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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-03-19 · 105 added, 142 removed, 156 unchanged (61% of the section changed)

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As a result of many factors, such as those set forth under the “Risk Factors” and “Cautionary Statement About Forward-Looking Statements” sections and elsewhere in this annual report, our actual results may differ materially from those anticipated in these forward-looking statements.

Navitas Semiconductor Corporation, a Delaware holding company, operates through its wholly owned subsidiaries, including Navitas Semiconductor Limited and GeneSiC Semiconductor LLC (“GeneSiC”).

Originally founded in 2014 as the legacy Navitas Semiconductor business, we were previously an SEC registrant named Live Oak Acquisition Corp.

II (“Live Oak”).

On October 19, 2021, we completed a business combination (which we refer to as the “Business Combination”) in which, among other transactions, Live Oak acquired Navitas Semiconductor Limited and its subsidiaries, changed our name to Navitas Semiconductor Corporation.

We acquired GeneSiC Semiconductor in August 2022.

Further details about the Business Combination and the acquisition of GeneSiC Semiconductor can be found in our SEC filings.

Founded in 2014, Navitas is a U.S.-based developer of gallium nitride power integrated circuits that provide superior efficiency, performance, size and sustainability relative to existing silicon technology.

Our solutions offer faster charging, higher power density and greater energy savings compared to silicon-based power systems with the same output power.

By unlocking this speed and efficiency, we believe we are leading a revolution in high-frequency, high-efficiency and high-density power electronics to electrify our world for a cleaner tomorrow.

We maintain operations around the world,

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including the United States, Ireland, Germany, Italy, Belgium, China, Taiwan, Thailand, South Korea, and the Philippines, with principal executive offices in Torrance, California.

We design, develop and market next-generation power semiconductors including gallium nitride (“GaN”) power integrated circuits (“ICs”), silicon carbide (“SiC”) and associated high-speed silicon system controllers, and digital isolators used in power conversion and charging.

Power supplies incorporating our products may be used in a wide variety of electronics products including mobile phones, consumer electronics, data centers, solar inverters and electric vehicles.

We utilize a fabless business model, working with third parties to manufacture, assemble and test our designs.

Our fabless model allows us to run the business today with minimal capital expenditures.

Our go-to-market strategy is based on partnering with leading manufacturers and suppliers through focused product development, addressing both mainstream and emerging applications.

We consider ourselves to be a pioneer in the GaN market with a proprietary, proven GaN power IC platform that is shipping in mass production to tier-1 companies including Samsung, Dell, Lenovo, LG, Xiaomi, OPPO, Amazon, vivo, and Motorola.

Most of the products we ship today are used primarily as components in mobile device chargers.

Charger manufacturers we ship to today are worldwide, supporting major international mobile brands.

Other emerging applications will also be addressed across the world.

In support of our technology leadership, we have formed relationships with numerous Tier 1 manufacturers and suppliers over the past eight years, gaining significant traction in mobile and consumer charging applications.

Navitas GaN has entered mass production and is being utilized by 9 out of the top 10 global mobile OEMs for the development of smartphones and laptops, with all 10 out of 10 currently in progress .

In addition, our supply chain partners have committed manufacturing capacity in excess of what we consider to be necessary to support our continued growth and expansion.

A core strength of our business lies in our industry leading IP position.

In addition to our comprehensive patent portfolio, our biggest proprietary advantage is our process design kit (PDK), the ‘how-to’ guide for Navitas designers to create new GaN based devices and circuits.

Our GaN power IC inventions and intellectual property translate across all of our target markets from mobile, consumer, EV, enterprise, and renewables.

We evaluate various complementary technologies and look to improve our PDK, in order to keep introducing newer genera tions of GaN technology.

In the years ended December 31, 2024 and 2023, research and development expenses represented approximately 91% and 87%, respectively, of our revenue.

Navitas’ research and development activities are located primarily in the US and China.

Navitas Semiconductor Corporation designs, develops and markets next-generation power semiconductors, including gallium nitride (“GaN”) power integrated circuits (“ICs”), high-voltage silicon carbide (“SiC”) devices, associated high-speed silicon system controllers, and digital isolators used in power conversion and charging applications.

We focus primarily on high-power markets, including AI data centers, energy and grid infrastructure, performance computing and industrial electrification.

Our products are designed to improve system efficiency, increase power density, enhance thermal performance, and reduce overall system size and cost compared to traditional silicon-based technologies.

By leveraging the electrical properties of wide bandgap (“WBG”) materials such as GaN and SiC, our solutions enable higher switching frequencies, higher voltage operation, and improved energy efficiency.

These capabilities are increasingly important in applications such as hyperscale data centers, renewable energy systems, grid modernization infrastructure, and industrial automation.

We operate as a fabless semiconductor design company and outsource wafer fabrication, assembly, and testing to qualified third-party manufacturing partners.

This business model allows us to operate with relatively low capital expenditure requirements;

however, our results depend on the capacity, cost structure, yield performance, and operational execution of our manufacturing partners.

We maintain operations around the world, including the United States, Ireland, Germany, Italy, Belgium, China, Taiwan, South Korea, and the Philippines, with principal executive offices in Torrance, California.

Private Placement of Common Stock (“PIPE” Offering)

On November 7, 2025, we entered into the Purchase Agreement with accredited investors for a private placement of approximately 14.8 million shares of Class A common stock at $6.75 per share.

The transaction closed on November 10, 2025, with Needham & Company as sole placement agent, resulting in gross proceeds of approximately $100.0 million and offering-related costs of $4.4 million.

Net proceeds are being used for working capital and general corporate purposes, including support of strategic initiatives in high-power markets.

All shares were delivered and settled in the fourth quarter of 2025.

Execution of At-The-Market Agreement

On March 19, 2025, we entered into an Open Market Sale Agreement SM (the “Sale Agreement”) with Jefferies LLC (“Jefferies”).

We subsequently completed two “At the Market” (ATM) offerings referred to as ATM One and ATM Two, respectively.

Pursuant to each agreement, we could offer and sell, from time to time, shares of our Class A common stock, par value $0.0001 per share, having an aggregate offering price of up to $50.0 million through Jefferies as sales agent.

As of June 30, 2025, we completed the sale of shares under both ATM One and ATM Two resulting in approximately 11.1 million shares under ATM One and 8.7 million shares under ATM Two, with gross proceeds of approximately $100.0 million and offering-related costs of $3.3 million in total.

All sales were completed in the second quarter of 2025.

Navitas 2.0 Restructuring Plan

During the fourth quarter of 2025, we have undertaken a strategic transformation (“Navitas 2.0 Restructuring Plan”) to reposition the Company as a focused high-power semiconductor company serving large, durable, higher-margin markets.

The fourth quarter 2025 total restructuring expense and impairment charges incurred by us were $16.6 million.

See Note - 18 “Restructuring and Impairment” to the Consolidated Financial Statements in Item 8 of this report for further details on the restructuring expense and impairment charges.

The Navitas 2.0 Restructuring Plan shifts the Company away from consumer-oriented, short-life-cycle segments toward long-term programs in AI data centers, energy and grid infrastructure, performance computing and industrial electrification.

This pivot is expected to improve business predictability, expand gross margin, and support a scalable and sustainable operating model.

To enable this transition, we took several decisive actions focusing on 1) distributor rationalization, 2) resource realignment, 3) technology roadmap acceleration, and 4) go-to-market restructuring.

Additionally, these actions support a disciplined operating model centered on four strategic pillars:

Market focus:

AI data centers, energy and grid infrastructure, performance computing and industrial electrification.

Technology leadership:

continuous innovation in GaN, GaN power ICs, and high-voltage silicon carbide, informed by customer requirements and co-design.

Operational efficiency:

a streamlined and rebalanced geographically deployed organization, a scalable foundry, and packaging and module partnerships.

Financial discipline:

prioritized investments, leverageable operating expenses, and a mix shift toward high-margin programs.

Equity Method Investment

In October 2024, the Company began applying the equity method of accounting for its related party investment, in accordance with Accounting Standards Codification (“ASC”) 323, Investments—Equity Method and Joint Ventures.

In October 2024, we began applying the equity method of accounting for our related party investment, in accordance with Accounting Standards Codification (“ASC”) 323, Investments—Equity Method and Joint Ventures.

Under ASC 323, an investor must use the equity method when it has significant influence over the investee, typically indicated by ownership of 20% to 50 % of the voting stock or other qualitative factors (e.g.

board representation).

The Company holds a 13.5% ownership stake in the investment and as part of the October 2024 transaction, received the option to appoint a representative to the investee’s board of directors.

As a result, the Company remeasured its investment to its fair value of $5.55 per share as of the change in accounting and recognized its proportionate share of the investee’s earnings and losses for the period from November through December 2024, resulting in a net gain of $3.9 million for the year ended December 31, 2024.

This amount is included in “Equity method investment gain” on the Statements of Operations.

May 2023 Public Offering

On May 26, 2023, the Company completed an underwritten public offering (the “May 2023 Public Offering”) of 10,000,000 shares of its Class A common stock at a public offering price of $8.00 per share, before deducting underwriting discounts and commissions.

In connection with the May 2023 Public Offering, the Company granted the underwriters of the offering a 30-day option to purchase up to an additional 1,500,000 shares of the Company’s Class A common stock (the “Option Shares”) from the Company at the same public offering price.

On June 1, 2023, the underwriters exercised in full their option to purchase the Option Shares.

The sale of the Option Shares closed on June 5, 2023.

After deducting underwriting discounts and commissions and before deducting offering expenses payable by the Company, the Company received net proceeds of $75.6 million and $11.3 million from the May 2023 Public Offering and sale of the Option Shares,

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respectively.

The total net proceeds received by the Company after deducting offering expenses was $86.5 million.

The Company intends to use the net proceeds for working capital and other general corporate purposes, including potential acquisitions or strategic manufacturing investments.

Buyout of Elevation Semiconductor

On January 19, 2023, the Company announced an agreement to acquire the remaining minority interest in its silicon control IC joint venture from Halo Microelectronics International Corporation (“Halo”).

Total consideration for the joint venture interests and certain intellectual property rights purchased from Halo, and certain other interests and agreements of Halo and joint venture employees, was approximately $22.4 million in Navitas stock.

As Navitas was already the majority shareholder, financial results from the joint venture have already been reflected in Navitas’ historical financial statements.

The transaction was completed on February 13, 2023.

In connection with the purchase of intellectual property, the Company recognized an intangible asset at its estimated fair value of $4.4 million related to acquired intellectual property.

Acquisition of GeneSiC

On August 15, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire 100% of the outstanding shares of GeneSiC Semiconductor Inc.

(“GeneSiC”) for $146.3 million of equity, $97.1 million of cash consideration, and potential future earn-out payments of up to an aggregate of $25.0 million in cash.

GeneSiC was a silicon carbide (“SiC”) pioneer with deep expertise in SiC power device design and process, based in Dulles, Virginia.

The future earn-out payments were fair valued at $0.6 million, for a total merger consideration of $244.0 million.

During the Company’s second quarter of 2023, the Company received information regarding products shipped by GeneSiC to a distributor prior to the Company’s acquisition of GeneSiC.

GeneSiC had the option, but not the obligation, to accept returns sold to the distributor.

The Company determined that a $1.7 million return liability should have been recorded as of the close of the acquisition on August 15, 2022.

The Company recorded the return liability as a purchase price adjustment as of June 30, 2023, resulting in an increase to goodwill and accounts payable and other accrued expenses of $1.7 million.

Acquisition of VDDTech

On June 10, 2022, the Company’s wholly owned subsidiary, Navitas Semiconductor Limited, acquired all of the capital stock of VDDTECH srl, a private Belgian company (“VDDTech”), for approximately $1.9 million in cash and stock.

Based in Mont-Saint-Guibert, Belgium, VDDTech creates advanced digital-isolators for next-generation power conversion.

VDDTech’s net assets and operating results since the acquisition date are included in the Company’s Consolidated Balance Sheets and Consolidated Statement of Operations for the year ended December 31, 2024.

We hold a 13.1% ownership stake in the investment and as part of the October 2024 transaction, received the option to appoint a representative to the investee’s board of directors.

As a result, we remeasured our investment to its fair value of $5.55 per share as of the change in accounting and recognized its proportionate share of the investee’s earnings and losses for the period from November through December 2024, resulting in a net gain of $3.9 million for the year ended December 31, 2024.

We recorded our share of losses for the year ended December 31, 2025, resulting in a net loss of $1.1 million, which was recorded in “Equity method investment gain (loss)” on the Statements of Operations.

Results of Operations

We design, develop and manufacture GaN ICs, SiC MOSFETs and Schottky MPS diodes that deliver best-in-class performance, ruggedness and quality.

We design, develop and manufacture GaN power ICs and SiC MOSFETs for a variety of end-uses and applications.

Our revenue represents the sale of semiconductors through specialized distributors to original equipment manufacturers (“OEMs”), their suppliers and other end customers.

Our revenues fluctuate in response to a combination of factors, including the following:

Our revenues fluctuate in response to a combination of factors.

In addition, our revenues may fluctuate in response to the Company’s announced transition to high-power markets.

Some of the factors that may cause these revenue fluctuations include the following:

• our overall product mix and sales volumes;

• gains and losses in market share and design win traction;

• gains and losses in market share and design win traction, including the Company’s ability to ramp new high-power products;

• pace at which technology is adopted in our end markets;

• the stage of our products in their respective life cycles;

• the effects of competition and competitive pricing strategies;

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• the effects of competition and competitive pricing strategies, particularly in the mobile and consumer markets impacted by our announced transition to high-power markets;

• availability of specialized field application engineering resources supporting demand creation and end customer adoption of new products;

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• declines in average selling prices due product advances and market competition;

• changes in customer and distributor relationships including the impact of the Q4 2024 disengagement with a significant distributor and the ability to replace the associated volumes with a combination existing and new distributors;

• seasonal demand patterns particularly in mobile and consumer markets.

Our product revenue is recognized when the customer obtains control of the product and the timing of recognition is based on the contractual shipping terms of a contract.

We provide a non-conformity warranty which is not sold separately and does not represent a separate performance obligation.

Our product revenue is diversified across the United States, Europe, and Asia.

• the availability, and fluctuations in the price of, the raw materials required for our products

• changes in customer and distributor relationships including the Company’s announced consolidation of its distribution network in connection with its transition to high-power markets;

• seasonal demand patterns in certain markets.

We consider the domicile of our end customers, rather than the distributors we sell to directly to be the basis of attributing revenues from external customers to individual countries.

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Research and development expense consists primarily of pre-production costs related to the design and development of our products and technologies, including costs related to cash and stock-based employee compensation, benefits and related costs of sustaining our engineering teams, project material costs, third-party fees paid to consultants, prototype development expenses, write-offs of material to be utilized in research and development, and other costs incurred in the product design and development process.

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Selling, General and Administrative Expense

Selling, general and administrative costs include employee compensation, including cash and stock-based compensation and benefits for executive, finance, business operations, sales, field application engineers and other administrative personnel.

In addition, it includes marketing and advertising, IT, outside legal, tax and accounting services, insurance, and occupancy costs and related overhead based on headcount.

Selling, general and administrative expense includes employee compensation, including cash and stock-based compensation and benefits for executive, finance, business operations, sales, field application engineers and other administrative personnel.

In addition, it includes marketing and advertising, IT, outside legal professional fees and legal settlements, tax and accounting services, insurance, and occupancy costs and related overhead based on headcount.

Selling, general and administrative costs are expensed as incurred.

Interest Income (Expense), net

Interest income (expense), net primarily consists of interest associated with our royalty agreement .

Interest income (expense), net primarily consists of interest earned on bank deposits and interest expense on our royalty agreement.

Dividend Income

Dividend income consist of income earned on money market treasury funds that are recorded as cash equivalents.

Dividend income consists of income earned on money market treasury funds that are recorded as cash equivalents.

Legacy N avitas is a dual domesticated corporation for Ireland and U.S.

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Amortization of intangible assets 18,937 18,926 11 — %

Restructuring expense 1,223 — 1,223 — %

Restructuring and impairment expense 18,049 1,223 16,826 1376 %

Total operating expenses 122,012 159,014 (37,002) (23) %

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Other income (expense), net:

Interest (expense) income, net (150) 1,314 (1,464) (111) %

Interest income (expense), net 863 (150) 1,013 (675) %

Dividend income 3,537 5,233 (1,696) (32) %

Gain (loss) from change in fair value of earnout liabilities 36,644 (33,788) 70,432 (208) %

(Loss) Gain from change in fair value of earnout liabilities (12,424) 36,644 (49,068) (134) %

Other income 6 102 (96) (94) %

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Loss before income taxes (115,782) (88,846) (26,936) 30 %

Income tax benefit (342) (517) 175 (34) %

Equity method investment gain 3,905 — 3,905 — %

Income tax provision (benefit) 50 (342) 392 (115) %

Equity method investment (loss) gain (1,121) 3,905 (5,026) (129) %

Net loss $ (116,953) $ (84,599) $ (32,354) 38 %

net loss attributable to noncontrolling interest — (518) 518 (100) %

Net loss attributable to controlling interest $ (84,599) $ (145,433) $ 60,834 (42) %

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Comparison of the Years ended December 31, 2025 and 2024

Net revenues for the twelve months ended December 31, 2024 were $83.3 million compared to $79.5 million for the twelve months ended December 31, 2023, an increase of $3.8 million, or 5%.

The increase was driven primarily by the growth in mobile markets.

Net revenues for the twelve months ended December 31, 2025 were $45.9 million compared to $83.3 million for the twelve months ended December 31, 2024, a decrease of $37.4 million, or 45%.

The decrease in sales was mainly due to the decline in the mobile and consumer markets in China.

Cost of Revenues

Cost of revenues for the twelve months ended December 31, 2024 was $55.0 million, an increase of $6.6 million or 14% compared to the twelve months ended December 31, 2023.

The increase was primarily driven by a $5.0 million inventory reserve related to a distributor disengagement and an increase in revenue from the mobile market.

Cost of revenues for the twelve months ended December 31, 2025 was $31.7 million, a decrease of $23.3 million or 42% compared to the twelve months ended December 31, 2024.

The decrease was primarily driven by lower sales volume, coupled with the absence of a $5.0 million inventory reserve recorded in the prior year related to a distributor disengagement and market mix.

Research and Development Expense

Research and development expense for the twelve months ended December 31, 2024 of $76.0 million increased by $7.2 million, or 10%, when compared to the twelve months ended December 31, 2023, primarily driven by an increase in product and package development as it relates to EV, enterprise and solar, coupled with a one-time $1.7 million project expense, a $2.0 million other asset impairment, as well as other R&D material purchases.

Research and development expense for the twelve months ended December 31, 2025 of $49.8 million decreased by $26.2 million, or 34%, when compared to the twelve months ended December 31, 2024, primarily driven by lower stock-based compensation of approximately $10.7 million, which was primarily due to the resignation of a senior management member resulting in reversal of $4.2 million related to our long-term incentive plan, coupled with a reduced headcount and employee-related costs of $10.1 million from our workforce reduction due to restructuring since the third quarter of 2024 and a $1.6 million decline in R&D product development costs.

Additionally, we had an other asset impairment and a one-time project expense of $3.7 million that was recorded in the prior year, but did not reoccur in the current year.

These are partially offset by a $2.2 million advanced R&D NRE impairment in 2025.

Selling, General and Administrative Expense

Selling, general and administrative expense for the twelve months ended December 31, 2024 of $62.9 million increased by $1.3 million, or 2%, when compared to the twelve months ended December 31, 2023.

The increase is primarily driven by a $7.5 million bad debt expense due to a distributor disengagement.

These expenses were largely offset by a decrease in stock-based compensation of approximately $8.0 million.

Selling, general and administrative expense for the twelve months ended December 31, 2025 of $35.2 million decreased by $27.7 million, or 44%, when compared to the twelve months ended December 31, 2024.

This is primarily driven by a decrease in stock-based compensation of approximately $17.8 million largely resulting from the reversal of $12.6 million following the separation of senior management members related to our long-term incentive plan.

The decrease was additionally driven by a $7.5 million bad debt expense due to a distributor disengagement in the prior year and a decrease in headcount and employee costs of $3.9 million as a result of our reductions in force and workforce optimization.

This was partially offset by approximately $4.0 million in CEO transition costs and governance costs in 2025.

Amortization of Definite-Lived Intangible Assets

Amortization of definite-lived intangible assets for the twelve months ended December 31, 2024 of $18.9 million increased by $0.1 million, or 1%, when compared to the twelve months ended December 31, 2023.

Amortization of intangible assets remained fairly consistent as we did not acquire new intangible assets.

Restructuring Expenses

We announced a cost-reduction plan (“2024 Restructuring Plan”).

The 2024 Restructuring Plan includes a reduction in headcount with the majority of the costs consisting of employee severance and benefits.

We incurred $1.2 million related to this plan for the twelve months ended December 31, 2024.

Amortization of intangible assets remained fairly unchanged as we did not acquire new intangible assets.

Restructuring and Impairment Expense

We announced cost-reduction plans that include streamlining distribution channels, reductions in headcount, and impairment of fixed assets.

We incurred $18.0 million of restructuring and impairment expenses for the year ended December 31, 2025, of which $16.6 million was related to the Navitas 2.0 Restructuring Plan and $1.4 million was related to the 2025 Restructuring Plan.

Other Income (Expense), net

Net interest income (expense), net for the twelve months ended December 31, 2024 o f $(0.2) million compared to income of $1.3 million for the twelve months ended December 31, 2023.

Interest income primarily consists of interest earned on our interest earning bank accounts and interest expense is associated with our royalty agreement.

The $0.9 million of interest income was primarily attributable to higher cash balances net of interest expense associated with our royalty agreement.

The $0.2 million expense as of December 31, 2024 is primarily due to interest associated with our royalty agreement.

The $1.3 million interest income in 2023 was due the interest rate received on money markets funds.

Dividend income consists of income earned on our money market treasury funds that are recorded as cash equivalents in our Consolidated Balance Sheets.

Increase of $1.2 million in dividend income from December 31, 2023 to December 31, 2024 is primarily due to the timing of when we transferred money into our money market treasury funds.

As a result, the prior-year figure reflects only nine months of activity compared to twelve months in the current year.

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During the twelve months ended December 31, 2024, we recognized a $36.6 million gain from a decrease in fair value of our earnout liabilities.

The gain of $36.6 million in our earn-out liability was primarily a result of the decrease of the closing price of our Class A common stock listed on the Nasdaq, resulting in a decrease in the estimated fair value of the earnout shares from $5.50 as of December 31, 2023 to $1.18 as of December 31, 2024 .

Income Tax Benefit

Income tax benefit for the twelve months ended December 31, 2024 was $0.3 million while for the twelve months ended December 31, 2023, income tax benefit was $0.5 million.

Dividend income consists of income earned on our money market treasury funds that are recorded as cash equivalents on our consolidated balance sheet.

The decrease of $1.7 million is primarily due to decreases in our investment balances as of December 31, 2025 compared to December 31, 2024.

During the twelve months ended December 31, 2025, we recognized a $12.4 million loss from an increase in fair value of our earnout liabilities.

The loss of $12.4 million in our earn-out liability was primarily a result of the increase of the closing price of our Class A common stock listed on the Nasdaq, resulting in an increase in the estimated fair value of the earnout shares from $1.18 as of December 31, 2024 to $2.33 as of December 31, 2025 .

Income Tax Provision (Benefit)

Income tax provision for the twelve months ended December 31, 2025 was $0.1 million while for the twelve months ended December 31, 2024, income tax benefit was $0.3 million.

We expect our tax rate to remain close to zero in the near term due to full valuation allowances against deferred tax assets.

Equity method investment gain

In October 2024, we began applying the equity method to account for our joint venture investment.

We adjusted the investment to its fair value of $5.55 per share as of the accounting change and recognized our proportionate share of the joint venture’s loss from the period November through December 2024, resulting in a net gain of $3.9 million for the year ended December 31, 2024.

Equity method investment (loss) gain

In 2024, we recorded a net gain of $3.9 million related to our joint venture investment, which primarily reflected a fair value adjustment prior to applying the equity method.

Beginning in October 2024, we applied the equity method and recognized our proportionate share of the joint venture’s results.

For the year ended December 31, 2025, we recognized our proportionate share of the joint venture’s loss, resulting in a net loss of $1.1 million, compared to the net gain of $3.9 million for the year ended December 31, 2024.

Liquidity and Capital Resources

Our primary use of cash is to fund our operating expenses, working capital requirements, and outlays for strategic investments and acquisitions.

In addition, we use cash to conduct research and development, incur capital expenditures.

In addition, we use cash to conduct research and development and fund capital expenditures.

We expect to continue to incur net operating losses and negative cash flows from operations and we expect our research and development expenses, general and administrative expenses and capital expenditures will remain relatively flat.

As December 31, 2024 , we had cash and cash equival ents of $86.7 million.

We currently expect to fund our cash requirements through the use of cash and cash equivalents on hand.

We believe that our current levels of cash and cash equivalents are sufficient to finance our operations, working capital requirements and capital expenditures for the foreseeable future.

We expect our operating and capital expenditures to remain relatively flat.

If additional funds are required to support our working capital requirements, acquisitions or other purposes, we may seek to raise funds through additional equity or debt financing or from other sources.

If we raise additional funds through the issuance of equity, the percentage ownership of our equity holders could be significantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing equity holders.

If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operating flexibility and would also require us to incur interest expense.

We can provide no assurance that additional financing will be available at all or, if available, that we would be able to obtain additional financing on terms favorable to us.

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The followin g table summarizes our consolidated cash flows for the periods presented (in thousands):

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We derive liquidity primarily from cash on hand and equity financing activities.

As of December 31, 2024, our balance of cash and cash equivalents was $86.7 million, which is a decrease of $65.2 million or 43% co mpared to December 31, 2023.

As of December 31, 2025, our balance of cash and cash equivalents was $236.9 million, which is an increase of $150.1 million or 173% co mpared to December 31, 2024, driven by our PIPE and ATM offerings .

Operating Activities

For the year ended December 31, 2025, net cash used in operating activities was $42.9 million, which primarily reflects a net loss of $117.0 million, adjusted for the amortization of intangible assets of $18.9 million, non-cash stock-based compensation of $14.5 million, non-cash loss of $12.4 million related to the change in fair value of our earnout liability, $3.8 million related to the impairment of a long-lived asset, depreciation of $3.5 million, partially offset by aggregate cash inflows from changes in operating assets and liabilities of $17.1 million.

Specifically, the changes reflect a $9.5 million decrease in accounts receivable, $6.2 million increase in accounts payable, accrued compensation and other accrued expenses, $2.2 million decrease in inventories, and a decrease of $1.0 million in other assets, partially offset by

decreases in operating lease liabilities related to lease payments of $1.7 million and a $0.3 million increase in prepaid expenses and other current assets.

For the year ended December 31, 2024, net cash used in operating activities was $58.8 million, which primarily reflects a net loss of $84.6 million, adjusted for non-cash stock-based compensation of $43.0 million, non-cash gains of $40.5 million in earnout and our equity investment due to changes in fair value, $7.9 million of non-cash bonus accruals, $7.7 million for our allowance for credit losses, a $2.0 million impairment of other asset, and an aggregate cash used in operating assets and liabilities of $1.9 million.

Specifically, the changes reflect a $2.8 million decrease in accounts payable, accrued compensation and other accrued expenses, $11.0 million decrease in customer deposit and deferred revenue, $1.7 million decrease in operating lease liability, partially offset by a $4.2 million decrease in accounts receivable, $6.8 million decrease in inventories, a decrease of $0.6 million in other assets, and a $2.1 million decrease in prepaid expenses and other current assets.

For the year ended December 31, 2023, net cash used in operating activities was $41.4 million, which primarily reflects a net loss of $146.0 million, adjusted for non-cash stock-based compensation of $54.0 million, non-cash losses of $33.8 million in earnout due to changes in fair value, $2.8 million of non-cash bonus accruals, and an aggregate cash provided in operating assets and liabilities of $2.8 million.

Specifically, the changes reflect $16.7 million increase in accounts receivable and $3.2 million increase inventory, both as a result of higher revenues, $2.6 million increase in prepaids and other current assets, and a $2.5 million increase in other assets, partially offset by an increase of $13.7 million in accounts payable primarily due to timing of disbursements and higher inventory, and an increase of $10.5 million in deferred revenue.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2024 of $9.3 million was primarily due to purchases of fixed assets of $6.8 million and $2.5 million cash funding of a joint venture.

Net cash used in investing activities for the year ended December 31, 2025 of $1.4 million was primarily due to purchases of fixed assets of $1.5 million, partially offset by net of proceeds from dispositions of $0.1 million.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2025 of $194.6 million was primarily the result of proceeds of $200.0 million related to our PIPE and ATM offerings, proceeds from our employee stock purchase plan of $1.5 million, and proceeds from stock option exercises of $1.0 million.

This was partially offset by the costs of our PIPE and ATM offerings of $7.7 million and payments on our finance lease of $0.2 million.

Net cash provided by financing activities for the year ended December 31, 2024 of $3.5 million was primarily the result of proceeds from stock option exercises of $0.8 million and proceeds from our employee stock purchase plan of $2.7 million.

Net cash provided by financing activities for the year ended December 31, 2023 of $89.7 million was primarily the result of proceeds from the issuance of common stock in our May 2023 public offering, net of issuance costs, of $86.5

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million, proceeds from the issuance of common stock in connection with stock option exercises of $1.9 million and proceeds from our employee stock purchase plan of $1.3 million.

Contractual Obligations, Commitments and Contingencies

In the ordinary course of business, we enter into contractual arrangements that may require future cash payments.

As of December 31, 2024 , our non-cancellable contractual arrangements consisted of lease obligations and an agreement for the purchase of equipment.

As of December 31, 2025 , our non-cancellable contractual arrangements consist of lease obligations and an agreement for the purchase of equipment.

Refer to Note 9 - “Leases” for further information on our minimum future payments related to lease obligations.

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GAAP requires our management to make judgments, assumptions and estimates that affect the amounts reported in our accompanying consolidated financial statements and the accompanying notes included elsewhere in this annual report.

Our management bases its estimates and judgments on historical experience, current economic and industry conditions and on various other factors that are believed to be reasonable under the circumstances.

Our management bases its estimates and judgments on historical experience, current economic and industry conditions and on various other

factors that are believed to be reasonable under the circumstances.

Actual results may differ from these estimates under different assumptions or conditions.

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Revenue is recognized when control of the product is transferred to the customer (i.e., when our performance obligation is satisfied), which is defined by the commercial terms of each purchase but typically occurs at shipment.

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determining whether control has transferred, we consider if there is a present right to payment and legal title, and whether risks and rewards of ownership have transferred to the customer.

In determining whether control has transferred, we consider if there is a present right to payment and legal title, and whether risks and rewards of ownership have transferred to the customer.

Refer to Note 2 - “Significant Accounting Policies” to our consolidated financial statements included elsewhere in this annual report for additional discussion of our revenue recognition policy.

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We account for awards of stock-based compensation under our employee stock-based compensation plan using the fair value method.

Accordingly, we estimate fair value of our stock-based awards and amortized this fair value to stock-based compensation expense over the requisite service period or vesting terms.

Accordingly, we estimate fair value of our stock-based awards and amortized this fair value to stock-based compensation expense over the requisite service period.

RSUs - The fair value per unit of each RSU grant award is determined on the grant date based on the Company’s stock price.

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The most significant assumptions and judgments include the expected volatility, risk-free interest rate, expected dividend rate and expected term of the award, in addition to the fair value of the underlying common stock.

LTIPs - The fair value for each tranche of the Long-term Incentive Plan Stock Option (“LTIP”) awards was determined using Black-Scholes model and a Monte Carlo simulation estimated at the initial grant date.

LTIP Awards - The fair value for each tranche of the Long-term Incentive Plan Stock Option (“LTIP”) awards was determined using Black-Scholes model and a Monte Carlo simulation estimated at the initial grant date.

We utilized the services of a professional valuation firm to develop the grant date fair value.

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During the years ended December 31, 2025 and 2024, the LTIP awards require management to make assumptions and to apply judgment in determining the timing and amount of the recognition of the awards.

The most significant assumptions and judgments include management’s forecasts related to award performance conditions, including whether certain

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performance conditions are probable.

The most significant assumptions and judgments include management’s forecasts related to award performance conditions, including whether certain performance conditions are probable.

Awards are not recognized until they are deemed to be probable to vest, and awards may be derecognized if they are determined to be no longer probable.

As a result of certain employee terminations during 2025, all LTIP awards were forfeited, and the LTIP is no longer applicable as of December 31, 2025 .

Earnout Shares

Certain shareholders of the Company are eligible to receive up to 10,000,000 Earnout Shares of the Company's Class A common stock, contingent upon the fulfillment of Earnout Milestones.

Certain shareholders of the Company are eligible to receive up to 10,000,000 earnout shares (the “Earnout Shares”) of Class A common stock, contingent upon the fulfillment of certain earnout milestones.

These milestones consist of three distinct criteria, with each criterion granting eligible stockholders 3,333,333 earn-out shares upon meeting the specified conditions.

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Any forfeited shares from unvested holders will be reallocated among the remaining earnout holders and (ii) the “Unvested Shares” - those associated with stockholders with unvested equity at the closing of the Business Combination which are subject to forfeiture if the employee leaves prior to the achievement of the earnout milestones.

As the implicit service period has passed, these shares now remain contingent solely on meeting the earnout performance condition.

As the implicit service period has passed, these shares now remain contingent solely on meeting the earnout performance

The Vested Shares are classified as liabilities in the Consolidated Balance Sheets and the Unvested Shares are equity-classified stock-based compensation to be recognized over time (see Note 10 - “Stock-based Compensation”).

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The change in fair value of the earn-out liability is recorded as part of “Other income (expense), net” in the consolidated statement of operations.

The estimated fair value of the earnout liability was determined using a Monte Carlo analysis of 20,000 simulations of the future path of the Company’s stock price over the earnout period.

The assumptions utilized in the calculation are based on the achievement of certain stock price milestones including projected stock price, volatility, and risk-free rate.

The estimated fair value of the earnout liability was determined using a Monte Carlo analysis of 20,000 simulations of the future path of the Company’s stock price over the earnout period to estimate the likelihood of achieving certain stock price milestones.

The assumptions utilized in the calculation include the Company’s stock price volatility, risk-free interest rate, and the expected term of the award.

Recently Issued and Adopted Accounting Standards

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As a “smaller reporting company” as defined in Item 10 of Regulation S-K, we are exempt from the disclosure requirements of this item in our Form 10-K.

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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 7. Management’s Discussion and Analysis