nvts-20220331
false00018217692022Q112/31252P3DP3DP3D00018217692022-01-012022-03-310001821769us-gaap:CommonClassAMember2022-05-12xbrli:shares0001821769us-gaap:CommonClassBMember2022-05-1200018217692022-03-31iso4217:USD00018217692021-12-31iso4217:USDxbrli:shares00018217692021-01-012021-03-310001821769us-gaap:SeriesAPreferredStockMember2021-12-310001821769us-gaap:SeriesBPreferredStockMember2021-12-310001821769nvts:SeriesB1ConvertiblePreferredStockMember2021-12-310001821769nvts:SeriesB2ConvertiblePreferredStockMember2021-12-310001821769us-gaap:CommonStockMember2021-12-310001821769us-gaap:AdditionalPaidInCapitalMember2021-12-310001821769us-gaap:RetainedEarningsMember2021-12-310001821769us-gaap:ReceivablesFromStockholderMember2021-12-310001821769us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001821769us-gaap:CommonStockMember2022-01-012022-03-310001821769us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001821769us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001821769us-gaap:RetainedEarningsMember2022-01-012022-03-310001821769us-gaap:SeriesAPreferredStockMember2022-03-310001821769us-gaap:SeriesBPreferredStockMember2022-03-310001821769nvts:SeriesB1ConvertiblePreferredStockMember2022-03-310001821769nvts:SeriesB2ConvertiblePreferredStockMember2022-03-310001821769us-gaap:CommonStockMember2022-03-310001821769us-gaap:AdditionalPaidInCapitalMember2022-03-310001821769us-gaap:RetainedEarningsMember2022-03-310001821769us-gaap:ReceivablesFromStockholderMember2022-03-310001821769us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001821769us-gaap:SeriesAPreferredStockMember2020-12-310001821769us-gaap:SeriesBPreferredStockMember2020-12-310001821769nvts:SeriesB1ConvertiblePreferredStockMember2020-12-310001821769nvts:SeriesB2ConvertiblePreferredStockMember2020-12-310001821769us-gaap:CommonStockMember2020-12-310001821769us-gaap:AdditionalPaidInCapitalMember2020-12-310001821769us-gaap:RetainedEarningsMember2020-12-310001821769us-gaap:ReceivablesFromStockholderMember2020-12-310001821769us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100018217692020-12-310001821769us-gaap:CommonStockMember2021-01-012021-03-310001821769us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001821769us-gaap:ReceivablesFromStockholderMember2021-01-012021-03-310001821769us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001821769us-gaap:RetainedEarningsMember2021-01-012021-03-310001821769us-gaap:SeriesAPreferredStockMember2021-03-310001821769us-gaap:SeriesBPreferredStockMember2021-03-310001821769nvts:SeriesB1ConvertiblePreferredStockMember2021-03-310001821769nvts:SeriesB2ConvertiblePreferredStockMember2021-03-310001821769us-gaap:CommonStockMember2021-03-310001821769us-gaap:AdditionalPaidInCapitalMember2021-03-310001821769us-gaap:RetainedEarningsMember2021-03-310001821769us-gaap:ReceivablesFromStockholderMember2021-03-310001821769us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100018217692021-03-3100018217692021-10-19xbrli:pure0001821769srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate201602Member2022-01-010001821769us-gaap:FurnitureAndFixturesMember2022-03-310001821769us-gaap:FurnitureAndFixturesMember2021-12-310001821769nvts:ComputerAndOtherEquipmentMember2022-03-310001821769nvts:ComputerAndOtherEquipmentMember2021-12-310001821769us-gaap:LeaseholdImprovementsMember2022-03-310001821769us-gaap:LeaseholdImprovementsMember2021-12-310001821769srt:MinimumMemberus-gaap:FurnitureAndFixturesMember2022-01-012022-03-310001821769srt:MaximumMemberus-gaap:FurnitureAndFixturesMember2022-01-012022-03-310001821769srt:MinimumMembernvts:ComputerAndOtherEquipmentMember2022-01-012022-03-310001821769srt:MaximumMembernvts:ComputerAndOtherEquipmentMember2022-01-012022-03-310001821769srt:MinimumMemberus-gaap:LeaseholdImprovementsMember2022-01-012022-03-310001821769srt:MaximumMemberus-gaap:LeaseholdImprovementsMember2022-01-012022-03-310001821769us-gaap:FairValueInputsLevel1Member2022-03-310001821769us-gaap:FairValueInputsLevel1Member2021-12-310001821769us-gaap:FairValueInputsLevel3Membernvts:EarnoutSharesMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001821769nvts:EarnoutSharesMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001821769us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001821769us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001821769us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001821769us-gaap:FairValueMeasurementsRecurringMember2022-03-310001821769us-gaap:FairValueInputsLevel1Membernvts:PublicWarrantsMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001821769nvts:PublicWarrantsMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001821769us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMembernvts:PrivatePlacementWarrantsMember2021-12-310001821769us-gaap:FairValueMeasurementsRecurringMembernvts:PrivatePlacementWarrantsMember2021-12-310001821769us-gaap:FairValueInputsLevel3Membernvts:EarnoutSharesMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001821769nvts:EarnoutSharesMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001821769us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001821769us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001821769us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001821769us-gaap:FairValueMeasurementsRecurringMember2021-12-310001821769nvts:TermLoanMemberus-gaap:SecuredDebtMember2020-04-29nvts:advance0001821769nvts:FirstTermAdvanceMemberus-gaap:SecuredDebtMember2020-04-290001821769nvts:SecondTermAdvanceMemberus-gaap:SecuredDebtMember2020-09-300001821769nvts:FirstTermAdvanceMemberus-gaap:SecuredDebtMember2020-09-300001821769nvts:ThirdTermAdvanceMemberus-gaap:SecuredDebtMember2020-09-300001821769us-gaap:PrimeRateMembernvts:TermLoanMemberus-gaap:SecuredDebtMember2020-04-292020-04-290001821769us-gaap:SecuredDebtMember2021-03-310001821769us-gaap:SecuredDebtMember2022-03-310001821769nvts:TermLoanMemberus-gaap:SecuredDebtMember2019-12-310001821769nvts:TermLoanMemberus-gaap:SecuredDebtMember2021-08-012021-08-010001821769nvts:TermLoanMember2022-03-310001821769srt:MinimumMember2022-03-310001821769srt:MaximumMember2022-03-310001821769nvts:EquityIncentivePlan2020Memberus-gaap:EmployeeStockOptionMember2020-08-052020-08-050001821769nvts:EquityIncentivePlan2020Memberus-gaap:EmployeeStockOptionMember2022-01-012022-03-310001821769nvts:EquityIncentivePlan2020Member2020-08-050001821769nvts:EquityIncentivePlan2020Memberus-gaap:EmployeeStockOptionMember2021-10-192021-10-190001821769nvts:EquityIncentivePlan2020Memberus-gaap:RestrictedStockMember2021-10-192021-10-190001821769nvts:EquityIncentivePlan2021Member2021-08-170001821769nvts:RevenuesNetMember2022-01-012022-03-310001821769nvts:RevenuesNetMember2021-01-012021-03-310001821769us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-03-310001821769us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001821769us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-03-310001821769us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-03-310001821769us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001821769srt:MinimumMember2021-12-310001821769srt:MaximumMember2021-12-3100018217692021-01-012021-12-310001821769srt:MinimumMember2022-01-012022-03-310001821769srt:MaximumMember2022-01-012022-03-310001821769us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001821769nvts:LongTermIncentivePlanStockOptionsMember2022-01-012022-03-310001821769us-gaap:EmployeeStockOptionMember2022-03-310001821769srt:ManagementMembernvts:LongTermIncentivePlanStockOptionsMembernvts:EquityIncentivePlan2021Member2021-12-292021-12-290001821769srt:ManagementMembernvts:LongTermIncentivePlanStockOptionsMembernvts:EquityIncentivePlan2021Member2021-12-29nvts:hurdle0001821769srt:MinimumMembersrt:ManagementMembernvts:LongTermIncentivePlanStockOptionsMembernvts:EquityIncentivePlan2021Member2021-12-292021-12-290001821769srt:MaximumMembersrt:ManagementMembernvts:LongTermIncentivePlanStockOptionsMembernvts:EquityIncentivePlan2021Member2021-12-292021-12-290001821769nvts:LongTermIncentivePlanStockOptionsMember2022-03-310001821769us-gaap:RestrictedStockUnitsRSUMember2021-08-252021-08-250001821769us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockUnitsRSUMember2021-08-252021-08-250001821769us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockUnitsRSUMember2021-08-25nvts:installment0001821769us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:RestrictedStockUnitsRSUMember2021-08-252021-08-250001821769us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2021-08-252021-08-250001821769nvts:ShareBasedPaymentArrangementTrancheFourMemberus-gaap:RestrictedStockUnitsRSUMember2021-08-252021-08-250001821769us-gaap:RestrictedStockUnitsRSUMember2021-12-310001821769us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001821769us-gaap:RestrictedStockUnitsRSUMember2022-03-310001821769nvts:RestrictedStockAndRestrictedStockUnitsMember2022-01-012022-03-310001821769nvts:RestrictedStockAndRestrictedStockUnitsMember2021-01-012021-03-310001821769us-gaap:CommonClassAMember2022-03-310001821769us-gaap:CommonClassAMember2022-01-012022-03-310001821769nvts:EarnoutSharesMember2022-01-012022-03-310001821769nvts:EarnoutSharesMember2021-01-012021-03-310001821769nvts:EquityIncentivePlan2020Memberus-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:EmployeeStockOptionMember2022-03-310001821769nvts:EquityIncentivePlan2020Memberus-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:EmployeeStockOptionMember2022-03-310001821769nvts:TheWarrantsMember2021-10-190001821769nvts:LiveOakAcquisitionCorpIIMembernvts:PublicWarrantsMember2021-10-190001821769us-gaap:CommonClassAMembernvts:PublicWarrantsMember2021-10-190001821769nvts:PrivatePlacementWarrantsMemberus-gaap:CommonClassAMember2021-10-190001821769nvts:PrivatePlacementWarrantsMember2021-10-190001821769nvts:PrivatePlacementWarrantsMembernvts:ClassAOrdinarySharesMember2021-10-190001821769nvts:TheWarrantsMember2021-10-192021-10-190001821769nvts:RedemptionOptionOneMemberus-gaap:CommonClassAMembernvts:PublicWarrantsMember2021-10-192021-10-190001821769nvts:RedemptionOptionOneMemberus-gaap:CommonClassAMembernvts:PublicWarrantsMember2021-10-190001821769srt:MinimumMembernvts:RedemptionOptionOneMemberus-gaap:CommonClassAMembernvts:PublicWarrantsMember2021-10-192021-10-19nvts:day0001821769nvts:RedemptionOptionOneMembernvts:PublicWarrantsMember2021-10-192021-10-190001821769nvts:RedemptionOptionTwoMemberus-gaap:CommonClassAMembernvts:PublicWarrantsMember2021-10-192021-10-190001821769nvts:RedemptionOptionTwoMemberus-gaap:CommonClassAMembernvts:PublicWarrantsMember2021-10-190001821769srt:MinimumMembernvts:RedemptionOptionTwoMemberus-gaap:CommonClassAMembernvts:PublicWarrantsMember2021-10-192021-10-190001821769nvts:RedemptionOptionTwoMembernvts:PublicWarrantsMember2021-10-192021-10-190001821769us-gaap:CommonClassAMembernvts:RedemptionOptionThreeMembernvts:PublicWarrantsMember2021-10-190001821769srt:MinimumMemberus-gaap:CommonClassAMembernvts:RedemptionOptionThreeMembernvts:PublicWarrantsMember2021-10-192021-10-190001821769nvts:RedemptionOptionThreeMembernvts:PublicWarrantsMember2021-10-192021-10-190001821769us-gaap:CommonClassAMembernvts:TheWarrantsMember2021-10-190001821769us-gaap:CommonClassAMembernvts:TheWarrantsMember2020-12-020001821769us-gaap:CommonClassAMembernvts:TheWarrantsMember2022-02-220001821769us-gaap:CommonClassAMembernvts:TheWarrantsMember2022-02-040001821769nvts:TheWarrantsMember2022-02-040001821769nvts:TheWarrantsMember2022-02-042022-02-0400018217692022-02-0300018217692022-02-042022-02-040001821769nvts:EarnoutSharesMemberus-gaap:CommonClassAMember2021-10-192021-10-190001821769nvts:EarnoutSharesMember2021-10-192021-10-190001821769nvts:EarnoutSharesMemberus-gaap:CommonClassAMembernvts:TriggeringEvent1Member2021-10-192021-10-190001821769nvts:EarnoutSharesMembernvts:TriggeringEvent2Memberus-gaap:CommonClassAMember2021-10-192021-10-190001821769nvts:EarnoutSharesMembernvts:TriggeringEvent3Memberus-gaap:CommonClassAMember2021-10-192021-10-190001821769nvts:EarnoutSharesMemberus-gaap:CommonClassAMember2021-10-190001821769us-gaap:MeasurementInputRiskFreeInterestRateMembernvts:EarnoutSharesMember2022-03-310001821769us-gaap:MeasurementInputRiskFreeInterestRateMembernvts:EarnoutSharesMember2021-12-310001821769nvts:EarnoutSharesMemberus-gaap:MeasurementInputPriceVolatilityMember2022-03-310001821769nvts:EarnoutSharesMemberus-gaap:MeasurementInputPriceVolatilityMember2021-12-310001821769us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMembernvts:DistributorAMember2022-01-012022-03-310001821769us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMembernvts:DistributorAMember2021-01-012021-03-310001821769us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMembernvts:DistributorBMember2022-01-012022-03-310001821769us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMembernvts:DistributorBMember2021-01-012021-03-310001821769us-gaap:RevenueFromContractWithCustomerMembernvts:DistributorCMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001821769us-gaap:RevenueFromContractWithCustomerMembernvts:DistributorCMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:CN2022-01-012022-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:CN2021-01-012021-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:US2022-01-012022-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:US2021-01-012021-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:TW2022-01-012022-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:TW2021-01-012021-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:KR2022-01-012022-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:KR2021-01-012021-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembernvts:AllOtherCountriesMember2022-01-012022-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembernvts:AllOtherCountriesMember2021-01-012021-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-03-310001821769us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2021-01-012021-03-310001821769us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembernvts:DistributorAMember2022-01-012022-03-310001821769us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembernvts:DistributorAMember2021-01-012021-12-310001821769us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembernvts:DistributorBMember2021-01-012021-12-310001821769nvts:DistributorCMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001821769nvts:DistributorCMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-12-310001821769nvts:DistributorDMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001821769nvts:DistributorEMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001821769us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembernvts:DistributorFMember2022-01-012022-03-310001821769us-gaap:RedeemableConvertiblePreferredStockMember2022-01-012022-03-310001821769us-gaap:RedeemableConvertiblePreferredStockMember2021-01-012021-03-310001821769nvts:WarrantsToPurchaseRedeemableConvertiblePreferredStockMember2022-01-012022-03-310001821769nvts:WarrantsToPurchaseRedeemableConvertiblePreferredStockMember2021-01-012021-03-310001821769nvts:WarrantsToPurchaseCommonSharesMember2022-01-012022-03-310001821769nvts:WarrantsToPurchaseCommonSharesMember2021-01-012021-03-310001821769nvts:EarnoutSharesMember2022-01-012022-03-310001821769nvts:EarnoutSharesMember2021-01-012021-03-310001821769us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001821769us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001821769us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001821769us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001821769us-gaap:DomesticCountryMember2021-12-310001821769us-gaap:StateAndLocalJurisdictionMember2021-12-310001821769srt:MinimumMembernvts:NoteReceivableWithAnEmployeeMembersrt:AffiliatedEntityMember2022-01-012022-03-310001821769srt:MaximumMembernvts:NoteReceivableWithAnEmployeeMembersrt:AffiliatedEntityMember2022-01-012022-03-310001821769nvts:NoteReceivableWithAnEmployeeMembersrt:AffiliatedEntityMember2022-01-012022-03-310001821769nvts:NoteReceivableWithAnEmployeeMembersrt:AffiliatedEntityMember2021-01-012021-03-310001821769nvts:NoteReceivableWithAnEmployeeMembersrt:AffiliatedEntityMember2022-03-310001821769nvts:NoteReceivableWithAnEmployeeMembersrt:AffiliatedEntityMember2021-12-310001821769nvts:JointVentureInvestmentMemberus-gaap:CorporateJointVentureMember2022-01-012022-03-310001821769nvts:JointVentureInvestmentMemberus-gaap:CorporateJointVentureMember2021-01-012021-03-310001821769us-gaap:OtherAssetsMembernvts:JointVentureInvestmentMemberus-gaap:CorporateJointVentureMember2022-03-310001821769nvts:ToddGlickmanMembernvts:PurchaseOfSharesFromExecutiveOfficerMembersrt:ManagementMember2022-03-112022-03-110001821769nvts:ToddGlickmanMembernvts:PurchaseOfSharesFromExecutiveOfficerMembersrt:ManagementMember2022-03-11



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number: 001-39755
Navitas Semiconductor Corporation
(Exact name of registrant as specified in its charter)
Delaware85-2560226
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2101 E. El Segundo Blvd., Suite 20590245
El Segundo,California
(Address of Principal Executive Offices)(Zip Code)
(844) 654-2642
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock,
par value $0.0001 per share
NVTSNasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable
date: 123,691,233 shares of Class A Common Stock and 0 shares of Class B Common Stock were outstanding at May 12, 2022.


CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. All statements other than statements of historical facts contained in this quarterly report, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this quarterly report and are subject to a number of important risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, including risks and uncertainties relating to:
our financial and business performance;
our ability to realize the benefits of the Business Combination, which may be affected by, among other things, competition and our ability to grow and manage growth profitably;
changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;
our product development timeline and expected start of production;
the implementation, market acceptance and success of our business model;
our ability to scale in a cost-effective manner;
developments relating to our competitors and industry;
the impact of health epidemics, including the Covid-19 pandemic, on our business and the actions we may take in response thereto;
our ability to obtain and maintain intellectual property protection, and not infringe on the rights of the intellectual property rights others;
our status as an emerging growth company (as defined by U.S. federal law);
our future capital requirements and sources and uses of cash;
our ability to obtain funding for our operations;
our business, expansion plans and opportunities;
the outcome of any known and unknown litigation and regulatory proceedings; and
the risks and uncertainties described in the summary below, and in our annual report on Form 10-K in the section titled “Risk Factors.”

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. Some of these risks and uncertainties may in the future be amplified by events we do not expect or cannot predict. Additionally, new risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, the forward-looking statements in this quarterly report may not prove to be accurate.

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this quarterly report, whether as a result of any new information, future events, changed circumstances or otherwise. You should read this quarterly report completely, and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Please see the Summary of Risk Factors below and the more detailed discussion in Part I, Item 1A (Risk Factors) of our annual report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022, for additional information about many of the risks we are exposed to in the normal course of our business.






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 our annual report on Form 10-K.
Consistent with the foregoing, we are exposed to a variety of risks, including risks associated with the following:
Risks Related to Our Business and Operations
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.
To date we have been successful in introducing our leading-edge GaN power IC technology in mobile charging applications, such as wall chargers and adapters for mobile phones and laptop computers, where we believe we have achieved a market-leading position in GaN power ICs. Growth in demand for our products depends on achieving similar successes in other markets where we believe our technology provides comparable advantages, including consumer electronics, data center, solar and EV. Although we believe we are on track in these efforts, no assurance can be given that we will succeed in similarly displacing legacy silicon solutions in these other target markets.
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, including governmental or regulatory changes.
We rely on a single third-party wafer fabrication facility for the fabrication of semiconductor wafers and on a limited number of suppliers of other materials, and the failure of this facility or any of these suppliers or additional suppliers to continue to produce wafers or other materials on a timely basis could harm our business and our financial results.
Increased costs of wafers and materials, or shortages in wafers and materials, 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.
We are dependent on a limited number of distributors and end customers. The loss of, or a significant disruption in the relationships with any of these distributors or end customers, could significantly reduce our revenue and adversely impact our operating results. In addition, if we are unable to expand or further diversify our end customer base, our business, financial condition, and results of operations could suffer.
Because we do not have long-term purchase commitments with our end customers, orders may be cancelled, reduced, or rescheduled with little or no notice, which in turn exposes us to inventory risk, and may cause our business, financial results and future prospects to be harmed.
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.
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.
From time to time, we may rely on strategic partnerships, joint ventures and alliances for manufacturing and research and development. However, we may not control these partnerships and joint ventures, and actions taken by any of our partners or the termination of these partnerships or joint ventures could adversely affect our business.
We may pursue mergers, acquisitions, investments and joint ventures, which could divert our management’s attention or otherwise disrupt our operations and adversely affect our results of operations.

Tax-Related Risks
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 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.
Any adjustment to the purchase price of the assets that were transferred pursuant to the restructuring of Legacy Navitas in 2020 could adversely impact our tax position.
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.
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.
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 prevented from being able to commercialize new products.
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.

Risks Related to Owning Our Common Stock
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.
Future resales of our Class A Common Stock, including following the expiration of lock-up periods related to the Business Combination, may cause the market price of our securities to drop significantly, even if our business is doing well.
If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.
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.
Our management has limited public company experience. The obligations associated with being a public company involve significant expenses and require significant resources and management attention, which may divert from our business operations and if we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.
We have identified material weaknesses in our internal control over financial reporting. If we 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.
We may issue a substantial number of additional shares under our employee equity incentive plans.







TABLE OF CONTENTS
Page
Part I - Financial Information
Item 1.
Item 2.
Item 4.
Item 1.
Item 1A.
Item 5.
SIGNATURES




PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and par value amounts)

March 31, 2022December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$253,797 $268,252 
Accounts receivable, net9,621 8,263 
Inventory13,130 11,978 
Prepaid expenses and other current assets2,988 2,877 
Total current assets279,536 291,370 
PROPERTY AND EQUIPMENT, net2,471 2,302 
OPERATING LEASE RIGHT OF USE ASSETS1,391  
INTANGIBLE ASSETS, net82 170 
NOTES RECEIVABLE200 206 
OTHER ASSETS3,223 1,553 
Total assets$286,903 $295,601 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and other accrued expenses$5,216 $4,860 
Accrued compensation expenses3,604 2,639 
Current operating lease liabilities844  
Deferred revenue17 29 
Current portion of long-term debt3,200 3,200 
Total current liabilities12,881 10,728 
LONG-TERM DEBT2,919 3,716 
OPERATING LEASE LIABILITIES NONCURRENT600  
WARRANT LIABILITY 81,388 
EARNOUT LIABILITY70,767 134,173 
OTHER LIABILITIES 60 
Total liabilities87,167 230,065 
COMMITMENTS AND CONTINGENCIES (Note 14)
STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value, 740,000,000 shares authorized as of March 31, 2022 and December 31, 2021, and 123,461,312 and 117,750,608 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively
15 15 
Additional paid-in capital348,658 294,190 
Accumulated other comprehensive loss(62)(2)
Accumulated deficit(148,875)(228,667)
Total stockholders’ equity199,736 65,536 
Total liabilities and stockholders’ equity$286,903 $295,601 
The accompanying condensed notes are an integral part of these condensed consolidated financial statements
5


NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)

Three Months Ended
March 31,
20222021
NET REVENUES$6,740 $5,317 
COST OF REVENUES3,777 2,959 
GROSS PROFIT2,963 2,358 
OPERATING EXPENSES:
Research and development13,413 4,254 
Selling, general and administrative24,544 5,369 
               Total operating expenses37,957 9,623 
LOSS FROM OPERATIONS(34,994)(7,265)
OTHER INCOME (EXPENSE), net:
Interest expense, net of interest income of $16 and $2
(24)(61)
Gain from change in fair value of warrants51,763  
Gain from change in fair value of earnout liabilities63,406  
Other expense(356) 
              Total other income (expense), net114,789 (61)
INCOME (LOSS) BEFORE INCOME TAXES79,795 (7,326)
PROVISION FOR INCOME TAXES3 19 
NET INCOME (LOSS)$79,792 $(7,345)
NET INCOME (LOSS) PER COMMON SHARE:
Basic net income (loss) per share attributable to common stockholders$0.67 $(0.37)
Diluted net income (loss) per share attributable to common stockholders$0.61 $(0.37)
WEIGHTED AVERAGE COMMON SHARES USED IN NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:
Basic common shares119,542 19,741 
Diluted common shares131,149 19,741 
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
6


NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
(in thousands)

Three Months Ended March 31,
20222021
NET INCOME (LOSS)$79,792 $(7,345)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax(60)(1)
Total other comprehensive loss(60)(1)
TOTAL COMPREHENSIVE INCOME (LOSS)$79,732 $(7,346)
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
7


NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
(unaudited)
(in thousands)

Redeemable Convertible Preferred StockStockholder's equity (deficit)
THREE MONTHS ENDED MARCH 31, 2022Series A
redeemable
convertible
preferred stock
Series B
redeemable
convertible
preferred stock
Series B-1
redeemable
convertible
preferred stock
Series B-2
redeemable
convertible
preferred stock
Common stockAdditional
paid in
capital
Accumulated
deficit
Notes receivable - shareholder'sAccumulated
comprehensive
income (loss)
Total
SharesAmountSharesAmountSharesAmountSharesAmountSharesAmount
BALANCE AT DECEMBER 31, 2021        117,751 $15 $294,190 $(228,667)$ $(2)$65,536 
Issuance of common stock under employee stock option and stock award plans— — — — — — — — 2,459 — 1,305 — — — 1,305 
Repurchase of common stock— — — — — — — — (67)— (550)— — — (550)
Exercise of warrants— — — — — — — — 3,318 — 29,641 — — — 29,641 
Stock-based compensation expense related to employee and non-employee stock awards— — — — — — — — — — 24,072 — — — 24,072 
Foreign currency translation adjustment— — — — — — — — — — — — — (60)(60)
Net income— — — — — — — — — — — 79,792 — — 79,792 
BALANCE AT MARCH 31, 2022        123,461 $15 $348,658 $(148,875)$ $(62)$199,736 
THREE MONTHS ENDED MARCH 31, 2021
BALANCE AT DECEMBER 31, 202016,620 $14,970 14,213 $27,371 5,416 $14,786 18,199 $52,379 16,774 $2 $3,557 $(75,982)$ $(1)$(72,424)
Issuance of common stock under employee stock option and stock award plans— — — — — — — 5,843 1 1,405 — (1,183)— 223 
Stock-based compensation expense related to employee and non-employee stock awards— — — — — — — — — — 1,835 — — — 1,835 
Foreign currency translation adjustment— — — — — — — — — — — — — (1)(1)
Net loss— — — — — — — — — — — (7,345)— — (7,345)
BALANCE AT MARCH 31, 202116,620 14,970 14,213 $27,371 5,416 $14,786 18,199 $52,379 22,617 3 $6,797 $(83,327)$(1,183)$(2)$(77,712)

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
8

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
(in thousands)
Three Months Ended March 31,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$79,792 $(7,345)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation125 80 
Amortization of intangibles88 88 
Amortization of deferred rent (10)
Non-cash lease expense243  
Other(357)7 
Stock-based compensation expense25,326 1,835 
Amortization of debt discount and issuance costs3 3 
Gain from change in fair value of warrants(51,763) 
Gain from change in fair value of earnout liability(63,406) 
Change in operating assets and liabilities:
Accounts receivable(1,358)359 
Inventory(1,152)(1,655)
Prepaid expenses and other current assets(109)201 
Other assets1,391 6 
Accounts payable, accrued compensation and other expenses817 619 
Operating lease liability(241) 
Net cash used in operating activities
(10,601)(5,812)
CASH FLOWS FROM INVESTING ACTIVITIES:
Asset acquisition
 (680)
Investment in joint venture
(2,704) 
Purchases of property and equipment
(294)(312)
Receipts on notes receivable
6 2 
Net cash used in investing activities
(2,992)(990)
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of warrants(38) 
Repurchase of common stock(550) 
Proceeds from issuance of common stock in connection stock option exercises526 222 
Principal payments on long-term debt(800) 
Net cash (used in) provided by financing activities
(862)222 
Effect of exchange rate changes on cash
 3 
NET DECREASE IN CASH AND CASH EQUIVALENTS
(14,455)(6,577)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
268,252 38,869 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$253,797 $32,292 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes
$23 $ 
Cash paid for interest
$67 $60 
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

9

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
1. ORGANIZATION AND BASIS OF PRESENTATION
On May 6, 2021, Navitas Semiconductor Limited, a private company limited by shares organized under the laws of Ireland (“Navitas Ireland”) and domesticated in the State of Delaware as Navitas Semiconductor Ireland, LLC, a Delaware limited liability company (“Navitas Delaware” and, together with Navitas Ireland, “Legacy Navitas”), entered into a business combination agreement and plan of reorganization (the “Business Combination Agreement” or “BCA”) with Live Oak Acquisition Corp. II, a Delaware corporation (“Live Oak”). Pursuant to the BCA, among other transactions consummated on October 19, 2021 (collectively, the “Business Combination”), Live Oak acquired all of the capital stock of Navitas Ireland (other than the Navitas Ireland Restricted Shares, as defined below) by means of a tender offer, and a wholly owned subsidiary of Live Oak merged with and into Navitas Delaware, with Navitas Delaware surviving the merger. As a result, Legacy Navitas became a wholly owned subsidiary of Live Oak effective October 19, 2021. At the closing of the Business Combination, Live Oak changed its name to Navitas Semiconductor Corporation.
References to the “Company” in these financial statements refer to Legacy Navitas and its predecessors before the consummation of the Business Combination, or to Navitas Semiconductor Corporation after the Business Combination, as the context suggests.
The Company was founded in 2013 and has since been developing ultra-efficient gallium nitride (GaN) semiconductors. The Company presently operates as a product design house that contracts the manufacturing of its chips and packaging to partner suppliers. Navitas maintains its operations around the world, including the United States, China, Taiwan and the Philippines, with principal executive offices in El Segundo, California.
Reorganization
Navitas Semiconductor USA, Inc. (f/k/a Navitas Semiconductor, Inc., “Navitas U.S.”) was incorporated in the State of Delaware on October 25, 2013. In 2020 Navitas U.S. initiated a restructuring to streamline its worldwide legal entity structure and more efficiently align its business operations (the “Restructuring”). The Restructuring introduced wholly owned subsidiary in China as well as the addition of Legacy Navitas, an entity registered in Ireland and the U.S., as the parent of Navitas U.S. and the other Navitas subsidiaries. In connection with the Restructuring, effective September 1, 2020, Legacy Navitas acquired certain intellectual property and other intangible assets from Navitas U.S. and, after the Restructuring, contracts directly with customers. The transfer of intellectual property and other intangible assets by Navitas U.S. to Legacy Navitas in connection with the Restructuring was among entities within the same consolidated group and, as a result, did not result in any gain or loss to the Company. Legacy Navitas is treated as a corporation for U.S. federal income tax purposes and is a tax resident in both Ireland and the United States. See Note 13.
Business combination
Pursuant to the terms of the BCA, the Business Combination was consummated (the “Closing”) on October 19, 2021 (the Closing Date”) by means of (i) a tender offer to acquire the entire issued share capital of Navitas Ireland (other than Navitas Ireland Restricted Shares (as defined below)) in exchange for the Tender Offer Consideration (as defined below) (the “Tender Offer”) and (ii) the merger of a wholly owned subsidiary of Live Oak (“Merger Sub”) with and into Navitas Delaware (the “Merger”), with Navitas Delaware surviving the Merger. See the Company’s annual report on 10-K filed with the SEC on March 31, 2022 for further information.

The Business Combination was accounted for as a reverse recapitalization, in accordance with GAAP. Under this method of accounting, although Live Oak issued shares for outstanding equity interests of Legacy Navitas in the Business Combination, Live Oak was treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Legacy Navitas issuing stock for the net assets of Live Oak, accompanied by a recapitalization. The net assets of Live Oak were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Navitas.
For all periods presented, unless stated otherwise, references to Legacy Navitas common shares and options for common shares outstanding before the Closing and related per share amounts have been retroactively restated to give effect to the reverse recapitalization, specifically, the Exchange Ratio of 1.0944 shares to 1 at Closing. References to share quantities for Legacy Navitas convertible preferred stock related to balances or activity before the Closing reflect the historical quantities and are not adjusted for the Exchange Ratio.
10

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
Basis of presentation
The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The results of operations for the three months ended March 31, 2022 shown in this report are not necessarily indicative of results to be expected for the full year ending December 31, 2022. In the opinion of the Company’s management, the information contained herein reflects all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the Company’s results of operations, financial position, cash flows and stockholders’ equity (deficit). Certain footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to Securities and Exchange Commissions (SEC) rules and regulations relating to interim financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K filed with the SEC on March 31, 2022. Except as further described below, there have been no significant changes in the Company’s accounting policies from those disclosed in its annual report on Form 10-K filed with the SEC on March 31, 2022.

Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company, its wholly owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. All intercompany transactions and balances have been eliminated in consolidation.
2. SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements
Leases
In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) (“ASU 2016-02”), and also issued subsequent amendments under ASU 2019-10 and ASU 2020-05 (collectively ASC 842). On January 1, 2022, the Company adopted ASC 842 and the related amendments. ASC 842 requires lessees to (i) recognize a right of use asset and a lease liability that is measured at the present value of the remaining lease payments, on the consolidated balance sheets, (ii) recognize a single lease cost, calculated over the lease term on a straight-line basis and (iii) classify lease related cash payments within operating and financing activities. The Company recognized approximately $1,634 of operating lease right-of-use assets and $1,685 operating lease liabilities on the consolidated balance sheets upon adoption on January 1, 2022.

Credit Losses

In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. This ASU requires entities to measure the impairment of certain financial instruments, including accounts receivable, based on expected losses rather than incurred losses. For non-public business entities, this ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted, and will be effective for the Company beginning in 2023. The Company is currently evaluating the impact of the new standard on the Company’s condensed consolidated financial statements and related disclosures.
11

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
3. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consist of the following:
 March 31, 2022December 31, 2021
Furniture and fixtures
$187 $265 
Computers and other equipment
3,455 3,116 
Leasehold improvements
610 577 
$4,252 $3,958 
Accumulated depreciation
(1,781)(1,656)
Total
$2,471 $2,302 
For the three months ended March 31, 2022 and 2021, depreciation expense was $125 and $80, respectively, and was determined using the straight-line method over the following estimated useful lives:
Furniture and fixtures
3 — 7 years
Computers and other equipment
2 — 5 years
Leasehold improvements
2 — 5 years
4. INVENTORY
Inventory consists of the following:
 March 31, 2022December 31, 2021
Raw materials
$2,518 $60 
Work-in-process
7,482 9,945 
Finished goods
3,130 1,973 
Total
$13,130 $11,978 
5. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The accounting guidance on fair value measurements clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices for identical assets in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.
The short-term nature of the Company’s cash and cash equivalents, accounts receivable, debt and current liabilities causes each of their carrying values to approximate fair value for all periods presented. Cash equivalents classified as Level 1 instruments were $145.0 million and $159.6 million as of March 31, 2022 and December 31, 2021, respectively.






12

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
The following table presents the Company’s fair value hierarchy for financial liabilities as of March 31, 2022 :
Level 1Level 2Level 3Total
Liabilities:
Earnout liability$70,767 $70,767 
Total$ $ $70,767 $70,767 
The following table presents the Company’s fair value hierarchy for financial liabilities as of December 31, 2021:
Level 1Level 2Level 3Total
Liabilities:
Public warrants$52,361 $52,361 
Private warrants29,027 29,027 
Earnout liability134,173 134,173 
Total$52,361 $29,027 $134,173 $215,561 

The liability for the Private Warrants is a level 2 valuation because there is no active market.
6. DEBT OBLIGATIONS
On April 29, 2020, the Company entered into a loan and security agreement with a new bank (the “Term Loan”), which provides for term advances up to $8,000. The loan is divided into three term advances, First Term Advance, Second Term Advance and Third Term Advance. The First Term Advance has a maximum available amount of $6,000. The Second Term Advance has a maximum available amount of $1,000 and is subject to the Company receiving aggregate net proceeds from Series B-2 Preferred Stock of $29,800 by no later than September 30, 2020. The Third Term Advance has a maximum available amount of $1,000 and is subject to the Company receiving aggregate net proceeds from Series B-2 Preferred Stock of $39,900 by no later than September 30, 2020. The Term Loan bears interest at a rate equal to the greater of (i) US Prime Rate plus 0.75% or (ii) 4% and is collateralized by all assets of the Company. As of March 31, 2022 and 2021, the interest rate was 4%. The loan is payable in monthly installments beginning September 1, 2021 with a final maturity date of January 1, 2024. Concurrent with the execution of the Term Loan, the Company paid off the outstanding principal balance and accrued interest on its then-existing long-term debt (which bore interest at 5% at December 31,2019) with a different bank, fully satisfying its obligations. On August 1, 2021, the Company drew down $2,000, the maximum available amount under the Second Term Advance and Third Term Advance.
In connection with execution of the Term Loan, the Company issued warrants to the bank (see Note 9). The fair value of the warrants at the date of issuance was $16 and was recorded as debt discount, subject to amortization using the effective interest rate method over the term of the loan.
Amortization of debt discount and issuance costs for the three months ended March 31, 2022 and 2021 was $3 and $3, respectively. Amortization of debt discount and issuance costs includes the write-off of unamortized costs as of the date that the prior term loan was extinguished in 2020.








13

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
The following is a summary of the carrying value of long-term debt as of March 31, 2022 and December 31, 2021: 
 March 31, 2022December 31, 2021
Note payable
$6,134 $6,933 
Less: Current portion
(3,200)(3,200)
Less: Debt discount and issuance costs
(15)(17)
Note payable, net of current portion
$2,919 $3,716 
As of March 31, 2022, future scheduled principal payments of debt obligations were as follows:
Fiscal Year
2022 (less than one year)$2,401 
20233,200 
2024533 
Thereafter 
Total$6,134 
7. LEASES:
The Company has entered into operating leases primarily for commercial buildings. These leases have terms which range from 0.7 to 2.8 years. There are no economic penalties for the Company to extend the lease, and it is not reasonably certain the Company will exercise the extension options. The operating leases do not contain material residual value guarantees or material restrictive covenants.

Rent expense, including short-term lease cost, was $352 and $267 for the three months ended March 31, 2022 and 2021, respectively.

Information related to the Company right-of-use assets and related operating lease liabilities were as follows:

March 31, 2022
Cash paid for operating lease liabilities$261 
Operating lease cost263 
Right-of-use assets obtained in exchange for lease obligations1,391 
Weighted-average remaining lease term2.06
Weight-average discount rate4.25 %


Maturities of lease liabilities due in 12-month period ending March 31,
2023$862 
2024539 
202592 
Thereafter 
 $1,492 
Less imputed interest(48)
Total lease liabilities$1,444 
14

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)


Supplemental information for comparative periods

As of December 31, 2021 prior to the adoption of ASC 842, minimum payments under operating leases having initial or remaining non-cancelable lease terms in excess of one year were as follows:

 Operating Leases
2022$966 
2023585 
2024170 
Total minimum payments$1,721 
8. SHARE BASED COMPENSATION:
 Equity Incentive Plans

The 2020 Equity Incentive Plan, initially adopted by the Company’s board of directors on August 5, 2020 as an amendment and restatement of the 2013 Equity Incentive Plan (“2013 Plan”), was amended and restated at the Closing of the Business Combination as the Amended and Restated Navitas Semiconductor Limited 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit (RSU) awards, stock appreciation rights, and other stock awards to employees, directors and consultants. Pursuant to the 2020 Plan, the exercise price for incentive stock options and non-statutory stock options is generally at least 100% of the fair market value of the underlying shares on the date of grant. Options generally vest over 48 months measured from the date of grant. Options generally expire no later than ten years after the date of grant, subject to earlier termination upon an optionee’s cessation of employment or service.

Under the terms of the 2020 Plan, the Company is authorized to issue 18,899,285 shares of common stock pursuant to awards under the 2020 Plan. As of October 19, 2021, the Company has issued an aggregate of 11,276,706 stock options and non-statutory options to its employees and consultants and 4,525,344 shares of restricted stock to employees, directors and consultants under the 2020 Plan. No awards have or will be issued under the 2020 Plan after October 19, 2021. Shares of Common Stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021 will become authorized for issuance pursuant to awards under the 2021 Plan (as defined below).
The Navitas Semiconductor Corporation 2021 Equity Incentive Plan (the “2021 Plan”) was adopted by the Company’s board of directors on August 17, 2021 and adopted and approved by the Company’s stockholders at the Special Meeting on October 12, 2021. Under the terms of the 2021 Plan, the Company is authorized to issue, pursuant to awards granted under the 2021 Plan, (a) up to 16,334,527 shares of Common Stock; plus (b) up to 15,802,050 shares of Common Stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021; plus (c) an annual increase, effective as of the first day of each fiscal year up to and including January 1, 2031, equal to the lesser of (i) 4% of the number of shares of Common Stock outstanding as of the conclusion of the Company’s immediately preceding fiscal year, or (ii) such amount, if any, as the board of directors may determine.

Stock-Based Compensation
At the Closing of the Business Combination on October 19, 2021, Legacy Navitas’ outstanding vested and unvested share-based compensation awards (as such terms are defined below) were converted into equity, RSUs or options in the Company at a ratio of 1.0944 to 1 share (the “Exchange Ratio”). Share and per share information below has been converted from historical disclosures based on the Exchange Ratio.
The Company recognizes the fair value of stock-based compensation in its financial statements over the requisite service period of the individual grants, which generally equals a four-year vesting period. The Company uses estimates of
15

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
volatility, expected term, risk-free interest rate and dividend yield in determining the fair value of these awards and the amount of compensation expense to recognize. The Company uses the straight-line method to amortize stock awards granted over the requisite service period of the award, which may be explicit or derived, unless market or performance conditions result in a graded attribution.

The following table summarizes the stock-based compensation expense recognized for the three months ended March 31, 2022 and 2021:

(In thousands)March 31, 2022March 31, 2021
Net revenues$ $113 
Research and development7,494 $206 
Selling, general and administrative17,832 $1,516 
Total stock-based compensation expense$25,326 $1,835 
Stock Options
Generally, stock options granted under the Plans have ten year terms and vest 1/4th on the anniversary of the vesting commencement date and 1/48th monthly thereafter. Stock options with performance vesting conditions begin to vest upon achievement of the performance condition. Expense is recognized beginning in the period in which performance is considered probable.

The fair value of incentive stock options and non-statutory stock options issued was estimated using the Black-Scholes model with the following weighted-average assumptions used during the three months ended March 31, 2021. The Company did not grant any awards during the three months ended March 31, 2022.
March 31, 2021
Risk-free interest rates
0.42 %
Expected volatility rates
44 %
Expected dividend yield
 
Expected term (in years)
6
Weighted-average grant date fair value of options
$0.48 

16

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)

A summary of stock options outstanding, excluding LTIP options as of March 31, 2022, and activity during the three months then ended, is presented below:
Stock OptionsShares
(In thousands)
Exercise Price Per ShareWeighted-
Average
Exercise
Price
Remaining Weighted-
Average
Remaining
Contractual
Term
(In years)
Per Share Average Intrinsic Value
Outstanding at December 31, 202111,253 
$.08 - $1.06
$0.51 6.80$9.75 
Granted
   —  
Exercised
(1,721)
$.08 - $1.06
0.30 — 9.98 
Forfeited or expired
(2)$1.061.06 — 9.22 
Cancelled
(1)$1.061.06 — 9.22 
Outstanding at March 31, 20229,529 
$.08 - $1.06
$0.56 7.06$9.72 
Vested and Exercisable at March 31, 20227,064 
$.08 - $1.06
$0.40 6.56$9.88 

During the three months ended March 31, 2022 and 2021, the Company recognized $124 and $139, respectively, of stock-based compensation expense for the vesting of outstanding stock options, excluding $1.4 million related to the LTIP Options described below. At March 31, 2022, unrecognized compensation cost related to unvested awards totaled $1.3 million. The weighted-average period over which this remaining compensation cost will be recognized is 2.1 years.

Long-term Incentive Plan Stock Options

The Company awarded a total of 6,500,000 performance stock options (“LTIP Options”) to certain members of senior management on December 29, 2021 pursuant to the 2021 Plan. These non-statutory options are intended to be the only equity awards for the recipients over the duration of the performance period. The options vest in increments subject to achieving certain performance conditions, including ten share price hurdles ranging from $15 to $60 per share, coupled with revenue and EBITDA targets, measured over a seven year performance period and expire on the tenth anniversary of the grant date. The options have an exercise price of $15.51 per share and the average fair value on the grant date was $8.13. The weighted average contractual period remaining is 9.7 years. The Black-Scholes model and a Monte Carlo simulation incorporating 100,000 scenarios. The valuation model utilized the following assumptions:

Risk-free interest rates
1.47 %
Expected volatility rates
58 %
Expected dividend yield
 
Cost of equity (for derived service period)
9.96 %
Weighted-average grant date fair value of options
$8.13 

The Company recognized $1.4 million of stock-based compensation expense for the three months ended March 31, 2022. The unrecognized compensations expense related to the LTIP Options is $51.5 million.

Restricted Stock Units
On August 25, 2021, the Company granted an aggregate of 4,135,000 Legacy Navitas RSU’s under the 2020 Plan to certain members of senior management pursuant to restricted stock unit agreements (collectively, the “RSU Agreements”). Each RSU represents the right to receive one share of common stock of the Company, subject to the vesting and other terms and conditions set forth in the RSU Agreements and the Plan. Up to 3,500,000 of these RSU awards vest in three equal installments over a three-year period subject to the occurrence of an IPO (which includes the Business Combination)
17

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
and certain valuation targets, subject to an accelerated vesting schedule based on the satisfaction of certain stock price targets. Up to 500,000 RSUs vest on the six-month anniversary of the grant date, subject to the occurrence of an IPO and certain valuation targets. Up to 52,500 RSUs vest upon the occurrence of an IPO, while the remaining 82,500 RSUs vest as specified by an RSU Agreement over a period of approximately three years. As of October 19, 2021, the IPO performance condition had been met due to the Business Combination.

A summary of RSUs outstanding as of March 31, 2022, and activity during the three months then ended, is presented below:

Restricted Stock Unit AwardsShares
(In thousands)
Weighted-Average
Grant Date Fair
Value Per Share
Outstanding at December 31, 20214,468 $9.62 
Granted3,535 10.72 
Vested(740)9.63 
Forfeited(17)17.95 
Outstanding at March 31, 20227,246 $10.15 

During the three months ended March 31, 2022 and March 31, 2021, the Company recognized $16.2 million and $1.4 million of stock-based compensation expense for the vesting of RSAs and RSUs. At March 31, 2022, unrecognized compensation cost related to unvested RSU awards totaled $14.7 million. The weighted-average period over which this remaining compensation cost is expected be recognized is 2.28 years.

The Company accrued $2.5 million and $2.0 million as of March, 2022 and December 31, 2021, respectively, related to a stock-based bonus plan that the Company plans to settle by issuing a variable number of fully-vested restricted stock units to employees. Based on the closing share price of the Company’s Class A Common Stock of $10.28 on March 31, 2022, approximately 241,287 shares would have been issued, however, the actual number of shares will be based on the share price at the date of settlement.
Unvested Earnout Shares
A portion of the earnout shares may be issued to individuals with unvested equity awards. While the payout of these shares requires achievement of the volume weighted average price of the Company's common stock, the individuals are required to complete the remaining service period associated with these unvested equity awards to be eligible to receive the earnout shares. As a result, these unvested earn-out shares are equity-classified awards and have an aggregated grant date fair value of $19.1 million (or $11.52 per share). During the three months ended March 31, 2022, the Company recognized $6.3 million of stock-based compensation expense for the vesting of earnout shares. At March 31, 2021, unrecognized compensation cost related to unvested earnout shares totaled $7.4 million. The weighted-average period over which this remaining compensation cost is expected be recognized is 0.6 years. Refer to Note 10 in this quarterly report.
9. WARRANT LIABILITY
In connection with the closing of the Business Combination, holders of Live Oak Class A ordinary shares automatically received Class A Common Stock of the Company, and holders of Live Oak warrants automatically received 13,100,000 warrants of the Company with substantially identical terms (“the Warrants”). At the Closing, 8,433,333 Live Oak public warrants automatically converted into 8,433,333 warrants to purchase one share of the Company’s Class A Common Stock at $11.50 per share (the “Public Warrants”), and 4,666,667 Private Placement Warrants held by the Sponsor and certain permitted transferees, each exercisable for one Class A ordinary share of Live Oak at $11.50 per share, automatically converted into warrants to purchase one share of the Company’s Class A Common Stock at $11.50 per share with substantially identical terms as the Public Warrants. On February 4, 2022, the Company gave notice that it would redeem all of the Warrants, as further described below.

The Warrants were exercisable only during the period commencing December 7, 2021 (12 months after the consummation of Live Oak’s initial public offering) and ending on the earlier of October 19, 2026 (five years after the
18

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
Closing of the Business Combination) or, in the event of redemption, the corresponding redemption date. The Company had the right to redeem not less than all of the outstanding Public Warrants on 30 days’ notice, at a redemption price of $0.01 per Warrant, if the reported closing price of the Common Stock was at least $18.00 per share for any 20 of 30 trading days ending three business days before the notice of redemption, subject to certain other conditions. The Company also had the right to redeem not less than all of the outstanding Public Warrants on 30 days’ notice, at a redemption price of $0.10 per Warrant, if the reported closing price of the Common Stock was at least $10.00 per share for any 20 of 30 trading days ending three business days before the notice of redemption, subject to certain other conditions. If the Company elected to exercise the latter right to redeem the Public Warrants for $0.10 per Warrant, and the reported closing price of the Common Stock was less than $18.00 per share for any 20 of 30 trading days ending three business days before the notice of redemption, the Company was required to concurrently redeem the Private Placement Warrants on the same terms. In addition, in such event, holders of Warrants subject to redemption would have the right to exercise their Warrants on a “cashless” basis, whereby they would receive a fractional number of shares of Common Stock per Warrant exercised before the redemption date, based on the volume weighted average price of the Common Stock for the 10 trading days following notice of redemption (the “Redemption Fair Market Value”) and the time period between the redemption date and the original expiration of the Warrants in the absence of redemption.

On February 4, 2022, the Company issued a notice of redemption that it would redeem, at 5:00 p.m. New York City time on March 7, 2022 (the “Redemption Date”), all of the Company’s outstanding Public Warrants and Private Placement Warrants to purchase shares of the Company’s Class A Common Stock that were governed by the Warrant Agreement, dated as of December 2, 2020 (the “Warrant Agreement”), between the Company and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agent”), at a redemption price of $0.10 per Warrant (the “Redemption Price”). On February 22, 2022, the Company issued a notice that the “Redemption Fair Market Value,” determined in accordance with the Warrant Agreement based on the volume weighted average price of the Common Stock for the 10 trading days immediately following the date on which notice of redemption was sent, was $10.33 and, accordingly, that holders exercising Warrants on a “cashless” basis before the Redemption Date would receive 0.261 shares of Common Stock per Warrant exercised. The Warrants were exercisable by their holders until immediately before 5:00 p.m. New York City time on the Redemption Date, either (i) on a cash basis, at an exercise price of $11.50 per share of Common Stock, or (ii) on a “cashless” basis in which the exercising holder would receive 0.261 shares of Common Stock per Warrant exercised. Between December 7, 2021 (the date the Warrants became exercisable) and the Redemption Date, an aggregate of 12,722,773 Warrants were exercised (including 17,785 on a cash basis and 12,704,988 on a “cashless” basis); an aggregate of 3,333,650 shares of Common Stock were issued upon exercise of the Warrants (including 15,101 shares in respect of cash exercises and 3,318,549 shares in respect of “cashless” exercises). A total of 377,187 Warrants remained outstanding and unexercised at the Redemption Date and were redeemed for an aggregate Redemption Price of $38. Prior to the redemption date, the warrants had an aggregate fair value of $81,388 which resulted in a gain of $51,763 due to the decrease in the fair value of the warrant liability in the quarter ended March 31, 2022. There were no outstanding warrants as of March 31, 2022.

10. EARNOUT LIABILITY
Certain of the Company’s stockholders are entitled to receive up to 10,000,000 Earnout Shares of the Company’s Class A common stock if the Earnout Milestones are met. The Earnout Milestones represents three independent criteria, which each entitles the eligible stockholders to 3,333,333 earn-out shares per milestone met. Each Earnout Milestone is considered met if at any time 150 days following the Business Combination and prior to October 19, 2026, the volume weighted average price of the Company’s Class A common stock is greater than or equal to $12.50, $17.00 or $20.00 for any twenty trading days within any thirty trading day period, respectively. Further, the Earnout Milestones are also considered to be met if the Company undergoes a Sale. A Sale is defined as the occurrence of any of the following: (i) engage in a “going private” transaction pursuant to Rule 13e-3 under the Exchange Act or otherwise cease to be subject to reporting obligations under Sections 13 or 15(d) of the Exchange Act; (ii) Class A common stock cease to be listed on a national security exchange, other than for the failure to satisfy minimum listing requirements under applicable stock exchange rules; or (iii) change of ownership (including a merger or consolidation) or approval of a plan for complete liquidation or dissolution.

These earnout shares have been categorized into two components: (i) the “Vested Shares” - those associated with stockholders with vested equity at the closing of the Business Combination that will be earned upon achievement of the Earnout Milestones and (ii) the “Unvested Shares” - those associated with stockholders with unvested equity at the closing of the Business Combination that will be earned over the remaining service period with the Company on their unvested
19

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
equity shares and upon achievement of the Earnout Milestones. The Vested Shares are classified as liabilities in the consolidated balance sheet and the Unvested Shares are equity-classified share-based compensation to be recognized over time (see Note 8 - Share-based Compensation). The earnout liability was initially measured at fair value at the closing of the Business Combination and subsequently remeasured at the end of each reporting period. 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 valuation model utilized the following assumptions:
March 31, 2022December 31, 2021
Risk-free interest rate
2.43 %1.23 %
Equity volatility rate
60.00 %55.00 %

At the closing of the Business Combination on October 19, 2021, the earnout liability had an initial fair value of $96,069, which was recorded as a long-term liability and a reduction to additional paid in capital in the consolidated balance sheet. As of March 31, 2022 and December 31, 2021, the earnout liability had a fair value of $70,767 and $134,173, respectively which resulted in a gain due to the decrease in the fair value of the earnout liability of $63,406.
11. SIGNIFICANT CUSTOMERS AND CREDIT CONCENTRATIONS
Customer Concentration
Nearly all of the Company’s revenues are attributable to sales of the Company’s products to distributors of electronic components. These distributors sell the Company’s products to a range of end users, including OEMs and merchant power supply manufacturers.

The following customers represented 10% or more of the Company’s net revenues for the respective three months ended March 31, 2022 and 2021, respectively:
CustomerMarch 31, 2022March 31, 2021
Distributor A39 %40 %
Distributor B13 14 %
Distributor C31 %32 %

20

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)

Revenues by Geographic Area
The Company considers the domicile of its end customers, rather than the distributors it sells to directly, to be the basis for attributing revenues from external customers to individual countries. Revenues for the three months ending March 31, 2022 and 2021, were attributable to end customers in the following countries:
CountryMarch 31, 2022March 31, 2021
China
58 %86 %
United States
33 4 
Taiwan
5  
Korea
4 8 
All others
 2 
Total
100 %100 %

Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consisted principally of cash, cash equivalents and trade receivables. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At times, such amounts may exceed federally insured limits. The Company has not experienced any losses on cash or cash equivalents held at financial institutions. The Company does not have any off-balance-sheet credit exposure related to its customers.
The following customers represented 10% or more of accounts receivable:
CustomerMarch 31, 2022December 31, 2021
Distributor A
26 %44 %
Distributor B
*14 %
Distributor C
12 %14 %
Distributor D
12 %*
Distributor E
10 %*
Distributor F21 %*
*Total customer accounts receivable was less than 10% of net accounts receivables.
Concentration of Supplier Risk
The Company currently relies on a single foundry to produce wafers for GaN ICs. Loss of the relationship with this supplier could have a substantial negative effect on the Company. Additionally, the Company relies on a limited number of third-party subcontractors and suppliers for testing, packaging and certain other tasks. Disruption or termination of supply sources or subcontractors, including due to the COVID-19 pandemic or natural disasters such as an earthquake or other causes, could delay shipments and could have a material adverse effect on the Company. Although there are generally alternate sources for these materials and services, qualification of the alternate sources could cause delays sufficient to have a material adverse effect on the Company. A significant amount of the Company’s third-party subcontractors and suppliers, including third-party foundries that supply wafers for GaN ICs, are located in Taiwan. A significant amount of the Company’s assembly and test operations are conducted by third-party contractors in Taiwan and the Philippines.

21

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(unaudited)
($ in thousands, except per share amounts and where noted)
12. NET INCOME (LOSS) PER SHARE:
Basic income (loss) per share is calculated by dividing net income (loss) by the weighted-average shares of common stock outstanding during the period. Diluted earnings per share are calculated by dividing net income (loss) by the weighted-average shares of common stock and dilutive common equivalent shares outstanding during the period. Dilutive common equivalent shares included in this calculation consist of dilutive shares issuable upon the assumed exercise of outstanding common stock options, the assumed vesting of outstanding restricted stock units and restricted stock awards, the assumed issuance of awards for contingently issuable performance-based awards, as computed using the treasury stock method. Performance-based restricted stock units and restricted stock awards are included in the number of shares used to calculate diluted earnings per share after evaluating the applicable performance criteria as of period end and under the assumption the end of the reporting period was the end of the contingency period, and the effect is dilutive. Restricted stock awards are eligible to receive all dividends declared on the Company’s common shares during the vesting period; however, such dividends are not paid until the restrictions lapse. The Company has no plans to declare dividends.
A summary of the net income (loss) per share calculation is as follows for the three months ended March 31,: 
(In thousands, except per share amounts)March 31, 2022March 31, 2021
Numerator - basic and diluted:
Net income (loss)$79,792 $(7,345)
Denominator
Weighted-average common shares - basic common stock119,542 19,741 
Weighted-average common shares - diluted common stock131,149 19,741 
Net income (loss) per share - basic common stock$0.67 $(0.37)
Net income (loss) per share - diluted common stock$0.61 $(0.37)
Denominator
Weighted-average common shares - basic common stock119,542 19,741 
Stock options and other dilutive awards11,607  
Weighted-average common shares - diluted common stock131,149 19,741 
Shares excluded from diluted weighted-average shares:1, 2
Redeemable convertible preferred stock shares 54,449 
Warrants to purchase redeemable convertible preferred stock 176 
Warrants to purchase common shares 1,107 
Earnout shares (potentially issuable common shares)10,000  
Unvested restricted stock units and restricted stock awards4,979  
Stock options potentially exercisable for common shares6,500