these efforts, we have strengthened our internal controls and made meaningful progress compared to the prior year.

Maintaining effective internal controls is an ongoing process, and if material weaknesses were to be identified in the future and not timely remediated, or if we were unable to continue to establish and maintain effective internal controls, we could be unable to produce timely and accurate financial statements or conclude that our internal control over financial reporting is effective.

Any such outcome could adversely impact investor confidence and our stock price.

During 2025, we successfully completed the remediation of the material weaknesses in our internal control over financial reporting that were previously identified in connection with the audit of our consolidated financial statements for the year ended December 31, 2024.

As part of this remediation effort, we enhanced our internal control environment through the engagement of an external advisor, the use of third-party resources, enhanced training programs, and the design and implementation of control activities to strengthen our financial close and reporting processes, as further described in Item 9A of this annual report.

As a result of these actions, management concluded that our internal control over financial reporting was effective as of December 31, 2025, and that the previously identified material weaknesses have been fully remediated.

We will continue to monitor and refine our internal controls to support ongoing compliance with applicable requirements.

We employ modeling techniques to support the valuation of our accounts receivable and to project the timing and amount of expected collections.

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A successful cyber attack could result in the theft, destruction, or unauthorized disclosure of our intellectual property, trade secrets, or customer data.

In addition, cyberattacks could target our suppliers and vendors, including providers of cloud services, many of whom are in possession of our most valuable intellectual property and personal information.

Given our industry and technology, cyber attacks against us may come from a variety of sources, such as competitors, criminal organizations or foreign state actors.

In 2024 we experienced at least two attempted cyber attacks that we are aware of, one of which resulted in unauthorized access to non-critical systems.

While these incidents did not materially affect our operations, future breaches could lead to significant financial losses, operational disruptions, and reputational damage.

If a successful cyberattack results in the compromise of our customer’s intellectual property, we may also be liable for contractual damages and penalties to that customer.

We could be subject to domestic or international changes in tax laws, tax rates or the adoption of new tax legislation, or we could otherwise have exposure to additional tax liabilities, which could adversely affect our business, results of operations, financial condition or future profitability.

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We, through our foreign subsidiaries, are subject to income taxes in other foreign jurisdictions as a result of foreign operations in such jurisdictions.

Thus, new laws and policy relating to either U.S., Irish or other applicable foreign jurisdiction taxes may have an adverse effect on our

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business and future profitability.

Thus, new laws and policy relating to either U.S., Irish or other applicable foreign jurisdiction taxes may have an adverse effect on our business and future profitability.

Further, existing U.S., Irish or other foreign tax laws, statutes, rules, regulations, ordinances or treaties could be interpreted, changed, modified or applied adversely to us, possibly with retroactive effect.

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Such changes could materially and adversely affect the effective tax rate of our business and require us to take further action, at potentially significant expense, to seek to preserve our effective tax rate.

Legacy Navitas is a tax resident of, and is subject to tax in, both the United States and Ireland.

While we intend to pursue relief from double taxation under the double tax treaty between the United States and Ireland, there can be no assurance that such efforts will be successful.

Accordingly, the status of Legacy Navitas as a tax resident in the U.S.

and Ireland may result in an increase in our cash tax obligations and effective tax rate, which increase may be material.

Because Legacy Navitas is registered as a Delaware limited liability company and because it is treated as a U.S.

corporation under Section 7874 of the Code and the Treasury Regulations promulgated thereunder, it is treated as a U.S.

corporation for U.S.

federal income tax purposes.

Because Legacy Navitas is treated as a domestic corporation for U.S.

federal income tax purposes, among other consequences, it is generally subject to U.S.

federal income tax on its worldwide income, and its dividends are treated as dividends from a U.S.

Regardless of the application of Section 7874 of the Code and its registration as a Delaware limited liability company, Legacy Navitas is also treated as an Irish tax resident for Irish income tax purposes as a consequence of being incorporated under the laws of Ireland.

Therefore, because Legacy Navitas is a tax resident of Ireland and the U.S., it could be liable for both U.S.

and Irish taxes on its worldwide income and dividends paid by it to us could be subject to Irish withholding taxes.

While we intend to pursue relief from double taxation under the double tax treaty between the United States and Ireland, there can be no assurance that such efforts will be successful or result in a favorable outcome.

Accordingly, the status of Legacy Navitas as a tax resident in the United States and Ireland may result in an increase in its cash tax obligations and effective tax rate, which increase may be material.

As a consequence of Legacy Navitas being treated as an inverted domestic corporation under the Homeland Security Act, the U.S.

The Federal Acquisition Regulation (“FAR”) prohibits U.S.

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This means that government agencies may be prohibited from entering into new contracts with an inverted domestic corporation, and may be prohibited from paying for contractor activities on existing contracts after the date of the “inversion.” If our business becomes heavily dependent upon revenues generated from U.S.

federal government contracts, the treatment of Legacy Navitas as an inverted domestic corporation could substantially decrease the value of our business and, accordingly, the value of our common shares.

The application of the “inverted domestic corporation” definition is somewhat unclear due to the lack of detailed regulations or other guidance promulgated with respect to the relevant provisions of the Homeland Security Act (or similar state or local rules).

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federal income tax purposes.

While the regulatory provisions and other guidance issued by the IRS and the Treasury Department with respect to Section 7874 of the Code provide more detailed guidance, which interprets Section 7874 of the Code as having expansive application, these regulations do not explicitly apply for the purposes of determining whether a corporation is an inverted domestic corporation under the Homeland Security Act (or similar state or local rules), and it is unclear to what extent they should be viewed as interpretive guidance for such purposes.

While the regulatory provisions and other guidance issued by the U.S.

Internal Revenue Service (“IRS”) and the Treasury Department with respect to Section 7874 of the Code provide more detailed guidance, which interprets Section 7874 of the Code as having expansive application, these regulations do not explicitly apply for the purposes of determining whether a corporation is an inverted domestic corporation under the Homeland Security Act (or similar state or local rules), and it is unclear to what extent they should be viewed as interpretive guidance for such purposes.

As discussed above, Legacy Navitas is treated as a U.S.

domestic corporation under Section 7874 of the Code.

Therefore, if the expansive guidance issued by the IRS and Treasury Department were viewed as interpretive for purposes of the definition of “inverted

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domestic corporation” in the Homeland Security Act (or similar state or local rules), it is expected that Legacy Navitas will be treated as an inverted domestic corporation for such purposes.

Therefore, if the expansive guidance issued by the IRS and Treasury Department were viewed as interpretive for purposes of the definition of “inverted domestic corporation” in the Homeland Security Act (or similar state or local rules), it is expected that Legacy Navitas will be treated as an inverted domestic corporation for such purposes.

As a result of the plans to expand our business operations, including to jurisdictions in which tax laws may not be favorable, our obligations may change or fluctuate, become significantly more complex or become subject to greater risk of examination by taxing authorities, any of which could adversely affect our after-tax profitability and financial results.

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federal net operating loss carryforwards and other tax attributes may become subject to an annual limitation in the event of certain cumulative changes in the ownership of our common stock.

Under Section 382 of the Code, if a corporation experiences an “ownership

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change,” the corporation’s ability to use its pre-change net operating loss carryforwards to offset its post-change income may be limited.

Under Section 382 of the Code, if a corporation experiences an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards to offset its post-change income may be limited.

An ownership change pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5 percent of a corporation’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.

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To compete in these markets, we rely on a combination of trade secret protection, nondisclosure and licensing agreements, patents and trademarks to establish and protect our proprietary intellectual property rights.

Our intellectual property rights may be challenged or infringed upon by third parties or we may be unable to maintain, renew or enter into new license agreements with third-party owners of intellectual property on reasonable terms.

In addition, our intellectual property may be subject to infringement or other unauthorized use outside of the United States.

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Unauthorized use of our intellectual property rights or our inability to preserve existing intellectual property rights could adversely impact our competitive position and results of operations.

Our ability to obtain additional patents is uncertain and the legal protection afforded by these patents may not adequately protect our rights or permit us to gain or keep competitive advantage.

Changes in either patent laws or interpretations of patent laws in the United States or elsewhere may diminish the value of our intellectual property or narrow the scope of our patent protection.

Even if patents are issued regarding our products and processes, our competitors may challenge the validity of those patents.

The loss of our patents could reduce the value of the related products that practice such patents.

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Our employees, consultants, contractors, outside collaborators and other advisors may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential or proprietary information.

Enforcing a claim that a third party illegally obtained and is using our trade secrets may be expensive and time consuming Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

Enforcing a claim that a third party illegally obtained and is using our trade secrets may be expensive and time consuming.

Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

Failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

We may not be able to obtain additional patents and the legal protection afforded by any additional patents may not adequately cover the full scope of our business or permit us to gain or keep competitive advantage.

Our ability to obtain additional patents is uncertain and the legal protection afforded by these patents may not adequately protect our rights or permit us to gain or keep competitive advantage.

In addition, the specific content required of patents and patent applications that are necessary to support and interpret patent claims can be uncertain due to the complex nature

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of the relevant legal, scientific and factual issues.

Changes in either patent laws or interpretations of patent laws in the United States or elsewhere may diminish the value of our intellectual property or narrow the scope of our patent protection.

Even if patents are issued regarding our products and processes, our competitors may challenge the validity of those patents.

If we infringe or misappropriate, or are accused of infringing or misappropriating, the intellectual property rights of third parties, we may incur substantial costs or prevent us from being able to commercialize new products.

The semiconductor industry is characterized by frequent litigation regarding patent and other intellectual property rights.

We have received communications, and we expect to receive additional communications from time to time, that allege or imply that our products or technologies infringe the patent or other intellectual property rights of third parties.

Lawsuits or other proceedings resulting from allegations of infringement could subject us to significant liability for damages, invalidate our proprietary rights and adversely affect our business.

If we infringe or misappropriate, or are accused of infringing or misappropriating, the intellectual property rights of third parties, we may incur substantial costs or be unable to commercialize new products.

The semiconductor industry is characterized by frequent litigation regarding patent and other intellectual property rights, including by both competitors and so-called “non-practicing entities.” We have received communications, and we expect to receive additional communications from time to time, that allege or imply that our products or technologies infringe the patent or other intellectual property rights of third parties or that invite us to take a license to certain allegedly infringed patents.

Lawsuits or other proceedings resulting from allegations of infringement could subject us to significant liability for damages, invalidate our proprietary rights, force us to make changes to our products, and adversely affect our business.

In some cases, the allegation of patent infringement is made against our end-customer who may seek indemnification from us.

In the event that any third-party succeeds in asserting a valid claim against us or any of our end customers, we could be forced to do one or more of the following:

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• seek to develop non-infringing technologies, which may not be feasible;

• incur significant legal expenses;

• incur significant legal expenses, including defense costs under indemnification obligations;

• pay substantial monetary damages to the party whose intellectual property rights we may be found to be infringing;

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We may not prevail in such matters or be able to license any valid and infringed patents from third parties on commercially reasonable terms.

This could result in the loss of our ability to import and sell our products or require us to pay costly royalties to third parties in connection with sales of our products.

In addition, if a third-party causes us to discontinue the use of any technologies, we could be required to design around those technologies.

This could result in the loss of our ability to make, import and sell our products or require us to pay costly royalties to third parties in connection with sales of our products.

In addition, if a third-party causes us to discontinue the use of any patented technologies, we could be required to design around those technologies.

This could be costly and time consuming and could have an adverse effect on our financial results.

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Defending ourselves against third-party claims, including litigation in particular, may be costly and time consuming and may divert management’s attention from our business.

Our ability to design and introduce new products in a timely manner is dependent upon third-party IP, including third party and “open source” software.

Our ability to design and introduce new products in a timely manner is dependent upon third-party intellectual property, including third party and “open source” software.

In the design and development of new products and product enhancements, we rely on third-party intellectual property such as software development tools and hardware testing tools.

Furthermore, certain product features rely on intellectual property acquired from third parties, including hardware and software tools and products.

The design requirements necessary to meet future consumer demands for more features and greater functionality from semiconductor products may

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exceed the capabilities of the third-party intellectual property or development tools that are available to us.

The design requirements necessary to meet future consumer demands for more features and greater functionality from semiconductor products may exceed the capabilities of the third-party intellectual property or development tools that are available to us.

In addition, hardware and software tools and products procured from third parties may contain design or manufacturing defects that such third parties are unable to resolve, including flaws that could unexpectedly interfere with the operation of our products.

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Concentration of ownership among existing executive officers, directors and their affiliates, including the investment funds they represent, may prevent new investors from influencing significant corporate decisions.

At December 31, 2024, executive officers, directors and their affiliates, including the investment funds they represent, as a group beneficially owned approximately 30.6% of our outstanding common stock.

At December 31, 2025, executive officers, directors and their affiliates, including the investment funds they represent, as a group beneficially owned a significant percentage of our outstanding common stock.

As a result, these stockholders are able to exercise a significant level of influence over matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and approval of significant corporate transactions.

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At December 31, 2025, we had approximately 510 million shares of Class A common stock authorized but unissued.

In addition, our certificate of incorporation authorizes us to issue up to 10,000,000 shares of Class B common stock and 1,000,000 shares of preferred stock.

The preferred stock can be issued with such rights and preferences as may be determined by our board.

Our certificate of incorporation authorizes us to issue shares of Class A common stock or other

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securities convertible into or exercisable or exchangeable for shares of Class A common stock from time to time, for the consideration and on the terms and conditions established by our board in its sole discretion, whether in connection with a financing, an acquisition, an investment, stock incentive plans or otherwise.

In addition, our certificate of incorporation authorizes us to issue up to 10,000,000 shares of Class B common stock, par value of $0.0001 per share (our “Class B common stock”) and 1,000,000 shares of preferred stock, par value of $0.0001 per share (our “preferred stock”).

Our preferred stock can be issued with such rights and preferences as may be determined by our board.

Our certificate of incorporation authorizes us to issue shares of Class A common stock or other securities convertible into or exercisable or exchangeable for shares of Class A common stock from time to time, for the consideration and on the terms and conditions established by our board in its sole discretion, whether in connection with a financing, an acquisition, an investment, stock incentive plans or otherwise.

Such additional shares of Class A common stock or such other securities may be issued at a discount to the market price of Class A common stock at the time of issuance.

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These provisions could also limit the price that investors might be willing to pay in the future for shares of our Class A common stock, thereby depressing the market price of Class A common stock.

In addition, because our board is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board.

In addition, because our board is responsible for appointing the members of our management team, these provisions may

frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board.

Among other things, these provisions include those establishing:

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• advance notice procedures that stockholders must comply with in order to nominate candidates to our board or to propose matters to be acted upon at an annual meeting or special meeting of stockholders, which may discourage or delay a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us until the next stockholder meeting or at all.

We may issue a substantial number of additional shares under an employee incentive plan.

We may issue a substantial number of additional shares under an employee incentive plan which may dilute the equity interests of our investors.

We have the ability to issue a substantial number of additional shares under an employee incentive plan.

The issuance of additional shares of common or preferred stock:

• may significantly dilute the equity interests of our investors;

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• may subordinate the rights of holders of Class A common stock if preferred stock is issued with rights senior to those afforded our Class A common stock;

• could cause a change in control if a substantial number of shares of our Class A common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

• could cause a change in control if a substantial number of shares of our Class A common stock is issued, which may affect, among other things, our ability to use our net operating loss carryforwards, if any, and could result in the resignation or removal of our present officers and directors;

• may adversely affect prevailing market prices for our Class A common stock.

The market price of our common stock may be affected by announcements regarding the selection of our products or technologies by key customers or industry participants, even though these events may not reflect binding commitments or future revenues.

This may be particularly true following the Company’s announcement of a pivot towards high-power markets.

Investors should not place undue reliance on such announcements as an indicator of our business prospects, future performance or otherwise when evaluating the value of our common stock.

From time to time, key customers or other industry participants, with whom we have established relationships in connection with our product and technology development, may publicly announce that they have selected, qualified or

approved our products or technologies for potential use in connection with their offerings or their own development programs, or that they are collaborating with us in connection with such programs.

Such announcements may generate significant investor interest and may lead to temporary fluctuations in our stock price as the market reacts to perceived business opportunities.

This may be particularly true following the Company’s announcement of a transition towards high-power markets.

However, the events and corresponding business opportunities which are referred to in, or implied by, such announcements may not constitute binding commitments or guaranteed revenue, and there can be no assurance that the underlying business relationships will endure, or that any such business opportunities will be realized.

Our success ultimately depends on customers placing orders for, and purchasing, our products, and there is no guarantee, based on such announcements, that any customer will ultimately place orders for our products or that any such orders will be material in amount.

As a result, our stock price may experience volatility based on news of potential activities by customers or other industry participants that may not ultimately translate into actual sales or revenue.

Investors should not place undue reliance on such announcements as an indicator of our business prospects, future performance or otherwise when evaluating the value of our common stock.

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 1A. Risk Factors